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/raid1/www/Hosts/bankrupt/TCR_Public/100312.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 12, 2010, Vol. 14, No. 70 Headlines ACCREDITED HOME: Reaches Settlement with Zurich Insurance AIRGAS INC: Moody's Puts 'Ba1' Rating on Guaranteed Senior Notes AIRTRAN HOLDINGS: Sees Q1 2010 Reduced Revenues by $5MM-$6MM AMR CORP: In Talks on Balancing Compensation and Costs ASARCO LLC: Asbestos Trust Wants to Waive Fin'l Reports Filing ASARCO LLC: Opposes Halcyon & DK Subs. Contribution Claims ASARCO LLC: Opposes USW Administrative Claim CANOPY FINANCIAL: Executives Plead Innocent to Fraud CANWEST GLOBAL: Loses 50% Ownership Claim in Jerusalem Post BANK OF AMERICA: To End Overdraft Fees on Debit Purchases BEAZER HOMES: Deutsche Bank Holds 4.94% of Common Stock BEAZER HOMES: Seeking Shareholder Nod for Equity Incentive Plan BLOCKBUSTER INC: Deutsche Bank Holds 4.61% of Common Stock BLOSSOM VALLEY: Wants to Use Prepetition Lenders' Cash Collateral BOMBARDIER INC: Moody's Withdraws 'Ba2' Rating on US$1 Bil. Notes BONES THEATRE: Files for Chapter 11 Bankruptcy in Indiana BONEYARD LLC: Wants to Borrow Money from Principal to Pay Fees BRE PROPERTIES: Fitch Downgrades Preferred Stock Rating to 'BB' BUCKEYE TECHNOLOGIES: S&P Raises Corporate Credit Rating to 'BB' CARBURTON PROPERTIES: Nat'l Servicing Wants Case Dismissed CARBURTON PROPERTIES: Taps Cohen Seglias as Bankruptcy Counsel CCS MEDIA: Court Confirms Reorganization Plan CENTAUR LLC: Organizational Meeting to Form Panel on March 17 CHARTER COMMUNICATIONS: Moody's Assigns 'Ba2' Amended Loan Rating CHEMTURA CORP: Court OKs Sale of PVC Additives Biz. for $16.2MM CHEMTURA CORP: Plan Exclusivity Extended Until July 11 CHEMTURA CORP: Proposes 2010 Employee Incentive Plan CHEMTURA CORP: To Provide SIDF With Postpetition Guarantee CHRYSLER LLC: New Chrysler Names Soave to Reintroduce Fiat Brand CHRYSLER LLC: Maynards' $45.5-Mil. Offer Wins Ohio Plant Auction CINCINNATI BELL: Moody's Assigns 'B2' Rating on $400 Mil. Notes CINCINNATI BELL: S&P Assigns 'B-' Rating on $400 Mil. Notes CIRCUIT CITY: Proposes to Sell Kentucky Property to Nicklies CIRCUIT CITY: Wants Wachovia Directed to Deliver 401(k) Assets CIRCUIT CITY: Wins Approval for Liquidation Retention Plan CITIGROUP INC: Holds Auction Rate Preferreds in Various Funds CITIGROUP INC: CEO Pandit Sees Return to "Sustained Profits" CITRUS 278: Stockholders to Infuse Funds to Pay Unsecureds COACHMEN INDUSTRIES: Unit Inks Deal with Private Developer COEUR D'ALENE: Names K. Leon Hardy as Senior Vice President COOPER-STANDARD: Fee Auditor OKs 18 Professionals' Fees COOPER-STANDARD: Proposes Duff & Phelps for Asset Valuation COOPER-STANDARD: Wants Tax Refunds Suit Dismissed COYOTES HOCKEY: Moyes to Sue NHL Over Balsillie's Bid Rejection DANNY'S SAN TAN: Files List of 20 Largest Unsecured Creditors DANNY'S SAN TAN: Section 341(a) Meeting Scheduled for April 15 DEED AND NOTE: Asks for Court Okay to Use Cash Collateral DETROIT: Sells $250 Million Without Recent Disclosure Filings DGI RESOLUTION: Receives Delisting Notice from NASDAQ DIRECT MARINE: Files for Bankruptcy After Failing to Pay Workers DOMINO'S PIZZA: Names Trojan & Goldman to Board of Directors DOMINO'S PIZZA: Selects John Macksood as Exec. Vice President DUANE READE: Reports $84 Million Net Loss for 4th Qtr. 2009 DUBAI WORLD: Banks Won't Take Cut; Formal Deal Seen Next Week EAST CAMERON: Court OKs Additional Financing from Lenders EPV SOLAR: Cooley Godward Named as Counsel to Creditors Committee FAIRFIELD RESIDENTIAL: To Bring Plan for Confirmation April 22 FAIRPOINT COMMUNICATIONS: Disclosure Statement Approved FAIRPOINT COMMUNICATIONS: Proposes to Pay Regulators Expenses FAIRPOINT COMMUNICATIONS: Wants Plan Exclusivity Until Aug. 23 FANNIE MAE: Sells $6-Bil. of 3-Year Benchmark Notes FANNIE MAE: To Buy Up to 200,000 Delinquent Loans From MBS Trusts FANNIE MAE: Releases January 2010 Monthly Summary FIRST NATIONAL: Posts $43.7 Million Net Loss in 2009 FOREST CITY: Moody's Assigns 'Caa2' Rating on New Preferred Stock FORTUNE VALLEY: Files for Ch. 11 Bankruptcy to Restructure Debt FRANCISCAN COMMUNITIES: Asks for Court OK to Use Cash Collateral FREMONT GENERAL: Tax Assets Spark Unusual Plan Fight GENCORP INC: 2010 Shareholders Meeting on March 24 GENERAL GROWTH: Pershing Square Holds 7.5% of Common Stock GENERAL GROWTH: Fairholme Proposes $2.713-Bil. Equity Investment GENERAL GROWTH: Amends Confidentiality Letter With Ackman GENERAL GROWTH: Vornado Joins Bidding Race for GGP Assets GENERAL GROWTH: Wants to Expand E&Y Tax Consultant Work GENERAL MOTORS: Modifies Brownfield Partners Fees GENERAL MOTORS: Proposes Global Settlement on Equipment Leases GENERAL MOTORS: Sues MCM to Disallow Secured Claim GENERAL MOTORS: Whitacre Expects to Pay Back Govt. Loans by June HARRAH'S ENTERTAINMENT: Reports $846.4 Mil. Net Income for 2009 HEXION SPECIALTY: Posts $92 Million Net Income for 2009 HOTEL METROPOLIS: Files for Chapter 11 in San Francisco HUDSON'S FURNITURE: Asks for Court Okay to Use Cash Collateral HUDSON'S FURNITURE: Section 341(a) Meeting Scheduled for March 29 I & C PROPERTY: Can Hire Brown Van Horn as Bankruptcy Counsel INTELSAT LTD: Reports $97 Million Net Loss for Fourth Quarter INTERGROUP CORPORATION: Receives NASDAQ Notice of Non-Compliance INTERSTATE HOTELS: Nearing Settlement on Plan Merger Litigation INTERSTATE HOTELS: Merger with Thayer, Jin Jiang Venture Approved JOSE JORGE: Has Access to Northwest Farm Cash Until March 31 LEHMAN BROTHERS: Europe Arm Sues Bankhaus for Return of $1 Bil. LEHMAN BROTHERS: M. Mazzatta Sues to Recover Collateral LEHMAN BROTHERS: Over $1 Bil. in Claims Change Hands in 17 Days LEHMAN BROTHERS: RSM Fines for Failings on Structured Products LEHMAN BROTHERS: Ex-CEO Fuld Not Aware of Repo 105, Counsel Says LEHMAN BROTHERS: Secures Demolition Agreement for Oak Knoll LEHMAN BROTHERS: Examiner's Bankruptcy Report Now Available LIBERTYPOINTE BANK: Closed; Valley National Assumes All Deposits LODGENET INTERACTIVE: Inks Employment Contract with Elsenbast LYONDELL CHEMICAL: Parent to Shut PP Plant in Italy LYONDELL CHEMICAL: Sues GEO Specialty for Breach of Contract MARIAH BAY: Files for Chapter 11 Bankruptcy Protection MERIDIAN RESOURCES: Has Fin'l Obligations of $104-Mil. at Dec. 31 MONTECITO AT MIRABEL: Wants Access to Compass Bank's Cash MOHAWK INDUSTRIES: Moody's Gives Stable Outlook; Keeps Ba1 Rating NATIONSTAR MORTGAGE: Moody's Assigns 'B1' Corporate Family Rating NATIONSTAR MORTGAGE: S&P Assigns 'B' Counterparty Credit Rating NAVISTAR INTERNATIONAL: Reports $17 Million Net Income for 2009 NBTY INC: S&P Changes Outlook to Positive; Affirms 'BB' Rating NEBRASKA INC: Fitch Affirms 'BB+' Issuer Default Rating NEENAH ENTERPRISES: Has Final Approval on $140 Million Financing NEXSTAR BROADCASTING: Reports $14 Million Net Income for Q4 NUTRACEA: Completes Sale of Cereal Ingredients Biz. to Kerry NY TIMES: Moody's Changes Outlook to Stable; Affirms 'B1' Ratings ORLEANS HOMEBUILDERS: NYSE Amex Intends to Suspend Firms Trading ORTHOFIX INTERNATIONAL: Moody's Retains 'B1' Corp. Family Rating PACIFIC LIFESTYLE: Can Use $1.7 Million DIP Loan Until June 30 PANGLOBAL BRANDS: Shares Could Be Delisted From OTCBB PARK PLACE: Section 341(a) Meeting Scheduled for March 15 PARK PLACE: Wants Wolff Hill as Bankruptcy Counsel PARK PLACE: Wants March 19 Deadline for Filing of Schedules PATRICK GISLER: Files Schedules of Assets & Liabilities PATRICK GISLER: Taps Brian D. Shapiro as Bankruptcy Counsel PCS EDVENTURES: Promotes Robert Grover to President PCS EDVENTURES: Cecil Andrus Retires from Board of Directors PENN TRAFFIC: Hilco Denied $300,000 Breakup Fee PERSONALITY HOTELS: Files for Chapter 11 in San Francisco PRESTIGE BRANDS: Moody's Affirms 'B1' Corporate Family Rating PRESTIGE BRANDS: S&P Affirms 'B+' Corporate Credit Rating PRIMEDIA INC: Moody's Downgrades Corporate Family Rating to 'B1' RATHGIBSON INC: Wants May 19 Auction for Assets; Lead Bid at $93MM RATHGIBSON INC: Amended Plan Calls for Asset Sale to Noteholders REDPRAIRIE CORPORATION: Moody's Assigns 'B2' Corp. Family Rating REDPRAIRIE HOLDING: S&P Puts 'B' Rating on CreditWatch Developing RENEW ENERGY: Grain Co. Loses Appeal of $5M Claim Against Renew RESERVE GOLF: To Sell Assets to McConnell Golf RIVIERA HOLDINGS: Moody's Withdraws 'D' Default Rating ROVI CORPORATION: Moody's Raises Rating on Senior Loan From 'Ba1' ROVI CORPORATION: S&P Gives Positive Outlook; Affirms 'BB-' Rating SARATOGA SHOE: Closes Shop After Six Months in Bankruptcy SCHWAB INDUSTRIES: Gets Interim Okay to Obtain DIP Financing SL GREEN: Offers Up to $250MM Aggregate Principal Amount of Notes SONIC AUTOMOTIVE: Prices $210MM Sr. Sub. Notes at 99.299% of Par SOUTHEAST TELEPHONE: Has Until March 15 to File a Chapter 11 Plan SPANSION INC: Esopus, et al., Object to ChipMOS's $300 Mil. Claim SPANSION INC: ITC Seeks Lift Stay to Adjudicate Samsung Action SOTHEBY'S INC: S&P Changes Outlook to Positive; Keeps 'BB-' Rating SPANSION INC: Spansion Japan Claim Reclassified Under Class 5B STANDARD PACIFIC: BlackRock Inc. Holds 10.25% of Common Stock STANDARD PACIFIC: Dimensional Fund Holds 5.14% of Shares STANDARD PACIFIC: Renaissance Technologies Holds 7.68% of Shares STANDARD PACIFIC: Vanguard Group Holds 4.86% of Common Stock SUBURBAN PROPANE: Moody's Assigns 'Ba3' Rating on $225 Mil. Notes SWOOZIE'S INC: Gets Okay to Hire Epiq as Claims Agent SWOOZIE'S INC: Schedules Filing Deadline Extended Until April 16 SWOOZIE'S INC: Section 341(a) Meeting Scheduled for April 20 SWOOZIE'S INC: Taps Alston & Bird as Bankruptcy Counsel TAVERN ON THE GREEN: Operator's Claim Cancelled for 'Fraud' TLC VISION: Replacement DIP Financing Approved TOUSA INC: Castlerigg, et al., Appeal Fraud Ruling TOUSA INC: Committee Amends Suit vs. Former Directors & Officers TOUSA INC: Committee Proposes Offshore Fund Pact TRIBUNE CO: Proposes to Assume Agreements With Marsh USA TRIBUNE CO: Says Unit's LBO Payments Legal TRIBUNE CO: Withdraws Request for Management Incentive Plan TRUMP ENT: Bondholder Plan Based on Faulty Forecasts, Says Icahn TWCC HOLDING: Moody's Assigns 'Ba2' Rating on $1.3 Bil. Loan B US CONCRETE: Gets Deficiency Notice from Nasdaq Stock UTEX COMMUNICATIONS: Section 341(a) Meeting Scheduled for April 6 US AIRWAYS: Pilots Support DOT Rules on Delta Slot Swap VALENCE TECHN: Receives NASDAQ Notification Over Minimum Bid Price VALUE MUSIC: Files for Bankruptcy Protection VINEYARD NATIONAL: Court Approves Disclosure Statement VISTEON CORP: China JV Makes Platforms for GM Sedan VISTEON CORP: CRISIL Downgrades TACO's Rating to 'BB' WARNER MUSIC: Posts $17 Million Net Loss in FY 2010 First Quarter WAVE SYSTEMS: Posts $1.0 Million Net Loss in Q4 2009 WEST FELICIANA: Bid Deadline for All Assets Set for April 2 XOMA LIMITED: Anticipates Non-Compliance Notice From NASDAQ ZEALOUS HOLDINGS: Must Get Court OK Prior to Any Assets Sale ZALE CORP: Directors Form Panel to Review Financing Options ZALE CORP: Franklin Resources Holds 4.7% of Common Stock * Bank Failures This Year Reach 27 after LibertyPointe Closed * BOOK REVIEW: Instincts of the Herd in Peace and War ********* ACCREDITED HOME: Reaches Settlement with Zurich Insurance --------------------------------------------------------- Accredited Home Lenders Holding Co. is seeking approval of a settlement with Zurich American Insurance Co. Prepetition, the Debtors obtained workers' compensation for its employees from Zurich. Zurich demanded and received an $800,000 letter of credit and was holding $94,457 in cash. Under the settlement, Zurich will take $306,933, returning $587,534 to Accredited Home. The settlement is up for hearing April 21. The Debtors said that in mid-December 2009, they circulated a proposed liquidating plan to the Official Committee of Unsecured Creditors and other major constituents. The Debtors added that they are negotiating towards confirming a consensual plan. After evaluating potential claims and lengthy negotiations, the Debtors have obtained a proposal from Lone Star to resolve any issues between the Debtors' estates and Lone Star which resolution includes the resolution of claims by all Lone Star entities and the payment of a significant sum of money to the estates. About Accredited Home Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- is a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. AIRGAS INC: Moody's Puts 'Ba1' Rating on Guaranteed Senior Notes ---------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to $250 million of guaranteed unsecured three year notes to be issued by Airgas Inc. Proceeds from the offering will be used to repay debt outstanding under its unsecured credit facility (primarily revolver borrowings). The ratings are currently under review, direction uncertain, due to Air Products' (A3, Prime-2) unsolicited all cash offer in February 2010 to acquire Airgas in a transaction valued at roughly $7 billion. "Airgas is proceeding with its plan to refinance balances outstanding under its revolver that expires in July 2011, despite the potential hostile takeover. This offering reinforces management's belief that it has sufficient resources to fend off the takeover offer and that it will remain an independent company," stated John Rogers, Senior Vice President at Moody's. Airgas' Baa3 ratings reflect its leading market share in packaged gases in North America, significant customer density due to bolt- on acquisitions, the stability of credit metrics over the business cycle, substantial operational and customer diversity, and roughly $500 million of yearly cylinder rental income. The ratings are tempered by the expectation for additional bolt-on acquisitions and upcoming debt maturities. The impact of the US recession on Airgas' credit metrics has been very modest relative to most other industrial companies. Moody's noted that EBITDA and Gross Cash Flow have declined by 10-12% in 2009. Prior to the takeover offer from Air Products Airgas' rating outlook had been positive due to its improving financial performance along with the expectation of further debt reduction. Airgas' ratings remain under review, direction uncertain, due to the lack of visibility on the ultimate financing for the proposed acquisition by Air Products, as well as actions that Airgas may undertake to prevent the acquisition. The review will focus on the ultimate impact to Airgas' bondholders as a result of the success or failure of the proposed acquisition. Ratings assigned and under review, direction uncertain: Airgas Inc. -- Guaranteed unsecured notes due in 2013 at Baa3 Ratings remaining under review, direction uncertain: Airgas Inc. -- Issuer rating at Baa3 -- Guaranteed unsecured notes due in 2014 at Baa3 -- Guaranteed senior subordinated notes due 2018 at Ba1 Moody's last rating action on Airgas was on February 5, 2010, when its ratings (Baa3 senior unsecured rating and Ba1 senior subordinate ratings) were placed under review, direction uncertain. 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 $3.9 billion in revenue for the LTM ending December 31, 2009. AIRTRAN HOLDINGS: Sees Q1 2010 Reduced Revenues by $5MM-$6MM ------------------------------------------------------------ AirTran Holdings, Inc., disclosed that on March 9, 2010, its management conducted a presentation at the JP Morgan Aviation, Transportation and Defense Conference. Management said the Company has been "successfully repositioned for good times and bad". AirTran, according to management, acted quickly to mitigate record high oil in 2008 and recorded net income in 2009. Management warned that AirTran's first quarter 2010 outlook has been hampered by winter storms. Management expects reduced revenue by $5 million to $6 million. A full-text copy of management's presentation is available at no charge at http://ResearchArchives.com/t/s?587b As reported by the Troubled Company Reporter on March 8, 2010, AirTran filed its annual report on Form 10-K, showing net income of $134.7 million on $2.3 billion of revenue for 2009, compared to a net loss of $266.3 million on $2.6 billion of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $2.3 billion in assets, $726.5 million of debts, and $501.9 million in stockholders' equity. The Company said its public debt is rated below-investment grade. This may adversely affect the Company's borrowing costs or ability to borrow. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?53dc About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. As of February 1, 2010, the Company operated 86 Boeing B717-200 aircraft and 52 Boeing B737-700 aircraft offering approximately 700 scheduled flights per day to 63 locations in the United States, including San Juan, Puerto Rico, and to Orangestad, Aruba, Cancun, Mexico, and Nassau, The Bahamas. * * * As reported by the Troubled Company Reporter on December 28, 2009, Moody's Investors Service raised its ratings of AirTran Holdings' corporate family and probability of default ratings each to Caa1 from Caa2. The 'Caa1' corporate family rating considers the still high leverage and AirTran's exposure to cyclical risks in the airline industry. The airline's carries a corporate credit rating of CCC+/Stable/-- from Standard & Poor's. AMR CORP: In Talks on Balancing Compensation and Costs ------------------------------------------------------ Thomas Horton, executive vice president of finance and planning & chief financial officer of AMR Corporation, spoke about the Company's recent financial performance and the outlook for the future at the JP Morgan Aviation and Transportation Conference on March 9, 2010. According to Fort Worth Star Telegram, Mr. Horton said at the conference that the carrier hopes to negotiate labor contracts that make the Company cost-competitive. "We are negotiating in good faith," Mr. Horton said. "It is our objective to see our people fairly compensated and well-compensated, but also that the company is competitive and strong for the long term." The report relates that Mr. Horton acknowledged that American and its pilots union, the Allied Pilots Association, are "far apart" in their contract negotiations. The Association of Professional Flight Attendants, Star Telegram reports, is meeting with the National Mediation Board next week to discuss being released from mediated negotiations with American. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. ASARCO LLC: Asbestos Trust Wants to Waive Fin'l Reports Filing -------------------------------------------------------------- The ASARCO Asbestos Personal Injury Settlement Trust seeks the Court's permission to waive the requirement to file audited financial statements as set forth under the ASARCO Asbestos Personal Injury Settlement Trust Agreement. The Asbestos Trust was created under the Parent Plan to address the substantial asbestos-related liabilities of the Debtors. As of the December 9, 2009 Plan Effective Date, the Asbestos Trust was funded with over $900 million in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO. In addition, separate and apart from the funds designated to pay Asbestos Personal Injury Claims, the Asbestos Trust also received $27.5 million to fund its operating expenses. Section 2.2(c) of the Asbestos Trust Agreement requires the Asbestos Trust to file, by April 30, 2010, an Annual Report containing audited financial statements. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, in Dallas, Texas, asserts that given the Asbestos Trust existed for only 21 days during 2009, the limited activity of the Trust does not warrant incurring the expense of having its financial statements audited for fiscal year 2009. Accordingly, the Asbestos Trust asks the Court to waive the requirement for filing audited financial statements for fiscal year 2009. Mr. Esserman assures Judge Schmidt that the Section 524(g) Trust Advisory Committee and the Futures Claims Representative both consent to the relief requested. The consent of both the TAC and the FCR are required for any modification of the Asbestos Trust Agreement. The TAC represents all holders of present Asbestos Personal Injury 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) ASARCO LLC: Opposes Halcyon & DK Subs. Contribution Claims ---------------------------------------------------------- Asarco Inc and unit Asarco LLC jointly object to the proffers of John Greene and Scott Vogel in support of Halcyon Master Fund LP and DK Acquisition Partners LP's request for allowance of administrative expense claims pursuant to Section 503(b) of the Bankruptcy Code. Halcyon and DK Acquisition seek more than $2.6 million from the Reorganized Debtors' bankruptcy estates based on the unfounded claim that their "bid" for the Southern Copper Company Judgment somehow propelled the Parent to submit the full-payment plan of reorganization that the Court confirmed, relates Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas. Halcyon and DK Acquisition have offered the Proffers in support of their request. Mr. Beckham, however, contends that the Proffers fail to meet even the most elementary standards for witness testimony in Federal Court. Specifically, Mr. Beckham asserts, the Proffers do not establish that the witnesses have personal knowledge of the matters on which they purport to testify, as required by the Federal Rules of Evidence. The testimony in the Proffers, he maintains, consists of inadmissible hearsay and the Court should exclude the Proffers from the evidence regarding Halcyon and DK Acquisition's "substantial contribution" claims. Messrs. Green and Vogel testify that they "believe that the vastly improved offers from the Parent and Sterlite" resulted from the disclosure of Halcyon and DK's bid. On behalf of the Debtors, Mr. Beckham argues that the Federal Rules of Evidence do not contemplate permitting witnesses to testify regarding what they believe. Rather, he points out, the Federal Rules demand that witnesses have personal knowledge of the matters on which they offer sworn testimony. Post-Hearing Response Briefs A. Halcyon and DK Acquisition Halcyon Master Fund L.P. and Midtown Acquisitions L.P., formerly known as DK Acquisition Partners, L.P., submitted a post-hearing response to the Court's inquiry regarding their request for payment of administrative expenses. The Court particularly directed the Parties to advise it as to whether it had previously ruled regarding the disclosure of confidential information to Professor Kenneth Klee, ASARCO's expert witness, regarding valuation of the SCC Judgment. At the Court's directive, (i) Halcyon and DK Acquisition, and (ii) ASARCO and the Parent also filed separate proposed findings of fact and conclusions of law in connection with Halcyon and DK's request. Copies of the Proposed Findings are available for free at: http://bankrupt.com/misc/ASARCO_PFindings_H&DK_021910.pdf http://bankrupt.com/misc/ASARCO_PFindings_ASARCO_021910.pdf On behalf of Halcyon and DK Acquisition, Darrell L. Barger, Esq., at Hartline, Dacus, Barger, Dreyer & Kern, L.L.P., in Corpus Christi, Texas, reminds Judge Schmidt that he ruled on July 23, 2009, that the terms of the bids to purchase the SCC Judgment received by the Debtors were to be kept confidential and could not be disclosed to anyone outside a narrowly defined group of notice parties that included the official committees, the United States Department of Justice, and the United States Trustee. However, despite their express written and oral confidentiality obligations, the Debtors disclosed the terms of Halcyon and DK's bids to Professor Klee for inclusion in his final proffer filed on August 15, 2009, Mr. Barger tells the Court. Professor Klee was deposed on August 16, 2009, and testified at the confirmation hearing the next day regarding, among other things, the initial bids and joint binding bid for the SCC Judgment received from Halcyon and DK. Halcyon and DK Acquisition inform the Court that prior to the filing of Professor Klee's final proffer, the Debtors asked their to disclose the terms of the bids to Professor Klee, but that they have denied such request. Halcyon and DK Acquisition are concerned that Debtors and the Parent are attempting to create the impression that the auction was not -- and was never intended to be -- confidential because the Parties knew that Professor Klee would eventually be given access to the auction bids for use in his expert opinion. Halcyon and DK Acquisition contend that while the Parties knew that Professor Klee wanted to review the bids at some point, it was never stated at any of the hearings cited by the Debtors and the Parent that Professor Klee would receive the bid information, much less that it would be publicly filed, while it was still confidential and before a stalking-horse agreement was entered. "The public disclosure of Halcyon and DK Acquisition's bids was a breach of the confidentiality provisions in the Initial Bids, the Final Bid, and DK's Expense Reimbursement Agreement," Mr. Barger emphasizes. Halcyon and DK Acquisition, in a supplemental filing, delivered to the Court a final invoice for $373,697 in attorneys' fees and expenses incurred in litigating their substantial contribution claim. They assert that the final invoice itemizes their actual and necessary legal expenses for the period from Feb. 1 to 28, 2010. B. Debtors and Parent The Reorganized Debtors and the Parent jointly submitted their Post-Hearing Response to the Court's Inquiry relating to Halcyon and DK Acquisition's request While the disclosure to Professor Klee of the details of the bids was discussed at several hearings in July and August 2009, no party, including Halcyon and DK Acquisition, ever objected to that disclosure, and all parties impliedly consented to the disclosure of bid information to Professor Klee, Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas, tells the Court. It was not until the November 2009 filing of their request that Halcyon and DK Acquisition first publicly objected to the disclosure, he notes. As a result, Mr. Beckham asserts, the Court has not been called upon to rule on the disclosure until now. The Court did, however, acknowledge the impending disclosure of bid information to Professor Klee on several occasions both before and during the Confirmation Hearing, he maintains. "The facts . . . clearly establish that Halcyon and DK Acquisition were clearly informed of the Debtor's plan and intention to disclose the results of the bid process to Klee and never complained or objected," Mr. Beckham says. Hence, the Reorganized Debtors and the Parent ask the Court to deny Halcyon and DK's request. ASARCO and Parent Talk Back On behalf of ASARCO and the Parent, Mr. Beckham insists that Halcyon and DK Acquisition's untimely Post-Hearing Response is nothing more than a mischaracterization of an inapplicable Court order. Mr. Beckham points out that Halcyon and DK's Post-Hearing Response is plagued with misrepresentations, overstatements, and inaccuracies and hence, their request should be denied. Halcyon and DK Acquisition asserted under their response brief that the Court entered a sweeping order, broadly prohibiting the disclosure of any bid information. Mr. Beckham argues that contrary to Halcyon and DK Acquisition's assertion, the Court's statements were limited to the discrete issue of discovery in connection with the request. "The Court did not address, nor was it asked to address, disclosure of bid information to Professor Klee or inclusion of that information in the Final Klee Proffer," he maintains. ASARCO and the Parent tell the Court that Halcyon and DK Acquisition knew certain details regarding their joint bid would be disclosed to Professor Klee, but nevertheless asserted that they had no obligation to stop any review or disclosure. Baker Botts Objects to Proposed Findings Baker Botts L.L.P. opposes the proposed findings of fact and conclusions of law submitted by (i) Halcyon and DK Acquisition, and (ii) ASARCO and the Parent in connection with Halcyon and DK Acquisition's request. Baker Botts served as the Debtors' counsel until the effective date of their Confirmed Chapter 11 Plan. As previously reported, Baker Botts is seeking allowance of its fees, amounting to $113,338,522, and reimbursement of expenses, aggregating $6,065,598, for the fee period from August 9, 2005, to December 8, 2009. Baker Botts is also asking for a fee enhancement, totaling $22,667,704. Baker Botts says its Fee Application details its extensive role in the Debtors' successful bankruptcy cases, and in some instances, highlights the array of challenging issues that it was forced to address. Specifically, Baker Botts asserts that its success in obtaining the SCC Judgment and conceiving the auction process for the judgment, together with ASARCO keeping Sterlite (USA), Inc., engaged as plan sponsor, resulted in two confirmable full-payment plans of reorganization being submitted. Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, however, contends that the two Proposed Findings contains findings and conclusions that conflict with Baker Botts' Fee Application, including language that convey that: -- the Parent's plan amendments in the spring and summer of 2009 were driven by several factors that include (i) the gradual but substantial rise in copper process, (ii) the Parent's desire to maintain ownership of ASARCO LLC, and (iii) the Parent's strong desire to bring an end to the costly litigation on environmental and asbestos claims; and -- Neither the SCC Judgment auction nor Halcyon and DK Acquisition's last-minute fractional-interest bid played any role in the Parent's decision. Mr. Kinzie also alleges that other portions of the Proposed Findings are incomplete; seek to limit or mischaracterize Baker Botts' role in the bankruptcy cases; fail to present a complete statement of events; and are inconsistent with the Fee Application. Thus, to avoid setting any precedent that could impact the fee applications of other professionals, Baker Botts asks the Court to refrain from entering the Proposed Findings or ruling on any fee application, until all of the parties have had the opportunity to present evidence supporting their fee applications to the Court. * * * Judge Schmidt will review documents relating to Halcyon and DK Acquisition's request and is taking the matter under advisement, the minutes of the March 2, 2010 hearing note. 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: Opposes USW Administrative Claim -------------------------------------------- The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO filed an unliquidated claim under Section 503(b)(1)(A) of the Bankruptcy Code for "the actual, necessary costs and expenses of preserving the estate." The Confirmed Plan of Reorganization provides for the payment in full of allowed administrative expenses. Asarco LLC, however, opposes to the Administrative Claim. Charles A. Beckham, Jr., Esq., at Haynes and Boone LLP, in Houston, Texas, contends that the Administrative Claim asserted by USW should be denied because: (i) it fails to describe a sufficient legal or statutory basis for USW's entitlement to an administrative expense claim, and (ii) the alleged claims for breach of the Special Successorship Clause of the CBA could not have accrued prior to the effective date of the Confirmed Plan. The USW's application for payment of administrative claims asserted unliquidated and contingent claims for damages based on alleged breaches of contractual obligations under ASARCO's collective bargaining agreement with the Union. The USW plainly admitted that its claims are contingent and unliquidated. Mr. Beckham argues that the contingent and unliquidated claims, by definition, have not occurred, so the USW's alleged claims are not "actual" expenses and cannot, therefore, constitute claims that provided a benefit to the Debtors' bankruptcy estates. ASARCO LC thus asks the Court to deny the USW Administrative Claim. As per the minutes of a March 5, 2010 hearing, the Parties will come to an agreement as to certain part of the Union's application, and a stipulation will follow in the near future. As to the Successorship Clause portion of the application, Judge Schmidt noted that he will review all documents and rule thereafter. For the time being, the Court has taken the matter under advisement. 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) CANOPY FINANCIAL: Executives Plead Innocent to Fraud ---------------------------------------------------- Andrew M. Harris at Bloomberg News reports that the co-founders of Canopy Financial Inc. pleaded not guilty to charges that they defrauded investors in a $75 million scheme blamed by the Company for its bankruptcy. Two co-founders of Canopy Financial, Inc., were charged March 1 with allegedly defrauding investors of roughly $75 million, while at the same time misappropriating roughly $19 million from client custodial accounts intended for health care savings and expenses. One defendant, Jeremy Blackburn, Canopy's former president and chief operating officer, was initially charged in December in connection with the investment fraud aspect of the case, while charges were filed for the first time March 1 against the second defendant, Anthony Banas, Canopy's chief technology officer. The charges contain the first allegations that either man was involved in an alleged scheme to misappropriate millions of dollars from Health Savings Accounts and Flexible Spending Accounts that Canopy held and administered for the benefit of individual clients. The criminal case is U.S. v. Blackburn, U.S. District Court, Northern District of Illinois (Chicago). The regulatory case is SEC v. Canopy Financial Inc., 09-cv-7429, U.S. District Court, Northern District of Illinois (Chicago). About Canopy Financial Canopy, based in Chicago, was a provider of financial processing services for the health-care industry. Canopy filed for Chapter 11 bankruptcy after discovering financial and accounting irregularities. Canopy Financial filed for Chapter 11 on November 25, 2009 (Bankr. N.D. Ill. Case No. 09-44943). The petition says assets are less than $10 million while debt exceeds $50 million. At the end of the year, the Court ordered the conversion of the case to a Chapter 7 liquidation. CANWEST GLOBAL: Loses 50% Ownership Claim in Jerusalem Post ----------------------------------------------------------- CanWest Global Communications Corp. lost a legal battle to acquire 50% ownership in The Jerusalem Post, according to a Jerusalem Post report. The report says that at the end of a protracted process, a New York-based arbitrator on March 5, 2010, denied all CanWest claims to ownership in the Post. The arbitrator ruled that Mirkaei Tikshoret Limited, the Mirkaei Tikshoret Group and its owner Eli Azur were the "prevailing parties in [the] arbitration" and denied "all of the claims" submitted by CanWest, the Post reported. CanWest was also ordered to pay the costs, expenses and attorneys' fees incurred by the Israeli owners of the Post, Mirkaei Tikshoret, during the legal dispute. The report said that when the sale of the Post by previous owners Hollinger International Inc., was announced in late 2004, it was stated that CanWest and Mirkaei Tikshoret would jointly own the Post and pay $13.2 million for it. But Geoffrey Elliot, vice president of corporate affairs at CanWest, said that after MTG acquired the paper, talks with CanWest failed to complete what would have been the second phase of the deal under which CanWest would have bought half of the Post. According to the report, the case then went to arbitration at the International Center for Dispute Resolution in New York. CanWest asserted that Azur breached his obligations under an agreement to jointly acquire the Post and related media businesses. Azur argued in defense that the parties had never reached a binding agreement. CanWest says it is reviewing the arbitrator's decision and is considering its options, according to reports. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). BANK OF AMERICA: To End Overdraft Fees on Debit Purchases --------------------------------------------------------- Bank of America said it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other banks to do the same, according to ABI. Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. BofA sought government backing in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. * * * BofA has received US$45 billion in government bailout money since the economic collapse in 2008. As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. Bank of America reported a third-quarter 2009 net loss of $1.0 billion. BEAZER HOMES: Deutsche Bank Holds 4.94% of Common Stock ------------------------------------------------------- The Corporate and Investment Banking business group and the Corporate Investments business group of Deutsche Bank AG hold as of February 26, 2010, 11,886,146 shares or roughly 4.94% of the common stock of Beazer Homes USA, Inc. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company reported $2.02 billion in total assets and $1.77 billion in total liabilities, resulting to a $250.0 million stockholders' equity, as of Dec. 31, 2009. At September 30, 2009, Beazer had $2,029,410,000 in total assets, including $507,339,000 in cash and cash equivalents, against $1,832,855,000 in total liabilities, resulting in $196,555,000 in stockholders' equity. Beazer had $374,851,000 in stockholders' equity at September 30, 2008. * * * According to the Troubled Company Reporter on January 12, 2010, Standard & Poor's Ratings Services assigned its 'CC' issue rating and its '6' recovery rating to Beazer Homes USA Inc.'s proposed $50 million 7.5% mandatory convertible subordinated notes due 2013. Beazer will use proceeds from the new notes, as well as a proposed $90 million equity offering, to redeem $127 million of senior notes due 2011, which the company can call at par. BEAZER HOMES: Seeking Shareholder Nod for Equity Incentive Plan --------------------------------------------------------------- Beazer Homes Usa, Inc., has filed with the Securities and Exchange Commission "Additional Information and Recommendations Related to Shareholder Proposals" related to its 2010 Annual Shareholders' Meeting scheduled for April 13, 2010. The Company's 2010 Proxy Statement contains four proposals which require shareholder approval: 1. The election of the seven nominees to the Company's Board of Directors; 2. The ratification of the selection of Deloitte & Touche LLP by the Audit Committee of the Board as independent registered public accounting firm for the fiscal year ending September 30, 2010; 3. The approval of an amendment to the Company's Amended and Restated Certificate of Incorporation that would increase the total number of authorized shares of common stock from 80 million shares to 180 million shares; and 4. The approval of the Beazer Homes USA, Inc. 2010 Equity Incentive Plan A full-text copy of the Additional Information is available at no charge at http://ResearchArchives.com/t/s?587c About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company reported $2.02 billion in total assets and $1.77 billion in total liabilities, resulting to a $250.0 million stockholders' equity, as of Dec. 31, 2009. At September 30, 2009, Beazer had $2,029,410,000 in total assets, including $507,339,000 in cash and cash equivalents, against $1,832,855,000 in total liabilities, resulting in $196,555,000 in stockholders' equity. Beazer had $374,851,000 in stockholders' equity at September 30, 2008. * * * According to the Troubled Company Reporter on January 12, 2010, Standard & Poor's Ratings Services assigned its 'CC' issue rating and its '6' recovery rating to Beazer Homes USA Inc.'s proposed $50 million 7.5% mandatory convertible subordinated notes due 2013. Beazer will use proceeds from the new notes, as well as a proposed $90 million equity offering, to redeem $127 million of senior notes due 2011, which the company can call at par. BLOCKBUSTER INC: Deutsche Bank Holds 4.61% of Common Stock ---------------------------------------------------------- The Corporate and Investment Banking business group and the Corporate Investments business group of Deutsche Bank AG hold as of February 26, 2010, 2,878,815 shares or roughly 4.61% of the common stock of Blockbuster Inc. About Blockbuster Inc. Dallas-based Blockbuster Inc. (NYSE: BBI, BBI.B) is a global provider of rental and retail movie and game entertainment. The Company provides its customers with convenient access to media entertainment anywhere and any way they want it -- whether in- store, by-mail, through vending and kiosks or digital download. With a highly recognized brand name and a library of over 125,000 movie and game titles, Blockbuster leverages its multi-channel presence to further build upon its leadership position in the media entertainment industry and to best serve the two million daily global customers and over 50 million annual global customers. The Company may be accessed worldwide at http://www.blockbuster.com/ Adverse Going Concern Opinion Anticipated The Company expects to file its Annual Report on Form 10-K for fiscal 2009 with the Securities and Exchange Commission on or before March 19, 2010. Management anticipates the report of the Company's independent registered public accounting firm relative to the Company's 2009 consolidated financial statements will contain an explanatory paragraph indicating that substantial doubt exists with respect to the Company's ability to continue as a going concern. The Company's independent public accountants have advised management that such an opinion will be related to the risk that the Company will have a low level of liquidity, particularly as a result of decreased cash from operations. As the Company noted, it intends to explore strategic alternatives, one or more which could improve its liquidity. As reported by the Troubled Company Reporter on March 4, 2010, Moody's Investors Service downgraded Blockbuster's long term ratings, including its Probability of Default Rating and its Corporate Family Rating to Caa3 from Caa1. The outlook is negative. The speculative grade liquidity rating remains SGL-3. "The Caa3 Probability of Default Rating reflects the significant increase in the likelihood of a transaction Moody's would consider a distressed exchange and hence a default" said Maggie Taylor, Vice President and Senior Credit Officer at Moody's. "This is given Blockbuster's stated desire to pursue a transaction which would strengthen its capital structure, which when given its weak financial performance, may well result in it making an offer to exchange some of its debt at a material discount to par," Ms. Taylor added. As reported by the TCR on September 18, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Blockbuster to 'B-' from 'CCC'. The outlook is stable. BLOSSOM VALLEY: Wants to Use Prepetition Lenders' Cash Collateral ----------------------------------------------------------------- Debtors Blossom Valley Investors, Inc., and Pear Avenue Investors LLC ask the U.S. Bankruptcy Court for the Northern District of California for authorization to: -- obtain financing from their prepetition lenders on a senior secured basis; -- use the prepetition lenders' cash collateral; and -- grant adequate protection to the prepetition lenders with respect to the real estate development projects known as Messina Gardens and Oak Knoll. The Debtors require access to additional working capital to fund their day-to-day operations associated with the Messina Gardens and Oak Knoll projects during the pendency of the Chapter 11 cases. Messina Gardens Cash Collateral/Postpetition Financing BOW agreed to extend $3,481,126 postpetition financing to the Debtors pursuant to the terms of the Debtors' prepetition loan from BOW for the Messina Gardens project. BOW also consented to the Debtors' access to the cash collateral generated from the sale of homes at the Messina Gardens project, in which BOW holds a security interest prepetition, in order to finish construction of the partially-completed homes at that property. The Messina cash collateral and financing will expire on September 30, 2010, or the earlier termination date. The Debtors' balance obligations under the Messina Financing will bear interest at the rate of 26 LIBOR + 500 basis points. As adequate protection for the Debtors' use of the Messina cash collateral and consideration for the Messina Financing, the Debtors propose to grant BOW: (i) a senior in priority postpetition lien on BOW's prepetition collateral; (ii) a new first-position postpetition lien in Lot Nos. 71 and 72 of the Messina Gardens property (not previously subject to BOW's lien) and the proceeds thereof acquired postpetition; and (iii) a new deed of trust on the Oak Knoll Property and the proceeds thereof, junior only to the existing deed of trust in favor of US Bank and a senior lien to be granted to BOW pursuant to the Oak Knoll Financing. In addition, the Debtors propose to grant BOW a super-priority administrative expense claim. A forbearance fee of 0.25% of the balance owed BOW will be added to the amount owed and paid when the prepetition loan from BOW is paid. Oak Knoll Cash Collateral - Postpetition Financing BOW will extend postpetition financing to the Debtors, on a non- revolving and revolving basis, in the aggregate amount of $4,725,000. The Oak Knoll Financing will consist of two loans: (i) the $1,125,000 non-revolving A&D Loan will be used for site work improvements on 25 partially finished lots at Oak Knoll; and (ii) the $3,600,000 revolving construction loan will be used for vertical construction of the 25 homes at Oak Knoll. The Debtor will grant BOW a priming lien with respect to all of the property of the Debtor relating to Oak Knoll, and a super- priority administrative claim over any and all other administrative expenses. As adequate protection for the use of the Oak Knoll cash collateral, the Debtor will provide US Bank, holders of prepetition security interest relating to Oak Knoll project, with an additional lien in the Debtors' postpetition assets (but which postpetition lien will be junior to BOW's liens granted under the Oak Knoll Financing). The Oak Knoll cash collateral and financing will be for 24 months from the effective date of loan documentation, which will permit the Debtor to complete the build-out and sales of the specified portions of the Oak Knoll property and maximize the value of the Debtors' assets relating to that project. The Debtors' balance on the obligations under the Oak Knoll Financing will bear interest at the rate of Prime + 1.0%, with a floor of 6.0%, and a maturity date of 24 months from the date the financing is extended. To secure the Oak Knoll Financing, the Debtors will grant BOW a priming lien with respect to all of the property of the Debtor relating to Oak Knoll, and a superpriority administrative claim over any and all other administrative expenses. The Debtors propose a hearing on their request for cash collateral use and DIP financing on March 24, 2010, at 10:30 a.m. before the Hon. Roger L. Efremsky in Courtroom 3099, 280 South First Street, San Jose, California. Objections, if any are due 7 days prior to the hearing. San Jose, California-based Blossom Valley Investors, Inc., and Pear Avenue Investors LLC filed for Chapter 11 on Sept. 10, 2009 (Bankr. N.D. Calif. Case Nos. 09-57669 and 09-57670). Joseph R. Dunn, Esq., and Jeffry A. Davis, Esq., at Mintz Levin Cohn Ferris Glovsky Popeo PC, represent the Debtors in their restructuring efforts. In its petition, Blossom Valley listed assets and debts both ranging from $10,000,001 to $50,000,000. BOMBARDIER INC: Moody's Withdraws 'Ba2' Rating on US$1 Bil. Notes ----------------------------------------------------------------- Moody's Investors Service has withdrawn the Ba2 rating assigned to Bombardier Inc.'s previously planned US$1.0 billion senior unsecured notes offering. The rating was assigned on February 8, 2010, when the company announced the commencement of a tender offer to purchase up to US$550 million aggregate amount of its 6.75% Notes due 2012, 6.30% Notes due 2014, and Floating Rate Senior Notes due 2013 using proceeds from the planned US$1.0 billion senior unsecured notes offering. The withdrawal of the rating follows Bombardier's announced termination of the proposed notes offering and tender offer due to unfavorable debt market conditions. Moody's last rating action was on February 8, 2010, at which time Moody's assigned a Ba2 rating to Bombardier's planned US$1.0 billion senior unsecured notes offering and affirmed all other ratings of the company. Bombardier Inc., headquartered in Montreal, Quebec, is a diversified manufacturing company involved in the aerospace and mass transit markets. BONES THEATRE: Files for Chapter 11 Bankruptcy in Indiana --------------------------------------------------------- Bones Theatre of Columbia City filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Indiana, according to a report by Paul Wyche at The Journal Gazette. Privately held Bones Theatre, which operates a theatre house in Columbia City, listed assets of at least $500,000 and debts of more than $1 million. The Company expects to emerge from bankruptcy by fall. The Journal Gazette says that according to a person with knowledge of the filing, patrons can expect no change in services -- including honoring gift cards -- as the private company goes through bankruptcy. BONEYARD LLC: Wants to Borrow Money from Principal to Pay Fees -------------------------------------------------------------- The Hon. Erithe A. Smith of the U.S. Bankruptcy Court for the Central District of California will consider at a hearing on April 6, 2010, at 10:30 a.m., Boneyard, LLC's request to obtain up to $25,000 unsecured credit from Le Plastrier Management Company, Inc. Le Plastrier is the Debtor's principal. The hearing will be held at Courtroom 5A, 411 W Fourth St., Santa Ana, California. Objections, if any are due 14 days prior to the hearing date. The Debtor relates that it has no unencumbered funds with which to pay the U.S. Trustee's fees, liability insurance premiums or expenses to preserve the property. The loan will be on an unsecured, administrative basis, and interest free. Irvine, California-based Boneyard, LLC, is a limited liability company whose sole member is Le Plastrier Management Co., Inc. Boneyard filed for Chapter 11 bankruptcy protection on Dec. 14, 2009 (Bankr. C.D. Calif. Case No. 09-23930). Richard W. Esterkin, Esq., who has an office in Los Angeles, California, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BRE PROPERTIES: Fitch Downgrades Preferred Stock Rating to 'BB' --------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating and outstanding obligation ratings of BRE Properties, Inc.: -- IDR to 'BBB-' from 'BBB'; -- Unsecured revolving credit facility to 'BBB-' from 'BBB'; -- Senior unsecured notes to 'BBB-' from 'BBB'; -- Convertible senior notes to 'BBB-' from 'BBB'; -- Preferred stock to 'BB' from 'BB+'. The Rating Outlook is Stable. The downgrades reflect Fitch's expectation that reductions in same property net operating income due to challenging market conditions will result in BRE's leverage, defined as net debt to recurring operating EBITDA, approaching 9.0 times (x) from its current level of 8.4x as of Dec. 31, 2009, absent meaningful deleveraging transactions. Fitch believes this expected leverage level, in addition to the company's significant geographic concentration (82% of same store NOI in 2009 was derived from the state of California), presents a credit profile consistent with a 'BBB-' IDR. In 2009, same-store NOI declined 6.5% for the year ended Dec. 31, 2009 and Fitch expects a similar decline in 2010. Additionally, while BRE has significantly reduced its development activities to represent 5% of total undepreciated assets as of Dec. 31, 2009, down from 13.4% as of Dec. 31, 2008, Fitch anticipates that competitive leasing conditions will cause BRE's properties under development and under lease-up to only provide modest incremental contribution to company NOI over the next 12 to 18 months. BRE has limited debt maturities through 2014, with the exception of 2012, when the company has $371.3 million of convertible senior notes that could potentially be put to the company. In addition, the company's unsecured revolving credit facility, with approximately $288 million drawn as of Dec. 31, 2009, also matures in 2012, resulting in a degree of debt maturity concentration assuming BRE does not meaningfully reduce amounts outstanding. Factors supporting the ratings include BRE's strong liquidity, solid unencumbered asset coverage of unsecured debt, and solid fixed charge coverage ratios. For the period Jan. 1, 2010 through Dec. 31, 2011, BRE's sources of liquidity (unrestricted cash, availability under BRE's unsecured revolving credit facility and expected retained cash flows from operating activities after dividends) are expected to cover uses of liquidity (debt maturities and recurring capital expenditures) by 3.4x. Additionally, BRE has solid asset coverage of unsecured debt. Fitch calculates that BRE's ratio of unencumbered operating real estate, valued at a blended 7.5% capitalization rate, to net unsecured debt was 2.0x and 1.6x as of Dec. 31, 2009 and Dec. 31, 2008, respectively. Although BRE encumbered assets in 2009, the amount of unsecured debt declined, improving its unencumbered asset to unsecured debt ratio. Cash flow coverage metrics are solid. For the 12 months ended Dec. 31, 2009, fixed-charge coverage (defined as recurring operating EBITDA less capital expenditures, divided by total interest incurred and preferred stock dividends) was 2.0x, improved from 1.8x in 2008. Additionally, BRE's risk-adjusted capital ratio improved to 1.1x as of Dec. 31, 2009 at a 'BBB' rating category stress level, up from 0.9x as of Dec. 31, 2008 due to the increase in the company's equity base. In addition, BRE's ratios under its unsecured revolving credit facility and senior unsecured note financial covenants do not hinder its financial flexibility. BRE's preferred stock has a cumulative coupon deferral option exercisable by BRE and thus has readily triggered loss absorption provisions in a going concern (i.e., without triggering a general corporate default and without effect on senior obligations). The Stable Outlook reflects BRE's strong liquidity position, expected stable fixed charge coverage and limited future development expenditures over the next 12 to 24 months. Guidelines For Further Rating Actions These factors may have a positive impact on BRE's ratings and/or Outlook: -- Leverage, defined as net debt to recurring operating EBITDA, sustaining below 8.0x for several quarters (leverage was 8.4x as of Dec. 31, 2009); -- Fixed charge coverage sustaining above 2.0x for several quarters (coverage was 2.0x for the year ended Dec. 31, 2009). These factors may have a negative impact on BRE's ratings: -- Leverage sustaining above 9.5x; -- Fixed charge coverage sustaining below 1.5x. -- A liquidity shortfall (liquidity coverage was 3.4x for the period Jan. 1, 2010 - Dec. 31, 2011). BUCKEYE TECHNOLOGIES: S&P Raises Corporate Credit Rating to 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Memphis, Tennessee-based Buckeye Technologies Inc. to 'BB' from 'BB-'. At the same time, S&P removed all ratings from CreditWatch, where they were placed with positive implications on Feb. 25, 2010. The rating outlook is positive. S&P also raised the issue-level rating on the company's senior unsecured notes due 2013 to 'BB' (the same as the corporate credit rating) from 'BB-'. The recovery rating on this debt remains at '4', indicating S&P's expectation for average (30% to 50%) recovery in the event of a payment default. "The upgrade reflects the significant reduction in Buckeye's adjusted debt -- to around $315 million at Dec. 31, 2009, from about $420 million at Dec. 31, 2008 -- through the combination of internally generated cash flow and funds received from alternative-fuel-tax-credits," said Standard & Poor's credit analyst Andy Sookram. For the 12 months ended Dec. 31, 2009, free operating cash flow increased to around $60 million from about $10 million for the previous 12 month period in 2008. The company achieved this through lower capital spending, its significant sales into nondiscretionary markets (such as food casings, baby diapers, wipes, and cigarette filters), and lower input costs. The positive rating outlook reflects S&P's view that Buckeye will generate higher earnings and cash flow in the intermediate term, leading to improved credit measures that S&P thinks that are in line with a higher rating. S&P's ratings incorporate the expectation that EBITDA will increase to about $125 million for the fiscal year ending June 30, 2011, and the company will continue to use free cash flow to reduce debt, resulting in adjusted debt to EBITDA of around 2x and interest coverage of nearly 6x. A ratings upgrade could occur if S&P believes Buckeye is willing to maintain a financial risk profile consistent with a higher rating, including debt to EBITDA in line with its expectation of around 2x and good liquidity. S&P could revise the rating outlook to stable if EBITDA were to decline by about 20% from current levels. S&P thinks such a decrease in EBITDA could occur if unfavorable economic conditions causes a significant drop in demand; if the industry fails to prudently manage capacity additions in the fluff pulp and nonwovens segment and the current pricing momentum is disrupted; or if input costs increase above S&P's current expectations. If these scenarios were to occur, S&P thinks debt to EBITDA would increase to around 3.5x on a sustained basis, which S&P thinks would be appropriate for the 'BB' rating given the company's fair business risk profile. CARBURTON PROPERTIES: Nat'l Servicing Wants Case Dismissed ---------------------------------------------------------- National Servicing and Administration, LLC, has asked the U.S. Bankruptcy Court for the District of Delaware to (i) dismiss the Chapter 11 case of Carburton Properties 8, LLC, or in the alternative, (ii) grant NSA relief from automatic stay so that a sale of the Orchards Village Senior Living Community can be completed. NSA claims that the Debtor intends "to use its Chapter 11 proceeding to frustrate the orders of the U.S. Bankruptcy Court for the District of Oregon and the Superior Court of Washington for Clark County, which, if permitted, would severely prejudice the rights of NSA and other affected parties in a situation where there is no equity in the subject property and the highest and best use of the property has already been determined to be the immediate sale of the property as opposed to use for any other type of reorganization." Orchards Village Investments, LLC, filed for Chapter 11 bankruptcy protection on February 13, 2009, in the U.S. Bankruptcy Court for the District of Oregon. According to NSA, the Hon. Randall L. Dunn of the U.S. Bankruptcy Court for the District of Oregon confirmed a Chapter 11 plan approving the sale of Carburton's modest, fractional interest in the land underlying the Orchards Village Senior Living Community on January 25, 2010. Carburton is a tenant in common owner of a fractional interest in the real property underlying the Orchards Village Senior Assisted Living Community in Vancouver, Washington. NSA says that the confirmed Plan was in the process of implementation when, on March 3, 2010, Carburton filed for Chapter 11 bankruptcy protection in order to disrupt the implementation of the Plan, and to destroy, frustrate, or otherwise delay an arms' length sale of the Orchards pursuant to the Plan, NSA states. NSA is represented by Saul Ewing LLP and Cairncross & Hempelmann, P.S. About Carburton Properties Portland, Oregon-based Carburton Properties 8, LLC, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. D. Delaware Case No. 10-10762). Robert K. Beste, Jr., Esq., at Cohen Seglias Pallas Greenhall & Furman, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. CARBURTON PROPERTIES: Taps Cohen Seglias as Bankruptcy Counsel -------------------------------------------------------------- Carburton Properties 8, LLC, has asked for permission from the U.S. Bankruptcy Court for the District of Delaware to employ Cohen, Seglias, Pallas, Greenhall & Furman, P.C., as bankruptcy counsel. Cohen Seglias will: a. advise the Debtor with respect to its duties and powers in the Debtor's bankruptcy case; b. assist the Debtor in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business and the desirability of the continuance of the business, and any other matter relevant to the case or to the formulation of a plan; c. participate with the Debtor in the formulation of a plan; and d. perform other legal services as may be required and in the interests of creditors. Cohen Seglias will be paid based on the hourly rates of its personnel: Partners $300-$400 Associate Attorneys $185-$265 Robert K. Beste, Jr., a partner at Cohen Seglias, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Portland, Oregon-based Carburton Properties 8, LLC, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. D. Delaware Case No. 10-10762). The Company estimated its assets and debts at $10,000,001 to $50,000,000 as of the Petition Date. CCS MEDIA: Court Confirms Reorganization Plan --------------------------------------------- CCS Medical, Inc., disclosed that the United States Bankruptcy Court for the District of Delaware has confirmed the Company's Plan of Reorganization. The Plan as confirmed has the support of a majority of the Company's First Lien and Second Lien Lenders. The Company currently expects to emerge from Chapter 11 within the next several weeks. "The Court's confirmation of our Plan is a major milestone for CCS Medical and we are very pleased with this important step forward in our restructuring process," said John Miclot, Chief Executive Officer of CCS Medical. "The fundamentals of our business are solid, and our success in significantly reducing our debt and strengthening our balance sheet will allow us to invest in the business to better serve our customers and their patients. We are proud of all that we have accomplished and we believe that the Plan confirmed by the Court provides the foundation for CCS Medical to emerge from Chapter 11 as a stronger, more competitive company." "CCS Medical continues to experience high demand for our products and services, and we remain focused on meeting and exceeding the needs of our customers. We are grateful for the strong support of our employees, customers and suppliers throughout this process and we appreciate the critical role that each of these constituencies has played in our successful restructuring," added Steve Saft, Chief Administrative Officer and Chief Financial Officer. Under the Plan, the Company will reduce its outstanding debt to approximately $200 million from approximately $522 million. As part of the Confirmation, the Company's First Lien Lenders will exchange their claims for 100% of the new equity in the Company and new debt. The majority of the Company's trade vendors will continue to be paid in full. About CCS Medical Founded in 1994, CCS Medical Inc. -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CENTAUR LLC: Organizational Meeting to Form Panel on March 17 ------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on March 17, 2009, at 1:30 p.m. in the bankruptcy case of Centaur, LLC, et al. