/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100325.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 25, 2010, Vol. 14, No. 83 Headlines AIRTRAN HOLDINGS: ComVest Partners Holds 3.0% of Common Stock AIRTRAN HOLDINGS: Sees 6% Rise in Q1 2010 Total Capacity AMCORE FINANCIAL: Operating Losses Prompt Going Concern Doubt AMERICAN AXLE: Co-Founder Sets 10b5-1 Stock Trading Plan AMTRUST FINANCIAL: Novak Revised Bid Wins Property & Casualty Biz ANDERSON HOMES: Wins Permission to Sell 4 Residential Properties ASARCO LLC: Plan Admin. Appeals Order on Plainfield Timely Filing ASCENDIA BRANDS: Taps ASK Financial to Prosecute Preference Suits ASCENDIA BRANDS: Wells Fargo DIP Loan to Expire at Month's End BANK OF FLORIDA: Banks Get FDIC Directive for Capital Need BASS PRO: Moody's Assigns Corporate Family Rating at 'Ba3' BUFFETS INC: S&P Affirms Corporate Credit Rating at 'B-' COMMERCIAL VEHICLE: Prices Stock Offering at $6.25 Per Share CARTERET ARMS: Connolly Sells Five Apartment Properties DELTA AIR: Reports $1.237 Billion Net Loss for 2009 DELTA AIR: Wants Claims Objection Deadline Moved to Dec. 31 DELTA AIR: Proposes BNY Mellon and RAIC Settlement DELTA AIR: M. Burns Appeals Order Expunging Claims DELTA FINANCIAL: Workers Seek OK on FLSA Deal DORAL ENERGY: Posts $1.1 Million Net Loss in Q2 Ended Jan. 31 E*TRADE FINANCIAL: S&P Raises Counterparty Credit Rating to 'CCC+' EASTMAN KODAK: Franklin Mutual Holds 3.7% of Common Stock EINSTEIN NOAH: Extends Preferred Stock Redemption Date Until 2011 EINSTEIN NOAH: CFO Richard Dutkiewicz Resigns Effective April 9 EUOKO GROUP: Posts $349,346 Net Loss in Q2 Ended January 31 EXTENDED STAY: Creditors Blocking Sternlicht Bid FEDERAL-MOGUL: Elects Daniel Ninivaggi to Board of Directors FEDERAL-MOGUL: Restates Agreements with CEO Alapont FIRST HORIZON: Banks Receive "Wells" Notices from SEC FLEETWOOD ENTERPRISES: Trustee OKs Snipped $7.5M Gibson Dunn Fee FLYING J: Court Approves $40 Million Sale Deal with Alon Israel FLYING J: Exclusivity Period Extended Until April 27 FORD MOTOR: Investment-Grade Rating to Come "Years Away" FOURTH QUARTER 118: Unit to Sell Rim Shopping Center Lot FREDDIE MAC: Conservator Re-Elects Directors; Alexander to Leave FRONTIER COMMUNICATIONS: Verizon Unit to Offer Senior Notes GANNETT CO: S&P Changes Outlook to Stable, Affirms 'BB' Rating GENCORP INC: Amends $280 Million Senior Credit Facility GRAHAM PACKAGING: Pays Term Loans From Proceeds of Shares Sale HOTELS UNION: Files for Bankruptcy to Avert DekaBank Foreclosure INDIANAPOLIS DOWNS: Moody's Cuts Corporate Family Rating to 'Caa3' INNATECH LLC: Liquidity Constraints Prompt Bankruptcy Filing JAPAN AIRLINES: Has Stipulation on Stay of Anti-Trust Suits JAPAN AIRLINES: Aims to Return to Profitability by Autumn JAPAN AIRLINES: Offers Early Retirement to Pilots JTT PROPERTIES: Files for Chapter 11 Bankruptcy in Vermont LEAR CORP: S&P Assigns 'BB-' Rating on $700 Mil. Senior Notes LEVEL 3 COMMS: 10% Senior Notes Has Unsec., Subordinated Guarantee LINN ENERGY: Moody's Changes Outlook to Positive; Puts 'B3' Rating LIONS GATE: CEO Failed Shareholders, Says Carl Icahn LIZ CLAIBORNE: S&P Downgrades Corporate Credit Rating to 'B-' MAGNA ENTERTAINMENT: Wins Nod to Send Plan for Voting MERNA REINSURANCE: S&P Assigns 'BB+' Rating on Senior Notes METRO-GOLDWYN-MAYER: Hedge Funds Unwilling to Sell at Low Price MF GLOBAL: Fitch Puts 'BB+' Stock Ratings on Negative Watch MIDWEST GAMING: S&P Assigns Corporate Credit Rating at 'B' MILES ROAD: Seeks Chapter 11 Protection in Kentucky MSCI INC: Moody's Assigns 'Ba2' Rating on $1.375 Bil. Loan MXENERGY HOLDINGS: Sempra Energy Holds Class B Common Stock NELLSON NUTRACEUTICAL: Ch. 11 Barred Firm's Bonuses, Trustee Says NES RENTALS: Moody's Assigns 'Caa2' Rating on Second Lien Notes NEW FRONTIER ENERGY: Posts $748,172 Net Loss in Q3 Ended Nov. 30 NEW MEDIA: Posts $1.089-Mil. Net Loss in Q3 Ended Jan. 31 NORTEL NETWORKS: Proposes Grant Thornton as Arbitrator NORTEL NETWORKS: Proposes Chilmark as Consulting Expert NORTEL NETWORKS: To Reduce Pension Advisers' Monthly Fees OROVILLE INN: Owner Accused of Bankruptcy Fraud OZBURN-HESSEY HOLDING: S&P Assigns 'B' Rating on Senior Loan PATRICK HACKETT: Receives Letter of Intent for $750,000 Loan PATRICK HACKETT: U.S. Trustee Withdraws Motion to Convert PERF-GO GREEN: Earns $2.2 Million in Q3 Ended December 31 PLIANT CORP: Court Issues Final Decree Closing Unit's Case PNG VENTURES: Emerges From Chapter 11 as Applied Natural PPA HOLDINGS: Committee Seeks Chapter 11 Examiner PRESTIGE BRANDS: Completes Offering of $150MM 2012 Notes RAINBOWS UNITED: Creditors Approves Plan of Reorganization RIVIERA HOLDINGS: Board OKs EBITDA Performance Threshold Targets ROADOR INDUSTRIES: Gets Bridge Financing from CEO Capital SIRIUS XM: Closes Offering of $800 Million 8.75% Senior Notes SKILLED HEALTHCARE: S&P Assigns 'BB-' Rating on $330 Mil. Loan SOUTH BAY EXPRESSWAY: Wants Until April 21 to File Schedules SPARTA COMMERCIAL: Posts $880,182 Net Loss in Q3 Ended January 31 SPECIALTY PACKAGING: Can Hire Frost Brown as Bankruptcy Counsel SPECIALTY PACKAGING: Weckerle Maschinenbau Joins Auction SPECIALTY PACKAGING: Files Schedules of Assets & Liabilities SPECIALTY PACKAGING: Gets Court's Nod to Hire KCC as Claims Agent SPHERIS INC: Oracle Fights $75M Sale to MedQuist, CBay STRATUS TECHNOLOGIES: S&P Assigns 'B-' Corporate Credit Rating SUNOVIA ENERGY: Posts $3.2 Million Net Loss in Q2 Ended January 31 SYNTHEMED INC: Eisner LLP Raises Going Concern Doubt TLC VISION: Judge Gross Declines to Appoint Equity Committee TRIUMPH GROUP: S&P Puts 'BB' Rating on CreditWatch Negative TRIUMPH GROUP: Vought Aircraft Deal Cues Moody's Ba2 Rating Review UAL CORP: Lost $40 Million from U.S. Winter Storms UAL CORP: Seeks Clarification on Use of Federal Grants UAL CORP: Names Dana Sacks as VP for Human Resources VISTEON CORP: D. Kempner, et al, Disclose 7.29% Stake VISTEON CORP: Patrick Li Discloses 4.75% Equity Stake VISTEON CORP: Kirkland Bills $3.86-Mil. for Sept.-Nov. Work VOUGHT AIRCRAFT: S&P Puts 'B' Rating on CreditWatch Positive WISE METALS: To Hold Conference Call on March 31 W.R. GRACE: Submits Fourth Set of Plan Modifications W.R. GRACE: Resolves CNA Objections on Sealed Air Releases W.R. GRACE: Proposes 2010-2012 Incentive Plan W.R. GRACE: Proposes Kaye Scholer as IP Counsel * Standard & Poor's Says 264 Global Defaults Set New Records * S&P Says Rushed Bankruptcy Exits Can Hurt Credit Quality * Law360 Calls Akin Gump's Philip Dublin as Rising Star * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AIRTRAN HOLDINGS: ComVest Partners Holds 3.0% of Common Stock ------------------------------------------------------------- West Palm Beach, Florida-based ComVest Investment Partners III, L.P.; ComVest III Partners, LLC; Robert L. Priddy; and Michael S. Falk disclosed that as of December 31, 2009, they may be deemed to beneficially own 4,059,100 shares or roughly 3.0% of Common Stock of AirTran Holdings, Inc. 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. 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. * * * 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. AIRTRAN HOLDINGS: Sees 6% Rise in Q1 2010 Total Capacity -------------------------------------------------------- AirTran Holdings, Inc.'s management on March 23, 2010, conducted a presentation at the Sidoti & Company Emerging Growth Institutional Forum. Management said first quarter 2010 total capacity as measured by available seat miles is expected to be up roughly 6%. Total unit revenue per ASM is expected to be up 4.75% to 5.25%. Average cost per gallon of fuel, all-in and net of hedges, is expected to be between $2.27 to $2.32. Non-fuel unit operating cost per ASM is expected to be up 4.5% to 5%. A full-text copy of management's presentation at the Sidoti & Company Emerging Growth Institutional Forum is available at no charge at http://ResearchArchives.com/t/s?5be4 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. 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. AMCORE FINANCIAL: Operating Losses Prompt Going Concern Doubt ------------------------------------------------------------- On March 22, 2010, AMCORE Financial, Inc., filed its annual report on Form 10-K for the fiscal year ended December 31, 2009. Deloitte & Touche LLP, in Milwaukee, Wisconsin, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's significant operating losses in 2008 and 2009, significant levels of criticized assets, and low levels of capital. The Company reported a net loss of $223.8 million for the year ended December 31, 2009, compared to a net loss of $97.8 million for 2008. The Company had net interest income of $75.4 million at December 31, 2009, compared to net interest income of $131.9 million at December 31, 2008. The Company's balance sheet as of December 31, 2009, showed $3.777 billion in assets, $3.741 billion of debts, and $36.0 million of stockholders' equity. The Company had net loans receivable of $2.008 billion and deposits of $3.406 billion at December 31, 2009. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5beb Rockford, Ill.-based AMCORE Financial, Inc. -- http://www.AMCORE.com/-- is a registered bank holding company incorporated under the laws of the State of Nevada in 1982. The operations are divided into three business segments: Commercial Banking, Consumer Banking, and Investment Management and Trust. MCORE directly owns AMCORE Bank, N.A., a nationally chartered bank. AMERICAN AXLE: Co-Founder Sets 10b5-1 Stock Trading Plan -------------------------------------------------------- American Axle & Manufacturing Holdings Inc. said Richard E. Dauch, co-founder, chairman and chief executive officer, has established a Rule 10b5-1 stock trading plan to sell a portion of his holdings of AXL common stock, as part of a personal financial planning strategy related to asset diversification and estate planning. The trading plan was established by Mr. Dauch in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934 and AAM's policies regarding insider transactions in AXL common stock. Under the plan, Mr. Dauch intends to sell up to 2.5 million shares of AXL common stock beginning no earlier than April 1, 2010, and continuing from time to time through March 31, 2011, subject to the market price of AXL common stock. The average selling price specified in the plan is approximately 11% higher than current trading levels. The maximum number of shares available for sale under the trading plan represents approximately 25% of Mr. Dauch's beneficial ownership of AXL common stock as of March 18, 2010. After giving full effect to the plan, Mr. Dauch's beneficial ownership would be in excess of 10% of AAM's outstanding common stock. Appropriate securities filings reporting the sales will be made with the Securities and Exchange Commission when due. Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- is a Tier I supplier to the automotive industry. American Axle manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. American Axle is the principal supplier of driveline components to General Motors for its rear-wheel drive light trucks and SUVs manufactured in North America, supplying substantially all of GM's rear axle and front four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. Sales to GM were roughly 78% of the Company's total net sales in 2009, 74% in 2008 and 78% in 2007. In addition to locations in the United States (Michigan, New York, Ohio and Indiana and Pennsylvania), the Company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, Scotand, South Korea and Thailand. The Company's balance sheet as of Dec. 31, 2009, showed $1.987 billion in assets and $2.547 billion of debts, for a $559.9 million stockholders' deficit. AMTRUST FINANCIAL: Novak Revised Bid Wins Property & Casualty Biz ----------------------------------------------------------------- AmTrust Insurance Agency, Inc., has won permission from Judge Pat Morgenstern-Clarren of the U.S. Bankruptcy Court for the Northern District of Ohio to sell its property and casualty business to Novak Insurance Agency, Inc., free and clear of liens, claims, interests, and encumbrances. Novak Insurance Agency, as stalking horse bidder, initially offered to acquire the business for $450,000. On February 12, 2010, the Court approved the portion of the Sale Motion related to sale procedures and entered the Sale Procedures Order. On February 19, 2010, the Debtors received a bid from a qualified bidder. On February 22, 2010, an auction was held at the Cleveland office of Squire, Sanders & Dempsey, L.L.P., and, in conjunction with such auction, the Buyer and the Seller have agreed to certain amendments to the Original Agreement. Novak provided the highest and best auction bid of $625,000, less a credit of $25,000 allowed for the Break-Up Fee. The Ad Hoc Committee of Noteholders in the Debtors' cases, the Internal Revenue Service, and New York Community Bank filed limited objections to the Sale. The Novak Agreement does not entail the assignment by the Seller of any lease or executory contract pursuant to Section 365 of the Bankruptcy Code, nor does it transfer any intellectual property or other assets owned by New York Community Bank. The Court's order noted that the Noteholders' Objection has been resolved by agreement. The Seller may sell the Purchased Assets free and clear of all liens against the Seller, its estate or any of the Purchased Assets. Any and all valid liens that the Noteholders' have in the Purchased Assets shall attach to the proceeds of the Sale, with the same validity and priority as they now have against the Purchased Assets. The validity and priority of the liens of the Noteholders in the Purchased Assets or in the proceeds of the Sale will remain subject to challenge. The remaining Objections were overruled in their entirety. About AmTrust Financial AmTrust Financial Corp. (PINK:AFNL) was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection on November 30, 2009 (Bankr. N.D. Ohio Case No. 09-21323). G. Christopher Meyer, Esq., and Sherri Lynn Dahl, Esq., at Squire Sanders & Dempsey L.L.P., assist the Debtors in their restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. Attorneys at Hahn Loeser & Parks LLP serve as counsel to the Official Committee of Unsecured Creditors. AmTrust Management listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. AmTrust Bank is not part of the Chapter 11 filings. On December 4, 2009, AmTrust Bank was closed by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with New York Community Bank, Westbury, New York, to assume all of the deposits of AmTrust Bank. ANDERSON HOMES: Wins Permission to Sell 4 Residential Properties ---------------------------------------------------------------- Anderson Homes, Inc., and its debtor-affiliates have won permission from the U.S. Bankruptcy Court for the Eastern District of North Carolina in Raleigh, to sell four residential properties. The Court order permitted the Debtors to pay certain closing costs, including broker's commissions, from the sale proceeds, and transfer all actual or potential liens to the proceeds of the sales. The Debtors are engaged in the development, construction and sale of residential properties in the form of single-family homes, townhomes and condominiums. The sale prices for the four properties are $126,470, $149,900, $165,200, and $261,000. In conjunction with the acquisition and development of the Sale Properties, the Debtors arranged financing with a number of lenders, each of whom hold deeds of trust to secure funds advanced to complete the improvements. With respect to the four properties, the Debtors arranged financing from Regions Bank for two properties, Wachovia and RBC for each of the two other properties. Certain other secured creditors hold deeds of trust on certain Sale Properties -- James D. Goldston and William Goldston and Stock Building Supply, Inc. The Debtors also contracted with various suppliers, contractors or other parties to supply materials or provide labor for the purpose of constructing the improvements on the Sale Properties. An official committee has been formed to represent the interests of the Lien Claimants. Wachovia has objected to the Debtors' motion on account of one property. The Court approved the Debtors' request and required the Debtors to reserve net sales proceeds relating to the lot subject to Wachovia's objection. About Anderson Homes, Inc. Headquartered in Raleigh, North Carolina, Anderson Homes, Inc., et al., are engaged in the development, construction and sale of residential properties in the form of single-family homes, townhomes and condominiums. Said properties are held for sale to the public and constitute the Debtors' inventory, which the Debtors sell in the ordinary course of business. The Debtors own, construct improvements on, and sell (i) single-family houses and townhomes in subdivisions known and referred to as Edgewater, Bridgewater, Bridgewater West, Cobblestone, Haw Village, Ridgefield, Amberlynn Valley, Cane Creek, Muirfield Village, Pine Valley, Quail Meadows, Thornton Commons Place, Willow Ridge, Creekside at Landon Farms, Keystone Crossing, Sterling Ridge, Jeffries Creek, Briar Chapel, and Villas at Forest Hills, and (ii) condominiums known as Blount Street Commons. Anderson Homes and its units filed for Chapter 11 on March 16, 2009 (Bankr. E.D. N.C. Lead Case No. 09-02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen, Esq., at Northen Blue, LLP, represent the Debtors in their restructuring effort. At the time of the filing, Anderson Homes said it had total assets of $17,190,001 and total debts of $13,742,840. ASARCO LLC: Plan Admin. Appeals Order on Plainfield Timely Filing ----------------------------------------------------------------- ASARCO LLC notified Judge Schmidt that it will take appeal to the United States District Court for the Southern District of Texas from his order granting Plainfield Special Situations Master Fund Limited's request to deem as timely filed Plainfield's motion to compel the Debtors to pay postpetition interest at state judgment interest rate for certain allowed general unsecured claims, or in the alternative, granting leave to file its Section 4.4 Motion under Rule 9006 of the Federal Rules of Bankruptcy Procedure. Motions under Section 4.4 of the Confirmed Plan seek additional postpetition interest and attorneys' fees. Mark A. Roberts, of Alvarez and Marsal North America, LLC and the Debtors' Plan Administrator, notified the Court that he will take an appeal over the same ruling. Plainfield Special Situations Master Fund Limited asked the Court to deem its request for payment of additional postpetition interests timely filed or, in the alternative, grant it leave to file its Section 4.4 Motion under Rule 9006 of the Federal Rules of Bankruptcy Procedure. Although the terms of the Court's scheduling order regarding payments of postpetition interests have been made applicable to the Plainfield's request, which is a motion under Section 4.4 of the Confirmed Plan of Reorganization, the Plan Administrator has asserted, in an e-mail correspondence, that Plainfield's request is not timely and Plainfield is required to file a motion for leave to file the request, relates Mark E. MacDonald, Esq., at MacDonald + MacDonald, P.C., in Dallas, Texas. Plainfield disagrees with that position, but in an abundance of caution, has asked the Court to Court determine, as a threshold matter, whether its request is timely. The Plan Administrator has agreed to allow certain general unsecured creditors of ASARCO until as late as January 25, 2010, to file Section 4.4 Motions, seeking payment of Postpetition Interest at a rate other than the federal judgment rate provided under the Plan, Mr. MacDonald relates. He notes that Plainfield filed its Section 4.4 Motion on January 22, 2010, but the Plan Administrator has not, however, agreed to apply the same January 25 deadline to Plainfield's request as it has for other general unsecured creditors. The Plan Administrator must apply that same deadline uniformly to all creditors within Class 3, including Plainfield, Mr. MacDonald argues. He asserts that no prejudice will result to the Plan Administrator or Reorganized ASARCO if all Section 4.4 Motions filed on or before January 22 or January 25 -- and not just those handpicked by the Plan Administrator or Reorganized ASARCO -- are deemed timely. 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) ASCENDIA BRANDS: Taps ASK Financial to Prosecute Preference Suits ----------------------------------------------------------------- Ascendia Brands, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ A.S.K. Financial LLP as special preference litigation counsel to investigate and prosecute preference actions. The Debtors relate that ASK will analyze the Debtors' records to identify potentially avoidable transfers under Section 547 of the Bankruptcy Code, to determine the gross transfers and evaluate the potential defenses that can be raised by each vendor/creditor. The Debtors tell the Court they believe there are significant gross transfers to creditors during the 90-day preference period. However, it is unknown how many of the transfers were preferential so as to warrant recovery. Joseph L. Steinfeld, Jr., co-managing principal at ASK, says based on the firm's current work flow and assuming it obtains clean and complete electronic data, the firm can complete its preference analysis within 4-6 weeks of receiving electronic data. ASK will then spend 1-2 weeks to perform corporate verifications and send out demand letters. ASK will give potential defendants 30 days to respond to the demand letters. Mr. Steinfeld anticipates that lawsuits will be filed 45-60 days after the first demand letters. ASK will charge legal fees on a contingency fee basis of: 15% of all gross collections obtained on cases settled prior to the filing of a complaint; 25% of all collections obtained on cases settled after the filing of a complaint but prior to the earlier of either the filing of the final pre-trial statement or the entry of a judgment; and 30% of all collections obtained on cases settled after the earlier of either the filing of the final pre-trial statement or the entry of judgment. ASK will advance all fees and expenses including adversary filing fees and seek reimbursement only from collections. If for some unforeseen reason, there is insufficient recovery to cover all of the out-of-pocket expenses ASK will not look to the Debtors' estate for reimbursement of any deficiency. ASK, however, will charge out-of-pocket expenses against the Debtors' portion of the gross proceeds recovered in adversary, appellate and other court filing fees; third party data retrieval costs; deposition expenses; entity name/officer verifications; skip tracing and asset investigation fees; service of process (for writs, etc.); court filing services (like Parcels); costs of a receiver that may be appointed in aid of execution of a judgment; travel expenses, photocopying, fax transmissions, postage and telephone charges; and lay witness fees and costs. About Ascendia Brands Headquartered in Hamilton, New Jersey, Ascendia Brands, Inc. -- http://www.ascendiabrands.com/-- was, prior to the sale of substantially all of its assets during bankruptcy, a manufacturer and seller of branded and private labeled health and beauty care products in North America, including Baby Magic, Binaca, Mr. Bubble, Calgon, Ogilvie, the healing garden, Lander and Lander Essentials. Remaining assets consist almost entirely of accounts receivable. The Company and six of its affiliates filed for Chapter 11 protection on August 5, 2008 (Bankr. D. Del. Lead Case No. 08-11787). Kenneth H. Eckstein, Esq., and Robert T. Schmidt, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtors in their restructuring efforts. M. Blake Cleary, Esq., Edward J. Kosmoswki, Esq., and Patrick A. Jackson, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as the Debtors' Delaware counsel. Epiq Bankruptcy Solutions LLC is the notice, claims and balloting agent to the Debtors. At July 5, 2008, Ascendia Brands, Inc., had $194,800,000 in total assets and $279,000,000 in total debts. ASCENDIA BRANDS: Wells Fargo DIP Loan to Expire at Month's End -------------------------------------------------------------- Ascendia Brands Inc.'s ability to borrow under its postpetition financing facility syndicated by Wells Fargo Foothill, Inc., expires March 31, 2010. Last month, Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware signed off an eleventh extension order extending the terms of the Final DIP Financing Order until end of March. The terms of the Eleventh Extension Order were negotiated in good faith and at arm's-length among the Debtors, Wells Fargo as DIP agent, and the DIP lenders. As reported in the Troubled Company Reporter on Sept. 11, 2008, Judge Shannon authorized the Debtors to obtain, on a final basis, up to $26,428,000 in postpetition financing, pursuant to a DIP loan agreement dated Aug. 5, 2008. A full-text copy of the Debtors' DIP loan agreement dated Aug. 5, 2008, is available for free at http://ResearchArchives.com/t/s?3083 About Ascendia Brands Headquartered in Hamilton, New Jersey, Ascendia Brands, Inc. -- http://www.ascendiabrands.com/-- was, prior to the sale of substantially all of its assets during bankruptcy, a manufacturer and seller of branded and private labeled health and beauty care products in North America, including Baby Magic, Binaca, Mr. Bubble, Calgon, Ogilvie, the healing garden, Lander and Lander Essentials. Remaining assets consist almost entirely of accounts receivable. The Company and six of its affiliates filed for Chapter 11 protection on August 5, 2008 (Bankr. D. Del. Lead Case No. 08-11787). Kenneth H. Eckstein, Esq., and Robert T. Schmidt, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtors in their restructuring efforts. M. Blake Cleary, Esq., Edward J. Kosmoswki, Esq., and Patrick A. Jackson, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as the Debtors' Delaware counsel. Epiq Bankruptcy Solutions LLC is the notice, claims and balloting agent to the Debtors. At July 5, 2008, Ascendia Brands, Inc., had $194,800,000 in total assets and $279,000,000 in total debts. BANK OF FLORIDA: Banks Get FDIC Directive for Capital Need ---------------------------------------------------------- Bank of Florida Corporation said in a regulatory filing yesterday that on March 18, 2010, each of its bank subsidiaries received Supervisory Prompt Corrective Action Directives from the Federal Deposit Insurance Corporation due to: -- Bank of Florida - Southwest's "critically undercapitalized" Status; -- Bank of Florida - Tampa Bay's "significantly undercapitalized" status; and -- Bank of Florida - Southeast's "undercapitalized" status. The Directives require that within 30 days of the effective date of the Directives -- by April 17, 2010 -- the subsidiary banks must: (1) be "adequately capitalized" under regulatory capital guidelines; and/or (2) accept an offer to be acquired by a depository institution holding company or combine with another insured depository institution. Each Directive will remain in effect until the respective subsidiary bank maintains "adequately capitalized" status for four consecutive quarters. Bank of Florida Corp. said, "If our subsidiary banks fail to meet or satisfy the requirements of the Directives, it is likely that the FDIC will take further regulatory enforcement actions against our subsidiary banks, including the imposition of consent orders or the closure of the subsidiary banks and the placement of them into receivership with the FDIC. If one of our subsidiary banks fails and is placed into receivership, it is highly likely the FDIC will exercise its "cross guarantee" rights and close the other subsidiary banks in order to reduce any cost or loss to the FDIC. While no assurance can be given that we will be successful in our efforts to recapitalize the subsidiary banks, the Company is undertaking a common stock offering and expects that the minimum offering size of approximately $45,000,000 million will return all three banks to "adequately capitalized" status. The holding company directors and executive officers have indicated an intent to invest in the offering at least $2.7 million, or approximately 5% of the minimum." The Directives also prohibit the subsidiary banks from: (1) paying interest on deposits in excess of prescribed limits; (2) accepting, renewing or rolling over any brokered deposits; (3) engaging in any new line of business; (4) making any subordinated debt payments, or any capital distributions or dividend payments to the Company or any affiliate; and (5) establishing or acquiring a new branch and also require the subsidiary banks to obtain the approval of the FDIC prior to relocating, selling or disposing of any existing branch. In addition, the Directives provide that the subsidiary banks may not pay any bonus to, or increase the compensation of, any director or officer without the prior approval of the FDIC, and that the subsidiary banks must comply with Section 23A of the Federal Reserve Act without the exemption for transactions with certain affiliated institutions. Lastly, the Directives prohibit the subsidiary banks from entering into any material transaction, including any investment, expansion, acquisition, sale of assets or other similar transaction which would have a significant financial impact on the bank without prior approval of the FDIC. The subsidiary banks are already substantially subject to each of these prohibitions. About Bank of Florida Corp. Bank of Florida Corporation was incorporated in Florida in September 1998 to serve as a holding company for Bank of Florida - Southwest. On August 24, 1999, Bank of Florida - Southwest commenced operations in Naples, Florida. On July 16, 2002, Bank of Florida - Southeast opened for business in Ft. Lauderdale, Florida and on November 5, 2004, Bank of Florida - Tampa Bay opened for business in Tampa, Florida. Bank of Florida Trust Company was approved to engage in fiduciary services and estate planning consultation on August 23, 2000. The Banks offer a complete range of interest bearing and non- interest bearing accounts. Lending products include commercial loans, real estate loans, home equity loans and consumer/installment loans. Trust Company offers non-proprietary, third-party investment consulting services and access to an extensive, nationwide network of independent money managers. BASS PRO: Moody's Assigns Corporate Family Rating at 'Ba3' ---------------------------------------------------------- Moody's Investors Service assigned a Ba3 Corporate Family Rating and a Ba3 Probability of Default Rating to Bass Pro Group, LLC. Moody's also assigned a B1 rating to the company's proposed $400 million secured Term Loan B facility. The rating outlook is stable. The ratings assigned are based on the terms and conditions as advised to Moody's and are subject to receipt of final documentation. Bass Pro's Ba3 Corporate Family Rating reflects the strength of the company's "Bass Pro Shop" brand, its good market position in the regions where it operates, and participation in the outdoor sports market which Moody's consider a relatively stable segment of the specialty retail industry. The rating reflects Bass Pro Shop' somewhat limited overall scale, with a current base of 55 stores, as well as the challenges inherent in the highly cyclical boat industry, which represents around 15% of the company's overall revenues. The rating also reflects the company's moderately high financial leverage. Although leverage is high for the Ba3 rating, it is Moody's expectation that the company will reduce leverage to more appropriate levels in the year ahead. The B1 rating assigned to the proposed secured Term Loan B facility reflects its secured position, taking into consideration that there are other debts in the capital structure (including its proposed $300 million asset based revolver -- not rated by Moody's) that will have a prior security interest in certain of the company's assets. The stable rating outlook reflects Moody's expectations that the company will continue to exhibit overall revenue and margin stability while utilizing free cash flow to reduce debt and leverage to levels more appropriate to its rating. These ratings were assigned: * Corporate Family Rating at Ba3 * Probability of Default Rating at Ba3 * $400 million senior secured Term Loan B due 2015 at B1 [LGD 5, 70%] Headquartered in Springfield, Missouri, Bass Pro Group LLC operates "Bass Pro Shops", a retailer of outdoor recreational products, through 55 stores in the US and Canada. Through "Tracker Marine" the company is a manufacturer and retailer of recreational boats and related marine products under brands including "Tracker", "Mako", "Tahoe" and "Nitro". The company also owns the Big Cedar Lodge. Total revenues exceed $2 billion. BUFFETS INC: S&P Affirms Corporate Credit Rating at 'B-' -------------------------------------------------------- Standard & Poor's Ratings Services said affirmed its 'B-' corporate credit rating on Eagan, Minnesota-based Buffets Inc. This action comes as the company is arranging a $250 million, senior secured, first-lien term loan. The proceeds will be used to refinance the company's existing first- and second-lien term loans. S&P is also assigning a '3' recovery rating to the proposed term loan and 'B-' issue level rating. The '3' recovery rating indicates S&P's expectation of meaningful (50-70%) recovery of principal in the event of default. The existing term loan has a '2' recovery rating and is currently rated 'B', one notch higher than the corporate credit rating. The lower recovery and issue level rating on the new first-lien facility reflects the larger size and the relatively smaller asset coverage in the event of default. "S&P's speculative-grade ratings on Buffets Inc. reflect its vulnerable position in the very competitive restaurant industry, highly leveraged capital structure, and limited financial flexibility," said Standard & Poor's credit analyst Charles Pinson-Rose. In the past year, weak sales have strained operating performance, but the company enhanced its credit profile through debt reduction. Through free cash flow, asset sales, and the elimination of cash-backed letters of credit, Buffets paid down over $42 million of debt in the past year. Consequently, operating lease adjusted debt to EBITDA improved to 6.8x at the end of the company's second quarter (ended Dec. 16, 2009) from 7.2x upon emergence from Chapter 11 reorganization in the spring of 2009. The refinancing will be leverage neutral, but will improve cash flow protection. Adjusted EBITDA coverage of interest will be about 1.5x after the transaction which is up from 1.0x on a last-12-month basis (including pay-in-kind interest), while unadjusted EBITDA to cash interest is about 3.0x. These ratios generally correspond to highly leveraged companies rated in the low-'B' category. COMMERCIAL VEHICLE: Prices Stock Offering at $6.25 Per Share ------------------------------------------------------------ Commercial Vehicle Group Inc. priced a public offering of 3,800,000 shares of common stock at a price of $6.25 per share to the public. The Company will grant the underwriter in the offering an option to purchase up to 570,000 additional shares of common stock at the same price per share to cover any over- allotments. The public offering of the shares was expected to close March 24. Assuming no exercise of the underwriter's over-allotment option, the Company expects to receive net proceeds from the offering of approximately $22,050,000 million after deducting underwriting discounts and commissions and estimated expenses of the offering. The Company expects to use the net proceeds from the offering for general corporate and working capital purposes, including the funding of strategic initiatives that the Company may undertake from time to time. Robert W. Baird & Co. acted as underwriter for the offering. About Commercial Vehicle Group New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq: CVGI) supplies fully integrated system solutions for the global commercial vehicle market, including the heavy-duty truck market, the construction and agricultural markets, and the specialty and military transportation markets. The products include static and suspension seat systems, electronic wire harness assemblies, controls and switches, cab structures and components, interior trim systems (including instrument panels, door panels, headliners, cabinetry and floor systems), mirrors and wiper systems specifically designed for applications in commercial vehicles. The Company has facilities located in the United States in Arizona, Indiana, Illinois, Iowa, North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington and outside of the United States in Australia, Belgium, China, Czech Republic, Mexico, Ukraine and the United Kingdom. Commercial Vehicle Group Inc.'s balance sheet for December 31, 2009, showed $250.5 million in total assets and $288.2 million in total liabilities for a $37.7 million stockholders' deficit * * * Commercial Vehicle carries a 'Caa2' Corporate Family Rating and 'Caa2/LD' Probability of Default Rating from Moody's. It has a 'CCC+' corporate credit rating from Standard & Poor's. CARTERET ARMS: Connolly Sells Five Apartment Properties ------------------------------------------------------- Mark Spivey, staff writer at myCentralNewJersey.com reports that Connolly Properties Inc. sold five apartment properties to different buyers at an auction: * Carteret Arms, a 270-unit, 15-story brick apartment building, sold to John Mavroudis for $13 million. * Grand Court Villa, a 109-year-old converted cigar factory in Trenton that has 63 apartment units, sold for $4.8 million. * Washington Crossing in Allentown, sold for $5.35 million. * Julian Court in Allentown, sold for $1.875 million. * The Livingston, a 36-unit, six-story Allentown apartment building, sold for $1.725 million. According to the report, most of the proceeds will be used to settle debt owed to New York Community Bank that holds the mortgages on all five properties. A portion of the proceeds will also be distributed to investors. The sale is subject to the U.S. Bankruptcy Court's approval. About Carteret Arms Plainfield, New Jersey-based Connolly Properties Inc. is in the real estate business, managing city apartment properties. On August 19, 2009, Connolly sent 15 apartment properties, including Carteret Arms, LLC, to Chapter 11 (Bankr. D. N.J. Case No. 09- 31726). Richard D. Trenk, Esq., at Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C., assists Carteret Arms in its restructuring efforts. DELTA AIR: Reports $1.237 Billion Net Loss for 2009 --------------------------------------------------- Delta Air Lines Inc., filed its annual report for the fiscal year ended December 31, 2009, on Form 10-K with the U.S. Securities and Exchange Commission. Delta recorded a net loss of $1.2 billion brought about by significant weakness in the airline revenue environment due to the global recession and $1.4 billion in fuel hedge losses. Delta's net loss for the year also includes a $407 million charge for merger-related items, a $321 million non-cash income tax benefit and an $83 million non-cash loss on the extinguishment of debt. Total operating revenue for the year 2009 declined $6.2 billion, or 18% on a 6% decrease in system capacity, or available seat mile, compared with 2008 on a combined basis. Passenger revenue accounted for $5.9 billion of the decrease. Passenger revenue per ASM declined 14% on a 14% decrease in passenger mile yield. The decrease in passenger mile yield reflects (ii) significantly reduced demand, particularly in international markets, (ii) a reduction in business demand, (iii) competitive pricing pressures and (iv) lower fuel surcharges due to the year-over-year decline on fuel prices. Volatile fuel prices continue to represent a significant risk to our business and the airline industry as a whole. While our fuel cost per gallon declined 35% in 2009 compared to 2008 on a combined basis, contributing to $5.4 billion in lower fuel expense excluding the mark-to-market adjustments related to fuel hedges settling in future periods, crude oil prices have risen 78% from December 31, 2008 to December 31, 2009, Richard H. Anderson, Delta's chief executive officer, said. "We have focused on maintaining a competitive cost structure through disciplined spending, productivity initiatives and accelerating Merger synergies. Our consolidated operating cost per ASM and fuel expense increased 4% on a 6% lower capacity in 2009 compared to 2008 on a combined basis. The increase primarily reflects an increase in pension expense from a decrease in value in pension trust assets due to declines in the financial markets during 2008," Mr. Anderson noted. At December 31, 2009, Delta had $4.7 billion in cash, cash equivalents and short-term investments, and $685 million in undrawn revolving credit facilities. In 2009, the Company completed $3.2 billion in financing transactions, according to Mr. Anderson. Restructuring and Merger-related Items Restructuring and merger-related items decreased $949 million, primarily due to these factors: * During 2009, Delta recorded a $288 million charge for merger-related items associated with integrating the operations of Northwest into Delta, including costs related to information technology, employee relocation and training, and re-branding of aircraft and stations. The Company expects to incur total cash costs of approximately $500 million over approximately three years to integrate the two airlines. * For 2009, Delta recorded a $119 million charge in connection with employee workforce reduction programs. * During 2008, the Company recorded $1.2 billion primarily in non-cash, merger-related charges related to the issuance or vesting of employee equity awards in connection with the Merger and $114 million in restructuring and related charges in connection with voluntary workforce reduction programs. In addition, Delta recorded charges of $25 million related to the closure of certain facilities and $14 million associated with the early termination of certain contract carrier arrangements. Restructuring and merger-related items totaled a $1.1 billion charge, primarily consisting of these: * Delta incurred $978 million in one-time primarily non-cash charges relating to the issuance or vesting of employee equity awards in connection with the Merger. * For severance and related costs, Delta incurred $114 million in restructuring and related charges in connection with two voluntary workforce reduction programs for U.S. non-pilot employees announced in March 2008 in which approximately 4,200 employees elected to participate. * Delta also had $25 million in facilities charges primarily related to accruals for future lease obligations for previously announced plans to close operations in Concourse C at the Cincinnati/Northern Kentucky International Airport. * The Company incurred $14 million in charges associated with the early termination of certain capacity purchase agreements with regional air carriers. Financial Condition and Liquidity Delta expects to meet our cash needs for 2010 from cash flows from operations, cash and cash equivalents, short-term investments and financing arrangements. The Company's cash and cash equivalents and short-term investments were $4.7 billion at December 31, 2009. Delta has $685 million of additional cash available from undrawn credit facilities. As of December 31, 2009, Delta had financing commitments from third parties, or definitive agreements to sell, all aircraft subject to purchase commitments, except for nine previously owned MD-90 aircraft. Under these financing commitments third parties have agreed to finance on a long-term basis a substantial portion of the purchase price of the covered aircraft. The global economic recession weakened demand for air travel, decreasing the Company's revenue and negatively impacting our liquidity. In an effort to lessen the impact of the global recession, Delta implemented initiatives to reduce costs, increase revenues and preserve liquidity, primarily through reducing capacity to align with demand, workforce reduction programs and the acceleration of Merger synergy benefits. "Our ability to obtain additional financing, if needed, on acceptable terms could be affected by the fact that substantially all of our assets are subject to liens," Mr. Anderson disclosed. Significant Liquidity Events Significant liquidity events during 2009 include: * In September 2009, Delta borrowed a total of $2.1 billion under three new financings, consisting of (i) $750 million of senior secured credit facilities, which include a $500 million first-lien revolving credit facility and a $250 million first-lien term loan facility; (ii) $750 million of senior secured notes; and (iii) $600 million of senior second lien notes. A portion of the net proceeds was used to repay in full the Bank Credit Facility due in 2010 with the remainder of the proceeds available for general corporate purposes. * In November 2009, Delta issued $689 million of Pass Through Certificates, Series 2009-1 through two separate trusts. Delta also used $342 million of the net proceeds of the 2009-1 EETC offering to prepay existing mortgage financings for five aircraft that were delivered and financed earlier in 2009 and for general corporate purposes. * In 2009, Delta entered into two revolving credit facilities for a total of $250 million. The Company also received the proceeds from the issuance of $150 million in unsecured tax exempt bonds. In addition, a $300 million revolving credit facility terminated on its maturity date. Legal Proceedings In May, June and July, 2009, a number of purported class action antitrust lawsuits were filed in the U.S. District Courts for the Northern District of Georgia, the Middle District of Florida, and the District of Nevada, against Delta and AirTran Airways. In these cases, the Plaintiffs originally alleged that Delta and AirTran engaged in collusive behavior in violation of Section 1 of the Sherman Act in November 2008 based upon certain public statements made in October 2008 by AirTran's CEO at an analyst conference concerning fees for the first checked bag, Delta's imposition of a fee for the first checked bag on November 4, 2008 and AirTran's imposition of a similar fee on November 12, 2008. The Plaintiffs sought to assert claims on behalf of an alleged class consisting of passengers who paid the fist bag fee after December 5, 2008, and seek injunctive relief and unspecified treble damages. All of these cases have been consolidated for pre-trial proceedings in the Northern District of Georgia by the Multi-District Litigation Panel. In February 2010, the plaintiffs in the MDL proceeding filed a Consolidated Amended Class Action Complaint which substantially expanded the scope of the original complaint, wherein the plaintiffs add new allegations concerning alleged signaling by both Delta and AirTran based upon statements made to the investment community by both carriers relating to industry capacity levels during 2008-2009. The Plaintiffs also add a new cause of action against Delta alleging attempted monopolization in violation of Section 2 of the Sherman Act, paralleling a claim previously asserted against AirTran but not Delta. On March 16, 2005, a retired Delta employee filed an amended class action complaint in the U.S. District Court for the Northern District of Georgia against Delta, and certain current and former Delta officers and directors on behalf of himself and other participants in the Delta Family-Care Savings Plan. The Amended Complaint alleges that the defendants were fiduciaries of the Savings Plan and, as such, breached their fiduciary duties under ERISA to the Plaintiff Class by (i) allowing class members to direct their contributions under the Savings Plan to a fund invested in Delta common stock; and (ii) continuing to hold Delta's contributions to the Savings Plan in Delta's common and preferred stock. The Amended Complaint seeks damages unspecified in amount, but equal to the total loss of value in the participants' accounts from September 2000 through September 2004 from the investment in Delta stock. The District Court stayed the action against Delta due to Delta's Chapter 11 proceedings and granted a motion to dismiss filed by the individual Defendants. The U.S. Bankruptcy Court for the Southern District of New York has ruled that a class claim filed against Delta in its Chapter 11 proceedings will be subordinated to any claim related to equity interests in Delta, which did not receive any distribution pursuant to the Plan of Reorganization. The Plaintiff has appealed this order. On July 31, 2009, two parallel putative class actions were filed against a number of Canadian, Asian, European, and U.S. carriers, including Delta, in the Ontario Superior Court of Justice. Both allege that the defendants colluded to fix the price of passenger surcharges, in Canada-Asia and Canada-Europe markets. There are no allegations in the complaints of any specific act by Delta in furtherance of either conspiracy. The Complaints seek damages in excess of $100 million. "We believe the claims in these cases are without merit and are vigorously defending these lawsuits," Mr. Anderson told the SEC. DELTA AIR LINES, INC. Consolidated Balance Sheet As of December 31, 2009 ASSETS Current Assets: Cash and cash equivalents $4,607,000,000 Short-term investments 71,000,000 Restricted cash and cash equivalents 423,000,000 Accounts receivable, net 1,353,000,000 Hedge margin receivable 7,000,000 Expendable parts & supplies inventories, net 327,000,000 Deferred income taxes, net 107,000,000 Prepaid expenses and other 846,000,000 ---------------- Total Current Assets 7,741,000,000 Property and Equipment, Net 20,433,000,000 Other Assets Goodwill 9,787,000,000 Identifiable intangibles, net 4,829,000,000 Other noncurrent assets 749,000,000 ---------------- Total Other Assets 15,365,000,000 ---------------- Total Assets $43,539,000,000 ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt $1,533,000,000 Air traffic liability 3,074,000,000 Accounts payable 1,249,000,000 Frequent flyer deferred revenue 1,614,000,000 Accrued salaries and related benefits 1,037,000,000 Hedge Derivatives liability 139,000,000 Taxes payable 525,000,000 Other accrued liabilities 626,000,000 ---------------- Total Current Liabilities 9,797,000,000 Noncurrent Liabilities: Long-term debt and capital leases 15,665,000,000 Pension, postretirement & related benefits 11,745,000,000 Frequent flyer deferred revenue 3,198,000,000 Deferred income taxes, net 1,667,000,000 Other noncurrent liabilities 1,222,000,000 ---------------- Total noncurrent liabilities 33,497,000,000 Commitments and Contingencies Stockholders' Equity: Common stock: Common stock at $0.00001 par value, 1,500,000,000 shares authorized, 794,873,058 shares issued at Dec. 31, 2009 - Additional paid-in capital 13,827,000,000 Accumulated deficit (9,845,000,000) Accumulated other comprehensive loss (3,563,000,000) Treasury stock, at cost, 10,918,274 shares at Dec. 31, 2009 (174,000,000) ---------------- Total Stockholders' Equity 245,000,000 ---------------- Total Liabilities and Stockholders' Equity $43,539,000,000 ================ DELTA AIR LINES, INC. Consolidated Statements of Operations Year Ended December 31, 2009 Operating Revenue: Passenger Mainline $18,522,000,000 Regional Carriers 5,285,000,000 --------------- Total Passenger Revenue 23,807,000,000 Cargo 788,000,000 Other, net 3,468,000,000 --------------- Total Operating Revenue 28,063,000,000 Operating expenses: Aircraft fuel and related taxes 7,384,000,000 Salaries and related costs 6,838,000,000 Contract carrier arrangements 3,823,000,000 Contracted services 1,595,000,000 Depreciation and amortization 1,536,000,000 Aircraft maintenance materials and outside repairs 1,434,000,000 Passenger commissions and other selling expenses 1,405,000,000 Landing fees and other rents 1,289,000,000 Passenger service 638,000,000 Aircraft rent 480,000,000 Impairment of goodwill and other tangible assets - Restructuring and merger-related items 407,000,000 Other 1,558,000,000 --------------- Total operating expense 28,387,000,000 --------------- Operating loss (324,000,000) Other (expense) income: Interest expense (1,278,000,000) Interest expense 27,000,000 Loss on extinguishment of debt (83,000,000) Miscellaneous, net 77,000,000 --------------- Total other expense, net (1,257,000,000) --------------- Loss before income taxes (1,581,000,000) Income tax benefit 344,000,000 --------------- Net Loss ($1,237,000,000) =============== DELTA AIR LINES, INC. Unaudited Consolidated Statement of Cash Flow Year Ended December 31, 2009 Cash Flows from Operating Activities: Net loss ($1,237,000,000) Adjustments to reconcile net (loss) to net cash (used in) provided by operating activities: Depreciation and amortization 1,536,000,000 Amortization of debt discount (premium), net 370,000,000 Loss on extinguishment of debt 83,000,000 Fuel hedge derivative instruments (148,000,000) Deferred income taxes (329,000,000) Pension, postretirement and postemployment expense (less than) in excess of payments 307,000,000 Equity-based compensation expense 108,000,000 Impairment of goodwill and tangible assets - Restructuring & merger-related items - Reorganization items, net - Changes in certain current assets & liabilities: Decrease in short-term investments - Decrease (increase) in receivables 147,000,000 Decrease (increase) in hedge margin receivables 1,132,000,000 Decrease (increase) in restricted cash & cash equivalents 79,000,000 (Increase) decrease in prepaid expenses and other current assets (61,000,000) (Decrease) increase in air traffic liability (286,000,000) (Decrease) increase in frequent flyer deferred revenue (298,000,000) Increase (decrease) in accounts payable 143,000,000 Other, net (167,000,000) ---------------- Net cash (used in) provided by operating activities 1,379,000,000 Cash Flows from Investing Activities: Property and equipment additions: Flight equipment, including advance payments (951,000,000) Ground property & equipment, including technology (251,000,000) (Increase) Decrease in restricted cash & cash equivalents (59,000,000) Decrease (Increase) in short-term investments 142,000,000 Increase in cash in connection with the Merger - Proceeds from sales of flight equipment 100,000,000 Proceeds from sales of investments 15,000,000 Other, net (4,000,000) ---------------- Net cash provided by (used in) investing activities (1,008,000,000) Cash Flows from Financing Activities: Payments on long-term debt and capital lease obligations (2,891,000,000) Proceeds from long-term obligations 2,966,000,000 Proceeds from American Express Agreement - Payment of short-term obligations, net - Proceeds from the sale of treasury stock, net - Other, net (94,000,000) ---------------- Net cash provided by (used in) financing activities (19,000,000) Net increase in cash & cash equivalents 352,000,000 Cash & cash equivalents at beginning of period 4,255,000,000 ---------------- Cash & cash equivalents at end of period $4,607,000,000 ================ About Delta Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- serves more than 160 million customers each year. Delta and the Delta Connection carriers offer service to 367 destinations in 66 countries on six continents. Delta employs more than 70,000 employees worldwide and operates a mainline fleet of nearly 800 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's trans-Atlantic joint venture with Air France KLM. Including its worldwide alliance partners, Delta offers customers more than 16,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta became the world's largest airline following merger with Northwest Airlines in 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. At December 31, 2009, Delta had total assets of $43,539,000,000 against total current liabilities of $9,797,000,000 and total noncurrent liabilities of $33,497,000,000, resulting in stockholders' equity of $245,000,000. At end-2008, Delta had stockholders' equity of $874,000,000. The December 31, 2009 balance sheet showed strained liquidity: Delta had total current assets of $7,741,000,000 against total current liabilities of $9,797,000,000. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. DELTA AIR: Wants Claims Objection Deadline Moved to Dec. 31 ----------------------------------------------------------- Delta Air Lines, Inc. and its debtor-affiliates ask Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York to extend the deadline within which they may challenge the validity of proofs of claim filed in their Chapter 11 cases through and including December 31, 2010. The Debtors are currently entitled to object to claims until April 19, 2010. According to Timothy E. Graulich, Esq., at Davis Polk & Wardwell, in New York, the Debtors have made exceptional progress in resolving disputed claims through settlements and objections. Specifically, he notes, since the effective date of their Plan of Reorganization in April 2007, the Debtors have made distributions on account of more than 43,000 allowed administrative, priority, secured and unsecured claims with a face value of almost $14.1 billion. In addition, the Debtors have made enormous progress in disputing and resolving claims, making distributions on account of resolved claims and undertaking the necessary tasks related to the distributions. Specifically, the Debtors have: * made nine distributions totaling approximately 346.8 million shares of New Delta Common Stock and approximately $8.9 million in cash on account of approximately 36,800 allowed unsecured claims in a face amount of approximately $14 billion; * filed 29 prior omnibus objections covering more than 6,800 proofs of claim; * resolved more than 6,800 disputed proofs of claim through objections, withdrawals and other resolutions at an initial value of approximately $77.5 billion; * filed 12 additional omnibus objections with respect to at least 240 proofs of claim arising from aircraft-related transactions; * analyzed and categorized variations in contract language from the operative documents of more than 200 separate aircraft leveraged lease transactions with respect to which tax indemnity or TIA claims and stipulated loss value or SLV claims have been filed; * filed five separate "test case" objections to TIA and SLV claims to determine Delta's obligations; * filed more than 40 other objections covering more than 250 TIA and SLV claims; * resolved approximately 1,270 aircraft-related claims, including various SLV and TIA-related claims; * finalized, calculated, withheld tax on account of and made distributions of cash and New Delta Common Stock on account of all individual Delta retiree claims entitled to general unsecured claims in the Chapter 11 cases; * engaged in settlements with The Bank of New York Mellon and the Hillsborough County Aviation Authority regarding their claims relating to bonds; and * reached a settlement agreement with BNY Mellon and the Regional Airports Improvement Corporation with respect to fees owed by Delta. Mr. Graulich notes that although very substantial progress has been made to date, the Debtors still need to attend to: * approximately 78 aircraft related claims that remain unresolved, representing a total of approximately $718.4 million in current value of claims, and approximately 78 non-aircraft claims that remain unresolved, representing approximately $213.1 million in total amounts claimed; * a number of TIA claims that have been appealed, and SLV claims that have not been finally resolved because open issues still exist; * objections to TIA claims and SLV claims that the Debtors could pursue or may not need to pursue at all in light of the TIA/SLV rulings; and * the resolution of various litigation and employee benefit claims through negotiated settlements. Attending to the outstanding issues has taken a very significant amount of time and attention for these to be done accurately and correctly, Mr. Graulich explains. Hence, until the Present Claims Objection Deadline is extended, the Debtors will be forced to file all of the possible objections to pursue as to each and every one of the remaining claims, he adds. Moreover, certain of the outstanding issues have proven incredibly complex, have involved dozens of opposing parties, and are not yet complete. The Claims Objection Extension request, therefore, is necessary to the efficient and equitable administration of the Chapter 11 cases, Mr. Graulich tells Judge Morris. Mr. Graulich assures the Court that the requested Extension will not materially prejudice claimants. About Delta Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- serves more than 160 million customers each year. Delta and the Delta Connection carriers offer service to 367 destinations in 66 countries on six continents. Delta employs more than 70,000 employees worldwide and operates a mainline fleet of nearly 800 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's trans-Atlantic joint venture with Air France KLM. Including its worldwide alliance partners, Delta offers customers more than 16,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta became the world's largest airline following merger with Northwest Airlines in 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. At December 31, 2009, Delta had total assets of $43,539,000,000 against total current liabilities of $9,797,000,000 and total noncurrent liabilities of $33,497,000,000, resulting in stockholders' equity of $245,000,000. At end-2008, Delta had stockholders' equity of $874,000,000. The December 31, 2009 balance sheet showed strained liquidity: Delta had total current assets of $7,741,000,000 against total current liabilities of $9,797,000,000. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. DELTA AIR: Proposes BNY Mellon and RAIC Settlement -------------------------------------------------- Prior to the Petition Date, Delta, as successor to and assignee of Western Airlines; The Bank of New York Mellon Trust Company, N.A.; the City of Los Angeles; and the Regional Airports Improvement Corporation were parties to these transaction documents: (a) Lease Between the City and Western Covering Terminal Facilities at Los Angeles International Airport dated November 7, 1985; (b) Partial Assignment of Terminal Facilities Lease dated as of November 1, 1985, by and between RAIC and Western; (c) Facilities Sublease also dated as of November 1, 1985, Between RAIC as lessor and Western as lessee or the "Facilities Sublease;" (d) Indenture dated as of November 1, 1985, between RAIC, as issuer, and Security Pacific National Bank as trustee, as supplemented by the Second Supplemental Trust Indenture dated as of May 1, 1996; (e) Guaranty Agreement dated as of May 1, 1996, between Delta and Harris Trust Company as successor trustee to SPNB under the Indenture; and (f) Contingent Lease Agreement dated as of November 1, 1985, between the City and RAIC. Pursuant to the Facilities Sublease between Delta and RAIC, Delta was entitled to occupy terminal space at Los Angeles International Airport in exchange for making facility rent payments equal to $88,000,000 in certain 1996 Special Facility Revenue Bonds issued by RAIC in 1996. The Bonds were issued pursuant to the Indenture between RAIC and BNY Mellon, which specified that the Bonds would be paid with Delta's Facility Rent payments under the Facilities Sublease. In October, 2005, the Debtors commenced an adversary proceeding against BNY Mellon, RAIC and the City, seeking to recharacterize the Transaction Documents as a financing arrangement and Delta's Facility Rent payments as debt payments rather than lease payments. The Debtors dismissed the Adversary Proceeding in February 2007, without prejudice. In connection with the confirmation of its Chapter 11 Plan of Reorganization, Delta assumed the Facilities Sublease and the other Transaction Documents governing its occupancy of terminal facilities at LAX. In August 2006, BNY Mellon filed Claim No. 5251 in connection with the Indenture. RAIC also filed Claim No. 4880 asserting claims based on the Facilities Sublease and the Indenture. Pursuant to negotiations, the Debtors remitted to RAIC $382,253 in satisfaction of the RAIC Claim. Delta also agreed to pay $160,189 of BNY Mellon's outstanding fees as a compromise, and BNY Mellon agreed that it would withdraw its Claim and consent to the withdrawal of the RAIC Claim. In this light, the Debtors sought and obtained the Court's authority to enter into a settlement agreement with BNY Mellon and RAIC, which provides for (1) Delta's remittance to BNY Mellon of $160,189, and (2) BNY Mellon's and RAIC's withdrawal of their Claims. Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Settlement Agreement provides that BNY Mellon fully discharges the Debtors from causes of action relating to the Chapter 11 Proceeding or the BNY Mellon Claim. RAIC also discharges the Debtors from all obligations relating to (i) the RAIC Claim, or (ii) the Bonds and the Transaction Documents. The Debtors noted that they received no objections to their Settlement. About Delta Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- serves more than 160 million customers each year. Delta and the Delta Connection carriers offer service to 367 destinations in 66 countries on six continents. Delta employs more than 70,000 employees worldwide and operates a mainline fleet of nearly 800 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's trans-Atlantic joint venture with Air France KLM. Including its worldwide alliance partners, Delta offers customers more than 16,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta became the world's largest airline following merger with Northwest Airlines in 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. At December 31, 2009, Delta had total assets of $43,539,000,000 against total current liabilities of $9,797,000,000 and total noncurrent liabilities of $33,497,000,000, resulting in stockholders' equity of $245,000,000. At end-2008, Delta had stockholders' equity of $874,000,000. The December 31, 2009 balance sheet showed strained liquidity: Delta had total current assets of $7,741,000,000 against total current liabilities of $9,797,000,000. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. DELTA AIR: M. Burns Appeals Order Expunging Claims -------------------------------------------------- M. Michele Burns took an appeal to U.S. District Court for the District of Delaware from the order issued by Judge Cecelia Morris of the United States Bankruptcy Court for the Southern District of New York (i) expunging, with prejudice, Ms. Burns' Claim Nos. 6906, 6907, 6908, 6909, 6910, 6912, 6913, 6914, 6915, 6916, 6917, 6918, 6919, 6920, 6921, 6922, 6923, 6924, 6925 and 8478, and (ii) capping the Claims to zero value pursuant to Section 502(b)(4) of the Bankruptcy Code. Ms. Burns wants the District Court to determine whether the Bankruptcy Court erred: (a) in ruling that her Claims were not entitled to administrative expense priority pursuant to Section 503 of the Bankruptcy Code; (b) in ruling that her Claims are for the services of an insider and therefore capped pursuant to Section 502(b)(4) of the Bankruptcy Code; (c) in ruling that the reasonable value of Ms. Burns' services was nominal and therefore, the Claims are capped at zero pursuant to Sections 502(b)(4) and 502(b)(7) of the Bankruptcy Code; and (d) by failing to order an evidentiary hearing to determine the reasonable value of Ms. Burns' services. Pursuant to Rule 8006 of the Federal Rule of Bankruptcy Procedure, the Debtors filed counter-designation of documents to be included in the record on Ms. Burns' Appeal. About Delta Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- serves more than 160 million customers each year. Delta and the Delta Connection carriers offer service to 367 destinations in 66 countries on six continents. Delta employs more than 70,000 employees worldwide and operates a mainline fleet of nearly 800 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's trans-Atlantic joint venture with Air France KLM. Including its worldwide alliance partners, Delta offers customers more than 16,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta became the world's largest airline following merger with Northwest Airlines in 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. At December 31, 2009, Delta had total assets of $43,539,000,000 against total current liabilities of $9,797,000,000 and total noncurrent liabilities of $33,497,000,000, resulting in stockholders' equity of $245,000,000. At end-2008, Delta had stockholders' equity of $874,000,000. The December 31, 2009 balance sheet showed strained liquidity: Delta had total current assets of $7,741,000,000 against total current liabilities of $9,797,000,000. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. DELTA FINANCIAL: Workers Seek OK on FLSA Deal --------------------------------------------- More than 400 former loan officers have asked a judge to grant final approval of their settlement of class action overtime claims with Delta Financial Corp., Bankruptcy Law360 reports. Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The Company filed a chapter 11 petition on December 17, 2007 (Bankr. D. Del. Lead Case No. 07-11880). On the same day, three affiliates filed separate chapter 11 petitions -- Delta Funding Corp., Renaissance Mortgage Acceptance Corp., and Renaissance R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to 07-11883). The Debtors selected Morrison & Foerster LLP as their general bankruptcy counsel and David B. Stratton, Esq. and James C. Carignan, Esq. at Pepper Hamilton LLP as their counsel. The Debtors hired AlixPartners LLP as their claims agent. The Official Committee of Unsecured Creditors retained Landis Rath & Cobb LLP as its Delaware counsel. The Debtors' amended consolidated quarterly financial condition as of Sept. 30, 2007, showed $7,223,528,000 in total assets and $7,108,232,000 in total liabilities. The Debtors' petition listed D.B. Structured Products Inc. as their largest unsecured creditor holding a $19,500,000 claim. DORAL ENERGY: Posts $1.1 Million Net Loss in Q2 Ended Jan. 31 ------------------------------------------------------------- Doral Energy Corp. filed its quarterly report on Form 10-Q, showing a net loss of $1,117,730 on $493,703 of revenue for the three months ended January 31, 2010, compared to a net loss of $239,823 on $338,948 of revenue for the same period ended January 31, 2009. The Company's balance sheet as of January 31, 2010, showed $20,726,351 in total assets, $10,009,187 of debt, and stockholders' equity of $10,717,164. "As of January 31, 2010, we had negative working capital. This factor raises substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?5be8 Doral Energy Corp. (OTC BB: DRLY) -- http://www.DoralEnergy.com/- - is an oil and gas exploitation and production company headquartered in Midland, Texas. Doral Energy Corp.'s strategy is to grow a portfolio of under-developed production and exploitation assets with the potential for generating near-term increases in existing production through operational improvements, and longer- term development of proved undeveloped reserves by infill drilling. Doral's first producing assets, the Hanson Properties in Eddy County, New Mexico, are located in the northwestern Permian Basin of New Mexico. E*TRADE FINANCIAL: S&P Raises Counterparty Credit Rating to 'CCC+' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it has raised its long-term counterparty credit rating on E*TRADE Financial Corp., to 'CCC+' from 'CCC'. At the same time, S&P raised its long-term counterparty credit rating on its subsidiary, E*TRADE Bank, to 'B' from 'B-'. The outlook on both is stable "The ratings upgrade reflects E*TRADE's improved financial condition and holding company cash flows, as well as the prospect for lower operating losses in 2010. Its 2009 debt exchange improved the holding company's cash flow by lowering interest costs by $200 million annually and essentially eliminating debt maturities until 2013, when $415 million of notes are due. The holding company now has enough liquid cash on its balance sheet to cover the next two years' debt service," said Standard & Poor's credit analyst Charles Rauch. Additionally, E*TRADE Bank has begun applying to the U.S. Office of Thrift Supervision for permission to pass dividends received from E*TRADE Securities LLC to the holding company on a quarterly basis. The OTS approved a $28 million dividend in December 2009 equal to the net earnings of E*TRADE Securities LLC for third quarter 2009. Nonetheless, the holding company still carries $2.6 billion of long-term debt -- an amount S&P considers quite large in relation to the current cash flow generating ability of its operating subsidiaries. Further, the ratings upgrade factors in the improved capital positions at the bank and the consolidated entity following three common stock offerings in 2009 that netted $733 million in proceeds and the conversion of $721 million in debt into equity in 2009. S&P believes this improved capital position is vital to E*TRADE so it can absorb more net losses this year. The stable outlook on E*TRADE reflects S&P's expectation that its profitability will remain under pressure and asset quality weak through 2010. If E*TRADE makes significant progress reducing the risk exposures within its residential real estate portfolios in 2010 so that it is positioned to return to profitability in 2011 and keeps the bank subsidiary's regulatory capital ratios in excess of the "well capitalized" level, S&P could upgrade the rating. On the other hand, S&P could downgrade the company if net losses show no sign of abating and the holding company needs to once more downstream capital to the bank subsidiary. EASTMAN KODAK: Franklin Mutual Holds 3.7% of Common Stock --------------------------------------------------------- Franklin Mutual Advisers, LLC, disclosed that as of March 3, 2010, it may be deemed to beneficially own 10,031,360 shares or roughly 3.7% of the common stock of Eastman Kodak Company. Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. As of December 31, 2009, the Company had total assets of $7.691 billion against total liabilities of $7.724 billion, resulting in shareholders' deficit of $35 million. On February 19, 2010, Moody's revised its rating outlook on the Company from negative to stable, and affirmed its B3 corporate rating and Caa1 senior unsecured rating. On February 11, 2010, S&P revised its B- rating outlook on the Company to stable from negative. All ratings on the Company, including the B- Corporate Rating, were affirmed. EINSTEIN NOAH: Extends Preferred Stock Redemption Date Until 2011 ----------------------------------------------------------------- Einstein Noah Restaurant Group Inc. has extended the redemption date for its Series Z Preferred stock held by Halpern Denny III, L.P. and has committed to redeem all remaining outstanding shares, inclusive of the accrued additional redemption price, on or before June 30, 2011. The previous redemption date was June 30, 2010. As of December 29, 2009, there was $32.2 million of Series Z Preferred stock outstanding and $1.3 million of accrued additional redemption price. Under the terms of the agreement, the company will redeem at least $5.0 million of the Series Z Preferred stock on or before March 31, 2010. The company will be allowed to make further redemptions of any amount and at any time until June 30, 2011, based upon the generation of free cash flow as well as the unrestricted cash balance available at that time. However, the company currently anticipates redeeming $12 million to $16 million of the Series Z Preferred stock on or before March 31, 2010, which will be comprised of an $11 million draw on the Company's senior secured credit facility as well as free cash flow beyond normal operating needs. The company also expects $12 million to $15 million of the Series Z Preferred stock to be outstanding on June 30, 2010. In addition, Halpern Denny was granted an option to exchange 50% of the Series Z Preferred shares, inclusive of the accrued additional redemption price of those shares that are outstanding on June 30, 2010, into shares of freely trading common stock at a price of $11.50 per share. Halpern Denny may exercise this option at any time after June 30, 2010, by giving notice to the company, and if it exercises this option, all additional redemption amounts that accrue after June 30, 2010, will be waived with respect to the shares of Series Z Preferred exchanged. The company said it must first redeem the shares of the Series Z Preferred stock that are not subject to the exchange option. Then, to the extent that Halpern Denny has not exercised its exchange option, the company may redeem the shares that are subject to the exchange option, which could serve to decrease the number of Series Z Preferred shares that are subject to the exchange option. A full-text copy of the letter agreement is available for free at http://ResearchArchives.com/t/s?5bbe About Einstein Noah Restaurant Group Based in Lakewood, Colorado, Einstein Noah Restaurant Group Inc. (Nasdaq: BAGL) -- http://www.einsteinnoah.com/-- operates a a retail chain of quick casual restaurants in the United States, specializing in foods for breakfast and lunch. The Company operates locations primarily under the Einstein Bros.(R) Bagels and Noah's New York Bagels(R) brands and primarily franchises locations under the Manhattan Bage(R) brand. The Company's retail system consists of more than 600 restaurants, including more than 100 license locations, in 35 states plus the District of Columbia. As of September 29, 2009, Einstein Noah had total assets of $213,792,000 against $155,494,000 in total liabilities. The September 29 balance sheet showed strained liquidity: the Company had $36,262,000 in total current assets against $69,956,000 in total current liabilities. EINSTEIN NOAH: CFO Richard Dutkiewicz Resigns Effective April 9 --------------------------------------------------------------- Einstein Noah Restaurant Group Inc said Richard P. Dutkiewicz, its chief financial officer, is resigning from his employment and all positions that he holds with the Company effective April 9, 2010. About Einstein Noah Restaurant Group Based in Lakewood, Colorado, Einstein Noah Restaurant Group Inc. (Nasdaq: BAGL) -- http://www.einsteinnoah.com/-- operates a a retail chain of quick casual restaurants in the United States, specializing in foods for breakfast and lunch. The Company operates locations primarily under the Einstein Bros.(R) Bagels and Noah's New York Bagels(R) brands and primarily franchises locations under the Manhattan Bage(R) brand. The Company's retail system consists of more than 600 restaurants, including more than 100 license locations, in 35 states plus the District of Columbia. As of September 29, 2009, Einstein Noah had total assets of $213,792,000 against $155,494,000 in total liabilities. The September 29 balance sheet showed strained liquidity: the Company had $36,262,000 in total current assets against $69,956,000 in total current liabilities. EUOKO GROUP: Posts $349,346 Net Loss in Q2 Ended January 31 ----------------------------------------------------------- Euoko Group, Inc., filed its quarterly on Form 10-Q, showing a net loss of $349,346 on $545,727 of revenue for the three months ended January 31, 2010, compared with a net loss of $516,959 on $290,009 of revenue for the same period of the prior year. The Company's balance sheet as of January 31, 2010, showed $1,241,237 in assets and $7,999,645 of debts, for a stockholders' deficit of $6,758,408. "The Company had a net loss of $945,269 for the six months ended January 31, 2010, and as of January 31, 2010, the Company had a stockholders' deficiency of $6,758,408. These matters raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the quarterly report is available for free at http://researcharchives.com/t/s?5bbf Toronto, Ontario-based Euoko Group, Inc. is engaged in the business of the development, marketing and distribution of skin treatments. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "EUOK". EXTENDED STAY: Creditors Blocking Sternlicht Bid ------------------------------------------------ The New York Post, citing an unidentified person close to the situation, reported that Barry Sternlicht's $3.9 billion offer to take Extended Stay Hotels out of bankruptcy may be blocked by creditors. According to the report, Mr. Sternlicht's offer to replace $4.1 billion in commercial mortgage-back securities used to carry out a leveraged buyout in 2007 with a $2.8 billion mortgage has been contested by holders of the securities, which include Bank of America, Citigroup, UBS AG and Cerberus Capital Management. The New York Post relates that some senior creditors fume that Mr. Sternlicht's proposal doesn't offer them an attractive enough interest rate relative to what junior creditors are getting. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FEDERAL-MOGUL: Elects Daniel Ninivaggi to Board of Directors ------------------------------------------------------------ Robert L. Katz, Senior Vice President, General Counsel and Secretary at Federal-Mogul Corporation, reports that following the increase of the size of the Company's Board of Directors to 10, Daniel A. Ninivaggi was elected by the Board to serve as a non- independent director effective March 18, 2010. Mr. Ninivaggi will hold office until the next annual election or until his successor is duly elected and will qualify, or until his earlier resignation or removal. Mr. Ninivaggi, 45, will, effective April 1, 2010, serve as the President of Icahn Enterprises L.P., which is the owner of approximately 76% of the Company's outstanding shares of common stock and an affiliate of Mr. Carl C. Icahn, the Chairman of the Company's Board of Directors. Mr. Ninivaggi has served as Of Counsel to the law firm of Winston & Strawn LLP since July 2009 and as a partner from 1998 to 2003. From 2003 until July 2009, Mr. Ninivaggi served in a variety of executive positions at Lear Corporation, a global automotive supplier, including as General Counsel from 2003 through 2007, as Senior Vice President from 2004 until 2006, and most recently as Executive Vice President and Chief Administrative Officer from 2006. Mr. Ninivaggi is a director of CIT Group Inc., a bank holding company. About Federal-Mogul Federal-Mogul Corporation -- http://www.federalmogul.com/-- is a global supplier of powertrain and safety technologies, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. The company's leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Federal-Mogul is focused on its sustainable global profitable growth strategy, creating value and satisfaction for its customers, shareholders and employees. Federal-Mogul was founded in Detroit in 1899. The company is headquartered in Southfield, Michigan, and employs nearly 39,000 people in 36 countries. The Company filed for Chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represented the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represented the Official Committee of Unsecured Creditors. The Debtors' Fourth Amended Plan was confirmed by the Bankruptcy Court on November 8, 2007, and affirmed by the District Court on November 14, 2007. Federal-Mogul emerged from Chapter 11 on December 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 5, 2009, Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the ratings on the company's senior secured debt; the recovery ratings are unchanged. The outlook is negative. "The ratings reflect Federal-Mogul's weak business risk profile as a major participant in the highly competitive global auto industry, and its aggressive financial risk profile," S&P said. FEDERAL-MOGUL: Restates Agreements with CEO Alapont --------------------------------------------------- Robert L. Katz, Senior Vice President, General Counsel and Secretary at Federal-Mogul Corporation, reports that on March 18, 2010, the Company entered into three agreements with its President and CEO, Jose Maria Alapont pursuant to which Mr. Alapont agreed to remain as President and CEO of the Company through March 23, 2013. The agreements are effective as of March 23, 2010, and amend and restate certain existing agreements between Mr. Alapont and the Company. Mr. Alapont will also continue as a member of the Company's Board of Directors. Mr. Alapont and the Company entered into the Second Amended and Restated Employment Agreement dated as of March 23, 2010, which amends and restates the Amended and Restated Employment Agreement dated as of December 31, 2008. Under the SAREA, Mr. Alapont has agreed to serve as President and CEO of the Company for a three- year period ending March 23, 2013, at a salary of $1.5 million per annum and with an annual cash bonus not to exceed $1.5 million per annum. The SAREA provides for payments under certain benefit plans and fringe benefits to Mr. Alapont in any calendar year in an aggregate dollar amount not greater than 125% of the aggregate 2009 dollar amount of payments under such benefit plans and fringe benefits. As of March 23, 2010, Mr. Alapont has fully qualified for 20 years of service credit under the KEY Executive Pension Plan, and accordingly no further years of service credit may be earned under the Key Plan and he may retire from the Company and receive benefits under this plan at any time. Pursuant to the SAREA, the Company and Mr. Alapont agreed that for purposes of determining "Final Average Compensation" the period for determining the three consecutive years in which Mr. Alapont earned the highest compensation will be the five year period ending March 23, 2010. In connection with the SAREA, the Company and Mr. Alapont agreed to restate the Stock Option Agreement dated February 15, 2008, between the Company and Mr. Alapont in respect of options to purchase four million shares of Common Stock of the Company under the Stock Option Agreement and did so by entering into a Restated Stock Option Agreement dated as of March 23, 2010. The Option has fully vested as of March 23, 2010 and is fully exercisable in accordance with the terms of the Restated Option Agreement as of such date. The Stock Option Agreement provided that in no event would the Option be exercised after December 27, 2014. Under the Restated Stock Option Agreement if, on any date prior to December 27, 2014, Mr. Alapont is no longer employed by the Company for any reason whatsoever, then the Option shall be exercisable by Mr. Alapont until and including the earlier of (i) the date which is the 90th day after the Relevant Date, and (ii) December 27, 2014. The Company has agreed in the Restated Option Agreement to register under the Securities Act of 1933, as amended, the shares of Common Stock subject to the Option as promptly as practicable following March 23, 2010, but not later than 30 days following the date of the Company's 2010 annual meeting of stockholders, by filing a Form S-8 registration statement in respect such shares of Common Stock. The Restated Option Agreement also provides that the Company, acting through the Compensation Committee of the Board of Directors, has the right in connection with any exercise of the Option, to cash out all or part of the portion of the shares of Common Stock for which the Option is being exercised by paying Mr. Alapont an amount in cash equal to the excess of the fair market value of the Common Stock, determined as of the date of exercise of the Option, over the option exercise price times the number of shares of Common Stock for which the Option is being exercised on such exercise date. If the Committee does not exercise in whole the Cash Out Right within one business day of receipt of notice of exercise of the Option, then the Option will have been exercised in the amount and manner specified in such notice. The Company and Mr. Alapont also amended and restated the Amended and Restated Deferred Compensation dated as of December 31, 2008 to reflect the Extended Term of Mr. Alapont's employment by entering into the Second Amended and Restated Deferred Compensation Agreement dated as of March 23, 2010. About Federal-Mogul Federal-Mogul Corporation -- http://www.federalmogul.com/-- is a global supplier of powertrain and safety technologies, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. The company's leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Federal-Mogul is focused on its sustainable global profitable growth strategy, creating value and satisfaction for its customers, shareholders and employees. Federal-Mogul was founded in Detroit in 1899. The company is headquartered in Southfield, Michigan, and employs nearly 39,000 people in 36 countries. The Company filed for Chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represented the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represented the Official Committee of Unsecured Creditors. The Debtors' Fourth Amended Plan was confirmed by the Bankruptcy Court on November 8, 2007, and affirmed by the District Court on November 14, 2007. Federal-Mogul emerged from Chapter 11 on December 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 5, 2009, Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the ratings on the company's senior secured debt; the recovery ratings are unchanged. The outlook is negative. "The ratings reflect Federal-Mogul's weak business risk profile as a major participant in the highly competitive global auto industry, and its aggressive financial risk profile," S&P said. FIRST HORIZON: Banks Receive "Wells" Notices from SEC ----------------------------------------------------- First Horizon National Corporation said that on March 18, 2010, two subsidiaries, FTN Financial Securities Corp. and First Tennessee Bank National Association, along with an executive officer, Frank J. Gusmus, Jr., received written "Wells" notices from the Staff of the United States Securities and Exchange Commission stating that the Staff intends to recommend that the SEC bring enforcement actions for allegedly aiding and abetting a former FTNFS customer, Sentinel Management Group, Inc., in violations of the federal securities laws. The subject of the Wells notices is a 2006 year-end securities repurchase transaction entered into by FTNFS with Sentinel, as discussed in Note 18 of FHN's Annual Report to shareholders for the year 2009. A Wells notice by the SEC Staff is neither a formal allegation of wrongdoing nor a determination by the SEC that there has been wrongdoing. A Wells notice generally provides the recipient with an opportunity to provide his, her, or its perspective to address the Staff's concerns prior to enforcement action being taken by the SEC. FHN believes that its subsidiaries and Mr. Gusmus complied with all applicable laws and regulations regarding the transaction. FHN and Mr. Gusmus intend to work within the Wells process to try to avoid the commencement of enforcement actions. If such actions are brought nonetheless, FHN believes they have meritorious defenses and they intend to advance those defenses vigorously. About First Horizon First Horizon National Corporation is a bank holding company. The Corporation, through its principal subsidiary, First Tennessee Bank National Association and its other banking-related subsidiaries provide diversified financial services through five business segments: Regional Banking, Capital Markets, National Specialty Lending, Mortgage Banking and Corporate. At December 31, 2009, the Corporation's subsidiaries had over 200 business locations in 16 states of the United States, Hong Kong, and Tokyo, excluding off-premises automated teller machines (ATMs). At December 31, 2009, the Bank had 183 financial center bank branch locations in three states: 173 branches in 17 Tennessee counties, including the metropolitan areas of the state, two branches in Georgia; and eight branches in Mississippi. At December 31, 2009, the Bank had $25.8 billion in total assets, $15.0 billion in total deposits, and $17.2 billion in total net loans. FLEETWOOD ENTERPRISES: Trustee OKs Snipped $7.5M Gibson Dunn Fee ---------------------------------------------------------------- Bankruptcy Law360 reports that the U.S. trustee overseeing Fleetwood Enterprises Inc.'s liquidation has agreed, after some haggling, to pay Fleetwood's counsel Gibson Dunn & Crutcher LLP more than $7.5 million for the first nine months of the Chapter 11 proceeding. Based in Riverside, California, Fleetwood Enterprises, Inc., was the second largest manufactured housing maker in the U.S. and the largest manufacturer of recreational vehicles over 30 feet in length. Fleetwood Enterprises listed assets of $560 million against debt totaling $624 million in its bankruptcy petition. Fleetwood Enterprises, together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher LLP, represent the Debtors in their restructuring efforts. FTI Consulting Inc. is the financial advisor to the Debtors. The Debtors tapped Greenhill & Co. LLC as its investment banker. FLYING J: Court Approves $40 Million Sale Deal with Alon Israel --------------------------------------------------------------- John Cox at Bakersfield.com reports that a federal bankruptcy judge said at the sale hearing that he will approve a $40 million sale of Flying J Inc.'s Big West refinery to Alon Israel Oil Co. Ltd. According to the report, the judge has not yet signed a sale order, and the purchase agreement has not yet been carried out. According to the Court-approved bidding procedures, affiliate Alon USA Energy Inc. was the stalking horse bidder with its $40 million offer. Parties were allowed to send competing bids for an auction scheduled March 19. The Bakersfield refinery is located in California's Central Valley and has the capacity to refine up to 70,000 barrels per day of crude oil. The refinery is supplied by crude oil produced in the San Joaquin Valley with its products marketed in California, and is a major provider of motor fuels in central California. About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FLYING J: Exclusivity Period Extended Until April 27 ---------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware issued a bridge order temporarily extending Flying J Inc. and its debtor-affiliates' exclusivity periods pending a final hearing. Specifically, Judge Walrath extended the Debtors' exclusive plan filing deadline until April 27, 2010, and the Debtors' exclusive solicitation deadline until June 27, 2010. The Court will hold another hearing on April 26 to consider the extension of the Debtors' exclusivity periods. Wilmington Trust FSB, in its capacities as successor administrative agent and collateral agent for the prepetition lenders of Flying J affiliate, Big West Oil, LLC, sought to deny or limit the Debtors' extension request. Wilmington argued that the Debtors' request for an August extension of their exclusive periods is premature while the Debtors await a decision by the Federal Trade Commission on a proposed merger of Flying J's core travel plaza business with Pilot Travel Centers LLC. The transaction is the cornerstone of the Debtors' proposed bankruptcy exit plan. Wilmington indicated that the FTC determination has been further extended to March 19, 2010. The Debtors have requested a June 22 extension of their plan filing period and an August 22 extension of their solicitation deadline. This is the Debtors' fifth request for extension. According to Wilmington, if the FTC determination is favorable, it is difficult to conceive why a further exclusivity extension until August would be required. Under a favorable FTC determination the Debtors should proceed diligently to obtain confirmation of their currently filed plan and little, if any, further extension beyond the exclusivity deadline should be necessary, Wilmington said. If the FTC determination is not favorable, Wilmington argued that the agent and the Big West Term Lenders should be given the right to be heard on the length of the further exclusivity extension, if any, that should be granted with respect to the Big West Debtors. Wilmington noted that the Flying J/Pilot deal does not directly involve the Big West Debtors. However, Wilmington said the Big West Lenders took the sidelines the past months as the Debtors tried to achieve their plan structure on the promise that the Big West Lenders would be paid in full from a refinancing to be carried out on a parallel path with the Flying J/Pilot deal. Wilmington told the Court that the Big West Lenders believe there are much more direct and expeditious plan alternatives available to satisfy Big West creditors than linking their fate and recoveries to a global plan structure that is dependent on consummating the Flying J/Pilot deal. Flying J/Pilot deal was announced in July 2009. The preliminary merger agreement with Pilot pertains specifically to Flying J's core travel plaza business, and it excludes Longhorn Pipeline, Big West Oil, Flying J Oil & Gas, Haycock Petroleum, and Transportation Alliance Bank. At that time, Flying J said it was in the process of pursuing or evaluating alternatives for each of these other businesses. About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FORD MOTOR: Investment-Grade Rating to Come "Years Away" -------------------------------------------------------- Shannon D. Harrington and Keith Naughton at Bloomberg News report that Ford Motor Company CFO Lewis Booth said that the automaker is "years away" from regaining the investment-grade rating it lost in 2005 even as growing U.S. market share and reduced debt lead to a surge in its bond prices. "We've got a lot of steps to go before we get to investment grade," Booth said in an interview with Bloomberg. While Ford bonds are trading as if they are two steps higher than their B3 rating from Moody's Investors Service, the Company's $50 billion in debt was 13 times earnings before interest, taxes, depreciation and amortization in 2009. Ford is pegging its rebound to a "fragile" economic recovery, Booth said. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The Company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. As reported by the Troubled Company Reporter on March 18, 2010, Moody's Investors Service raised Ford's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B2 from B3, secured credit facility to Ba2 from Ba3, senior unsecured debt to B3 from Caa1, trust preferred to Caa1 from Caa2, and Speculative Grade Liquidity rating to SGL-2 from SGL-3. Also raised is Ford Credit's senior debt rating to B1 from B2. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. FOURTH QUARTER 118: Unit to Sell Rim Shopping Center Lot -------------------------------------------------------- Fourth Quarter Properties 140, LLC, asks the U.S. Bankruptcy Court for the Northern District of Georgia, in Newnan, for permission to sell roughly 0.995 acres of real property at the Rim Shopping Center in San Antonio, Bexar County, Texas, free and clear of liens. FQP 140 also seeks permission to disburse the sale proceeds to the holders of liens on the property and pay real estate commissions earned by real estate brokers in connection with the sale. FQP 140 and its non-debtor affiliate Fourth Quarter Properties LXII, LP, entered into a sale agreement with TDC Rim Overlook, L.P. FQP 140 and FQP LXII propose to sell to TDC 2.33 acres of land at the Rim Shopping Center. The property to be sold includes the FQP 140 tract, containing roughly 0.995 acres, and roughly 1.379 acres owned by FQP LXII. FQP 140 and its affiliates own and operate the Rim Shopping Center. The property is to be sold for the total purchase price of $712,200, which has been divided on a pro rata basis so that FQP 140 will receive $299,124 and FQP LXII will receive $413,076. The property will be used by TDC for parking for a tenant located on TDC's adjoining property. The property contains a powerline easement across its entirety and therefore cannot be developed for any other purpose. According to FQP 140, these entities assert liens on the property: (A) Wachovia Bank, N.A., holds a first priority lien on the property on account of its claim for in excess of $115,000,000. Wachovia is represented in the case by: Paul M. Baisier, Esq. SEYFARTH SHAW, LLP One Peachtree Pointe, 1545 Peachtree Street, Suite 700 Atlanta, Georgia 30309. (B) Pape-Dawson Consulting Engineers, Inc., asserts a construction lien on the FQP 140 tract in an amount in excess of $60,000. Pape-Dawson is represented by its agent: Eugene H. Dawson 555 E. Ramsey San Antonio, Texas 78216 (C) Fugro Consultants, Inc., asserts a construction lien in the approximate amount of $43,790. Fugro is represented in the case by: Joseph M. Cibor 6100 Hillcroft Houston, Texas 77081 (D) Bexar County, Texas, asserts an unmatured claim for 2010 property taxes on the FQP 140 tract. Bexar County is represented in the case by its counsel of record: David G. Aelvoet, Esq. Linebarger Goggan Blair Pena, et al. 711 Navarro, Suite 300 San Antonio, Texas 78205 FQP 140 tells the Court that proceeds from the sale of the FQP 140 tract will be distributed, in part, as $4,153.25 will be deducted from the sales proceeds for a proration of 2010 property taxes. $1,744.36 of the amount will come from the sales proceeds from the sale of the FQP 140 tract. $234,764.20 as a principal reduction to Wachovia; $21,000.00 to Pape-Dawson; and $18,512.78 to Fugro The Debtor says Wachovia, Pape-Dawson and Fugro have agreed to accept the amounts set forth in exchange for a release of their liens on the FQP 140 tract. The Debtor expects to close the sale by March 29, 2010. Newnan, Georgia-based Fourth Quarter Properties 118, LLC, dba The Rim, operates a real estate business. The Company filed for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr. N.D. Ga. Case No. 09-13960). James P. Smith, Esq., at Stone & Baxter, LLP, assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. According to the schedules, the Company has total assets of $34,245 and total liabilities of $118,761,086. FREDDIE MAC: Conservator Re-Elects Directors; Alexander to Leave ---------------------------------------------------------------- The Federal Housing Finance Agency, as conservator of Freddie Mac, executed a written consent re-electing each of the then-current directors -- other than Barbara T. Alexander -- as members of Freddie Mac's Board of Directors effective as of the adjournment of the meeting of Freddie Mac's Board of Directors on March 19, 2010. Ms. Alexander had notified FHFA that she would not stand for re- election to the Board at the expiration of her then-current term. The individuals elected by the Conservator for another term as Directors: * Linda B. Bammann * Carolyn H. Byrd * Robert R. Glauber * Charles E. Haldeman, Jr. * Laurence E. Hirsch * John A. Koskinen * Christopher S. Lynch * Nicolas P. Retsinas * Eugene B. Shanks, Jr. * Anthony A. Williams Ms. Alexander's term, and her service on the Board, ended as of the adjournment of the meeting of the Board on March 19, 2010, when the written consent became effective. The terms of the Directors elected under the March 15, 2010 consent will continue until the date of the next annual meeting of stockholders or the Conservator next elects Directors of Freddie by written consent, whichever occurs first. About Freddie Mac Based in McLean, Virginia, Freddie Mac (NYSE: FRE) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. The Company's participation in the secondary mortgage market includes providing its credit guarantee for residential mortgages originated by mortgage lenders and investing in mortgage loans and mortgage- related securities. The Company earns management and guarantee fees for providing its guarantee and performing management activities (such as ongoing trustee services, administration of pass-through amounts, paying agent services, tax reporting and other required services) with respect to issued PCs and Structured Securities. At December 31, 2009, the Company's consolidated balance sheets showed total assets of $841.,784 billion, total liabilities of $837.412 billion, and total equity of $4.372 billion. Freddie Mac is under conservatorship and is dependent upon the continued support of Treasury and FHFA to continue operating its business. The Company received $6.1 billion and $30.8 billion in June 2009 and March 2009, respectively, pursuant to draw requests that FHFA submitted to Treasury on the Company's behalf to address the deficits in the Company's net worth as of March 31, 2009, and December 31, 2008, respectively. As a result of funding of the draw requests, the aggregate liquidation preference on the senior preferred stock owned by Treasury increased from $14.8 billion as of December 31, 2008, to $51.7 billion on December 31, 2009. FRONTIER COMMUNICATIONS: Verizon Unit to Offer Senior Notes ----------------------------------------------------------- Frontier Communications disclose that Communications Holdings Inc., a subsidiary of Verizon Communications Inc. formed for the purposes of holding defined assets and liabilities of the local exchange business and related landline activities of Verizon in 14 states, intends to offer, subject to market and other conditions, Senior Notes due 2017 and Senior Notes due 2020 in a private placement that is exempt from the registration requirements of the Securities Act of 1933, as amended. The gross proceeds of the offering will be deposited into an escrow account. Spinco intends to use the net proceeds from the offering to fund a portion of a special cash payment by Spinco to Verizon, in connection with the spin-off of Spinco to Verizon's shareholders and the subsequent merger of Spinco with and into Frontier. About Frontier Communications Frontier Communications Corporation, headquartered in Stamford, Connecticut, is the fifth largest wireline telecommunications company in the U.S., serving more than 7 million access lines in primarily rural areas and small- and medium-sized cities. * * * Fitch Ratings has maintained Frontier's Issuer Default Rating at 'BB', on Positive Watch. Standard & Poor's Ratings Services also retained Frontier's corporate credit rating at 'BB/Stable/--' despite the upsizing of the Company's 8.125% senior notes due 2018 from $450 million to $600 million at the end of September 2009. GANNETT CO: S&P Changes Outlook to Stable, Affirms 'BB' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its rating outlook on Gannett Co. Inc. to stable from negative and affirmed all ratings, including the 'BB' corporate credit rating. "The outlook revision to stable," said Standard & Poor's credit analyst Emil Courtney, "reflects S&P's belief that the company's publishing ad revenue decline is moderating enough that, when combined with cost-saving initiatives and aggressive levels of debt repayment in 2009 and in the March 2010 quarter (exceeding $1 billion during the period), these will likely enable Gannett to improve credit measures over the intermediate term." As a result, S&P believes the risk is now limited that Gannett would have difficulty refinancing large maturities in 2011 and 2012 totaling just over $2.1 billion (at March 2010), absent another disruption to credit markets. Consequently, the rating is unlikely to go lower over the intermediate term. GENCORP INC: Amends $280 Million Senior Credit Facility ------------------------------------------------------- GenCorp Inc. executed an amendment to its $280.0 million senior credit facility. The amendment, among other things: * permits the Company to repurchase or refinance its outstanding convertible subordinated notes and senior subordinated notes, subject to certain conditions; * permits the Company to incur additional senior unsecured or subordinated indebtedness, subject to specified limits and other conditions; * provides more flexible terms surrounding the leverage ratio compliance; and * permits the Company to conduct a rescission offer, using stock and cash up to $15.0 million, with respect to certain units issued under the GenCorp Retirement Savings Plan. The amendment reduces the revolving credit facility capacity from $80.0 million to $65.0 million and the letter of credit subfacility capacity from $125.0 million to $100.0 million. In addition, the interest rate on LIBOR rate borrowings is LIBOR plus 325 basis points, an increase of 100 basis points, and the letter of credit subfacility commitment fee has been similarly amended. On March 18, 2010, the Company also entered into an agreement with certain holders to repurchase $22.5 million principal amount of its 9.5% senior subordinated notes at 102% of par, plus accrued and unpaid interest, and $14.3 million principal amount of its 2.25% convertible subordinated debentures at 93% of par, plus accrued and unpaid interest. The Company anticipates that it will retire the repurchased securities. The Company repurchased the debt using a portion of the net proceeds of its 4.0625% convertible subordinated debentures issued in December 2009. Scott J. Seymour, GenCorp Inc. President and CEO and President, Aerojet, said, "We are pleased with the successful closing of this amendment which provides the Company with more flexibility to manage its capital structure and operations." 