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 5209, Wilmington, DE 19801. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Centaur, LLC, aka Centaur Indiana, LLC -- http://www.centaurgaming.net/-- is an Indianapolis, Indiana-based company involved in the development and operation of entertainment venues focused on horse racing and gaming. The Company filed for Chapter 11 bankruptcy protection on March 6, 2010 (Bankr. D. Delaware Case No. 10-10799). Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, assists the Company in its restructuring effort. The Company estimated its assets and debts at $500,000,001 to $1,000,000,000 as of the Petition Date. CHARTER COMMUNICATIONS: Moody's Assigns 'Ba2' Amended Loan Rating ----------------------------------------------------------------- Moody's Investors Service assigned provisional ratings of (P) Ba2 to Charter Communications Operating LLC's amended and restated senior secured credit facilities. While terms and conditions of the restated credit facilities are expected to remain largely unchanged, the amendment will allow CCO to extend maturities on up to $7.7 billion of its existing bank debt (dependent upon lender participation) and obtain revolving credit commitments which had previously been eliminated upon the company's filing of Chapter 11 Bankruptcy protection last year. CCO is an indirect wholly owned subsidiary of intermediate holding company CCH II, which is owned by Charter Communications, Inc. Depending on lender consent, the proposed transaction will term out a portion of CCO's $6.4 billion (remaining unamortized amount) term loan due March 6, 2014 (subject to a stipulated $2 billion minimum participation), extend the maturity on up to $1.3 billion of its revolving credit facility due March 6, 2013 (which currently does not revolve) and provide for the extended portion to revolve. Participating lenders are expected to receive both increased pricing and an amendment fee. Under the terms of the amendment, consenting lenders will essentially convert CCO's existing term loan facility into new "Term C Loans" due September 6, 2016, and outstanding revolver commitments into "New Revolving Commitments" due March 6, 2015. The new revolver commitments will be available for revolving loans, letters of credit and swingline loans on a fully revolving basis. Maturity and pricing will remain unchanged for CCO's incremental term loan facility (due March 6, 2014) and those lenders who do not participate in the proposed exchange. As total term debt remains unchanged, the term loan extension will have no impact on leverage and only a modest impact on free cash flow generation given increased pricing. Following the completion of the proposed transaction, Moody's anticipates Charter will apply a substantial portion of its cash-on-hand ($709 million at December 31, 2009) to repay new revolver borrowings in order to eliminate the company's negative carry. Over the rating horizon, Moody's anticipate the company will generate positive free cash flow of at least $400 million annually, leading to some modest organic deleveraging of the balance sheet over time, prior to further requisite refinancing of maturing debt obligations. Moody's has assigned these ratings: Issuer - Charter Communications Operating, LLC * New senior secured credit facilities -- Assigned (P)Ba2 (LGD 2, 28%) The last rating action was on November 30, 2009, when Moody's assigned a Ba3 Corporate Family Rating and a Ba3 Probability of Default Rating to Charter's indirect intermediate holding company CCH II, LLC following the company's emergence from bankruptcy. Charter Communications, Inc. is one of the largest domestic cable multiple system operators serving approximately 4.8 million basic subscribers and generating annual revenues approximating $6.8 billion. The company maintains its headquarters in St. Louis, Missouri. CHEMTURA CORP: Court OKs Sale of PVC Additives Biz. for $16.2MM --------------------------------------------------------------- After conducting an auction on February 22, 2010, Judge Robert Gerber approved the sale of Chemtura Corp.'s global PVC Additives business to Artek Aterian Holding Company LLC, a Delaware limited liability company, and its sponsors, Aterian Investment Partners Distressed Opportunities, LP, a Delaware limited partnership and Artek Surfin Chemicals Ltd., an Indian private limited company for, among other things, cash consideration, amounting to $16,200,000, and the assumption by Artek of certain liabilities that include certain pension obligations and environmental liabilities. A copy of the Asset Purchase Agreement the Debtors entered into with Artek is available for free at: http://bankrupt.com/misc/ChemtArtkAPA.pdf Before the Court entered its order, Oracle USA, Inc. filed an objection regarding an assumption and assignment of its contract in connection with the Sale. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Plan Exclusivity Extended Until July 11 ------------------------------------------------------ Bankruptcy Judge Robert Gerber granted Chemtura Corporation and its debtor affiliates' request for a further extension of their Exclusive Plan Filing Period through and including June 11, 2010, and their Exclusive Solicitation Period through and including August 10, 2010. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, contends that the size and complexity of the Debtors' cases alone warrants extension of the Exclusive Periods. He notes that the Debtors' Chapter 11 cases involve 27 debtors with assets and operations located in 12 states around the United States, and the Debtors have more than $1 billion in prepetition funded debt on a consolidated basis. Mr. Cieri reports that the Debtors have been making extraordinary efforts to analyze their contracts; review and analyze more than 14,000 proofs of claim; secure Court approval of a reduction of certain retiree obligations; perform the valuation work required for the Chapter 11 process; and satisfy the information requests of numerous constituents including the Official Committee of Unsecured Creditors, the Official Committee of Equity Holders, and the prepetition lenders and their advisors. The Debtors have also been busy with implementing their revised business plan and have made significant strides in improving their business, Mr. Cieri points out. He tells the Court, however, that although the Debtors are confident that the business plan will provide the foundation for a viable Chapter 11 plan, the specifics and implementation of the plan are still in development and will undoubtedly be the subject of further discussion and diligence. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Proposes 2010 Employee Incentive Plan ---------------------------------------------------- Chemtura Corporation and its debtor affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to implement their Management Incentive Plan and Emergence Incentive Plan for the year 2010. The 2010 MIP and the 2010 EIP are collectively referred to as the 2010 Key Employee Incentive Plan. The 2010 KEIP will govern the compensation available to certain of the Debtors' management- level employees for the 2010 calendar year and upon the Debtors' emergence from Chapter 11, Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, relates. In the ordinary course of business, the Debtors established a compensation plan for management-level employees, which include three components: a base salary, an annual incentive plan providing compensation for meeting or exceeding performance targets during a particular compensation year, and a longer term incentive plan designed to reward the senior management team for long-term improvements in equity value. However, the specific design of the Prepetition Incentive Program suffered from several limitations and failed to deliver the intended results. Specifically, unexpected and unprecedented challenges in the credit markets and the global economy meant that yearly bonus targets were difficult for many managers to achieve, leading to limited payouts at the end of the bonus cycle. After the Petition Date, the Debtors' management developed a better incentive program for 2009, which consisted of two parts: a management incentive plan and an emergence incentive plan, which applies to the 12-month period preceding emergence from bankruptcy. The 2009 MIP was structured based on an assumption of a Chapter 11 emergence in the first quarter of 2010. The 2009 KEIP proved to be highly successful in attracting talented professionals to the Debtors' business and motivating them to achieve measurable success in their positions, Mr. Cieri points out. However, he notes, it was not a "lay-up" based on targets that were easily achievable. The Debtors tell the Court that they wish to build on their success in 2009 and encourage the business units that did not meet their plan targets in 2009 to redouble their efforts in 2010, by implementing a new incentive plan to cover the 2010 period. Accordingly, the Debtors formulated the 2010 KEIP with the assistance of their advisors and attorneys, including Alvarez & Marsal North America LLC, Lazard Freres & Co. LLC and Kirkland & Ellis LLP, and also worked with an outside compensation specialist consultant, Matthew Turner of Pearl Meyer & Partners. The Debtors seek to follow the basic structure of the 2009 KEIP for the 2010 KEIP. The 2010 MIP will be structured to incentivize management employees toward optimal performance during the 2010 compensation period. The 2010 EIP will constitute a longer range program designed to fill an "incentive gap" that would otherwise result if the Debtors did not provide industry-standard long-term incentives during the remaining term of the Chapter 11 cases. 2010 Management Incentive Plan The proposed 2010 MIP would be available to 310 of the Debtors' management-level employees. The metrics used for the 2010 MIP are the same as those used for the 2009 MIP, but the targets are higher, according to Mr. Cieri. The 2010 MIP emphasizes as a performance target a metric based on earnings before interest, taxes, depreciation and amortization on a consolidated or business unit basis for the 2010 calendar year, while also maintaining focus on other working capital variables. The "target" level for the 2010 MIP is set at a consolidated EBITDA level of $300 million, or, put differently, 25% greater than the EBITDA covenant required by the terms of the Debtors' DIP Facility. The specific metrics of the underlying performance targets under the 2010 MIP are different for the four divisional groupings among the MIP participants: (a) Seven eligible executives, including the chief executive officer, the chief financial officer, the senior vice president and general counsel, the senior vice president of human resources, and three vice presidents; (b) The Executive Vice President of the Engineered Products division and the Executive Vice President of the Performance Products division; (c) Managers at each of the Debtors' separate business units, including a total of 172 eligible participants; and (d) Managers responsible for the Debtors' business operations at the functional level, including a total of 129 eligible participants. The applicable minimum threshold of Consolidated EBITDA or Business Unit EBITDA must be achieved in order for any bonus to be payable to eligible participants under the proposed 2010 MIP. Grants under the 2010 MIP will not be paid until early 2011, after 2010 financials are available and the Debtors' management is able to analyze 2010 performance. Moreover, the grants will only be payable to persons who continue to be employed by the Debtors at that time. The total targeted payout pool for the 2010 MIP is $12.5 million but, because the payment amounts are based on actual achievements that will create value for the Debtors, the payout amount can be said to be effectively self-funded, Mr. Cieri says. 2010 Employee Incentive Plan The 2010 EIP will apply to certain of the Debtors' management- level employees as well as qualifying new employees. The number of employees included in the EIP and the size of the grant pool will be dependent on the achievement of specific EBITDA goals, but will be approximately 150 employees. Like the 2009 EIP, the 2010 EIP provides that EIP grants will be made only upon successful emergence from Chapter 11 and awards made available to eligible mangers will be subject to time-based vesting requirements and, therefore, will be made in restricted stock, stock options or cash at the sole discretion of the board of directors of the Reorganized Debtors. The value of the incentive pool that will be made available to managers at the time of emergence from Chapter 11 as a result of the 2010 EIP is linked to specific EBITDA levels for the company, with a maximum 2010 EIP Grant Pool, totaling $19 million, at an EBITDA level of $345 million. A summary of the EBITDA levels associated with each 2010 EIP Grant Pool is: Overview of Emergence Incentive Plan Metrics (in millions) --------------------------------------------------------- 2010 EBITDA $260 $280 $300 $320 $345 2010 EIP $7 $9 $11.7 $15.4 $19 Grant Pool 2010 % of 2.7 3.2 3.9 4.8 5.5 EBITDA Shared Additionally, the 2010 EIP includes an equity grant pool of $750,000 that the Debtors can use in their discretion to allow for the participation of new hires. Mr. Cieri says that to date, the Debtors have utilized only $285,000 of the $750,000 allocated as part of the 2009 EIP and will carry forward the unused balance to 2010. The EBITDA levels established for the 2010 EIP Grant Pool significantly exceed those set in 2009, demonstrating the Debtors' focus on providing managers with increased challenge and incentive, Mr. Cieri tells the Court. He further adds that the grant pool available pursuant to the 2010 EIP is keyed to achieving EBITDA levels that are significantly higher than the $245 million of consolidated EBITDA required through the end of February 2011 by the terms of the DIP Facility. Support from Committees Under the Incentive Plan Motion, the Debtors note that they consulted with the Official Committee of Unsecured Creditors and the Official Committee of Equity Holders in formulating the 2010 KEIP. According to the Debtors, advisors to both Committees are supportive of the 2010 KEIP, although the Equity Committee has asked the Debtors to consider an additional compensation component for certain senior executives that would be based on a metric tied to, among other things, equity recovery. In a subsequent filing, however, the Debtors relay that they made an error regarding their statement that the Equity Committee is supportive of the 2010 KEIP. Mr. Cieri says representatives of the Equity Committee have informed the Debtors that the Equity Committee does not support the 2010 KEIP. In a separate filing, the Equity Committee clarifies that it does not object to the Debtors' request but believes that the request "does not go far enough." Jay M. Goffman, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York, tells the Court that the Equity Committee is supportive of the proposed Incentive Plan, however, it also believes the 2010 EIP does not sufficiently accomplish the set objective and should be enhanced to meaningfully incentivize the Debtors' key management to maximize value for all stakeholders, including equity security holders. Accordingly, the Equity Committee proposes that the 2010 KEIP be supplemented to provide for enhanced awards to certain participants based upon a metric tied to recoveries on claims and the achievement of value for existing shareholders. "To be clear, the Equity Committee has not proposed anything that would preclude participants in the 2010 EIP from receiving bonuses in the event that the EBITDA targets that the Debtors have established are met. Instead, the Equity Committee has proposed that certain participants be entitled to an enhanced award that is tied to returns to equity security holders and the satisfaction of all claims," Mr. Goffman points out. Mr. Goffman assures the Court that the Equity Committee stands ready to work with the Debtors to improve the 2010 KEIP in a manner that will serve the interests of all stakeholders and will not cost creditors anything. USW Objects The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union argues that the 2010 KEIP is nothing more than a "dressed-up" bonus program for executive and managerial employees, including nine known "insiders," when, at the same time, the Debtors seek to substantially reduce or eliminate retiree medical and life insurance benefits to retirees. James L. Linsey, Esq., at Cohen Weiss and Simon LLP, in New York contends that the Debtors' request should be denied because the KEIP "is anything but an ordinary course transaction." He emphasizes that the proposed bonuses under the 2010 KEIP constitute retention payments prohibited by Section 503(c)(1) of the Bankruptcy Code. In addition, pursuant to Section 503(c)(3), Mr. Linsey asserts that the 2010 KEIP, to the extent it applies to insiders as well as other officers and managers of the Debtors, should be denied because the bonus payments cannot be justified by the facts and circumstances of the case. For these reasons, the USW asks the Court to deny the Debtors' request. Debtors Answer USW In response to the USW, Mr. Cieri reiterates that the 2010 KEIP program is virtually identical in terms of structure to the 2009 KEIP program. He notes that the process the Debtors followed in developing the 2010 KEIP was the same as that used for the 2009 KEIP, except that the Debtors consulted not only with the Creditors' Committee but the newly appointed Equity Committee as well. Both Committees support the 2010 KEIP, though the Equity Committee wishes to add an additional compensation component that would be payable in certain circumstances, Mr. Cieri says. He adds that the U.S. Trustee, which objected to the 2009 KEIP, has not objected to the 2010 KEIP. Only the USW has filed an objection. Mr. Cieri contends that the grounds on which the USW has objected -- that the KEIP (i) violates Section 503(c) of the Bankruptcy Code because it provides payments to insiders; (ii) is a retention plan in disguise; (iii) establishes "lay-up" targets; and (iv) is not consistent with industry practice or incentivizing employees -- are for the most part the same grounds the U.S. Trustee originally objected to the 2009 KEIP. Mr. Cieri notes that based on the presentation at the hearing for the 2009 KEIP Motion, the Court found that compensation program to have complied with all relevant portions of the Bankruptcy Code and to have constituted an appropriate exercise of business judgment. The Debtors maintain that they have provided ample evidence to support approval of the 2010 KEIP, specifically: -- The 2010 KEIP, which the Debtors developed through an extensive internal process and deliberation with advisors, the Committees, is an incentive-based plan that is tied to substantial performance metrics that, if satisfied, will inure to the benefit of all stakeholders in these Chapter 11 cases; and -- Implementing the 2010 KEIP is a sound exercise of the Debtors' business judgment because its benchmarks are challenging, it is consistent with the Debtors' ordinary course practice, it is comparable to similar compensation packages, it will incentivize the Debtors' employees to reach superior performance targets and the costs are reasonable. For these reasons, the Debtors ask the Court to overrule the USW's objection. Moreover, in separate filings, Alan Swiech, Chemtura Corporation's senior vice president of human resources, and Matthew Turner, managing director at Pearl Meyer & Partners, submitted declarations in support of the Debtors' 2010 KEIP Motions. Mr. Swiech says he and other members of the management team worked closely with PM&P to ensure that (1) under the KEIP, equity grants are tied to market-derived benchmarks linked to the company's performance at emergence, and (2) the KEIP is consistent with long term incentive plans that comprise typical incentive packages in the industry in which the Debtors' operate, and rewards the senior management team for long-term improvements in enterprise value. Mr. Turner relates that PM&P has concluded that any lack of a long-term incentive opportunity during the Debtors' Chapter 11 cases, which would result absent implementation of the 2010 KEIP, would cause a shortfall in total compensation as compared to the market. He notes that without long-term incentive opportunities comparable to the market, the Debtors likely would need to increase base pay to attract high-caliber talent. Mr. Turner adds that utilizing the benchmark numbers obtained through research and regression analysis, PM&P has provided the Debtors with appropriate and competitive annual compensation figures upon which an industry-comparable employee incentive compensation plan should be based. He assures the Court that the 2010 KEIP is consistent with that analysis and in line with competitive market levels. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: To Provide SIDF With Postpetition Guarantee ---------------------------------------------------------- Chemtura Corp. and its units sought and obtained the Court for authority to incur unsecured debt outside of the ordinary course of business as an administrative expense in the form of a guaranty of certain obligations of Gulf Stabilizers Industries, Limited, a joint venture based in Jubail, Saudi Arabia, which 49% is owned by Chemtura Europe GmbH, an indirect non-Debtor subsidiary of Debtor Chemtura Corporation. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, notes that GSI had net sales of approximately $42 million in 2009. GSI anticipates an increase in sales and a gain in market share within its market territory in the next several years. GSI has stand-alone sources of financing provided by Saudi American Bank and Saudi Industrial Development Fund. Specifically, GSI may borrow up to SAR26,250,000 pursuant to a credit agreement with SAMBA and may borrow up to SAR106,731,000 pursuant to a loan agreement with SIDF, according to Mr. Cieri. GSI has been using funds from the SIDF Facility to expand and modify a factory located in Jubail for the production of anti- oxidants and ultraviolet stabilizer products. In 2008, GSI began engineering work on additional 4,000 metric tons of capacity for the Jubail Facility. In March 2009, GSI expanded the Jubail Facility with a non-dust blend production line. Shortly thereafter, in order to keep ahead of growing demand for GSI's products within the Marketing Territory, GSI was required to invest in further capacity within the Jubail Facility. In the midst of GSI's expansion of the Jubail Facility, however, SIDF became concerned of Chemtura's ability to honor the Prepetition Guarantee because of these Chapter 11 cases and thus, suspended all disbursements under the SIDF Loan Agreement. Mr. Cieri notes that SIDF is currently holding approximately SAR11,600,000 in disbursements and has informed GSI that it will not make any further advances until it is satisfied that Chemtura will honor the Prepetition Guarantee during the course of its Chapter 11 case, if required to do so. "This situation is negatively impacting GSI's ability to fund the expansion of the Jubail Facility, which could adversely affect the AO/UV business operations and the Debtors' overall business plan if not corrected," Mr. Cieri says. In order to address SIDF's concerns, the Debtors engaged in negotiations with SIDF, pursuant to which SIDF has agreed to resume loan disbursements and release the undisbursed amount of SAR11,600,000 to GSI if Chemtura replaces the Prepetition Guarantee by a new Court-approved irrevocable and unconditional postpetition guarantee. Accordingly, the Debtors ask the Court for permission to enter into a Postpetition Guarantee for SIDF. A copy of the proposed Postpetition Guarantee is available for free at http://bankrupt.com/misc/ChemSaudiPostGty.pdf 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: New Chrysler Names Soave to Reintroduce Fiat Brand ---------------------------------------------------------------- Mike Ramsey at Bloomberg News reports that Chrysler Group LLC, the automaker controlled by Fiat SpA, said former Volkswagen AG executive Laura Soave will be in charge of reintroducing the Fiat brand to North America. The Fiat 500 will be sold at Chrysler dealerships with sales staff for the brand. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Maynards' $45.5-Mil. Offer Wins Ohio Plant Auction ---------------------------------------------------------------- netDockets reports that Old Carco LLC, formerly known as Chrysler LLC, has declared Maynards Industries (1991) Inc. as the winning bidder for its stamping plant in Twinsburg, Ohio. Maynards is offering $45.5 million for the assets, topping the $45 million final bid from Twinsburg Industrial Park LLC, the stalking horse bidder. Twinsburg Industrial Park was declared the back-up bidder. Twinsburg Industrial first offered $27.5 million for the assets in a deal announced in February. The Troubled Company Reporter ran a story on the stalking horse deal with Twinsburg Industrial on March 2, 2010. The TCR and Chrysler Bankruptcy News have reported that the Twinsburg Industrial stalking horse agreement requires Old Carco to pay Twinsburg Industrial a break-up fee amounting $600,000 or the amount of the net proceeds of an alternative transaction, not to exceed $600,000. The Break-up Fee will be payable as an administrative expense under Sections 503(b)(1) and 507(a)(2) of the Bankruptcy Code on the date of the closing, and out of the proceeds, of the applicable transaction. In no event will Twinsburg Industrial be entitled to payment of the Break-up Fee unless and until the closing of an Approved Alternative Transaction. According to Chrysler Bankruptcy News, Corinne Ball, Esq., at Jones Day, in New York, said the Debtors seek to sell: -- 11 parcels of real property totaling 195 acres located at 2000 East Aurora Road, Twinsburg, Summit County, Ohio together with all facilities (including a state-of-the- art stamping facility), buildings, fixtures and other improvements located thereon and certain ancillary rights related thereto; -- all intangible property pertaining thereto; and -- certain personality, trade fixtures and equipment located and/or used at the Real Property. The Property was pledged as collateral to secure the Debtors' obligations under the Amended and Restated First Lien Credit Agreement among Carco Intermediate Holdco II LLC, Old Carco, the lender parties thereto and JPMorgan Chase Bank, N.A., as the agent to the First Lien Lenders who hold the first priority lien on all of the Property, subject to certain permitted liens. The Court will convene a hearing today to consider approval of the Maynards deal. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CINCINNATI BELL: Moody's Assigns 'B2' Rating on $400 Mil. Notes --------------------------------------------------------------- Moody's Investors Service has assigned a B2 rating to Cincinnati Bell Inc.'s proposed $400 million senior unsecured notes offering, to be issued under its shelf registration. The company expects to use the net proceeds to redeem $375 million of the company's outstanding 8 3/8% Senior Subordinated Notes due 2014 and to pay accrued interest and call premium. Moody's has taken these rating actions: Issuer: Cincinnati Bell Inc. Assignments: Issuer: Cincinnati Bell Inc. -- US$400M Senior Subordinated Regular Bond/Debenture, Assigned B2, LGD5 - 89% The Company's Ba3 CFR reflects its solid market position as an incumbent residential telecommunications provider and the revenue diversification it derives from its wireless network and business customer base. At the same time, CBB has relatively high leverage and modest free cash flow in relation to total debt. Moody's anticipates that downward pressure on the Company's revenue will persist due to continuing access line losses in CBB's incumbent wireline territories and intense competition in wireless segment. Together with share repurchases, the Company's capital expenditures in its wireless and technology solutions segments will constrain free cash flow generation over the next two to three years, which will affect its ability to materially delever. The stable outlook is based on Moody's expectations CBB will be able to maintain stable EBITDA levels by offsetting access line losses by increasing efficiencies in its incumbent wireline operations and by growing data and broadband revenues in its wireless segment. Moody's notes that the company has been addressing its debt maturities over the past two years, and is likely to take out more debt due in the intermediate term. As noted previously, the Ba3 rating on CBB's senior unsecured notes is close to the breakpoint between a Ba3 and B1 rating under Moody's Loss Given Default framework. However, the proposed senior subordinated offering preserves the recovery cushion provided to the senior unsecured debt holders, and provides additional support to the Ba3 rating of the senior unsecured notes. Moody's most recent rating action for CBB was on Septmeber 30, 2009 when Moody's assigned a Ba3 rating to the company's senior unsecured note issuance. Cincinnati Bell Inc., with headquarters in Cincinnati, Ohio, provides telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. CBB generated $1.3 Billion in revenues in 2009. CINCINNATI BELL: S&P Assigns 'B-' Rating on $400 Mil. Notes ----------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' issue-level and a '6' recovery ratings to Cincinnati-based Cincinnati Bell Inc.'s proposed $400 million senior subordinated notes due 2018. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery in the event of a payment default. The company will use the issue proceeds, together with cash on hand, to redeem the 8.375% senior subordinated notes due 2014 that are currently callable. Ratings are based on preliminary documentation and are subject to review of final documents. In addition, S&P affirmed all ratings on CBI, including the 'B+' corporate credit rating. The outlook is stable. "The ratings on CBI reflect the significant competitive pressures facing its core wireline business, which contributes the majority of consolidated revenues and EBITDA," said Standard & Poor's credit analyst Naveen Sarma. Additionally, CBI's wireless operations remain subject to material competition from both national wireless providers and regional competitors such as Leap Wireless International Inc. "Other credit risks," added Mr. Sarma, "include the company's single-market concentration, a highly leveraged financial profile, and limited discretionary cash flow after funding a new $150 million share repurchase program." Tempering factors include healthy EBITDA margins at the core wireline business despite ongoing access-line erosion, a diversified product offering which provides some customer stickiness, and growing contributions from its technology solutions business. CIRCUIT CITY: Proposes to Sell Kentucky Property to Nicklies ------------------------------------------------------------ Pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, and Rules 2002, 6004 and 6006 of the Federal Rules of Bank Procedure, Circuit City Stores Inc. and its units ask the Court: (a) for authority to enter into an agreement with Janet F. Nicklies for the sale of certain of Circuit City Stores, Inc.'s real property located at 5120 Dixie Highway, in Louisville, Kentucky, subject to higher or otherwise better bids; (b) to approve proposed bidding procedures; (c) to approve the Sale free and clear of all liens; and (d) to approve the assumption, assignment and sale of the lease associated with the Property free and clear of all Liens. The Property comprises approximately 4.02 acres in Louisville, Kentucky. In addition to having operated a retail store on the Property until the conclusion of its going-out-of-business sales, Circuit City leased and continues to lease a certain portion of the Property to EEG, Inc., successor by merger to The Hair Design School, Inc., pursuant to a lease dated June 23, 2003, as amended. The Sale of the Property would be subject to the Lease, which would be assigned to any purchaser of the Property, according to Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia. Since the Debtors' going-out-of-business sales were commenced, Circuit City, along with its real estate advisor, DJM Realty, LLC, has been marketing the Property and Lease. Various proposals to purchase the Property were received, and Circuit City determined that Ms. Nicklies' proposal was considerably higher or otherwise better than the alternate proposals received. On February 16, 2010, Circuit City entered into the Agreement with Ms. Nicklies. Pursuant to the Agreement, Circuit City, the Seller, has agreed to sell the Property and assign the Lease to the Purchaser, Ms. Nicklies, for $750,000, subject to higher or otherwise better proposals. According to Mr. Foley, the significant terms of the Agreement include: (a) Property to be acquired consists solely of the Seller's right, title and interest in and to the Property, together with all rights and appurtenances pertaining to the land; all buildings, structures and other improvements on the land; electrical, mechanical, air conditioning and other fixtures attached; and the Seller's interest as landlord under the Lease. The Lease will be assigned to the Purchaser. (b) Possession of the Property would be delivered "as is, where is." The Property would be sold free and clear of all liens, claims and encumbrances, except for certain permitted encumbrances. (c) The Sale would be subject to Court approval and competitive bidding pursuant to the bidding procedures. (d) The closing of the Sale will occur on (1) April 1, 2010, or (2) 10 days after entry of the Sale order. In the event Closing has not occurred by 6:00 p.m., Eastern Time, on April 1, 2010 -- Outside Date -- for any reason other than a default by the Purchaser, the Agreement, at the election of the Purchaser to be exercised no later than the Outside Date, will become null and void and the Purchaser will receive a refund of the Deposit. (e) The Agreement could be terminated before Closing: (1) by Purchaser, if an action is initiated to take any material portion of the Property by eminent domain proceedings; (2) by Purchaser, in the event of damage to the Property exceeding $70,000 occurring during the period after the date of the Agreement and before Closing, if Seller does not repair the damage; (3) by the Seller, in order for it to accept a higher or better offer for the Property pursuant to the Bidding Procedures; or (4) by either Purchaser or Seller if the Court has not entered the Sale Order on or before the Outside Date. In accordance with the Agreement, Ms. Nicklies has placed $130,000 into an escrow account with Chicago Title Insurance Company. If the Sale is consummated under the Agreement, the Deposit will be applied to the Purchase Price. Upon Closing of the Sale, or if the Agreement is terminated before to Closing because of the Purchaser's breach of the Agreement, the Seller would be entitled to the Deposit, Mr. Foley says. A full-text copy of the Agreement is available at no charge at http://bankrupt.com/misc/CC_LouisvilleNickliesAgrmnt021610.pdf Proposed Bidding Procedures To ensure the Seller receives the highest or otherwise best proposal for the Property, it will entertain alternate proposals. Parties have until March 9, 2010, at 4:00 p.m., Eastern Time, to make a bid and to submit an alternate proposal. All bids are to be sent to Circuit City, counsel to the Debtors, counsel to the Official Committee of Unsecured Creditors, and DJM Realty. If the Seller receives any "Qualified Bid," it would hold an auction on March 16, 2010, at 10:00 a.m., Eastern Time, telephonically or at the offices of Skadden, Arps, Slate, Meagher & Flom LLP. The Seller will advise the Purchaser and all other parties that submitted a Qualified Bid of the Auction. To be considered a "Qualified Bid" and a "Qualified Bidder", the person or entity submitting the bid would be required to submit an offer by the Bid Deadline that includes, among others, an executed copy of the Agreement, marked to show the amendments and modifications to the Agreement that the Qualified Bidder proposes, including modifications to the Purchase Price, which price must be at least $800,000. Following the Auction, if any, the Seller intends to proceed with a hearing to approve the Sale on March 18, 2010, at 10:00 a.m., Eastern Time. Objections to the Sale, if any, must be filed and served no later than 4:00 p.m., Eastern Time, on March 11, 2010. The Seller believes that the Sale and the Lease Assignment represent its best opportunity under the circumstances to maximize the value of the Property and the Lease. The Sale of the Property and the Assignment of the Lease are in the best interests of Circuit City's estate and stakeholders, Mr. Foley asserts. 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. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). CIRCUIT CITY: Wants Wachovia Directed to Deliver 401(k) Assets -------------------------------------------------------------- Circuit City Stores Inc. and its units ask the Court to direct Wachovia Bank, N.A., as custodian of Circuit City Stores, Inc.'s supplemental 401(k) plan, to deliver the 401(k) assets to the Debtors' estates. Effective March 1, 2005, Circuit City established the Supplemental 401(k) Plan to provide "a select group of management or highly compensated employees" with supplemental benefits through salary deferrals and matching employer contributions. As of January 20, 2010, there were 28 participants, and the Supplemental 401(k) Plan had assets of $1,114,527, in various investment funds. The Supplemental 401(k) Plan is administered by an Administrative Committee appointed by the Circuit City board of directors, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, informs the Court. The Supplemental 401(k) Plan provides pre-tax salary deferrals to the Participants under the Employee Retirement Income Security Act of 1974. Pursuant to Supplemental 401(k) Plan, the Participants were deemed to be general unsecured creditors of Circuit City with respect to the benefits due. The Supplemental 401(k) Plan was also considered unfunded. Consequently, the Participants had no ownership interest in contributions to the Plan, according to Mr. Foley. To hold contributions made pursuant to the Supplemental 401(k) Plan, Circuit City was permitted to and did establish a "grantor trust to hold assets . . . as reserves against the Company's unfunded, unsecured obligations under the [Supplemental 401(k)] Plan." These reserves, however, were "at all times [to] be subject to the claims of the Company's creditors," Mr. Foley says. According to Mr. Foley: (a) The Supplemental 401(k) Plan is a "top hat" deferred compensation plan under ERISA. A "top hat" plan is "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees." (b) Because the Supplemental 401(k) Plan is a "top hat" deferred compensation plan under ERISA, the Plan assets are property of the Debtors' estates. As the custodian of the Supplemental 401(k) Plan, Wachovia must "deliver to the [Debtors] and to account for property that has come into his possession, custody, or control as a custodian," Mr. Foley asserts. He notes that courts have previously ordered custodians of top hat deferred compensation plans to deliver their assets to a debtor's estate. 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. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). CIRCUIT CITY: Wins Approval for Liquidation Retention Plan ---------------------------------------------------------- Circuit City Stores Inc. and its units obtained approval to implement a liquidation retention plan and pay certain wind down retention pay to 20 plan participants. To recall, on March 25, 2009, the Court approved a wind down incentive and retention plan, as modified by agreement with the Official Committee of Unsecured Creditors, and authorized payment of wind down incentive pay to participants in that plan. Under the Wind Down Incentive Plan and Retention Plan, participants were divided into two categories. Tier I Participants consisted of management level employees that may be considered "insiders," as the term is defined in Section 101(31) of the Bankruptcy Code. Tier II Participants consisted of non- insider key employees. With respect to Tier I Plan Participants, payments have been or will be made in accordance with the Wind Down Incentive and Retention Plan upon completion of tasks associated with each payment. With respect to Tier II Plan Participants, however, the Wind Down Incentive and Retention Plan expired on January 15, 2010, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, relates. The Debtors and the Creditors Committee have proposed and solicited votes on their First Amended Joint Plan of Liquidation, which contemplates the continued liquidation of the Debtors' assets, reconciliation of liabilities, and the distributions according to the priorities set forth in the Bankruptcy Code. The Debtors have continued to work towards an orderly and efficient liquidation process. To assist them with that process, the Debtors currently have 23 full-time employees. At this time, the Debtors believe that the continued employment of their remaining employees is in the best interests of their creditors and estates. According to Mr. Foley, the Debtors' ability to keep their remaining employees is threatened by three primary factors: (1) The employees recognize that, due to the liquidation, long-term employment with the Debtors is not an option. (2) The employment market in Richmond has improved considerably over the last several months. Indeed, the Debtors have had certain unexpected resignations by certain key employees. (3) The Wind Down Incentive and Retention Plan expired. As a result, the Debtors have no ability to "incentivize" their employees to remain until their services are no longer needed. Moreover, additional unexpected employment losses threaten the Debtors' ability to achieve an orderly and efficient liquidation. To successfully continue and complete the liquidation process, the Debtors developed, along with their restructuring professionals, an appropriate but limited liquidation retention plan for 20 employees. None of the Plan Participants are members of the Debtors' management or "insiders," and are not persons in control of the Debtors, Mr. Foley explains. Liquidation Retention Plan Because the Wind Down Incentive and Retention Plan has expired, it is imperative that the Plan Participants continue to be motivated to provide their substantial contributions to the liquidation of the Debtors. The Liquidation Retention Plan would help ensure that Plan Participants, each of whom is essential to the liquidation process and critical to managing the effective and timely liquidation of the Debtors' estates, are retained in order to maximize value for the Debtors' creditors, Mr. Foley says. The Liquidation Retention Plan consists of retention bonus payments to the Plan Participants based on their continued service to the Debtors through the earlier of (i) the date the Debtors sever the Plan Participant and (ii) the effective date of a plan of liquidation. All payments to a particular Plan Participant under the Liquidation Retention Plan will be made on each participant's applicable End Date. Although the total payments under the Liquidation Retention Plan will vary, the Debtors estimate that they will accrue $9,400. If a Plan Participant voluntarily terminates his employment or is terminated for cause before the End Date, the Plan Participant will not receive any portion of any payment that he would have received had he continued to be employed by the Debtors on the End Date. The Liquidation Retention Plan treats each Plan Participant differently, and payments to a particular Plan Participant depend on three factors: (i) weekly salary, (ii) the percentage of the weekly salary designated under the Liquidation Retention Plan, and (iii) the number of weeks actually worked beginning with the first week after the Debtors' Wind Down Incentive and Retention Plan ended for the particular Plan Participant and ending on that Plan Participant's applicable End Date. Notably, the Plan Participants are not required to accomplish specific performance metrics to be eligible for payment. The Creditors' Committee has advised the Debtors that it supports the approval of the Liquidation Retention Plan. The Debtors also seek, pursuant to Section 107(b) of the Bankruptcy Code and Rule 9018 of the Federal Rules of Bankruptcy Procedure, to file the list of the Plan Participants and the terms of their retention bonus payments under seal to protect the employees from potential harm caused by the disclosure of confidential information. In separate filings, the Debtors seek to shorten the notice period and to expedite hearing on the motion to be heard on February 11, 2010. Mr. Foley explains that the delay in filing the motion until this point was to provide the Creditors' Committee with an opportunity to review and provide comments on the motion. The Creditors' Committee also consents to having the motion heard on an expedited basis and shortened notice. 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. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. 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). CITIGROUP INC: Holds Auction Rate Preferreds in Various Funds ------------------------------------------------------------- Citigroup Global Markets Inc.; Citigroup Financial Products Inc.; Citigroup Global Markets Holdings Inc.; and Citigroup Inc., disclosed in a regulatory filing on Wednesday that: -- 216 shares or 3.7% of Auction Rate Preferred securities of BlackRock MuniYield Michigan Insured Fund, Inc.; -- 99 shares or 3.9% of Auction Rate Preferred securities of Nuveen Virginia Premium Income Municipal Fund; -- 48 shares or 3.2% of Auction Rate Preferred securities of Nuveen Massachusetts Premium Income Municipal Fund; -- 874 shares or 6.8% of Auction Rate Preferred securities of Gabelli Dividend & Income Trust; -- 4,192 shares or 29.9% of Auction Rate Preferred securities of Van Kampen Senior Income Trust; -- 515 shares or 17.9% of Auction Rate Preferred securities of Nuveen Maryland Premium Income Municipal Fund; and -- 248 shares or 18.5% of Auction Rate Preferred securities of Nuveen Connecticut Premium Income Municipal Fund About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: CEO Pandit Sees Return to "Sustained Profits" ------------------------------------------------------------ Matthias Rieker at Dow Jones Newswires reports that Citigroup Chief Executive Vikram Pandit told money managers at a Citigroup conference Thursday at the Waldorf Astoria that the bank is poised to return to "sustained profits" after being kept afloat by government support during the market meltdown. According to Dow Jones, Citigroup executives said the sell-down of unwanted assets by Citigroup may not impose a drag on profits, fueling a further run-up of Citi's stock. According to Dow Jones, slides prepared for Mr. Pandit's presentation show Citi's goal is to generate a return on assets of 1.25% to 1.5% in its core businesses. In 2009, the businesses Citi intends to keep and expand returned 1.15%, generating profits of $14.7 billion. But the bank reported a net loss of $1.6 billion, partly because of losses at Citi Holdings, the assets it plans to sell or wind down over the next few years, Dow Jones notes. Dow Jones says analysts have warned that Citi's plans to dispose of $547 billion in noncore assets could offset profit growth in its core banking, securities and transaction-services business. But Mr. Pandit, according to Dow Jones, suggested that unless the economy weakens, it may have enough reserves to offset any sales below their valuation on the bank's books. Dow Jones further notes that in response to Mr. Pandit's remarks, Citigroup shares rose 22 cents, or 5.6%, to close at $4.18 in 4 p.m. New York Stock Exchange composite trading. Dow Jones says the shares have risen 23% in the past six trading days amid speculation the government may accelerate a planned sale of a 27% stake after it becomes free to sell on March 16. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITRUS 278: Stockholders to Infuse Funds to Pay Unsecureds ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona will consider at a hearing on March 23, 2010, at 10:00 a.m., the approval of a disclosure statement explaining Citrus 278, LLC's proposed plan of reorganization. The hearing will be held at 230 N. First Ave., 6th Floor, Courtroom 603, Phoenix, Arizona. The Debtor will begin soliciting votes on the plan following approval of the adequacy of the information in the disclosure statement. According to the Disclosure Statement, the plan proposes to pay the priority claims in full. It also proposes to give secured creditors with an interest in the Citrus Real Property the opportunity to be paid in full on their allowed secured claims immediately, or to remain as investors under new notes, and with an opportunity to share in the potential upside of the development. In addition, the plan will result in the unsecured creditors receiving a substantial payout. The unsecured creditors will share pro rata in the sum of $200,000. The Debtor's statements and schedules list unsecured claims totaling $3,118,740. The plan will be implemented by the retention of its existing management. This implementation will also include the management and disbursement of the funds infused by the interest holders. A full-text copy of the disclosure statement will be available for free at http://bankrupt.com/misc/Citrus278_DS.pdf Phoenix, Arizona-based Citrus 278, LLC, is limited liability company engaged in the business of owning and developing real property in the State of Arizona. The Company filed for Chapter 11 bankruptcy protection on November 5, 2009 (Bankr. D. Ariz. Case No. 09-28416). Mark W. Roth, Esq., at Polsinelli Shughart P.C. assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. COACHMEN INDUSTRIES: Unit Inks Deal with Private Developer ---------------------------------------------------------- All American Building Systems LLC, a subsidiary of Coachmen Industries Inc., entered into a contract with a private developer for the construction of two modular apartment buildings in Dubuque, Iowa. This contract is for the first phase of a housing project that the Company anticipates will involve the construction of 12 apartment buildings containing a total of 216 dwelling units, with a total project price of approximately $13 million. The contract price for the design, construction, delivery, and finish of the two apartment buildings currently under contract with the Company is approximately $2.4 million, and work on these buildings is to begin immediately. The Company anticipates that the bulk of the revenue for these two apartment buildings will be recognized in the second quarter of 2010. 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. COEUR D'ALENE: Names K. Leon Hardy as Senior Vice President ----------------------------------------------------------- Coeur d'Alene Mines Corporation appointed K. Leon Hardy to the position of Senior Vice President -- Operations, effective March 2, 2010. Mr. Hardy will replace Richard M. Weston, who will resign, following a short leave of absence, effective March 31, 2010. Mr. Hardy was appointed as the Company's Senior Vice President North American Operations in July 2008. Mr. Hardy served as the Vice President and interim General Manager of the Company's San Bartolome mine during 2008 and Vice President and General Manager for the Company's subsidiary Coeur Argentina S.R.L. from May 2003 to July 2008. Mr. Hardy was employed with Apex Silver Mines as Operations Manager at their San Cristobal project in Bolivia from 1999 to 2002. Mr. Hardy was employed in Argentina with Minera Alumbrera Ltd from 1996 to 1998. Mr. Hardy was employed with Cyprus Amax Minerals from 1979 to 1996. In connection with Mr. Hardy's appointment to the position of Senior Vice President -- Operations, the Company and Mr. Hardy entered into a Second Amendment to Restated Employment Agreement, dated March 2, 2010, which amends the Amended and Restated Employment Agreement, dated December 31, 2008, between the Company and Mr. Hardy, as previously amended by the First Amendment to Restated Employment Agreement, dated July 31, 2009. The Second Amendment sets forth certain changes to Mr. Hardy's compensation, including an increase in Mr. Hardy's base salary to $275,000. Furthermore, Mr. Hardy is entitled to an annual incentive bonus during each calendar year for the duration of the Employment Agreement targeted to be 50% of Mr. Hardy's then current annual salary. In addition, Mr. Hardy has the opportunity to earn a long-term incentive bonus with a target level of 190% of his base salary. The bonuses are at the discretion of the Company's Board of Directors. About Coeur d'Alene Mines Coeur d'Alene Mines Corporation (NYSE:CDE, TSX:CDM, ASX:CXC) is one of the world's leading silver companies and also a significant gold producer. Coeur common shares are traded on the New York Stock Exchange under the symbol CDE, the Toronto Stock Exchange under the symbol CDM, and its CHESS Depositary Interests are traded on the Australian Securities Exchange under symbol CXC. At September 30, 2009, the Company had $3,059,759,000 in total assets, including cash and cash equivalents of $45,603,000; against $193,341,000 in total current liabilities and $888,959,000 in total long-term liabilities. At September 30, 2009, the Company had accumulated deficit of $419,574,000 and stockholders' equity of $1,977,459,000. Coeur d'Alene Mines had $402.2 million in accumulated deficit as of June 30, 2009. As reported by the Troubled Company Reporter on August 11, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Coeur D'Alene Mines to 'B-' from 'CCC' and raised the ratings on the company's $180 million senior unsecured notes due 2024 ($106 million outstanding) and $230 million senior unsecured notes due 2028 ($150 million outstanding) to 'CCC+' from 'CCC-'. The recovery rating on the notes remains unchanged at '5'. S&P removed the corporate credit and issue-level ratings from CreditWatch, where they were placed with positive implications on May 18, 2009. The outlook is positive. COOPER-STANDARD: Fee Auditor OKs 18 Professionals' Fees ------------------------------------------------------- Warren H. Smith & Associates filed final reports in Court, recommending the approval of fee applications of these professionals retained in the Chapter 11 cases of Cooper-Standard Holdings Inc.: Professional Fee Period Fees Expenses ------------ ---------- ---------- -------- Alvarez & Marsal North 08/03/09 to $1,176,014 $31,720 America LLC 10/31/09 Bennett Jones LLP 08/02/09 to $20,538 $22 10/31/09 Ernst & Young 08/03/09 to $726,527 $18,498 10/31/09 Foley & Lardner 08/03/09 to $190,012 $4,221 10/31/09 Fried Frank Harris 08/03/09 to $2,636,492 $79,358 Shriver & Jacobson LLP 10/31/09 Kramer Levin Naftalis 08/14/09 to $780,291 $10,545 10/31/09 Lazard Freres 08/03/09 to $587,096 $8,362 10/31/09 Richards Layton 08/03/09 to $153,355 $12,281 10/31/09 Young Conaway Stargatt 08/14/09 to $70,285 $4,324 & Taylor LLP 10/31/09 Warren H. Smith has also recommended the approval of the Creditors Committee's applications to reimburse the expenses of TD High Yield Fund for $1,591, and Pioneer High Yield Fund for $659, for the period August 13 to October 31, 2009. Both firms are members of the Creditors Committee. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COOPER-STANDARD: Proposes Duff & Phelps for Asset Valuation ----------------------------------------------------------- Cooper-Standard Holdings Inc. and its debtor-affiliates seek court approval to employ Duff & Phelps LLC as their asset valuation provider effective January 28, 2010. The Debtors tapped the firm to provide valuation of their personal and real properties, customer contracts, technology- related intangible assets, trademarks, among other things. The firm is also tasked to make valuation of the reporting units owned by the Debtors including CSA North America, CSA Europe, CSA South America and CSA Asia Pacific, and equity investments including Nishikawa Standard Company, Guyoung Technology Co. LTD and Shanghai SAIC-Metzler Sealing. Also part of Duff & Phelps' duties is to provide valuation of Cooper-Standard Automotive (Deutschland) GmbH, Cooper-Standard Automotive Ceska republika s.r.o, and Cooper-Standard Automotive Polska Sp. z.o.o., and make estimation of the replacement cost of some of the Debtors' tangible assets. Duff & Phelps will be paid for its services on an hourly basis and will be reimbursed for its expenses. The hourly rates of the firm's professionals are: Professionals Hourly Rates ------------- ------------ Managing Director $565 Director $515 Vice-President $415 Senior Associate $320 Analyst $235 Administrative $120 The firm estimates that its fees for the services will be about $625,000 to $690,000. Steven Shanker, managing director at Duff & Phelps, assures the Court that his firm does not hold or represent interest adverse to the Debtors, and that it is a disinterested person pursuant to Section 101(14) of the Bankruptcy Code. The Court will hold a hearing on March 18, 2010, to consider approval of the proposed employment. Deadline for filing objections is March 11, 2010. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COOPER-STANDARD: Wants Tax Refunds Suit Dismissed ------------------------------------------------- Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc. and Cooper-Standard Automotive Canada Ltd. ask the Ontario Superior Court of Justice to dismiss the complaint by Cooper Tire & Rubber Company, saying that Cooper Tire's claim of ownership of the tax refunds is baseless. Drew Sloan, Esq., at Richards Layton & Finger P.A., in Wilmington, Delaware, says that CSA Canada owns the tax refunds since it is the company, and not Cooper Tire, which paid the taxes. "Cooper Tire never paid CSA Canada's taxes, either directly or effectively through its cash management system," Mr. Sloan says in court papers, citing the testimonies of Cooper Tire's witnesses that it is the Canadian unit that paid its own taxes. The testimonies, Mr. Sloan says, also revealed that CSA Canada and Cooper Tire had separate accounts under Cooper Tire's cash management system that was designed to prevent commingling of the accounts. "While owned by Cooper Tire, CSA Canada was a separately incorporated subsidiary of [CS Automotive] that had its own separately maintained bank accounts from which the taxes were paid," he points out. Mr. Sloan dismisses Cooper Tire's assertion that it retained an ownership interest in pre-closing tax refunds, saying that a provision in the stock purchase agreement does not state that those refunds belong to Cooper Tire. The stock purchase agreement was executed in connection with the sale of Cooper Tire's stock to CSHI in 2004. Cooper Tire asserts ownership of the tax refunds based on this agreement, which reportedly entitles Cooper Tire to all refunds of its taxes and interest received by CSHI or any of its units. Cooper Tire has been demanding CSHI to remit about $60 million in tax refunds, which CSA Canada received from the Canada Revenue Agency in July 2009. It also seeks to recover $42.5 million in additional tax refunds yet to be received. "At no point prior to closing did Cooper Tire tell [CSHI] that it was retaining an ownership interest in pre-closing tax refunds, or that it had anything more than a contractual right to receive payment," Mr. Sloan further says. CSHI, et al., also ask the Canadian Court to deny approval of Cooper Tire's motion for summary judgment, saying "there are no disputed issues of material fact" with respect to the claims asserted by Cooper Tire in its complaint. They also oppose Cooper Tire's motion for leave to file reply brief in support of its motion for summary judgment on grounds that the Canadian Court's previous scheduling orders "prohibit the filing of reply briefs in support of the parties' motions for summary judgment." Cooper Tire earlier filed a motion for summary judgment, arguing that under federal common law and Delaware law, the tax refunds are not part of the defendants' bankruptcy estates on grounds that the defendants hold those funds in trust for the benefit of Cooper Tire. Cooper Tire's motion for leave also drew flak from the Official Committee of Unsecured Creditors. "The [Creditors Committee] believes that already too much time, expense and estate resources have been wasted in this adversary proceeding's elongated discovery and briefing period at the primary expense of the Debtors' unsecured creditors," says the Creditors Committee's attorney, Maris Finnegan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. In a related development, the Canadian Court issued a scheduling order, requiring Cooper Tire and the defendants to jointly submit a form of pretrial statement on March 19, 2010. A pretrial conference is scheduled for April l, 2010, while a trial is scheduled for April 12 and April 13, 2010, according to the order. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COYOTES HOCKEY: Moyes to Sue NHL Over Balsillie's Bid Rejection --------------------------------------------------------------- Mike Sunnucks at Business Journal of Phoenix reports that Jerry Moyes, former owner of Phoenix Coyotes, likely will countersue the National Hockey League. According to report, NHL sued Mr. Moyes for breached an agreement with the league when he stopped financing the team in 2008 and held talks with Jim Balsillie to buy the Coyotes and move them to Hamilton, Ontario. NHL is seeking $60 million in damages including payment for the team's expected $20 million loss this season. Business Journal relates Mr. Moyes' counterclaim could focus on the league's rejection of Mr. Balsillie's $242 million bid for the Coyotes. NHL acquired the team for $140 million and is working on a deal to sell the team to Iced Edge Holdings to keep the team in Phoenix market. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. In November 2009, Judge Redfield T. Baum approved the sale of the Phoenix Coyotes to the National Hockey League, which had bought the team to quash a plan by bidder Jim Balsillie's to move the team to Ontario, Canada. Coyotes was sent to Chapter 11 to effectuate a sale by owner Jerry Moyes to Mr. Balsillie. The city of Glendale, Ariz., is seeking to convert the Coyotes' Chapter 11 case to a Chapter 7, echoing the Debtors and unsecured creditors' belief that the city is trying to wriggle out of having its bankruptcy claim estimated. The team's former owners have filed a Chapter 11 plan of liquidation, to rebuff the Chapter 7 conversion bid. DANNY'S SAN TAN: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------- Danny's San Tan, LLC, has filed with the U.S. Bankruptcy Court for the District of Arizona a list of its 20 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/azb10-05585.pdf Scottsdale, Arizona-based Danny's San Tan, LLC, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. D. Ariz. Case No. 10-05585). Bert L. Roos, Esq., who has an office in Phoenix, Arizona, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. The Company's affiliates -- Danny's Tempe, LLC, and Danny's Crossroads, LLC -- filed also Chapter 11 petitions. DANNY'S SAN TAN: Section 341(a) Meeting Scheduled for April 15 -------------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of creditors in Danny's San Tan, LLC's Chapter 11 case on April 15, 2010, at 10:00 a.m. The meeting will be held at the US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, AZ (341-PHX). 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. Scottsdale, Arizona-based Danny's San Tan, LLC, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. D. Ariz. Case No. 10-05585). Bert L. Roos, Esq., at Phoenix, Arizona, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. DEED AND NOTE: Asks for Court Okay to Use Cash Collateral --------------------------------------------------------- Deed And Note Traders, LLC, has sought authorization from the U.S. Bankruptcy Court for the District of Arizona to use the cash securing their obligations to their prepetition lenders. Scott D. Gibson, Esq., at Gibson, Nakamura & Green, P.L.L.C., explains that the Debtor needs to use the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. The Debtor says the secured lenders' interests are adequately protected by its current payment of taxes and monthly insurance premiums associated therewith, and by its current payment of repair and payroll costs associated with the maintenance and preservation thereof. According to the Debtor, secured lenders are entitled to protection of their interests only against losses attributable to the decrease in the value of their collateral. The Debtor will provide additional adequate protection to its secured lenders by sequestering any net operating income remaining after the payment of necessary operating expenses in a separate bank account and allocating said income and the Debtor's expenses to each property on a pro rata basis. Tucson, Arizona-based Deed and Note Traders, L.L.C., filed for Chapter 11 bankruptcy protection on February 12, 2010 (Bankr. D. Ariz. Case No. 10-03640). Scott D. Gibson, Esq., at Gibson, Nakamura & Green, PLLC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $1,000,001 to $100,000,000. DETROIT: Sells $250 Million Without Recent Disclosure Filings ------------------------------------------------------------- Darrell Preston at Bloomberg News reports that Detroit sold $250 million of debt on March 11 without having filed annual financial reports on time for five years. According to the report, city spokesman Dan Lijana said Detroit received more than $500 million of orders and sold the debt at an average interest rate of 5.08%, less than the 5.75% the city had expected to pay. Detroit will provide backing by payments of state aid from sales taxes to the general obligation issue, which enabled it to maintain investment grade. The city provided a June 30, 2008 financial statement, its most recent, to investors. A fiscal 2009 report is expected to be complete by May 31, Mr. Lijana told Bloomberg. Moody's Investors Service, which rates the city's general obligation debt at Ba3, its third-highest rating below investment grade, assigned an A1 rating to the bond issue because of the legal structure that protects state payments to bondholders. Standard & Poor's, which gave a BB rating on the city's general obligation debt, assigned an AA- rating to the new issue. Detroit warned bondholders in a March 2 preliminary offering statement of the risk of bankruptcy as it prepares to sell $250 million of bonds to help close its budget deficit. The city said that while it hasn't taken steps to reorganize under Chapter 9, it may have few other options if its financial condition worsens. Detroit is facing a deficit estimated at $280 million. Only two cities -- Menasha, Wisconsin, and Vallejo, California -- have sought bankruptcy protection during the past two years. DGI RESOLUTION: Receives Delisting Notice from NASDAQ ----------------------------------------------------- On March 4, 2010, DGI Resolution, Inc., formerly known as deCODE genetics, Inc. received notice from The Nasdaq Stock Market that its common stock will be delisted. The Company's stock was suspended on January 6, 2010, and has not traded on NASDAQ since that time. NASDAQ will file a Form 25 with the Securities and Exchange Commission to complete the delisting. The delisting will become effective ten days after the Form 25 is filed. About DGI Resolution deCODE Genetics Inc., now known as DGI Resolution, Inc., is a global leader in analyzing and understanding the human genome. deCODE has identified key variations in the sequence of the genome conferring increased risk of major public health challenges from cardiovascular disease to cancer, and employs its gene discovery engine to develop DNA-based tests to assess individual risk of common diseases; to license its tests and intellectual property to partners; and to provide comprehensive, leading- edge contract services to companies and research institutions around the globe. The Company was founded in 1996 and is headquartered in Reykjavik, Iceland. The Company filed for Chapter 11 on November 16, 2009 (Bankr. D. Del. Case No. 09-14063). The petition listed assets of $69.9 million against debt of $314 million. Liabilities include $230 million on 3.5% senior convertible notes. In January 2010, deCODE genetics, Inc., completed the sale of its Iceland-based subsidiary deCODE genetics ehf (also known as Islensk erfdagreining) and its drug discovery and development programs to Saga Investments LLC, a private company. The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the corporate name change of deCODE genetics, Inc., to DGI Resolution, Inc., following the sale. DIRECT MARINE: Files for Bankruptcy After Failing to Pay Workers ---------------------------------------------------------------- Direct Marine Services filed for Chapter 11 bankruptcy protection, according to reporting by Katherine Schmidt at houmatoday.com. The Company has been accused of failing to pay its workers and creditors. The U.S. Department of Labor sued the company and its employees for failing to pay its workers in accordance with the Federal Labor Standards Act on Dec. 29, 2009. At least eight other lawsuits have been filed against the company in Terrebonne court for more than $400,000 in unpaid bills, Ms. Schmidt says. A meeting of creditors will take place on March 26, 2010, at F. Edward Hebert Federal Building, No. 111, 6000 S. Maestri St. in New Orleans. Direct Marine Services operates a boat-building company. DOMINO'S PIZZA: Names Trojan & Goldman to Board of Directors ------------------------------------------------------------ Domino's Pizza named Gregory A. Trojan and Jim Goldman to its Board of Directors effective March 1, 2010. A) Gregory A. Trojan Since 2007, Mr. Trojan has served as president and chief operating officer at Guitar Center, Inc., the leading United States retailer of guitars, amplifiers, percussion instruments, keyboards and pro- audio and recording equipment, based in Westlake Village, California. From 1996 to 2006, he was president and CEO of House of Blues Entertainment, Inc. Mr. Trojan served as CEO of California Pizza Kitchen for two years while at Pepsico Inc., and held various positions within Pepsico from 1990 to 1996. Prior to that, he was a consultant at Bain & Company, the Wharton Small Business Development Center and Arthur Andersen & Co. "We are thrilled to welcome Greg to our Board," said David A. Brandon, Domino's Chairman. "His broad consumer retail experience in industries spanning food, entertainment and hard goods will bring valuable strategic insights to our brand, making him an important member of our very talented Board." Mr. Trojan earned his MBA from the Wharton School at the University of Pennsylvania in 1986 and holds a bachelor's degree from the University of Virginia's McIntire School of Commerce. He has previously served on the Board of Directors at Oakley Inc. B) Jim Goldman Since 2004, Mr. Goldman has served as president and CEO of Godiva Chocolatier Inc., based in New York City. He was president of the Foods and Beverage Division at Campbell Soup Company from 2001 to 2004. He worked in various executive positions at Nabisco Inc. from 1992 to 2000. Prior to his work at Nabisco Inc., Mr. Goldman was a senior consulting associate at McKinsey & Co. "We are extremely fortunate to have Jim joining us as a new member on our Board," said David A. Brandon, Domino's Chairman. "His previous board experience and innovative business sense will be a tremendous resource to us as we move forward. He adds strength to our already top-notch team." Mr. Goldman earned his MBA from the Johnson School of Management at Cornell University in 1985 and holds a bachelor's degree from Dartmouth College. He served as a member of the Board of Directors at The Children's Place Retail from 2006 to 2008, on the Compensation Committee. He also served on the Board of Trustees at the YMCA Camps Becket and Chimney Corners in Becket, Massachusetts, from 1992 to 1998. About Domino's Pizza Founded in 1960, Ann Arbor, Michigan-based Domino's Pizza, Inc. (NYSE: DPZ) -- http://www.dominos.com/-- is the recognized world leader in pizza delivery. Through its primarily locally owned and operated franchised system, Domino's operates a network of 8,886 franchised and Company-owned stores in the United States and over 60 international markets. The Domino's Pizza((R)) brand, named a Megabrand by Advertising Age magazine, had global retail sales of over $5.5 billion in 2008, comprised of nearly $3.1 billion domestically and over $2.4 billion internationally. During the third quarter of 2009, the Domino's Pizza((R)) brand had global retail sales of over $1.2 billion, comprised of over $672 million domestically and over $570 million internationally. As of September 6, 2009, the Company had $443.7 million in total assets against $156.9 million in total current liabilities and $1.636 billion in total long-term liabilities, resulting in $1.350 billion in stockholders' deficit. DOMINO'S PIZZA: Selects John Macksood as Exec. Vice President ------------------------------------------------------------- Domino's Pizza named John Macksood to the position of Executive Vice President of Supply Chain. Mr. Macksood has been with the Company for 24 years. He was previously second-in-command for the supply chain operation as its Vice President of Logistics and Network Planning, and played a vital role in that division's growth. Domino's President and CEO J. Patrick Doyle congratulated Macksood on his new position, and offered his vote of confidence: "John has been key to our successful history in supply chain. I'm confident he will drive positive, reliable results for our company into the future, and to continue the strong partnership with franchisees that makes this business a unique part of our success story." Macksood joined Domino's in 1986 from North American Van Lines Company. He has held positions of increasing responsibility at Domino's in logistics and purchasing; and has overseen the creation of business line extensions, including a produce processing plant, freight redistribution and thin crust shell processing plant. He graduated from Michigan State University with a Materials Logistics Management degree. A Michigan native, Macksood is married to Denise and has two children: Chad, 17 and Madison, 13. The company also announced that current Executive Vice President of Supply Chain, L. David Mounts, will be leaving Domino's, effective April 1. Mounts has accepted the position of CEO of Inmar, Inc. The company, located in Winston-Salem, North Carolina, specializes in reverse logistics, promotion services, revenue recovery and information management. Mounts, 46, joined Domino's in October 2005, in the position of Chief Financial Officer and later transitioned to run the company's supply chain business from September 2007 to present. "David Mounts has done a great job with our supply chain business. He took over a very strong operation and made it even stronger. We wish him the very best in his new position, and know he will do a great job at Inmar, too," said Doyle. About Domino's Pizza Founded in 1960, Ann Arbor, Michigan-based Domino's Pizza, Inc. (NYSE: DPZ) -- http://www.dominos.com/-- is the recognized world leader in pizza delivery. Through its primarily locally owned and operated franchised system, Domino's operates a network of 8,886 franchised and Company-owned stores in the United States and over 60 international markets. The Domino's Pizza((R)) brand, named a Megabrand by Advertising Age magazine, had global retail sales of over $5.5 billion in 2008, comprised of nearly $3.1 billion domestically and over $2.4 billion internationally. During the third quarter of 2009, the Domino's Pizza((R)) brand had global retail sales of over $1.2 billion, comprised of over $672 million domestically and over $570 million internationally. As of September 6, 2009, the Company had $443.7 million in total assets against $156.9 million in total current liabilities and $1.636 billion in total long-term liabilities, resulting in $1.350 billion in stockholders' deficit. DUANE READE: Reports $84 Million Net Loss for 4th Qtr. 2009 ----------------------------------------------------------- Duane Reade Holdings Inc. reported financial results for the fourth quarter and year ended Dec. 26, 2009. Net retail store sales, which exclude pharmacy resale activity, increased 5.3% to $451.3 million from $428.6 million in the fourth quarter of 2008. The increase in net retail store sales is due to the opening of new stores, renovated store locations and strong pharmacy same-store sales growth. At the end of 2009, the Company operated 257 stores, compared to 251 stores at the end of 2008. The Company's net loss for the fourth quarter of 2009 was $84.8 million, compared with $17.4 million in the prior year period. The fourth quarter operating loss improved to $1.4 million, compared to an operating loss of $3.6 million in the prior year period. The improvement in operating loss was primarily attributable to the $7.9 million increase in Adjusted FIFO EBITDA, partially offset by increased depreciation and amortization expenses of $2.2 million, a higher LIFO inventory valuation charge of $1.9 million and a $0.6 million increase in other expenses. Full Year Results For the full year, total net sales were $1.837 billion, reflecting an increase of 3.6% compared to $1.774 billion in 2008. Net retail store sales increased 4.0% to $1.757 billion, from $1.690 billion in the prior year, with better than anticipated performance at new and renovated store locations. For the full year, operating loss was $7.6 million compared with a $15.8 million operating loss in the prior year. Net loss for the current year was $124.3 million, compared to $72.8 million in 2008. John A. Lederer, Chairman and Chief Executive Officer, commented, "We are pleased with our operating results for the fourth quarter and full year as we demonstrated continued improvement in a number of important metrics despite the challenging economy. We are especially pleased that we exceeded our expectations for full year Adjusted FIFO EBITDA, which increased 13.9%. Additionally, we are delighted with the continued positive traction of our business transformation, as evidenced by strong results in pharmacy sales, the launch of Look Boutique, our store-within-a-store beauty concept, as well as the introduction of our DR Delish exclusive brand, which we introduced through The Duane Reader, our in-store publication. These accomplishments speak to our ever increasing desire and ability to better serve the needs of our core urban market." A full-text copy of the Company's press release on its fourth quarter and full year 2009 results is available for free at http://ResearchArchives.com/t/s?5852 About Duane Reade Founded in 1960, Duane Reade is the largest drug store chain in New York City, offering a wide variety of prescription and over- the-counter drugs, health and beauty care items, cosmetics, convenience foods, greeting cards and photofinishing. As of June 27, 2009, the Company operated 253 stores. At September 26, 2009, Duane Reade Holdings, Inc., had $725,237,000 in total assets against $867,282,000 in total liabilities, resulting in stockholders' deficit of $142,045,000. * * * The Troubled Company Reporter said July 17, 2009, that Moody's Investors Service affirmed Duane Reade's Caa1 Corporate Family Rating and Ca Probability of Default Rating. Duane Reade's Caa1 CFR reflects the company's high leverage and weak coverage along with its geographic concentration in and disproportionate exposure to economic conditions in the intensely competitive New York metro market. The rating also incorporates Moody's expectation that free cash flow will be weak over the next 12 months due to relatively modest cash flow that is largely consumed by capital expenditures. DUBAI WORLD: Banks Won't Take Cut; Formal Deal Seen Next Week ------------------------------------------------------------- Mirna Sleiman at Dow Jones Newswires reports that bankers familiar with the matter said Dubai World creditors have rejected the idea of taking a "haircut" on $22 billion of debt. Dow Jones says preliminary discussions are shifting towards extending the maturity of existing loans and bonds. "They agreed to keep paying interest on the debt and to reschedule maturities of the principal," a senior banker at a local creditor told Zawya Dow Jones Thursday. "Banks, especially local ones, can't handle any losses on their exposure to Dubai World. The conglomerate needs to maintain a good long term relationship with lenders." Zawya Dow Jones notes it was feared that Dubai would try and force creditors into taking a 40% "haircut" on their exposure to Dubai World. Zawya Dow Jones relates that according to the bankers these initial discussions were universally rejected by lenders. Zawya Dow Jones says Dubai finance department, which is involved in the Dubai World restructuring, denies such terms were ever discussed. According to Zawya Dow Jones, another banker familiar with negotiations said the restructuring has entered the final phases. That banker said, "We agreed on the terms and now have to discuss it with the other banks." Major creditors are hopeful that the terms of formal deal will be made public next week." Dubai World representatives have held informal meetings with creditors in London and Dubai. Zawya Dow Jones says a steering committee that represents about 90 creditors includes Standard Chartered PLC, Royal Bank of Scotland Group PLC, HSBC Holdings PLC and Lloyds Banking Group PLC. Business services firm KPMG is representing the steering committee. On Wednesday, Zawya Dow Jones reported that Dubai World was to meet United Arab Emirates banks by Thursday and may propose a debt restructuring that involves creditors receiving their full principal investment. Zawya Dow Jones cited a report by Middle East Economic Digest. Zawya Dow Jones said the two U.A.E. banks that will be involved in meetings are Emirates NBDEmirates NBD and Abu Dhabi Commercial Bank. 6-Month Standstill In November 2009, the Troubled Company Reporter ran a story about Dubai World seeking a six-month standstill on its debt obligations. The government of Dubai said it would restructure Dubai World and has appointed Deloitte LLP to lead the restructuring effort, naming an executive at the consultancy as the group's "chief restructuring officer." Bloomberg News' Arif Sharif and Laura Cochrane said Dubai World has US$59 billion in liabilities. Bloomberg said Dubai accumulated US$80 billion of debt by expanding in banking, real estate and transportation before credit markets seized up last year. The Wall Street Journal said Standard & Poor's in an October report estimated Dubai World could be responsible for as much as 50% of Dubai's total government and corporate debt load of some US$80 billion to US$90 billion. Large Exposure As reported by the Troubled Company Reporter-Europe on Dec. 1, 2009, The Wall Street Journal's Chip Cummins, Dana Cimilluca and Sara Schaefer Munoz, citing a person familiar with the matter, said that U.K.'s Royal Bank of Scotland Group PLC, HSBC Holdings PLC, Barclays PLC, Lloyds Banking Group PLC, Standard Chartered PLC and ING Groep NV of the Netherlands, are among the international banks that have large exposure in Dubai World. RBS has lent roughly US$1 billion to Dubai World, another person said, according to the Journal. Sources also told the Journal Barclays's exposure to Dubai World is roughly US$200 million, and that exposure is effectively hedged. David Robertson at The (U.K) Times reported Credit Suisse has estimated that European banks could have EUR40 billion (GBP36 billion) in loans to Dubai and much of this could be at risk if the Gulf emirate defaults. The Journal, citing people familiar with the matter, said the banks with the greatest exposure to Dubai World are Abu Dhabi Commercial Bank and Emirate NBD PJSC, people familiar with the matter said. Dow Jones Newswires' Margot Patrick related that a report by the Emirates Banks Association said the top eight foreign banks in the United Arab Emirates by lending volume -- HSBC, Standard Chartered, Barclays, HSBC, Royal Bank of Scotland's ABN Amro, Citigroup Inc., BNP Paribas SA, Lloyds and Credit Agricole SA's Calyon, -- extended about US$36 billion in loans in 2008 throughout the federation, without breaking down the loans by emirate or type of borrower. About Dubai World Dubai World -- http://www.dubaiworld.ae/-- is Dubai's flag bearer in global investments. As a holding company it operates a highly diversified spectrum of industrial segments and plays a major role in the emirate's rapid economic growth. Dubai World's investment spans four strategic growth areas of 21st Century commerce namely, Transport & Logistics, Drydocks & Maritime, Urban Development and Investment & Financial Services. Dubai World's portfolio includes DP World, one of the largest marine terminal operators in the world; Drydocks World & Dubai Maritime City designed to turn Dubai into a major ship-building and maritime hub; Economic Zones World which operates several free zones around the world including Jafza and TechnoPark in Dubai; Nakheel the property developer behind iconic projects such as The Palm Islands and The World among others; Limitless the international real estate master planner with current development projects in various parts of the world; Leisurecorp a global sports and leisure investment group, reshaping the industry by unlocking value across investment, development and brand opportunities; Dubai World Africa which oversees the regional development and portfolio of investments in the African continent; and Istithmar World, the group's investment arm that has a global footprint in finance, capital, leisure, aviation and various other business ventures. The Sun Never Sets on Dubai World, its Web site says. EAST CAMERON: Court OKs Additional Financing from Lenders --------------------------------------------------------- The Hon. Robert Summerhays of the U.S. Bankruptcy Court for the Western District of Louisiana, in a final order, authorized East Cameron Partners, LP, to obtain an additional loan from Cheyne Special Situations Fund LP, Cheyne Vista Fund LP, Dupont Pension Trust, Camulos Master Fund LP and Plainfield Direct Inc. As reported in the Troubled Company Reporter on February 16, 2010, the DIP lenders have already provided $4 million in postpetition financing. The Debtor would use the additional $490,000 from the DIP lenders meet its ongoing operational and administrative needs and to preserve the value of its estate pending the sale of substantially all of its assets. The lenders agreed to grant the additional loan the Debtor in exchange for the grant of a superperiority administrative claim, priming of liens on any and all encumbered property, first liens on any and all unencumbered property, and perfected security interest in and liens of the highest available priority on the DIP collateral. The DIP lenders advised the Debtor during negotiations that they will not consent to being primed by a superpriority lien granted to another third party lender. About East Cameron Partners Based in Lafayette, Louisiana, East Cameron Partners, LP -- http://www.eastcameronpartners.com/-- is an independent oil and gas exploration and production company. The Company filed for Chapter 11 relief on Oct. 16, 2008 (Bankr. W.D. La. Case No. 08-51207). Benjamin W. Kadden, Esq., Christopher T. Caplinger, Esq., and Stewart F. Peck, Esq., at Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, represent the Debtor as counsel. Michael H. Piper, Esq., and William E. Steffes, Esq., at Steffes, Vingiello & McKenzie, L.L.C., represent the Official Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed over $100 million each in assets and debts. EPV SOLAR: Cooley Godward Named as Counsel to Creditors Committee ----------------------------------------------------------------- Cooley Godward Kronish LLP has been selected as counsel to the creditors committee of EPV Solar, Inc. The Cooley team is led by partner Jay Indyke and includes associates Michael Klein and Seth Van Aalten. About Cooley Godward Cooley Godward Kronish LLP -- http://www.cooley.com-- represents hundreds of clients in a wide range of industries from offices in nine major commercial markets. With 650 attorneys throughout the U.S., Cooley Godward's business and litigation practice reaches across a broad array of dynamic industry sectors, including technology, life sciences, clean tech, real estate, financial services, retail and energy. About EPV Solar Robbinsville, New Jersey-based EPV Solar, Inc., fka Energy Photovoltaics, Inc., filed for Chapter 11 bankruptcy protection on February 24, 2010 (Bankr. D. N.J. Case No. 10-15173). Kenneth Rosen, Esq., and Samuel Jason Teele, Esq., at Lowenstein Sandler PC, assist the Company in its restructuring effort. The Company estimated its assets and its debts at $50,000,001 to $100,000,000. FAIRFIELD RESIDENTIAL: To Bring Plan for Confirmation April 22 -------------------------------------------------------------- Fairfield Residential LLC received approval from the U.S. Bankruptcy Court for the District of Delaware of the disclosure statement explaining its proposed Plan of Reorganization. The Debtors will shortly begin soliciting votes on the Plan. The deadline to vote on the Plan would be April 14. The Debtors will present the Plan for confirmation at a hearing on April 22. Objections to confirmation are due April 16. The Official Committee of Unsecured Creditors is now supporting the Plan. The Plan projects a 9.3% recovery for unsecured creditors owed an aggregate of $717.8 million. Secured creditors Wachovia Finance Co., owed $18.2 million and Capmark Financial, owed $79.5 million are recovering 40.6% and 100%, respectively. The Plan contemplates and is predicated upon transfer of the Liquidating Assets and certain of the Debtors' liabilities, including Claims, into the Fairfield Trust. Newco will be formed on or before the Effective Date by the New Money Investors and Management as a new entity, which will purchase and subsequently hold, directly or indirectly, all of the Reorganized Fairfield Assets. Fairfield will receive 10% of the membership interests. New Money Investors will invest up to the aggregate of $119.5 million in NewCo in this manner: (i) the New Money Investors will initially invest $19.5 million in Newco on the Effective Date (which includes the amount necessary to make the Closing Payment); (ii) the New Money Investors will make a subsequent investment in Newco of $50 million; and (iii) the New Money Investors will commit to co-invest $50 million in acquisitions of multi-family residential real estate projects by Newco. The New Money Investors are comprised of Och-Ziff Real Estate Acquisitions LP, and California State Teachers' Retirement System. At the same time that the New Money Investors make their initial $19.5 million investment, Management will make an investment of $1.5 million. Current members of management involved in the transaction are Chris Hashioka, Greg Pinkalla, Ted Bradford, Jim Hribar, Perry Raptis and Don Byerly. The transaction with the New Money Investors is subject to higher and better offers. The Debtors and the Official Committee of Unsecured Creditors have agreed that, in the event that (a) prior to December 31, 2010, Fairfield consummates an Alternative Transaction (New Money Investors are outbid at the auction) and (b) OZ and CalSTRS have not otherwise breached their obligations under the Plan or the New Money Definitive Documents, or otherwise terminated in violation of the terms thereof the New Money Definitive Documents, then OZ and CalSTRS will have the right to seek: i) the payment of $2.0 million to OZ; and ii) the reimbursement of actual and documented expenses incurred by OZ and CalSTRS in connection with or relating to the negotiation of the New Money Investment in an aggregate amount that does not exceed $500,000. In the event that (x) the New Money Investment is not consummated prior to December 31, 2010, and (y) OZ and CalSTRS have not otherwise breached their obligations under this Plan or the New Money Definitive Documents, or otherwise terminated in violation of the terms thereof the New Money Definitive Documents, then OZ and CalSTRS will have the rights to seek the reimbursement of their reasonable actual and documented expenses incurred in connection with or relating to the negotiation of the New Money Investment. The amounts will be paid contemporaneously with the consummation of an Alternative Transaction or upon the effective date under a confirmed plan of reorganization or liquidation other than the Plan. The New Money Investors will provide an aggregate commitment of $50 million for investment in multifamily acquisitions; provided that each such acquisition must be acceptable to the New Money Investors. Any investment will dilute the other holders of membership interests, except for management. For a period commencing on the effective date and ending upon the earlier of (i) December 31, 2010, or (ii) the date on which certificates of occupancy have been issued for those joint venture projects amounting to more than 90% of the aggregate number of units under construction on December 31, 2009. A full-text copy of the amended Disclosure Statement is available for free at: http://bankrupt.com/misc/FairfieldResidential_AmendedDS.pdf A full-text copy of the amended Plan is available for free at: http://bankrupt.com/misc/FairfieldResidential_AmendedPlan.pdf About Fairfield Residential San Diego, California-based Fairfield Residential LLC is a fully integrated multifamily housing company that through its various subsidiaries provides a diverse mix of services to a wide range of investors, joint venture partners and clients. FFR either directly or indirectly acts as a general partner or managing member of, and owns varying stakes in, a number of project level operating companies. The Company and its affiliates -- FF Development, Inc., et al. -- filed for Chapter 11 bankruptcy protection on December 13, 2009 (Bankr. D. Delaware Case No. 09-14378). Daniel J. DeFranceschi, Esq.; Lee E. Kaufman, Esq.; Paul Noble Heath, Esq.; and Travis A. McRoberts, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Brett H. Miller, Esq., Stefan W. Engelhardt, Esq., and Melissa A. Hager, Esq., at Morrison & Foerster LLP; and William E. Chipman Jr., Esq., Kerri K. Mumford, Esq., and Kimberly A. Brown, Esq., at Landis Rath & Cobb LLP. Fairfield Residential listed $100,000,001 to $500,000,000 in assets and more than $1,000,000,000 in liabilities. Dow Jones says Fairfield listed assets worth $958 million and liabilities of nearly $835 million. FAIRPOINT COMMUNICATIONS: Disclosure Statement Approved ------------------------------------------------------- Don Jeffrey at Bloomberg News reports that FairPoint Communications Inc., won court approval of the disclosure statement explaining its Chapter 11 plan and a $75 million loan to finance its exit from Chapter 11. A confirmation hearing on the plan is set for May 11. Various parties objected to the Disclosure Statement. The objectors include two rivals, Verizon Communications Inc. and Comcast Corp. The Debtors, however, addressed objections by some parties, including the Pension Benefit Guaranty Corp., with respect to the adequacy of the information in the Disclosure Statement. The Debtors, however, said that plan confirmability issues will be addressed at the confirmation hearing. The affiliates of Verizon Communications; the Vermont Utilities; CPA Associates 9, L.P.; ACE American Insurance Company, raised issues with respect to the confirmability of the Plan. "The Disclosure Statement Hearing is not the appropriate time to assert arguments regarding the confirmability of a plan of reorganization and therefore the confirmation-related objections should be overruled," FairPoint told the Court. "I cannot find this plan patently unconfirmable," Judge Lifland said. "The objections could be raised at the confirmation hearing," he said. The amended plan would give holders of secured debt 92% of the shares in the reorganized company and give unsecured creditors 8%. According to Bloomberg, a lawyer for the committee of unsecured creditors said one issue remains between them and FairPoint, and that they will try to resolve it before the confirmation hearing. The matter is the potential proceeds of some litigation involving FairPoint. The Debtors summarized responses to each of the Disclosure Statement Objections, a copy of which is available for free at http://bankrupt.com/misc/FairPt_FairPtReplytoDSObjs.pdf 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 October 26, 2009 (Bankr. S.D.N.Y. 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 COMMUNICATIONS: Proposes to Pay Regulators Expenses ------------------------------------------------------------- FairPoint Communications Inc. and its units seek the Court's authority to reimburse the actual and reasonable expenses and costs incurred by the New Hampshire Public Utility Commission's Staff Advocates and the Vermont Department of Public Service, including the reasonable fees and expenses of the agencies' professionals, in connection with proceedings related to the Debtors' Chapter 11 cases. The Debtors' Plan of Reorganization incorporates and implements the settlement of certain regulatory issues between the Debtors and each of the New Hampshire Staff Advocates and the Vermont DPS, James T. Grogan, Esq., at Paul Hastings Janofsky & Walker LLP, in New York, reminds the Court. The Court's approval of the New Hampshire and Vermont Regulatory Settlement Agreements will be sought in connection with the confirmation of the Plan. Mr. Grogan notes that in connection with obtaining final approval of the Settlement Agreements by the New Hampshire Commission and the Vermont Board, the parties will incur expenses and costs relating to a number of interim measures that they must undertake, including the submission of evidence and participation in hearings regarding the approval of the Settlement Agreements. Expenses and costs, he adds, have been incurred to date in connection with the negotiation of the Settlement Agreements and the related regulatory approvals. In order to enable the Regulatory Agencies to devote sufficient resources to the approval of the Settlement Agreements and to act in a timely manner, the New Hampshire Staff Advocates and the Vermont DPS have requested that the Debtors reimburse them for their reasonable postpetition expenses and costs incurred during these Chapter 11 cases and the postpetition regulatory proceedings, solely in furtherance of the process of negotiating the terms of the Settlement Agreements and any proceedings to obtain the approval of the Agreements. Subject to the Court's approval, the Debtors have agreed to reimburse those expenses and costs in accordance with the terms of the Settlement Agreements, Mr. Grogan relates. Moreover, the Debtors propose uniform procedures to govern the reimbursement of fees and expenses of counsel to the Regulatory Agencies: (a) On or before the 30th day of each month following the month for which reimbursement is sought, each Regulatory Agency seeking reimbursement will serve a monthly statement by hand or overnight delivery on these notice parties: (1) The Debtors c/o FairPoint Communications, Inc. 521 East Morehead Street, Suite 500, Charlotte, NC 28202 Attn: Shirley J. Linn and Susan L. Sowell, Esq. (2) Paul, Hastings, Janofsky & Walker LLP 75 East 55th Street, New York, NY 10022 Attn: Luc A. Despins, Esq. and James T. Grogan, Esq. (3) Andrews Kurth, LLP 450 Lexington Avenue, New York, NY 10017 Attn: Paul N. Silverstein, Esq. and Jonathan I. Levine, Esq.; (4) The Office of the United States Trustee 33 Whitehall Street, 21st Floor New York, New York 10004 Attn: Andrew D. Velez-Rivera and Elisabetta G. Gasparini (5) Kaye Scholer LLP 425 Park Avenue, New York NY 10022 Attn: Margot B. Schonholtz, Esq. and Nicholas J. Cremona, Esq. (b) Each Monthly Statement will specify the expenses and costs for which reimbursement is sought, including the fees and expenses of any professional. (c) With respect to the reimbursement of fees of professionals retained by the Regulatory Agencies, the Monthly Statement will set forth, in reasonable detail, (i) an appropriate narrative description of the services rendered; (ii) the persons who performed the services; (iii) the time expended by each person on each activity, broken out in increments of tenths of an hour; and (iii) the billing rate of each the person. (d) With respect to the reimbursement of expenses of the Regulatory Agencies and professionals retained by them, the Statement will set forth, in reasonable detail, (i) the nature of each expense for which reimbursement is sought; (ii) the amount sought for reimbursement on account of each expense; and (iii) supporting documentation for each expense. (e) Objections, if any, to a Monthly Statement submitted by a Regulatory Agency will be served on the applicable Regulatory Agency and the Notice Parties within 20 business days after receipt of the statement by the objecting party. (f) In the event no objection is interposed by any of the Notice Parties within 20 business days after receipt of the Monthly Statement, the Debtors will then be authorized to pay the Monthly Statement as requested. (g) If an objection is interposed, the Debtors will hold payment with respect to the disputed item pending resolution of the objection. The Debtors, the objecting parties and the applicable Regulatory Agency will then endeavor to amicably resolve any disputes as soon as practicable. If the dispute is not resolved within 10 business days after an objection is interposed, any party may request that the Court resolve the dispute. The Court will convene a hearing to consider this motion on March 22, 2010. Objections will be due by March 15. 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 October 26, 2009 (Bankr. D. S.D.N.Y. 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 COMMUNICATIONS: Wants Plan Exclusivity Until Aug. 23 -------------------------------------------------------------- Pursuant to Section 1121(b) of the Bankruptcy Code, an initial period of 120 days is provided after the commencement of a Chapter 11 case during which a debtor has the exclusive right to propose a plan of reorganization. Section 1121(c)(3) provides that if a debtor proposes a plan within the Exclusive Proposal Period, it has the balance of 180 days after the commencement of the Chapter 11 case to solicit acceptances of the plan. During the Exclusive Plan Proposal Period and the Exclusive Solicitation Period, plans may not be proposed by any party-in- interest other than the debtor. FairPoint Communications Inc. and its units have filed a Chapter 11 Plan well within the Exclusive Filing Period. However, out of abundance of caution, the Debtors ask Judge Lifland of the United States Bankruptcy Court for the Southern District of New York pursuant to Section 1121(d) to extend: (a) their Exclusive Filing Period through August 23, 2010; and (b) their Exclusive Solicitation Period through October 21, 2010. Section 1121(d) allows the Court to extend a debtor's Exclusive Period for cause. According to James T. Grogan, Esq., at Paul Hastings Janofsky & Walker LLP, in New York, the Debtors seek to extend their Exclusive Periods to ensure that in the event the proposed Plan is not ultimately confirmed, they are afforded an opportunity to rework the Plan terms, as necessary, and solicit acceptances of that revised plan without the concomitant deterioration and disruption of their businesses that is likely to be caused by the filing of competing plans by non-debtor parties. Mr. Grogan further asserts that the Debtors' requested extension is warranted for these reasons: -- The Debtors' cases are large and complex. These cases are also compounded by state and federal regulatory regimes that apply to communications common carriers. -- The Debtors have demonstrated good faith progress towards their reorganization. Among others, the Debtors have repeatedly demonstrated their continuing commitment toward an expeditious restructuring by devoting their energies and resources to negotiation of the Plan and Disclosure Statement with the Lender Steering Committee, the Unions, the Regulatory Authorities, and certain holders of FairPoint's unsecured senior notes. Furthermore, the Debtors have filed a Chapter 11 Plan and Disclosure Statement within the initial 120 days of the Petition Date. -- The Debtors are not seeking an extension of the Exclusive Periods to delay the reorganization for some speculative event or to pressure creditors to accede to a plan that is unsatisfactory to them. -- The Debtors have time met and will continue to timely meet their postpetition obligations in these cases. The Court will convene a hearing to consider the Debtors' request on March 22, 2010, at 10:00 a.m., Eastern Time. Objections are due no later than March 15. 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 October 26, 2009 (Bankr. D. S.D.N.Y. 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) FANNIE MAE: Sells $6-Bil. of 3-Year Benchmark Notes --------------------------------------------------- Fannie Mae sold $6 billion of three-year notes in a benchmark issue. Dow Jones Newswires' Prabha Natarajan says the sale follows a similar large-sized offering from Freddie Mac last week. Terms of the notes: Pricing Date March 11, 2010 Settlement Date March 15, 2010 Maturity Date May 7, 2013 Issue Size $6 billion Coupon 1.750% Price 99.839 Yield 1.803% Payment Dates Each May 7th and November 7th, beginning May 7, 2010 Spread +31 basis points / 1.375% 03/15/13 U.S. Treasury CUSIP 31398AJ94 Listing Application will be made to list the securities on the EuroMTF market of the Luxembourg Stock Exchange Barclays Capital Inc., Deutsche Bank Securities Inc., and J.P. Morgan & Co. are the joint lead managers. The co-managers include, Banc of America Securities, CastleOak Securities, L.P., FTN Financial Capital Markets, RBC Capital Markets, UBS Securities LLC, and Williams Capital Group LP. Dow Jones says the Office of the Federal Home Loan Banks is expected to come out with its own offering on Wednesday, as all three government-sponsored enterprises tap the market before the end of the Federal Reserve's purchase program on March 31. Dow Jones adds that for the GSEs, issuing benchmark notes this month is a way to get large amount of funding done. For investors it's a safe-haven purchase with the likely option of selling the paper to the Fed when it conducts its last purchase later this month, Dow Jones says. Dow Jones also notes market participants expect the central bank to purchase agency debt with maturities in the three-year range, but there's no official word on it. According to Dow Jones, the Company said U.S. investors bought 70% of the deal, Asian buyers picked up 17%, fund managers bought 60% of the deal, while central banks bought 28.5%. Dow Jones notes the Company said this is slightly changed from the purchase trend for Fannie debt so far this year, where central banks have bought 34% of Fannie's issuance to date, and fund managers 52%. About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FANNIE MAE: To Buy Up to 200,000 Delinquent Loans From MBS Trusts ----------------------------------------------------------------- Fannie Mae has said it anticipates buying roughly 150,000 to 200,000 loans from MBS trusts this month, and expects that it will continue purchasing loans in each of the subsequent few months until it has substantially reduced the current population of loans that are four or more months delinquent. On February 10, 2010, Fannie Mae said it intends to increase significantly its purchases of loans from single-family MBS trusts that are delinquent as to four or more consecutive monthly payments. The total dollar volume (measured by scheduled unpaid principal balance) of all loans that were four or more months delinquent in Fannie's single-family MBS as of December 31, 2009, was approximately $127 billion. Of that amount, $82 billion backed Fannie's CL prefix MBS and $45 billion backed Fannie's non- CL prefix MBS. Early this month, Fannie said March 2010 purchases of loans that are four or more months delinquent will be reflected in the MBS pool factors released on the fourth business day of April 2010. Fannie said loans that become four or more months delinquent after December 31, 2009, will be included in the purchase population as they become eligible. About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FANNIE MAE: Releases January 2010 Monthly Summary ------------------------------------------------- Fannie Mae early this month released its January 2010 Monthly Summary. The monthly summary report contains information about Fannie Mae's monthly and year-to-date activities for our gross mortgage portfolio, mortgage-backed securities and other guarantees, interest rate risk measures, and serious delinquency rates. A full-text copy of the report is available at no charge at http://ResearchArchives.com/t/s?5886 About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FIRST NATIONAL: Posts $43.7 Million Net Loss in 2009 ---------------------------------------------------- First National Bancshares, Inc. filed its annual report on Form 10-K, showing a net loss of $43.7 million on $12.7 million of net interest income for 2009, compared with a net loss of $44.8 million on $20.0 million of net interest income for 2008. Net loss for the year ended December 31, 2009, included $39.7 million in the provision for loan losses, as compared to $20.5 million in the provision for loan losses for the year ended December 31, 2008. Net loss for the year ended December 31, 2008, included $28.7 million in a non-cash accounting charge for goodwill impairment. Net interest income for the year ended December 31, 2009, decreased by 36.5% or $7.3 million to $12.7 million, as compared to $20.0 million recorded during the same period in 2008, primarily due to the negative impact of the proportionally increased level of nonperforming loans, as well as the overall decrease of 173 basis points in the rates earned on the Company's average interest-earning assets. The net interest margin for the year ended December 31, 2009, was 1.58%, as compared to the 2.57% net interest margin recorded for the year ended December 31, 2008, or a reduction of 99 basis points during the year ended December 31, 2009, primarily due to the excess liquidity that was held on the balance sheet, primarily in lower-yielding interest- bearing bank balances at the Federal Reserve and lost interest income on the elevated level of nonperforming assets as compared to 2008. The Company's balance sheet as of Dec. 31, 2009, showed $717.7 million in assets and $721.8 million of debts, for a stockholders' deficit of $4.1 million. Elliott Davis LLC expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's nonperforming assets which have increased to $137.3 million as of December 31, 2009, provision for loan losses of $39.7 million and $20.5 million, respectively, for the years ended December 31, 2009, and 2008, and significant losses each year. Additionally, the Company's subsidiary bank is significantly undercapitalized under regulatory capital guidelines and during 2009, the subsidiary bank entered into a consent order regulatory enforcement action with its primary regulator, the Office of the Comptroller of the Currency. The consent order requires management to take a number of actions, including, among other things, reducing the level of nonperforming assets and increasing and maintaining its capital levels at amounts in excess of the Bank's current capital levels. "The uncertainty of the Company's ability to replenish its capital raises substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the annual report is available for free at : http://researcharchives.com/t/s?5883 About the Company Spartanburg, S.C.-based First National Bancshares, Inc. was organized in 1999 to serve as the holding company for First National Bank of the South, a national banking association., referred to herein as the "Bank." The Company operates a network of full-service branches in select markets across the state of South Carolina. The Company's assets consist primarily of its investment in the Bank, and its primary activities are conducted through the Bank. As of December 31, 2009, the Company's consolidated total assets were $717.7 million, its consolidated total loans were $537.2 million, and its consolidated total deposits were $641.5 million. FOREST CITY: Moody's Assigns 'Caa2' Rating on New Preferred Stock ----------------------------------------------------------------- Moody's Investors Service assigned a Caa2 preferred rating to Forest City Enterprises, Inc.'s new cumulative perpetual convertible preferred stock issue. The rating agency also affirmed its B3 senior unsecured rating for Forest City Enterprises, Inc. The rating outlook is negative. The preferred stock is being offered in reliance on the exemption from registration provided by the Section 4(2) of the Securities Act of 1933, as amended. The proceeds from the issuance will be primarily used to defray the issuance costs, as well as for general corporate purposes. With respect to $170 million of the new preferred stock, Forest City entered into separate, privately negotiated exchange agreements with certain holders of three separate series of the Company's senior notes due in 2011, 2015 and 2017,: $51.2 million of 3.625% Puttable Equity-Linked Senior Notes due 2011, $121.7 million of 7.625% Senior Notes due 2015, and $5.8 million of 6.500% Senior Notes due 2017, which were exchanged for $50.7 million, $114.4 million and $4.9 million of preferred stock, respectively. In conjunction with the exchange of notes, the Company also issued an additional $50.0 million of preferred stock for cash pursuant to separate, privately negotiated purchase agreements. The B3 senior unsecured rating continues to reflect the deterioration in its portfolio performance experienced by Forest City during the current recession: both its retail and residential segments posted negative same property NOI for the first nine months of fiscal 2009, -2.0% and -3.3% (based on pro-rata consolidation), respectively. These negative results were offset by stronger performance from the office segment of 6.2% same property NOI based on pro-rata consolidation; these results largely reflect long-term office leases, as well as the valuable and well-leased life sciences portfolio (recently joint-ventured with Health Care REIT). Still, Forest City's development exposure remains high at $2.1 billion at pro-rata consolidation; it is somewhat mitigated by the remaining equity commitment of only $130 million as of October 31. 2009. Positively, Forest City has also made significant progress in its refinancing efforts including the extension of its line of credit until 2012 and the reduction in its fiscal 2011 refinancing exposure to $321 million at October 31, 2009, from $427 million at July 31, 2009. The negative rating outlook continues to reflect Forest City's weakened debt protection measures. Moody's believes this will likely persist for several quarters as a result of the broader economic environment. Moody's stated that the achievement of stable rating outlook would depend on Forest City's fixed charge coverage (defined as pro-rata share of recurring EBITDA divided by interest expense, capitalized interest, and preferred dividends) stabilizing at above 1.2x and debt/EBITDA being closer to 14x. Maintaining sound liquidity would also be important for the outlook to be stabilized. A downgrade would likely result from continued earnings deterioration and further pressure on leverage and coverage metrics, as well as any breach of covenants or liquidity challenges. These ratings were assigned with a negative outlook: * Forest City Enterprises, Inc. -- $220 million cumulative perpetual convertible preferred stock at Caa2. These ratings were affirmed with a negative outlook: * Forest City Enterprises, Inc. -- B3 senior unsecured rating. Moody's last rating action with respect to Forest City was on July 29, 2009, when the ratings were lowered to B3 from B1 and the rating outlook was maintained on negative. Forest City Enterprises, Inc. [NYSE: FCE-A] is a national real estate company that is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. At October 31, 2009, its assets totaled $12.8 billion. FORTUNE VALLEY: Files for Ch. 11 Bankruptcy to Restructure Debt --------------------------------------------------------------- According to 9news.com, Fortune Valley Hotel and Casino in Central City filed for Chapter 11 protection to restructure its debt. The Company says the filing will not affect the present operations. The Company hopes to emerge from bankruptcy this summer. Fortune Valley Hotel and Casino operates casino. FRANCISCAN COMMUNITIES: Asks for Court OK to Use Cash Collateral ---------------------------------------------------------------- Franciscan Communities Villa De San Antonio has sought permission from the U.S. Bankruptcy Court for the Western District of Texas to use the cash collateral securing their obligation to their prepetition lenders. Ronald Hornberger, Esq., at Plunkett & Gibson, Inc., the attorney for the Debtor, explains 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 Debtors propose to grant the prepetition lenders replacement liens in and to all of the cash collateral and an allowed super-priority claim. San Antonio, Texas-based Franciscan Communities Villa De San Antonio filed for Chapter 11 bankruptcy protection February 26, 2010 (Bankr. W.D. Texas Case No. 10-50712). Ronald Hornberger, Esq., at Plunkett & Gibson, Inc., 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. FREMONT GENERAL: Tax Assets Spark Unusual Plan Fight ---------------------------------------------------- Four groups of stakeholders are vying for the chance to reorganize Fremont General Corp., setting the stage for a contentious confirmation showdown this week, Law360 reports. Tax benefits worth as much as $200 million have attracted interest from parties, according to Law360. Based in Santa Monica, California, Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at September 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represent the Debtor as counsel. Kurtzman Carson Consultants LLC is the Debtor's noticing agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. Fremont's formal schedules showed $330,036,435 in total assets and $326,560,878 in total debts. GENCORP INC: 2010 Shareholders Meeting on March 24 -------------------------------------------------- The 2010 Annual Meeting of Shareholders of GenCorp Inc. will be held on March 24, 2010, at 9:00 a.m. Eastern time, at the Omni Berkshire Place, 21 East 52nd Street, in New York. Items of Business are: (1) To elect eight directors to the Company's Board of Directors to serve until the 2011 annual meeting of shareholders and until their successors have been duly elected and qualified; (2) To amend the Company's Amended Articles of Incorporation to restrict certain transfers of the Company's common stock to preserve the value of certain tax assets associated with net operating loss carryforwards under Section 382 of the Internal Revenue Code; (3) To approve certain amendments to the GenCorp 2009 Equity and Performance Incentive Plan to increase the number of shares authorized and reserved for issuance thereunder by 1,500,000 shares and increase the maximum individual award limits set forth therein; (4) To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending November 30, 2010; and (5) To consider and act on such other business as may properly be brought before the meeting or any adjournments or postponements thereof. A Notice of Annual Meeting and Proxy Statement were sent to each holder of record of GenCorp common stock, par value $0.10 per share, at the close of business (5:00 p.m. Eastern time) on January 29, 2010. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?587d About GenCorp GenCorp Inc. manufactures aerospace and defense systems, with a separate real estate segment. GenCorp's Aerospace and Defense segment includes the operations of Aerojet-General Corporation, which develops and manufactures propulsion systems for defense and space applications, armament systems for precision tactical weapon systems and munitions applications. GenCorp's Real Estate segment includes activities related to the entitlement, sale, and leasing of excess real estate assets. GenCorp owns 12,200 acres of land adjacent to U.S. Highway 50 between Rancho Cordova and Folsom, California, east of Sacramento. GenCorp also owns 580 acres in Chino Hills, California. As of November 30, 2009, the Company had total assets of $935.7 million against total liabilities of $1.224 billion, resulting in stockholders' deficit of $295.1 million. * * * According to the Troubled Company Reporter on Jan. 26, 2010, Standard & Poor's Ratings Services said it raised its ratings on GenCorp Inc. by one notch and removed all ratings from CreditWatch, where S&P had placed them with positive implications on Dec. 15, 2009. The corporate credit rating is now 'B-' and the outlook is stable. The recovery ratings were not on CreditWatch and remain unchanged. The rating actions follow the company's repayment of $125 million of debt that was tendered to it, with proceeds from the $200 million in convertible subordinated debentures it issued in late December 2009. GENERAL GROWTH: Pershing Square Holds 7.5% of Common Stock ---------------------------------------------------------- Pershing Square Capital Management, L.P.; PS Management GP, LLC; Pershing Square GP, LLC; and William A. Ackman disclosed that as of March 9, 2010, they may be deemed to beneficially own an aggregate of 23,953,782 shares of common stock of General Growth Properties, Inc., representing roughly 7.5% of the outstanding Common Shares. The Pershing entities also said they have additional economic exposure to roughly 54,907,669 Common Shares under certain cash- settled total return swaps, bringing their total aggregate economic exposure to 78,861,451 Common Shares -- roughly 24.9% of the outstanding Common Shares. As reported by the Troubled Company Reporter, Pershing and Fairholme Capital Management, LLC, have proposed to commit an equity investment in General Growth in a letter dated March 8. Pershing and Fairholme have proposed to commit, severally but not jointly, $3.925 billion of new equity capital at a value of $15 per current share. The proposal includes: -- a commitment to purchase $3.8 billion of common stock of the reorganized Company, after giving effect to the distribution of General Growth Opportunities, at a price of $10 per share; and -- a commitment to provide the currently unfunded $125 million of capital to backstop a $250 million rights offering by General Growth Opportunities at a price of $5 per share. Pershing and Fairholme do not seek commitment fees, ticking fees or other fees, other than reimbursement for out-of-pocket expenses. In exchange for its $2.78 billion commitment, Fairholme will received $15 strike price warrants on GGP. Pershing will receive no upfront commitments fees or warrants for its $1.15 billion commitment unless and until its proposed commitment is funded. The deal has no exclusivity, no-shop provisions, overbid requirements, commitment, break or other similar fees. Fairholme is the largest unsecured creditor of General Growth, holding roughly $1.83 billion in face amount of unsecured indebtedness. A full-text copy of the letter to GGP is available at no charge at http://ResearchArchives.com/t/s?587e About General Growth 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: Fairholme Proposes $2.713-Bil. Equity Investment ---------------------------------------------------------------- Fairholme Capital Management, L.L.C. on behalf of The Fairholme Fund (Ticker: FAIRX) and The Fairholme Focused Income Fund (Ticker: FOCIX), each a series of Fairholme Funds, Inc., on March 10 announced a proposal pursuant to which the Funds would acquire approximately 271.3 million shares (or approximately $2.713 billion) of new equity capital of the reorganized General Growth Properties, Inc. (Ticker: GGP) at $10.00 per share to facilitate GGP's emergence from bankruptcy. In addition, under the proposal, the Funds would provide funding of approximately $67.5 million in connection with the $250 million rights offering of General Growth Opportunities, a new subsidiary of GGP, at $5 per share. The Funds currently hold approximately $1.83 billion in face amount of GGP's unsecured indebtedness. The proposal responded to a request by GGP of its largest stakeholders concerning their interest in making a commitment to subscribe for new common stock of GGP upon the effectiveness of GGP's anticipated plan of reorganization, with the proceeds to be applied to redeem existing unsecured creditors at par plus accrued interest and to provide funds to pay for emergence costs and working capital needs after emergence. The proposal was designed to respond to GGP's additional request that the commitment be consistent with the parallel equity investment proposed by Brookfield Asset Management Inc. on February 24, 2010. The proposal involves commitments by the Funds and Pershing Square, each severally but not jointly, and in accordance with the terms and conditions described in the term sheet. The proposal is not binding. Any binding commitment will be reflected only in mutual agreed definitive documentation. About Fairholme Capital Fairholme Capital Management, L.L.C. is registered with the SEC as an investment adviser and, as of March 9, 2010, has approximately $15 billion of assets under management. Fairholme Capital is the investment manager of the Fairholme Funds, Inc. and its series The Fairholme Fund and The Fairholme Focused Income Fund, each of which is an Investor under the terms attached hereto as Annex A. Operating and investment decisions for Fairholme Capital and the Funds are made by Bruce R. Berkowitz, in conjunction with Charles M. Fernandez. Mr. Berkowitz is the founder and Managing Member of Fairholme Capital and the President and a Director of Fairholme Funds, Inc. Mr. Charles M. Fernandez is the President of Fairholme Capital and a Vice-President and a Director of Fairholme Funds, Inc. About General Growth 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: Amends Confidentiality Letter With Ackman --------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission on March 2, 2010, General Growth Properties, Inc., disclosed that it amended a June 5, 2009 Letter Agreement with William A. Ackman, on his own behalf and on behalf of Pershing Square Capital Management, L.P., and related investment funds on February 24, 2010. GGP Senior Vice President and Chief Financial Officer Edmund Hoyt relates Mr. Ackman agreed to provide Brookfield Asset Management, Inc. with a letter agreement it required as a condition to making Brookfield's $2.625 billion proposed equity commitment announced on February 24, 2010. In turn, GGP agreed to amend the June 5 Letter that permits Mr. Ackman and Pershing Square to make public statements regarding the company, its management, the company's board of directors or any possible restructuring or alternative transaction involving the company or any of its direct and indirect subsidiaries. Moreover, Mr. Ackman and Pershinq Square agree to coordinate these public statements in advance with GGP, Mr. Hoyt adds. A full-text copy of the Amended Letter Agreement is available for free at http://ResearchArchives.com/t/s?5725 About General Growth 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: Vornado Joins Bidding Race for GGP Assets --------------------------------------------------------- New York-based commercial real-estate giant Vornado Realty Trust may bid in whole or in part for General Growth Properties, Inc.'s assets joining Simon Property Group, Inc. and Brookfield Asset Management, Inc., The New York Post reports. Sources familiar with the matter told The Post that one way Vornado might enter the bidding is by teaming up with Brookfield Asset and carving out some of the properties that complement Vornado's retail assets. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wants to Expand E&Y Tax Consultant Work ------------------------------------------------------ General Growth Properties Inc. and its units seek the Court's authority to expand the scope of Ernst & Young LLP's employment as their tax services provider. The Debtors and E&Y entered into a tax return engagement letters dated February 1, 2010, General Growth Properties, Inc. Vice President and Deputy General Counsel Linda J. Wight, discloses. Under the Engagement Letters, E&Y will perform these services to the Debtors: (a) Statement of Work No. 1 -- 2009 Income Tax Return Review -- E&Y will perform review procedures with respect to the Debtors' U.S. federal income tax returns for the taxable year ended December 31, 2009; (b) Statement of Work No. 2 -- Tax Controversy Services -- E&Y will provide tax advice and controversy services for The Howard Hughes Corporation & Subsidiaries, Howard Hughes Properties, Inc., and Summerlin Corporation concerning the issues in the current examination by the Internal Revenue Service for tax years 2007 and 2008; (c) Statement of Work No. 3 -- State Forms K-1 -- E&Y will prepare the state equivalent forms K-1 for the year ended December 31, 2009 for the states listed in Attachment 1 of the State Forms K-1 Engagement Letter from information developed from the Debtors' records, as well as information furnished by the Debtors' personnel; (d) Statement of Work No. 4 -- 2009 Partnership Tax Returns -- E&Y will provide these tax services to the Debtors: -- E&Y will prepare the U.S. federal income tax return, Form 1065, for Howard Hughes Properties LP and Rouse FS LLC for the year ended December 31, 2009; -- E&Y will prepare the state and local income tax and franchise tax returns for Howard Hughes Properties LP and Rouse FS LLC for those jurisdictions listed on Attachment 1 to the 2009 Partnership Tax Returns Engagement Letter for the year ended December 31, 2009; and -- E&Y will prepare extension requests, if necessary. (e) Statement of Work #5 -- 2009 Partnership Tax Allocations -- E&Y will provide tax services in connection with the allocation of depreciation expense and non-recourse liabilities among the partners of GGP LP and GGPLP LLC for the year ended December 31, 2009. The Services are substantially identical to the services already being provided to the Debtors with respect to the prior year, just for the new tax calendar year, Ms. Wight points out. She adds that the Services are necessary to enable the Debtors to satisfy their tax regulatory obligations. Moreover, E&Y, at the request of the Debtors, also may render additional support related to the 2009 Income Tax Return Review Services and to the 2009 Partnership Tax Returns Services, deemed appropriate and necessary for the Debtors' estates. The Incremental 2009 Income Tax Return Review Services include an analysis of any shift in ownership of the Debtors' stock, the preparation of statements required by Sections 382 and 383 of the Internal Revenue Code, and a determination of whether these Sections limit the amount of taxable income or tax that can be offset by net operating loss carryforwards, certain recognized built-in losses, certain excess credits, or net capital loss carryovers. The Incremental 2009 Partnership Tax Returns Services include tax planning and representation before taxing authorities. Any Incremental Services requested by the Debtors will be covered under a separate engagement letter which will be subject to Bankruptcy Court approval, and any associated fees will be discussed upon the Debtors' request of the Incremental Services. Moreover, the Debtors seek that E&Y's employment be made effective nunc pro tunc to February 1, 2010, to allow E&Y to be paid for work performed on behalf of the Debtors on or after February 1, 2010, but prior to February 25, 2010. E&Y intends to charge the Debtors for 2009 Income Tax Return Review; State Forms K-1, 2009 Partnership Tax Returns, and 2009 Partnership Tax Allocations services according to its professionals' customary hourly rates: Professional Rate per Hour ------------ ------------- National Partner $660 to $695 Principal/Partner $475 to $575 Executive Director $435 to $515 Manager/Senior Manager $350 to $410 Senior $210 to $325 Staff $95 to $155 E&Y will charge the Debtors for Tax Controversy Services according to its professionals' customary hourly rates: Professional Rate per Hour ------------ ------------- National Partner $660 to $810 Principal/Partner $540 to $770 Executive Director $495 to $685 Manager/Senior Manager $400 to $615 Senior $240 to $430 Staff $100 to $200 In addition, E&Y estimated a fee ceiling for these Services: Service Expected Fee Ceiling ------- -------------------- 2009 Income Tax Return Review $18,000 2009 State Forms K-1 $68,000 2009 Partnership Tax Returns $15,000 2009 Partnership Tax Allocations $110,000 No estimated fee ceiling was given for the Tax Controversy Services. The Debtors will reimburse E&Y for expenses incurred. Timothy G. Overcash, a partner at E&Y, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About General Growth 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: Modifies Brownfield Partners Fees ------------------------------------------------- Motors Liquidation Co. and its units eek the Court's authority to (i) amend the fee cap to provide for Brownfield Partners LLC's continued environmental consulting services for a total cost of consultant labor not to exceed $1,100,000, and (ii) implement revised rates to be charged by Brownfield. The Revised Rates are: Revised Standard Original Standard Staff Hourly Rates Hourly Rates ----- ---------------- ----------------- Partner $330 $275 Partner $300 $250 Sr. Associate $264 $220 Associate $198 $165 Staff Associate $174 $145 Administrative/Clerical $66 $55 The Court HAS authorized the Debtors to employ Brownfield to provide the Services, nunc pro tunc to June 1, 2009. Pursuant to a first engagement letter, Brownfield agreed to a total consultant labor cost not to exceed $100,000. Subsequently, the Court authorized Brownfield to continue providing the Services for fees not to exceed $200,000. Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that Brownfield has become a critical player in the Debtors' remediation efforts. Accordingly, on March 5, 2010, the Debtors executed the Second Letter Agreement that provides for the Second Amended Fee Cap of $1,100,000, and the Revised Rates. Mr. Miller contends that the Second Amended Fee Cap will allow Brownfield to further assist the Debtors in addressing environmental matters and facilitate the efficient and economic administration of their estates. The Revised Rates are necessary in order to appropriately compensate Brownfield Partners for (i) its increased level of responsibility in assisting the Debtors to resolve claims for environmental damages and (ii) the impact of redirecting a substantial portion of its resources away from its principal business activities and towards the Debtors' environmental restructuring effort. Were the Debtors not to agree to the revised rates, their ability to continue to utilize the existing project team would be "compromised," Mr. Miller tells the Court. Moreover, the Revised Rates are in line with rates charged by the Debtors' other environmental consultants, he says. 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: Proposes Global Settlement on Equipment Leases -------------------------------------------------------------- Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, Motors Liquidation Co. and its units ask the Court to approve and ratify these settlement agreements and compromises: (a) a Global Settlement Agreement among General Motors LLC or New GM; Motors Liquidation Company; MLCS, LLC, formerly known as Saturn, LLC; Saturn County Bond Corporation; HNB Investment Corp.; General Foods Credit Corporation; General Foods Credit Investors No. 2 Corporation; Philip- Morris Capital Corporation; General Electric Capital Corporation; U.S. Bank, National Association as owner trustee under leveraged lease transactions; The Bank of New York Mellon, as indenture trustee, pass-through trustee or purchase option agent; Manufacturers and Traders Trust Company, as indenture Trustee; and Wells Fargo Bank Northwest, National Association, as indenture trustee; and (b) a GECC Omnibus Agreement among New GM; MLC; MLCS, LLC; GECC; General Motors of Canada Limited; General Electric Canada Management Services; U.S. Bank; and U.S. Bank Trust, National Association The Debtors also seek the Court's permission to reject certain personal property equipment leases, or the Designated Leases, under the GECC Omnibus Agreement. As part of the GECC Omnibus Agreement, GECC and GECC Canada, the counterparties to the Designated Leases, are consenting to the rejection and agreeing to waive any rejection damage claims they may have against the Debtors. Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Settlements are hinged on a series of fixed equipment lease transactions, mobile equipment lease transactions and furniture equipment lease transactions. The Global Settlement Agreement and GECC Omnibus Agreement are the result of months of collaborative negotiations among the Debtors, the Official Committee of Unsecured Creditors, New GM, and the various counterparties to the equipment lease transactions subject to the Settlement Agreements, he says. Mr. Miller specifies that the Global Settlement Agreement provides for the allowance of claims against the Debtors related to certain fixed equipment leveraged lease transactions designated as Subject Leveraged Lease Transactions, consisting of GM 1991 A-3, GM 2000 A-1, GM 2000 A-3, GM 2001 A-1, GM 2001 A-2, GM 2001 A-3, GM 2001 A-4, GM 2001 A-5, GM 2001 A-6, GM 2001 A-7, and GM 2001 A-8. The GECC Omnibus Agreement addresses certain issues specific to GECC with respect to the Subject Leveraged Lease Transactions designated as GM 2001 A-2, GM 2001 A-4, GM 2001 A-6, and GM 2001 A-8. The GECC Omnibus Agreement also provides for the rejection of a single investor fixed equipment lease transaction or SIL Leases, referred to as the B-1 Lease, the mobile equipment leases, and the furniture leases, and the assumption of a SIL transaction called the C-1 Lease, says Mr. Miller. The Settlement Agreements are expected to result in, among other things: (i) the satisfaction by New GM of administrative and cure Claims against the Debtors in connection with both the assumptions and the rejections of the SIL Transactions; (ii) the liquidation of claims against the Debtors in connection with the Subject Leveraged Lease Transactions being rejected; (iii) the purchase by New GM of otherwise unmarketable equipment leased by the Debtors under the Subject Leveraged Lease Transactions being rejected, thereby directly mitigating, or in some cases eliminating, rejection damage claims against the Debtors; (iv) the purchase by New GM of the Designated Leases being rejected and the waiver of rejection damage claims against the Debtors in connection with those Rejections; and (v) the Debtors receipt of full releases from the counterparties to the Transactions. Satisfaction of Claims under the Settlements Under the Global Settlement Agreement, administrative claims totaling $995,912, which relate to the Subject Leveraged Lease Transactions, will be fully and finally satisfied by New GM for the benefit of the relevant Indenture Trustee. The Global Settlement Agreement also provides for the allowance of these prepetition general unsecured tax indemnity claims in favor of one of these owner participants with respect to Tax Indemnity Agreements entered into in connection the Subject Leverage Lease Transactions: Claim Amount Recipient ------------ --------- $22,400,000 General Foods No. 2, as 2001 A-1 Owner Participant $1,600,000 General Foods No. 2, as 2001 A- 7 Owner Participant The Settlement Agreements also contemplate the allowance of prepetition general unsecured rejection damages claims arising from Participation Agreement and other Operative Documents in favor of these Indenture Trustees: Claim Amount Recipient ------------ --------- $44,412,510 M&TT, as 2000 A-3 Indenture Trustee $141,305,874 Wells Fargo, as 2001 A-1 Indenture Trustee $142,197,253 Wells Fargo, as 2001 A-2 Indenture Trustee $45,835,565 Wells Fargo, as 2001 A-6 Indenture Trustee $6,753,243 Wells Fargo, as 2001 A-7 Indenture Trustee $6,789,209 Wells Fargo, as 2001 A-8 Indenture Trustee Modification of Stay As a condition to the effectiveness of the GECC Omnibus Agreement, GECC has required that the Debtors consent to a limited modification of the automatic stay to allow it to provide notices and an invoice to the Debtors under a tri-party agreement among MCL; GECC, as assignee of Newman Financial Services, Inc.; and Shreveport Red River Utilities, LLC, which provides utility services to the Debtors' plant in Shreveport, Louisiana. The Tri- Party Agreement relates to financing GECC provides to Red River. The Stay Modification would allow GECC solely to meet certain conditions in asserting claims against New GM and Red River. Mr. Miller maintains that the Settlement Agreements will result in a reduction of both administrative and general unsecured claims against the Debtors' estates, while at the same time alleviating the financial burden, time and uncertainty associated with litigation of the issues resolved under the Settlement Agreements. 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: Sues MCM to Disallow Secured Claim -------------------------------------------------- Motors Liquidation Company filed an adversary complaint against MCM Management Corp. asking the U.S. Bankruptcy Court for the Southern District of New York to: (i) disallow MCM's Claim No. 371 in the secured amount of $22,476,106, and (ii) allow that Claim only in an unsecured amount, if any. Furthermore, MLC asked the Court to be awarded money judgment for damages, attorney's fees and other costs in connection with MCM's breach of contract. Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP, in Detroit, Michigan, related that prior to the Petition Date, MLC awarded several demolition contracts through competitive bid to MCM. The Demolition Contracts involved the demolition of several former General Motors manufacturing sites, known as Muncie Manual Transmission, Pontiac Validation Center, Lansing Plants 1 and 6, Lansing Plants 2 and 3 and Building 70, and Grand Blanc. Each of the Demolition Contracts consists of a "Demolition Package" describing the scope of the work to be performed, the Construction General Conditions, and a purchase order incorporating by reference the Demolition Package and Terms & Conditions. In addition to the Demolition Contracts, MLC and MCM entered into agreements whereby MCM would pay to purchase from MLC the buildings, but not the underlying land, at the Demolition Sites. Each of the Building Contracts required MCM to dispose of all machinery, fixtures, attachments and structures located within the designated area in accordance with the Demolition Contracts, Ms. Kovsky-Apap said. The intent of the Demolition Contracts and Building Contracts, taken together, was that MCM would be paid for its demolition work through the proceeds of the material harvested from the Buildings. Specifically, MCM was to make an upfront payment to MLC, after which it was free to dismantle and demolish the Buildings. MCM would recoup its upfront payment and realize profit on the projects through stripping out and selling steel and other valuable scrap materials from the Demolition Sites. With respect to all of the Demolition Sites other than Muncie Manual Transmission, MCM was also obligated to share with MLC any scrap material revenue above a certain threshold point. With respect to the Grand Blanc site, the applicable Demolition Contract required MCM to share with MLC the revenue from the sale of certain stamping dies. According to MLC, MCM has failed to make payment in full for the Buildings. Specifically, MCM has failed to pay and owes MLC $3,500,000 for Lansing Plants 2 and 3 and $3,597,000 for Grand Blanc. MCM has also failed to share any scrap material or stamping die revenue with MLC. Upon information and belief, MCM owes MLC a substantial amount of shared revenue under the Demolition Contracts. MCM has refused to make payment in full for the Buildings or to share scrap or stamping die revenue with MLC. Upon information and belief, MCM claims that it is owed money by MLC for additional work performed outside the scope of the Demolition Contracts and for delay damages, including lost profits. MLC did not cause undue delays of work under any of the Demolition Contracts, Ms. Kovsky-Apap stressed. Furthermore, the Terms & Conditions expressly limits damages for any delay caused by MLC to "the direct, unavoidable net expenses incurred by [MCM] which will, in all cases, exclude lost profits and consequential damages." On May 28, 2009, MCM recorded construction or mechanic's liens on the underlying real estate at the Demolition Sites. MCM alleged in its Lien claims that MLC owed it a total of $22,476,106. Additionally, MCM recorded its purported interest in the Buildings. On June 26, 2009, MCM filed a proof of claim in MLC's Chapter 11 case asserting that it has a secured claim in the amount of $22,476,106. MCM has no valid basis for this Claim, Ms. Kovsky-Apap pointed out. MLC believes that some or all of the additional scope of work included in MCM's Claim has either been paid already, or was not approved by MLC pursuant to the Demolition Contracts and is therefore not entitled to payment, Ms. Kovsky-Apap asserted. During the period leading up to the filing of this complaint, MCM had effectively stopped working on the Demolition Sites. Ms. Kovsky-Apap stated further that the Terms & Conditions of the Demolition Contract provides that, if a contractor fails to complete the work or to perform any other obligation under a contract, MLC has the right to rectify the situation to its satisfaction, including completion of the work through separate contracts with other parties, and the breaching contractor will be responsible for paying MLC's costs in doing so. Moreover, pursuant to the Terms & Conditions, MCM is responsible to pay the cost of all permits required, except the general building permit, in order to complete the work under the Demolition Contracts, Ms. Kovsky-Apap averred. MCM incurred a total bill of $218,561 in principal under the Discharge Permit, under which MCM obtained a water discharge permit to discharge accumulated ground water at the Grand Blanc Demolition Site. The amount does not include interest, fees or penalties. According to Ms. Kovsky-Apap, MCM defaulted on payment of this debt. As a result, Genesee County has recorded a lien against MLC's real property at Grand Blanc. 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: Whitacre Expects to Pay Back Govt. Loans by June ---------------------------------------------------------------- Katie Merx at Bloomberg News reports that General Motors Company said it plans to pay back government loans before June. Chief Executive Officer Ed Whitacre reiterated March 10 that GM aims to repay about $5.7 billion in remaining U.S. debt before June. Meanwhile, Bloomberg News reports that General Motors, which is winding down its Hummer brand after a deal to sell the unit failed, is resuming production of its Hummer H3 and H3T models to fill a fleet order. GM will resume production at its Shreveport, Louisiana, plant from April 12 to May 13 to fill a commercial order for 849 of the sport-utility vehicles, Nick Richards, a GM spokesman, said in an interview with Bloomberg. 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) HARRAH'S ENTERTAINMENT: Reports $846.4 Mil. Net Income for 2009 --------------------------------------------------------------- Harrah's Entertainment, Inc., on March 9, 2010, filed with the Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2010. Harrah's reported a net income of $846.4 million for 2009 on net revenues of $8.907 billion. At December 31, 2009, the Company had $28.979 billion in total assets against $27.203 billion of total liabilities and $2.642 billion of Preferred stock. Harrah's Entertainment Stockholders' deficit was $922.9 million at December 31, 2009. The December 31 balance sheet showed strained liquidity: the Company had $1.598 billion in total current assets against $1.605 billion of total current liabilities. A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?587f On February 19, 2010, Harrah's completed the acquisition of the Planet Hollywood Resort and Casino located in Las Vegas, Nevada. Planet Hollywood is adjacent to Paris Las Vegas and gives Harrah's seven contiguous resorts on the east side of the Las Vegas Strip. On March 5, 2010, Harrah's received the consent of its lenders under its CMBS financing to amend the terms of the CMBS financing to, among other things, (i) provide Harrah's subsidiaries that are borrowers under the CMBS mortgage loan and/or related mezzanine loans the right to extend the maturity of the CMBS Loans, subject to certain conditions, by up to 2 years until February 2015, (ii) amend certain terms of the CMBS Loans with respect to reserve requirements, collateral rights, property release prices and the payment of management fees, (iii) provide for ongoing mandatory offers to repurchase CMBS Loans using excess cash flow from the CMBS entities at discounted prices, (iv) provide for the amortization of the mortgage loan in certain minimum amounts upon the occurrence of certain conditions and (v) provide for certain limitations with respect to the amount of excess cash flow from the CMBS entities that may be distributed to Harrah's. Any CMBS Loan purchased pursuant to the amendments will be cancelled. The amendment to the terms of the CMBS Loans will become effective upon execution of definitive documentation. In addition, Harrah's has agreed to purchase $124 million of face value of CMBS Loans for $37 million, subject to the execution of definitive documentation for the amendments. In the fourth quarter of 2009, Harrah's purchased $950 million of face value of CMBS Loans for $237 million. Pursuant to the terms of the amendments, the borrowers have agreed to pay lenders selling CMBS Loans an additional $48 million for loans previously sold, subject to the execution of definitive documentation for the amendments. On February 23, 2010, the Human Resources Committee of the Board of Directors of the Company adopted an amendment to the Harrah's Entertainment, Inc. Management Equity Incentive Plan. The amendment provides for an increase in the available number shares of the Company's non-voting common stock for which options may be granted to 4,566,919 shares. The amendment also revised the vesting hurdles for performance- based options under the Plan. The performance options vest if the return on investment in the Company of TPG Capital, L.P., Apollo Global Management, L.L.C. and their respective affiliates -- the "Majority Stockholders -- achieve a specified return. Previously, 50% of the options vested upon a 2x return and 50% vested upon a 3x return. The triggers have been revised to 1.5x and 2.5x, respectively. In addition, a pro-rata portion of the 2.5x options will vest if the Majority Stockholders achieve a return on their investment that is greater than 2.0x, but less than 2.5x. The pro rata portion will increase on a straight line basis from 0 to a participant's total number of 2.5x options depending upon the level of returns that the Majority Stockholders realize between 2.0x and 2.5x. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com/-- through its wholly owned subsidiary, Harrah's Operating Company, Inc., operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. As of June 30, 2009, the Company had $30.7 billion in total assets and total current liabilities of $1.71 billion, long-term debt of $19.3 billion, deferred credits and other of $718.2 million, deferred income taxes of $5.74 billion, and preferred stock of $2.46 billion. Harrah's Entertainment carries a 'Caa3' Corporate Family rating, and a 'Caa3' Probability of default rating from Moody's. The ratings "reflect very high leverage and a negative outlook for gaming demand over the next year," Moody's said in September 2009. HEXION SPECIALTY: Posts $92 Million Net Income for 2009 ------------------------------------------------------- Hexion Specialty Chemicals, Inc., on Tuesday reported its results for the fourth quarter and year ended December 31, 2009. Results for the fourth quarter of 2009 include: -- Revenues of $1.09 billion in the fourth quarter of 2009 compared to $1.18 billion during the prior year period as the sales decline reflected the contractual pass through of lower raw material prices, which more than offset year -over-year volume gains and pricing actions. -- Operating income of $36 million for the fourth quarter of 2009 compared to an operating loss of $876 million for the prior year period. Fourth quarter 2009 operating income improved compared to the prior year due to lower asset impairment and business realignment costs. Fourth quarter 2008 results included $800 million in terminated merger expenses. -- Net loss attributable to Hexion Specialty Chemicals, Inc. of $6 million for the 2009 quarter versus $921 million in the prior year period. The fourth quarter 2009 loss reflected the same factors impacting operating results and lower interest expense. -- Segment EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $106 million in the fourth quarter of 2009 compared to $46 million during the prior year period. Fiscal year 2009 results include: -- Revenues of $4.0 billion versus $6.1 billion in 2008, with lower volumes accounting for $1.1 billion of the decline, the contractual pass through of lower raw material costs reducing sales by $791 million and unfavorable foreign currency translation of $167 million. -- Operating income of $94 million versus an operating loss of $893 million in 2008. Full-year 2009 results primarily reflected a reduction in terminated merger and settlement expense as Hexion recorded $1.027 billion in terminated merger and settlement costs in 2008. Hexion's operating income also reflected the improvement in its gross profit as a percentage of net sales, which increased to 13% in 2009 compared to 10% in the prior year period. Operating income also benefited from a $48 million reduction in selling, general and administrative expenses in 2009 versus 2008. -- The Company posted net income attributable to Hexion Specialty Chemicals, Inc. of $92 million in 2009 compared to a net loss of $1.190 billion in 2008, which reflected a $224 million gain on the extinguishment of $298 million in face value of outstanding debt securities and $81 million in decreased interest costs. -- Hexion recorded 2009 Segment EBITDA of $385 million versus $461 million in 2008. Adjusted EBITDA was $529 million for the year ended December 31, 2009. "We continued to close the revenue gap versus the prior year as our volumes increased by 5 percent in the fourth quarter of 2009 compared to the fourth quarter of 2008," said Craig O. Morrison, Chairman, President and CEO. "Although certain end markets remain challenged, our Segment EBITDA has been recovering due to gradually improving volumes and the cumulative impact of our cost reduction and productivity initiatives." At December 31, 2009, Hexion had $2.973 billion in total assets against $5.022 billion of total liabilities. Hexion shareholder's deficit was $2.063 billion at December 31, 2009. The Company also said at December 31, 2009, Hexion had $3.510 billion of debt. In addition, at December 31, 2009, Hexion had $367 million in liquidity including $135 million of unrestricted cash and cash equivalents, $183 million of borrowings available under its senior secured revolving credit facilities, and $49 million of borrowings available under additional credit facilities at certain domestic and international subsidiaries and an equity commitment from certain affiliates of Apollo Management, L.P. Hexion entered into an amendment to its Senior Secured Credit Facilities during the first quarter of 2010. Under the amendment, Hexion extended the maturity of $957 million of term loans from May 5, 2013 to May 5, 2015, and increased the interest rate with respect to such term loans from LIBOR plus 2.25% to LIBOR plus 3.75%. The Company also issued $1 billion aggregate principal amount of senior secured notes due 2018. The Company used the net proceeds of $993 million from the issue to repay $800 million of Hexion's U.S. term loans under the Senior Secured Credit Facility, pay certain related transaction costs and expenses, and provide incremental liquidity of $162 million. Following the refinancing, Hexion's pro forma liquidity at December 31, 2009, totaled $529 million. In addition, in late December 2009 and early January 2010 Hexion renewed its revolving line of credit facility commitments from lenders, which will take effect upon the May 31, 2011 maturity of the existing revolving facility commitments. The new commitments, which total $200 million, will extend the availability of the revolver to 2013. The new revolving loans, which cannot be drawn until the existing revolving credit facility matures, will bear interest at a rate of LIBOR plus 4.50%. At December 31, 2009, the Company was in compliance with the senior secured bank leverage ratio under the covenants for its senior secured bank facility. Hexion expects to have adequate liquidity to fund its ongoing operations for the foreseeable future from cash on its balance sheet, cash flows provided by operating activities, amounts available for borrowings under its credit facilities and amounts available from its parent. Outlook "We were pleased with our ability to generate cash flow from operations in 2009, which totaled $355 million, as well as our ability to reduce working capital by $303 million in the past year, with working capital as a percentage of sales of 9.3 percent," Mr. Morrison said. "We will continue to focus aggressively on cash management going forward. We also improved our capital structure in 2009 through careful cash management, the repurchase of a portion of our debt securities and our recent refinancing, which provided incremental liquidity and extended a significant amount of our maturities." "Regarding customer demand, a high level of uncertainty remains in 2010, but we are guardedly optimistic that the signs of stabilization in several end markets will continue to drive a gradual improvement in our volumes. Regardless of market conditions, we are focused on creating value from the continued achievement of our productivity initiatives and growth from our specialty product applications. We also continue to strategically expand our operations in high growth international markets, such as the construction of a new plant at our Onsan, Korea site, which will support our Versatic Acids and Derivatives products." "Similar to 2009, we plan to focus on the items we can control in the coming year, including our cost-control initiatives, site restructurings, and serving our customers. We believe that as the economy recovers, Hexion is well positioned to benefit from its lower cost structure and global customer base." A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?5880 A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?5881 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. * * * 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. HOTEL METROPOLIS: Files for Chapter 11 in San Francisco ------------------------------------------------------- Hotel Metropolis II LLC, the owner of Metropolis Hotel in San Francisco, filed a bankruptcy petition on March 10 (Bankr. N.D. Calif. Case No. 10-30802). Hotel Metropolis II listed $1 million to $10 million in assets and $10 million to $50 million in debt in its petition. Three San Francisco-based hotel operators have filed for bankruptcy this week. On March 9, Majestic LLC, owner of Hotel Majestic, filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 10-30787). Personality Hotels III LLC, the owner of Hotel Frank and Vertigo Hotel in San Francisco, filed for Chapter 11 on March 10 (Bankr. N.D. Calif. Case No. 10-30804). Both Personality Hotels and Hotel Metropolis II are represented by Edward C. Singer, Esq., at Lemi Group Legal Department. HUDSON'S FURNITURE: Asks for Court Okay to Use Cash Collateral -------------------------------------------------------------- Hudson's Furniture Showroom, Inc., has sought authorization from the U.S. Bankruptcy Court for the Middle District of Florida to use cash collateral. The cash collateral may be subject to a lien in favor of Furniture Brands International, Inc. The Debtor estimates that it owes FBI $1,750,000 as of the Petition Date. Justin M. Luna, Esq., at Latham, Shuker, Eden & Beaudine, LLP, the attorney for the Debtor, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtor anticipates that it will require the use of $2,680,000 to continue and maintain operations for the next four weeks, and, depending on the month, a greater or lesser amount will be required each comparable period thereafter. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at http://bankrupt.com/misc/HUDSONS_FURNITURE_budget.pdf In exchange for using cash collateral, the Debtor proposes to grant FBI a replacement lien to the same validity, extent, and priority as its prepetition lien. About Hudson's Furniture Sanford, Florida-based Hudson's Furniture Showroom, Inc., owns and operates several retail furniture stores in Florida, including stores in the cities of Sarasota, Lakeland, Pinellas Park, Tampa, Brandon, Melbourne, Ormond Beach, Altamonte Springs, Ocoee, Orlando and Clearwater, Florida. The Company filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. M.D. Fla. Case No. 10-03322). Justin M. Luna, Esq.; Mariane L. Dorris, Esq.; and Victoria I. Minks, Esq., at Latham Shuker Eden & Beaudine LLP, assists the Company in its restructuring effort. The Company estimated its assets and liabilities at $10,000,001 to $50,000,000. The Company's affiliates -- A&J Rentals, LLC; Hud Twenty-Five Ocoee, LLC; Hud Twenty-Three Tampa, LLC; and Hud-Five, LLC -- filed separate Chapter 11 petitions on October 13, 2009. HUDSON'S FURNITURE: Section 341(a) Meeting Scheduled for March 29 ----------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Hudson's Furniture Showroom, Inc.'s Chapter 11 case on March 29, 2010, at 10:00 a.m. The meeting will be held at 6th Floor Suite 600, 135 West Central Boulevard, Orlando, FL 32801. 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. Sanford, Florida-based Hudson's Furniture Showroom, Inc., filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. M.D. Fla. Case No. 10-03322). Justin M. Luna, Esq.; Mariane L. Dorris, Esq.; and Victoria I. Minks, Esq., at Latham Shuker Eden & Beaudine LLP, assist the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. I & C PROPERTY: Can Hire Brown Van Horn as Bankruptcy Counsel ------------------------------------------------------------- The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida authorized I & C Property Management, Inc. to employ the David Marshall Brown, Esq. and the law firm of Brown, Van Horn & Associates, P.A. on a general retainer. Brown Van Horn is expected to represent the Debtor in the Chapter 11 proceedings. To the best of the Debtor's knowledge, Brown Van Horn is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Brown, Van Horn & Associates, P.A. 33 NE 2, St No. 208 Ft. Lauderdale, FL 33301 Tel: (954) 765-3166 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). The Company listed $10,000,001 to $50,000,000 in assets and $100,001 to $500,000 in liabilities. INTELSAT LTD: Reports $97 Million Net Loss for Fourth Quarter ------------------------------------------------------------- Intelsat S.A. reported results for the three months and year ended Dec. 31, 2009. Intelsat S.A. reported revenue of $620.8 million and a net loss of $97.0 million for the three months ended Dec. 31, 2009. The company also reported Intelsat S.A. EBITDAii, or earnings before net interest, gain on early extinguishment of debt, taxes and depreciation and amortization, of $454.0 million, and Intelsat Luxembourg Adjusted EBITDAii of $488.9 million, or 79% of revenue, for the three months ended Dec. 31, 2009. Intelsat S.A. reported revenue of $2.5 billion and a net loss of $781.7 million for the year ended Dec. 31, 2009. The net loss includes non-cash charges of $499.1 million incurred in the first quarter of 2009 for orbital location impairments. The company also reported Intelsat S.A. EBITDA of $1.4 billion and Intelsat Luxembourg Adjusted EBITDA of $2.0 billion, or 79 percent of revenue, for the year ended Dec. 31, 2009. As of December 31, 2009, Intelsat S.A. had total assets of $17,342,935,000 against total current liabilities of $814,643,000; long-term debt, net of current portion of $15,223,010,000; deferred satellite performance incentives, net of current portion of $128,774,000; deferred revenue, net of current portion of $254,636,000; deferred income taxes of $548,719,000; accrued retirement benefits of $239,873,000; other long-term liabilities of $335,159,000; and noncontrolling interest of $8,884,000; resulting in shareholder's deficit of $210,763,000. "2009 was a record revenue year for Intelsat, reflecting the continued strength of the fixed satellite services sector. Our growth was fueled by the diverse capabilities of our global network, which provides critical infrastructure for network services, media and government customers," said Intelsat CEO, David McGlade. "In 2009 we signed a number of significant customer agreements that reflect our strategic goals of expanding direct-to-home neighborhoods for regional service providers, being the commercial satellite services supplier of choice for military operations and providing bandwidth for telecom and data service providers. These agreements increased our revenue backlog from $8.8 billion at year end 2008 to $9.4 billion at year end 2009." A full-text copy of Intelsat's earnings release is available at no charge at http://ResearchArchives.com/t/s?5874 A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?5882 About Intelsat, Ltd. Headquartered in Pembroke, Bermuda, Intelsat, Ltd., formerly PanAmSat Corp., -- http://www.intelsat.com/-- is the largest fixed satellite service operator in the world and is owned by Apollo Management, Apax Partners, Madison Dearborn, and Permira. The company has a sales office in Brazil. Intelsat Ltd.'s balance sheet showed total assets of US$12.05 billion, total debts of US$12.77 billion and stockholders' deficit of US$722.3 million as of March 31, 2008. INTERGROUP CORPORATION: Receives NASDAQ Notice of Non-Compliance ---------------------------------------------------------------- The InterGroup Corporation on March 4, received notice from the NASDAQ Listing Qualifications Staff indicating that the Company's common stock would be subject to delisting from The NASDAQ Capital Market due to the Company's continued non-compliance with the minimum $2.5 million stockholders' equity requirement, as set forth in Listing Rule 5550(b), unless the Company requests a hearing before a NASDAQ Listings Qualification Panel. The Company intends to timely request a hearing before the Panel and, accordingly, the Company's common stock will remain listed on The NASDAQ Capital Market pending a final determination by the Panel following the hearing. In connection with the hearing, the Company intends to submit a plan outlining its strategy for regaining compliance with the Rule. Under NASDAQ's Listing Rules, the Panel may, in its discretion, determine to continue the Company's listing pursuant to an exception to the Rule for a maximum of 180 calendar days from the date of the Staff Determination, or through August 31, 2010, in order to permit the Company adequate time to effectuate its plan and regain compliance with the Rule. However, there can be no assurance that the Panel will grant the Company additional time or that the Company's efforts to maintain the listing of its common stock on NASDAQ will be successful. INTERSTATE HOTELS: Nearing Settlement on Plan Merger Litigation --------------------------------------------------------------- Interstate Hotels & Resorts Inc. entered into a memorandum of understanding with respect to a settlement of the litigation relating to the agreement and plan merger dated Dec. 18, 2009, with Hotel Acquisition Company LLC, HAC Merger Sub Inc., HAC Merger Partnership LP, Interstate Operating Company LP. The members of Company's board of directors, HAC, Merger Sub and Merger Partnership have been named as defendants in the lawsuit docketed as Khanna v. Hewitt, Docket No. CL09-1583. Under the memorandum of understanding, the parties will execute a stipulation of settlement, which will be subject to court approval. There can be no assurance that the settlement will be finalized or that the court will approve the settlement. The settlement terms, which require court approval, provide that the Litigation will be dismissed with prejudice against all defendants. The Company and the other named defendants deny any liability with respect to the facts and claims alleged in the Litigation. Defendants further deny that any supplemental disclosure was required under any applicable statute, rule, regulation or law. Without agreeing that any of the claims in the Litigation have any merit, the Company has agreed, pursuant to the settlement terms, to make the following disclosures which supplement the information provided in the Company's definitive proxy statement, dated Feb. 5, 2010. The settlement will not affect the amount of the merger consideration to be paid to the Company's stockholders in the merger. Arlington, Virginia-based Interstate Hotels & Resorts, Inc. (NYSE: IHR) and its affiliates -- http://www.ihrco.com/-- manages or has ownership interests in a total of 232 hospitality properties with more than 46,000 rooms in 37 states, the District of Columbia, Russia, India, Mexico, Belgium, Canada, Ireland and England. The company has ownership interests in 56 of those properties, including six wholly owned assets. Interstate Hotels & Resorts also has contracts to manage 13 to be built hospitality properties with approximately 3,000 rooms which includes the company's entry into new markets such as Costa Rica. At September 30, 2009, the Company's consolidated balance sheets showed $456.2 million in total assets, $311.8 million in total liabilities, and $144.4 million in shareholders' equity. The Company reported current assets of $64 million and current liabilities of $85.4 million at September 30, 2009, resulting in a $21.4 million working capital deficit. Going Concern Doubt The Company states that the report from its independent registered public accounting firm, KPMG LLP, included in the Company's Form 10-K for the year ended December 31, 2008, included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to potential credit facility covenant violations. In July 2009, the Company successfully amended the terms of the its Credit Facility which, among other things, eliminated the NYSE listing requirement, eliminated the total leverage ratio debt covenant and extended the maturity of its debt from March 2010 to March 2012. * * * Interstate Hotels carries Moody's "Caa1" corporate family rating. INTERSTATE HOTELS: Merger with Thayer, Jin Jiang Venture Approved ----------------------------------------------------------------- Interstate Hotels & Resorts on March 10 said its stockholders approved, at a special meeting, the merger agreement by which Interstate will be acquired by Hotel Acquisition Company, LLC. HAC is a 50/50 joint venture between subsidiaries of Thayer Hotel Investors V-A LP, a private equity fund sponsored by Thayer Lodging Group, and Shanghai Jin Jiang International Hotels (Group) Company Limited. Thayer Lodging, founded in 1991, is a private equity sponsor that invests exclusively in the lodging sector. Jin Jiang Hotels is the world's 13th largest hotel company in terms of number of rooms according to Hotels Magazine. On December 18, 2009, under the terms of the merger agreement, the outstanding shares of Interstate common stock will be acquired by HAC for $2.25 per share in cash. Interstate expects to close the merger no later than March 18, 2010, subject to the satisfaction of various closing conditions of the parties pursuant to the terms of the merger agreement. In connection with the merger, a request was submitted on behalf of Interstate to the New York Stock Exchange for withdrawal of the listing of its common stock. Interstate's proposed delisting is contingent, among other conditions, on the closing of the merger. To effect the delisting, the New York Stock Exchange will file a Form 25 with the Securities and Exchange Commission. About Interstate Hotels Arlington, Virginia-based Interstate Hotels & Resorts, Inc. (NYSE: IHR) and its affiliates -- http://www.ihrco.com/-- manages or has ownership interests in a total of 232 hospitality properties with more than 46,000 rooms in 37 states, the District of Columbia, Russia, India, Mexico, Belgium, Canada, Ireland and England. The company has ownership interests in 56 of those properties, including six wholly owned assets. Interstate Hotels & Resorts also has contracts to manage 13 to be built hospitality properties with approximately 3,000 rooms which includes the company's entry into new markets such as Costa Rica. At September 30, 2009, the Company's consolidated balance sheets showed $456.2 million in total assets, $311.8 million in total liabilities, and $144.4 million in shareholders' equity. The Company reported current assets of $64 million and current liabilities of $85.4 million at September 30, 2009, resulting in a $21.4 million working capital deficit. Going Concern Doubt The Company states that the report from its independent registered public accounting firm, KPMG LLP, included in the Company's Form 10-K for the year ended December 31, 2008, included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to potential credit facility covenant violations. In July 2009, the Company successfully amended the terms of the its Credit Facility which, among other things, eliminated the NYSE listing requirement, eliminated the total leverage ratio debt covenant and extended the maturity of its debt from March 2010 to March 2012. * * * Interstate Hotels carries Moody's "Caa1" corporate family rating. JOSE JORGE: Has Access to Northwest Farm Cash Until March 31 ------------------------------------------------------------ The Hon. W. Richard Lee of the U.S. Bankruptcy Court for the Eastern District of California, in a fourth interim order, authorized Jose Jorge and Fatima Jorge to use the cash collateral of Northwest Farm Credit Services until March 31, 2010. A continued interim hearing on the Debtors' cash collateral use will be held on March 24, 2010, at 9:00 a.m. in this Court. Any objections may be presented at the continued hearing. The Debtors would use the money to fund their Chapter 11 case, pay suppliers and other parties. The Court also ordered that the California and Idaho creamery checks will continue to be payable to Northwest Farm. Northwest Farm holds a perfected security interest on the Debtors' personal property and the second deed of trust on the real property. The Court added that any funds not expended pursuant to the interim order will remain in the accounts subject to further order of the Court. The remaining proceeds from the March 1 to 15, milk proceeds checks, after payment, will constitute adequate protection to Northwest Farm. The Debtors will deposit all cash collateral received from Northwest Farm into the accounts. As adequate protection for any diminution in value of Northwest Farm's collateral, the Debtors will grant Northwest Farm a replacement lien on like collateral to the extent and in the same priority as existed on the cash collateral. About Jose Jorge Gustine, California-based Jose Jorge -- dba Jose M. Jorge Dairy, dba Jorge Family Dairy -- operate two dairies as sole proprietor, one in California and one in Idaho. Jose Jorge filed for Chapter 11 bankruptcy protection on December 10, 2009 (Bankr. E.D. Calif. Case No. 09-62001). Hilton A. Ryder, Esq., who has an office in Fresno, California, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. LEHMAN BROTHERS: Europe Arm Sues Bankhaus for Return of $1 Bil. --------------------------------------------------------------- PricewaterhouseCoopers, administrators for Lehman Brothers International Europe, sued German affiliate, Lehman Brothers Bankhaus, for the return of $1 billion in client money it held when the investment bank collapsed, Bloomberg News reported on February 16. The first hearing on the matter, according to PwC, was scheduled for July 6 in Frankfurt. LBIE's claim against Lehman Brothers Bankhaus may affect how much claimants, whose money was supposed to be held in ring-fenced accounts by LBIE, will get back, according to a judgment in London in December 2009, Bloomberg related. PwC "have been unable even to hazard a guess" as to what portion of the $1 billion LBIE had deposited with Bankhaus will be returned, Justice Michael Briggs said in the judgment, which dictated how client money held by LBIE should be returned, as quoted by Bloomberg. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: M. Mazzatta Sues to Recover Collateral ------------------------------------------------------- Mark Mazzatta and Michele McHugh-Mazzatta filed an adversary complaint against Lehman Brothers OTC Derivatives, Inc., Lehman Brothers Inc., Lehman Brothers Holdings, Inc., and JPMorgan Chase Bank, N.A., seeking declaratory judgment, injunctive relief, damages and imposition of a constructive trust based on the parties' rights and obligations under a Master Agreement dated October 12, 2007, between LOTC and the Mazzatas and the annex documents to the master agreement. Pursuant to the Master Agreement and related document, the Mazzattas delivered AAA rated Municipal Bonds with a market value of more than $607,000 and more than $900,000 in cash to LBI as agent for LOTC. As of August 31, 2008, the Collateral was valued at $1,689,021 based on account statements, composed of Bonds having a value of $719,164 and $969,856 in cash. The Bonds are in a segregated account in the Mazzattas' name at LBI, and the Cash is in a segregated account at JPMorgan, A/C # 066626277. On September 15, 2008, an Event of Default occurred under the terms of the Master Agreement. Subsequently, the Mazzattas delivered a Notice of Default to LOTC. As a result, LBI, LOTC, and LBHI are obligated to comply with the terms of the Master Agreement and applicable law, and immediately return the Collateral to the Mazzattas. However, despite repeated requests, LBI, LOTC and LBHI have failed to deliver the Collateral to the Mazzattas. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Over $1 Bil. in Claims Change Hands in 17 Days --------------------------------------------------------------- The Office of the Clerk of the Bankruptcy Court received more than 100 notices of transfer of claims, aggregating more than $1 billion, in the Debtors' Chapter 11 cases from February 16 to March 5, 2010: * Ahorro Corporacion Financiera S.V. S.A. Transferors Claim No. Claim Amount ----------- --------- ------------ Dinero Activo I Fondo de Inversion 60359 $712,345 Vital Dinero Fondo de Inversion 60360 $4,278,635 Fonalava Fondo de Inversion 60361 $10,689,745 EPSV Araba Eta Gasteizko 60362 $223,054 Aurreski Kutxa III 60365 $148,702 EPSV Araba Eta Gasteizko Aurreski Kutxa IV Araba Pensiones EPSV-Tuboplast 60363 $148,702 Hispania SA Vital Pension Garantizado 2012, 60364 $966,568 P.P.I., E.P.S.V. * Alandsbanken Sverige AB Transferors Claim No. Claim Amount ----------- --------- ------------ Sparbanken Vastra Malardalen 56951 $1,499,812 * Bank of America Mexico S.A. Transferors Claim No. Claim Amount ----------- --------- ------------ Grupo Actinver 13114 $11,296,761 * Banc of America Securities LLC Transferors Claim No. Claim Amount ----------- --------- ------------ Merrill Lynch International 47718 $9,582,743 13114 $11,296,761 59405 $4,870,055 * CAT Brokerage AG Transferors Claim No. Claim Amount ----------- --------- ------------ Innovatis Investment Fund Ltd. 58690 $7,000,000 * CC Arbitrage Ltd. Transferors Claim No. Claim Amount ----------- --------- ------------ Luminus Energy Partners 66337 $11,256,426 Master Fund, Ltd. 66338 $11,256,426 * Cedar Hill Capital Partners Master Fund L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ Cedar Hill Capital Partners 23494 $558,876 Offshore Ltd. 23496 $1,389,215 23495 $1,948,092 88009420 -- * Citigroup Financial Products Inc. Transferors Claim No. Claim Amount ----------- --------- ------------ Macgere SGPS, SA 39786 $2,830,200 Controlac SGPS, SA 39733 $2,830,200 Citibank Belgium S.A. 55408 $159,329,718 * Contrarian Funds LLC Transferors Claim No. Claim Amount ----------- --------- ------------ Emirates National Oil Company 5015 $827,300 * C.V.I G.V.F. (Lux) Master S.a.r.l. Transferors Claim No. Claim Amount ----------- --------- ------------ Bankers Life and Casualty Company 12571 $4,341,279 Brahman C.P.F. Partners LP 19787 $578,712 Brahman Investments I (SPVP) Ltd. 25649 $5,017,686 Conseco Life Insurance Company 12578 $183,714 12568 $864,016 Washington National Insurance Company 12574 $1,136,317 BY Partners L.P. 25650 $2,708,449 25651 $4,527,796 CBARB, A Seg Acc.of Geode Cap. 30692 $4,498,638 Master Fund Ltd * Daiwa Securities Capital Markets Co. Ltd. Transferors Claim No. Claim Amount ----------- --------- ------------ Murata Machinery Ltd. 60860 $1,865,671 Lehman Brothers International Europe 62783 $1,898,704 * Deutsche Bank AG, London Branch Transferors Claim No. Claim Amount ----------- --------- ------------ Fundamental European Value SA 21779 $5,830,829 Diversified Financials Europe S.A. 21557 $627,628 Corporate Credit (Europe) SA 21657 $2,883,417 Swiss Re Global Markets Limited 27880 $6,051,196 London Select Fund Limited 23593 $11,117,158 Mizuho Bank (Switzerland) Ltd. 56637 $6,762,122 Marshall Wace Core Fund Limited 13320 $6,607,185 European Credit Fund SICAV 21659 $5,650,589 European Credit (Luxembourg) S.A. 21556 $80,798,607 21777 $5,661,508 Relative European Value S.A. 21558 $1,026,966 21656 $4,419,580 Diversified European Credit S.A. 21775 $38,562,702 21776 $3,779,559 Swiss Re Financial Products Corp. 27877 $7,157,163 27877 $9,262,048 27878 $40,590,299 27879 $75,335,304 Gulf Stream-Sextant CLO 2006-1 Ltd. 19145 $3,336,027 19146 $3,336,027 66094 $3,336,027 66095 $3,336,027 Gulf Stream-Sextant CLO 2007-1 Ltd. 19143 $5,448,826 19144 $5,448,826 66096 $5,460,726 66097 $5,460,726 HSBC Bank (Cayman) Limited 13314 $2,882,856 13315 $70,957 13316 51,612 13317 41,460 13318 $35,788 13319 $36,330 31935 $74,941 31936 $85,524 31937 $106,465 31938 $146,369 31939 $5,946,739 31940 $73,824 Investment Grade Europe S.A. 21778 $4,194,922 HSH Nordbank AG 4699 $764,348 30067 $30,761,755 20232 $5,602,725 20234 $5,602,725 20235 $30,761,755 20236 $21,544,979 20237 $21,544,979 45922 $21,876,326 45923 $21,876,326 Capula Global Relative Value 19686 $8,524,454 Master Fund Limited The Drake Global Opportunities 32328 $5,323,144 (Master) Fund Ltd. The Governor and the Company of 7369 $14,697,630 the Bank of Ireland 7370 $14,697,603 7371 $2,698,951 * Elliott Associates L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ Deutsche Bank AG, London 27004 $2,899,895 * Goldman Sachs & Co. Transferors Claim No. Claim Amount ----------- --------- ------------ Stone Lion Portfolio L.P. 50323 $19,194,992 Goldman Sachs Japan Co. Ltd. 46198 $989,494 46197 $983,338 44616 $986,451 Ahorro Corporacion Financiera 60359 $712,345 S.V., S.A. 60360 $4,278,635 60361 $10,689,745 60362 $223,054 60363 $148,702 60364 $966,568 60365 $148,702 * Goldman Sachs International Transferors Claim No. Claim Amount ----------- --------- ------------ Daiwa Securities Capital 60860 $1,865,671 Markets Co. Ltd. 62783 $1,898,704 * Goldman Sachs Japan Co. Ltd. Transferors Claim No. Claim Amount ----------- --------- ------------ Hirakata Shinkin Bank 54989 $4,470,519 62783 $4,476,760 The Kuwana Shinkin Bank 46198 $989,494 44616 $986,451 46197 $983,338 * Goldman Sachs Lending Partners LLC Transferors Claim No. Claim Amount ----------- --------- ------------ Sacher Funding Ltd. 15160 $42,316,157 JMG Triton Offshore Fund Limited 21884 $ 4,472,483 21843 $4,472,483 66312 $4,078,143 66313 $4,078,143 * Hirakata Shinkin Bank Transferors Claim No. Claim Amount ----------- --------- ------------ Lehman Brothers International Europe 62783 $4,746,760 * JPMorgan Chase Bank, N.A. Transferors Claim No. Claim Amount ----------- --------- ------------ Second Market Inc. 50055 $20,307,165 * Liquidity Solutions Inc. Transferors Claim No. Claim Amount ----------- --------- ------------ Pira Energy Group -- $8,087 * Longacre Master Fund II L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ FH Emerging Markets Debt Fund L.P. 5127 $1,750,000 15085 $1,750,000 5126 $1,750,000 15084 $1,750,000 * Longacre Opportunity Fund L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ Neste Oil Oyj 13099 $836,012 Element Capital Master Fund Ltd. 33290 $5,368,208 33291 $5,368,208 * Merrill Lynch Credit Products LLC Transferors Claim No. Claim Amount ----------- --------- ------------ Abaxbank S.p.A. 16060 $14,914,322 16059 $14,580,223 16062 $14,568,878 * Merrill Lynch International Transferors Claim No. Claim Amount ----------- --------- ------------ Merrill Lynch Pierce Fenner & 13114 $11,296,761 Smith Incorporated Merrill Lynch Japan 47718 $9,582,743 Securities Co. Ltd 56114 $3,957,017 * Merrill Lynch Japan Finance Co. Ltd. Transferors Claim No. Claim Amount ----------- --------- ------------ Kawasaki Heavy Industries Ltd. 36307 $10,978,401 10711 $10,978,401 413 $10,978,401 * Merrill Lynch Japan Securities Co. Ltd. Transferors Claim No. Claim Amount ----------- --------- ------------ The Higo Bank Ltd. 47718 $9,582,743 ESCA Co. Ltd. 56114 $3,957,017 * Merrill Lynch, Pierce, Fenner & Smith Incorporated Transferors Claim No. Claim Amount ----------- --------- ------------ Bank of America Mexico S.A. 13114 $11,296,761 * Nexen Energy Marketing Europe Ltd. Transferors Claim No. Claim Amount ----------- --------- ------------ Nexen Energy Marketing London Ltd. 18830 $20,589,383 17154 $20,589,383 * SecondMarket Inc. Transferors Claim No. Claim Amount ----------- --------- ------------ Carnegie Bank A/S 50055 $20,307,165 * Serengeti Overseas Ltd. Transferors Claim No. Claim Amount ----------- --------- ------------ Longacre Opportunity Fund L.P. 32498 $674,515 30540 $674,515 4660 $1,520,816 35434 $1,520,816 54846 $1,520,816 * Serengeti Partners LP Transferors Claim No. Claim Amount ----------- --------- ------------ Longacre Opportunity Fund L.P. 4660 $1,013,877 35434 $1,013,877 54846 $1,013,877 * SPCP Group L.L.C. Transferors Claim No. Claim Amount ----------- --------- ------------ LM Isis Opportunities Master Fund Ltd. 3892 $3,054,687 3893 $3,054,687 Brigadier Capital Master Fund Ltd. 3925 $11,875,901 3924 $11,875,901 Export Development Canada 1265 $4,830,064 3232 $4,830,064 3231 $4,830,064 Popular High Grade Fixed 4893 $4,512,732 Income Fund Inc. 3383 $4,512,732 Alliance Laundry Equipment 1300 $1,046,015 Receivables Trust 2005 1299 $1,046,015 Central European Media 171 $19,900,000 Enterprises Ltd. 117 $19,900,000 * Stone Lion Portfolio L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ Banc of America Securities LLC 59406 $5,817,523 47718 $9,582,743 47717 $9,582,743 3014 $9,582,743 * Taconic Capital Partners 1.5 L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ Merrill Lynch Credit Products LLC 16060 $2,237,149 * TPG Credit Opportunities Investors L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ Merrill Lynch Credit Products LLC 16062 $3,619,825 * TPG Credit Opportunities Fund L.P. Transferors Claim No. Claim Amount ----------- --------- ------------ Merrill Lynch Credit Products LLC 16062 $3,609,920 * TPG Credit Strategies Fund LP Transferors Claim No. Claim Amount ----------- --------- ------------ Merrill Lynch Credit Products LLC 16062 $7,339,131 * TSO LLC Transferors Claim No. Claim Amount ----------- --------- ------------ Deutsche Bank AG, London 27004 $2,899,895 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: RSM Fines for Failings on Structured Products -------------------------------------------------------------- The Financial Services Authority (FSA) has fined RSM Tenon Financial Services Limited (Tenon) GBP700,000 for significant failings in its advice and sales processes relating to Lehman- backed structured products, and for having poor systems and controls to prevent unsuitable advice in its structured product and pension switching business. This is the first enforcement action resulting from the FSA's review of the marketing and distribution of structured products, particularly those backed by Lehman Brothers, concluded in October 2009. The FSA found that, in relation to its sales of Lehman- backed structured products between November 2007 and August 2008, Tenon failed to treat some of its customers fairly. It breached Principle 3 of the FSA's Principles for Businesses by failing to take reasonable care to organise and control its affairs responsibly and effectively, and Principle 9 by failing to take reasonable care to ensure the suitability of its advice to its customers. Specifically, the FSA found that Tenon: * failed to fully assess the risks of structured products and ensure advisers considered those risks when providing advice to customers; * failed to provide suitable advice to its customers and/or failed to demonstrate the suitability of its advice by recording insufficient personal and financial information on customers' files; and * failed to implement and maintain appropriate compliance monitoring to control the use of non-compliant direct offer financial promotions. In addition, in relation to Tenon's structured products and pension switching business more generally, the FSA found that the firm failed to have effective risk management systems in place to manage and control its affairs -- and ultimately failed to prevent or minimise the risk of unsuitable sales. As a result of these failings, the FSA has imposed a fine of GBP700,000 on the firm. In addition, Tenon will: * conduct a past business review of all its sales of Lehman- backed structured products. Customers that received unsuitable advice will be able to sell their product to Tenon and have the money they invested reimbursed plus interest; * review sales of other structured products between 1 November 2007 and 1 December 2009, and pay appropriate redress where unsuitable advice was given; * conduct a review of pension switching business it transacted between 6 April 2006 and 1 December 2009 to assess the suitability of recommendations made to customers and, if appropriate, implement a customer redress programme; and * instruct a skilled person to undertake a review of its current sales and compliance processes relating to the sale of all investment products, to assess their appropriateness and the suitability of recommendations made to customers. The FSA will oversee the firm's past business reviews and redress process, and an independent third party will review the actions taken by the firm. Margaret Cole, FSA director of enforcement and financial crime, said: "Firms giving investment advice must ensure they fully assess clients' needs and make suitable recommendations -- they must also have the necessary systems and controls in place to demonstrate this. We take failure in this area very seriously and the fine and other actions announced today demonstrate our commitment to credible deterrence. "This is the first action we have taken for advice failings relating to Lehman-backed structured products following our recent review, and we acted swiftly and decisively in order to return money to investors as quickly as possible. We will continue to take tough action where we find evidence that firms are giving unsuitable advice to investors." Tenon co-operated fully with the FSA and agreed to settle at an early stage of the FSA's investigation, therefore qualifying for a 30% reduction in penalty. Were it not for this discount, the FSA would have imposed a financial penalty of o1m. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Ex-CEO Fuld Not Aware of Repo 105, Counsel Says ---------------------------------------------------------------- Michael Corkery at The Wall Street Journal reports that Patricia Hynes, Esq., at Allen & Overy LLP, counsel to former Lehman Brothers CEO Richard Fuld, said, "The examiner believes the Lehman estate has a "colorable" claim against Dick Fuld because Lehman did not provide enhanced disclosures about certain financing arrangements called Repo 105 transactions. Mr. Fuld did not know what those transactions were -- he didn't structure or negotiate them, nor was he aware of the accounting treatment." "Furthermore, the evidence available to the Examiner shows that the Repo 105 transactions were done in accordance with an internal accounting policy, supported by legal opinions and approved by Ernst & Young, Lehman's independent outside auditor. At no time did Lehman's senior financial officers, legal counsel or Ernst & Young raise any concerns about the use of Repo 105 with Mr. Fuld, who throughout his career faithfully and diligently worked in the interests of Lehman and its stakeholders." "Best Seller" On Thursday, Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York unsealed a 2,200-page report -- table of contents alone is 45 pages -- prepared by Chapter 11 examiner Anton Valukas, Esq., at Jenner & Block, on the collapse of Lehman Brothers. According to The Wall Street Journal, Judge Peck said the report reads like a "best seller." The Journal says Mr. Valukas spent more than a year and $38 million to investigate the events surrounding Lehman's downfall. The Journal's Mike Spector, Peter Lattman and Jeffrey McCracken relate that the examiner's report singles out senior executives, auditor Ernst & Young and other investment banks for serious lapses that led to Lehman's bankruptcy. The report contains fresh allegations of balance sheet manipulation, with Lehman used using accounting methods to move assets off its books. The report also noted that investment banks, including J.P. Morgan Chase & Co., made demands for collateral and modified agreements with Lehman that hurt Lehman's liquidity and pushed it into bankruptcy. Repo 105 Messrs. Spector, Lattman and McCracken at the Journal report that the Chapter 11 examiner detailed a "materially misleading" approach Lehman took to how it funded itself. The report discussed the "repo" market, in which firms sell assets in exchange for cash to fund operations, often just overnight or for a few days. According to the Journal, the examiner said that Lehman -- anxious to maintain favorable credit ratings -- engaged in an accounting device known within the firm as "Repo 105" to essentially park $50 billion of assets away from Lehman's balance sheet and reduce leverage ratios. The Journal explains that in an ordinary repo transaction, Lehman would raise cash by selling assets with a simultaneous obligation to buy them back within days, according to the report. The transactions would be accounted for as financings, and the assets would remain on Lehman's balance sheet. In a Repo 105 transaction, according to the Journal, Lehman did the same thing. But because the moved assets represented 105% or more of the cash it received in return, accounting rules allowed the transactions to be treated as "sales" rather than financings. The result: Assets shifted away from Lehman's balance sheet, reducing the leverage ratios it reported to investors. "In this way, unbeknownst to the investing public, rating agencies, Government regulators, and Lehman's Board of Directors, Lehman reverse engineered the firm's net leverage ratio for public consumption," says the report, according to the Journal. The Journal also relates that Lehman's own global financial controller, Martin Kelly, told the examiner that "the only purpose or motive for the transactions was reduction in balance sheet" and "there was no substance to the transactions." The Journal says Mr. Kelly warned former Lehman finance chiefs Erin Callan and Ian Lowitt about the maneuver, saying the transactions posed "reputational risk" to Lehman if their use became publicly known. The Journal also relates that in an interview with the examiner, senior Lehman Chief Operating Officer Bart McDade said he had detailed discussions with Mr. Fuld about the transactions and that Mr. Fuld knew about the accounting treatment. The examiner's report said that in a November 2009 interview with the examiner, Mr. Fuld said he had no recollection of Lehman's use of Repo 105 transactions but that if he had known about them he would have been concerned. According to the Journal, the report says Mr. Fuld's denial of recollection must be weighed by a trier of fact against other evidence. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Secures Demolition Agreement for Oak Knoll ----------------------------------------------------------- SunCal has secured a signed agreement between the Lehman/SunCal bankruptcy trustee and the remediation firm CST Environmental Acquisition on a $3.7 million plan to demolish numerous outbuildings throughout the former Oak Knoll Naval Medical Center. The agreement is being submitted to the presiding judge in U.S. Bankruptcy Court for approval so the work can get underway. Lehman Brothers is the financial partner for the 167-acre property that SunCal, as development manager, plans to redevelop into a master-planned community "SunCal is managing all of the cleanup efforts, including coordination of the various contractors already working on the site and the upcoming demolition by CST," said David Soyka on behalf of SunCal. "Only with the support of Lehman ALI and the ongoing leadership of Oakland Councilman Larry Reid could this have become a reality." SunCal is continuing to work through the court to bring in a new source of funding to resolve the remaining issues at the property and move the development forward. The plans for the Oak Knoll community include 960 homes with a diversity of housing types, 82,000 square feet of commercial/retail, and 50 acres of parks and open space. "This is another positive step for the City of Oakland and the future of Oak Knoll," said Oakland City Councilman Larry Reid. "I applaud SunCal for being a consistent and ongoing advocate for the cleanup and development of the former Naval Medical Center property." "We're pleased that we're able to soon begin demolishing the World War II-era outbuildings, cleaning up debris, securing the hospital building and removing the remaining asbestos," said Chet Chelstowski, vice president of CST Environmental Acquisition. "We're ready to get started and finish the much-needed cleanup of this site." In October 2009, SunCal secured an initial $550,000 from Lehman that is being used for property-wide weed abatement, cleaning up wood piles, repairing perimeter fences and providing a team of armed security guards 24 hours per day to help secure the property from trespassers. SunCal initiated legal action against Lehman in January 2009 in order to obtain the cleanup funds and resolve other issues involving the property; SunCal itself is not in bankruptcy and continues to do business. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Examiner's Bankruptcy Report Now Available ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York today at a hearing unsealed the report of the Examiner in the Lehman Brothers Holdings Inc. Chapter 11 proceedings and allowed the report to be released to the public. As a public service, Jenner & Block is providing links to the nine-volume Examiner's report online at http://lehmanreport.jenner.com "As I stated in the report, our ability to complete this report in a timely fashion was due in no small part to the cooperation and responsiveness of the parties in the matter. I think everyone understood the importance of providing an accurate picture of what led to the demise of Lehman Brothers," said Jenner & Block Chairman Anton R. Valukas who was appointed the Examiner in the bankruptcy proceedings of Lehman Brothers Holdings, Inc. in January 2009. Mr. Valukas was charged with investigating and unraveling the events leading to the banking giant's collapse, a critical role in what is considered to be the largest bankruptcy in U.S. history. Additional supporting materials referenced in the report will also be added online and will be available soon. 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) LIBERTYPOINTE BANK: Closed; Valley National Assumes All Deposits ---------------------------------------------------------------- LibertyPointe Bank, New York, New York, was closed March 11 by the New York State Banking Department, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of LibertyPointe Bank. The three branches of LibertyPointe Bank will reopen on Friday as branches of Valley National Bank. Depositors of LibertyPointe Bank will automatically become depositors of Valley National Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. LibertyPointe Bank customers should continue to use their existing branches until they receive notice from Valley National Bank that it has completed systems changes to allow other Valley National Bank branches to process their accounts as well. Thursday evening, Friday, and over the weekend, depositors of LibertyPointe Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of December 31, 2009, LibertyPointe Bank had approximately $209.7 million in total assets and $209.5 million in total deposits. Valley National Bank will pay the FDIC a premium of 0.15 percent to assume all of the deposits of LibertyPointe Bank. In addition to assuming all of the deposits, Valley National Bank agreed to purchase essentially all of the failed bank's assets. The FDIC and Valley National Bank entered into a loss-share transaction on $181.5 million of LibertyPointe Bank's assets. Valley National Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-800-591-2820. The phone number will be operational Friday from 9:00 a.m. to 6:00 p.m., EST; on Saturday from 9:00 a.m. to 3:00 p.m., EST; on Sunday from 9:00 a.m. to 3:00 p.m., Eastern Daylight Time (EDT); and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/LibertyPointe.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $24.8 million. Valley National Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. LibertyPointe Bank is the 27th FDIC-insured institution to fail in the nation this year, and the first in New York. The last FDIC-insured institution closed in the state was Waterford Village Bank, Williamsville, July 24, 2009. LODGENET INTERACTIVE: Inks Employment Contract with Elsenbast ------------------------------------------------------------- LodgeNet Interactive Corporation entered into an employment agreement with Frank P. Elsenbast pursuant to which Mr. Elsenbast has been engaged as the Company's next Senior Vice President and Chief Financial Officer. Mr. Elsenbast will assume the responsibilities currently held by Gary H. Ritondaro, who announced his intention to retire in mid-2010. Mr. Elsenbast brings more than 20 years of corporate finance, media industry background and public accounting experience to his new responsibilities with the Company. Since 2000, Mr. Elsenbast has been employed with ValueVision Media, Inc. (NASD:VVTV) d/b/a ShopNBC, a multi-channel electronic retailer serving 75 million homes in the US. Mr. Elsenbast most recently served as Senior Vice President and CFO of ShopNBC since 2004. Prior to joining ShopNBC, Mr. Elsenbast served in a variety of financial and analytical roles with The Pillsbury Company. Mr. Elsenbast began his career as a Certified Public Accountant with Arthur Andersen, LLP. Under the Employment Agreement, Mr. Elsenbast will receive a salary of $340,000 per year, an annual bonus calculated in the same manner as other senior vice presidents of the Company except that Mr. Elsenbast is guaranteed a minimum bonus of $75,000 in 2010, and other benefits consistent with those received by Company officers in comparable positions. The Employment Agreement provides for severance compensation equal to 18 months of salary in the event of termination without Cause or with Good Reason following a Change in Control, as such terms are defined in the Employment Agreement. In addition, on the date he begins his employment, Mr. Elsenbast will receive a restricted stock grant of 20,000 shares of the Company's common stock, which will vest half on the third anniversary of his employment and half on the fourth anniversary of his employment. Mr. Elsenbast will also receive stock options to purchase 30,000 shares of the Company's common stock at a purchase price equal to the closing stock price on the day before his first day of employment. One-quarter of these options will vest on each of the first, second, third and fourth anniversaries of his employment. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported $508.3 million in assets and $579.3 million in total liabilities, resulting to a $71.0 million stockholders' deficit as of Dec. 31, 2009. * * * According to the Troubled Company Reporter on September 30, 2009, Moody's Investors Service upgraded LodgeNet Interactive Corporation's speculative grade liquidity rating to SGL-3 (indicating adequate liquidity) from SGL-4 (indicating poor liquidity) while revising the outlook for all ratings to stable from negative. Concurrently, Moody's also affirmed LodgeNet's B3 corporate family rating and Caa1 probability of default rating. LYONDELL CHEMICAL: Parent to Shut PP Plant in Italy --------------------------------------------------- LyondellBasell Industries announced a project to cease the production of polypropylene (PP) at Terni, Italy. The company has started the employee consultation process regarding a project to permanently shut down the unit. "Demand for polypropylene continues to be affected by global economic conditions and the resulting market environment has made facilities such as Terni no longer economically viable. We expect to be able to meet projected customer demand for polypropylene (including local customers in Terni) with product supplied from our other facilities in Italy," said Anton De Vries, LyondellBasell's senior vice president, Olefins and Polyolefins ? Europe, Asia and International. LyondellBasell said that PP production activities in Italy will be focused on the company's world-scale sites at Ferrara and Brindisi. The Terni plant has a nameplate capacity of 255 KT per year. In conjunction with the shutdown project, LyondellBasell has started consultation with representatives of the employees to determine the appropriate path forward for the employees at the site. The plant currently has approximately 120 permanent employees. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Sues GEO Specialty for Breach of Contract ------------------------------------------------------------ Lyondell Chemical Company filed a complaint against GEO Specialty Chemicals, Inc., seeking declaratory judgment against GEO Specialty for breach of contract. Lyondell and GEO Specialty entered into a purchase and sale contract, whereby Lyondell sold to GEO Specialty tertiary butyl hydroperoxide or "TBHP" 70% subject to certain maximum limitations. Lyondell sold to GEO Specialty TBHP 70 worth $238,439 between November 24, 2008, and January 10, 2009. The corresponding payments owed to GEO Specialty to Lyondell for these sales became due between December 24, 2008, and February 9, 2009. Peter Friedman, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, asserts that GEO Specialty has not paid Lyondell the $238,439 due and owing under the Sales Contract. Since GEO Specialty has defaulted on its payment, it is required to pay Lyondell's "costs of collection, including, but not limited to, reasonable attorney's fees," he says. GEO Specialty filed Claim No. 12728 asserting prepetition claims against Equistar for $207,000, allegedly arising from goods sold by GEO Specialty to Equistar. Mr. Friedman argues that the debt owed by GEO Specialty to Lyondell under the Sales Contract constitutes property of Lyondell's bankruptcy estate under Section 541 of the Bankruptcy Code and is "matured debt" under Section 542(b) of the Bankruptcy Code. In this light, he asserts that the matured debt owed to Lyondell cannot be set off against the $207,000 debt allegedly owed by Equistar to GEO Specialty because the debts are not mutual debts as required under Section 553 of the Bankruptcy Code. Similarly, $34,948 of the matured debt owed by GEO Specialty to Lyondell is ineligible for set-off under Section 553 because it arose after the Petition Date, he asserts. In addition, Mr. Friedman insists that Lyondell performed its obligations under the Sales Contract, however, GEO Specialty breached, and is in default of, the Sales Contract by failing and refusing to remit to Lyondell all amounts due under the Sales Contract. As a result, Lyondell has been damaged in an amount of not less than $238,439, he asserts. GEO Specialty's failure to pay Lyondell its matured debt, and its attempts to set off the debt owed to Lyondell against the alleged debt owed by Equistar, thus, violated Section 362(a)(3), (a)(6) and a(7) of the Bankruptcy Code, he contends. Mr. Friedman further argues that GEO Specialty's violations of the automatic stay were deliberate because it had actual knowledge of the bankruptcy cases at all relevant times and was advised by the Debtors that its actions violate the automatic stay. Similarly, Mr. Friedman says that GEO Specialty has knowledge of the Order Enforcing Stay in the Debtors' Chapter 11 cases and of the requirement under Section 553 that any set-off be between the same parties. Thus, Lyondell asks the Court to enter a judgment: (a) declaring that GEO Specialty owes a matured debt to Lyondell in the principal amount of $238,439; (b) awarding damages in an amount not less than $238,439, resulting from GEO Specialty's breach of the Sales Contract; (c) directing GEO Specialty to pay $238,439 to Lyondell; (d) declaring that failure by GEO Specialty to pay its matured debt to Lyondell and attempts to effectuate an improper and unauthorized set-off against debts allegedly owed by Equistar to GEO Specialty constitute willful violations of Sections 362(a)(3), 362(a)(6) and 362(a)(7); (e) declaring that the failure by GEO Specialty to pay its matured debt to Lyondell and that GEO Specialty's attempts to effectuate an improper and unauthorized set-off against debts allegedly owed by Equistar to GEO lacked reasonable basis and constitute contempt of court; and (f) awarding Lyondell its costs and expenses, including reasonable attorney's fees, incurred in connection with its efforts to (i) recover property of the estate, (ii) enforce its rights and collect debts arising under the Sales Contract, and (iii) compel compliance by GEO Specialty with its obligations under the Bankruptcy Code and the Stay Order. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MARIAH BAY: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------ Richard Abshire at The Dallas Morning News reports that Mariah Bay Leasing filed for Chapter 11 bankruptcy. Mr. Abshire, citing a press release, says this property owner is one of... 38... that pay property taxes into the TIF... a total of 113 acres... The Harbor development, which includes this property owner as well as several others, has paid a total of $256,061 (in property taxes owned under the TIF agreement). They still owe a total of $223,063, only a portion of which is owed by this particular company. Mariah Bay Leasing is one of the companies associated with The Harbor. MERIDIAN RESOURCES: Has Fin'l Obligations of $104-Mil. at Dec. 31 ----------------------------------------------------------------- Resource Corporation reported that its balance sheet as of Dec. 31, 2009, will reflect secured and unsecured financial obligations totaling approximately $104 million, before adjustments for working capital. The Company said it has a credit facility with a group of banks with a maturity date of Feb. 21, 2012. Outstanding obligations under the Credit Facility are secured by a pledge of the outstanding capital stock of the Company's subsidiaries and by a first priority lien on not less than 95% of its present value of proved oil and natural gas properties. As of Dec. 31, 2008, and continuing to the present time, the Company was not in compliance with certain financial covenants contained in the Credit Facility, resulting in an event of default. Availability of borrowings under the Credit Facility are governed by periodic borrowing base redeterminations determined on criteria established by the lenders, based on the value of proved reserves. Effective April 30, 2009, Meridian was notified that the redetermined borrowing base under the Credit Facility was $60 million. As of the April 30, 2009 redetermination, the Company had outstanding borrowings of $95 million, resulting in a borrowing base deficiency of $35 million. At the time of the redetermination and continuing to the present time, the Company does not have sufficient liquidity to allow for the repayment of the deficiency, resulting in an additional event of default under the Credit Facility. During 2009, Meridian entered into a series of forbearance agreements whereby the lenders agreed to forbear from exercising the remedies available to them under the loan documents as a result of the events of default. As of December 31, 2009, the Company's outstanding obligations under the Credit Facility are $87.5 million, resulting in a deficiency of $27.5 million. Furthermore, the Company entered into a series of forbearance agreements with the lenders under the Credit Facility during 2009 and was required to pay a forbearance fee to the lenders in exchange for their agreement to forbear from exercising their remedies related to the events of default. In addition, the Company utilized the services of its advisor, Rivington Capital Advisors LLC, in its discussions and negotiations with the lenders. The Company's December 31, 2009 balance sheet will reflect a $1.1 million payable associated with these agreements. About Meridian Resource Based in Houston, Texas, The Meridian Resource Corporation (NYSE:TMR) -- http://www.tmrc.com/-- is an independent oil and natural gas company engaged in the exploration, exploitation, acquisition and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high- potential wells for exploration and development. Meridian has a field office in Weeks Island, Louisiana. At September 30, 2009, the Company had $190,339,000 in total assets, including $18,090,000 in total current assets, against $120,634,000 in total current liabilities and $17,736,000 in asset retirement obligations. The Company noted that its default under the debt agreements, which has been mitigated in the short term by certain forbearance agreements, negatively impacts future cash flow and the Company's access to credit or other forms of capital. There is substantial doubt as to the Company's ability to continue as a going concern for a period longer than the next 12 months, the Company said. It added that it might have to seek protection under federal bankruptcy laws if it is unable to comply with the forbearance agreements or if those agreements expire. MONTECITO AT MIRABEL: Wants Access to Compass Bank's Cash --------------------------------------------------------- Montecito at Mirabel Development, L.L.C., asks the U.S. Bankruptcy Court for the District of Arizona to approve a stipulation between Compass Bank, authorizing the Debtor to access the cash collateral. The cash collateral includes, but not limited to, all funds in the Debtor's accounts, all rents paid or payable to the Debtor, and all other monies generated from the operation of the Debtor's business with respect to its real estate development project containing 9 single-family residences and 35 vacant lots located Northwest Corner of Cave Creek Road and Mirabel Club drive in Sottsdale, Arizona. The Debtor relates that the cash collateral serves as additional security for certain loan obligations owed to Compass Bank. The Debtor will use the money to pay for the normal operating expenses to maintain and preserve the going concern value of the property, and Compass Bank consents to the Debtor's use of cash collateral. Mesa, Arizona-based Montecito At Mirabel Development, L.L.C. -- dba Montecito @ Mirabel Development, LLC -- filed for Chapter 11 bankruptcy protection on December 31, 2009 (Bankr. D. Ariz. Case No. 09-33899). Randy Nussbaum, Esq., at Nussbaum & Gillis, P.C., 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. MOHAWK INDUSTRIES: Moody's Gives Stable Outlook; Keeps Ba1 Rating ----------------------------------------------------------------- Moody's Investors Service stabilized Mohawk Industries, Inc.'s rating outlook due to Moody's expectation that demand has likely stabilized for residential floor coverings and that Mohawk's credit metrics will likely improve in 2010. The speculative grade liquidity rating was upgraded to SGL 1 from SGL 2 and the Ba1 corporate family rating and probability of default ratings were affirmed as was the Ba2 unsecured notes rating. The combination of cost cutting initiatives and a gradual improvement in demand for residential floor covering led to strong cash flow generation after March 2009 and higher fourth quarter earnings. "With the generation of more than $550 million of free cash flow in 2009 and Moody's expectation of at least $250 million of free cash flow in 2010, Moody's expect Mohawk to repay most, if not all, of the $500 million notes due in January 2011 with cash, resulting in minimal drawn downs on its revolver, if any," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. The stable outlook reflects Moody's belief that residential demand for floor covering, which is where about 70% of revenue is generated, has shown signs of stabilizing. Moody's expects commercial demand for floor covering to remain pressured throughout 2010, although the velocity of the decline will likely moderate in the latter half of 2010. Moody's expects 2010 revenue to range between $5.2 billion and $5.6 billion and adjusted EBITDA to be between $600 million and $700 million. The stable outlook incorporates Moody's expectation that the first quarter will likely show seasonal weakness, but that Mohawk's liquidity profile will remain strong. The Ba1 corporate family rating reflects Mohawk's leading market share in the carpet segment, floor tiling segment and the Unilin (laminate) segment, consistently strong cash flow and its generally conservative financial policies. The corporate family rating also reflects the size of the company, which is over $5.3 billion, despite a 30% decrease since the recession started in December 2007. Mohawk's improved cost structure should reduce earnings volatility and lead to higher earnings when demand improves. These factors help offset the lower levels of discretionary consumer spending, continuing uncertainty in the housing market and declining demand for commercial floor covering. Nonetheless, Moody's expects Mohawk's credit metrics to improve in 2010 as residential demand improves, debt is reduced and Mohawk increases prices to offset higher raw material costs. The upgrade in the liquidity rating to SGL 1 reflects Mohawk's very good liquidity profile highlighted by more than $530 million of cash (about 1/3 overseas), access to a $600 million 4 year ABL revolving credit facility and strong annual operating cash flow between $400 million and $500 million before working capital changes. Mohawk's liquidity is further supported by the lack of dividends or share repurchases and no financial covenants, provided availability under the revolver remains above $90 million. The principal constraint to Mohawk's liquidity is the $500 million maturity in January 2011 and the acceleration of its revolver's maturity date if the company doesn't repay, refinance, defease or adequately reserve for the January 2011 notes and the April 2012 notes three months prior to maturity. Mohawk's liquidity is also constrained by the seasonality of its cash flows, especially in Q1 where cash has historically been consumed by working capital and in Q4, when the majority of cash is generated. Rating upgraded: Speculative Grade Liquidity rating to SGL-1 from SGL-2; Ratings affirmed: -- Corporate Family Rating at Ba1; -- Probability of Default Rating at Ba1; -- $500 million 5.75% senior unsecured notes, due January 15, 2011 at Ba2 (LGD 5, 71%); -- $400 million 7.20% senior unsecured notes, due April 15, 2012 at Ba2 (LGD 5, 71%); and -- $900 million 6.125% senior unsecured notes, due 2016 at Ba2 (LGD 5, 71%) The last rating action was on September 14, 2009, where Moody's downgraded the unsecured notes to Ba2 following the company's announcement that it entered into a $600 million ABL revolving credit facility and affirmed all other ratings. Headquartered in Calhoun, Georgia, Mohawk Industries is a leading producer of floor covering products for residential and commercial applications in the U.S. Mohawk products includes brands such as Mohawk, Unilin, Karastan, Ralph Lauren, Lees, Bigelow, Dal-Tile and American Olean. Revenue for the year ended December 31, 2009, approximated $5.3 billion. NATIONSTAR MORTGAGE: Moody's Assigns 'B1' Corporate Family Rating ----------------------------------------------------------------- Moody's assigns a B1 Corporate Family Rating and a B2 Senior Unsecured Note rating to Nationstar Mortgage, with a stable outlook. The ratings reflect Nationstar's recent business wins in the large, fragmented residential mortgage servicing market as well as the company's efficient loan servicing system and infrastructure, experienced management team and successful on-boarding of new servicing relationships over the past several years. In arriving at a rating, Moody's also notes Nationstar's satisfactory capital and leverage metrics as well as revenue diversification between servicing and origination activities. At the same time, the rating also reflects Nationstar's mono-line nature and limited differentiation in the highly competitive residential mortgage servicing market. Additionally, Nationstar's dependence on secured, short term funding, which results in a high level of encumbered assets and limited financial flexibility constitutes an important factor in the rating. Reliance on funding facilities with short tenors subjects the company to significant renewal/ refinancing risk. Non-renewal of one facility could potentially affect renewals of other facilities. Nationstar's high recent and projected growth rate is another risk factor influencing the rating. In Moody's experience, rapid growth implies increased risk, as it can cause stress on controls as well as management and systems capacity, especially if coupled with an increase in delinquency rates, and potentially affect the company's business and operating results. The notching for the B2 Senior Unsecured Note rating reflects the substantial amount of secured debt in the company's capital structure. The rating outlook is stable, reflecting Moody's expectations that the company will be able to profitably grow its origination and servicing operations, at least over the near term. Nationstar is headquartered in Lewisville, TX. NATIONSTAR MORTGAGE: S&P Assigns 'B' Counterparty Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned a 'B' counterparty credit rating to Nationstar Mortgage LLC. The outlook is stable. "Inconsistent earnings, dependence on market funding, and the likelihood that the firm will have to support a significant debt burden following management's proposed $250 million senior unsecured debt issuance drive the rating," said Standard & Poor's credit analyst Jeffrey Zaun. "On the other hand, low credit risk, good risk management, and favorable market conditions support the rating." The stable outlook assumes inconsistent earnings and moderately increasing leverage after Nationstar's proposed $250 million debt offering. S&P could lower the ratings if earnings and interest coverage deteriorate materially. S&P could raise the ratings if its competitive position improves while leverage and earnings remain consistent. NAVISTAR INTERNATIONAL: Reports $17 Million Net Income for 2009 --------------------------------------------------------------- Navistar International Corporation reported financial results for its fiscal first quarter, ended Jan. 31, 2010. The Company's net income for the first quarter was $17 million, equal to $0.23 of diluted earnings per share in the face of lower revenues due in part to lower first-quarter military revenues. The first-quarter results reflect improved commercial performance and efforts to control costs over manufacturing expenses while the company continued its investments in the development of its 2010- emissions compliant engines. The Company's balance sheet at Jan. 31, 2010, showed total assets of $9.12 billion and total liabilities of $10.74 billion, for a stockholders' deficit of $1.62 billion. "First quarter results reflect the progress we are making in the toughest of economic conditions and in a normally difficult seasonal quarter for our company due to fewer operating days," said Daniel C. Ustian, Navistar's chairman, president and chief executive officer. "And we were able to deliver those results while investing in the future. The last half of 2010 will provide opportunities for even better margins as we launch our 2010 EGR strategies. "And as we move forward in 2010, we will continue to drive further cost improvements and are confident that the strategies we have put in place will help us achieve our goal for revenue and profitability, with $20 billion in revenue and $1.8 billion in manufacturing segment profit, when the market fully recovers," Ustian added. Navistar achieved a number of milestones, which comprise key building blocks for the future of the business. The company launched its first commercial trucks for the Indian market with joint venture partner Mahindra & Mahindra Ltd. (M&M). In December, Navistar also completed its acquisition of the concrete mixer manufacturing business of Continental Mfg. Company, Inc. In addition, the company saw its order share for its bus and Class 6- 8 products grow to 51% for the first four months of the fiscal year. The company believes these initiatives and expansions will be key contributors to its future success. "Our EGR message is resonating with the marketplace as evidenced by our continued strong market share levels," said Ustian. "The breadth, depth and value of our product family is now being enhanced by an EGR solution that is gaining acceptance with the marketplace." A full-text copy of the Company's statement is available for free at http://ResearchArchives.com/t/s?5877 About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. * * * According to the Troubled Company Reporter on Jan. 28, 2010, Standard & Poor's Ratings Services said it has revised its outlook on Navistar International Corp. and related entities to stable from negative and affirmed its 'BB-' corporate credit rating and other ratings. Moody's Investors Service is maintaining its B1 long-term rating, SGL-2 Speculative Grade Liquidity rating and stable outlook for Navistar International Corporation following the announcement that GE Capital will become the preferred provider of retail financing in support of Navistar's truck and bus sales in the US. This agreement, which takes effect immediately, has potentially beneficial elements for Navistar. The chief benefit is that Navistar's captive finance operation, Navistar Financial Corporation, should be relieved of the capital and liquidity burden necessary to support new retail and lease originations. In addition, GE Capital's stronger balance sheet and superior capital market access relative to that of NFC, should improve the availability of the financing that can be offered to retail purchasers of Navistar equipment. Although this agreement signals NFC's retreat from providing retail and lease financing in the future, the company will continue to provide wholesale financing to its dealer network. NBTY INC: S&P Changes Outlook to Positive; Affirms 'BB' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Ronkonkoma, New York-based NBTY Inc. to positive from stable. At the same time, S&P affirmed the 'BB' corporate credit rating on the company. In addition, Standard & Poor's affirmed the 'BBB-' issue-level rating on NBTY's senior secured credit facility. The recovery rating is '1', which indicates S&P's expectation of very high (90%-100%) recovery for debt holders in the event of payment default. S&P also affirmed the 'BB' issue-level ratings on the senior subordinated notes. The recovery rating is '3', which indicates S&P's expectation of meaningful (50%-70%) recovery for debt holders in the event of payment default. "S&P revised the outlook to positive from stable due to the company's strong operating performance and improved credit metrics," said Standard & Poor's credit analyst Jacqueline Hui. "The ratings on NBTY reflect its acquisition-oriented growth strategy, the risk of adverse publicity about vitamin products depressing its sales, and the risks of product liability." NBTY benefits from its strong position and diversified distribution channels in the vitamin, minerals, and supplements industry. The rating does not factor in any additional large debt-financed acquisitions or dividends. NBTY is a vertically integrated VMS manufacturer and marketer, with a strong U.K. retail presence that constitutes about 23% of the company's fiscal 2009 net sales. S&P believes the company's vertical integration and manufacturing efficiency allow it to produce low-cost products. NBTY's three-tier distribution strategy, which includes retail, wholesale, and direct-response channels (including mail order and internet sales), provides diversification and lowers distribution risk. However, it is S&P's opinion that the VMS market remains highly competitive and fragmented in all distribution channels, and is currently characterized by heavy promotional and discount activity. NBTY has historically grown through acquisitions. Since 1986, it has acquired and integrated nearly 30 companies, and has made larger acquisitions in recent years, including Rexall Sundown, Solgar, and Leiner Health Inc. The acquisitions strengthen its existing customer relationships and enable it to gain some key new ones, diversify its product mix, and gain significant manufacturing and distribution capacity. NBTY has customer concentration with one national retailer accounting for about 30% of wholesale sales. However, NBTY also gained a sizable new customer through its Leiner acquisition. The company has been successful integrating its acquisitions. S&P expects NBTY's credit protection measures to remain strong to compensate for any adverse publicity inherent in the vitamin industry and possible future acquisitions. S&P could consider a rating upgrade if the company is able to demonstrate sustained operating performance improvement and maintain leverage near 2x for the coming quarters. Alternatively, S&P could consider a rating downgrade if the company's financial policy becomes more aggressive or if operating performance weakens and leverage exceeds 3.5x. S&P estimates that this could occur if EBITDA declined 45% (assuming debt levels do not significantly change). NEBRASKA INC: Fitch Affirms 'BB+' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Rating of First National of Nebraska, Inc., at 'BB+' and the short-term IDR at 'B'. The Rating Outlook remains Negative. A complete list of ratings is detailed at the end of this release. Approximately $12.5 billion of debt and deposits is affected by these actions. The affirmation reflects FNNI's ability to build the cushion on its regulatory capital ratios in 2009 in preparation for the consolidation of off-balance sheet assets in accordance with SFAS 166 and SFAS 167. The consolidation of approximately $2.3 billion of off-balance sheet credit card assets occurred on Jan. 1, 2010 for GAAP purposes, but the bank should be able to phase-in the consolidation for regulatory capital purposes, with 50% of assets being consolidated in the third quarter of 2010 and the remaining 50% of assets being consolidated by March 31, 2011. The net impact of the consolidation will be a decline in shareholder's equity, which Fitch expects will reduce regulatory capital ratios from their current levels. FNNI's total capital ratio improved to 13.3% at year-end 2009 compared to 10.9% the prior year due to significant contraction in risk-weighted assets, the generation of positive earnings, driven largely by gains realized from the sale of Visa stock, and the suspension of the common dividend after the first quarter payment. The tangible common equity to tangible managed assets ratio also improved in 2009, with asset contraction, but will decline with the consolidation of off-balance sheet assets. Fitch believes the bank has historically been an aggressive capital manager and the maintenance of higher capital ratios over time will be a factor when considering ratings stability. Fitch expects the bank will seek to improve capital ratios further in 2010 and capital will get a boost from FNNI's agreement to sell a 51% interest in its merchant processing to TSYS for $150.5 million. This transaction is expected to close in April 2010. The affirmation also reflects the bank's ability to improve pre- provision net revenue, despite the weak economy and nearly 12% balance sheet contraction, with an increase in the net interest margin and the achievement of significant operating efficiencies. FNNI was also able to refinance maturing credit card conduits and term securitizations in a difficult capital markets environment and extended the maturity of its $138.8 million parent company revolver to June 2011, although $45 million of amortization payments are required in 2010. The Negative Outlook reflects the headwinds FNNI will face in 2010 as historically high provision expenses continue to pressure earnings and capital ratios while the implementation of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 could challenge the bank's competitive positioning in the credit card industry. Fitch expects profitability will decline in 2010 as provision expense remains high, merchant processing revenue declines following the majority sale, and Visa stock gains are excluded. While Fitch believes the absolute dollar amount of bankcard provisions could decline, given the contraction in the portfolio and recent signs of stabilization in unemployment, Fitch expects non-bankcard provisions could increase as commercial lending and real estate remain under stress. Negative rating action could be driven by an inability to retain a comfortable cushion on capital ratios following the consolidation of off- balance sheet assets, failure to refinance maturing credit card funding vehicles, and/or deterioration in longer-term earnings prospects resulting from the implementation of the CARD Act. Conversely, rating stability will be driven by the maintenance of higher capital levels, improving asset quality trends, enhanced holding company liquidity, and consistent earnings performance. The notching of the parent company below the bank continues to reflect limited liquidity and relatively high double leverage. As of Dec. 31, 2009, the parent company had $35.8 million in cash and liquid securities versus $45 million of debt amortization payments due in 2010. According to Fitch's calculations, double leverage amounted to 125% at year-end 2009, which reflects the injection of parent debt into subsidiaries. As a result, the parent is highly reliant on dividend capacity from subsidiary banks to service debt obligations and Fitch believes stricter regulatory oversight across the financial institution space may prevent the up- streaming of dividends until consistent signs of profitability emerge. This funding profile is consistent with non-investment grade ratings. FNNI operates 10 commercial bank subsidiaries in Nebraska, Kansas, South Dakota, Colorado, Texas, and Illinois. Credit card operations are housed in the lead bank, First National Bank of Omaha, and a credit card bank charter in Atlanta, Infibank, N.A. FNNI became a private company in 2002 and is controlled by the Lauritzen family. At Dec. 31, 2009, the bank had $14.7 billion of assets and approximately $12 billion in managed loans. Fitch has affirmed these ratings with a Negative Outlook: First National of Nebraska, Inc. -- Long-term IDR at 'BB+'; -- Short-term IDR at 'B'; -- Individual at 'C/D'; -- Support at '5'; -- Support floor at 'NF'. First National Bank of Omaha -- Long-term IDR at 'BBB-'; -- Short-term IDR at 'F3'; -- Subordinated debt at 'BB+'; -- Long-term deposits at 'BBB'; -- Short-term deposits at 'F3' -- Individual at 'C'; -- Support at '5'; -- Support floor at 'NF'. First National Bank (Fort Collins) -- Long-term IDR at 'BBB-'; -- Short-term IDR at 'F3'; -- Long-term deposits at 'BBB'; -- Short-term deposits at 'F3'; -- Individual at 'C'; -- Support at '5'; -- Support floor at 'NF'. First National Bank (North Platte) -- Long-term IDR at 'BBB-'; -- Short-term IDR at 'F3'; -- Long-term deposits at 'BBB'; -- Short-term deposits at 'F3'; -- Individual at 'C'; -- Support at '5'; -- Support floor at 'NF'. NEENAH ENTERPRISES: Has Final Approval on $140 Million Financing ---------------------------------------------------------------- Neenah Enterprises, Inc. and its units sought and obtained final approval from the U.S. Bankruptcy Court for the District of Delaware to obtain $140 million of postpetition secured financing and use cash collateral. Robert E. Ostendorf, Jr., NEI President and CEO said, "We are pleased to have received the final approval of our DIP facility, and the continued support from our lenders. The DIP facility enables us to continue to provide our employees with pay and benefits, make post-petition payments to suppliers, and continue to satisfy our commitments to our customers. Most importantly, I believe the Court's final approval of our DIP facility, which gives NEI full access to those funds, will reinforce the confidence that our customers and suppliers have shown in our company since our filing, helping us to maintain and build on these important relationships, and is a critical milestone in our efforts to quickly emerge from bankruptcy protection with a significantly improved balance sheet." The postpetition financing consists of (i) a multiple draw super- priority secured term loan facility in an aggregate principal amount of up to $50 million from certain funds or accounts each managed or advised by MacKay Shields LLC and GoldenTree Asset Management LP; and (ii) a revolving loan facility with commitments in an aggregate amount equal to $90 million, pursuant to a postpetition agreement with Bank of America, N.A., as administrative agent for the Working Capital DIP Lenders. The Debtors will grant security interests, liens, and superpriority claims to the Term Loan DIP Agent and Term Loan DiP Lenders, and to the Working Capital DIP Agent and the Working Capital DIP Lenders. A copy of the DIP Financing Agreements is available for free at: http://bankrupt.com/misc/NEENAH_ENTERPRISES_diploanpacts.pdf The Term Loan DIP Facility The Term Loan DIP Facility will mature nine months after the Closing Date. The Term DIP Loans will bear interest at the Applicable Margin (being a rate per annum equal to 10.00%) plus the current LIBOR rate as determined by the Term Loan DIP Agent in accordance with its customary procedures, and utilizing the electronic or other quotation sources as it considers appropriate, payable at the end of the relevant interest period, but in any event at least quarterly; provided that in no event the LIBOR Rate at any time e less than 2.50%. At the even to default, the Term DIP Loans will bear interest at an additional 2.00% per annum. The Term Loan DIP Agreement contains customary mandatory prepayment for the financing and others deemed by the Debtors and the Term Loan DIP Lenders to be appropriate to the transactions, including prepayments from proceeds of (i) asset sales, (ii) insurance and condemnation proceeds, and (iii) equity or debt issuances received by the Debtors. Mandatory prepayments to the Term Loan DIP Agent and/or the Term Loan DIP Lenders will result in an permanent reduction of the Term Loan DIP Facility, until it has been reduced to zero. The Working Capital DIP Loans Working Capital DIP Loans may be drawn during the period from and including the February 5, 2010 closing date up to but excluding the Working Capital DIP Termination Date. The commitment to make Working Capital DIP Loans under the Working Capital DIP Facility will expire at the end of the Availability Period. All obligations under the Working Capital DIP Facility will be due and payable in full in cash on the ninth month anniversary of the Closing Date. The Working Capital DIP Loans will bear interest at LIBOR plus 6.50% per annum or at the Base Rate plus 5.00% per annum at the Debtors' option. In the event of default, the loans will bear interest at an additional 2.00% per annum. Cash Collateral The Debtors will also use the Cash Collateral to provide additional liquidity. In exchange for the use of cash collateral, the Debtors will grant adequate protection of the liens and security interests to the Prepetition Working Capital Lenders, and to the holders of the December 29, 2006 Secured Notes by and among the Debtors and The Bank of New York Mellon Trust Company, N.A., as collateral trustee and as collateral agent. Cash collateral consisting of proceeds of Bank Priority Collateral coming into the possession or control of the Debtors will be applied to reduce the outstanding obligations under the Prepetition Working Capital Loan Agreement. Once the Prepetition Working Capital Loans have been repaid in full, Working Capital DIP Loans may be repaid and reborrowed. About Neenah Enterprises Headquartered in Neenah, Wisconsin, Neenah Enterprises, Inc. -- http://www.nfco.com/-- is the indirect parent holding company of Neenah Foundry Company. Neenah Foundry Company and its subsidiaries manufacture and market a wide range of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets. Neenah is one of the largest independent foundry companies in the United States, with substantial market share in the municipal and various industrial markets for gray and ductile iron castings and forged steel products. The Company filed for Chapter 11 bankruptcy protection on February 3, 2010 (Bankr. D. Del. Case No. 10-10360). Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., assist the Company in its restructuring effort. The Company had $286,611,000 in total assets against total liabilities of $449,435,000, resulting in stockholder's deficit of $162,824,000. The Company's affiliates -- NFC Castings, Inc.; Neenah Foundry Company; Cast Alloys, Inc.; Neenah Transport, Inc.; Advanced Cast Products, Inc.; Gregg Industries, Inc.; Mercer Forge Corporation; Deeter Foundry, Inc.; and Dalton Corporation -- filed separate Chapter 11 petitions. NEXSTAR BROADCASTING: Reports $14 Million Net Income for Q4 ----------------------------------------------------------- Nexstar Broadcasting Group Inc. reported financial results for the fourth quarter ended December 31, 2009. Nexstar reported income from operations for the three months ended December 31, 2009 of $14.1 million, compared with a $17.5 million operating loss in the quarter ended December 31, 2008, which included a $33.9 million impairment charge. Broadcast cash flow totaled $28.8 million in the fourth quarter of 2009 compared with $34.7 million for the same period in 2008. Adjusted EBITDA totaled $24.7 million for the fourth quarter of 2009, compared with $30.3 million in the fourth quarter of 2008. Free cash flow in the quarter ended December 31, 2009 was $13.1 million, compared with $7.4 million in the comparable period of 2008. The Company's total debt at December 31, 2009 was $670.4 million. As defined in the Company's credit agreement, consolidated total net debt was $495.7 at December 31, 2009. This excludes approximately $132.3 million of senior subordinated 7% PIK notes as well as approximately $42.4 million of senior subordinated 12% PIK notes. As defined in the Company's credit agreement, the Company's total leverage ratio at December 31, 2009 was 6.8x compared to a total permitted leverage covenant of 8.75x. Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Highlighting the benefits of our revenue diversification initiatives, Nexstar generated strong fourth quarter financial results despite the cyclical impact of significantly lower political advertising. With the improving economy and the successful execution of our new business development strategies, Nexstar generated a 6% year-over- year increase in non political gross local spot revenue and an 11% rise in non political gross national spot revenue. Of note, automotive related advertising rose on a quarterly sequential basis throughout 2009 and in the fourth quarter improved by over 25% compared with the third quarter. Although fourth quarter automotive advertising revenue declined 7.7% from last year's levels, Nexstar generated an overall increase in billings from its top ten advertising categories in the 2009 fourth quarter. "Reflecting further success in leveraging our core television operations into new revenue streams, these gains were complemented by continued significant double digit growth in fourth quarter retransmission consent fee revenue which rose 62.0% to $6.4 million while e-MEDIA revenues rose 19.6% to $3.4 million, a record level of quarterly revenue from this source. In a year when the majority of our broadcast TV peers experienced new media revenue declines, the continued outsized growth of our e-Media platform again validates our differentiated approach to this business. The 2009 fourth quarter represents our thirteenth consecutive period of revenue growth from Nexstar's community web portal strategy and 2009 e-MEDIA revenue posted a very solid 15% gain over 2008. In addition to the significant year-over year revenue growth from these sources, Nexstar also recorded approximately $0.7 million of management fee revenue in the 2009 fourth quarter. "With our focus throughout 2009 on expense management, total fourth quarter 2009 operating expenses declined approximately 6.3% from the same period last year when excluding the impairment charge. Free cash flow of $13.1 million in the fourth quarter of 2009, a 78.1% rise over last year, benefited from reduced capital expenditures related to the completion of digital television conversion spending and a reduction in cash interest expense. "We believe our fourth quarter results provide strong evidence that we continue to be an industry leader in generating increases in core advertising activity, an important industry metric, and this trend is extending into 2010 and will be reflected in the first quarter results and throughout the year. With the ad environment improving and auto advertising increasing, Nexstar expects a return to growth in 2010. Operating results will benefit from increases in overall advertiser spending, the strength of the Super Bowl and Olympic broadcasts, significant political revenue and continued growth of revenue derived from retransmission agreements, e-MEDIA, and management fees. In addition, with Nexstar's de-leveraging initiatives, streamlined operating and cost structure and limited 2010 cap-ex commitments, we have substantial operating leverage in our model and are confident that Nexstar is well positioned to generate significant free cash flow in 2010 which will be deployed for debt reduction and new value creating initiatives." A full-text copy of the company's fourth quarter results is available for free at http://ResearchArchives.com/t/s?5851 About Nexstar Broadcasting Nexstar Broadcasting Group, Inc., as of March 31, 2009, owned, operated, programmed or provided sales and other services to 58 television stations, all of which were affiliated with the NBC, ABC, CBS, Fox, MyNetworkTV, The CW, RTN and TVA television networks, in markets located in New York, Pennsylvania, Illinois, Indiana, Missouri, Texas, Louisiana, Arkansas, Alabama, Utah, Massachusetts Florida, Montana and Maryland. Through various local service agreements, Nexstar provided sales, programming and other services to stations owned or operated by independent third parties. Nexstar operates in one reportable television broadcasting segment. Nexstar is highly leveraged, which makes it vulnerable to changes in general economic conditions. Nexstar's ability to repay or refinance its debt will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond Nexstar's control. According to the Troubled Company Reporter on Oct. 21, 2009, Standard & Poor's Ratings Services said it affirmed its ratings on Irving, Texas-based TV broadcaster Nexstar Broadcasting Group Inc., including the 'B-' corporate credit rating. The rating outlook is stable. NUTRACEA: Completes Sale of Cereal Ingredients Biz. to Kerry ------------------------------------------------------------ NutraCea completed the previously announced sale of NutraCea's existing cereal ingredients business and certain related equipment to Kerry Inc., a global food ingredients company on March 9, 2010 for $3.9 million. In addition, NutraCea received $272,000 for inventory related to its cereal ingredients business. A finder's fee in the amount of $200,000 was paid from the purchase price. At the closing, Kerry and NutraCea entered into a Toll Processing agreement whereby until the earlier of (1) the date Kerry begins production of cereal products using the assets purchased under the sale or (2) October, 31, 2010, NutraCea will produce cereal products for Kerry at NutraCea's Dillon, Montana plant. NutraCea has also agreed that it will not process or sell certain cereal products for a period of five (5) years from the date of the closing. W. John Short, Chairman and CEO, commented, "We are pleased to have completed the sale of our cereal business to Kerry Inc. It represents a first but significant step in the execution of our strategy aimed at selling non-core assets to pay down debt and refocus on our core businesses of stabilized rice bran, defatted rice bran, rice bran oil and nutraceutical and pharmaceutical derivatives of SRB." On November 10, 2009 NutraCea filed for court supervised protection to restructure its operation under Chapter 11 of the US Bankruptcy Code. NutraCea is a world leader in production and utilization of stabilized rice bran. NutraCea holds many patents for stabilized rice bran (SRB) production technology and proprietary products derived from SRB. NutraCea's proprietary technology enables the creation of food and nutrition products to be unlocked from rice bran, normally a waste by-product of standard rice processing. Phoenix, Arizona-based Nutracea, a California corporation, filed for Chapter 11 bankruptcy protection on November 10, 2009 (Bankr. D. Ariz. Case No. 09-28817). S. Cary Forrester, Esq., at Forrester & Worth, PLLC, assists the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. NY TIMES: Moody's Changes Outlook to Stable; Affirms 'B1' Ratings ----------------------------------------------------------------- Moody's Investors Service changed The New York Times Company's rating outlook to stable from negative. The rating outlook change is based on Moody's expectation that a moderation of revenue declines along with reductions in operating costs will stabilize debt-to-EBITDA leverage (5.7x FY 2009 incorporating Moody's standard adjustments and after buyouts) at a level below 6x and Moody's view that the company has an adequate liquidity profile to fund pension contributions over the next 12-18 months. NY Times' B1 Corporate Family Rating, B1 Probability of Default Rating and SGL-3 speculative-grade liquidity rating are not affected. Outlook Actions: Issuer: New York Times Company (The) -- Outlook, Changed To Stable From Negative Moody's expects NY Times' newspaper advertising revenue to fall in the high single-digit range in 2010, but anticipates an economic recovery will moderate the declines as the year progresses and stabilize revenue in 2011. Payments for severance and pension withdrawal liabilities accrued in 2009 are likely to consume a meaningful amount of NY Times' cash flow after interest, taxes and capital spending in 2010. Moody's nevertheless projects NY Times' free cash flow will be sufficient to fund its planned $60-80 million of largely voluntary 2010 qualified pension plan contributions and the likely higher amount of required contributions in 2011. The SGL-3 speculative-grade liquidity rating reflects Moody's view that the company has an adequate liquidity profile. Moody's expects that NY Times will be able to fund operating needs and pension contributions over the next 12-15 months from cash and projected free cash flow, but the cushion is not large relative to the size of the company and potential risks to newspaper advertising revenue. The expiration of the $400 million revolver in June 2011 also tempers the overall liquidity profile. The revolver is currently undrawn (except for $67 million of LCs) and Moody's expects modest reliance on the facility in 2010 given the timing of restructuring payments and pension contributions. Moody's anticipates a smaller credit line can be negotiated, but a refinancing is not factored into the SGL-3 rating. NY Times has no funded debt maturities until $75 million of MTNs expire in September 2012. The last rating action on NY Times was on April 24, 2009, when Moody's downgraded the CFR, PDR and senior unsecured note ratings to B1 from Ba3. NY Times is a New York based media company with operations in newspaper publishing and information services. The company operates The New York Times, the International Herald Tribune, The Boston Globe, 15 other daily newspapers, and more than 50 Web sites including NYTimes.com and About.com. Revenue approximates $2.4 billion for the FY 2009. ORLEANS HOMEBUILDERS: NYSE Amex Intends to Suspend Firms Trading ---------------------------------------------------------------- Orleans Homebuilders, Inc., received a written notice from NYSE Amex LLC (the "Exchange") stating that the Exchange intends to suspend trading in the Company's common stock, apply to the Securities and Exchange Commission (the "SEC") to delist the common stock and to truncate the procedures regarding continued listing evaluation and follow-up as specified in Section 1009 of the NYSE Amex LLC Company Guide (the "Company Guide"). In particular, the written notice from the Exchange stated that (i) as a result of the Company filing of a voluntary petition under Chapter 11 of the United States Bankruptcy Code on behalf of itself and a majority of its operating subsidiaries on March 1, 2010, the Staff has determined that the Company is financially impaired and, as such, is not in compliance with Section 1003(a)(iv) of the Company Guide in that is has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, and its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company will be able to continue its operations and meet is obligations as they mature; and (ii) the Company is not in compliance with Section 134 and Section 1101 of the Company Guide because the Company failed to timely file its Annual Report on Form 10-K for the fiscal year ended June 30, 2009 and its Quarterly Reports on Form 10-Q for the periods ended September 30, 2009 and December 31, 2009. The Exchange also indicated that, based upon the foregoing, the Staff has concluded that it appears that it is appropriate to initiate immediate delisting proceedings at this time. The Company does not intend to appeal the Exchange's determination to delist the Company's common stock and to apply to the SEC to delist the Company's common stock. The written notice from the Exchange states that if the Company does not appeal the Staff Determination by March 12, 2010, the delisting determination will become final, the Exchange will suspend trading in the Company's common stock and will submit an application to the SEC to strike the Company's common stock from listing and regulation on the Exchange in accordance with Section 12 of the Securities Exchange Act of 1934, as amended, and rules promulgated thereunder. After the Company's common stock is delisted, the Company cannot predict whether any trading market, including any over-the-counter trading market, for the Company's common stock will develop or be sustained. About Orleans Homebuilders Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker & Lancaster, Masterpiece Homes, Realen Homes, and Orleans -- develops, builds and markets high-quality single-family homes, townhouses and condominiums. From its headquarters in suburban Philadelphia, the Company serves a broad customer base including first-time, move-up, luxury, empty-nester and active adult homebuyers. The Company currently operates in the following 11 distinct markets: Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. Orleans Homebuilders employs approximately 300 people. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. D. Delaware Case No. 10-10684). Curtis S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, is the Company's Delaware and restructuring counsel. Cahill Gordon & Reindell LLP is the Company's bankruptcy and restructuring counsel. Blank Rome LLP is the Company's special corporate counsel. FTI Consulting Inc. is the Company's financial advisor. BMO Capital Markets is the Company's M&A advisor. Lieutenant Island Partners is the Company's M&A consultant. The Company's claims and notice agent is Garden City Group Inc. The Company estimated its assets and liabilities at $100,000,001 to $500,000,000. ORTHOFIX INTERNATIONAL: Moody's Retains 'B1' Corp. Family Rating ---------------------------------------------------------------- Moody's commented on Orthofix International NV, following the announcement on March 9, 2010, of the divestiture of the vascular business unit to Covidien for up to $19 million. There are no changes to the B1 Corporate Family Rating or the stable outlook, however, Moody's expects the divestiture to improve headroom under the company's financial covenants, thus improving the liquidity profile. The last rating action for Orthofix was on November 18, 2009 when Moody's changed the rating outlook to stable from negative. Orthofix is a provider of pre and post operative products to address bone and joint health needs of patients. Orthofix offers surgical and non-surgical products primarily for the spine, orthopedics and sports medicine markets. The company reported revenues of approximately $546 million for the twelve months ended December 31, 2009. PACIFIC LIFESTYLE: Can Use $1.7 Million DIP Loan Until June 30 -------------------------------------------------------------- The Hon. Paul B. Snyder of the U.S. Bankruptcy Court for the Western District of Washington approved a stipulation among Pacific Lifestyle Homes, Inc., Kevin and Nicki Wann, lender, and the Official Committee of Unsecured Creditors, extending the DIP loan maturity date until June 30, 2010. The Debtor would use the money to pay, among other things, property taxes, utility costs, maintenance costs and general overhead with respect to the property. On December 9, 2008, the Court authorized the Debtor to obtain postpetition financing and granting liens, security interests and super-priority administrative expense status to the DIP lender. Pursuant to the terms of the DIP financing order, the lender extended a $1,700,000 loan to the Debtor. Based in Vancouver, Washington, Pacific Lifestyle Homes, Inc. is a homebuilder throughout Southwest Washington and Northern Oregon. The company filed for Chapter 11 relief on Oct. 16, 2008 (Bankr. W.D. Wash. 08-45328). Brian A. Jennings, Esq., at Perkins Coie LLP, in Seattle; Jeanette L. Thomas, Esq., and Steven M. Hedberg, Esq., at Perkins Coie LLP, in Portland, Oregon, represent the Debtor in the Chapter 11 case. John R. Knapp, Jr., Esq., at Cairnross & Hempelmann PS, represent the official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed between $50 million and $100 million each in assets and debts. PANGLOBAL BRANDS: Shares Could Be Delisted From OTCBB ----------------------------------------------------- Panglobal Brands Inc. announced March 10 that its shares may be delisted from the Over the Counter Bulletin Board quotation system. The delisting is pursuant to a notice that it is ineligible for continued listing due to late periodic filings three times in the past 24 months. The Company has appealed the ruling and has a hearing scheduled for Friday March 12, 2010. If the Company's common stock is delisted, it will continue to be available for trading under the ticker symbol of PNGB on the Nasdaq Pink Sheets at http://www.otcmarkets.com/pink/quote/quote.jsp?symbol=ispg.pk The Company remains a reporting issuer and its periodic reports are filed on the SEC's EDGAR system at http://www.sec.gov/edgar/searchedgar/webusers.htm If delisted, the Company expects to reapply for a listing on the OTCBB when it becomes eligible to do so in 12 months. About Panglobal Brands Inc. Panglobal Brands, Inc. is committed to building a diverse stable of apparel brands, capitalizing on opportunities to participate in the hottest fashion trends as they happen. Our business strategy is to create a balance with dynamic branded products and the traditionally more stable private label apparel business by selling branded products through specialty retailers and by running a private label division catering to department store chains. Our current brands include: SoSik, which represents affordable fashions for the burgeoning junior market; Scrapbook and Crafty Couture, which are aimed at the teen and junior markets and features mix and match knits; and Haven, a value oriented contemporary print dress label. This strategy plus a management team with significant apparel industry experience, enables Panglobal Brands to bring high-value products to market at competitive price points. PARK PLACE: Section 341(a) Meeting Scheduled for March 15 --------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Park Place at Metrowest Phases Four and Five, Ltd.'s Chapter 11 case on March 15, 2010, at 11:00 a.m. The meeting will be held at 6th Floor Suite 600, 135 West Central Boulevard, Orlando, FL 32801. 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. Orland, Florida-based Park Place at Metrowest Phases Four and Five, Ltd., filed for Chapter 11 bankruptcy protection on February 17, 2010 (Bankr. M.D. Fla. Case No. 10-02342). Peter N. Hill, Esq., at Wolff Hill McFarlin & Herron PA, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. The Company's affiliates -- Park Place at Metrowest Phases Six and Seven, LTD, and Park Place at Metrowest Phase Three, LTD -- filed separate Chapter 11 petitions. PARK PLACE: Wants Wolff Hill as Bankruptcy Counsel -------------------------------------------------- Park Place at Metrowest Phases Four and Five, Ltd., has sought permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Wolff, Hill, McFarlin & Herron, P.A., as bankruptcy counsel. WHM&H will, among other things: a. advise the Debtor concerning the operation of its business in compliance with Chapter 11 and orders of the Court; b. defend any causes of action on behalf of the Debtor; c. prepare applications, motions, reports, and other legal papers in the Debtor's Chapter 11 case; and d. assist in the formulation of a plan of reorganization and preparation of a disclosure statement. Peter N. Hill, a shareholder of WHM&H, says that the Debtor has agreed to pay the firm compensation for actual necessary services rendered by the firm, based on the nature, the extent and the value of the services, the time spent on the services, and the cost of comparable services other than in the case. WHM&H hasn't agreed to share the compensation with any other entity, other than with members or regular associates of WHM&H. Peter N. Hill, a shareholder of WHM&H, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Orland, Florida-based Park Place at Metrowest Phases Four and Five, Ltd., filed for Chapter 11 bankruptcy protection on February 17, 2010 (Bankr. M.D. Fla. Case No. 10-02342). The Company's affiliates -- Park Place at Metrowest Phases Six and Seven, LTD, and Park Place at Metrowest Phase Three, LTD -- filed separate Chapter 11 petitions. PARK PLACE: Wants March 19 Deadline for Filing of Schedules ----------------------------------------------------------- Park Place At Metrowest Phases Four And Five, Ltd., has asked the U.S. Bankruptcy Court for the Middle District of Florida to further extend the deadline for the filing of schedules of assets and liabilities and statement of financial affairs until March 19, 2010. On March 9, 2010, the Court granted the Debtor an extension until March 10, 2010, to file the schedules and statements. The Debtor said that it was still compiling the information needed to complete the schedules and statements within the allowed time. Prior to the Petition Date, a receiver was appointed to take possession of the property and records of the Debtor. The Debtor says that it is still working with the receiver. According to the Debtor, it requires additional time to gather the information needed to file the schedules and statements. Orland, Florida-based Park Place at Metrowest Phases Four and Five, Ltd., filed for Chapter 11 bankruptcy protection on February 17, 2010 (Bankr. M.D. Fla. Case No. 10-02342). Peter N. Hill, Esq., at Wolff Hill McFarlin & Herron PA, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. The Company's affiliates -- Park Place at Metrowest Phases Six and Seven, LTD, and Park Place at Metrowest Phase Three, LTD -- filed separate Chapter 11 petitions. PATRICK GISLER: Files Schedules of Assets & Liabilities ------------------------------------------------------- Patrick M. Gisler has filed with the U.S. Bankruptcy Court for the District of Nevada its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $7,095,000 B. Personal Property $927,700 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $16,194,930 E. Creditors Holding Unsecured Priority Claims $289,803 F. Creditors Holding Unsecured Non-priority Claims $1,258,669 ----------- --------- TOTAL $8,022,700 $17,743,402 Bend, Oregon-based Patrick M. Gisler -- dba Oregon Lifestyles Realty Inc.; Gisler Management Inc.; Crawfords Trailer Park, Inc. -- filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. D. Nev. Case No. 10-10299). Timothy P. Thomas, Esq., at the Law Offices Of Brian D. Shapiro, LLC, assists Mr. Gisler in his restructuring effort. PATRICK GISLER: Taps Brian D. Shapiro as Bankruptcy Counsel ----------------------------------------------------------- Patrick M. Gisler has sought authorization from the U.S. Bankruptcy Court for the District of Nevada to employ Brian D. Shapiro, LLC, as bankruptcy counsel. Brian D. Shapiro will: a. represent the Debtor with respect to all aspects of the bankruptcy case, including contested matters, formulation and confirmation of a plan of reorganization, preparation and approval of the disclosure statement, and any adversary proceedings; and b. represent the Debtor with respect to review, analysis and defense of exemption matters. Timothy P. Thomas, an attorney at Brian D. Shapiro, says that the firm will be paid based on the hourly rates of its personnel: Timothy P. Thomas $375 Sarah Callahan $125 Senior Partners $375 Partners $300 Associates $225 Paralegals $125 Law Clerk $100 Mr. Thomas assures the Court that Brian D. Shapiro is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Bend, Oregon-based Patrick M. Gisler -- dba Oregon Lifestyles Realty Inc.; Gisler Management Inc.; Crawfords Trailer Park, Inc. -- filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. D. Nev. Case No. 10-10299. According to the schedules, Mr. Gisler has assets of $8,022,700, and debts of $17,743,402. PCS EDVENTURES: Promotes Robert Grover to President --------------------------------------------------- PCS Edventures!.com Inc. promoted Robert Orson Grover to the positions of President, Chief Operating Officer, and Chief Technology Officer. Mr. Grover's expanded oversight responsibilities will include marketing, sales and product development. He will continue to be heavily involved in PCS' international business initiatives. "Robert has been a key part of our Company for over twenty years," noted Anthony A. Maher, Chairman, Chief Executive Officer, and Acting Financial Officer of PCS Edventures!.com, Inc. "The Board and I have the utmost confidence in his abilities to execute these expanded responsibilities in a professional and highly effective manner." "The assumption of these additional responsibilities by Robert will allow PCS to more effectively address the evolving nature of the educational market landscape," continued Maher. "PCS products and services are designed to allow students to develop, in a fun and interesting way, the critical thinking skills necessary to succeed in the 21st Century workplace. The consolidation of our operational activities under one President/COO/CTO will allow me to focus my attention, as CEO, upon longer-term strategic initiatives, the evaluation of acquisition opportunities, financial planning and expanding our relationships within the investment community." Mr. Grover was one of the Company's original founding employees and over the past twenty years has been responsible for product development and technology initiatives. A lifelong native of Idaho, he is a Boise State University alumnus, where he earned an AAS degree in Management and a BA degree in English. About PCS Edventures!.com Boise, Idaho-based PCS Edventures!.com, Inc. (OTC BB: PCSV) -- http://www.edventures.com/-- is engaged in the design, development and delivery of educational learning labs bundled with related technologies and programs to the K-12 market worldwide. The PCS suite of products ranges from hands-on learning labs in technology-rich topics in Science, Technology, Engineering and Math (STEM) to services rich in imagination, innovation, and creativity. PCS programs operate in over 6,000 sites in all 50 United States as well as in 17 countries internationally. At December 31, 2009, the Company's consolidated balance sheets showed total assets of $1,381,676, total liabilities of $721,417, and total stockholders' equity of $660,259. Going Concern Doubt For the nine months ended December 31, 2009, the Company had a net loss of $1,455,405 on total revenues of $1,841,608, as compared to a net loss of $1,024,586 on total revenues of $2,315,747 for the same period in the prior year. The Company said its established sources of revenues are not sufficient to cover the Company's operating costs. Although the Company has positive working capital, it has accumulated significant losses. "The combination of these items raises substantial doubt about its ability to continue as a going concern." PCS EDVENTURES: Cecil Andrus Retires from Board of Directors ------------------------------------------------------------ PCS Edventures!.com, Inc. said that Cecil D. Andrus is leaving its Board of Directors. Mr. Andrus advised the Company that he is retiring for personal reasons and not because of any disagreement with the Company concerning its operations, policies or practices. Mr. Andrus stated, "I have gladly devoted time and effort over the years to help the Company fulfill its commitment to enhance the education of children in the U.S. and other countries. I also recognize the tremendous opportunity this represents for building shareholder value and feel the Company is now well on its way to profitability and financial success. I have complete confidence in the Company's management to continue its mission." "Mr. Andrus has given PCS a decade and half of dedicated service," noted Anthony A. Maher, Chairman, Chief Executive Officer, and Acting Financial Officer of PCS Edventures!.com, Inc. "Our Company has benefited from his wise counsel, and we will miss his direct style and insight." Governor Andrus joined the PCS Board of Directors in November 1995, following his retirement from public service in January of that year. Previously, Mr. Andrus had served as Governor of the state of Idaho, the only person elected Governor of the state four different times. Mr. Andrus also served as the Secretary of the Interior in the Carter Administration, the first Idahoan to serve in a Presidential Cabinet. After leaving public service, Mr. Andrus founded and now directs the Andrus Center for Public Policy at Boise State University. In addition, Mr. Andrus is a former Director of Albertsons and KeyCorp and a former Director of The Coeur D'Alene Mines and Rentrak Corp. He also serves "Of Counsel" to the Gallatin Group, a public affairs and corporate analysis firm. About PCS Edventures!.com Boise, Idaho-based PCS Edventures!.com, Inc. (OTC BB: PCSV) -- http://www.edventures.com/-- is engaged in the design, development and delivery of educational learning labs bundled with related technologies and programs to the K-12 market worldwide. The PCS suite of products ranges from hands-on learning labs in technology-rich topics in Science, Technology, Engineering and Math (STEM) to services rich in imagination, innovation, and creativity. PCS programs operate in over 6,000 sites in all 50 United States as well as in 17 countries internationally. At December 31, 2009, the Company's consolidated balance sheets showed total assets of $1,381,676, total liabilities of $721,417, and total stockholders' equity of $660,259. Going Concern Doubt For the nine months ended December 31, 2009, the Company had a net loss of $1,455,405 on total revenues of $1,841,608, as compared to a net loss of $1,024,586 on total revenues of $2,315,747 for the same period in the prior year. The Company said its established sources of revenues are not sufficient to cover the Company's operating costs. Although the Company has positive working capital, it has accumulated significant losses. "The combination of these items raises substantial doubt about its ability to continue as a going concern." PENN TRAFFIC: Hilco Denied $300,000 Breakup Fee ----------------------------------------------- Bill Rochelle at Bloomberg News reports that the Bankruptcy Court has refused to grant Hilco Merchant Resources LLC a $300,000 breakup fee under a proposal to liquidate 57 stores owned by supermarket operator Penn Traffic Co. Before the Hilco agreement could be approved by the bankruptcy judge, a better offer to acquire nearly all the stores as a going concern was received from Tops Markets LLC. Tops Markets acquired substantially all of the assets of Penn Traffic for $85 million. Tops Markets also agreed to take on another $70 million in related costs. The sale to Tops was completed this month. Syracuse, New York-based The Penn Traffic Company -- dba P&C Foods, Bi-Lo Foods, and Quality Markets -- operates supermarkets in Pennsylvania, upstate New York, Vermont, and New Hampshire under the Bilo, P&C and Quality trade names. The Company filed for Chapter 11 bankruptcy protection on November 18, 2009 (Bankr. D. Del. Case No. 09-14078). Ann C. Cordo, Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell assist the Company in its restructuring effort. Donlin Recano is the Company's claims agent. The Company listed $150,347,730 in assets and $136,874,394 in liabilities as of May 4, 2009. These affiliates also filed separate Chapter 11 petition: Sunrise Properties, Inc.; Pennway Express, Inc.; Penny Curtiss Baking Company, Inc.; Big M Supermarkets, Inc.; Commander Foods Inc.; P and C Food Markets, Inc. of Vermont; and P.T. Development, LLC. PERSONALITY HOTELS: Files for Chapter 11 in San Francisco --------------------------------------------------------- Personality Hotels III LLC, the owner of Hotel Frank and Vertigo Hotel in San Francisco, filed for Chapter 11 on March 10 (Bankr. N.D. Calif. Case No. 10-30804) Personality Hotels III listed $10 million to $50 million in assets and $50 million to $100 million in debt in its petition. Bloomberg News reports that Personality Hotels owns four other hotels and is San Francisco's largest boutique hotel operator. Personality Hotels spent $10 million renovating Hotel Frank and $5 million on renovating Vertigo Hotel, named after the Alfred Hitchcock movie. Three San Francisco-based hotel operators have filed for bankruptcy this week. On March 9, Majestic LLC, owner of Hotel Majestic, filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 10-30787). Hotel Metropolis II LLC, the owner of Metropolis Hotel in San Francisco, filed a bankruptcy petition March 10 (Bankr. N.D. Calif. Case No. 10-30802). Both Personality Hotels and Hotel Metropolis II are represented by Edward C. Singer, Esq., at Lemi Group Legal Department. PRESTIGE BRANDS: Moody's Affirms 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed Prestige Brands, Inc.'s debt ratings, including the company's corporate family rating of B1. Moody's also assigned new ratings to the company's proposed $180 million bank facilities and proposed $150 million senior unsecured debt offering of Ba2 and B3, respectively. Moody's also upgraded the company's speculative liquidity rating to SGL-2 from SGL-3 due to the improved liquidity profile as a result of the proposed refinancing. All existing ratings will be withdrawn upon the completion of the refinancing and Moody's satisfactory review of final documentation. The outlook remains stable. The affirmation of the Prestige's ratings and stable outlook reflect the company's diverse portfolio of leading niche brands; its high margins; its flexible outsourced business model; and its low-capital expenditure requirements. "Prestige's financial and operating performance continues to perform relatively well amidst a difficult economic environment with relatively strong credit metrics for a B1 issuer," says Moody's Vice President and Senior Credit Officer Janice Hofferber. The proposed refinancing improves Prestige's liquidity profile by extending the company's debt maturities while restoring its revolving credit bank facility, albeit at a lower committed amount. "Prestige's ratings however, will remain constrained by its relatively small scale, participation in highly competitive segments in near-pharmacy like categories and appetite for debt financed acquisitions needed to supplement the company's relative low organic growth rate," adds Ms. Hofferber. These ratings of Prestige were affirmed (instrument ratings to be withdrawn upon completion of the proposed transaction): -- Corporate Family Rating of B1 -- Probability of Default Rating of B1 -- $300 million senior secured term loan facility due 4/06/11 of Ba3 (LGD 3, 36%) -- $126 million 9 �% senior subordinated notes due 4/15/12 of B3 (LGD 5, 88%) These ratings of Prestige were upgraded: -- Speculative Grade Liquidity rating to SGL-2 from SGL-3 These ratings of Prestige were assigned: -- $30 million senior secured revolving credit facility due 2015 of Ba2 (LGD 2, 24%) -- $150 million senior secured term loan B due 2016 of Ba2 (LGD 2, 24%) -- $150 million senior unsecured notes due 2018 of B3 (LGD 5, 79%) -- Outlook is stable. The last rating action regarding Prestige was on March 27, 2008, when Moody's downgraded the company's speculative grade liquidity rating to SGL-3 from SGL-2 and affirmed the company's long-term ratings including its corporate family rating of B1 with a stable outlook. Prestige Brands, Inc., headquartered in Irvington, New York, is a marketer of a broad portfolio of branded over-the-counter healthcare products, household cleaning products, and personal care products. Key brands include Compound W, Chloraseptic, Little Remedies, Clear Eyes, Murine, Wartner, New Skin, Comet, Chore Boy, Spin and Span, and Cutex. Total revenues for the last 12-month period ending December 31, 2009, were $299 million. PRESTIGE BRANDS: S&P Affirms 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B+' corporate credit rating on Irvington, New York-based Prestige Brands Inc. The outlook is stable. At the same time, S&P assigned its 'BB' issue-level rating to Prestige Brands Inc.'s proposed new $180 million senior secured credit facility, which consists of a $30 million revolving credit facility maturing in 2015, and a $150 million term loan maturing in 2016. The assigned issue-level rating is two notches higher than the corporate credit rating on Prestige Brands. The recovery rating is '1', indicating S&P's expectation for very high (90%- 100%) recovery in the event of a payment default. At the same time, S&P assigned its 'B+' issue-level rating (same as the corporate credit rating) to Prestige Brands' proposed new $150 million senior notes due 2018. The recovery rating is '3', indicating S&P's expectation for meaningful (50%-70%) recovery in the event of a payment default. Upon completion of the refinancing, S&P will withdraw the existing ratings on the senior secured credit facility (term loan B maturing in 2011) and the senior subordinated notes due 2012. As of Dec. 31, 2009, the company had $324.3 million of debt (adjusted for capitalized operating leases outstanding). "The ratings on Prestige Brands Inc. reflect the company's participation in the highly competitive consumer products industry, where it competes with larger and better capitalized companies," said Standard & Poor's credit analyst Jayne M. Ross. "The ratings also reflect Prestige Brands' lack of international diversity in its product lines, and its leveraged financial profile." The company has established brands with leading niche market positions. However, many of these brands compete with those of much larger pharmaceutical and consumer products companies with much greater resources for product development and marketing. Most of the company's brands have U.S. domestic concentrations and have more of a niche focus. Prestige Brands has acquired many of these brands from larger competitors who underinvested in their growth because of their limited potential to expand globally. The company's strategy is to develop new product innovations for these brands and increase marketing. Prestige Brands outsources research and development and manufacturing to third parties, although the company is involved in developing any new product innovations. While this helps reduce Prestige Brands' expenses, it also potentially limits the company's control of new product development. S&P expects that Prestige Brands' debt leverage will remain below 4x and that the company will maintain its niche market positions. S&P would consider a lower rating if the company does not maintain adequate liquidity or if the company faces operating challenges that result in total debt to EBITDA exceeding more than 5.5x. This could result from a more than 15% sales decline and more than a 300-basis-point drop in EBITDA margin. S&P would consider a negative outlook if the covenant cushion under its bank term loan facility is less than 15%. S&P would consider a positive outlook or an upgrade if credit protection measures were to improve further and be sustained, with total debt to EBITDA of less than 3x. However, S&P does not think this is likely over the near term as S&P expects that the company will be acquisitive and that leverage will remain in the 3x to 4x range. PRIMEDIA INC: Moody's Downgrades Corporate Family Rating to 'B1' ---------------------------------------------------------------- Moody's Investors Service lowered its ratings for PRIMEDIA Inc., including the company's Corporate Family Rating to B1 from Ba3, as outlined below. The downgrades are based on expectations that revenue levels will remain below historical levels for some time and that cash flow available for debt repayment will remain very limited after restructuring expenses and dividends. While the company generates adequate levels of cash flow from ongoing operations, a substantial portion continues to be dividended to shareholders leaving only modest amounts for debt reduction. The resulting free cash flow to debt levels of approximately 3% on a Moody's adjusted basis are weak and are expected to remain at relatively low levels. The rating outlook has been revised from negative to stable. The B1 rating reflects the strength of the company's apartment listing business but is tempered by its leverage and post-dividend cash flow coverage, particularly given PRIMEDIA's relatively small scale and limited diversification. While the company is diversified geographically and across several brands, it derives over 90% of its ad revenue from the apartment listing business. The rating also reflects the competitive landscape in the apartment listing business, notably the online apartment business, which faces ongoing pressure from ebay owned, Rent.com, which is the largest (by traffic) apartment listings provider. PRIMEDIA has reduced expenses to address the reduced revenue levels of the business, especially around its New Homes and Distributech operations which have declined dramatically. The company has done a good job of aligning expense levels to the revised size of the business, and operating margins have improved as a result (note that company reported operating margins increased to 28.2% in Q4 2009 from 23.6% in Q4 2008). Overall EBITDA remains at levels below historic periods but should show some improvement as the company recognizes a full year of the cost reductions. Moody's also notes that, despite the difficult economic environment, PRIMEDIA's apartment listing business only experienced declines of 2.5%. Nonetheless, free cash flow levels remain weak after ongoing restructuring costs and dividends and are expected to remain minimal over the near term. These ratings were changed: -- Corporate Family Rating to B1 from Ba3 -- Probability of Default Rating to B2 from B1 -- Senior secured revolving credit facility due 2013 -- to B1 LGD3, 30% from Ba3, LGD3, 35% -- Senior secured term loan B due 2014 -- to B1 LGD3, 30% from Ba3, LGD3, 35% -- Speculative Grade Liquidity rating -- SGL-2 -- Rating Outlook to Stable from Negative The last rating action occurred on January 26, 2009, when Moody's changed PRIMEDIA's rating outlook to negative. PRIMEDIA's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and the competitive position of the company versus others in its industry, ii) the capital structure and the financial risk of the company, iii) the projected financial and operating performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance of risk. These attributes were compared against other issuers both within and outside of PRIMEDIA's core industry and PRIMEDIA's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Norcross, Georgia, PRIMEDIA reported sales of $258 million for the fiscal year ended December 31, 2009. RATHGIBSON INC: Wants May 19 Auction for Assets; Lead Bid at $93MM ------------------------------------------------------------------ RathGibson Inc. is seeking approval from the Bankruptcy Court for a sale process where a creditor group will buy the assets absent higher and better bids. Pursuant to an Asset Purchase Agreement dated March 8, 2010, RathGibson Acquisition Co., LLC, formed by a group comprised by some of the existing secured lenders and holders of 70% of the $209.5 million in 11.25% unsecured notes has offered to pay $93 million cash and assume certain liabilities in exchange for RathGibson's assets. The sale of the assets is an integral part of the Second Amended Plan and consummation of the Plan is dependent upon consummation of the sale. To further market test the assets, RathGibson proposes to hold a May 19 auction, with bids due May 12. Each bidder is required to, among other things (i) be prepared to consummate the sale on or before June 16, following entry of the plan confirmation order, and (ii) submit a $10 million deposit. The sale would be approved as part of the approval of the liquidating Chapter 11 plan at a May 21 confirmation hearing. RathGibson Acquisition, as stalking horse bidder, will be entitled to a break-up fee of $2.79 million and expense reimbursement of up to $1 million in the event the Debtor consummates a sale with another party. The Court will hold a hearing on March 23 to consider approval of the proposed sale process. Objections are due March 18. About RathGibson Inc. Headquartered in Lincolnshire, Illinois, RathGibson Inc. -- http://www.RathGibson.com/, http://www.GreenvilleTube.com/ and http://www.ControlLine.com/-- is a worldwide manufacturer of highly engineered stainless steel, nickel, and titanium tubing for diverse industries such as chemical, petrochemical, energy -- power generation, energy -- oil and gas, food, beverage, pharmaceutical, biopharmaceutical, medical, biotechnology, and general commercial. Manufacturing locations include: Janesville, Wisconsin, North Branch, New Jersey, Clarksville, Arkansas (Greenville Tube), and Marrero, Louisiana (Mid-South Control Line). In addition to the sales offices in Janesville, North Branch, and Marrero, RathGibson has also strategically placed sales offices in Houston, Texas, USA; Shanghai, China; Manama, Bahrain; Melbourne, Australia; Seoul, Republic of Korea; Mumbai, India; Singapore; Vienna, Austria; and Buenos Aires, Argentina. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. Garden City Group is claims and notice agent. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Scott Welkis, Esq., Kristopher M. Hansen, Esq., and Jayme T. Goldstein, Esq., at Stroock & Stroock & Lavan represent Wilmington Trust FSB, as administrative agent, and an ad hoc committee of certain holders of Senior Notes. Attorneys at Richards, Layton & Finger P.A., also represent the ad hoc noteholders committee. RATHGIBSON INC: Amended Plan Calls for Asset Sale to Noteholders ---------------------------------------------------------------- RathGibson Inc. and its affiliates filed a modified Chapter 11 plan on March 8 incorporating a settlement with creditor groups and calling for a sale of the business for $93 million cash to noteholders, absent higher and better bids. The sale of the assets is an integral part of the Second Amended Plan and consummation of the Plan is dependent upon consummation of the sale. The asset purchase agreement with RathGibson Acquisition Co., LLC, the entity formed by secured lenders and holders of unsecured notes, requires confirmation of the Plan by June 1. Under the Plan, the Debtors intend to sell substantially all of their assets, make distributions to holders of allowed claims and certain equity interests, and effect the wind down of the estates. According to the disclosure statement, recovery by interest and claim holders would be as follows: -- Holders of DIP financing claims aggregating $83.6 million, administrative claims and fee claims will be paid in full in cash. Holders of prepetition secured claims aggregating $53.29 million were paid from the proceeds of the DIP financing. -- Unless there is a higher offer at auction, holders of the unsecured notes owed a total of $209.5 million and other RathGibson unsecured creditors are expected to receive 1.2% on their claims. -- Holders of general unsecured claims totaling $209.25 million against debtor Greenville Tube Company (on account of its guarantee of the notes), are to recover a 0.2% dividend. -- Holders of $152.2 million of pay-in-kind notes issued by debtor RGCH Holdings Corp. will split $300,000, for a 0.2% recovery. -- Holders of interests in RathGibson, RGCH, and Greenville won't receive anything. Holders of interests in RG Tube Holdings LLC will split $25,000 cash allocated to the class pursuant to the global settlement. A hearing to consider approval of the revised disclosure statement is scheduled for April 9, 2010, 2:00 p.m. (Eastern Time). Ballots will be sent to creditors after the revised Disclosure Statement is approved. Completed ballots must be returned by May 11. The Debtor is targeting a May 21 confirmation hearing for the Plan. Objections are due May 11. Lenders in the Chapter 11 case agreed to extend the maturity of the loan to June 30, although the sale agreement requires confirmation of the Chapter 11 plan by June 1. Last year, RathGibson filed a plan and obtained approval of the explanatory disclosure statement. It was effectively dropped in the face of objection from creditors of affiliates not dealt with in the original reorganization. A copy of the Second Amended Plan is available for free at: http://bankrupt.com/misc/RathGibson_2nd_Plan.pdf A copy of the Second Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/RathGibson_2nd_DiscStatement.pdf About RathGibson Inc. Headquartered in Lincolnshire, Illinois, RathGibson Inc. -- http://www.RathGibson.com/, http://www.GreenvilleTube.com/ and http://www.ControlLine.com/-- is a worldwide manufacturer of highly engineered stainless steel, nickel, and titanium tubing for diverse industries such as chemical, petrochemical, energy -- power generation, energy -- oil and gas, food, beverage, pharmaceutical, biopharmaceutical, medical, biotechnology, and general commercial. Manufacturing locations include: Janesville, Wisconsin, North Branch, New Jersey, Clarksville, Arkansas (Greenville Tube), and Marrero, Louisiana (Mid-South Control Line). In addition to the sales offices in Janesville, North Branch, and Marrero, RathGibson has also strategically placed sales offices in Houston, Texas, USA; Shanghai, China; Manama, Bahrain; Melbourne, Australia; Seoul, Republic of Korea; Mumbai, India; Singapore; Vienna, Austria; and Buenos Aires, Argentina. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. Garden City Group is claims and notice agent. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Scott Welkis, Esq., Kristopher M. Hansen, Esq., and Jayme T. Goldstein, Esq., at Stroock & Stroock & Lavan represent Wilmington Trust FSB, as administrative agent, and an ad hoc committee of certain holders of Senior Notes. Attorneys at Richards, Layton & Finger P.A., also represent the ad hoc noteholders committee. REDPRAIRIE CORPORATION: Moody's Assigns 'B2' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned new ratings to RedPrairie Corporation following the company's announcement that it has agreed to be acquired by a private-equity sponsor New Mountain Capital in a leveraged buyout for $526 million. Ratings assigned include B2 corporate family rating, B3 probability of default rating, and B2 ratings to the proposed $240 million first-lien senior secured term loan and the proposed $30 million revolving credit facility. The rating outlook is revised to positive. Proceeds from the new credit facilities will be used to repay obligations under its existing first and second lien facilities. The acquisition of RedPrairie will be financed with the proceeds from $240 million senior secured term loan and $322 million of common equity from New Mountain Capital. The transaction is expected to close on March 24, 2010. The change to positive ratings outlook reflects Moody's expectations that the company should be able to demonstrate positive sequential revenue growth in 2010, despite a decline in revenues in FY 2009. The change in outlook also reflects Moody's expectation that RedPrairie should be able to reduce its financial leverage by continuing to execute its business plan over the near term, while sustaining its competitive position in the supply chain management software market. Moody's believes that the company has demonstrated its ability to reduce cost, expand EBITDA margins, and generate good positive free cash flow, even in a difficult macroeconomic environment, which shows the resiliency of its business model. The affirmation of RedPrairie's B2 corporate family rating reflects its strong product offerings and domain expertise in the warehouse management, store operations and time & labor management software space, as well as its growing presence in the transportation management systems market. Additionally, high barriers-to-entry stemming from the business critical nature and high switching costs of its products, coupled with its stable recurring maintenance revenue streams and high-customer retention rates, help mitigate some of the competitive pressures RedPrairie may experience in the highly fragmented supply chain management software market. The CFR rating is constrained by the company's high financial leverage, small scale relative to some larger and better capitalized competitors, product revenue concentration within warehouse management systems and large exposure to retail and consumer-goods end-markets. RedPrairie Corporation (NewCo) These ratings and assessments were assigned to RedPrairie (NewCo): * Corporate Family Rating -- B2 * Probability of Default Rating -- B3 * Proposed $30 million Senior Secured Revolving Credit Facility due 2015 -- B2 (LGD3, 34%) * Proposed $240 million Senior Secured 1st Lien Term Loan due 2016 -- B2 (LGD3, 34%) The ratings outlook is positive. All the ratings at RedPrairie (NewCo) are subject to the closing of the transaction and Moody's review of final documentation. RedPrairie Corporation (OLD) Upon closing of the proposed transaction and repayment of existing debt, Moody's will withdraw the ratings of RedPrairie (OLD) including: * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * $20 million Senior Secured Revolving Credit Facility due 2012 at B1, LGD3, 35% * $170 million Senior Secured First Lien due 2012 at B1, LGD3, 35% * $70 million Senior Secured Second Lien due 2013 at Caa1, LGD5, 86% The ratings could be upgraded to B1, if the company demonstrates significant improvement in revenue growth while maintaining EBITDA margins in 21%-23% range, growth in positive free cash flow and debt paydown, such that its Adjusted Debt / EBITDA is below 4.0x and Free cash flow / Debt is greater than 10% on a sustained basis. The ratings outlook could be revised to stable, if the company experiences revenue decline and contraction in EBITDA margins and free cash flow, such that the leverage on an adjusted Debt/EBITDA basis is above 5.0x on a sustained basis. Moody's last rating action was on January 23, 2007, when Moody's affirmed RedPrairie's ratings following the company's announcement of its intentions to offer a one-time debt financed $25 million dividend to its equity sponsors. Headquartered in Waukesha, Wisconsin, RedPrairie delivers productivity solutions to help companies around the world in three categories -- inventory, transportation and workforce. RedPrairie provides these solutions to manufacturers, distributors and retailers. The company generated revenues of approximately $261 million in FY 2009. REDPRAIRIE HOLDING: S&P Puts 'B' Rating on CreditWatch Developing ----------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'B' corporate credit rating on Waukesha, Wisconsin-based workforce, inventory, and transportation productivity software provider RedPrairie Holding Inc. on CreditWatch with developing implications. In addition, S&P assigned a 'B+' issue rating to the company's proposed $240 million term loan, maturing 2016 and its new $30 million revolver, maturing 2015. S&P also assigned '3' recovery ratings to the debt, indicating meaningful (50%-70%) recovery in the event of a payment default. S&P is not placing the new rating on CreditWatch. These actions reflect New Mountain Capital LLC's proposed acquisition of the company. If New Mountain completes its acquisition, the new credit agreement resets covenant step-downs, which are restrictive under the existing capital structure. "Based on the resolution of these covenant concerns, as well as recent positive operating trends," said Standard & Poor's credit analyst Jennifer Pepper, "S&P would raise RedPrairie's corporate credit rating to 'B+' upon completion of the acquisition." The transaction very modestly levers up an improved balance sheet. If the transaction is not completed, near-term covenant concerns would remain, and S&P could lower the rating. RENEW ENERGY: Grain Co. Loses Appeal of $5M Claim Against Renew --------------------------------------------------------------- Law360 reports that a federal judge has found for Renew Energy LLC in an appeal by the receiver for Olsen's Mill Inc., who had disputed a bankruptcy court's rejection of the grain company's $5.4 million administrative claim for prepetition corn payments. Headquartered in Jefferson, Wisconsin, Renew Energy LLC -- http://www.renewenergyllc.com/-- operates an ethanol plant facility. The Company filed for Chapter 11 on January 30, 2009 (Bankr. W.D. Wis. Case No. 09-10491). Christopher Combest, Esq., at Quarles & Brady LLP, represents the Debtor in its restructuring efforts. William T. Neary, the United States Trustee for Region 11, appointed five creditors to serve on an Official Committee of Unsecured Creditors. The Debtor disclosed $188,953,970 in total assets and $194,410,573 in total debts. RESERVE GOLF: To Sell Assets to McConnell Golf ---------------------------------------------- Alan Blondin at The Sun News says Reserve Golf Club is expected to sell its assets to McConnell Golf as part of a reorganization plan. Inactive and resigned club members have filed an objection in attempt to delay the sale. McConnell, through the limited liability subsidiary company Reserve Golf Club Acquisition LLC, is offering $522,705 plus a commitment to infuse significant new capital to fund capital improvements and offset reported negative cash flow from club operations. The sale price includes $456,454 in existing debts to vendors and lenders that McConnell Golf would absorb, an escrow account of $66,250 to be shared by current and resigned members who choose not to join under McConnell Golf, and $1 for the sellers, according to report. The proposed sale stipulates that members who resign their memberships and inactive members who decline new memberships in writing are eligible to share in an escrow account totaling $66,250. Based in Pawleys Island, South Carolina, Reserve Golf Club of Pawleys Island LLC operates a golf course club. The company filed for Chapter 11 protection on December 4, 2009 (Bankr. D. S.C. Case No.09-09116). G. William McCarthy, Jr., Esq., represents the Debtor in its restructure efforts. The company listed assets of between $1 million and $10 million, and debts of between $100,000 to $500,000. RIVIERA HOLDINGS: Moody's Withdraws 'D' Default Rating ------------------------------------------------------ Moody's Investors Service has withdrawn the ratings of Riviera Holdings Corporation for business reasons. These Riviera ratings were withdrawn: -- Probability of Default Rating at D -- Corporate Family Rating at Ca -- $20 million senior secured revolver expiring 2012 at Ca (LGD 3, 48%) -- $225 million senior secured term loan due 2014 at Ca (LGD 3, 48%) Moody's previous rating action related to Riviera occurred on April 3, 2009 when Moody's downgraded the company's Probability of Default Rating to D, among other things. Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, Colorado. Riviera generates annual net revenue of approximately $180 million. ROVI CORPORATION: Moody's Raises Rating on Senior Loan From 'Ba1' ----------------------------------------------------------------- Moody's Investors Service revised Rovi Corporation's ratings outlook to positive from stable and upgraded the senior secured term loan to Baa3 from Ba1. Concurrently, Moody's affirmed Rovi's corporate family rating at Ba3, probability of default rating at Ba3, and speculative-grade liquidity rating at SGL-2. The change in ratings outlook to positive reflects Rovi's improved credit metrics following substantial debt repayments over the last twelve months, and expectations of continued modest growth in revenues and profitability, and strong free cash flow generation. The upgrade of the senior secured term loan to Baa3 reflects the reduced proportion of secured term loan borrowings in Rovi's capital structure following the repayment of an additional $50 million of the facility. Moody's notes that the company is in the process of issuing $400 million convertible senior notes. One of the uses of the proceeds will be to repay the entire balance outstanding under senior secured term loan. On the closing of this transaction, Moody's will withdraw all the ratings of Rovi Corporation, as per Moody's withdrawal policy. This rating has been upgraded: -- $157 million ($550 million originally) senior secured term loan due 2013 to Baa3 (LGD2, 15%) from Ba1 (LGD2, 20%) These ratings are unchanged: -- Corporate family rating: Ba3 -- Probability of default rating: Ba3 -- Speculative grade liquidity rating: SGL-2 -- Ratings outlook is positive The Ba3 corporate family rating is driven by Rovi's solid recurring revenues from the licensing of its strong portfolio of patents spanning copy protection and interactive program guides. The licenses generate strong cash flows which have exhibited good growth in recent years. The rating is also supported by management's financial policies which are focused on reducing debt while also maintaining strong cash balances. As of December 31, 2009, the company's debt leverage as measured by adjusted Debt / EBITDA was 2.5x and had an unrestricted cash balance of $272 million. Additionally, the rating incorporates the concern that both the copy protection and the interactive program guide sectors are evolving fairly rapidly, particularly as web based viewing becomes more prevalent, and the current patent portfolio may become less relevant over the next five years. Moody's most recent rating action was on May 12, 2009, when Moody's revised Rovi's senior secured term loan rating to Ba1 from Ba2 and senior unsecured notes rating to Ba3 from B1. Headquartered in Santa Clara, California, Rovi Corporation has a leading patent portfolio of copy protection technology and interactive program guides. Fiscal year 2009 revenues were approximately $484 million. ROVI CORPORATION: S&P Gives Positive Outlook; Affirms 'BB-' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Santa Clara, California based Rovi Corporation to positive from stable. At the same time, S&P affirmed its 'BB-' corporate credit rating on the company. In addition, S&P revised its recovery rating on Rovi's existing unsecured convertible debt to '3', indicating its expectation of meaningful (50% to 80%) recovery for debtholders in the event of a payment default, from '6'. S&P raised its issue-level rating on the debt to 'BB-' -- at the same level as its 'BB-' corporate credit rating on the company -- from 'B', in accordance with its notching criteria for a '3' recovery rating. Ratings on all existing debt other than the convertible notes were affirmed along with the corporate credit rating. Rovi also plans to offer $400 million of privately placed Rule 144A convertible bonds due 2040, which Standard & Poor's will not rate. "The outlook revision is based on Rovi's strong operating performance despite the recession and associated challenges facing the economy," noted Standard & Poor's credit analyst Andy Liu. In the fourth quarter of 2009, Rovi grew its sales 17% year over year, and EBITDA increased 28.6%. The company had double-digit contributions from each of its two main segments: service providers and consumer electronics manufacturers. SP segment sales grew 22.6%, as the company continues to benefit from digital cable conversion and increases in international licensees. CE segment sales grew 14.5%, benefiting from a higher shipment of products incorporating the company's interactive programming guide (IPG) and patent/product licensing. Standard & Poor's believes that both operating segments will enjoy good growth over the intermediate term as connectivity increases between various hardware and platforms, creating a greater need for guidance products, such as Rovi's IPG. Rovi has proposed an issuance of $400 million convertible bonds due 2040 in a private placement. The company plans to use $159.5 million of proceeds to retire its existing secured debt, up to $100 million for share repurchases, up to $75 million to retire a portion of its existing convertible debt, and the remainder for general corporate purposes. The debt offering will raise Rovi's pro forma debt leverage to 3.0x at the end of 2009, from an actual level of 2.3x. The $100 million share repurchase represents the largest share repurchase by the company since November 2008. S&P's view is that without the restraints imposed by financial covenants on the secured debt, Rovi will likely pursue share repurchases more actively than in the past. S&P still believe, however, that the company will try to reduce its total amount of debt outstanding, though not at the same pace as in the recent past. The 'BB-' corporate credit rating reflects Rovi's narrow business platform, technology risk, exposure to product lifecycles, and moderate debt leverage. High barriers to entry afforded by the company's patent portfolio, the strong market position in its niche markets, and a good EBITDA margin are positive factors. SARATOGA SHOE: Closes Shop After Six Months in Bankruptcy --------------------------------------------------------- Larry Rulison, business writer at Times Union, reports that Saratoga Shoe Depot has closed six months after it filed for Chapter 11 bankruptcy protection. Difficulty getting financing for inventory at both the Delmar and original Saratoga Springs locations prompted the decision to close. Saratoga Springs, New York-based Saratoga Shoe Depot, Inc., sells shoes, apparel, and accessories for women, men, and children. The company filed for Chapter 11 protection in August 27, 2009 (Bankr. N.D. N.Y. Case No.09-13175). Francis J. Brennan, Esq., at Nolan & Heller, LLP, represents the Debtor. The company listed assets of less than $50,000, and debts of between $1 million and $10 million. SCHWAB INDUSTRIES: Gets Interim Okay to Obtain DIP Financing ------------------------------------------------------------ Schwab Industries, Inc., et al., sought and obtained interim authorization from the Hon. Russ Kendig of the U.S. Bankruptcy Court for the Northern District of Ohio to obtain postpetition secured superpriority financing from EFO Financial Group, LLC. The DIP lenders have committed to provide up to $18,308,655, which will consist of advances in three faces: (i) an emergency advance of $3,500,000 to be made upon the entry of the interim order of the Court authorizing the Loan; (ii) a second advance of $3,500,000 to be made after entry of the interim order authorizing the loan; and (ii) a third and final advance of $18,308,655 to be made after the entry of the interim order and the completion of a full due diligence review. Lawrence E. Oscar, Esq., and Daniel A. DeMarco, Esq., at Hahn Loeser & Parks LLP, the attorneys for the Debtors, explained that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The DIP facility will mature 12 months from the closing of the emergency advance of the Loan. The DIP facility will incur interest at 12% per annum. In the event of default, Debtors will pay an additional 8% default interest per annum. The Debtors' obligations under the DIP facility are secured by a first priority mortgage lien on all of the real property owned by the Debtors and a first priority lien on all other property interests of the Debtor. The Lender will also receive an allowed superpriority administrative expense. The DIP lien is subject to a carve-out of up to $250,000 for U.S. Trustee and Clerk of Court fees, fees payable to professional employed in the Debtors' case, and fees of the committee in pursuing actions challenging the DIP Lenders' lien. The Debtors are required to pay a host of fees to EFO Financial, including: a. commitment fee -- 2% of the emergency advance, interim advance and final advance to be paid from the proceeds of the advances; b. exit fee -- 2% of the maximum loan amount payable upon maturity of the Loan; and c. loan servicing fee -- 1.1% of the maximum principal amount of each Advance, due and fully earned at the closing; and d. unused line fee -- calculated on the basis of 35 basis points per month of the principal amount of the Loan which hasn't been advanced commencing 30 days after entry of the final order. More information on the Loan is available for free at: http://bankrupt.com/misc/SCHWAB_INDUSTRIES_commitmentletter.pdf The Court has set a final hearing for March 17, 2010, at 10:00 a.m., EDT, on the Debtors' request to obtain DIP financing. About Schwab Industries Dover, Ohio-based Schwab Industries, Inc., produces, supplies and distributes ready-mix concrete, concrete block, cement and related supplies to commercial, governmental and residential contractors throughout Northeast Ohio and Southwest Florida. The Company filed for Chapter 11 bankruptcy protection on February 28, 2010 (Bankr. N.D. Ohio Case No. 10-60702). The Company estimated its assets and liabilities at $50,000,001 to $100,000,000. SL GREEN: Offers Up to $250MM Aggregate Principal Amount of Notes ----------------------------------------------------------------- SL Green Realty Corp. has commenced a cash tender offer to purchase up to $250,000,000 aggregate principal amount of the outstanding 3.000% Exchangeable Senior Notes due 2027 issued by the Company's operating partnership, SL Green Operating Partnership, L.P., and the outstanding 4.000% Exchangeable Senior Debentures due 2025 (the "4.000% Notes"), 5.150% Notes due 2011 (the "5.150% Notes") and 5.875% Notes due 2014 (the "5.875% Notes, and together with the 3.000% Notes, the 4.000% Notes and the 5.150% Notes, the "Notes") issued by Reckson Operating Partnership, L.P. ("Reckson"), a wholly-owned subsidiary of SL Green OP, in each case at a purchase price per $1,000 principal amount as set forth in the table below. The Tender Offer will expire at 12:00 midnight, New York City time, on April 7, 2010, unless extended with respect to any series of Notes (as such time and date may be extended, the "Expiration Date") or earlier terminated by the Company. The Tender Offer is being made pursuant to the Offer to Purchase dated March 11, 2010, the accompanying Letter of Transmittal and, with respect to the Exchangeable Notes, the Company's Schedule TO, which have been filed with the Securities and Exchange Commission and more fully set forth the terms and conditions of the Tender Offer. In order to receive the Total Consideration set forth in the table above, holders of 5.150% Notes and 5.875% Notes (together, the "Non-Exchangeable Notes") must validly tender and not validly withdraw their Non-Exchangeable Notes at or prior to 5:00 p.m., New York City time, on March 24, 2010, unless extended with respect to either series (such date and time, as the same may be extended with respect to either series, the "Early Tender Date"). In the case of each series of Non-Exchangeable Notes, the Total Consideration includes an early tender premium of $30 per $1,000 principal amount of 5.150% Notes and 5.875% Notes (the "Early Tender Premium"). Holders of Non-Exchangeable Notes validly tendering their Notes after the Early Tender Date and on or prior to the Expiration Date and not validly withdrawing such Notes will only be eligible to receive the applicable Tender Offer Consideration set forth in the table above, which is equal to the applicable Total Consideration minus the applicable Early Tender Premium. Holders of 3.000% Notes and 4.000% Notes (together, the "Exchangeable Notes") that validly tender and do not validly withdraw their Notes on or prior to the Expiration Date will receive a Total Consideration equal to the applicable Tender Offer Consideration set forth in the table above. The amount of each series of Notes that will be purchased in the offer will be based on the maximum purchase amount of up to $250,000,000 aggregate principal amount of Notes (the "Maximum Purchase Amount"), the order of priority for such series of Notes set forth in the table above (the "Acceptance Priority Level") and with respect to the 3.000% Notes and 5.875% Notes, the maximum purchase sublimits ("Maximum Purchase Sublimits"), as more fully described in the Offer to Purchase. The Maximum Purchase Sublimit for the 3.000% Notes is $100,000,000 aggregate principal amount and the Maximum Purchase Sublimit for the 5.875% Notes is $50,000,000 aggregate principal amount. The Maximum Purchase Amount and the Maximum Purchase Sublimits are subject to increase at the discretion of the Company. As described in the Offer to Purchase, holders of Exchangeable Notes may withdraw the tender of their Exchangeable Notes at any time on or prior to the Expiration Date. Holders of Non- Exchangeable Notes may withdraw the tender of their Non- Exchangeable Notes at any time prior to 5:00 p.m., New York City time, on March 24, 2010, unless extended by the Company with respect to any series of such Notes. Validly withdrawn Notes may be re-tendered at any time prior to the Expiration Date. The Tender Offer is conditioned on the completion of the previously announced senior notes offering by Reckson, and SL Green OP and the Company, as co-obligors, on terms satisfactory to the Company, which will be subject to customary closing conditions, and is subject to the satisfaction or waiver of certain other conditions set forth in the Offer to Purchase. The Tender Offer is not conditioned on the tender of a minimum principal amount of any series of Notes. The Company may amend, extend or, subject to certain conditions, terminate the Tender Offer with respect to any series of Notes at any time. The Company will pay the applicable Total Consideration or Tender Offer Consideration, as the case may be, plus accrued and unpaid interest in respect of any Notes accepted for purchase in the Tender Offer up to, but not including, the date of payment for the Notes, which is expected to be the next business day following the Expiration Date. The senior notes being issued by Reckson, and SL Green OP and the Company, as co-obligors, have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The senior notes will be offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act. The Company has engaged Citi, BofA Merrill Lynch and Deutsche Bank Securities to act as dealer managers for the Tender Offer. The Company has engaged Global Bondholder Services Corporation to act as information agent and depositary for the Tender Offer. About SL Green SL Green Realty Corp. is a self-administered and self-managed real estate investment trust, or REIT, that predominantly acquires, owns, repositions and manages Manhattan office properties. The Company is the only publicly held REIT that specializes in this niche. As of December 31, 2009, the Company owned interests in 29 New York City office properties totaling approximately 23,211,200 square feet, making it New York's largest office landlord. In addition, at December 31, 2009, SL Green held investment interests in, among other things, eight retail properties encompassing approximately 374,812 square feet, three development properties encompassing approximately 399,800 square feet and two land interests, along with ownership interests in 31 suburban assets totaling 6,804,700 square feet in Brooklyn, Queens, Long Island, Westchester County, Connecticut and New Jersey. As reported in the Troubled Company Reporter on February 8, 2010, Fitch Ratings has affirmed the Issuer Default Rating of SL Green Realty Corp. and its subsidiaries SL Green Operating Partnership, L.P., and Reckson Operating Partnership, L.P.: SL Green Realty Corp. -- IDR at "BB+"; -- Perpetual preferred stock at "BB-". SL Green Operating Partnership, L.P. -- IDR at "BB+"; -- Revolving credit facility at "BB+"; -- Convertible unsecured notes at "BB+". Reckson Operating Partnership, L.P. -- IDR at "BB+"; -- Senior unsecured notes at "BB+" -- Convertible unsecured notes at "BB+". SONIC AUTOMOTIVE: Prices $210MM Sr. Sub. Notes at 99.299% of Par ---------------------------------------------------------------- Sonic Automotive, Inc. on March 10 announced the pricing of its private offering of $210 million in aggregate principal amount of 9.0% Senior Subordinated Notes due 2018 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933 and in offshore transactions pursuant to Regulation S under the Securities Act. The notes will be guaranteed by all of the Company's operative domestic subsidiaries. The notes were priced at 99.299% of par, resulting in a yield to maturity of 9.125%. This offering is expected to close on March 12, 2010, subject to the satisfaction or waiver of customary closing conditions. The net proceeds of this offering will be used to redeem a portion of the Company's 8 5/8% Senior Subordinated Notes due 2013. The notes and the related guarantees have not been registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. About Sonic Automotive Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is the nation's third-largest automotive retailer, operating 145 franchises. Sonic can be reached on the web at http://www.sonicautomotive.com/ * * * As reported by the TCR on March 11, 2010, Moody's Investors Service confirmed the B2 Corporate Family and Probability of Default ratings for Sonic Automotive, Inc., assigned a Caa1 rating to the new $210 million senior subordinated notes issue. Moody's also assigned a positive outlook. These rating actions conclude the review for possible upgrade initiated January 27, 2010. SOUTHEAST TELEPHONE: Has Until March 15 to File a Chapter 11 Plan ----------------------------------------------------------------- The Hon. Joseph M. Scott, Jr. of the U.S. Bankruptcy Court for the Eastern District of Kentucky, in a bridge order, extended SouthEast Telephone, Inc.'s exclusive periods to file its Chapter 11 plan and an explanatory disclosure statement until March 15, 2010. As reported in the Troubled Company Reporter on January 28, 2010, the Debtor requested for a Plan filing extension until March 29, 2010, and in soliciting acceptances of that Plan until May 29, 2010. Pikeville, Kentucky-based SouthEast Telephone, Inc., operates a telecommunication business. The Company filed for Chapter 11 on Sept. 28, 2009 (Bankr. E.D. Ky. Case No. 09-70731). Jamie L. Harris, Esq., and Laura Day DelCotto, Esq., at Wise DelCotto PLLC, represent the Debtor in its restructuring effort. In the Debtor's schedules, it said it has assets of at least $15,573,655, and total debts of $31,423,707. SPANSION INC: Esopus, et al., Object to ChipMOS's $300 Mil. Claim ----------------------------------------------------------------- Esopus Creek Value L.P., Plainfield Special Situations Master Fund II, Limited, Plainfield Liquid Strategies Master Fund Limited and Plainfield OC Master Fund Limited, in their capacities as holders of convertible notes of Spansion, Inc., oppose the claim filed on March 13, 2009, by ChipMOS Technologies, Inc., identified as Claim No. 5, which asserts a $305,620,348 unsecured claim. On September 15, 2005, ChipMOS and Spansion entered into an Assembly and Test Services Agreement whereby ChipMOS provided wafer sort services to Spansion, subject to certain payment and credit terms. In a letter dated January 19, 2009, ChipMOS gave Spansion notice of alleged breach and notice of intention to terminate the Services Agreement arising from $18,078,843 that ChipMOS claimed was in default under the terms of the Services Agreement. On February 3, 2009, ChipMOS reiterated its intent to terminate the Services Agreement, asserting that Spansion owed $28,913,767 for services rendered, and acknowledged receipt of a letter from Spansion dated January 29, 2009, in which Spansion alleged ChipMOS had breached the Services Agreement and engaged in tortuous interference under Taiwanese law. ChipMOS terminated the Services Agreement on February 19, 2009, and demanded payment of $72,813,971 in accounts receivable and a damages claim of $233,764,869 based on ChipMOS' calculation of the "sum of payments for minimum capacity requirements for each statement of work." ChipMOS filed its Proof of Claim regarding the Receivables Claim and the Damages Claim, with a stated total unsecured claim of $305,620,348 on March 13, 2009. On January 25, 2010, ChipMOS filed with the Court a notice of transfer of a portion of the ChipMOS Claim to Citigroup Financial Products Inc. ChipMOS transferred an aggregate of $299,547,477 consisting of (i) $65,782,617 of the Receivables Claim and (ii) $233,860 of the Damages Claim. Against this backdrop, Esopus et al., ask the Court to disallow, expunge or reduce $235,837,731 of the ChipMOS Claim, which is the face amount of the ChipMOS Claim, less the $69,782,617 in receivables the parties have agreed to by stipulation, and which the Court approved in its Order Approving Stipulation Between the Debtors and ChipMOS Regarding Limited Relief from the Automatic Stay, dated October 13, 2009. Esopus et al. object to the Unstipulated Portion of the ChipMOS Claim as invalid due to lack of evidence. Esopus et al. assert that ChipMOS has provided nothing more in support of the ChipMOS Claim than an invoice and what appears to be a self-created spreadsheet of damages showing an extrapolation of past billing five years into the future, without any explanation or objective support for the assumption underlying the calculation. Esopus at al., Seek to Depose Citigroup Esopus et al. inform the Court that it will take a testimony upon oral examination of Citigroup before a person authorized by law to administer oaths. The deposition will commence at 10:00 a.m. on April 13, 2010, at the offices of Quinn Emanuel Urquhart Oliver & Hedges, LLP, in New York. Esopus et al. relates that Citigroup is obligated to produce documents in connection with their objection to Claim No. 5 for inspection and copying. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: ITC Seeks Lift Stay to Adjudicate Samsung Action -------------------------------------------------------------- The U.S. International Trade Commission asked a federal district court to lift the automatic stay in the Debtors' Chapter 11 cases so that it can proceed to adjudicate patent actions brought by Samsung Electronic Co. Ltd. against Spansion Inc. and its affiliates, Law 360 reports. The ITC asserts that its Section 337 investigation should be immune from the automatic stay because it is nonpecuniary in nature, the report adds. On July 31, 2009, Samsung filed a complaint with the ITC seeking only injunctive-like relief against Spansion, Inc., Spansion LLC, Spansion Japan, and certain other parties relating to postpetition infringement of two of its patents. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SOTHEBY'S INC: S&P Changes Outlook to Positive; Keeps 'BB-' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on New York City-based Sotheby's to positive from negative. At the same time, S&P affirmed all the ratings on the company, including the 'BB-' corporate credit rating. The outlook revision reflects the company's recent substantial improvement in operating performance and credit metrics in the fourth quarter of 2009, as well as the likelihood that trend will continue in the near term. The speculative-grade ratings on art auctioneer Sotheby's reflect S&P's view that volatile worldwide demand for art can lead to large swings in operating performance, the company's seasonal cash flows, and its aggressively leveraged capital structure and financial risk. Revenue and operating profits improved substantially at Sotheby's in the fourth quarter of 2009; this marked the first quarter of revenue gains since the fourth quarter of 2007. Sotheby's auction-related revenue increased 35.7% largely as a result of expanding commission margins by 440 basis points to 20.4% from 16.0%. Furthermore, Sotheby's reduced its principal activities and losses associated with auction guarantees and inventory write- downs, which positively affected revenues by $19.9 million. The revenue gains were in spite of the fact that net auction sales were down 7%. In the near term, S&P expects similar sales trends because S&P believes the company will continue to limit guarantees. In addition, S&P believes the recent successful auctions in 2010 will likely attract more sellers to art auctions, leading to higher net auction sales. Sotheby's also managed costs and lowered general and administrative expenses by $11 million, which amounted 11.5% as a percentage of sales. S&P expects general and administrative expenses to increase in 2010, but not to the magnitude of the sales increases. Thus, administrative cost leveraging and operating margins could improve appreciably. While S&P expects positive sales and profitability trends to continue in 2010, exact levels of sales and profitability are difficult to predict. Nonetheless, S&P currently expect leverage (at the end of the second quarter after the spring auction season) to be no higher than the low 4x area, which would equate to unadjusted EBITDA of approximately $120 million and would be a measurable improvement from leverage of 5.4x at the end of 2009. However, S&P would not be surprised if the spring auctions are particularly strong, leading to even better credit ratios. Generally, S&P's ratings on companies with leverage in the low 4x area are in the low 'BB' or high 'B' rating categories. SPANSION INC: Spansion Japan Claim Reclassified Under Class 5B -------------------------------------------------------------- Bankruptcy Judge Kevin Carey has reclassified the Rejection Damages Claim of Spansion Japan Limited under Class 5B. Judge Carey held that the Spansion Japan Rejection Damages Claim will receive identical treatment to the other claims in Class 5B under the Second Amended Plan of Reorganization dated as of February 8, 2010, including but not limited to, the benefit of a reserve on account of that Claim. Spansion Japan filed with the Court Proof of Claim No. 1165 seeking payment of $761,238,570 in rejection damages against Spansion LLC arising from a rejection of a Second Amended and Restated Foundry Agreement between Spansion LLC and Spansion Japan, dated March 30, 2007. Spansion Japan Limited filed its Claim No. 1165 for damages resulting from the rejection of a Foundry Agreement with the Debtors for $761,238,570 on January 15, 2009. In the Debtors' proposed Plan of Reorganization, the Debtors (a) purport to classify Spansion Japan's Rejection Damages Claim separately from the other Class 5B general unsecured claims, (b) seek to provide Spansion Japan with zero recovery on account of its Rejection Damages Claim worth approximately $761 million, and (c) seek to get away with failing to provide for a reserve to protect Spansion Japan's interest during the liquidation and final allowance of its Rejection Damages Claim following confirmation. In a motion, Spansion Japan asked the Court to determine the proper classification of the Rejection Damages Claim and require the Debtors to establish a reserve for distribution on account of the Rejection Damages Claim in accordance with the procedures established for holders of Class 5B claims under the Debtors' plan of reorganization. "Denying Spansion Japan these basic bankruptcy rights while providing them to every other general unsecured creditor in Class 5B is directly in conflict with the fundamental principle underlying the Bankruptcy Code of equal treatment of similarly situated creditors," relates Karen B. Skomorucha, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) STANDARD PACIFIC: BlackRock Inc. Holds 10.25% of Common Stock ------------------------------------------------------------- BlackRock Inc. disclosed that as of February 26, 2010, it may be deemed to beneficially own 10,780,138 shares or roughly 10.25% of the common stock of Standard Pacific Corp. BlackRock previously disclosed that as of December 31, 2009, it may be deemed to beneficially own 10,052,076 shares or roughly 9.56% of the common stock of Standard Pacific. 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 December 31, 2009, the Company had $1.861 billion in total assets against $1.421 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. STANDARD PACIFIC: Dimensional Fund Holds 5.14% of Shares -------------------------------------------------------- Dimensional Fund Advisors LP disclosed that as of December 31, 2009, it may be deemed to beneficially own 5,407,260 shares or roughly 5.14% of the common stock of Standard Pacific. 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 December 31, 2009, the Company had $1.861 billion in total assets against $1.421 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. STANDARD PACIFIC: Renaissance Technologies Holds 7.68% of Shares ---------------------------------------------------------------- New York-based Renaissance Technologies LLC and James H. Simons disclosed that as of December 31, 2009, they may be deemed to beneficially own 8,077,800 shares or roughly 7.68% of the common stock of Standard Pacific. 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 December 31, 2009, the Company had $1.861 billion in total assets against $1.421 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. STANDARD PACIFIC: Vanguard Group Holds 4.86% of Common Stock ------------------------------------------------------------ The Vanguard Group, Inc., disclosed that as of December 31, 2009, it may be deemed to beneficially own 5,109,062 shares or roughly 4.86% of the common stock of Standard Pacific. 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 December 31, 2009, the Company had $1.861 billion in total assets against $1.421 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. SUBURBAN PROPANE: Moody's Assigns 'Ba3' Rating on $225 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Suburban Propane Partners, L.P.'s (Suburban) proposed offering of $225 million senior unsecured notes due 2020. Moody's also affirmed Suburban's Ba2 Corporate Family Rating. The proceeds from the offering and cash on hand will be used to fund a simultaneously announced tender offer for the partnership's currently outstanding $250 million senior unsecured notes due 2013. The outlook is stable. "This proactive refinancing of a 2013 debt maturity is another demonstration of Suburban's prudent financial management," commented Pete Speer, Moody's Vice President. Suburban's Ba2 CFR is supported by its leading market position in propane, proven cost saving initiatives and conservative leverage and distribution policies. The partnership's large equity funded debt reduction in 2009 helps mitigate the risks of operating in the highly competitive and fragmented propane and fuel oil business and Moody's concerns regarding Suburban's declining volumes trend. This strong financial profile also offsets partnership's smaller asset and earnings scale relative to similarly rated propane competitors and master limited partnership (MLP) peers. The outlook is stable based on Moody's expectation that fiscal year 2010 earnings will decline from elevated prior year levels, as indicated in the December 2009 quarterly results, but that cash flows will still fully cover distributions and planned capital expenditures. Increases in leverage (Debt/EBITDA) above 2.5x could result in a negative outlook or ratings downgrade. Suburban has clearly stated its desire to be a consolidator of the major propane industry players and Moody's have incorporated this event risk into the ratings with the expectation that any major acquisition would have substantial equity funding. Leverage of 3.5x could be consistent with a Ba2 rating with a much larger asset and earnings base. Suburban continues to have good liquidity. Despite lower earnings and greater working capital funding requirements in the quarter ended December 26, 2009, the partnership was able to fund its operations with cash on hand. The partnership has not drawn on its revolver for working capital needs since April 2006. Suburban ended the quarter with $115 million of cash and $89 million of revolver availability, leaving ample liquidity for the remainder of the heating season. The Ba3 rating for the senior unsecured notes reflects both the overall probability of default of Suburban, to which Moody's assigns a PDR of Ba2, and a loss given default of LGD 5 (80% changed from 76%). The $250 million revolving credit facility (unrated) is senior secured and therefore the notes are rated one notch beneath the Ba2 CFR under Moody's Loss Given Default Methodology. The last rating action was on August 24, 2009, when Suburban's CFR was upgraded to Ba2 from Ba3 following the partnership's announced tender offer for $175 million of its outstanding senior unsecured notes funded with equity offering proceeds and cash balances. Suburban Propane Partners, L.P., is a publicly traded MLP based in Whippany, NJ. The partnership is among the largest retail marketers of propane in the United States and also distributes fuel oil and refined fuels, markets natural gas and electricity and sells related products and services. SWOOZIE'S INC: Gets Okay to Hire Epiq as Claims Agent ----------------------------------------------------- Swoozie's, Inc., sought and obtained authorization from the Hon. C. Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia to employ Epiq Bankruptcy Solutions, LLC, as claims, balloting and noticing agent, nunc pro tunc to the Petition Date. Epiq will, among other things: a. prepare and serve required notices in the Debtor's bankruptcy case; b. within five business days after the service of a particular notice, file or arrange to have filed with the Clerk's Office a declaration of service that includes (i) an alphabetical list of persons on whom Epiq served the notice, along with their addresses, and (ii) the date and manner of service; c. maintain an official claims register by receiving and docketing all proofs of claim and proofs of interest in a claims database; and d. maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make such list available upon request to the Clerk of Court or any party in interest Epiq will be compensated base on its services agreement with the Debtor. A copy of the agreement is available for free at: http://bankrupt.com/misc/SWOOZIE_epiqservicespact.pdf Daniel C. McElhinney, the Executive Director of Epiq, assured the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Founded in 1999 and based in Atlanta, Georgia, Swoozie's, Inc., offers products and services ranging from invitations and custom printing to housewares and party goods. The Company operates stores in 14 states across the Southeast, Northeast, Texas and California. The Company filed for Chapter 11 bankruptcy protection on March 2, 2010 (Bankr. N.D. Ga. Case No. 10-66316). Wendy R. Reiss, Esq., at Alston & Bird, LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SWOOZIE'S INC: Schedules Filing Deadline Extended Until April 16 ---------------------------------------------------------------- The Hon. C. Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia has extended, at the behest of Swoozie's, Inc., the filing of schedule of assets and liabilities and statement of financial affairs until April 16, 2010. The Debtor says that given the substantial burdens already imposed on Debtor's management by the commencement of the Debtor's bankruptcy case, the limited number of employees available to collect the information, the competing demands upon those employees, and the more than 800 potential creditors located throughout the world, many of which may not have submitted invoices recently, the Debtor needs additional time to file the schedule and the statement. Founded in 1999 and based in Atlanta, Georgia, Swoozie's, Inc., offers products and services ranging from invitations and custom printing to housewares and party goods. The Company operates stores in 14 states across the Southeast, Northeast, Texas and California. The Company filed for Chapter 11 bankruptcy protection on March 2, 2010 (Bankr. N.D. Ga. Case No. 10-66316). Wendy R. Reiss, Esq., at Alston & Bird, LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SWOOZIE'S INC: Section 341(a) Meeting Scheduled for April 20 ------------------------------------------------------------ The U.S. Trustee for Region 21 will convene a meeting of creditors in Swoozie's, Inc.'s Chapter 11 case on April 20, 2010, at 11:00 a.m. The meeting will be held at 9th Floor Conference Room, 75 Spring Street, SW, Atlanta, GA 30303. 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 1999 and based in Atlanta, Georgia, Swoozie's, Inc., offers products and services ranging from invitations and custom printing to housewares and party goods. The Company operates stores in 14 states across the Southeast, Northeast, Texas and California. The Company filed for Chapter 11 bankruptcy protection on March 2, 2010 (Bankr. N.D. Ga. Case No. 10-66316). Wendy R. Reiss, Esq., at Alston & Bird, LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SWOOZIE'S INC: Taps Alston & Bird as Bankruptcy Counsel ------------------------------------------------------- Swoozie's, Inc., has asked for permission from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Alston & Bird LLP as bankruptcy counsel. Alston & Bird will, among other things: (a) assist Debtor in the preparation of its schedules, statement of affairs, and the periodic financial reports required by the U.S. Bankruptcy Code, the Bankruptcy Rules, or any order of the Court; (b) assist Debtor in consultations, negotiations and all other dealings with creditors, equity security holders, and other parties-in-interest concerning the administration of the Debtor's bankruptcy case; (c) prepare pleadings, conducting investigations, and making court appearances incidental to the administration of Debtor's estate; (d) assist the Debtor in the development and formulation of a plan and/or other means to maximize value to its estate, including the preparation of a plan, disclosure statement, and any related documents for submission to the Court and to the Debtor's creditors, equity holders, and other parties-in-interest. Alston & Bird will be paid based on the hourly rates of its personnel: Dennis J. Connolly $760 Wendy R. Reiss $495 William S. Sugden $490 Sage M. Sigler $370 Wendy R. Reiss, a senior associate with Alston & Bird, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Founded in 1999 and based in Atlanta, Georgia, Swoozie's, Inc., offers products and services ranging from invitations and custom printing to housewares and party goods. The Company operates stores in 14 states across the Southeast, Northeast, Texas and California. The Company filed for Chapter 11 bankruptcy protection on March 2, 2010 (Bankr. N.D. Ga. Case No. 10-66316). Wendy R. Reiss, Esq., at Alston & Bird, LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. TAVERN ON THE GREEN: Operator's Claim Cancelled for 'Fraud' ----------------------------------------------------------- U.S. District Judge Miriam Goldman Cedarbaum in Manhattan ruled that New York City owns the rights to the trade name, "Tavern on the Green." New York City -- Tavern's landlord -- or the family of the flamboyant restaurateur Warner LeRoy, which ran the restaurant since 1976, have been claiming ownership of the trademark. Nation's Restaurant News relates that the LeRoy family runs the restaurant argued that it had the name trade marked more than 30 year go but the city pointed out that it set the restaurant more than 35 years before the family registered the name. According to Bill Rochelle at Bloomberg News, Judge Cedarbaum wrote a 22-page opinion where she canceled the restaurant operator's claim of ownership "for fraud." With evidence showing the city maintained the restaurant at the same location for so long, Judge Cedarbaum concluded that the city "has a protectable interest in that name under the law of New York." She pointed out undisputed facts showing how the restaurant operator didn't make full disclosure of the city's interest in the name on applying to the Patent and Trademark Office for a service mark in 1978. About Tavern on the Green Tavern on the Green LP is the operator of the 75-year-old restaurant in New York's Central Park. Tavern on the Green, the second-highest grossing restaurant in the U.S. last year, was founded in 1934 by New York Parks Commissioner Robert Moses and the license was bought by restaurateur Warner LeRoy in 1974. The Company filed for Chapter 11 on September 9, 2009 (Bankr. S.D.N.Y. Case No. 09-15450). It listed assets and debts of as much as $50 million each. TLC VISION: Replacement DIP Financing Approved ---------------------------------------------- Bill Rochelle at Bloomberg News reports that TLC Vision Corp. received final approval for $25 million in financing that pays off financing initially used to operate the company after the Chapter 11 filing in December. Pursuant to the junior secured superpriority debtor-in-possession credit agreement dated as of February 3, 2010, with Charlesbank Equity Fund VII, Limited Partnership, as collateral and administrative agent, the lenders will provide $25 million financing that is junior in priority to the prepetition secured claims and to the adequate protection claims and liens granted to the prepetition lenders. The material terms of the replacement financing are: Commitment: A multiple draw junior term loan facility in an amount not to exceed $25 million. Borrowing availability: Initial advance: $10 million Subsequent draws: $1 million to $15 million Term: The DIP facility will mature on the earliest of: (i) 35 days after the date of the entry of the interim order, or (ii) May 20, 2010, unless extended, or (iii) the occurrence of a termination event. Fees: (a) an exit fee equal to 4% of the maximum pricipal amount of the DIP facility, fully earned and payable on the maturity date; and (b) a commitment fee equal to 2% of the maximum principal amount of the DIP facility, fully earned and payable on the closing date. Interest Rate: A rate per annum equal to 1 month LIBOR Rate plus 10% due and payable in cash arrears, on (a) the last day of each month and (b) the maturity date. Default Interest Rate: The rate otherwise in effect plus 2%. Event of Default: Customary The Debtors will use the cash collateral to provide additional necessary capital to operate their business, pay employees, maximize value and pursue sale process. The prepetition lenders consented to the Debtors' use of cash collateral. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will continue to grant the prepetition lenders additional and replacement security interest and liens in the collateral. The prepetition replacement liens will have the same priority as the liens securing the prepetition obligations, and DIP facility, and junior to the carve out. In addition allowed superpriority administrative claim will be granted to the prepetition lenders. The Debtors previously obtained $15 million in DIP financing from lenders led by Cantor Fitzgerald Securities, as administrative agent. About TLCVision TLCVision -- http://www.tlcvision.com/-- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. Through its centers' management, technology access service models, extensive optometric relationships, direct to consumer advertising and managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. TLC Vision (USA) Corporation, and two of its corporate affiliates filed petitions for Chapter 11 on Dec. 21, 2009 (Bankr. D. Del. Case No. 09-14473). The petition says assets and debts are $100 million to $500 million. The Company's lead U.S. restructuring counsel is the law firm of Proskauer Rose LLP and Canadian restructuring counsel is the law firm of Torys LLP. The Company's financial advisor is Conway Del Genio Gries & Co., LLC. Epiq Bankruptcy Solutions is claims and notice agent. TOUSA INC: Castlerigg, et al., Appeal Fraud Ruling -------------------------------------------------- Castlerigg Master Investments, Ltd., Helios Funding, LLC, McDonnell Loan Opportunity, Ltd., and SOF Investments, L.P., in their capacity as First Lien Term Loan Lenders took an appeal to the U.S. District Court for the Southern District of Florida from Judge Olson's October 13, 2009 final judgment on the action commenced by the Official Committee of Unsecured Creditors against the Debtors' prepetition lenders. Moreover, the First Lien Lenders posted supersedeas bonds, totaling $1,470,867, on February 26, 2010, in the United States Bankruptcy Court for the Southern District of Florida, to stay execution of Judge Olson's Amended Final Judgment on the Committee Action against Citicorp, et al. The Bonds are: Lender Bond Amount ------ ----------- Castlerigg Master Investments, Ltd. $536,071 SOF Investments, L.P. 507,963 Helios Funding, LLC 303,260 McDonnell Loan Opportunity, Ltd. 123,573 The Official Committee of Unsecured Creditors in Tousa Inc.'s cases won judgment against secured lenders on claims that loans made six months before the Chapter 11 filing were fraudulent transfers. The bankruptcy judge required the lenders to post a total of $700 million in appeal bonds to stay enforcement of his October ruling that the transactions were voidable in bankruptcy. The First Lien Lenders, Second Lien Lenders and Senior Transeastern Lenders posted supersedeas bonds on December 22, 2009, to stay, pending appeal, execution of Judge Hanen's Amended Final Judgment on the Creditors Committee Action against Citicorp and certain other defendants. 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 Amends Suit vs. Former Directors & Officers ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Tousa Inc.'s cases amended its complaint against Konstantinos Stengos, Antonio Mon and several other directors and officers of the Debtors on February 19, 2010, and added allegations of (i) breach of fiduciary duty against TOUSA, Inc.'s Conveying Subsidiaries' directors, and (ii) aiding and abetting against TOUSA, Inc.'s board of directors. The Committee asserts that at all relevant times, each Director Defendant was either: (l) a director, officer, manager or managing trustee of a Conveying Subsidiary; (2) a director or manager of the corporate entities that, directly or indirectly, served as a member, manager, trustee, partner and/or owner of a Conveying-Subsidiary; or (3) an officer of TOUSA, Inc. who signed multiple resolutions on behalf of TOUSA, Inc. as the sole member, manager, or general partner of certain Conveying-Subsidiaries, authorizing those Conveying-Subsidiaries to enter into a July 31, 2007 transaction, whereby the Director Defendants caused the Conveying Subsidiaries to incur over $500 million in new debt obligations that were secured by liens on all of the Conveying Subsidiaries' assets. Under the First Amended Complaint, the Committee seeks damages for breach of fiduciary duties owed to the Conveying TOUSA Subsidiaries and their creditors in connection with the July 31, 2007 Transaction. Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida, asserts that the sole purpose of the July 2007 Transaction was to enable TOUSA, Inc. and TOUSA Homes LP to repay an old debt to the Senior Transeastern Lenders, for which the Conveying TOUSA Subsidiaries were never liable. Indeed, she notes, the Transaction was held to be a fraudulent conveyance by the Court on October 13, 2009. She further asserts that at the time of the July 2007 Transaction, each of the TOUSA Conveying Subsidiaries was an obligor of nearly $1.1 billion of bonds issued by TOUSA, Inc. and had various other debt obligations and as a result, the Bondholders were subordinated behind the new, secured lenders as a result of the Transaction. More importantly, the July 2007 Transaction saddled the Conveying TOUSA Subsidiaries a massive amount of secured debt for which they received little or no value in return, became financially hamstrung as the company and the market collapsed, and were unable to access necessary credit and liquidity or pursue other options, Ms. Redmond asserts. Against this backdrop, the Director Defendants owed fiduciary duties to all of the Conveying TOUSA Subsidiaries and derivatively to their creditors, Ms. Redmond contends. However, she maintains, the Director Defendants breached their fiduciary duties by, among other things: -- acting solely in the interest of TOUSA, Inc. and its shareholders, even though the Conveying TOUSA Subsidiaries' insolvency required that they act in the best interest of the Conveying Subsidiaries and their stakeholders, including creditors; and -- failing to investigate and inform themselves properly of the financial condition of each of the Conveying Subsidiaries and the Transaction's effect on that company. "Instead, the Director Defendants abdicated their duties to the Conveying-Subsidiaries and their creditors by executing written consents prepared by TOUSA, Inc. in lieu of meeting," the Committee alleges. The Committee complains that while the TOUSA Inc. Board received advice from Lehman Brothers prior to entering the July 2007 Transaction, TOUSA Inc. instructed Lehman to disregard the impact of the Transaction on the Conveying TOUSA Subsidiaries and their creditors. The Director Defendants thus acted in a grossly uninformed manner when approving the Transaction, and in violation of their duties of care, loyalty, and good faith, Ms. Redmond argues. Messrs. Mon and Stengos further breached their fiduciary duties by, among other things, withholding information from TOUSA, Inc.'s advisors and other of the Director Defendants, and blocking efforts by TOUSA, Inc., to arrange an equity investment in the company as a remedy to its financial problems in 2007, because they feared dilution of their ownership interests, the Committee tells the Court. The Committee thus asserts that the TOUSA Board Directors are liable for aiding and abetting the breaches committed by the Subsidiary Directors. Technical Olympic, S.A., owned a majority of TOUSA, Inc.'s stock and controlled the TOUSA Board at the time the Transaction was approved and executed. Technical Olympic, the Committee further argues, thus aided and abetted the Director Defendants' breaches of fiduciary duty (i) by encouraging, inducing and assisting them in entering into the July 2007 Transaction, (ii) by pressuring the Director Defendants to act in the best interests of TOUSA, Inc.'s shareholders even though the Conveying Subsidiaries were insolvent, and (iii) by discouraging TOUSA, Inc. from seeking new capital to pay off its debt to the Senior Transeastern Lenders. Accordingly, the Committee asks the Bankruptcy Court to award: (l) it judgment in an amount to be determined at trial, including compensatory and punitive damages; and (2) its attorneys' fees and expenses incurred in this action. Directors Seek Dismissal of Complaint In separate filings, Candace Corra, Tom McAndrew, and Gordon Stewart, and Brian Konderik ask the Bankruptcy Court to dismiss the Committee Complaint filed against them. Ms. Corra, and Messrs. McAndrew and Gordon are directors or managers of four Conveying TOUSA Subsidiaries. The Subsidiary Directors' counsel, William L. Petros, Esq., at Petros & Elegant, in Coral Gables, Florida, argues that: -- the Complaint fails to state facts sufficient to support a claim for fiduciary duty against the Subsidiary Directors. For one, the Complaint fails to establish a fiduciary relationship between the Subsidiary Directors and the remaining 30 Conveying Subsidiaries to which the Subsidiary Directors are not employees; and -- the Complaint fails to allege any facts suggesting that the Subsidiary Directors acted in bad faith, knowingly violated the laws, or took any other action remotely sufficient to pierce the business judgment rule under the Local Rules of U.S. Bankruptcy Court for the District of Delaware. Mr. Petros reminds the Court that the entire premise of the Committee's damages claim rests on the July 31, 2007 Transaction, which was avoided pursuant to the Final Judgment entered in the action commenced by the Committee against Citicorp North America, Inc. "Thus, complete relief has already been granted for the damages alleged in the D&O Action," Mr. Petros maintains. For his part, Mr. Konderik, a co-manager of Conveying Subsidiary Engle Homes Commercial Construction, LLC, contends that the Committee cannot demonstrate that it has standing to pursue a breach of fiduciary duty claim against him under Delaware law and Arizona law because the Committee's direct claim for breach of fiduciary duty is precluded as a matter of law. Counsel to Mr. Konderik, Joseph L. Rebak, Esq., at Tew Cardenas, LLP, in Miami, Florida, points out that the Committee is merely disguising its direct claims as derivative claims and that the Complaint is replete with self-serving allegations that the Director Defendants' alleged actions harmed the Conveying Subsidiaries' creditors. Moreover, the Delaware Limited Liability Company Act and the Arizona Limited Liability Company Act contains provisions, which protect managers like Mr. Konderik from personal liability for the debts, obligations, and liabilities of the company, Mr. Rebak asserts. Technical Olympics Insists on Motion to Withdraw Reference Technical Olympic, S.A., and certain of the Director Defendants reacted to the Committee's opposition of their request to withdraw reference of the matter from the Bankruptcy Court to the U.S. District Court for the Southern District of Florida. Counsel to Technical Olympic, Andrew D. Zaron, Esq., at Hunton & Williams LLP, in Miami, Florida, insists that the D&O Action alleges state-law based causes of action and is indisputably a non-core matter. That contestable fact, he maintains, coupled with judicial efficiency concerns and the potential for a jury trial, strongly supports immediate withdrawal of the reference so that the litigation can be adjudicated in the first instance, by the only court able to issue final rulings -- the District Court. At best, the Committee attempts to confuse the issue by arguing that Technical Olympic's filing of boilerplate D&O proofs of claims for compensation and indemnification has somehow "transformed" this non-core litigation into one that must remain in the Bankruptcy Court, Mr. Zaron tells the Court. He clarifies that the proofs of claim are nominally related to the July 31, 2007 Transaction that gave rise to the D&O Action and do not support the Committee's position. Moreover, Mr. Zaron maintains, the Committee ignores that many of the factual and legal issues presented in the Committee Citicorp Action are distinct from the issues that must be explored in the D&O Action, and many of the defendants in the D&O Action had no opportunity to participate, or be involved at all in the Committee Citicorp Action. Accordingly, Technical Olympic asks the Bankruptcy Court to withdraw reference of the D&O Action to the District Court. In a separate filing, Maria Cervino, Clerk of the Bankruptcy Court, transmitted to the District Court pertinent portions of the Bankruptcy Court's record on the Motion to Withdraw Reference. Director Defendants Paul Berkowitz, Stephen Wagman and Russell Devendorf join in Technical Olympic's Motion to Withdraw Reference. In another Court-approved stipulation, the Committee and Tommy McAden agree to extend the date by which Mr. McAden can answer or respond to the D&O Action through April 2, 2010. 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 Proposes Offshore Fund Pact ------------------------------------------------ The Official Committee of Unsecured Creditors in Tousa Inc.'s cases, the Conveying TOUSA Subsidiaries and Distressed High Yield Trading Opportunities Fund Ltd., referred to as "Offshore Fund," ask the Bankruptcy Court to authorize their entry into a settlement and the implementation of a bar order. The Offshore Fund and Distressed High Yield Trading Opportunities Fund LLC are Senior Transeastern Lenders and defendants in the action commenced by the Committee against Citicorp. Counsel to the Committee, Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida, reveals that before the Committee filed its Complaint, the Funds decided to liquidate and began distributing their assets to their redeeming investors. As the Funds had not distributed all of their assets by the time the Committee Complaint was filed, the Offshore Fund voluntarily set up a Cayman Islands trust to hold a reserve for the claims of the Conveying Subsidiaries. The Cayman Trust held $3 million. About $300,000 of the Trust funds has been spent, primarily for defense costs in connection with the Committee Complaint. After Judge Olson entered a final judgment on the Committee Complaint, counsel for the Funds informed the Committee that given the amount of the judgment and the other claims against the Funds, the Funds lacked sufficient assets to pay creditors in full. In this light, the Committee entered into good faith negotiations with the Funds and the parties ultimately reached a settlement, which provides for these salient terms: (a) Immediately upon approval of the Settlement, Offshore Fund will pay $2,900,000 to the Conveying TOUSA Subsidiaries. The Settlement Amount represents a distribution of 70.05% of the Conveying Subsidiaries' claim and represents the Funds' best estimate of the percentage recovery for the Offshore Fund's unsecured creditors in accordance with British Virgin Islands law. (b) The Settlement Amount will be augmented by additional amounts, if any, to ensure that the Conveying TOUSA Subsidiaries receive the same percentage recovery as other unsecured creditors of the Funds, which amount, if not paid with the Settlement Amount, will be paid immediately on the date which the Augmentation Amount is determined by the Funds. (c) The order approving the Settlement will contain a bar Order that will enjoin, stay and bar any other defendant in the Committee Action and their employees from pursuing any action, seeking contribution, reimbursement, indemnity or any other payment from the Funds and their directors arising out of a July 31, 2007 settlement among TOUSA, Inc., TOUSA Homes LP and the lenders to the Transeastern Joint Venture, the Committee Action, or the Final Judgment, including any decision resulting from an appeal of the Final Judgment upon payment of the Settlement Amount and the Augmentation Amount. (d) The Debtors and the Committee will release the Funds for Claims relating in any manner to the 2007 Settlement, the Committee Action or the Final Judgment. (e) After payment of the Settlement Amount and any Augmentation Amount, the Funds will withdraw their appeal of the Final Judgment. Given the Funds' insolvency and the potential for a British Virgin Islands' insolvency proceeding with respect to the Offshore Fund, the Committee believes that collection from the Offshore Fund may be more complicated if there is further delay in the collection process. Moreover, due to the number of parties to the Committee Action and the extent of evidence introduced at trial, the appeal process is likely to be extended and costly, Ms. Redmond points out. The Settlement Agreement, by contrast, will allow the Committee and the estates to avoid the costs of litigation with an additional defendant, while allowing the Offshore Fund to avoid the costs of an extended appeal, Mr. Redmond maintains. 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. TRIBUNE CO: Proposes to Assume Agreements With Marsh USA -------------------------------------------------------- Tribune Co. and its units seek the authority from the U.S. Bankruptcy Court for the District of Delaware to assume (a) a settlement and cooperation agreement, (b) joint privilege and common interest agreement, (c) and guaranteed cost program agreement with Marsh USA, Inc. In early 1998, Marsh assisted in arranging for the transfer of certain formerly self-insured workers' compensation liabilities of non-debtor Times Mirror Company to Reliance National Indemnity Company and Swiss Reinsurance America Corporation. Marsh also was involved in helping to place a guaranteed cost program for certain of Times Mirror's future workers' compensation liabilities. Reliance and Swiss Reinsurance performed their obligations related to the Workers' Comp Liabilities and GCP until Reliance entered into liquidation proceedings in October 2001. Swiss Reinsurance, which had been directly funding claims related to the Workers' Comp Liabilities and GCP on behalf of Times Mirror, likewise ceased its performance, on the asserted grounds that Tribune, as successor-in-interest to Times Mirror, was not entitled to the direct performance and benefit of Swiss Reinsurance's obligations due to the fact that Reliance entered into liquidation proceedings. On May 2, 2003, Tribune Company filed a complaint against Marsh in the Superior Court of the State of California for the County of Los Angeles. The Lawsuit included claims against Marsh arising out of its involvement in arranging for the transfer of the Workers' Comp Liabilities and Marsh's involvement in placing the GCP. The complaint alleged, among other things, that Marsh had acted negligently in failing to ensure that Times Mirror would have direct access to Swiss Reinsurance's performance and obligations in the event reliance became insolvent. Tribune and Marsh eventually agreed to a consensual resolution of the Lawsuit. The Agreements contain the terms of the overall settlement of the Lawsuit agreed to by Tribune and Marsh on or about August 15, 2005. (A) Settlement Agreement The Settlement Agreement provides for a final resolution of all claims that Tribune or Marsh could have brought in the Lawsuit, except those claims covered by the GCP Agreement. Pursuant to the Settlement Agreement, Tribune agreed to take reasonable steps to seek recovery for the Workers' Comp Liabilities from available sources, including Swiss Reinsurance and Reliance-in-Liquidation. In return, Marsh agreed to pay for a portion of all fees and costs previously incurred by Tribune in pursuing the Recovery Actions and a portion of all future fees and costs incurred by Tribune in pursuing the Recovery Actions. In addition, to the extent that the funds obtained from the Recovery Actions were insufficient to satisfy the Workers' Comp Liabilities, Marsh agreed to pay a portion of those liabilities. Currently, Marsh is withholding payment of in excess of $1,000,000 owed to Tribune under the Settlement Agreement, for claims reimbursements and fees and costs reimbursements. Marsh requested that Tribune assume the Agreements and indicated that the reimbursement required pursuant to the Settlement Agreement would be made upon assumption. In addition, Tribune believes it will receive in excess of $4,000,000 in additional payments from Marsh under the terms of the Settlement Agreement on account of future reimbursements for fees and costs incurred in pursuing the Recovery Action against Reliance. (B) Joint Privilege Agreement On or about May 19, 2005, the Parties entered into the Joint Privilege Agreement in order to facilitate the sharing of information related to the Recovery Actions and other proceedings related to the Workers' Comp Liabilities. In part, the Joint Privilege Agreement exists to protect, to the maximum extent possible, any applicable privileges or protections the Parties have with respect to any shared information. The Joint Privilege Agreement contains procedures that govern requests by third parties for common interest information and procedures for withdrawal from the Joint Privilege Agreement by either of the Parties. (C) GCP Agreement As part of the overall settlement of the Lawsuit, the Parties agreed to a standstill on claims related to the GCP. Specifically, the GCP Agreement provides for the tolling of any applicable period of limitations and the postponement of any deadline for the assertion of claims or defenses arising out of or relating to the placement of the GCP. Both Tribune and Marsh retain the right to unilaterally terminate the GCP Agreement. Pursuant to the GCP Agreement, any GCP claims asserted subsequent to a termination are to be resolved by confidential arbitration, with limited rights to discovery. In consideration for the proposed assumption of the Agreements, Marsh has agreed to voluntarily withdraw its proof of claim against the Tribune Debtors, which was filed in an unliquidated amount. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Says Unit's LBO Payments Legal ------------------------------------------ Law Debenture Trust Company of New York is asking the Court to compel and direct: (i) the Debtors to cause any non-debtor affiliate or subsidiary to terminate the undisclosed and unauthorized payments of professional fees and expenses to the Debtors' leveraged buyout lenders; (ii) the LBO Lenders to provide an accounting of all unauthorized fee payments; and (iii) the LBO Lenders to disgorge the unauthorized fee payments. Garvan F. McDaniel, Esq., at Bifferato Gentilotti LLC, in Wilmington, Delaware, co-counsel for Law Debenture Trust Company of New York, related that even though the Debtors are insolvent, they nonetheless have entered into an undisclosed transaction to benefit their LBO Lenders at the expense of their estates and have kept this arrangement hidden from the Court and creditors. Mr. McDaniel adds that the Debtors have arranged to pay millions of dollars in fees to the LBO Lenders' restructuring professionals -- no less than four law firms and two financial advisory firms -- even though the LBO Lenders are unsecured creditors holding disputed claims arising from an LBO that most likely constituted a fraudulent conveyance. According to Law Debenture, prior to the Petition Date, certain LBO Lenders formed a steering committee in connection with Tribune's restructuring and hired several legal and financial advisors. At some point, perhaps on the eve of Tribune's filing, the LBO Lenders demanded that the Debtors cause certain non-debtor subsidiaries to pay the LBO Lenders' professional fees. The Debtors caused their non-debtor subsidiaries to pay the LBO Lenders' fees under the purported threat that the LBO Lenders would exercise remedies. In a memorandum filed March 2, 2010, the Debtors aver that the payments related to the leveraged buy-out were entirely consistent with Tribune (FN) Cable Ventures, Inc.'s legal obligations and applicable bankruptcy law. The Debtors assert that: (a) Tribune Company's filing did not relieve TCV of its contractual obligations, and the record establishes a basis for legitimate concern over the possibility of harmful action, including creditor enforcement action, that could have caused substantial damaged to the value of TCV or another Non-Debtor Guarantors, including the Chicago National League Ball Club, LLC, the entity that owned the Chicago Cubs at the time of the filing. (b) TCV and Tribune received benefits in return, including a "Payment Blockage Notice" from J.P. Morgan Chase Bank, N.A., as agent to the Senior Lenders, that served to prevent the Bridge Lenders from enforcing their rights against the Non-Debtor Guarantors. (c) Far from keeping the payments "secret," Tribune insisted that no payments be made without disclosure to and consultations with key constituencies, including the Official Committee of Unsecured Creditors, which included broad representation of virtually every major creditor constituency in the Debtors' cases, as well as the U.S. Trustee, to ensure that they understood the nature and basis of the payments and had an opportunity to voice any concerns or objections. (d) TCV entered into the Credit Agreement Guarantee with appropriate corporate authorization by its Board of Directors, including delegated authority to various TCV officers to both approve entry into, and performance under, the Credit Agreement Guarantee. (e) None of the postpetition professional fee payments were made with funds obtained from or earned by any Debtor; rather, the payments were made from funds generated from TCV's partnership interest in a general partnership that operates the TV Food Network. (f) The determination to refrain from filing TCV was based on independent business reasons unrelated to its contractual obligations under the Credit Agreement Guarantee, and J.P. Morgan was not consulted and had no role in connection with which Tribune entities were filed. A hearing on the Motion is scheduled for March 26. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Withdraws Request for Management Incentive Plan ----------------------------------------------------------- Tribune Co. and its units ask the Court to dismiss without prejudice their pending request for authority to implement the Transition Management Incentive Plan and the Key Operators Bonus programs. According to the Debtors, the Court suggested at the January 27, 2010 hearing that they consider incorporating the TMIP and the KOB into a Chapter 11 plan of reorganization. The Debtors wish to follow the Court's suggestion, and thus seek to dismiss voluntarily their request to implement the TMIP and the KOB. The Debtors relate that the Official Committee of Unsecured Creditors and the Steering Committee of the Debtors' Senior Lenders do not object to the relief requested. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRUMP ENT: Bondholder Plan Based on Faulty Forecasts, Says Icahn ---------------------------------------------------------------- Steven Church at Bloomberg reports that lawyers Carl Icahn who is fighting control with Donald Trump for Trump Entertainment Resorts Inc., said at the last day of the two-week confirmation hearing that the bankruptcy court should confirm the Icahn plan because it is superior to the bondholder-backed plan of Donald Trump. According to the report, Jeffrey Jonas, lawyer for Mr. Icahn, said the noteholder plan is based on faulty revenue projections and will leave the Company with new financial problems within a few years. Under Icahn's plan the company would exit bankruptcy without any debt. Mr. Jonas also noted that bondholders can't win approval for a DIP loan that is needed to keep the casinos operating while in bankruptcy. Trump Entertainment, however, disputes the claim that Trump Entertainment would shut down without the loan. It also balked at the Icahn plan, noting that it gives up everything to Icahn and the secured lenders, while noteholders owed $1.2 billioin would be wiped out. The contested confirmation hearing to determine who will end up owning Trump Entertainment's casinos began February 23. The company and holders of 8.5% senior notes are proponents of one plan. Carl Icahn and Beal Bank, holders of prepetition secured claims, are proponents of the other. Under the plan proposed by the Beal Bank and Icahn Partners, dated January 5, 2010, second lien lenders owed $1.25 billion and general unsecured claim, who are out-of-the money would conditionally receive a $14 million cash as "gift" from the secured lenders. Under the plan, majority of the first lien debt will be converted to 62.971% of the equity in the reorganized Debtors. The remaining 33.326% will be available for sale to second lien noteholders in a $225 million rights offering. Mr. Icahn has bought 51% of Beal's $485 million first lien secured claim and holds $154.9 million of the second lien claims. Mr. Icahn already has an existing controlling stake in the Tropicana Atlantic City Hotel & Casino, one of the Debtors' largest competitors. Under the plan proposed by the Ad hoc committee of holders of second lien notes, the noteholders and unsecured creditors will recover just under 1% in the form of stock (5% of the stock of the reorganized Debtor is allocated for distribution) or in cash. They would also have rights to acquire 70% of the new common stock. The second lien noteholders committee is backstopping the $225 million rights offering. Secured lenders and Mr. Icahn will be paid in full by paying Mr. Icahn $125 million in rights offering proceeds, 100% of net sale proceeds from any sale of the Trump Marina and new debt. Mr. Trump and the bondholders have offered to put up $225 million in fresh cash and new loans. Mr. Icahn and Beal Bank are ready to provide $488 million in secured loans. A full-text copy of the disclosure statement explaining Beal & Icahn's plan is available for free at: http://bankrupt.com/misc/TrumpEntertainment_5thABealDS.pdf A full-text copy of the disclosure statement explaining the Noteholders' and Debtors' plan is available for free at: http://bankrupt.com/misc/Trump_6thANoteholdersDS.pdf About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. Garden City Group is the claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's TWCC HOLDING: Moody's Assigns 'Ba2' Rating on $1.3 Bil. Loan B -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to TWCC Holding Corp.'s (d/b/a The Weather Channel Companies) proposed $1.3 billion senior secured term loan B. The new facility is expected to mature in 2015, rank pari passu with TWCC's undrawn $150 million Ba2 rated revolving credit facility and be guaranteed by TWCC and all its subsidiaries and secured by substantially all of the assets of TWCC and the subsidiaries. Net proceeds from the offering and balance sheet cash will be used to repay all of TWCC's existing Ba2 rated term loan B ($1.1 billion as of 12/31/09) and $225 million of the company's unrated senior subordinated notes ($610 million as of 12/31/09). Moody's will withdraw the existing term loan B Ba2 rating upon repayment. The refinancing is roughly leverage neutral and meaningfully improves the company's free cash flow generation. The rating outlook is stable. Assignments: Issuer: TWCC Holding Corp. -- Senior Secured Bank Credit Facility, Assigned Ba2 (LGD3-39%) In Moody's view, the proposed lower interest rate spread and LIBOR floor on the new $1.3 billion term loan versus the current $1.1 billion term loan B reflects the improvement in the credit markets since the company was acquired and the joint venture was created in August 2008. The joint venture is owned by NBC Universal (Baa2 senior unsecured) and private equity funds including Bain Capital Partners, LLC and Blackstone Management Partners LLC. Moody's estimates that the lower cost of bank debt along with the partial repayment of the 13.5% senior subordinated notes will significantly decrease TWCC's run rate of cash interest expense by about $36 million per year. As a result, Moody's expects that TWCC will generate improved free cash flow in excess of $100 million, pro forma for full year 2010, which is slightly ahead of Moody's original expectation when it assigned ratings prior to the recessions' impact. The stable rating outlook also assumes advertising market conditions will continue to improve. Moody's expects that TWCC will utilize its excess cash to amortize the new term loan facility. The Ba2 rating on the proposed facility reflects the first priority claim on the cash flow and assets, including the assets and capital stock of TWCC's subsidiaries. The one notch rating gap to TWCC's Ba3 Corporate Family Rating is driven by the contractual seniority to $385 million (pro forma for the refinancing) of senior subordinated notes which provide loss absorption cushion in the event of default. Moody's last rating action was on August 14, 2008, when it assigned the company a Ba3 CFR. TWCC's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of TWCC's core industry and TWCC's ratings are believed to be comparable to those of other issuers of similar credit risk. TWCC Holding Corp. (d/b/a as The Weather Channel Companies), headquartered in Atlanta, GA is a multi-platform media and information company focused on providing weather information via a variety of distribution platforms. Content is delivered to individuals most notably through its national U.S. cable network "The Weather Channel", the Internet, and mobile. TWCC also builds radar systems and provides weather data and forecasting services to a variety of industries. TWCC is comprised of three operating segments: The Weather Channel Networks, The Weather Channel Interactive and Weather Services International Corporation. US CONCRETE: Gets Deficiency Notice from Nasdaq Stock ----------------------------------------------------- U.S. Concrete Inc. received a letter from The Nasdaq Stock Market indicating that the bid price of the Company's common stock for the last 30 consecutive business days had closed below the minimum $1.00 per share required for continued listing under the Nasdaq Marketplace Rules. The Company has been provided an initial period of 180 calendar days, or until Sept. 7, 2010, to regain compliance. The letter states the Nasdaq staff will provide written notification that the Company has achieved compliance with the rule if at any time before Sept. 7, 2010, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. In the event the Company cannot demonstrate compliance with the minimum bid price rule by Sept. 7, 2010, the Nasdaq staff will send the Company written notification that its securities are subject to delisting. At that time, the Company may appeal the delisting determination to a hearings panel. Alternatively, the Company may be eligible for an additional grace period if it meets the initial listing standards, with the exception of bid price, for The Nasdaq Capital Market. About U.S. Concrete U.S. Concrete (Nasdaq: RMIX) services the construction industry in several major markets in the United States through its two business segments: ready-mixed concrete and concrete-related products; and precast concrete. The Company has 125 fixed and 11 portable ready-mixed concrete plants, seven precast concrete plants and seven producing aggregates facilities. During 2008 (including acquired volumes), these plant facilities produced approximately 6.3 million cubic yards of ready-mixed concrete and 3.5 million tons of aggregates. * * * As reported by the Troubled Company Reporter on February 24, 2010, Standard & Poor's Ratings Services lowered its corporate credit rating on U.S. Concrete to 'CC' from 'CCC+'. At the same time, S&P lowered the issue-level rating on the company's senior subordinated notes due 2014 to 'C' (one notch below the corporate credit rating) from 'CCC'. S&P revised the recovery rating to '6', indicating its expectation of negligible recovery (0%-10%) in the event of a payment default, from '5'. The rating outlook is negative. UTEX COMMUNICATIONS: Section 341(a) Meeting Scheduled for April 6 ----------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in UTEX Communications Corp.'s Chapter 11 case on April 6, 2010, at 4:00 p.m. The meeting will be held at Austin Room 118, Homer Thornberry Building, 903 San Jacinto, Austin, TX 78701. 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. Austin, Texas-based UTEX Communications Corp., dba FeatureGroup IP, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. W.D. Texas Case No. 10-10599). Patricia Baron Tomasco, Esq., at Munch Hardt Kopf & Harr, P.C., assists the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. US AIRWAYS: Pilots Support DOT Rules on Delta Slot Swap ------------------------------------------------------- The US Airline Pilots Association (USAPA), representing the pilots of US Airways, on March 10 announced support for the conditions imposed by the Department of Transportation (DOT) on US Airways' proposed slot swap with Delta Airlines. USAPA also reaffirms its request to the Department of Justice for a full investigation to expose likely anti-competitive results of the deal. The deal would give Delta 51% of New York-LaGuardia Airport departures and US Airways 58% of the Reagan Washington National Airport departures. The two airlines submitted a joint waiver request from the prohibition on purchasing slots at New York LaGuardia Airport. The waiver would allow US Airways to transfer 125 pairs of slots to Delta, plus a lease/option of an additional 15 pairs of slots at LaGuardia Airport. The waiver also allows Delta to transfer 43 pairs of slots to US Airways at Reagan Washington National Airport. A pair of slots is one takeoff and one landing. The DOT announced in February that it was proposing conditional divestitures, "because of the unusual size of the transaction, which dramatically enhances the respective market position of Delta at LaGuardia and US Airways at Reagan National Airport, the reduced competitive incentives that the carriers would have at the respective airports, and the potential for use of the transferred slot interests in an anticompetitive manner." "Historically this kind of market domination results in higher airfares, reduced frequency of flights and less choice and generally has an adverse effect on the traveling public, particularly in medium- and small-sized markets," said USAPA President Mike Cleary. "This also would have a huge impact on jobs, and in this case US Airways employees with decades of experience would be negatively impacted. Although we support the DOT's decision to require slot divestitures, we want to make it clear that waivers to laws that minimize the intent of the law should not be granted. That is why we are asking the Department of Justice to investigate the transaction." Headquartered in Charlotte, N.C., the US Airline Pilots Association (USAPA) represents more than 5,000 US Airways pilots in five domiciles across the United States. Visit the USAPA Web site at www.USAirlinePilots.org. 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. VALENCE TECHN: Receives NASDAQ Notification Over Minimum Bid Price ------------------------------------------------------------------ Valence Technology, Inc. announced that it received written notice on March 8, 2010 from The NASDAQ Stock Market indicating that the Company is not in compliance with the $1.00 minimum bid price requirement for continued listing on the NASDAQ Capital Market, as set forth in Listing Rule 5550(a)(2). The notice has no effect on the listing of the Company's common stock at this time, and its common stock will continue to trade on the NASDAQ Capital Market under the symbol "VLNC." The Company will be provided 180 calendar days, or until September 7, 2010, to regain compliance. To regain compliance, the bid price of the Company's common stock must close at $1.00 or higher for a minimum of 10 consecutive business days within the stated 180-day period. If the Company is not in compliance by September 7, 2010, the Company may be afforded a second 180 calendar day grace period if it meets the NASDAQ Capital Market initial listing criteria (except for the minimum bid price requirement), as set forth in Listing Rule 5810(c)(3)(A). If it otherwise meets the initial listing criteria, NASDAQ will notify the Company that it has been granted an additional 180 calendar day compliance period. If the Company does not regain compliance within the allotted compliance period(s), including any extensions that may be granted by NASDAQ, the Company's common stock will be subject to delisting from the NASDAQ Capital Market. The Company would then be entitled to appeal the NASDAQ Staff's determination to a NASDAQ Listing Qualifications Panel and request a hearing. About Valence Technology Valence Technology is an international leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Founded in 1989, Valence Technology today offers a proven technology and manufacturing infrastructure that delivers ISO- certified products and processes that are protected by an extensive global patent portfolio. Headquartered in Austin, Texas, Valence Technology is strategically aligned by five business segments: Motive, Marine, Stationary, Industrial and Military. In addition to the corporate headquarters in Texas, Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. Valence Technology is traded on the NASDAQ Capital Market under the ticker symbol "VLNC." For more information, visit www.valence.com. VALUE MUSIC: Files for Bankruptcy Protection -------------------------------------------- According to freetimes.com, Value Music Concepts Inc. filed for Chapter 11 protection, placing Manifest Discs and Tapes in limbo. The company filed for bankruptcy in 2004 following a merger with the Central South chain of stores. A meeting of creditors is set on April 1, 2010. Based in Georgia, Value Music Concepts Inc. is a music retail store. VINEYARD NATIONAL: Court Approves Disclosure Statement ------------------------------------------------------ BankruptcyData reports that the U.S. Bankruptcy Court approved Vineyard National Bancorp's Disclosure Statement related to the Joint Plan of Liquidation presented by the Company and its official committee of unsecured creditors. BData says the Disclosure Statement asserts, "The Plan provides for the disposition of all assets of the Debtor's Estate through the establishment of a Liquidating Trust for the benefit of the Holders of Allowed Claims consistent with the priority provisions of the Bankruptcy Code, as provided for in the Debtor's Plan of Liquidation. Remaining assets, to the extent not converted to cash or other proceeds as of the Effective Date, will be sold or otherwise disposed of after the Effective Date, with all net cash proceeds to be distributed to Holders of Allowed Claims as provided for in the Plan." Vineyard National Bancorp (NASDAQ: VNBC) (AMEX: VXC.PR.D) -- http://www.vineyardbank.com/-- was the financial holding company, which provides a variety of lending and depository services to businesses and individuals through its wholly owned subsidiary, Vineyard Bank, National Association. Vineyard Bank was closed July 17 by regulators, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with California Bank & Trust, San Diego, California, to assume all of the deposits of Vineyard Bank, N.A., excluding those from brokers. As of March 31, 2009, Vineyard Bank, N.A., had total assets of $1.9 billion and total deposits of approximately $1.6 billion. In addition to assuming all of the deposits of the failed bank, California Bank & Trust agreed to purchase approximately $1.8 billion of assets. The FDIC will retain the remaining assets for later disposition. California Bank & Trust purchased all deposits, except about $134 million in brokered deposits, held by Vineyard Bank, N.A. Vineyard National Bancorp filed for Chapter 11 on June 21, 2009 (Bankr. C.D. Calif. Case No. 09-26401). VISTEON CORP: China JV Makes Platforms for GM Sedan --------------------------------------------------- A Visteon Corporation joint venture based in China has launched an instrument cluster and audio systems on Shanghai General Motors' new small car, Chevrolet New Sail. Yanfeng Visteon Automotive Electronics (YFVE) -- the electronics arm of Visteon's joint venture with the Shanghai Automotive Industry Corporation (SAIC) -- developed the products based on Visteon's global instrument cluster and audio platforms, offering New Sail owners an appealing in-car electronics experience. YFVE and its subsidiaries' strong engineering and manufacturing capabilities made it possible to design and manufacture the cluster and audio systems in China. By leveraging Visteon's renowned global platforms, the talented engineering team at YFVE was able to customize the products to meet Shanghai GM's requirements for state-of-the-art functionality and appearance. "We are proud to contribute to Shanghai GM's new small car for the China market," said Steve Meszaros, product group president. "Visteon's automotive intellect, combined with YFVE's product development capability and manufacturing footprint, position us well to support automakers in the small car segment in China." Incorporating a single gauge for speed display, the cluster features two 2.5-inch digital LCD displays, which are considered unique in this small car segment. The stylish LCD displays also have an advanced heating function to allow quick response time and save electrical power in low-temperature environments. The use of leading lighting technology enhances background illumination on the speed gauge, enabling the user to read instrument indicators more easily in all lighting conditions while improving vehicle interior styling harmony. Visteon also supplies audio systems for the New Sail in two variants. The basic version features an AM/FM radio with auxiliary input, while the higher-end version also offers a CD player and MP3 interface. "Visteon's platform approach has been well-received and makes the cluster and audio systems a reality at competitive cost," said Matthew Cole, general manager of YFVE. "The products are a testimony to YFVE's capabilities in product development. With more than 15 years experience in the China market, we can confidently meet our customers' diverse needs." Yanfeng Visteon Automotive Electronics, a joint venture between Visteon and Yanfeng Visteon, is a leading automotive electronics supplier in China, specializing in audio and infotainment, driver information, center stack electronics and powertrain systems. With approximately 4,000 employees in five manufacturing plants and one technical center, YFVE supports domestic China and export markets. 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: CRISIL Downgrades TACO's Rating to 'BB' ----------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of TACO Visteon Engineering Pvt Ltd to 'BB/Negative/P4+' from 'BBB- /Negative/P3'. Facilities Ratings ---------- ------- INR15.0 Million Long-Term Loans BB/Negative (Downgraded from 'BBB-/Negative') INR40.0 Million Packing Credit P4+ (Downgraded from 'P3') Foreign Currency (Reduced from INR75.0 million) The downgrade reflects a steep decline in business levels for TVEPL, resulting in the company reporting after tax losses for the nine months ended December 31, 2009. The downgrade also reflects CRISIL's belief that the growth in TVEPL's revenue and profitability over the near term will remain sluggish, as there is limited visibility on orders from its parent, Visteon Corp. and its affiliates. Therefore, TVEPL's credit profile is expected to remain weak over the medium term, in contrast to CRISIL's earlier expectations. TVEPL's weak performance is attributable to Visteon continuing to be under bankruptcy, as well as to the impact of the slowdown in the global automobile industry (more particularly the US and European automobile markets, which are yet to recover completely from the slowdown). TVEPL generates its entire revenues from Visteon and its affiliates, and geographically a majority of TVEPL's revenues (over 85 per cent) are from the US and Europe. The ratings also take into account TVEPL's moderate net worth, which makes it vulnerable to business downturns. The ratings, nevertheless, continue to be supported by TVEPL's comfortable gearing levels and its moderate liquidity position. Outlook: Negative CRISIL believes that TVEPL's business levels to witness continued pressure over the near term, because of the weak sentiment in the global automotive market, which will impact order generation by Visteon and its affiliates. Greater than anticipated decline in TVEPL's business levels, adversely affecting its cash generation, could result in a rating downgrade. Conversely, significant increase in revenues and profitability could result in the outlook being revised to 'Stable'. About TACO Visteon TACO Visteon Engineering Pvt Ltd was incorporated as a 50:50 joint venture between Tata Autocomp Systems Ltd (TACO, rated 'AA-/Negative/P1+' by CRISIL) and Visteon. Recently, TACO sold its entire stake in the joint venture to one of the Indian subsidiaries of Visteon. Consequently, Visteon now holds 100 per cent in TVEPL. Using computer-aided design and computer-aided engineering tools, TVEPL designs interior systems, and climate control systems and electronics, and designs, develops, and assists in the manufacture of total engine induction systems, for Visteon and its associates. Visteon is a leading player in delivering climate, interior, and electronics components and systems to global automobile original equipment manufacturers. TVEPL commenced operations in 2005. The company's premier facility is based in Pune and it has offices in the UK and the US. For 2008-09 (refers to financial year, April 1 to March 31), TVEPL reported a net profit of INR37.7 million on net revenues of INR348.4 million, compared with a net profit of INR17.4 million on net revenues of INR289.5 million for 2007-08. 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) WARNER MUSIC: Posts $17 Million Net Loss in FY 2010 First Quarter ----------------------------------------------------------------- Warner Music Group Corp. filed its quarterly report on Form 10-Q, showing a net loss of $17 million, or ($0.11) per diluted share, for the first quarter ended December 31, 2009, compared with net income of $23 million, or $0.15 per diluted share, in the prior- year quarter. The prior-year quarter included a gain of $36 million, or $0.24 per diluted share, related to the sale of the company's investment in Front Line Management. For the quarter, revenue grew 3.5% to $918 million from $887 million in the prior-year quarter. As of December 31, 2009, the Company's cash and cash equivalents totaled $339 million, compared to cash and cash equivalents of $384 million at December 31, 2008. Net cash used in operating activities was $42 million compared to net cash provided by operating activities of $43 million in the prior-year quarter. Net cash used in investing activities was $2 million compared to $117 million provided by investing activities in the prior year quarter. The prior year quarter included proceeds of $123 million from the sale of the Company's remaining equity state in Front Line Management. The Company's balance sheet as of Dec. 31, 2009, showed $3.934 billion in assets and $4.031 billion of debts, for a stockholders' deficit of $97 million. A full-text copy of the Company's fiscal 2010 first quarter report is available for free at http://researcharchives.com/t/s?5223 About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on November 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. WAVE SYSTEMS: Posts $1.0 Million Net Loss in Q4 2009 ---------------------------------------------------- Wave Systems Corp. reported net revenues of $5.2 million for the fourth quarter ended December 31, 2009, compared to net revenues of $3.3 million, for the same period of 2008. Q4 2009 net revenues rose 7.6% over Q3 2009, as higher software licensing sales more than offset a modest decline in services revenues related to a government consulting contract. For the full year 2009, net revenues grew 114% to $18.9 million compared to 2008 net revenues of $8.8 million due primarily to higher per-unit royalty rates earned during 2009. Wave Systems reported a net loss attributable to common stockholders of $1.0 million, or $0.01 per basic and diluted share, for the fourth quarter of 2009, compared with a fourth quarter 2008 net loss attributable to common stockholders of $4.0 million, or $0.07 per basic and diluted share. The Q4 2008 net loss included a charge of $657,000 related to the non-cash beneficial conversion feature on the Series J and Series K convertible preferred stock issued during that quarter. For the full year 2009, Wave Systems reported a net loss attributable to common stockholders of $3.3 million, or $0.05 per basic and diluted share, compared with a 2008 net loss attributable to common stockholders of $21.2 million, or $0.38 per basic and diluted share. "The fourth quarter of 2009 was a watershed period for Wave as we continued to increase sequential revenue for the quarter and full year, completed our largest-ever enterprise upgrade sale and worked to expand our PC OEM business through a software reseller agreement with HP," commented Steven Sprague, Wave's CEO. "In addition to the financial significance of the $5.7 million multi- year software license and maintenance orders we secured from a 'Big Three' U.S. automaker ($1.9 million of which was recorded as billings in Q4 '09), we believe their adoption of Wave's management solution for self-encrypting drives demonstrates the value and performance benefits of our approach to data protection." Mr. Sprague continued, "On the distribution side, our new HP reseller agreement allows HP to offer Wave software to their customers through VAR and direct sales channels, opening up a new base of prospective enterprise customers. I'm pleased to report that in Q1 2010 we have already filled our first order as a result of this relationship." "As part of our strategy, we have hired several seasoned PC industry sales and marketing team me mbers who will focus solely on HP initiatives," Mr. Sprague added. "We are also furthering investment in our sales and marketing programs to support this and other OEM opportunities as we continue to pursue customers interested in the data protection and identity protection solutions we provide. Supporting this interest is domestic and international legislation that imposes, in some cases, financial penalties for companies who experience data breach or loss." Wave says its auditors' opinion letter, which will be contained in Wave's Form1 10-K for the year ended December 31, 2009, raises substantial doubt about the Company's ability to continue as a going concern given its recurring losses from operations, working capital position and its accumulated deficit. The Company's balance sheet as of Dec. 31, 2009, showed $6,327,925 in assets and $8,187,881 of debts, for a stockholders' deficit of $1,859,956. About Wave Systems Wave Systems Corp. (NASDAQ: WAVX) http://www.wave.com/-- provides software to help solve critical enterprise PC security challenges such as strong authentication, data protection, network access control and the management of these enterprise functions. WEST FELICIANA: Bid Deadline for All Assets Set for April 2 ----------------------------------------------------------- West Feliciana Acquisition, L.L.C., obtained authorization from the Hon. Douglas D. Dodd of the U.S. Bankruptcy Court for the Middle District of Louisiana for a process of selling substantially all of its assets. The deadline for the submission of bids is April 2, at 5:00 p.m. (CST.) The Debtor will seek approval of the sale to the winning bidder at the hearing on April 9 at 11:00 a.m. (CST) at the U.S. Bankruptcy Court, 707 Florida Street, Room 222, Baton Rouge, Louisiana. Objections, if any are due April 8, at 3:00 p.m. (CST.) The Debtor must file a notice of lead bidder and secondary bidder, along with a signed purchase, no later than April 7 at 5:00 p.m. (CST.) The closing on the sale transaction will occur within 7 business days after entry of the sale order. About West Feliciana Saint Francisville, Louisiana-based West Feliciana Acquisition, LLC, filed for Chapter 11 bankruptcy protection on January 17, 2010 (Bankr. M.D. La. Case No. 10-10053). Louis M. Phillips, Esq., at Gordon, Arata, McCollam, Duplantis & Eagan, L.L.P., assists the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. XOMA LIMITED: Anticipates Non-Compliance Notice From NASDAQ ----------------------------------------------------------- As previously disclosed, in September 2009, XOMA Ltd. received notice from NASDAQ that for the 30 consecutive business days preceding September 15, 2009, the bid price for its common shares closed below the minimum $1.00 per share required by NASDAQ's continued listing rules and that XOMA has until March 15, 2010, to regain compliance with this requirement. The company anticipates receiving a letter from NASDAQ on or shortly after March 16, 2010, indicating that it has not regained compliance with this requirement. XOMA intends to request a hearing before the NASDAQ Listing Qualifications Panel (the "Panel"), which request will stay delisting pending the Panel's decision following the hearing. At the hearing, XOMA intends to request continued listing based on a plan for regaining compliance. Although the Panel has the authority to grant the company up to an additional 180 days from the date of the forthcoming NASDAQ notice, to implement its plan, there can be no assurance that the Panel will grant XOMA's request for continued listing. A copy of the company's full year 2009 and fourth quarter results are available free at: http://ResearchArchives.com/t/s?5884 About XOMA XOMA -- http://www.xoma.com.-- a fully integrated product development infrastructure, extending from pre-clinical science to approval, and a team of about 200 employees at its Berkeley, California location. ZEALOUS HOLDINGS: Must Get Court OK Prior to Any Assets Sale ------------------------------------------------------------ Zealous, Inc., has entered negotiations with two private parties for three of its trading algorithms from its financial services division. "Nearly a decade ago the company began developing trading algorithms and it is from those early efforts that these three algorithms were conceived," said Milton C. Ault III, President, CEO and Chairman of Zealous, Inc. Zealous Holdings, Inc. (ZHI), a wholly owned subsidiary of Zealous Inc., developed, marketed and briefly conducted business utilizing this system and its series of algorithms. ZHI and its two wholly owned subsidiaries were closed in early 2009 as an aftermath to the financial crisis of Fall 2008. ZHI is in the midst of a Chapter 7 proceeding and must get bankruptcy court approval prior to any sale of assets. Zealous Inc., on behalf of its defunct financial services division, will continue the negotiations and manage the process to complete the possible sale of assets. Ault explained, "If sold, the proceeds from the sale of this asset will go directly to resolve the outstanding debt this division has." The company makes no assurances that a transaction will occur and to that end, the company will pursue the negotiations to the benefit of its shareholders. "Zealous is very pleased that more creditors are working with the company to settle the debt. It is from the cooperation and patience of these creditors that has allowed Zealous to develop and nurture its assets for the benefit of our shareholders and creditors," said Ault. The company in conjunction with it recent appointment of Gary Gottlieb as Chief Restructuring Officer has established a dedicated email address for all potential creditors to contact the company and present a claim. Any party should remit their claim to settlements@zealousinc.net. About Zealous, Inc. Zealous, Inc. Zealous, Inc., is a holding company that operates through its three subsidiaries, Zealous Interactive, Inc., Health and Wellness Partners, Inc., and Zealous Holdings, Inc. Zealous Interactive, Inc. is a multimedia company specializing in online media distribution and content management. The flagship enterprise of Interactive is its adult portal and social network and features its print and online publications and over 500 URLs and websites. Health and Wellness Partners, Inc., is a distributor of health, energy and vitality products that promote wellness in body, mind and spirit. Zealous Holdings, Inc., was a financial services holding company now discontinued and involved in Chapter 7 dissolution. ZALE CORP: Directors Form Panel to Review Financing Options ----------------------------------------------------------- Matt Appel, Chief Financial Officer at Zale Corporation, has said the Company's primary financial focus over the next 90 days is to strengthen its liquidity profile by attracting new capital to the business. Jack Lowe, Chairman of Zale's Board of Directors, has said the board has formed a committee of independent directors to review a wide range of financing alternatives which will be formally vetted through Peter J. Solomon Company. Mr. Lowe said, "We are at the very initial stages of this process and I am confident that it will result in an outcome that's in the best interest of our shareholders, our employees and our customers." Mr. Appel said, "I am confident that we will identify options to implement a long-term capital structure from which we can fuel the recovery of the business." Zale on February 24 reported net earnings of $6.7 million, or $0.21 per share, for the second fiscal quarter ended January 31, 2010, compared to a net loss of $31.8 million, or $1.00 per share, in the comparable period in fiscal 2009. Aggregate revenues were $582 million, a decrease of 14.3% compared to $679 million during the second fiscal quarter of 2009. Same store sales during the second fiscal quarter decreased 11.2%, compared to a decrease of 18.1% during the 2009 period. At January 31, 2010, Zale had $1.202 billion in total assets against total current liabilities of $316.117 million, long-term debt of $367.600 million, and other liabilities of $192.831 million; resulting in stockholders' investment of $325.891 million. The Company has closed a total of 187 retail locations since January 31, 2009, of which 28 were closed in the quarter ended January 31, 2010. The Company reduced aggregate selling, general and administrative expenses by $40 million during the quarter ended January 31, 2010, compared to the same period in fiscal 2009. This reduction resulted primarily from the Company's initiatives to reduce expenses including store closures. During the quarter ended January 31, 2010, the Company recorded a non-cash $23.3 million pre-tax charge for the impairment of certain store property and equipment. Operating margin for the second quarter of fiscal 2010 was (0.6%), an improvement of 260 basis points compared to the comparable period in the prior year. In the quarter ended January 31, 2010, the Company had an income tax benefit of $12 million, compared to tax expense of $7 million in the comparable period in the prior year. The income tax benefit was attributable to a $17 million credit recorded as a result of recent tax law changes increasing the net operating loss carry- back period to 5 years, partially offset by $5 million of tax expense related primarily to earnings from the Company's Canadian operations. Inventory at January 31, 2010, was $738 million, a decrease of roughly $110 million from January 31, 2009. As of January 31, 2010, the Company had outstanding debt of $368 million compared to $390 million as of January 31, 2009. Availability under the Company's $500 million asset-backed revolving credit facility as of January 31, 2010, was roughly $67 million. "We have made progress year over year in gross margin, expenses, earnings per share and inventory levels," commented Theo Killion, President and Interim Chief Executive Officer. "Our direct competitors have demonstrated that the market for mid-tier jewelers has stabilized. It is critical that we focus on retail fundamentals and the core diamond business while we leverage our brand equity, capabilities and personnel to improve top line volumes," added Mr. Killion. About Zale Corporation Dallas, Texas-based Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating roughly 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at www.zales.com, www.zalesoutlet.com and www.gordonsjewelers.com As reported by the Troubled Company Reporter on February 10, 2010, The Deal.com's Sara Behunek reported that analysts said bankruptcy looms for Zale if it fails to restructure its debt and put in place a solid merchandising strategy. The Deal.com points to these signs that Zale is on the brink: -- Zale reported same-store sales for November-December fell 12%; -- Zale lost $57.6 million for its first quarter, ended October 31, and for its 2009 fiscal year, which ended July 31; -- Zale posted a net loss of $190 million on total revenue of $1.8 billion, down from $2.1 billion the year earlier; -- The Wall Street Journal has reported that Zale has asked vendors to buy back unsold merchandise at full price; -- The company's top three officers resigned last month. As reported by the TCR on January 26, 2010, Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP, told The Deal's Maria Woehr in an interview that there will be retailers that cannot possibly survive due a lack of consumer confidence. With regard to Zales, Ms. Hershcopf said, "I don't know how it continues to survive when so many of its prior customers are not working." As reported by the TCR on August 7, 2009, Zale closed 118 underperforming retail locations during the fiscal fourth quarter ended July 31, 2009. The Company closed a total of 191 underperforming locations during fiscal year 2009, of which 160 were retail stores and 31 were kiosks. In addition to the closures, the Company entered into agreements in principle on certain of its remaining retail locations, which would result in a reduction in aggregate rental obligations commencing in fiscal year 2010. Following the closures, the Company operates 1,931 retail locations, according to the TCR report. ZALE CORP: Franklin Resources Holds 4.7% of Common Stock -------------------------------------------------------- San Mateo, California-based Franklin Resources, Inc.; Charles B. Johnson; and Rupert H. Johnson, Jr., disclosed that as of February 28, 2010, they may be deemed to own 1,500,000 shares or roughly 4.7% of the common stock of Zale Corporation. Dallas, Texas-based Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating roughly 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at www.zales.com, www.zalesoutlet.com and www.gordonsjewelers.com As reported by the Troubled Company Reporter on February 10, 2010, The Deal.com's Sara Behunek reported that analysts said bankruptcy looms for Zale if it fails to restructure its debt and put in place a solid merchandising strategy. The Deal.com points to these signs that Zale is on the brink: -- Zale reported same-store sales for November-December fell 12%; -- Zale lost $57.6 million for its first quarter, ended October 31, and for its 2009 fiscal year, which ended July 31; -- Zale posted a net loss of $190 million on total revenue of $1.8 billion, down from $2.1 billion the year earlier; -- The Wall Street Journal has reported that Zale has asked vendors to buy back unsold merchandise at full price; -- The company's top three officers resigned last month. As reported by the TCR on January 26, 2010, Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP, told The Deal's Maria Woehr in an interview that there will be retailers that cannot possibly survive due a lack of consumer confidence. With regard to Zales, Ms. Hershcopf said, "I don't know how it continues to survive when so many of its prior customers are not working." As reported by the TCR on August 7, 2009, Zale closed 118 underperforming retail locations during the fiscal fourth quarter ended July 31, 2009. The Company closed a total of 191 underperforming locations during fiscal year 2009, of which 160 were retail stores and 31 were kiosks. In addition to the closures, the Company entered into agreements in principle on certain of its remaining retail locations, which would result in a reduction in aggregate rental obligations commencing in fiscal year 2010. Following the closures, the Company operates 1,931 retail locations, according to the TCR report. * Bank Failures This Year Reach 27 after LibertyPointe Closed ------------------------------------------------------------- Regulators closed LibertyPointe Bank in New York, on March 11, raising the total closings for this year to 27. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of LibertyPointe Bank. The Federal Deposit Insurance Corporation was appointed receiver for the banks. In accordance with Federal law, allowed claims against failed financial institutions will be paid, after administrative expenses, in this order of priority: 1. Depositors 2. General Unsecured Creditors 3. Subordinated Debt 4. Stockholders 2010 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ---------- -------------- ----------- LibertyPointe Bank $209.7 Valley National $24.8 Sun American Bank $535.7 First-Citizens Bank $103.8 Waterfield Bank $155.6 {FDIC Created} $51.0 Centennial Bank $215.2 Zions Bank $96.3 Bank of Illinois $211.7 Heartland Bank $53.7 Rainier Pacific Bank $446.2 Umpqua Bank, Roseburg $95.2 Carson River Community $51.1 Heritage Bank of Nevada $7.9 George Washington $412.8 FirstMerit Bank $141.4 La Jolla Bank $3,600.0 OneWest Bank, FSB $882.3 The La Coste Nat'l $53.9 Community National $3.7 Marco Community Bank $119.6 Omaha Bank $38.1 1st American State $18.2 Community Development $3.1 First National Bank $832.6 Community & Southern $260.4 Florida Community $875.5 Premier American Bank $352.6 American Marine Bank $373.2 Columbia State Bank $58.9 Marshall Bank, N.A. $59.9 United Valley Bank $4.1 First Regional Bank $2,180.0 First-Citizens Bank $825.5 Comm. Bank & Trust $1,210.0 SCBT, N.A. $354.5 Charter Bank $1,200.0 Charter, Albuquerque $201.9 Evergreen Bank $488.5 Umpqua Bank, Roseburg $64.2 Columbia River Bank $1,100.0 Columbia State Bank $172.5 Bank of Leeton $20.1 Sunflower Bank $8.1 Premier American Bank $350.9 Bond Street subsidiary $85.0 Town Community $69.6 Bank First American $17.8 St. Stephen State $24.7 First State Bank $7.2 Barnes Banking $827.8 {DINB Created} $271.3 Horizon Bank $1,400.0 Washington Federal $539.1 In 2009, there were 140 failed banks, compared with just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 702 Banks on Problem List In its quarterly banking profile, the Federal Deposit Insurance Corp. said that the number of institutions on its "Problem List" rose to 702 at the end of 2009, from 552 at the end of the third quarter and 252 at the end of 2008. The FDIC, in its February 23 report, said that total assets of "problem" institutions were $402.8 billion at yearend 2009, compared with $345.9 billion at the end of September and $159.0 billion at the end of 2008. Both the number and assets of "problem" institutions are at the highest level since June 30, 1993. The Deposit Insurance Fund (DIF) decreased by $12.6 billion during the fourth quarter to a negative $20.9 billion (unaudited) primarily because of $17.8 billion in additional provisions for bank failures. Also, unrealized losses on available-for-sale securities combined with operating expenses reduced the fund by $692 million. Accrued assessment income added $3.1 billion to the fund during the quarter, and interest earned, combined with termination fees on loss share guarantees and surcharges from the Temporary Liquidity Guarantee Program added $2.8 billion. For the year, the fund balance shrank by $38.1 billion, compared to a $35.1 billion decrease in 2008. The DIF's reserve ratio was negative 0.39% on December 31, 2009, down from negative 0.16% on September 30, 2009, and 0.36% a year ago. The December 31, 2009, reserve ratio is the lowest reserve ratio for a combined bank and thrift insurance fund on record. Forty-five insured institutions with combined assets of $65.0 billion failed during the fourth quarter of 2009, at an estimated cost of $10.2 billion. For all of 2009, 140 FDIC- insured institutions with assets of $169.7 billion failed, at an estimated cost of $37.4 billion. This was the largest number of failures since 1990 when 168 institutions with combined assets of $16.9 billion failed. On November 12, 2009, the FDIC adopted a final rule amending the assessment regulations to require insured depository institutions to prepay their quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011, and 2012 on December 30, 2009, along with each institution's risk-based assessment for the third quarter of 2009. The FDIC is asking banks to prepay three years of premiums on Dec. 30 to raise $45 billion for the fund. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. They are rated by the FDIC or Office of the Thrift Supervision as either a "4" or "5", based on a scale of 1 to 5 in ascending order of supervisory concern. The Problem List is not divulged to the public. No advance notice is given to the public when a financial institution is closed. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ 2009 702 $402,800 140 $169,700 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 A copy of the FDIC's Quarterly Banking Profile for the quarter ended Dec. 31, 2009, is available for free at: http://bankrupt.com/misc/FDIC_QBP_Q4_09.pdf * BOOK REVIEW: Instincts of the Herd in Peace and War ----------------------------------------------------- Author: Wilfred Trotter Publisher: Beard Books Softcover: 264 pages List Price: $34.95 by Henry Berry Instincts of the Herd in Peace and War examines how individuals become involved in social groups and how this affects their involvement in a nation, the ultimate social group. According to Trotter, human beings are, by nature, "gregarious," and their gregariousness is instinctive. Consequently, individuals are compelled to attach themselves to a primary social group and assume a role within it. Individuals may form attachments to other groups and take different or modified roles within them, but it is their attachment to, identification with, and role within a primary group that lends them their personal identity, sense of purpose, and sense of self-worth and fulfillment. Although a nation is the ultimate group, it becomes the primary social group only in the case of war. To Trotter, war and peace are not mutually exclusive social states. They form a continuum of historical social states that comprise the entirety of all possible social states. There can be no utopias, nor can there be eternal wars. The flow of events brings periods of peace and war. The events in Europe preceding World War I -- the period during which Trotter wrote the first edition of his book -- were a test case for the author's observations and conclusions. The people of England, France, Germany, and other European nations became focused on defending their nations against external enemies. Societies (i. e., nations) underwent upheaval as their people turned from limited involvement with smaller social groups to large-scale involvement in national defense. Trotter's book is recognized as a classic in the field of sociology, a relatively new science in the latter 1800s and early 1900s. Trotter and others sought to understand the group dynamics of democratic societies, which were replacing the class structure of aristocratic, hierarchal societies. Trotter also sought to counter the misleading effects of psychology, especially the influence of Freudian psychology, which saw individuals as influenced mostly by inner, largely subconscious feelings and experiences. Trotter argues that psychology is not an independent field. Says the author, "The two fields -- the social and the individual -- are absolutely continuous; all human psychology, it is contended, must be the psychology of associated man, since man as a solitary animal is unknown to us . . . ." Even a hermit is born in society; and society has an interest in hermits for what they may reflect about conditions of society. This reprint is the second edition of Trotter's classic work. The second edition includes the author's 45-page "Postscript of 1919," assaying the conditions of peace after World War I had ended. "With the cessation of war this great stream of moral power [in defending the nation] began rapidly to dry up at its source," observes Trotter. He proffers that the aim of statecraft is keeping this "great stream of moral power" in times of peace. He believes that the progressive evolution of society can be accomplished by a "scientific statecraft [applying] the intellect as an active factor in the direction of society." While basically a work of sociology, Trotter's book can be a picture of individual and group behavior for leaders in any organization where motivation, unity, and progress are important. This includes business leaders, especially leaders of larger companies with multiple business sites and different employee segments. Business leaders will immediately grasp the truth and relevance of the author's view of society and glean from it essential lessons and leadership principles, practices, and goals. Wilfred Trotter (1872-1939) was an English surgeon as well as an influential sociologist. ********* 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 ***