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. * * * Standard & Poor's Ratings Services said late January 2010 it raised its ratings on GenCorp Inc. by one notch to 'B-'. Outlook is stable. GRAHAM PACKAGING: Pays Term Loans From Proceeds of Shares Sale -------------------------------------------------------------- David W. Bullock, Chief Financial Officer of Graham Packaging Company Inc., disclosed that on March 11, 2010, the underwriters of the Company's initial public offering partially exercised their option to purchase additional shares of the Company's common stock, par value $0.01 from the Company and purchased 1,565,600 additional shares at the initial public offering price of $10.00 per share. The Option Purchase closed on March 16, 2010. On March 16, 2010, Graham Packaging purchased 1,565,600 newly issued limited partnership units from its subsidiary, Graham Packaging Holdings Company, for an aggregate amount of $14.7 million, in connection with the Option Purchase. No underwriters were involved in the sale of securities. The sale was exempt from the registration requirements of the Act under Section 4(2) of the Securities Act of 1933, as amended. The Company received net proceeds of $14.7 million (after underwriting discount and before expenses) and contributed the Net Proceeds to its subsidiary, Holdings, in exchange for 1,565,600 newly-issued limited partnership units of Holdings. Holdings contributed the Net Proceeds to its subsidiary, Graham Packaging Company, L.P., as Operating Company, which used the Net Proceeds and cash on hand to repay a portion of Term Loan B and Term Loan C under the Credit Agreement, dated as of October 7, 2004, among Holdings, the Operating Company, GPC Capital Corp. I, the lenders from time to time party thereto and Deutsche Bank AG Cayman Islands Branch, as administrative agent, as amended, modified or supplemented to. An aggregate of $14.9 million of the Term Loans was repaid, of which $2.6 million was allocated to repay principal and accrued interest on Term Loan B and $12.3 million was allocated to repay principal and accrued interest on Term Loan C. Graham Packaging earlier this month filed its annual report on Form 10-K for the fiscal year ended December 31, 2009. Graham Packaging report net income of $21.084 million for 2009 from a net loss of $57.277 million for 2008 and a net loss of $206.052 million for 2007. At December 31, 2009, the Company had total assets of $1.984 billion against total current liabilities of $428.018 million; long-term debt of $2.336 billion; deferred income taxes of $17.646 million; other non-current liabilities of $99.854 million; resulting in partners' deficit of $897.285 million. 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?5be5 About Graham Packaging Headquartered in York, Pennsylvania, Graham Packaging Holdings Company, -- http://www.grahampackaging.com/-- the parent company of Graham Packaging Company, L.P., is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of June 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. HOTELS UNION: Files for Bankruptcy to Avert DekaBank Foreclosure ---------------------------------------------------------------- Hotels Union Square Mezz 1 LLC filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware to block a foreclosure auction by its mezzanine lender. According to reporting by Reuters, Hotels Union owns the W New York Union Square hotel, located on Park Avenue South. The W in Union Square has been hit by the recession. According to Reuters, Hotels Union, an entity controlled by an affiliate of Lubert-Adler Real Estate Funds known as LEM, said in the filing that it owes its creditors between $100 million and $501 million. The Dubai World unit that purchased the hotel paid $285 million for it in 2006. Reuters relates that LEM, a lender on the property, foreclosed on the hotel in December after the Dubai World unit missed making mortgage payments. But then DekaBank Deutsche Girozentrale announced it was going to foreclose on the property because LEM had failed to pay on its loans. As an unsecured creditor, DekaBank is owed $60 million according to the filing. Efforts to restructure the remaining mezzanine-level debt have "not yet been completed successfully," Rick Matthews, an LEM spokesman, said in an e-mailed statement to Bloomberg News. He said the bankruptcy filing "was intended to provide additional time to complete that process, and emerge with a healthy balance sheet that allows the hotel to continue to thrive in a competitive marketplace." INDIANAPOLIS DOWNS: Moody's Cuts Corporate Family Rating to 'Caa3' ------------------------------------------------------------------ Moody's Investors Service downgraded Indianapolis Downs, LLC's Corporate Family Rating and Probability of Default Rating to Caa3 from Caa2. Moody's also downgraded the company's senior secured first lien facilities to B2 from B1 and its second lien notes to Caa3 from Caa2. The rating outlook is negative. The Caa3 Corporate Family Rating and negative outlook reflect Moody's view that Indianapolis Downs' capital structure is not sustainable in its current form and that some form of restructuring appears likely. Debt/EBITDA is extremely high at over 10 times and Moody's does not expect that the company's internal cash flow and cash balances will be sufficient to cover its interest expense in 2010. Additionally, the company's $25 million revolver is fully drawn. Indianapolis Downs' weak financial condition is due primarily to the slower than expected ramp up of its permanent facility which opened in March 2009. Ratings downgraded and LGD assessments revised: * Corporate Family Rating to Caa3 from Caa2 * Probability of Default Rating to Caa3 from Caa2 * Senior secured first lien revolver to B2 (LGD 1, 5%) from B1 (LGD 1, 6%) * Senior secured first lien term loan to B2 (LGD 1, 5%) from B1 (LGD 1, 6%) * Senior secured second lien notes to Caa3 (LGD 4, 54%) from Caa2 (LGD 4, 56%) * Senior secured third lien notes to Ca (LGD 6, 93%) from Ca (LGD 6, 94%) Moody's last rating action for Indianapolis Downs was on March 5, 2009, when the company's Corporate Family Rating and Probability of Default Rating were downgraded to Caa2 from Caa1. Indianapolis Downs, LLC, owns and operates Indiana Downs, a 180- acre pari-mutuel horse racing facility located about 25 miles southeast of Indianapolis, Indiana in Shelbyville, Indiana. INNATECH LLC: Liquidity Constraints Prompt Bankruptcy Filing ------------------------------------------------------------ netDockets reports that Innatech LLC has filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the Eastern District of Michigan. netDockets says Innatech blamed its bankruptcy filing on liquidity constraints caused by the state of the domestic automotive industry and the company's "investment in and development of unique injection molding processes." netDockets, citing papers filed in court, says Innatech's financial difficulties resulted in a default under its credit agreement and the company's lender, Bridge Healthcare Finance, LLC, terminated the credit agreement on February 28, 2010. Innatech reports that Bridge stopped funding all obligations of the company other than payroll upon the termination of the credit agreement. Prior to its termination, the credit agreement provided for an $8 million revolving loan and a $5.5 million term loan to Innatech. As of the bankruptcy filing, the outstanding balances under the revolving and term loans were $3.56 million and $2.95 million, respectively. Innatech is represented by Clark Hill PLC and Amherst Partners, LLC, netDockets says. Headquartered in Rochester, Michigan, Innatech LLC manufactures and designs "highly-engineered injection molded components and assemblies." Innatech's are sold to Tier I and Tier II automotive suppliers and to customers in the packaging, office furniture, appliances, household goods, toys, and personal care markets. Innatech employs almost 150 people at three facilities located in Michigan, Indiana and Ohio. JAPAN AIRLINES: Has Stipulation on Stay of Anti-Trust Suits ----------------------------------------------------------- Between 2006 and 2008, various plaintiffs commenced certain antitrust class actions against Japan Airlines Corp. and its debtor affiliates and certain other defendants, which actions collectively have been transferred by the United States Judicial Panel on Multidistrict Litigation to courts in the Eastern District of New York and Northern District of California and currently are titled on their JPML dockets as: (a) In re Air Cargo Shipping Services Antitrust Litig., Case No. 06-MD-1775 (JG) (VVP) (E.D.N.Y. June 20, 2006); (b) In re Transpacific Passenger Air Transportation Antitrust Litig., Case No. M:08-cv-01913-CRB (N.D. Cal. Feb. 19, 2008); (c) In re Air Cargo Shipping Services Antitrust Litigation, Case No. 1:06-md-01777 (E.D.N.Y.); and (d) In re Transpacific Passenger Air Transportation Antitrust Litigation, Case No. 07-cv-05634 (N.D. Cal.). The order recognizing the Debtors' Japan Proceeding as a foreign main proceeding pursuant to Chapter 15 of the Bankruptcy Code (a) applies the automatic stay of Section 362 of the Bankruptcy Code with respect to the Debtors and the property of the Debtors in the territorial jurisdiction of the United States; and (b) enjoins all persons and entities from commencing or continuing any judicial, administrative or any other action or proceeding involving or against the Debtors or their assets or proceeds thereof that are located in the United States. Certain of the Debtors' co-defendants in the Multidistrict Litigation have filed pleadings or stated on the record in one or more of the Antitrust Actions that the Recognition Order enjoins the Plaintiffs from continuing the Antitrust Actions against the Debtors and the Co-Defendants. Accordingly, Eiji Katayama, Esq., the foreign representative of the Debtors, and the Plaintiffs entered into a stipulation to clarify the scope of the stay and injunction with respect to the Antitrust Actions to permit the Plaintiffs to continue to prosecute the Antitrust Actions against the Co-Defendants, but not against the Debtors in any respect, and agree to all other terms and provisions contained in the Stipulation. The Parties acknowledge and agree that the stay and injunction provided in the Recognition Order enjoin all persons and entities from commencing or continuing, including the issuance or employment of process of, any judicial, administrative or any other action or proceeding against the Debtors or their assets or proceeds thereof that are located in the United States, or to recover a claim or enforce any judicial, quasi-judicial, regulatory, administrative or other judgment, assessment, order, lien or arbitration award solely against the Debtors or their assets or proceeds thereof that are located in the United States. Moreover, the Parties acknowledge and agree that the stay and injunction do not prohibit the Plaintiffs from commencing or continuing, including the issuance or employment of process of, any judicial, administrative or any other action or proceeding against any Co-Defendant or any Co-Defendant's assets or proceeds thereof and to recover a claim or enforce any judicial, quasijudicial, regulatory, administrative or other judgment, assessment, order, lien or arbitration award against any Co- Defendant or any Co-Defendant's assets or proceeds thereof; provided that with respect to any actions or proceedings involving the Debtors, no actions of any kind may be taken against the Debtors or their assets or proceeds thereof, in any respect. Accordingly, the Parties ask the Court to approve the Stipulation. The Court will consider the Stipulation on March 30, 2010 at 10:00 (Eastern Time). Objections (a) Cargo Antitrust Litigation Defendants The defendants in the Cargo Antitrust Litigation assert that the language in the February 17 Injunction Order is clear. Indeed, the Defendants argue, relying on the Court's stay of all proceedings "involving or against" Japan Airlines, the Court of Appeals for the Second Circuit stayed the indirect purchasers' appeal in the Cargo Antitrust Litigation as to all parties. Counsel for one of the defendants, Cathay Pacific Airways, Ltd., David H. Bamberger, Esq., at DLA Piper LLP (US), in Washington, D.C., says the order required appellants to inform the Court of Appeals, in writing, as to the status of the bankruptcy stay. No further action has occurred in the appeal, suggesting that all parties understood the Court of Appeals' order applies to all parties, not just Japan Airlines, he notes. Mr. Bamberger relates that counsel for the cargo plaintiffs was present at the January 19, 2010 hearing, where counsel for the passenger plaintiffs told the Court that the "involving or against" language would stay the Passenger antitrust lawsuit in its entirety. The same analysis applies to the Cargo Antitrust Litigation, Mr. Bamberger avers. Despite the Court's instruction to plaintiffs that, if they wished to object to the scope of the Injunction, they do so at the January 28 hearing, plaintiffs chose not to do so, he asserts. Thus, plaintiffs in the Cargo Antitrust Litigation can claim no error of fact or law or manifest injustice that would allow for reconsideration of the language of the Injunction, Mr. Bamberger argues. Accordingly, the Defendants ask the Court to reject plaintiffs' and JAL's Stipulation and Agreed Order, and leave the February 17 stay in place. (b) Passenger Antitrust Litigation Defendants Counsel for one of the defendants in the Passenger Air Transportation Antitrust Litigation, Singapore Airlines Ltd., William R. Sherman, Esq., at Latham & Watkins, LLP, in Washington, D.C., says that the February 17 injunction is clear on its face, plaintiffs themselves told the Court that they knew the words "involving or against" would stay the consolidated multidistrict antitrust lawsuit in its entirety, and Japan Airlines thereafter requested that the Court enter that same language as a preliminary injunction and a permanent injunction. Thus, plaintiffs and JAL are not seeking a "clarification," but rather an untimely and unjustified reconsideration and modification of the Injunction. Mr. Sherman relates that in a mysterious union of opposing interests, plaintiffs and Japan Airlines ask the Court to allow the Passenger Antitrust Litigation to proceed while, at the same, requesting that the Court continue to enjoin all parties from employing judicial process against Japan Airlines. That modification would, if adopted, deprive defendants in the Passenger Antitrust Litigation from obtaining crucial evidence from Japan Airlines, Mr. Sherman avers. According to Mr. Sherman, plaintiffs have obtained information from Japan Airlines, which they have used to construct their Consolidated Amended Complaint. Indeed, the CAC pegs JAL as the central figure in the alleged conspiracy. Mr. Sherman says that were the Court to modify the stay as plaintiffs and Japan Airlines desire, the defendants would be forced to litigate the antitrust case without access to the evidence on which plaintiffs have concededly based their claims, and without access to discovery from Japan Airlines that could undermine the inferences plaintiffs seek to draw from Japan Airlines documents they have selectively relied upon. To avoid that unjust outcome, Mr. Sherman argues that the Court should reject the modifications contained in the Stipulation, and should leave the existing injunction in place. In a letter addressed to the Court on March 17, 2010, All Nippon Airways, Ltd., and Continental Airlines, Inc., relates that they are also defendants in the Passenger Antitrust Litigation. ANA and Continental said they participated in the drafting of the Objection, but their names were accidentally omitted from the Objection. Accordingly, ANA and Continental informed the Court that they join in the Objections. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Aims to Return to Profitability by Autumn --------------------------------------------------------- Kazuo Inamori, chairman of Japan Airlines Corp., said he aims to return the carrier to profitability on a monthly basis by the autumn, as he lashed out at the firm's corporate management. In a joint press conference in Tokyo held on March 17, 2010, Mr. Inamori labeled the airline's managers as unfit "to run a greengrocery," adding that the former state-run carrier had become gloomier since taking his post but pledged to "work to achieve recovery at any cost." "I'm fully confident that we can make the international operation profitable. If we can't, there won't be any reason for JAL's existence . . . Maintaining international routes, we will achieve revival," The Straits Times quoted Mr. Inamori as saying. Mr. Inamori was nominated by the government to replace Haruka Nishimatsu, who stepped down as head of the ailing airline on January 20. Mr. Inamori also mentioned that JAL will likely forgo hiring of new employees for spring 2011 as it undergoes rehabilitation, Japan Today said. Mr. Inamori also emphasized that the carrier will turn itself around while keeping its international routes, even though they have been seen as a drag on its loss-making operations, the report added. JAL's president and chief operating officer Masaru Onishi said the company may discard its cargo flights as part of the restructuring, but would continue its cargo business by shipping goods on passenger planes. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Offers Early Retirement to Pilots ------------------------------------------------- Japan Airlines Corp. offered an early retirement program for pilots as part of its downsizing plans for rehabilitation under court protection from creditors, The Japan Times reported. According to the news, in the first early retirement program for pilots since its integration with Japan Air System Co. in 2002, JAL will accept voluntary retirement applications from pilots aged 35 and over from March 18 through April 16, 2010. JAL is attempting to sell 49 aging planes to major trading houses and overseas leasing companies, reports said. JAL must deal with an excess of pilots given the likelihood that it will stop operating midsize McDonnell Douglas MD-90 and other jets, AsiaPulse News says. Japan Airlines Corp. also said it will start soliciting early- retirement applications on March 18, 2010 from rank-and-file employees and midlevel managers aged 35 and older at its key flight-services arm, Japan Airlines International Co. The Japan Times said the move is part of JAL's program to eventually eliminate 15,700 jobs, or about 30% of its group workforce, by the business year through March 2013 as it aims to turn itself around under a government-supervised rehabilitation process. The Japan Times adds that JAL will solicit 2,700 applications from employees at its group firms, including 1,700 at Japan Airlines International, on March 1. JAL officials said the airline expects to reduce its personnel expenses by JPY18 billion in fiscal 2010, which begins April 1, the report reveals. Early Retirement Could Change Air Transport Industry Landscape The early retirement of a substantial number of Japan Airlines' pilots could change the landscape of the air transport industry in Japan, according to the Center for Asia Pacific Aviation. According to the report, Japanese cockpit crew has always been in short supply and many carriers have had to hire non-Japanese crew on contracts. The report relates that training pilots to commercial airline standards is costly and takes time. A ready supply of qualified crew -- holding licenses issued by the Japan Civil Aviation Bureau -- is a chance that some airlines, and would-be airlines, in Japan will not want to miss. However, the Center for Asia Pacific Aviation says, many of JAL's senior pilots have sole experience on the previously prestigious B747, as JAL has a direct career path to first officer on the four engine B747s. The carrier still has 37 Boeing B747-400s in service, but has said it will retire all of these within the next two years. The report says this will make the restructuring interesting, to estimate which of the more readily adaptable JAL Group cockpit crew with B737, B767 and B777 twin engine experience will feel it better to take the voluntary package. Some JAL competitors are thought to be making plans to approach JAL crew members who may take the early retirement program. The Center for Asia Pacific Aviation avers that this sort of opportunity with a scarce resource as experienced pilots does not come often in Japan and, as JAL is forced to cut back on costs, the timing for new entry or expansion is ideal. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JTT PROPERTIES: Files for Chapter 11 Bankruptcy in Vermont ---------------------------------------------------------- Bruce Edwards, staff writer at Times Argus, reports that James Theodore and his company JTT Properties filed for Chapter 11 in the U.S. Bankruptcy Court in Rutland, Vermont listing assets of $3,451,212 and debts of $4,164,794 owed to Fannie Mae. Mr. Edward relates that Mr. Theodore listed personal assets of $89,826 in savings account, 56,507 in a retirement account, a 2004 Porsche SUV valued at $30,405 and a 1998 Ford Taurus wagon valued at $1,960. According to the report, the bankruptcy filing lists more than a dozen properties owned by Mr. Theodore including: 15 and 33 Woodstock Ave., 38 Cottage St., 18 and 20 Church St., 78-82 Strongs Ave., 129 Curtis Ave., 90 Barnes St., 60 Elm St., 49 Williams St. and 45-45 1/2 Pleasant St., and the Mill River Apartments in Clarendon. A property in Manchester, N.H., is also listed. The properties are valued at $2.5 million. JTT Properties said in its Web sites that it provides affordable housing in the Vermont and New Hampshire Region. Its owner James T. Theodore started in the construction business in 1976 working for landlords renovating and maintaining apartments in the Manchester NH area. LEAR CORP: S&P Assigns 'BB-' Rating on $700 Mil. Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said it is assigning a 'BB-' issue-level rating and '1' recovery rating to auto supplier Lear Corp.'s proposed $700 million senior unsecured notes, to be offered in two tranches maturing in 2018 and 2020. At the same time, S&P affirmed its 'B' corporate credit rating and other ratings on the company. The outlook is positive. S&P revised Lear's outlook to positive from stable on Feb. 17, 2010, partly reflecting the gradual improvement in industrywide auto production in the U.S. and Europe. S&P believes the proposed refinancing supports S&P's outlook change by leading to slightly lower leverage and an improved debt maturity profile. Beyond these benefits, factors S&P continues to monitor include how the company's strategic and financial policies evolve under the new board's direction, including possible future uses of some of the company's substantial cash balances. "S&P believes Lear's credit profile could support a higher corporate credit rating if the improved outlook for light-vehicle production in North America and Europe proves sustainable," said Standard & Poor's credit analyst Lawrence Orlowski. "S&P assume that Lear's global sales for 2010 will reach at least $10.2 billion, and because of lower fixed costs caused by operational restructuring, S&P expects margins to improve over those in 2009," he continued. Consequently, S&P believes leverage could decline significantly in 2010 if global light-vehicle sales stay in line with or exceed S&P's expectations. Lear is a leading, global Tier 1 automotive supplier and had sales of $9.7 billion in 2009. The company should benefit, in S&P's view, from higher operating profitability because of various restructuring actions, such as transferring manufacturing capacity to lower-cost regions, reducing manufacturing capacity, and eliminating administrative overhead. S&P assumes the company will generate positive free operating cash flow in 2010 and 2011. However, if auto production drops suddenly, Lear could begin using cash again. S&P expects cash balances to decline somewhat, depending on the amount of secured debt paydown and net proceeds raised from the issuance of senior unsecured notes. But S&P still expects the resulting amount to provide a sufficient cushion to cover operating cash needs. Intra-quarter working capital peaks should be about $400 million as auto production increases. S&P considers Michigan-based Lear's business risk profile to be weak, largely because of volatile auto production, high fixed costs, fierce competition, and severe pricing pressures that characterize the global auto supplier industry. Furthermore, Lear has significant exposure -- 36% based on 2009 sales -- to General Motors Co. (unrated) and Ford Motor Co. (B-/Stable/--). The outlook is positive. Besides the factors listed above that S&P will continue to monitor, S&P also expect to monitor the company's progress in improving adjusted segment margins toward its stated goal of approximately 7%, from 6.1% in its seating segment and 2.5% in its electrical power management segment in the fourth quarter of 2009. S&P could raise the rating if the company shows significant improvement toward reaching its goal of 7% adjusted segment margins and if the company demonstrates a consistent pattern of generating free operating cash flow. On the other hand, S&P could revise the outlook back to stable if global vehicle demand declines again and prevents the company from expanding its adjusted segment margins. For example, this could occur if revenue and gross margins stayed flat with those in 2009. LEVEL 3 COMMS: 10% Senior Notes Has Unsec., Subordinated Guarantee ------------------------------------------------------------------ On March 19, 2010, Level 3 Financing, Inc., a wholly owned subsidiary of Level 3 Communications, Inc., entered into a Supplemental Indenture, dated as of March 19, 2010, to the Indenture, dated as of January 20, 2010, among Level 3 Communications, Inc., as Guarantor, Level 3 Financing, as Issuer, and The Bank of New York Mellon, as Trustee, relating to Level 3 Financing's 10% Senior Notes due 2018. The Guarantee Supplemental Indenture was entered into among Level 3 Financing, Level 3 Communications, LLC, a wholly owned subsidiary of Level 3 Communications, Inc., and The Bank of New York Mellon, as Trustee. Pursuant to the Guarantee Supplemental Indenture, Level 3 LLC has provided an unconditional, unsecured guaranty of the Notes. On March 19, 2010, Level 3 Financing entered into an additional Supplemental Indenture dated as of March 19, 2010, to the Indenture. The Subordination Supplemental Indenture was entered into among Level 3 Financing, Level 3 Communications, Inc., Level 3 LLC and The Bank of New York Mellon, as Trustee. Pursuant to the Subordination Supplemental Indenture, the unconditional, unsecured guaranty of Level 3 LLC of the Notes will be subordinated in any bankruptcy, liquidation or winding up proceeding of Level 3 LLC to all obligations of Level 3 LLC under the Level 3 Financing Amended and Restated Credit Agreement dated as of March 13, 2007. In early 2010, Level 3 Financing, Inc., issued US$640 million aggregate principal amount of 10% Senior Notes due 2018 in a private offering. In conjunction with a concurrent tender offer and consent solicitation, the proceeds from this issuance were used to repurchase US$547 million of aggregate principal amount of its 12.25% Senior Notes due 2013. The remaining US$3 million of aggregate principal amount of the 12.25% Senior Notes due 2013 are expected to be redeemed in the first quarter of 2010. A copy of the Guarantee Supplemental Indenture is available for free at http://researcharchives.com/t/s?5be6 A copy of the Subordination Supplemental Indenture is available for free at http://researcharchives.com/t/s?5be7 Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 has total assets of $9.062 billion against total debts of $8.571 billion as of Dec. 31, 2009. Level 3 carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LINN ENERGY: Moody's Changes Outlook to Positive; Puts 'B3' Rating ------------------------------------------------------------------ Moody's Investors Service changed the outlook for Linn Energy, LLC to positive from stable. Moody's also assigned a B3 (LGD 5; 81%) rating to Linn's proposed $500 million senior unsecured notes and affirmed its existing B1 Corporate Family Rating, B1 Probability of Default Rating, the existing B3 (though LGD is changing from LGD 6 to LGD 5 and the point estimate is changing from 91% to 81%) senior unsecured note ratings. Moody's also affirmed Linn's SGL-3 Speculative Grade Liquidity Rating. Note proceeds from the offering will be used to repay borrowings under its senior secured credit facility. Under Moody's Loss Given Default methodology, the rating for the new and existing senior notes remains two notches lower than the B1 CFR. Despite more than doubling the amount of senior unsecured notes in the capital structure, the company's expected $1.5 billion borrowing base revolver, will still be nearly 60% of the capital structure as determined under the LGD methodology, pro-forma for the $500 million notes offering. This results in the notes still being double-notched from the CFR. "The positive outlook reflects the company's steady growth both in terms of reserves and production, maintaining a reasonable leverage profile and competitive cost structure" said Ken Austin, Moody's Senior Credit Officer. "While still not completely in- line with the higher rated E&P peer group, Linn is on pace to strengthen its profile and make it firmly compatible with the Ba3 peer group over the next 12 to 18 months." The positive outlook also considers the company's use of equity to fund its larger acquisitions. In order to help fund its $330 million acquisition of Antrim Shale properties, Linn is expected to issue at least $310 million if equity. When combined with the approximately $181 million of equity that was issued to fund a $150 million of Permian assets in January, Linn's most recent acquisitions will have been fully equity funded on a combined basis. Although Moody's do not expect the company to necessarily use this high level of equity for all future acquisitions, Linn has indicated that it expects to use at least 60% of equity for large acquisitions, which should help keep leverage on PD reserves within existing ranges as it continues to acquire assets. The affirmation of the B1 CFR reflects the company's overall sizeable and durable asset base that compares favorably to similarly rated E&P companies. While Linn's LLC structure prevents more rapid improvement in its credit profile, the company has built an asset base that possesses a durable productive base that is not hostage to steep decline curves and is not as capital intensive as some of the shale plays. In addition, the company's aggressive hedging program and exposure to oil and liquids production is likely to result in better than average margins over the near-term, providing further support for cash flows. The B1 CFR is tempered by the company's LLC corporate structure which has the burden of not only sustaining, but also growing its regular cash distributions to unit holders. Given the need to distribute most of its cash flow competes with the high level of reinvestment needs inherent in the E&P business, there is a reliance on acquisitions to supplement organic growth, making event risk elevated. Although the company has proven that it will issue equity to help fund acquisitions, debt levels are expected to continue to rise as the company pursues additional acquisitions. The B1 CFR also considers the company's still relatively high leverage on production. Pro forma for the two acquisitions this year, debt/average daily production is approximately $43,770/boe, which ranks among the highest in the per group. While pro forma debt/proven developed reserves of approximately $7.58/boe pro- forma is considered a bit high, it is in-line with B1 average and actually a bit lower than Linn's year-end 2008 levels. Moody's expects that leverage on the production will likely remain on the higher end for the rating as the LLC model does not lend itself to much debt reduction. However, Linn's efforts to grow its Granite Wash production are successful, leverage on production could improve materially within the next 12 to 18 months. Further, if the company maintains its intended strategy of funding all acquisitions with 60% equity, leverage on the PD reserve base is also likely to see improvement. The SGL-3 Speculative Grade Liquidity rating reflects the significant availability Linn will have under its senior secured revolving credit facility. Although Linn is renewing its senior secured revolving credit facility at $250 million lower than the existing borrowing base credit facility (going to $1.5 billion from $1.75 billion), pro forma for the notes offering and Michigan asset acquisition, Linn will have over $600 million of availability. This availability, along with expected cash flows should be more than sufficient to cover planned capital spending needs, interest expense, and working capital requirements over the next twelve months. Moody's also expects that will Linn will have sufficient room under the credit facility's maintenance covenants that will ensure accessibility over the next twelve months. Moody's last rating action for Linn Energy, LLC was on May 12, 2009, when Moody's affirmed the B1 CFR following the issuance of new notes. Linn Energy is a Houston, TX based independent energy company engaged in the development, production, acquisition, and exploitation of long life crude oil and natural gas properties in the United States. The company's reserves and production are located in California, Permian, and Mid- Continent regions. LIONS GATE: CEO Failed Shareholders, Says Carl Icahn ---------------------------------------------------- Carl C. Icahn issued an open letter to Jon Feltheimer, the Co- Chairman and Chief Executive Officer of Lions Gate Entertainment Corp., in response to Lions Gate's announcement that its board of directors had rejected the Icahn Group's previously announced offer to purchase UP TO ALL of Lions Gate's outstanding common shares for $6.00 in cash per share: CARL C. ICAHN 767 Fifth Avenue, 47th Floor New York, New York 10153 March 24, 2010 Lions Gate Entertainment Corp. 2700 Colorado Avenue, Suite 200 Santa Monica, California 90404 Attention: Jon Feltheimer, Co-Chairman and Chief Executive Officer Dear Jon, I found several aspects of your statement yesterday of great concern. To say that you have exhibited a "patient, disciplined strategy of building a strong and diversified company step by step over the past 10 years" is absurd. In actuality, most of the stock's appreciation during the decade was the result of one transaction -- the acquisition of Artisan. In the press release announcing that acquisition, Artisan CEO Amir Malin stated, "We enter 2004 with our strongest theatrical slate ever." After the acquisition, Lions Gate's stock reached a high of $11.40 on November 10, 2004. But when the pipeline acquired from Artisan ran out, for several years the stock went nowhere, and then in September of 2008 it began its precipitous decline to a low of $4.85 on February 4, 2010. I believe the stock would have continued declining if I had not acquired 1,236,938 shares between February 5, 2010, and February 11, 2010, and then announced a tender offer on February 16, 2010. You claim that I offer no "meaningful vision", thereby implying that you have one. I cannot help but wonder why your "vision" -- if so "meaningful" -- never translated into shareholder value? I believe that one of my strongest traits as an investor is that I don't personally claim to be a visionary in regard to any particular industry. I believe in finding strong managers and holding them accountable. If the stock price of a company remains stagnant for years, as it has with Lions Gate, then clearly something is wrong. I suggest that your directors have failed shareholders. They have never taken a long hard look at this "meaningful vision" you claim to possess and have not been willing to hold you accountable for it. Instead, they have rewarded you and the rest of management with bonuses, options and golden parachutes while your shareholders have watched their stock decline. Unfortunately, as is often the case, hand-picked boards let self-proclaimed "visionary" CEOs chase their vision indefinitely, even when years pass and their vision is clearly a delusion. To make matters worse, I continue to fear (as I have previously expressed) that the current board will allow you to borrow billions to pursue your new "vision" of library consolidation, exhibited by your interest in acquiring MGM and Miramax. This is simply another delusion in my opinion, as library values are currently in a secular decline, never to return to cash flows seen during the heyday of DVD sales. I believe that you are, as you should be, frustrated by the five-year stagnation of Lions Gate. But more importantly, I am fearful that you have determined to "swing for the fences" using excessive debt and risking the shareholders' equity. The road to bankruptcy is littered with companies whose CEOs -- under the banner of "vision" -- have been permitted by lax board oversight to gamble their companies into oblivion. Sincerely yours, Carl C. Icahn About Lions Gate British Columbia-domiciled and Santa Monica, California- headquartered Lions Gate is a leading, diversified independent producer and distributor of motion pictures, home entertainment, television programming and animation worldwide and holds a majority interest in the pioneering CinemaNow VOD business. The Lions Gate brand name is synonymous with original, cutting edge, quality entertainment in markets around the world. As reported by the Troubled Company Reporter on March 10, 2010, Standard & Poor's Ratings Services revised its rating outlook on Lions Gate to negative from stable. At the same time, S&P affirmed ratings on Lions Gate, including the 'B-' corporate credit rating. Lions Gate carries Moody's "B2" corporate family rating and probability of default rating. LIZ CLAIBORNE: S&P Downgrades Corporate Credit Rating to 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on New York-based Liz Claiborne Inc. to 'B-' from 'B'. The outlook is developing. "The downgrade reflects the continued deterioration in the company's credit metrics and S&P's expectation that they could remain weak in the near term," said Standard & Poor's credit analyst Linda Phelps. "In addition, underlying economic conditions and consumer spending remain weak; hence, the company's progress in improving its business could be slow and uneven." The company needs to refinance its credit facility which matures next year. The ratings on Liz Claiborne reflect its highly leveraged financial profile; participation in the highly competitive and inherently cyclical apparel industry; the fashion risk associated with its product portfolio; sourcing concentration; and the still challenging economic and retail environment. Key rating concerns include execution risk associated with the company's relatively new business focus on four key brands (Juicy Couture, Lucky Brands, MEXX, and Kate Spade). There's increased concern on company-owned retail operations, especially given the currently weak retail environment and limited consumer discretionary spending. S&P acknowledge the company has been successful at taking costs out of the business. Liz Claiborne is one of the larger women's apparel companies in the U.S., with about $3 billion in revenues for the 12 months ended Jan. 2, 2010. In recent years the company has added faster growing and higher margined contemporary lifestyle brands to its portfolio, including Juicy Couture, Lucky Brands, MEXX, and Kate Spade, which are positioned more toward the better and premium market segments. The company's brand portfolio also includes well-recognized names such as Liz Claiborne, Monet, and DKNY. In 2007, the company embarked on a new strategy with a more branded focus and as part of its strategic review, sold, exited, and/or discontinued non-core businesses (including all of its moderate brands). The developing outlook reflects S&P's concern that the weak retail environment will continue to hamper Liz Claiborne. If the company is unable to turn around its Mexx's business and operating results and cash flow metrics remain at current levels, S&P could revise the outlook to negative. S&P would consider lowering the rating if the company is unable to refinance its revolving credit facility or liquidity becomes constrained. Alternatively, S&P could raise the ratings if the company's Mexx business recovers and it results in increasing profitability and stronger credit metrics such that EBITDA coverage of interest increases to 2.0x. For this to occur, EBITDA would have to increase 238% from 2009 levels assuming debt remains unchanged. MAGNA ENTERTAINMENT: Wins Nod to Send Plan for Voting ----------------------------------------------------- Magna Entertainment Corp. received approval from the Bankruptcy Court of the disclosure statement explaining the latest iteration of its bankruptcy plan. The Plan will now be sent to creditors for voting. Magna will seek court approval of the Plan by April 30. Magna Entertainment this week amended the Chapter 11 plan it has jointly proposed with MI Developments Inc. and the Official Committee of Unsecured Creditors to provide for the transfer of Maryland Jockey Club to MID. The original Plan, including the litigation settlement to be implemented by the Plan, was announced by MID on January 11, 2010. Rather than being sold by MEC pursuant to an auction as originally contemplated, MJC will form part of the assets of MEC that are to be transferred to MID under the amended Plan. In return for the transfer of MJC, MID will pay the secured and unsecured claims of MJC creditors to the extent allowed or agreed in an estimated amount of US$23 million to US$25 million. The amended Plan also provides that the amount to be paid by MID to the non-MJC unsecured creditors of MEC pursuant to the Plan will be increased from US$75 million to US$89 million. The amended Plan is subject to the confirmation of the Bankruptcy Court. MID, MEC and the Committee, among others, have entered into a Support Agreement pursuant to which, among other things, MID and the Creditors Committee agreed to support the Plan and MEC agreed to seek confirmation of the Plan by the U.S. Bankruptcy Court on or prior to April 30, 2010. The Support Agreement may be terminated if, among other things, the U.S. Bankruptcy Court denies confirmation of the Plan. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MERNA REINSURANCE: S&P Assigns 'BB+' Rating on Senior Notes ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' issue-level rating on the notes exposed to losses from earthquakes, including fires following, and sprinkler leakage in the covered territory to be issued by Merna Reinsurance II Ltd. Merna Re II is a special purpose insurer formed pursuant to the Bermuda Insurance Act, 1978, as amended, and is owned by a purpose trust. The issuer was incorporated under the laws of Bermuda on Feb. 26, 2010. Merna Re II will cover losses resulting from earthquakes in Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Tennessee, and Wisconsin. Merna Re II will cover losses in this territory that result from earthquakes, regardless of whether the earthquake epicentre occurs in the covered territory. State Farm Fire & Casualty Co. is the insurance company ceding the covered risks to Merna Re II. Ratings List Merna Re II Ltd. Senior secured notes BB+ METRO-GOLDWYN-MAYER: Hedge Funds Unwilling to Sell at Low Price --------------------------------------------------------------- The Wall Street Journal's Mike Spector and Lauren A. E. Schuker report that the hedge funds controlling big chunks of Metro- Goldwyn-Mayer Inc.'s bank debt signaled Wednesday an unwillingness to sell for a lowball price. People familiar with the matter have told the Journal that MGM has received only three bids, all at roughly $1.5 billion or less. The Journal says those making offers include Time Warner Inc., Lions Gate Entertainment Corp. and Len Blavatnik's Access Industries. Creditors had been hoping for a figure of around $2 billion. The Journal relates that over the past few months, several hedge funds have bought into the studio's bank debt at around 60 cents on the dollar. According to the Journal, those investments imply the studio is worth about $2.4 billion, well above what current suitors are bidding. Sources told the Journal at least $1 billion of MGM's bank debt is now held by a small group of hedge funds. According to the sources, about eight to 10 private investment firms now hold between $300 million and $400 million chunks of MGM's debt. Those sources said the largest holders are Anchorage Advisors and Highland Capital Management. The sources also said Apollo Global Management holds a small piece of MGM's debt. The Journal says many of these hedge funds sit on a steering committee that is negotiating with MGM and its advisers. The two camps met Tuesday to discuss MGM's most recent bids and are set to convene again next week to continue discussing a standalone plan, according to the Journal. The Journal also relates that people familiar with the matter said MGM has asked its lenders to grant leniency on debt payments until mid-May 2010 as it continues to work on backup restructuring plans that would hand control to creditors. The Journal says the creditors' willingness to take control of MGM could be their move to inject more competition into the bidding process and fetch higher prices for the studio. The Journal relates that during a conference call Wednesday, some creditors had hoped to be given a choice between bids for the company or a separate plan that would give them control. Instead, they were told MGM continued to work on the separate plan with other creditors and that the film studio needed yet more time to get a deal done. According to the Journal, Patrick H. Daugherty, a partner and head of private equity at Highland, said in a statement his firm is evaluating joining the steering committee. "[W]e are certainly willing and able to consider a standalone plan that would provide a full recovery for our investors," Mr. Daugherty, according to the Journal. According to the Troubled Company Reporter on March 10, 2010, people familiar with the matter told The Wall Street Journal that MGM is readying a backup plan should bids for its assets come in too low. Sources told the Journal, MGM creditors are increasingly willing to assume control over the studio. The sources said that under that scenario, MGM would likely pursue a "standalone" plan in which lenders would convert their debt to equity. MGM has hired investment bank Moelis & Company and the law firm Skadden, Arps, Slate, Meagher & Flom. In August, it hired the restructuring expert Stephen F. Cooper to help lead the company. Among the potential bidders for a restructuring-oriented deal are Qualia Capital, an investment firm with film industry veterans. MGM is facing a March 31 deadline for its bank debt and an April 8 deadline for a $250 million credit facility. About Metro-Goldwyn-Mayer Metro-Goldwyn-Mayer, Inc., is an independent, privately held motion picture, television, home video, and theatrical production and Distribution Company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. An investor consortium, comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group, owns MGM. MF GLOBAL: Fitch Puts 'BB+' Stock Ratings on Negative Watch ----------------------------------------------------------- Fitch Ratings has placed the ratings of MF Global on Rating Watch Negative to reflect concern following the sudden departure of CEO Bernard Dan and the replacement of Board Chairman Alison Carnwatch whose term was scheduled to end in August 2010. Both roles will be assumed by Jon S. Corzine effective immediately, who previously had no managerial role in the company. To facilitate the transition, the former CEO and Board Chairman will remain with the company until May 2010 and August 2010, respectively. Fitch also points to less than favorable internal capital generation as a potential negative driver in the rating. In order to resolve the Rating Watch Negative, Fitch will evaluate: -- The Company's fiscal fourth quarter 2010 and full year fiscal results; -- An updated plan to improve profitability metrics allowing for internal capital generation, and subsequent steps taken by the company to achieve desired results; -- MFG's managerial and strategic changes that may occur as a result of the appointment the new CEO; These ratings have been placed on Rating Watch Negative: MF Global, Ltd -- Long-term Issuer Default Rating at 'BBB'; -- Short-term IDR at 'F2'; -- Senior debt at 'BBB'; -- Preferred stock at 'BB+'. MF Global is a leading futures and options broker with subsidiaries in major financial hubs. Main subsidiaries are registered futures commissions merchants and broker/dealers. MF Global is heavily regulated as a member of commodities, futures, and securities exchanges in the U.S., Europe and the Asia-Pacific region. MIDWEST GAMING: S&P Assigns Corporate Credit Rating at 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Des Plaines, Illinois-based Midwest Gaming Borrower LLC. The rating outlook is negative. At the same time, S&P assigned the company's $120 million senior secured first-lien credit facilities (consisting of a $10 million revolving credit facility and a $110 million delayed-draw term loan) S&P's issue-level rating of 'BB-' (two notches higher than the 'B' corporate credit rating). S&P also assigned this debt its recovery rating of '1', indicating its expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. In addition, S&P assigned the company's $175 million senior secured second-lien notes an issue-level rating of 'B' (at the same level as the 'B' corporate credit rating) with a recovery rating of '4', indicating S&P's expectation of average (30% to 50%) recovery for noteholders in the event of a payment default. The notes will be co-issued by Midwest Gaming Finance Corp., a subsidiary of Midwest Gaming Borrower. Proceeds from the proposed debt offerings, along with approximately $150 million of equity contributed by the equity sponsors and $10 million of vendor financing, will be used to fund the construction costs of the Des Plaines Casino in Des Plaines, Ill., a $125 million license fee, and other transaction expenses. (The ratings are based on preliminary terms and conditions.) The 'B' corporate credit rating reflects the risks surrounding Midwest's ability to ramp up internally generated cash flow in sufficient time to cover fixed charges given uncertainties surrounding demand, and difficulties in managing costs typically observed in the first several months of operation of a new gaming project. While an interest reserve account will be funded through proceeds from the notes offering, S&P is concerned that the reserve account, which covers only three months of interest post- opening, does not provide sufficient cushion against a slow ramp- up of the property. In addition, the rating reflects the risk of construction delays and cost overruns (though the company entered into a guaranteed maximum price contract for approximately 75% of the hard construction costs, which, along with a $20 million completion guarantee and a $12.8 million construction contingency, largely mitigates this risk). Midwest's lack of diversity, as the owner and operator of a single casino, also factors into the rating. MILES ROAD: Seeks Chapter 11 Protection in Kentucky --------------------------------------------------- Don Jeffrey at Bloomberg News reports that Miles Road LLC filed for Chapter 11 in Lexington, Kentucky (Bankr. E.D. Ky. Case No. 10-50958), on March 24 after its bank foreclosed on its property. Closely held Miles Road is a developer of residential real estate in Kentucky. The petition says that the Company has debts of $100 million to $500 million. Miles Road is suing Kentucky Bank before the Bankruptcy Court. According to the Bloomberg report, Miles Road said Kentucky Bank secured a judgment of foreclosure on a residential development in Nicholasville, Kentucky, and is seeking judgments in state court against Miles Road principals to pay what's owed on loans. Miles Road requested an injunction against the bank to refrain from collection attempts. The largest creditor listed in the filing is Kentucky Bank, a unit of Kentucky Bancshares Inc. of Paris, Kentucky, with $347.7 million in unsecured debt and $5 million in secured debt. MSCI INC: Moody's Assigns 'Ba2' Rating on $1.375 Bil. Loan ---------------------------------------------------------- Moody's Investors Service assigned a Ba2 to a proposed $1.375 billion credit facility of MSCI, Inc., affirmed the Ba2 Corporate Family Rating and changed the rating outlook to positive from developing. Pursuant to a definitive merger agreement, MSCI agreed to acquire RiskMetrics Group, Inc.'s outstanding common equity in a cash and stock transaction for total consideration of approximately $1.6 billion. The existing secured debt of both MSCI and RiskMetrics is expected to be repaid in connection with the acquisition. The transaction is expected to be funded with existing cash of MSCI and RiskMetrics, newly issued common stock of MSCI and a new $1.275 billion secured term loan facility. A new $100 million revolving credit facility will be undrawn at closing. The transaction is subject to customary closing conditions, including approval by the shareholders of RiskMetrics, the receipt by MSCI of the proceeds of the debt financing for the transaction, antitrust clearance and other customary regulatory approvals. The transaction is currently expected to close in MSCI's third fiscal quarter of 2010. "The RiskMetrics business is a solid strategic fit for MSCI and substantially increases its scale and product line diversification. RiskMetrics' multi-asset class analytic products are market leaders with significant growth potential and will nicely complement MSCI's equity index, equity analytic, and multi- asset class product lines," stated Lenny Ajzenman, Senior Vice President. MSCI's financial strength metrics were very strong for the rating category at November 30, 2009, and will decline to a level that is modestly weak for the Ba2 rating category pro forma for the acquisition. The positive rating outlook anticipates that financial strength metrics will substantially improve over the next year driven by debt repayments, revenue growth and cost synergies. The Ba2 Corporate Family Rating continues to reflect MSCI's leading market positions and a largely subscription-based revenue model with high customer retention rates. The ratings are constrained by a relatively small revenue base relative to other Ba2-rated service issuers, the potential for weak demand from financial sector clients amid a slow economic recovery, integration risks, and the potential for further large acquisitions. These ratings (assessments) were assigned: * $100 million 5 year secured revolving credit facility, Ba2 (LGD 3, 33%) * $1.275 billion 6 year secured term loan, Ba2 (LGD 3, 33%) These ratings (assessments) were affirmed: * Corporate Family Rating, Ba2 * Probability of Default Rating, Ba3 * $75 million secured revolving credit facility, Ba2 (LGD 2, 29%)- ratings expected to be withdrawn upon closing of refinancing * $380.5 million secured term loan, Ba2 (LGD 2, 29%) - ratings expected to be withdrawn upon closing of refinancing * Speculative Grade Liquidity Rating, SGL-1 The last rating action on MSCI was on March 1, 2010, when Moody's affirmed the Ba2 Corporate Family Rating and debt instrument ratings of MSCI and changed the rating outlook to developing from positive after the announcement of the RiskMetrics acquisition. MSCI is a leading provider of investment decision support tools to investment institutions worldwide. The company's key product lines are international equity indices marketed under the MSCI brand and equity portfolio analytics marketed under the Barra brand. MSCI's revenues for the fiscal year ended November 30, 2009, were $443 million. RiskMetrics is a leading provider of risk management and corporate governance products and services to participants in the global financial markets. RiskMetrics' revenues for the year ended December 31, 2009, were approximately $303 million. MXENERGY HOLDINGS: Sempra Energy Holds Class B Common Stock ----------------------------------------------------------- Sempra Energy Trading LLC said it is the sole holder of Class B Common Stock of MXenergy Holdings Inc. Class C Common Stock represents approximately 7.4% of the Company's total outstanding common stock. In connection with two master supply and hedge agreements, RBS Sempra is also the Company's primary liquidity and hedge provider. Pursuant to the terms of the Company's Certificate of Incorporation, RBS Sempra is entitled to appoint one director to the Company's Board of Directors. In September 2009, RBS Sempra appointed Michael A. Goldstein to serve as the Class B Director. Effective March 16, 2010, Mr. Goldstein resigned his position as the Class B Director due to his assumption of new responsibilities at RBS Sempra. During his tenure, Mr. Goldstein served on the Executive Committee, the Compensation Committee and the Risk Oversight Committee of the Board of Directors. Also effective March 16, 2010, RBS Sempra appointed Jacqueline Mitchell to serve as the Class B Director. Ms. Mitchell is Senior Managing Director at RBS Sempra Commodities, where she oversees RBS Sempra's North American natural gas trading and marketing operations. As part of RBS Sempra's senior management team, she has been instrumental in creating and overseeing steady growth in their commodity trading business. Ms. Mitchell's in-depth understanding of natural gas commodity markets is expected to provide expertise and insight for the Company's risk management and other operating activities. Ms. Mitchell will also serve on the Executive Committee, the Compensation Committee and the Risk Oversight Committee. About MXenergy MXenergy Holdings Inc. was founded in 1999 as a retail energy marketer. The two principal operating subsidiaries of Holdings are MXenergy Inc. and MXenergy Electric Inc. which are engaged in the marketing and supply of natural gas and electricity, respectively. Holdings and its subsidiaries operate in 39 market areas located in 14 states in the United States and in two Canadian provinces. At Dec. 31, 2009, the Company's assets were at $222.96 million, and debts were at $142.01 million, resulting to a $80.95 million stockholders' equity for Dec. 31, 2009. Mxenergy carries Caa3 long term corporate family and Ca/LD probability of default ratings from Moody's Investors Service. NELLSON NUTRACEUTICAL: Ch. 11 Barred Firm's Bonuses, Trustee Says ----------------------------------------------------------------- Bankruptcy Law360 reports that a U.S. trustee has fired back at Nellson Nutraceutical LLC in a dispute over the payment of management incentive bonuses, arguing in an appeals brief that the debtor is trying to add language to the Bankruptcy Code that isn't there. Headquartered in Irwindale, California, Nellson Nutraceutical, Inc., aka Nellson Candies, Inc., formulates, makes and sells bars and powders for the nutrition supplement industry. The Debtor and its affiliates filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represented the Debtors in their restructuring efforts. The Hon. Christopher Sontchi confirmed a Chapter 11 plan of liquidation filed by Nellson Nutraceutical Inc. and its debtor-affiliates on July 25, 2008 NES RENTALS: Moody's Assigns 'Caa2' Rating on Second Lien Notes --------------------------------------------------------------- Moody's Investors Service has assigned a Caa2 rating to the planned seven-year second lien notes of NES Rentals Holdings, Inc. Additionally, the company's Caa1 corporate family and probability of default, and the Caa2 $224 million second lien term loan ratings remain unchanged. Proceeds from the $250 million second lien notes due 2017 will refinance the $224 million second lien term loan due 2013, with a small amount being used to reduce revolver borrowing and pay related fees/expenses. The company also plans to amend its existing $375 million first lien, asset- based revolving credit facility, scheduled to expire July 2011. The amendment effort, as outlined, would extend expiration on most of the facility's commitment until 2014; expiration for lenders who do not agree to amend would remain July 2011, with amending lenders agreeing to effectively absorb those outstandings that mature July 2011. The first lien amendment transaction would not close until after the second lien notes close. Until the amendment closes, commitment size of the extended portion will remain uncertain. Upon completion of both the second lien note issuance and the revolver amendment-- assuming at least $275 million of the $375 million revolver commitment amends-- Moody's expects to change NES' rating outlook to stable from negative. Rating outlook stabilization following the revolver amendment would reflect an improved liquidity profile. Regarding the second lien transaction, the note issuance would move the maturity to 2017 from 2013 and reduce risk of financial ratio covenant breach. (Risk of covenant breach under the existing second lien credit agreement stems from an ongoing total leverage test.) Regarding the first lien amendment, the company's maturity extension plan should boost confidence of sustained borrowing line access. Confidence of liquidity profile adequacy while NES endures poor equipment rental markets, should limit downside risk enough to avoid rating downgrade. The Caa1 corporate family rating anticipates prolonged unprofitability as equipment rental demand and pricing remains weak. NES, like many in the equipment rental sector, could accumulate a material retained deficit before construction markets and other equipment demand sources improve enough that operating profits exceed interest costs. In Moody's view the U.S. non- residential construction activity decline underway should abate in 2011, but the primary demand growth rate that resumes in 2011 will be far from the strong, sustained levels that followed the 2001 recession, and rental pricing increases should remain muted. A challenging price environment beyond 2011, competitors' focus on penetrating industrial-based (an NES' area of emphasis) versus construction-based markets, slim interest coverage and a relatively seasoned rental fleet will sustain the weak credit profile. NES' Caa1 rating also acknowledges good regional diversity across the eastern U.S., recent cost cuts, and the company's plan to conservatively manage fleet spending as low demand persists. Ratings assigned: * Second lien notes due 2017, Caa2 LGD 5, 77% Ratings affirmed: * Corporate family and probability of default, affirmed at Caa1 * Second lien term loan due 2013, Caa2 LGD 5, to 78% from 79% Ratings assigned herein are subject to review of final documentation. Moody's last rating action occurred May 12, 2009, when NES' probability of default rating was raised to Caa1/LD (the "LD" designation was subsequently removed) from Caa3. NES Rentals Holdings, Inc., based in Chicago, Illinois and majority-owned by Diamond Castle Investments, is an equipment rental company in the U.S. Revenues for 2009 were approximately $300 million. NEW FRONTIER ENERGY: Posts $748,172 Net Loss in Q3 Ended Nov. 30 ---------------------------------------------------------------- New Frontier Energy, Inc., filed its quarterly report on Form 10- Q, showing a net loss of $748,172 on $69,711 of revenue for the three months ended November 30, 2009, compared with a net loss of $1,135,361 on $336,302 of revenue for the same period of 2008. The Company's balance sheet as of November 30, 2009, showed $18,064,111 in assets, $7,807,930 of debts, and $10,256,181 of stockholders' equity. "The Company has incurred significant operating losses. As of November 30, 2009, the Company has limited financial resources and has not been able to generate positive cash flow from operations. The Company had a working capital deficiency of $2,987,953 at November 30, 2009, and $2,833,562 at February 28, 2009. These factors raise substantial doubt about our 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?5bc0 Based in Denver, New Frontier Energy is a natural resource exploration and production company engaged in the exploration, acquisition, and development of oil and natural gas properties in the United States. The Company is currently developing three significant properties in Colorado and Wyoming. NEW MEDIA: Posts $1.089-Mil. Net Loss in Q3 Ended Jan. 31 --------------------------------------------------------- New Media Lottery Services, Inc., filed its quarterly report on Form 10-Q, showing a net loss of $1,089,939 on $178,650 of revenue for the three months ended January 31, 2010, compared to a net loss of $566,332 on $233,394 of revenue for the same period of the prior year. The Company's balance sheet as of January 31, 2010, showed $2,056,723 in assets, $5,051,382 of debts, $2,000 of Series A convertible redeemable preferred stock, and $3,472,270 of minority interest, for a stockholders' deficit of $6,468,929 "For the year ended April 30, 2009, the Company has incurred operating losses of $15,886,684 (excluding minority interest and other comprehensive loss) from inception of the Company through April 30, 2009. The Company's stockholders' deficit at April 30, 2009 was $12,256,234. Additionally, the Company has sustained additional operating losses for the nine months ended January 31, 2010 of $2,365,384, has a working capital deficit of $4,844,787, and negative cash flows from operations. These factors combined, raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?5bc1 Harrisonburg, Va.-based New Media Lottery Services, Inc. supplies lotteries with a white label lottery system, games and management support to develop new income streams from digital lottery product distribution, including the Internet, mobile telephony, interactive television and digital vending. NORTEL NETWORKS: Proposes Grant Thornton as Arbitrator ------------------------------------------------------ Nortel Networks Inc. and its affiliated debtors seek the Court's permission to employ Grant Thornton LLP as arbitrator in connection with the sale of their Optical Networking and Carrier Ethernet business. As arbitrator, Grant Thornton is tasked to resolve any dispute that may ensue between Nortel entities and the buyer, Ciena Corporation, in connection with the transition services that will be provided by Nortel to facilitate the orderly completion of the sale and its transition to the buyer. Erik Lioy, a partner at the Forensic, Investigative & Litigation Services group of Grant Thornton, was designated to facilitate the arbitration. Grant Thornton is an accounting and business advisory firm that provides information technology services. The U.S.-based firm is a member of Grant Thornton International Ltd. Grant Thornton will be paid a $100,000 flat fee for its services and will be reimbursed for its necessary and reasonable expenses. The firm's professionals and their hourly rates are: Professionals Hourly Rates ------------- ------------ Partners $525 Managers/Senior Managers $350 to 475 Associates/Senior Associates $175 to 325 Paraprofessionals $100 Mr. Lioy assures the Court that Grant Thornton does not have interests adverse to the interest of the Debtors' estates, creditors and equity security holders, and that it is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Proposes Chilmark as Consulting Expert ------------------------------------------------------- Nortel Networks Inc. and its affiliated debtors ask the Court to authorize their legal counsel to employ Chilmark Partners LLP as its consulting expert. The Debtors want Chilmark Partners employed to assist their counsel, Cleary Gottlieb Steen & Hamilton LLP, in all legal proceedings concerning the allocation of proceeds from the sale of certain assets of Canada-based Nortel Networks Corp. and its affiliates. The issue on the allocation of the sale proceeds will be decided by means of an arbitration or other proceedings due to the absence of an agreement among the Nortel companies on the allocation. "The services of a capable and experienced consulting expert such as Chilmark are essential to Cleary Gottlieb as it navigates the complex and challenging issues posed to the Debtors by the allocation process," says the Debtors' attorney, Ann Cordo, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware. Chilmark has extensive experience fashioning imaginative solutions to complex problems and has the resources available to advise Cleary Gottlieb in the matter, Ms. Cordo says. Chilmark will be paid a monthly fee of $250,000 for its services and will be reimbursed for its necessary and reasonable expenses. The Firm will also get an additional $2 million fee upon confirmation of NNI's plan of reorganization or resolution of the allocation of the sale proceeds. About 75% of Chilmark's monthly fees will be credited against the $2 million fee, provided that the credits will not reduce the fee below zero. Matthew Rosenberg, Esq., a member of Chilmark, assures the Court that his Firm does not have interests adverse to the Debtors' estates or any class of creditors, and that the Firm is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: To Reduce Pension Advisers' Monthly Fees --------------------------------------------------------- Nortel Networks Inc. and its affiliated debtors ask the Court to approve these proposed amendments to the compensation scheme of their pension advisers, Palisades Capital Advisors LLC and Punter Southall LLC: (1) Beginning on December 2009, the monthly cash fee paid to the firms will be reduced from $200,000 to $125,000. (2) The length of the guaranteed payment period will be extended two months, from the first 10 months of the Firms' engagement to the first 12 months of the advisers' employment, and will run through April 2010. In case the employment agreement is terminated prior to the end of the guaranteed payment period, the Firms will be entitled to at least the aggregate monthly cash fee payable through the guaranteed payment period. (3) The sharing percentages of the monthly cash fee stated in the employment agreement would continue through February 2010, with 65s% of the monthly cash fee payable to Palisades and 35% to Punter. The Firms agreed that in March and April 2010, 50% of the monthly cash fee will be paid to both firms and in subsequent months, 35% will be paid to Palisades and 65% to the other firm. The Court will hold a hearing on March 31, 2010, to consider approval of the proposed amendments. Deadline for filing objections is March 24. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) OROVILLE INN: Owner Accused of Bankruptcy Fraud ----------------------------------------------- David Hardy and two dozen other residents at Oroville Inn has commenced a lawsuit against landlord Jonothan Benefield. The plaintiffs are represented by Drexel A. Bradshaw, Esq., at Brad Shawassociates. The 72-page complaint filed in the United States District Court in Sacramento claims that Mr. Benefield is not only criminally negligent but also engaged in serious bankruptcy fraud. "Add to Benefield's list of sins a shell game in which he is not only mistreating his tenants but trying to illegally avoid a mountain of ill gotten debt," said Bradshaw, who has filed suit to force Benefield to live up to his obligations and make financial restitution to the tenants, many of whom have seen their health deteriorate due to their residency at the Oroville Inn. "The Oroville Inn is owned by Walnut Hill Enterprises, LLC. A Chapter 13 was filed by W.H.E., LLC. -- a similar but not identical company name," Bradshaw explains. "These are not the same entity. The bankruptcy petition contends the bankruptcy estate has less than $50,000 in assets, and does not include my clients, the tenants, as creditors. Despite the fact that Walnut Hill Enterprises, LLC has not filed for bankruptcy, the bankruptcy attorney has asserted that a stay is in effect, meaning we can't move forward with the complaint on behalf of the Oroville Inn tenants. This is totally false. Adding insult to injury, the bankruptcy attorney sent a threatening notice to each tenant stating that they had to keep paying rent. In simple language: That's bankruptcy fraud." Until Bradshaw's efforts, Hardy -- like dozens of other low-income and some disabled residents of the Oroville Inn (2066 Bird Street, Oroville) -- has been powerless even though Benefield had been cited by the Oroville City Council for maintaining a property that is a "nuisance" and "substandard" with more than 700 violations of health and safety codes. On January 2, 2009 the owners of the Oroville Inn denied the City's request for a voluntary inspection resulting in a warrant which forced an inspection on January 22, 2009. So horrific were the conditions found there that immediate improvements "or demolition of the property" was ordered by the Court. To date, no improvements have been made. OZBURN-HESSEY HOLDING: S&P Assigns 'B' Rating on Senior Loan ------------------------------------------------------------ Standard & Poor's Ratings Services assigned a 'B' rating to Ozburn-Hessey Holding Co. LLC's new $310 million, first-lien senior secured credit facility, which consists of a $35 million revolving bank loan and a $275 million term loan B. The recovery rating is '3', indicating meaningful (50% to 70%) recovery of principal in a payment default scenario. S&P also assigned a 'CCC+' rating to the company's $75 million second-lien senior secured term loan, and a '6' recovery rating, indicating negligible (0% to 10%) recovery of principal in a payment default scenario. This new structure supersedes the previous transaction, which S&P rated on March 5, 2010. S&P withdrew the ratings on those issues. Despite increased debt leverage, the ratings receive support from stable industry fundamentals in the third-party logistics segment, as well as OHL's relatively stable mix of end markets (consumer, food and beverage, and health care accounted for more than 60% of 2009 net revenues, defined as gross revenues less purchased transportation). Still, the recent outlook revision to negative from stable reflects increased debt leverage resulting from OHL's consolidation of certain more cyclical international operations that provide global freight management and logistics services. Pro forma for the proposed transaction to combine its international operations under OHL, credit measures are somewhat stretched for the ratings and further earnings pressures could reduce covenant cushion and constrain liquidity. The outlook is negative. "S&P expects demand for domestic third- party logistics to remain fairly healthy over the near term, given good industry fundamentals," said Standard & Poor's credit analyst Anita Ogbara. "However, S&P expects credit metrics to remain stretched, given incremental leverage from the addition of OHL's more cyclical international operations," she continued. S&P could lower the ratings if OHL's access to liquidity becomes constrained under its current covenants or if funds from operations to total debt consistently falls into the high-single- digits percent range. Alternatively, S&P could revise the outlook to stable if earnings improve and credit measures strengthen, resulting in FFO to total debt consistently in the midteens percentage range. PATRICK HACKETT: Receives Letter of Intent for $750,000 Loan ------------------------------------------------------------ Hackett's Stores, Inc., announced March 23 that its wholly owned subsidiary, Patrick Hackett Hardware Company, has been presented with a letter of intent for financing of up to $750,000. Proceeds from the loan would be used to repay certain indebtedness and to purchase additional inventory. Herbert Becker, President and CEO of Patrick Hackett, stated, "We are currently reviewing this non-binding LOI and trying to negotiate better terms for the company." Mr. Becker continued, "The fact the company received this LOI is itself a positive development and appears to be an indication that capital seems to be more accessible than it was just a few months ago." Final terms of the offer are being negotiated and, if agreed upon, ultimately must be approved by the court. About Patrick Hackett Hackett's Stores, Inc., is the parent company of Patrick Hackett Hardware Company and HIIO, Inc. Patrick Hackett Hardware Company has a wide variety of merchandise and business lines, including a full service hardware, consumer electronics, equipment rental, brand name clothing, footwear, sporting goods and gourmet foods. HIIO, Inc., represents a concept platform for a new specialty retailer focused on fashion clothing and outerwear, footwear and selected gift items. There are currently no HIIO-branded stores opened to date. Hackett's Stores, Inc. (Pink Sheets:HCKI) is a holding of Seaway Valley Capital Corporation (Pink Sheets:SEVA). Based in New York, Patrick Hackett Hardware Company -- http://www.hackettsonline.com/-- began in 1830 as a hardware store in upstate New York. Hacketts now operates full-service department stores and a specialty store, selling a full line of clothes, consumer electronics, cell phones, shoes, housewares, hardware and others. Patrick Hackett filed for Chapter 11 on November 10, 2009 (Bankr. N.D. N.Y Case No. 09-63135). The Debtor disclosed less than $10,000,000 in total asset Hackett's Stores, Inc., whose shares trade currently on the Pink Sheets, is not nor has ever been in bankruptcy or bankruptcy protection." PATRICK HACKETT: U.S. Trustee Withdraws Motion to Convert --------------------------------------------------------- Hackett's Stores, Inc., said that on March 23 the United States Trustee's office has withdrawn its motion to convert the case of Hackett's wholly owned subsidiary, Patrick Hackett Hardware Company, to a Chapter 7. David Antonucci, counsel for Patrick Hackett Hardware Company in the case, stated, "As previously discussed this is what we did anticipate, but now it is official. And we would like to again thank the United States Trustee's office for withdrawing this motion." Company President and CEO, Herbert Becker added, "As previously stated we expected that the conversion motion would be withdrawn, and now that has happened. At this point we are in the final stages of preparing our Chapter 11 emergence plan, and we expect to present it to the creditors and the court so Patrick Hackett can ultimately emerge from Chapter 11." About Patrick Hackett Hackett's Stores, Inc., is the parent company of Patrick Hackett Hardware Company and HIIO, Inc. Patrick Hackett Hardware Company has a wide variety of merchandise and business lines, including a full service hardware, consumer electronics, equipment rental, brand name clothing, footwear, sporting goods and gourmet foods. HIIO, Inc., represents a concept platform for a new specialty retailer focused on fashion clothing and outerwear, footwear and selected gift items. There are currently no HIIO-branded stores opened to date. Hackett's Stores, Inc. (Pink Sheets:HCKI) is a holding of Seaway Valley Capital Corporation (Pink Sheets:SEVA). Based in New York, Patrick Hackett Hardware Company -- http://www.hackettsonline.com/-- began in 1830 as a hardware store in upstate New York. Hacketts now operates full-service department stores and a specialty store, selling a full line of clothes, consumer electronics, cell phones, shoes, housewares, hardware and others. Patrick Hackett filed for Chapter 11 on November 10, 2009 (Bankr. N.D. N.Y Case No. 09-63135). The Debtor disclosed less than $10,000,000 in total asset Hackett's Stores, Inc., whose shares trade currently on the Pink Sheets, is not nor has ever been in bankruptcy or bankruptcy protection." PERF-GO GREEN: Earns $2.2 Million in Q3 Ended December 31 --------------------------------------------------------- Perf-Go Green Holdings, Inc., filed its quarterly report on Form 10-Q, showing net income of $2,212,875 on $242,991 of revenue for the three months ended December 31, 2009, compared to net income of $7,880,000 on $462,000 of revenue for the same period of 2008. The Company's balance sheet as of December 31, 2009, showed $2,298,906 in assets and $4,942,254 of debts, for a stockholders' deficit of $2,643,348. "The Company had net cash used in operations of $1,169,375 for the nine month period ended December 31, 2009; and has a working capital deficit of $2,931,983 and a stockholders' deficit of $28,449,951 at December 31, 2009. Further, losses from operations are continuing subsequent to December 31, 2009, and the Company anticipates that it will continue to generate significant losses from operations for the near future. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future." "These conditions raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?5bc2 Based in New York, Perf-Go Green Holdings, Inc., markets and distributes biodegradable plastics and biodegradable products. PLIANT CORP: Court Issues Final Decree Closing Unit's Case ---------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware has entered a final decree closing the Chapter 11 case of In re Alliant Company, LLC, Case No. 09-10448 (MWF), effective as of February 18, 2010. The order indicates the estate has been fully administered as required by Section 350(a) of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedure. The order also notes that all fees due pursuant to 28 U.S.C. Section 1930 have been paid. Pliant emerged from its bankruptcy case effective December 3, 2009, as a wholly owned direct subsidiary of Berry Plastics Corporation. Berry Plastics acquired 100% of the common stock of Pliant for an acquisition purchase price of $561 million. About Pliant Corp Headquartered in Schaumburg, Illinois, Pliant Corporation produced value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. Pliant operated 16 manufacturing facilities around the world, and employed approximately 2,800 people with annual net sales of $900 million for the 12 months ended September 30, 2009. Pliant and 10 of its affiliates filed for Chapter 11 protection on January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel. As of September 30, 2005, the Company had $604.3 million in total assets and $1.19 billion in total debts. The Debtors emerged from Chapter 11 on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed February 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, served as bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acted as claims and noticing agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Creditors Committee selected Lowenstein Sandler PC as its counsel. As of September 30, 2008, the Debtors had $688.6 million in total assets and $1.03 billion in total debts. PNG VENTURES: Emerges From Chapter 11 as Applied Natural -------------------------------------------------------- PNG Ventures, Inc., and its wholly owned subsidiaries, New Earth LNG, LLC, Arizona LNG, LLC, Applied LNG Technologies USA, LLC, Fleet Star, Inc., and Earth Leasing, Inc. have successfully emerged from the voluntary reorganization filed on September 9, 2009 under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Plan of Reorganization, confirmed on March 12, 2010, resulted in conversion of a majority of the Company's outstanding debt to new common equity, and eliminated or mitigated the impact of certain onerous contracts inherited as part of the Company's June 30, 2008 Share Exchange Transaction with Earth Biofuels, Inc. Throughout the reorganization process, the Company operated its business in the ordinary course. The Company's day-to-day operations and delivery of products or services to its customers were not adversely affected by the Chapter 11 filing. Cem Hacioglu, President & CEO of PNG Ventures, said, "We are very happy to have successfully completed this critical process within a short period and are excited about the prospects of our new company going forward. Having recapitalized our balance sheet and eliminated a number of debilitating operational and financial impediments, we are now superbly positioned to take advantage of the tremendous growth opportunities in the alternative fuels market and become the preeminent provider of cleaner burning fuels for the domestic and international markets." Mr. Hacioglu continued, "On behalf of our Board of Directors and management team, we would like to thank our employees and professional team for their hard work, perseverance and dedication. We would also like to thank our Plan sponsors, Medley Capital and Sandell Asset Management for their faith in us and our long-term prospects. Most especially, however, we would like to thank our customers, suppliers and other business partners for their patience throughout this arduous process. We will continue to work very hard to be deserving of the trust and confidence they have placed in us and our Company." As part of the Plan of Reorganization, the majority of the Company's senior credit facility was converted into approximately 66% of the common stock of the newly organized Company with the balance settled for a combination of cash and a $9.8 million four- year term loan. In addition, the Company's trade and unsecured debts were exchanged for a creditor trust of approximately $1.2 million and 7.5% of the common stock of the newly reorganized Company. The Plan was funded by approximately $8.3 mm in return for a combination of approximately 26.5% of the common stock of the newly reorganized Company, a new $5.5 million four-year term loan and $250,000 short-term loan. Previously outstanding equity, including all options, warrants and other derivative instruments linked to that equity, was eliminated as part of the Plan. The Company remains a public entity and, upon completion of the customary regulatory review and distribution of the creditor shares, should resume trading under a new symbol based on the name Applied Natural Gas Fuels, Inc. The foregoing is intended as a summary of the terms of the final Plan of Reorganization and confirmation process. A more detailed description can be found within the Company's Current Report on Form 8-K which will be filed with the Securities and Exchange Commission. A copy of the Plan and Disclosure Statement are available at http://www.altlng.com. About Applied Natural (fka "PNG Ventures, Inc.") PNG Ventures, now known as Applied Natural, engages in the production, distribution, and sale of liquefied natural gas ("LNG") to customers consisting of public utilities, industrial end-users and other fleet customers within the transportation, manufacturing, distribution, and municipal markets, primarily in California, Arizona, and Nevada. The Company also offers turnkey fuel solutions, including delivery, equipment storage, fuel dispensing equipment, and fuel loading facilities. PNG Ventures and its affiliates filed for Chapter 11 on September 10, 2009 (Bankr. D. Del. Case No. 09-13162). Attorneys at Fox Rothschild LLP represent the Debtors in their restructuring effort. Logan & Co. serves as claims and notice agent. PNG won confirmation of its reorganization plan in March 2010. The Plan gives the first-lien creditor $5.5 million cash, a new $9.8 million secured loan, and 66% of the new stock in return for a $35.5 million claim. In exchange for financing the plan, lenders will receive a new four-year term loan and 26.5% of the stock. Unsecured creditors are receiving about 28% in cash plus 7.5% of the new stock. Existing stock was canceled. PPA HOLDINGS: Committee Seeks Chapter 11 Examiner ------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of PPA Holdings, LLC, and its 21 affiliates asks the U.S. Bankruptcy Court for the Central District of California to direct the appointment of an examiner pursuant Bankruptcy Code Sections 1104(c)(1) and (c)(2) as to Debtors PPA Holdings, LLC, and Pacific Property Assets, LLC. The Committee tells Judge Erithe A. Smith that, based on its investigation to date, the panel believes that it and the secured and unsecured creditors are without reliable information concerning certain matters pertaining to the Debtors, their properties, business affairs and transactions and financial condition pre and postpetition. Specifically, the Committee alleges that: -- PPA Assets transferred its interest in Pine Villa, LLC to a third party shortly prior to the petition date for no, or nominal, consideration. That transfer may be avoidable as a fraudulent conveyance. The Committee said an investigation into the value of the transferred interest and the terms and conditions upon which the transfer occurred is required. The Committee wants the Examiner empowered to conduct that investigation. -- In the years prior to the petition date, the Debtors' principals -- Messrs. John J. Packard and Stewart -- withdrew, in the aggregate, in excess of $7 million from the Debtors, in addition to their salaries, and that Messrs. Packard and Stewart contend that some or all of those advances have been repaid. The Committee contends that claims to recover the unpaid balance of those advances are assets of the Debtors' estates. -- PPA Assets holds a 25% interest in a limited liability company that owns a Sunseeker Portofino yacht. The Committee lacks information as to the business purpose, of any, for the acquisition of that interest, whether or not the yacht was used for business purposes before or after the Petition Date, and whether, to the extent the yacht was used for other than business purposes, PPA Assets has been compensated for the use of the yacht or reimbursed for the expenses of such usage. To the extent that the yacht was acquired for other than a business purpose, or has been used for other than business purposes, the Committee says claims may exist in favor of the PPA Assets bankruptcy estate. -- The Debtors raised $19 million in the one year prior to the Petition Date. To date, the Committee has not been able to account for the Debtors' use of those funds. To determine whether any of those funds were diverted and, as a result, if claims exist to recover any investor funds that were diverted to improper purposes, the Committee requests that the Examiner be empowered to conduct an investigation as to the amount of investor funds raised by the Debtors during the year prior to the Petition Date and the manner in which the Debtors utilized those funds. -- At the First Meeting of Creditors in these bankruptcy cases, a number of investors questioning the Debtors indicated that they were solicited to lend money to the Debtors for the acquisition of new properties in close proximity to the Petition Date. In response to questions from those investors, Mr. Stewart indicated that the Debtors did not anticipate that they would not be able to pay their debts as they fell due until shortly before the Petition Date. The Committee says the date upon which the Debtors knew that they would not be able to pay their debts as they fell due may be an important issue with respect to potential fraudulent conveyance claims that the estate may possess, as well as a matter of substantial concern to investors who elected to loan monies to the Debtors in relative proximity to the Petition Date. As a result, the Committee wants the Examiner empowered to conduct an investigation to determine when the Debtors knew, or should have known, that the Debtors would not be able to pay their debts as they fell due. -- PPA Assets' September 2009 monthly operating report indicates that Mr. Packard was reimbursed $18,265.18 for credit card expenses. Although the Committee has requested detailed back up for this payment and questioned why Mr. Packard apparently paid credit card expenses that the Debtors ought to have paid directly, the Committee has never received a satisfactory explanation for this payment, which may represent an improper post-petition insider payment. -- PPA Assets' monthly operating reports reflect large, unexplained expenditures in the form of credit card payments and on line web payments. The Committee says one possible explanation for at least some of the disbursements is that they were paid to fund construction expenses for the rehabilitation of real property owned by Mesa Ridge LLC, a non-debtor wholly owned subsidiary of PPA Holdings that owns an apartment complex in Mesa Arizona that is currently being rehabilitated with the proceeds of a construction loan. If true, the Committee believes that such expenditures would be unauthorized post-petition transfers. In addition, the Committee is informed and believes that PPA Holdings posted certain deposits in connection with the Mesa Ridge rehabilitation project that may, under certain circumstances, be refundable to PPA Holdings. The Committee wants the Examiner empowered to conduct an investigation into the terms and conditions under which the Mesa Ridge project is being conducted, as well as to determine the business purpose of the Debtors' postpetition credit card expenditures and on line web payments. -- The Committee's accountant has conducted a preliminary review of the Debtors' monthly operating reports and has noted issues/discrepancies that require further explanation. The Committee is represented in the Debtors' cases by: Richard W. Esterkin, Esq. L. Bruce Fischer, Esq. Tricia A. Takagi, Esq. MORGAN, LEWIS & BOCKIUS LLP 300 South Grand Avenue, Twenty-Second Floor Los Angeles, CA 90071-3132 Tel: (213) 612-2500 Fax: (213) 612-2501 A hearing on the Committee's request is scheduled for May 20, 2010, at 2:00 p.m. About PPA Holdings Irvine, California-based PPA Holdings LLC and its affiliates collectively owned and managed 47 multi-family apartment complexes, consisting of 2,398 individual apartment units, three office/commercial buildings, and a condominium unit. The Company and its affiliates filed for Chapter 11 on June 26, 2009 (Bankr. C.D. Calif. Lead Case No. 09-16353). Nanette D. Sanders, Esq., and Todd C. Ringstad, Esq., at Ringstand & Sanders LLP, represent the Debtors in their restructuring efforts. Richard W. Esterkin, Esq., at Morgan Lewis & Bockius LLP, represents the official committee of unsecured creditors as counsel. The Debtors listed $10 million to $50 million in assets and $50 million to $100 million in debts. PRESTIGE BRANDS: Completes Offering of $150MM 2012 Notes -------------------------------------------------------- Prestige Brands Holdings, Inc.'s subsidiary Prestige Brands, Inc., has completed its offering of $150 million aggregate principal amount of its new 8 1/4% Senior Notes due 2018 and the early settlement of its previously announced cash tender offer and consent solicitation with respect to its outstanding 9 1/4% Senior Subordinated Notes due 2012 (the "Old Notes"). The New Notes were privately offered to qualified institutional buyers pursuant to Rule 144A and Regulations S under the Securities Act of 1933, as amended. Prestige Brands used the net proceeds from the sale of the New Notes, together with other available funds, to fund the purchase of the Old Notes and the related costs to be incurred in connection with the Tender Offer. As of 5:00 p.m., New York City time, on March 23, 2010 (the "Consent Payment Deadline"), $97,913,000 aggregate principal amount of Old Notes had been validly tendered and not withdrawn, which represented 77.71% of the outstanding aggregate principal amount of the Old Notes. On March 24, 2010, Prestige Brands accepted for purchase and payment the Old Notes that had been validly tendered at or prior to the Consent Payment Deadline. Holders of Old Notes who tendered their Old Notes at or prior to the Consent Payment Deadline received $1,005.00 for each $1,000 principal amount of the Old Notes validly tendered (which included the consent payment of $30.00 per $1,000 principal amount of Old Notes), plus any accrued and unpaid interest on the Old Notes up to, but not including, March 24, 2010. In conjunction with the Tender Offer, Prestige Brands solicited consents to adopt proposed amendments to the indenture, dated as of April 6, 2004, under which the Old Notes were issued (as supplemented, the "Indenture"), that, among other things, eliminated substantially all of the restrictive covenants and certain events of default in the Indenture, and shortened the minimum notice period for a redemption from 30 days to three business days. As of the Consent Payment Deadline, consents from holders of 77.71% had been received and not withdrawn, representing a sufficient amount to approve the proposed amendments, and on March 24, 2010, a supplement to the Indenture was executed effecting the proposed amendments. Those holders who did not tender their Old Notes or respond to the consent solicitation by the Consent Payment Deadline are entitled to do so at or prior to 11:59 p.m., New York City time, on April 6, 2010 (the "Expiration Date"). The Expiration Date marks the expiration of the Tender Offer. However, holders who respond to the Tender Offer after the Consent Payment Deadline but on or prior to the Expiration Date will not receive the consent payment of $30.00 per $1,000 principal amount of Old Notes, and will only be eligible to receive $975.00 per $1,000 principal amount of Old Notes tendered. Holders who validly tender their Old Notes will also receive accrued and unpaid interest on the Old Notes up to, but not including, the date of payment for the Old Notes tendered on or prior to the Expiration Date. Prestige Brands has engaged BofA Merrill Lynch as Dealer Manager and Solicitation Agent for the Tender Offer. Persons with questions regarding the Tender Offer should contact BofA Merrill Lynch at (888) 292-0070 (toll free) or (980) 388-9217 (collect). Requests for copies of the Offer to Purchase or other tender offer materials may be directed to D.F. King & Co., Inc., the Information Agent, at (800) 769-7666 (toll-free) or (212) 269-5550 (collect), or in writing at 48 Wall Street, 22nd Floor, New York, NY 10005. About Prestige Brands Prestige Brands, Inc., markets and distributes brand name over- the-counter healthcare, personal care and household products throughout the United States, Canada and certain international markets. Key brands include Compound W(R) wart treatments, Chloraseptic(R) sore throat relief and allergy treatment products, New Skin(R) liquid bandage, Clear Eyes(R) and Murine(R) eye care products, Little Remedies(R) pediatric over-the-counter healthcare products, The Doctor's(R) NightGuard(TM) dental protector, Cutex(R) nail polish remover, Comet(R) and Spic and Span(R) household cleaners, and other well-known brands. * * * As reported in the Troubled Company Reporter on March 12, 2010, 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. RAINBOWS UNITED: Creditors Approves Plan of Reorganization ---------------------------------------------------------- Bill Wilson at The Wichita Eagle reports that creditors of Rainbows United approved a reorganization plan that calls for: * a 30-year payment of the $2.1 million balance of the prepetition loan from Emprise Bank with variable interest rate at 5.75%, and * repayment of the $2.3 million owed to the Internal Revenue Service over five years. According to the report, proceeds from the sale of the Company's property at 340 S. Broadway and 251 S. Whittier will be used to pay off a $1.5 million postpetition operations loan from Empire. Headquartered in Wichita, Kansas, Rainbows United, Inc. -- http://www.rainbowsunited.org/-- is a Wichita nonprofit agency that serves children with special needs and their families. Rainbows United serves more than 2,600 children aged birth through 5, including more than 2,300 with special needs. The organization, which has 435 full- and part- time employees, serves primarily Sedgwick and Butler counties. Rainbows United filed for Chapter 11 bankruptcy protection on July 30, 2009 (Bankr. D. Kan. Case No. 09-12457). Edward J. Nazar, Esq., at Redmond & Nazar, L.L.P., assists the Company in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. RIVIERA HOLDINGS: Board OKs EBITDA Performance Threshold Targets ---------------------------------------------------------------- The Board of Directors of Riviera Holdings Corporation approved award ranges for fiscal 2010 under the Company's Incentive Compensation Plan and established 2010 EBITDA threshold targets for the Registrant's wholly owned subsidiaries, Riviera Black Hawk Inc. and Riviera Operating Corporation, and a consolidated EBITDA threshold target, which is comprised of the RBH and ROC EBITDA thresholds targets less certain corporate expenses. For purposes of 2010 incentive compensation, property level EBITDA and Consolidated EBITDA performance threshold targets are: * $4.7 million for Riviera Las Vegas under ROC; * $9.6 million for Riviera Black Hawk under RBH; and * $11.0 million for Consolidated. The awards under the Plan are earned only if the applicable EBITDA threshold targets are exceeded. If property level and Consolidated EBITDA performance threshold targets are exceeded, a percentage (described below) of the excess EBITDA (the "Excess EBITDA") will be set aside in a bonus pool payable to eligible participants. Under the Board approved formula for fiscal 2010: i) Robert A. Vannucci, the President and Chief Operating Officer of ROC, and other key property level managers, are eligible to share in a bonus pool equal to 25% of Excess EBITDA for either of ROC or RBH, as applicable, and ii) Messrs. Westerman, Marchionne and Simons are eligible to share in a bonus pool equal to 7.5% of Excess EBITDA for each of ROC, RBH and Consolidated. Mr. Westerman is the Registrant's Chief Executive Officer, President and Chairman of the Board; Mr. Marchionne is the Registrant's Secretary and General Counsel and ROC's Secretary and Executive Vice President and; Mr. Simons is the Registrant's Treasurer and Chief Financial Officer and ROC's Treasurer, CFO and Vice President of Finance. Depending on the size of the aforementioned Excess EBITDA bonus pools, the possible award ranges under the Plan for fiscal 2010 are (a) zero to $250,000 for Messrs Westerman and Vannucci, and (b) zero to $125,000 for Messrs. Marchionne and Simons. About Riviera Holdings Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino on the Strip in Las Vegas, Nevada, and the Riviera Black Hawk Casino in Black Hawk, Colorado. The company's balance sheet for Sept. 30, 2009, showed $203.3 million in total assets and $280.9 million in total liabilities for a $77.5 million stockholders' deficit. ROADOR INDUSTRIES: Gets Bridge Financing from CEO Capital --------------------------------------------------------- RoaDor Industries Ltd. said in its bi-weekly default status report said it is currently undertaking transactions to raise funds to meet the Company's operational needs, including a bridge loan financing. The first portion of the bridge financing referenced has been received. This was provided by CEO Capital Corporation as purchase order financing in the amount of $150,000 at 2% per month interest. Additional bridge financing is expected this week. Meanwhile, the Company said that the former auditor McCarney Greenwood LLP have advised that they have resigned as the Auditors due to the prior delays in payment by the Company, which have since been settled. With the initial portion of the bridge financing having been received, the Company has engaged the services of DNTW Chartered Accountants LLP as the new auditor. The audit has now commenced and as at the date of this release, the Company continues to expect to file the Annual Required Filings and Interim Required Filings on or about April 16, 2010. About RoaDor RoaDor has developed, patented and commercialized polyvinyl chloride (PVC) roll-up doors designed specifically for the commercial truck, van and trailer industry. Marketed and sold under the RoaDor name, they represent a major challenge to the traditional wood or aluminum doors. RoaDor roll-up doors are approximately half the weight and eliminate the major industry problems resulting from paint peeling and delamination as well as roller and hinge rusting. The commercial truck, van and trailer market represents a large opportunity. In the United States alone there are 6.5 million vehicles with roll-up doors currently on the road and in excess of 200,000 new vehicles produced into this market each year. The Company did not file its audited financial statements for its fiscal year ended September 30, 2009. With respect to this late filing, the Company is currently subject to a management cease trade order in Ontario (pursuant to an order of the Ontario Securities Commission dated February 24, 2010). The Company was unable to file the Annual Required Filings by the prescribed deadline because of a lack of working capital and the resultant delay in funding its auditors to perform the audit of the Annual Financial Statements. SIRIUS XM: Closes Offering of $800 Million 8.75% Senior Notes ------------------------------------------------------------- SIRIUS XM Radio has closed the sale of $800 million of its 8.75% Senior Notes due 2015. The Notes were priced without a new issuance discount. Consequently, the Notes were issued to investors at 100% of their principal amount. SIRIUS XM will use the net proceeds from the offering to redeem on April 16, 2010, all of its outstanding $500 million principal amount of 9 5/8% Senior Notes due 2013, CUSIP No. 82966UAK9, at a redemption price of 104.813% plus accrued interest. The Company issued the related notice of redemption to the trustee earlier today, who will notify noteholders of the details of the April 16 redemption. The balance of the net proceeds from the offering will be used to repay the $244 million of outstanding amounts under the Company's senior secured term loan due 2012, to pay fees and expenses of the offering and for general corporate purposes. The Notes have not been registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration, except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. About Sirius XM Radio Based in New York, Sirius XM Radio Inc. has two principal wholly owned subsidiaries, XM Satellite Radio Holdings Inc. and Satellite CD Radio Inc. XM Satellite Radio Holdings Inc. owns XM Satellite Radio Inc., the operating company for the XM satellite radio service. Satellite CD Radio Inc. owns the Federal Communications Commission license associated with the SIRIUS satellite radio service. XM Satellite Radio Inc. owns XM Radio Inc., the holder of the FCC license associated with the XM satellite radio service. In July 2008, the Company's wholly owned subsidiary, Vernon Merger Corporation, merged with and into XM Satellite Radio Holdings Inc. and, as a result, XM Satellite Radio Holdings Inc. became Sirius' wholly owned subsidiary. As of December 31, 2009, the Company had total assets of $7.263 billion against total liabilities of $7.226 billion. * * * Sirius carries (i) a 'B' corporate credit rating from Standard & Poor's and (ii) 'Caa1' corporate family rating and 'B3' probability of default rating from Moody's. SKILLED HEALTHCARE: S&P Assigns 'BB-' Rating on $330 Mil. Loan -------------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'BB-' rating (one notch higher than the corporate credit rating) to Skilled's proposed $330 million senior secured term loan maturing in 2016 and its $100 million revolving credit facility maturing in 2015. The recovery rating on these debt issues is '2', indicating S&P's expectation for substantial (70%-90%) recovery in the event of payment default. The rating outlook is stable. "The speculative-grade rating on Foothill Ranch, Calif.-based Skilled Healthcare Group Inc. reflects the company's vulnerabilities tied to its geographic concentration, reimbursement risk, competition, and relatively aggressive growth strategy," said Standard & Poor's credit analyst David Peknay. As a moderate-size company in a limited number of markets, Skilled Healthcare's weak business risk profile reflects uncertainty tied to potentially adverse shifts in local economic and political developments and government and managed care reimbursement in its key areas. As of Dec. 31, 2009, Skilled operated 78 skilled nursing facilities and 22 assisted living facilities in seven states. The risk of geographic concentration is highlighted by the predominance of revenues generated in only two states. California and Texas contributed 44% and 25% of revenues in 2009, respectively. The company's long-term care services segment generates the majority of total revenues. Skilled's nursing facilities, including integrated rehabilitation therapy services at those facilities, provide about 85% of total revenues. As part of its ancillary services business segment, Skilled provides third-party rehabilitation and operates three licensed hospices SOUTH BAY EXPRESSWAY: Wants Until April 21 to File Schedules ------------------------------------------------------------ South Bay Expressway, L.P. and California Transportation Ventures Inc. ask the Bankruptcy Court to extend until April 21, 2010, the deadline within which they may file their schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases, and statements of financial affairs. Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure require a debtor to file its (i) schedules of assets and liabilities; (ii) schedules of current income and expenditures; (iii) schedules of executory contracts and unexpired leases; and (iv) statements of financial affairs within 15 days after a debtor's bankruptcy filing. R. Alexander Pilmer, Esq., at Kirkland & Ellis LLP, in Los Angeles, California, discloses that the Debtors have over 40,000 known creditors. He contends that due to the nature of the Debtors' businesses, limited staff available to perform required internal review, the pressure incident to the commencement of the bankruptcy cases, and the fact that certain prepetition invoices have not yet been received or entered into the Debtors' financial accounting system, the Debtors have begun, but have not yet completed, compiling the information required to complete the Schedules and Statements. The Debtors anticipate that they will be unable to complete the Schedules and Statements in the time required under Bankruptcy Rule 1007(c). Hence, they are asking for a 16-day extension through and including April 21, 2010, without prejudice to their ability to ask for additional time for cause shown. About South Bay Expressway South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10- 04516). Its affiliate, California Transportation Ventures Inc., also filed for bankruptcy. The Debtors developed and operate a four lane, nine mile express toll road in Southern California commonly referred to as the South Bay Expressway or State Road 125. Both estimated assets and debts of $500 million to $1 billion in their bankruptcy petitions. Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring effort. PricewaterhouseCoopers LLP is auditor and tax advisor. Imperial Capital LLC is financial advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The Debtors say that as of the bankruptcy filing, they have roughly $640 million in book value of total assets and roughly $570 million in book value of total liabilities. SPARTA COMMERCIAL: Posts $880,182 Net Loss in Q3 Ended January 31 ----------------------------------------------------------------- Sparta Commercial Services, Inc., filed its quarterly report on Form 10-Q, showing a net loss attributable to common stockholders of $880,182 on $161,086 of revenue for the three months ended January 31, 2010, compared to a net loss attributable to common stockholders of $969,878 on $278,268 of revenue for the same period ended January 31, 2009. The Company's balance sheet as of January 31, 2010, showed $5,695,644 in in assets, $4,514,258 of debts, and $1,181,387 of stockholders' equity. "During the period January 1, 2001, (date of inception) through January 31, 2010, the Company incurred loss of $30,044,948. Of these losses, $2,897,901 was incurred in the nine months ending January 31, 2010, and $3,679,417 in the nine months ending January 31, 2009. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?5bea Sparta Commercial Services, Inc. (OTC BB: SRCO) -- http://www.spartacommercial.com/-- is a New York-based, nationwide financial services company dedicated to the powersports industry, offering financing and leasing products to consumers and retail powersports dealers, as well as a variety of commercial products for governmental agencies that require motorcycles and other equipment for law enforcement activities. SPECIALTY PACKAGING: Can Hire Frost Brown as Bankruptcy Counsel --------------------------------------------------------------- Specialty Packaging Holdings, Inc., et al., sought and obtained authorization from the Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to employ Frost Brown Todd LLC as bankruptcy counsel. Frost Brown will, among other things: a. provide assistance, advice and representation concerning a plan of reorganization, a disclosure statement relating thereto, and the solicitation of consents to and confirmation of the plan; b. advise the Debtors in connection with any sale of assets; c. provide assistance, advice and representation concerning any further investigation of the assets, liabilities and financial condition of the Debtors that may be required; d. provide counseling and representation with respect to the assumption or rejection of executory contracts and leases and other bankruptcy-related matters arising from the Debtors' Chapter 11 cases. Robert A. Guy, Jr., a member of Frost Brown, says that the firm will be paid based on the hourly rates of its personnel: Members $200-$500 Associates $160-$265 Paralegals $85-$180 Mr. Guy assured the Court that Frost Brown is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Lewisburg, Tennessee-based Specialty Packaging Holdings, Inc., is a color cosmetic developer and manufacturer. The Company, Cosmetic Specialties Inc. and affiliates filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. Del. Case No. 10-10142). The Company listed $50,000 in assets and $10,000,001 in liabilities. SPECIALTY PACKAGING: Weckerle Maschinenbau Joins Auction -------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware has entered an order allowing Weckerle Maschinenbau GMBH to participate in the auction for the assets of Specialty Packaging Holdings, Inc. On Jan. 15, 2010, the Debtors entered into an asset purchase agreement with All4 Cosmetics, Inc., wherein All4 Cosmetics will purchase, for $13 million in cash, the Debtor's assets that are used in connection with the manufacturing and selling of cosmetic products, and to potentially assume certain of executor contracts and unexpired leases of the Debtors. A copy of the assets purchase agreement is available for free at: http://bankrupt.com/misc/SPECIALTY_PACKAGING_assetpurchasepact.pdf In the previously approved bidding procedures, an auction was set for March 23, 2010, at 10:00 a.m., to entertain competing bids for the property. The deadline for the submission of bids was set for March 19, 2010. All4 Cosmetics will receive a $400,000 break-up fee if it loses at the auction. According to the Creditors Committee, one party submitted a qualified bid by the deadline and, thus, was qualified to join the auction. The Creditors Committee, however, informed the Court that a third bidder, Weckerle, intended to join the auction but was not able to submit a "fully confirming bid" by the deadline. Accordingly, the Committee asked the Court to allow Weckerle to join the auction without either All4 Cosmetics or the unidentified bidder withdrawing its bid. Weckerle, a German entity, has raised funding from two lenders located in Germany. Each of those lenders require that its respective Board approves the financing before it will extend a final financing commitment. Each of the Boards will be meeting prior to the start of the Auction, and Weckerle has relayed to the Committee that it believes approval from the Boards is formality. Because of the timing of the meeting of the Weckerle's proposed lenders, Weckerle was unable to submit a bid that did not contain a financing contingency. Weckerle indicated to the Committee that it is extremely confident that it will receive approval from its lenders' respective Boards prior to the star of the Auction, and thus will be able to waive its financing contingency by the time the Auction begins. The result of the auction is not yet available in the Court's docket. About Specialty Packaging Lewisburg, Tennessee-based Specialty Packaging Holdings, Inc., is a color cosmetic developer and manufacturer. The Company, Cosmetic Specialties Inc. and affiliates filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. Del. Case No. 10-10142). Dominic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, assists the Company in its restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. The meeting of creditors pursuant to Section 341 of the Bankruptcy Code was held on February 18, 2010 at 10:00 a.m. It will be continued to April 7, 2010 at 10:00 a.m. SPECIALTY PACKAGING: Files Schedules of Assets & Liabilities ------------------------------------------------------------ Specialty Packaging Holdings, Inc., filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $3,522 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $16,129,198 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,000,000 ----------- ---------- TOTAL $3,522 $17,129,198 Lewisburg, Tennessee-based Specialty Packaging Holdings, Inc., is a color cosmetic developer and manufacturer. The Company, Cosmetic Specialties Inc. and affiliates filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. Del. Case No. 10-10142). Dominic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, assists the Company in its restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. SPECIALTY PACKAGING: Gets Court's Nod to Hire KCC as Claims Agent ----------------------------------------------------------------- Specialty Packaging Holdings, Inc., et al., sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Kurtzman Carson Consultants LLC as notice, claims and solicitation agent, nunc pro tunc to the Petition Date. KCC will, among other things: a. prepare and serve notices in the Debtors' Chapter 11 cases; b. receive, examine, and maintain copies of proofs of claim and proofs of interest filed in the Debtors' Chapter 11 cases; c. maintain official claims registers in the Debtors' Chapter 11 cases by docketing proofs of claim and proofs of interest in a claims database that includes information for each claim or interest asserted; and d. record transfer of claims and any order entered by the Court which may affect a claim by making a notation on the claims register. KCC will be compensated for its services based on its service agreement with the Debtors. A copy of the agreement is available for free at http://ResearchArchives.com/t/s?5be3 Albert H. Kass, vice president of KCC's corporate restructuring, assured the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Lewisburg, Tennessee-based Specialty Packaging Holdings, Inc., is a color cosmetic developer and manufacturer. The Company, Cosmetic Specialties Inc. and affiliates filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. Del. Case No. 10-10142). Dominic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, assists the Company in its restructuring effort. SPHERIS INC: Oracle Fights $75M Sale to MedQuist, CBay ------------------------------------------------------ Bankruptcy Law360 reports that Oracle America Inc. has objected to the $75 million proposed sale of Spheris Inc. to MedQuist Inc. and CBay Inc., saying it wants the court to deny any provision that would allow for the unauthorized transfer of its software. Spheris Inc. received approval from the U.S. Bankruptcy Court for the District of Delaware for a sale process where MedQuist Inc. and CBay Inc., portfolio companies of CBaySystems Holdings Ltd., would be the lead bidder at an auction. An auction will be held on April 13, if competing bids are received by April 8. The Debtor will present the results of the auction at a hearing on April 15. Subsidiaries of CBAy are under contract to buy the assets of Spheris for $75.25 million, absent competing bids for the assets. CBay will obtain ownership of substantially all of the assets of the Debtors, except, among other things, substantially all avoidance claims or causes of auctions available under Chapter 5 of the Bankruptcy Code. CBay will receive a break-up fee of $2.1 million and expense reimbursement of up to $375,000, in the event the Debtors closed a deal with another buyer. About Spheris Inc. Based in Franklin, Tennessee, Spheris Inc. -- http://www.spheris.com/-- is a global provider of clinical documentation technology and services. Spheris Inc., along with five affiliates, filed for Chapter 11 on Feb. 3, 2010 (Bankr. D. Del. Case No. 10-10352). Attorneys at Young Conaway Stargatt & Taylor, LLP, and Willkie Farr & Gallagher LLP represent the Debtors in their Chapter 11 effort. Jefferies & Company serve as financial advisors to the Debtors. Attorneys at Schulte Roth & Zabel LLP and Landis Rath & Cobb LLP serve as counsel to the prepetition and DIP lenders. Garden City Group Inc. is claims and notice agent. The petition says that assets range from $50,000,001 to $100,000,000 while debts range from $100,000,001 to $500,000,000. STRATUS TECHNOLOGIES: S&P Assigns 'B-' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Maynard, Mass.-based Stratus Technologies Inc. The outlook is stable. At the same time, S&P assigned Stratus' proposed $215 million senior secured notes a 'B-' rating, with a recovery rating of '3', indicating its expectation for meaningful recovery (50%-70%) recovery in the event of a payment default. Bermuda-based Stratus Technologies Bermuda Ltd. is the parent of the company, owning 100% of Stratus. Stratus and its parent are co-issuers and co- guarantors of the proposed notes. The company will use the note proceeds to refinance existing debt and pay related fees and expenses. The parent and Stratus will also be amending its second-lien notes (approximately $77 million), which S&P does not rate. "The rating reflects Stratus' niche position in a highly competitive global server market, challenging prospects for near- term revenue growth, and a highly leveraged financial profile," said Standard & Poor's credit analyst Martha Toll-Reed. A significant base of more stable and recurring service revenues and consistently profitable operations partially offset those factors. With 30 years of operating history, Stratus is a provider of high availability solutions and related services for mission-critical applications. SUNOVIA ENERGY: Posts $3.2 Million Net Loss in Q2 Ended January 31 ------------------------------------------------------------------ Sunovia Energy Technologies, Inc., filed its quarterly report on Form 10-Q, showing a net loss of $3,239,146 on $755,725 of revenue for the three months ended January 31, 2010, compared to a net loss of $3,483,433 on $280,089 of revenue for the same period ended January 31, 2009. The Company's balance sheet as of January 31, 2010, showed $7,456,220 in assets, $2,602,961 of debts, and $4,853,259 of stockholders' equity. Bobbitt, Pittenger & Company, P.A., in Sarasota, Fla., expressed substantial doubt about the Company's ability to continue as a going concern after reviewing the Company's consolidated financial statements for the three and six months ended January 31, 2010, and 2009. The independent auditors noted that of the Company's losses of $8,028,744 and $6,395,450 for the six months ended January 31, 2010, and 2009, respectively. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?5be9 Sarasota, Fla.-based Sunovia Energy Technologies, Inc. is developing, designing, and integrating photovoltaic solar cells into products for incident management, energy efficient advertising, and low-cost durable solar modules for easy installation and incremental upgrading of capacity. The Company is also developing and selling environmentally responsible, energy efficient lighting products that are based on the latest and most efficient light emitting diode (LED) technologies. SYNTHEMED INC: Eisner LLP Raises Going Concern Doubt ---------------------------------------------------- On March 22, 2010, SyntheMed, Inc., filed its annual report on Form 10-K for the year ended December 31, 2009. Eisner LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring net losses, limited revenues and cash outflows from operating activities and does not have sufficient cash or working capital to meet anticipated requirements through 2010. The Company reported a net loss of $4,103,000 on $360,000 of revenue for the year ended December 31, 2009, compared to a net loss of $4,404,000 on $181,000 of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $3,331,000 in assets, $428,000 of debts, and $2,903,000 of stockholders' equity. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5bec Iselin, N.J.-based SyntheMed, Inc., is a biomaterials company engaged in the development and commercialization of innovative and cost-effective medical devices for therapeutic applications. The Company's products and product candidates, all of which are based on its proprietary, bioresorbable polymer technology, are primarily surgical implants designed to prevent or reduce the formation of adhesions (scar tissue) following a broad range of surgical procedures. The Company's lead product, REPEL-CV(R) Bioresorbable Adhesion Barrier, is a bioresorbable film designed to be placed over the surface of the heart at the conclusion of cardiac surgery to reduce the formation of post-operative adhesions. TLC VISION: Judge Gross Declines to Appoint Equity Committee ------------------------------------------------------------ netDockets reports that Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware has entered an order denying a request by the holders of 12% of TLC Vision (USA) Corporation's equity for the appointment of an Official Committee of Equity Security Holders in TLC Vision's bankruptcy cases. The equity holders that filed the motion are Strategic Turnaround Opportunity Fund, L.P., Strategic Turnaround Equity Partners, L.P. (Cayman), Rexon Galloway Capital Growth, LLC, Trinad Capital Master Fund Ltd., Red Oak Fund, L.P., Pinnacle Fund, LLLP, Bruce Galloway Rollover IRA, Sara Galloway Rollover IRA, Gary Herman IRA, Inventron, Ltd. (Energy), Lorraine Herman, and Larry Hopfensinger. According to netDockets, they had asserted that appointment of an equity committee was appropriate because "it is clear that the Debtors' 700 equity holders are in the money." netDockets relates that Judge Gross held that the legal standard for appointment of an equity committee is a showing by a preponderance of the evidence that (i) "there is a substantial likelihood that [equity holders] will receive [a] meaningful distribution in the case under a strict application of the absolute priority rule, and (ii) [equity holders] are unable to represent their interests without an official committee." (citing Exide Tech. v. State of Wisconsin Investment Board, 2002 WL 32332000 (D. Del. Dec 23, 2002)). He further noted that equity holders seeking an official committee bear a "heavy" burden of proof because appointment of an equity committee is "'extraordinary relief' that should be the 'rare exception.'" (citing In re Spansion, Inc., 2009 Bankr. LEXIS 3958 (Bankr. D. Del. Dec. 18, 2009)). Applying those standards to the TLC Vision equity holders' request, netDockets continues, Judge Gross held that Strategic Turnaround et al., had failed to meet the burden, stating that Strategic Turnaround et al., "provided no evidence to support their claim" and, further, that "[m]ere speculation without evidence as to the enterprise value of the Debtors' ongoing operations fails to carry the burden of proof." He further held that the interests of equity holders "are adequately represented in these cases" and that the Official Committee of Unsecured Creditors "has proven to be a particularly capable and effective advocate." Judge Gross also described the cost to TLC Vision's bankruptcy estates of appointing an official equity committee now as "enormous" because the equity holders "waited approximately two months before raising the matter with the Court . . . and [the bankruptcy cases] have now reached the stage that adding an equity committee to the negotiations would be counter-productive." 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. TRIUMPH GROUP: S&P Puts 'BB' Rating on CreditWatch Negative ----------------------------------------------------------- Standard & Poor's Rating Services said it has placed its ratings on Wayne, Pennsylvania-based Triumph Group Inc., including the 'BB' corporate credit rating, on CreditWatch with negative implications. The action reflects the proposed acquisition of Vought Aircraft Industries Inc. (B/Watch Pos/--; see the related release on Vought published) by Triumph for $1.44 billion, which includes $525 million in cash, refinancing of Vought's existing debt, and about $460 million in Triumph's stock. Triumph expects to fund the transaction with a combination of current and new credit facilities and other financings. Pro forma debt to pro forma adjusted EBITDA was about 3.2x as of Dec. 31, 2009. The ratio worsens considerably to about 4.5x once Vought's substantial underfunded pensions and other benefit plan liabilities and modest operating leases of both companies are added to debt. S&P expects material debt reduction from internally generated cash flows over the next several years. "Although the proposed transaction would increase Triumph's financial risk, it also would improve noticeably the firm's competitive business position," said Standard & Poor's credit analyst Roman Szuper. The transaction would add Vought's complementary capabilities as a leading manufacturer of aerostructures for commercial, military, and business jet aircraft. The purchase would also broaden Triumph's program and customer diversity. Triumph is a diversified supplier to the aerospace and defense industry, serving original equipment manufacturers, military, airlines, and air cargo carriers. The combined company will have about $3.1 billion in revenues. S&P's review will focus on Triumph's financial policy, cash generation, anticipated debt reduction, strengthened business risk profile, and industry conditions. TRIUMPH GROUP: Vought Aircraft Deal Cues Moody's Ba2 Rating Review ------------------------------------------------------------------ Moody's Investors Service has placed the ratings of Triumph Group, Inc., including the Ba2 Corporate Family and Probability of Default ratings, and the Ba3 senior subordinated notes rating on review for possible downgrade following the company's announcement of its agreement to acquire Vought Aircraft Industries, Inc. from The Carlyle Group for cash and stock totaling $1.44 billion, including the retirement of Vought debt. Post-closing, Carlyle will own approximately 31% of the outstanding stock of Triumph. Triumph expects to fund the transaction with a combination of new and existing credit facilities, with an expected closing of July 2010 subject to regulatory and shareholder approvals. In a related action the ratings of Vought have been affirmed, including the company's B2 CFR and PDR, Ba2 senior secured facility and B3 unsecured notes rating. It is anticipated that upon closing of the proposed transaction, Vought's debt will be retired and the company's ratings will be withdrawn. Moody's review will focus on the strategic business fit of the two companies with consideration of customer concentration and platform mix, implication of the much larger organization and revenue base, and potential operational synergies. Further, the review of the consolidated financial profile will examine 1) the projected liquidity position, 2) the cash flow generation capabilities of the combined companies, and 3) the pro-forma leverage profile with its higher debt level, and particularly, implications of Vought's sizeable underfunded pension position. The company's Speculative Grade Liquidity rating has been downgraded to SGL-2 from SGL-1, which while recognizing Triumph's strong liquidity profile, incorporates consideration of the proposed financing arrangements which will include some usage of existing cash and borrowings under an expanded revolving credit facility. These ratings/assessments have been placed on review for possible downgrade: * Corporate Family Rating, Ba2; * Probability of Default Rating, Ba2; * $175 million senior subordinated notes, Ba3 (LGD4, 67%). This rating has been downgraded: * Speculative Grade Liquidity Rating, to SGL-2 from SGL-1. The last rating action for Triumph Group was on November 4, 2009, when the company's Ba2 CFR, Ba3 senior subordinated note rating, and stable outlook were assigned. Triumph Group, Inc., headquartered in Wayne, PA, designs, manufactures, repairs and overhauls aircraft components, such as hydraulic, mechanical and electromechanical control systems, aircraft and engine accessories, structural components and assemblies, non-structural composite components, APUs, avionics and aircraft instruments. The company's customers include OEMs of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers. Revenue for the LTM period ended 12/31/09 was approximately $1.25 billion. UAL CORP: Lost $40 Million from U.S. Winter Storms -------------------------------------------------- United Air Lines, Inc. disclosed that winter storms that occurred in February 2010 cost it $40 million in revenue, ranking first among U.S. carriers that reported weather-related revenue losses, The Associated Press reports. US Airways, Inc. reported losing $30 million, Continental Airlines, Inc. $25 million and Southwest $15 million, AP says. The storms caused the cancellation of several thousand flights, which stretch from Washington to New York, AP notes. However, the storms had the reverse effect in increasing revenue per available seat mile, AP discloses. That's because with some passengers rebooking on other flights, there were fewer empty seats, AP adds. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Seeks Clarification on Use of Federal Grants ------------------------------------------------------ United Air Lines, Inc. wants the U.S. Department of Transportation to prohibit any use of some federal grants made to small communities to subsidize lower fare competition against existing service offered by United or other carriers, Andrew Compart of the Aviation Week reports. United's move came after the DOT awarded $1 million to Huntsville, Alabama and $500,000 to Knoxville, Tennessee under a Small Community Air Service Development Program, Mr. Compart discloses. Mr. Compart relates that Huntsville has said and Knoxville has indicated that each might use its grant money to subsidize new low-fare service to Baltimore/Washington Airport, which service United currently offers. In a letter sent to the DOT on March 1, 2010, United sought clarification on the use of the federal grants that would be inconsistent with the DOT's policies and would be prohibited, Mr. Compart says. If DOT does not do so, it should explain why, United said in its March 1 Letter, Mr. Compart relates. As early as October 2, 2009, United already wrote to the DOT about the then Huntsville and Knoxville applications for grants, Mr. Compart says. United's concerns, however did not stop the DOT from awarding grants to the communities, Mr. Compart relates. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Names Dana Sacks as VP for Human Resources ---------------------------------------------------- UAL Corporation, parent company of United Air Lines, Inc. announced that it has named Dana Sacks vice president - Human Resources Partners and Talent Acquisition. Ms. Sacks will be responsible for leading the HR support team for the company's business leaders and for talent acquisition. Most recently Ms. Sacks served as vice president of Human Resources for PepsiAmericas. In her time there she held a variety of human resources leadership positions with responsibility for HR strategic planning, merger and acquisition activities, organization design, succession planning and leadership development for their International Business Unit. Prior to PepsiAmericas, Ms. Sacks held HR leadership roles at Tellabs, Platinum Technology and Amoco Corporation. Ms. Sacks will report to Marc Ugol, senior vice president - Human Resources. "Having Dana join the team reinforces our commitment to further driving a performance culture, and to attracting and retaining a highly talented workforce," said Mr. Ugol. "We continue to invest in developing a world class Human Resources organization to help drive our business performance." About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. VISTEON CORP: D. Kempner, et al, Disclose 7.29% Stake ----------------------------------------------------- In a 13D filing with the U.S. Securities and Exchange Commission dated March 9, 2010, Davidson Kempner Partners, Brigade Capital Management LLC, Plainfield Asset Management LLC and their related entities and persons -- the Reporting Persons -- disclosed that they are deemed to beneficially own, in the aggregate, 9,500,000 shares of Visteon Corporation common stock. The Reporting Persons acquired their shares of Visteon stock for investment purposes through various transaction dates. They note that paid these aggregate amounts to acquire the Visteon shares: Davidson Kempner Filing Persons $2,905,883 Brigade Filing Persons $1,608,236 Plainfield Filing Persons $252,000 The aggregate number of shares of Visteon stock owned by the Reporting Persons represents 7.29% of the 130,324,581 shares outstanding of Visteon as of February 22, 2010. The Reporting Persons and their specific Visteon shares beneficially owned are: Shares Beneficially Equity Entity Owned Stake ------ ------------ ------ Davidson Kempner Partners 300,000 0.23% Davidson Kempner Institutional Partners 630,000 0.48% M.H. Davidson & Co. 54,000 0.04% Davidson Kempner International, Ltd. 702,000 0.54% Davidson Kempner Distressed Opportunities Fund LP 1,362,000 1.05% Davidson Kempner Distressed Opportunities International Ltd. 2,952,000 2.27% MHD Management Co. 300,000 0.23% MHD Management Co. GP, LLC 300,000 0.23% M.H. Davidson & Co. GP, LLC 54,000 0.04% Davidson Kempner Advisers Inc. 630,000 0.48% Davidson Kempner International Advisors LLC 702,000 0.54% DK Group LLC 1,362,000 1.05% DK Management Partners LP 2,952,000 2.27% DK Stillwater GP LLC 2,952,000 2.27% Thomas L. Kempner, Jr. 6,000,000 4.60% Stephen M. Dowicz 6,000,000 4.60% Scott E. Davidson 6,000,000 4.60% Timothy I. Levart 6,000,000 4.60% Robert J. Brivio, Jr. 6,000,000 4.60% Eric P. Epstein 6,000,000 4.60% Anthony A. Yoseloff 6,000,000 4.60% Avram Z. Friedman 6,000,000 4.60% Conor Bastable 6,000,000 4.60% Brigade Capital Management, LLC 2,600,000 2.00% Brigade Leveraged Capital Structures Fund 2,600,000 2.00% Donald E. Morgan, III 2,600,000 2.00% Plainfield Asset Management LLC 900,000 0.69% Plainfield OC Master Fund Limited 225,000 0.17% Plainfield Liquid Strategies Master Fund 45,000 0.03% Plainfield Special Situations Master Fund 630,000 0.48% Max Holmes 900,000 0.69% The Reporting Persons executed a joint Form 13D filing with the SEC as they insist that they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934. The Reporting Persons formed an Ad Hoc Committee of Visteon's stockholders to evaluate and assert the rights of Visteon's equity holders, Thomas L. Kempner, Jr., executive managing member of Davidson Kempner Partners, relate. The Reporting Persons aver that they have been monitoring Visteon's bankruptcy cases, and that they may seek to influence the outcome of these cases for the purpose of attempting to protect and maximize stockholder value. In this light, the Reporting Persons relate that they approved a letter to be sent to the Board of Directors of Visteon on March 8, 2010, seeking that the Board convene a meeting with the Ad Hoc Committee and its advisors. The "Davidson Kempner Filing Persons" consist of Davidson Kempner Partners; Davidson Kempner Institutional Partners, L.P.; M.H. Davidson & Co.; M.H. Davidson & Co. GP, L.L.C; Davidson Kempner International, Ltd.; Davidson Kempner Distressed Opportunities Fund LP; Davidson Kempner Distressed Opportunities International Ltd.; MHD Management Co.; MHD Management Co. GP, L.L.C.; Davidson Kempner Advisers Inc.; Davidson Kempner International Advisors, L.L.C.; DK Group LLC; DK Management Partners LP; DK Stillwater GP LLC; Thomas J Kempner, Jr.; Stephen M Dowicz; Scott E Davidson; Timothy L Levari; Robert J Brivio, Jr.; Eric P. Epstein; Anthony A Yoseloff; Avram Z. Friedman; and Conor Bastable. The "Brigade Filing Persons" consist of Brigade Capital Management, LLC; Brigade Leveraged Capital Structures Fund Ltd. and Donald E Morgan, III. The "Plainfield Filing Persons" consist of Plainfield Asset Management LLC; Plainfield Special Situations Master Fund II Limited; Plainfield Liquid Strategies Master Fund Limited; and Plainfield OC Master Fund Limited and Max Holmes. D. Kempner May Acquire 6.8MM Add'l Visteon Shares In a related filing, Davidson Kempner submitted a declaration to the U.S. Bankruptcy Court for the District of Delaware dated March 10, 2010, notifying Judge Sontchi that it currently has beneficial ownership of 6 million shares of Visteon Corporation common stock. Davidson Kempner further related that it is, at present time, considering the purchase, acquisition, or accumulation of not more than 6.8 million additional shares of Visteon common stock. Davidson Kempner clarified that at the present time, it is not a party to any agreement to purchase the common stock. If Davidson Kempner acquires 6.8 million additional shares of Visteon stock, it will have beneficial ownership of 12.8 million shares of Visteon stock after that transfer becomes effective and will be a "Substantial Shareholder." About Visteon Corporation Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; the company has facilities in 25 countries and employs approximately 29,500 people. 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: Patrick Li Discloses 4.75% Equity Stake ----------------------------------------------------- In a 13D filing with the U.S. Securities and Exchange Commission, Patrick Li disclosed that he is deemed to beneficially own 6,190,675 shares of common stock of Visteon Corporation as of March 3, 2010. Mei Qui and He Yi each possess sole power to vote 3,095,337.5 shares of Mr. Li's Visteon stock. The shares directly owned by Mr. Li constitutes 4.75% of the shares outstanding of Visteon Corp., based on Visteon's 130,400,00 total shares outstanding as of September 9, 2009. About Visteon Corporation Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; the company has facilities in 25 countries and employs approximately 29,500 people. 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: Kirkland Bills $3.86-Mil. for Sept.-Nov. Work ----------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, Kirkland & Ellis LLP seeks payment of interim fees for $4,857,696 and reimbursement of expenses for $115,380 for the period from September 1, 2009, through November 30, 2009. Kirkland & Ellis serves as the Debtors' counsel. The Debtors certified to the Court that no objections were filed as to Rothschild Inc.'s monthly fee application for September 2009. The Debtors further certified to the Court that they received no objection as to Pachulski Stang Ziehl & Jones LLP's fee application for the period from September 1 to November 30, 2009. In a separate filing, Chanin Capital Partners LLC seeks payment of fees, totaling $150,000, and reimbursement of expenses for $1,879 for the period from January 1 to 31, 2010. Chanin Capital serves as the restructuring and financial advisor of the Official Committee of Unsecured Creditors. The Committee certified to the Court that no objections were asserted as to Chanin Capital's monthly fee application for December 2009. About Visteon Corporation Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; the company has facilities in 25 countries and employs approximately 29,500 people. 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) VOUGHT AIRCRAFT: S&P Puts 'B' Rating on CreditWatch Positive ------------------------------------------------------------ Standard & Poor's Rating Services said it has placed its ratings on Irving, Texas-based Vought Aircraft Industries Inc., including the 'B' corporate credit rating, on CreditWatch with positive implications. The action reflects the proposed acquisition of Vought by higher- rated Triumph Group Inc. (BB/Watch Neg/--; see the related release on Triumph published) for $1.44 billion, which includes $525 million in cash, refinancing of Vought's existing debt, and about $460 million of Triumph's stock. Vought is a leading manufacturer of aerostructures for commercial, military, and business jet aircraft. Triumph is a diversified supplier to the aerospace and defense industry serving original equipment manufacturers, military, airlines, and air cargo carriers. The combined company will have about $3.1 billion in revenues. Upon closing of the transaction, S&P could withdraw Vought's ratings if its debt is refinanced as S&P currently expects. WISE METALS: To Hold Conference Call on March 31 ------------------------------------------------ Wise Metals Group said it will have a conference call on March 31, 2010, to report its year end results for 2009. The Company has amended its senior secured revolving credit agreement to provide for, among other things, an extension of the maturity date of the facility to May 5, 2011. The extension was approved by all lenders, including The Teachers' Retirement System of Alabama and The Employees' Retirement System of Alabama. About Wise Metals Group Wise Metals Group LLC is a holding company formed for the purpose of managing the operations of Wise Alloys LLC, Wise Recycling LLC, Listerhill Total Maintenance Company LLC and Alabama Electric Motor Services LLC. Wise Alloys LLC manufactures and sells aluminum can stock and related aluminum products primarily to aluminum can producers. Wise Recycling LLC is engaged in the recycling and sale of scrap aluminum and other non-ferrous metals. Listerhill Total Maintenance Company LLC specializes in providing maintenance, repairs and fabrication to manufacturing and industrial plants all over the world ranging from small onsite repairs to complete turn-key maintenance. Alabama Electric Motor Services LLC specializes in the service, repair, and replacement of electric motors and pumps. * * * The Company's balance sheet for Sept. 30, 2009, showed $463.3 million in total assets, $556.0 million in total current liabilities, $166.7 in total non-current liabilities, and $89.9 million in redeemable preferred membership interest for a $349.3 million in total stockholders' deficit. W.R. GRACE: Submits Fourth Set of Plan Modifications ---------------------------------------------------- The Plan Proponents -- consisting of W.R. Grace & Co., and its debtor-affiliates, the Official Committee of Equity Security Holders, the Official Committee of Asbestos Personal Injury Claimants and the Future Asbestos PI Claims Representative -- submitted to the U.S. Bankruptcy Court for the District of Delaware a fourth set of modifications to the First Amended Joint Plan of Reorganization. The Fourth Set of Plan Modifications, dated March 19, 2009, covers modifications that are either technical in nature -- including correcting typographical or similar errors. The 4th Set of Plan Modifications have also been made in order to comply with various settlements reached between the Plan Proponents and certain plan objectors to resolve outstanding objections to confirmation of the Plan, Theodore M. Freedman, Esq., at Kirkland & Ellis LLP, in New York, relates. The Fourth Set of Plan Modifications includes the substantial modification of the insurance neutrality language of the Plan pursuant to a stipulation dated December 31, 2009, between the Plan Proponents and certain Insurers. The Plan Modifications also call for the modification of the definition of "Indirect PI Trust Claim" and addition of language to the Asbestos PI Trust Distribution Procedures to make clear that Section 502(e) of the Bankruptcy Code cannot be applied to Indirect Personal Injury Trust Claims and Indemnified Insurer TDP Claims, as defined in the Asbestos PI Trust Distribution Procedures, pursuant to a stipulation dated February 5, 2010, between the Debtors and certain Insurers, says Mr. Freedman. Mr. Freedman relates that pursuant to a stipulation between the Plan Proponents, Seaton Insurance Company and OneBeacon America Insurance Company, dated February 15, 2010, the Plan was also modified to: (a) add certain defined terms that pertain to Seaton and OneBeacon; (b) add language to, among other things, make clear that the indemnified parties in the Sealed Air Corporation agreement are not released from any direct contractual indemnification obligations they may have to OneBeacon under the 1996 CD Agreement, as defined in the Plan; (c) clarify the reservations from the injunction for the benefit of holders of Grace-Related Claims to provide that Seaton can only assert a Grace-Related Claim based on a 1996 Unigard Agreement, and OneBeacon can only assert a Grace-Related Claim with respect to the 1996 CU Agreement, as defined in the Plan; (d) add Section 8.5.4 to the Plan to describe certain reservations from the Injunction for the benefit of OneBeacon; and (e) clarify the Debtors' obligations to indemnify and hold harmless the Sealed Air Indemnified Parties, particularly with respect to OneBeacon based on or arising under the 1996 CU Agreement. A stipulation was also reached between the Plan Proponents, Continental Casualty Company and Continental Insurance Company dated March 19, 2010, by which the Plan was modified to: (a) add certain defined terms that pertain to CNA; (b) add certain language to make clear that the Sealed Air Indemnified Parties are not released from contractual indemnification obligations and hold harmless obligations for which they are directly obligated to CNA and that arise directly under the CNA/Old Grace Delaware 5/20/97 Settlement Agreement, as defined in the Plan, except to the extent that the obligation gives rise to, is based on, arises out of, or otherwise relates to any asbestos claim; (c) add Section 8.5.3 to the Plan containing a reservation from the Successor Claims Injunction, as defined in the Plan, for the benefit of CNA; and (d) clarify the Debtors' obligations to indemnify and hold harmless the Sealed Air Indemnified Parties, particularly with respect to CNA based upon or arising under any of the CNA/Old Grace Delaware Settlement Agreements, with respect to environmental claims asserted by Kaneb or Hatco Environmental Claims, as defined in the Plan. In addition, Section 5.14 was added to the Asbestos PI TDP to make clear that the claims of BNSF Railway Company seeking indemnification from Grace based upon an alleged contractual indemnity obligation will be channeled to the Asbestos PI Trust. If entitled to payment, BNSF will be paid by the Asbestos PI Trust in accordance with procedures under the Asbestos PI TDP. The Asbestos PI TDP was also modified to indicate that the Alternate Dispute Resolution Procedures will be developed by the Trustees of the Asbestos PI TDP with the consent of the Trust Advisory Committee established pursuant to the Asbestos Trust Agreement and the Future Claimants Representative. Once developed, the ADR Procedures will be created and become a part of the Asbestos PI TDP, Mr. Freedman explains. According to Mr. Freedman, no new settlements relating to Asbestos Claims have been filed since the Third Set of Modifications to the Plan, which was filed on December 16, 2009. However, the Schedule of Asbestos Claims has been modified to: * delete the "conditional upon the Approval Order becoming final" language for three agreements related to (i) AG de 1830 Compagnie Beige d' Assurances Generales Incendie Accidents et Risques Divers S.A., now known as AG Insurance, (ii) Allianz SE, formerly known as Allianz Aktiengesellschaft, Allianz S.p.A., formerly known as Riunione Adriatica di Sicurta S.p.A., and (iii) Zurich Insurance Company because the Approval Order as to each of those Agreements is now a Final Order; and * add the conditional language as to Arrowood/Royal since the Royal Order is on appeal. A full-text copy of the summary of the Fourth Set of Modifications to the Plan is available at no charge at: http://bankrupt.com/misc/WRGrace_4thPlanModifications.pdf The Debtors also submitted to Judge Judith K. Fitzgerald an updated and amended chart summarizing the requirements for the confirmation of, and enlisting remaining objections to, the Plan. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Resolves CNA Objections on Sealed Air Releases ---------------------------------------------------------- W.R. Grace & Co., Inc., the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders as Plan Proponents, and Continental Casualty Company and Continental Insurance Company, as insurers, agreed to resolve the injunction provisions relating to Sealed Air Corporation. CNA objected to the confirmation of the Plan, asserting, among other things, that the release of non-debtor Sealed Air Corporation under the Successor Claims Injunction, as defined in the Plan, (i) enjoins CNA's claims against Sealed Air, and (ii) improperly releases and enjoins contractual indemnification claims that CNA has against Sealed Air, including indemnification claims arising from environmental coverage claims. The Parties specifically agreed to make certain modifications to the Plan to resolve the Sealed Air Release and Injunction Objections. The Plan Modifications, as it relates to the Parties' stipulation, provide: * the addition of defined terms "CNA," "CNA/Old Grace Delaware 5/30/97 Settlement Agreement," "CNA/Old Grace Delaware Settlement Agreements," "CNA Post-Trial Brief" and "Kaneb;" * that the Plan does not release the Sealed Air Indemnified Parties from any contractual indemnification and hold harmless obligations for which the Sealed Air Indemnified Parties are directly obligated to CNA and that arise directly under the CNA/Old Grace Delaware 5/30/97 Settlement Agreement, except to the extent that any obligation relates to any asbestos claim; * the addition of Section 8.5.3 to the Plan, containing a reservation from the Successor Claims Injunction for the benefit of CNA; * the addition of language which provides that the Debtors' obligations to indemnify, defend, and hold harmless the Sealed Air Indemnified Parties will "survive" confirmation and the Debtors' discharge, and will remain fully effective and enforceable after the effective date of the Plan. The Debtors have agreed to use good faith efforts to obtain releases from Kaneb Pipeline Operating Partnership in favor of the Debtors' insurers -- including CNA -- with respect to claims arising from an oil pipeline, and adjoining property located at Otis Air Force Base in Sandwich, Massachusetts. Pursuant to the Stipulation, and contingent on the Plan confirmation, CNA agrees that its objections with respect to Sealed Air Release and Injunction under the Plan will be deemed withdrawn. The Plan, as amended in accordance with the Stipulation, is not confirmed by the Bankruptcy Court and the U.S. District Court for the District of Delaware, or any order confirming the Plan as so amended is overturned on appeal. CNA's withdrawal of the Sealed Air Release and Injunction Objections will be a nullity and of no force or effect, and CNA will have the right to raise any and all objections to any new or modified plan that is proposed by the Debtors or any other party. CNA will remain a party to the Insurance Neutrality Stipulation, as defined in the Plan. However, the CNA Objections relating to the insurance neutrality stipulation "are now withdrawn." No change or modification of the Plan will alter the rights of CNA under the Stipulation unless agreed to in writing by all the Parties. Parties Stipulate to Allow Claims The Plan Proponents reached separate a stipulation with National Union Fire Insurance Company of Pittsburgh, PA to resolve portions of National Union's Claim No. 18508 for $2,553,216. The Claim consists of: (i) $78,908 for legal fees and expenses in connection with the bonds under certain agreements with Reaud, Morgan & Quinn, Inc., and Environmental Litigation Group, P.C., arising after September 30, 2007; (ii) $59,583 for additional amounts claimed owing for premiums on the RMQ bonds; and (iii) $2,414,720 in amounts claimed owing for premiums arising under a Tennessee surety bond. Plan Proponents assert that under the Plan, the Allowed Claim and the portions of the New National Union Claim relating to the RMQ Bonds are to be classified as Class 6 Asbestos PI Claims under the Plan. National Union insisted that the RMQ Bonds portion of the Claim must be treated as Class 9 General Unsecured Claim. The Stipulation specifically provides that: * the Tennessee Bond portion of Claim NO. 18508 will be allowed for $2,417,720 as a Class 9 General Unsecured Claim under the Plan; * the RMQ Bonds portion of the Claim will be reduced to $121,942, and will not bear or pay interest of any kind; and * all other amounts reflected in Claim no. 18508 will be disallowed and expunged. Separately, the Plan Proponents settled Claim no. 9553 filed by Longacre Master Fund, Ltd., and Longacre Capital Partners (QP), L.P., by allowing it for a reduced amount of $8,825,416. The Claim will not bear or pay interest of any kind. Longacre, as successor-in-interest to Insurance Company of Pittsburgh, PA, originally filed Claim No. 9553 in the Debtors' cases for $9,806,018. Longacre objected to the confirmation of the Plan, asserting that Claim No. 9553 should be classified as a Class 9 General Unsecured Claim under the Plan, as opposed to the Debtors' assignment of the Claim as a Class 6 Asbestos PI Claim. Pursuant to the Stipulations, National Union and Longacre agree to (i) withdraw all of their objections to the Plan, (ii) take no further actions of any nature that may hinder, delay, or oppose the action of the Plan Proponents in seeking confirmation of the Plan, and (iii) not oppose the entry of an order confirming the Plan. The Parties further agree that pursuant to Rule 408 of the Federal Rules of Evidence, the Stipulations may not be used as proof of liability or classification with respect to any claims other than Claim Nos. 18508 and 9553. Documents Filed Under Seal Anderson Memorial Hospital filed under seal its response to the Debtors' opposition to its request for their full and complete answers during deposition in relation to the Plan. Separately, OneBeacon America Insurance Company and Seaton Insurance Company also filed under seal an exhibit supporting their request to take judicial notice of certain documents and facts. * * * The Court ruled that the request of Jonathan Lee Riches to intervene in the Phase II Confirmation Hearing as a creditor in the Debtors' cases "is stricken." Judge Fitzgerald noted that Mr. Riches did not file a response to the Court's directive for him to show cause for his Motion. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Proposes 2010-2012 Incentive Plan --------------------------------------------- W.R. Grace & Co. and its debtor-affiliates ask Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to approve the Grace 2010-2012 Long-Term Incentive Plan for certain key employees, as part of the Debtors' ongoing long- term incentive compensation program. The Court had previously authorized the Debtors to implement the long-term incentive plans in the Debtors' Chapter 11 cases for management and other key employees of the Debtor selected to participate: Date of Order Period of LTIP ------------- -------------- August 26, 2002 2002-2004 LTIP March 26, 2003 2003-2005 LTIP June 9, 2004 2004-2006 LTIP July 13, 2005 2005-2007 LTIP July 24, 2006 2006-2008 LTIP August 29, 2007 2007-2009 LTIP August 26, 2008 2008-2010 LTIP April 22, 2010 2009-2011 LTIP The Debtors' long-standing, ongoing strategy for its long-term incentive program necessitates that a renewed LTIP be implemented each calendar year, with no more than three LTIPs in effect in any year. Thus, upon the Court's approval of the 2010-2012 LTIP, the 2008-2010 LTIP, the 2009-2011 LTIP, and the 2010-2012 LTIP will each be active in 2010, Theodore Freedman, Esq., at Kirkland & Ellis LLP, in New York, relates. The aggregate targeted award value of the 2009-2011 LTIP will be $15.5 million, including the chief executive officer of the Debtors, which will be distributed to Key Employees in the form of (i) targeted cash payout opportunities and (ii) options covering shares of common stock of the Debtors' parent corporation, W. R. Grace & Co. With respect to a 2010-2012 LTIP award for any specific Key Employee, the Debtors' management will exercise discretion to determine the percentage split between the value of the targeted cash award and the value of options granted for Grace Stock. This means that the allocation of the total value awarded to some Key Employees will be more heavily weighted towards awards of options for Grace Stock, while others will be more heavily weighted towards targeted cash payout opportunities, as determined by Debtors' management, Mr. Freedman says. In no event will the total targeted cash award opportunities under the 2010-2012 L TIP exceed 50% of the $15.5 million aggregate targeted award value, or $7.75 million, Mr. Freedman clarifies. If earned, the aggregate cash awards under the 2010-2012 LTIP will not exceed: Year Targeted Cash Payout Maximum Cash Payout ------------- ------------------- -------------- 2012 $2.53 million $2.53 million 2013 $5.22 million $12.47 million ------------------- -------------- Total $7.75 million $15.5 million Cash awards to Key Employees, if earned, will be made in one-third and two-thirds installments in 2012 and 2013, which continues the cash payout practice applicable to the prior Chapter 11 LTIPs, according to Mr. Freedman. The performance criteria for the cash awards portion of the 2010- 2012 LTIP are essentially the same as the provisions of the 2009- 2011 LTIP in these respects: (a) Business performance for cash awards is measured on a three-year performance period, commencing with 2010. (b) The applicable compounded annual three-year growth rate in core earnings before interest and taxes or EBIT to achieve a cash payment of 1 00% of the 2009-2011 LTIP target award will be 6% per annum. Core EBIT for the three-year period is adjusted for changes in pension expense and LTIP expense. (c) Partial payouts for EBIT growth rates between 0% and 6% will be implemented on a straight-line basis. (d) The amount of the 2010-2012 LTIP cash payments will be increased at EBIT compounded annual growth rates in excess of the 6%, up to a maximum of 200% of the Base Target Cash Award at an annual compounded EBIT growth rate of 25%. (e) Cash payouts, if earned, will occur in 113 and two-third installments in early March following years two and three of the LTIP. The 113 installment following year two is limited to one-third of the Base Targeted Cash Award. (f) Cash payout adjustments for a "significant acquisition" and a "significant divestiture" applicable to the calculation of cash awards under the immediately prior Chapter 11 LTIPs will also apply to cash awards under the 2010-2012 LTIP. The portion of $15.5 million aggregate targeted award value that is not allocated to cash award opportunities for Key Employees, will be awarded to Key Employees in the form of options on Grace Stock. The value of an option on a share of Grace Stock granted under the 2010-2012 LTIP will be calculated by dividing the price of a share of Grace Stock on the award date by the applicable Black Scholes factor, as defined in the LTIP, Mr. Freedman says. Mr. Freedman discloses that currently, the number of shares of Grace Stock available for option grants of options under the Plan equals approximately 1.359 million. The grants will be awarded under the Grace 2000 Stock Incentive Plan, which was authorized and approved by the Court in 2001. Under the 2010-2012 LTIP, the Debtors anticipate utilizing all remaining authority under the Plan, including granting options covering approximately 1.359 million shares of Grace Stock. In no event, will the total number of shares covered by grants under the 2010-2012 L TIP exceed the remaining authority under the Plan. The "strike price" of the stock options awarded under the 2010- 2012 LTIP will be the price of Grace Stock as of the award date. One-third of the awarded stock options would vest in 2011, one- third would vest in 2012, and the remaining one-third would vest in 2013, each on the anniversaries of the award date. The stock options would generally be exercisable for a period of five years after grant. Adjusting the Program for the 2010-2012 L TIP so that the Debtors' management has the discretion to weight the total value of an award to any specific Key Employee more heavily towards options on Grace Stock will allow management to more effectively align the interests of Key Employees with the interests of the Debtors' shareholders and other stakeholders, Mr. Freedman contends. Furthermore, implementing the 2010-2012 LTIP maximizes the value of the Debtors' estates and furthering the Debtors' efforts to successfully reorganize during the remaining period of the Chapter 11 process, by promoting the motivation and retention of Key Employees. The Debtors must provide sufficient incentives to motivate and retain a critical mass of their high-performing employees in sufficient numbers during the remaining pendency of the Debtors' chapter 11 cases to maximize the likelihood of a successful restructuring, Mr. Freedman tells Judge Fitzgerald. The Court will convene a hearing on April 19, 2010, to consider the Debtors' request. Objections, if any, must be filed by March 26. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Proposes Kaye Scholer as IP Counsel ----------------------------------------------- W.R. Grace & Co., and its units ask the U.S. Bankruptcy Court to allow them to employ Kaye Scholer LLP as their special counsel for intellectual property matters. According to Theodore Freedman, Esq., at Kirkland & Ellis LLP, in New York, Kaye Scholer is qualified to render services as intellectual property counsel to the Debtors because of the firm's knowledge of the Debtors' business. Kaye Scholer also has a wealth of experience relating to intellectual property counseling, prosecution and litigation for Grace, as well as expertise in the field of intellectual property law and litigation, he adds. Mr. Freedman says the scope of services provided by Kaye Scholer, currently an ordinary course professional retained in these bankruptcy cases, includes the rendering of legal opinions and the provision of other intellectual property law legal services to the Debtors for the benefit of the Debtors' continuing business operations. Mr. Freedman relates that Kaye Scholer has, from time to time, agreed to conduct searches, prosecute applications, render opinions, file oppositions, cancellations and other litigations for the Debtors on matters involving intellectual property law, which may relate, among others, to: * whether the Debtors' trademarks or copyrights, or particular uses of such trademarks and copyrights, may infringe the intellectual property of third parties; and * whether the trademarks or copyrights alleged by third parties to be infringed by Grace's intellectual property are valid under applicable trademark and copyright laws. In addition, the Debtors have also been consulting with Kaye Scholer on a wide range of issues relating to intellectual property law, including advice in connection with: (i) the preparation and filing of trademark and copyright applications; (ii) the preparation of agreements and other legal instruments relating to intellectual property; (iii) allegations by third parties that the Debtors may have infringed upon intellectual property of those third parties; and (iv) administrative proceedings in the United States Patent and Trademark Office. The Kaye Scholer professional who will be rendering the Kaye Scholer IP Services for the Debtors is John P. Rynkiewicz, Esq., who will be paid based on his hourly rate of $567. Mr. Rynkiewicz will also be reimbursed for his out-of-pocket expenses. Mr. Rynkiewicz assures Judge Fitzgerald that his firm is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Standard & Poor's Says 264 Global Defaults Set New Records ------------------------------------------------------------ Standard & Poor's says that 2009 set many new records in terms of global corporate default and transition performance. There were 264 defaults globally, the highest annual total since its database began in 1981. The rated debt amount affected by these defaults reached $627.7 billion, also a series high. Distressed exchanges featured prominently as a trigger, accounting for 39% of defaults globally and 55% of total debt affected by defaults. Credit degradation among nondefaulting issuers was widespread and pronounced, especially in the first half of 2009, with the percentage of issuers downgraded during the course of the year reaching 18.34%, the highest rate in 29 years. There were 3.85 downgrades for every upgrade, the worst ratio on record. In addition, the average number of notches recorded among downgrades rose in 2009 to 1.76, a pace unmatched since 2002. Financials featured disproportionately among issuers that experienced downgrades of seven or more notches. Meanwhile, global speculative-grade default rates -- expressed as a percentage of the issuer count -- rose to levels that, though not unprecedented, had not been seen since 1991, driven by trends in the U.S. At the end of December 2009, speculative-grade default rates rose to 10.93% in the U.S. compared with 7.5% in Europe, 5.90% in the emerging markets, 7.5% in Asia-Pacific, and 9.35% in an assorted grouping of other developed markets. In all regions, default rates in 2009 outpaced the long-term averages. If all rated entities are included, the global default rate rose to 3.99% in 2009 from 1.72% a year earlier. Meanwhile, the investment-grade default rate fell to 0.32% in 2009 from 0.41% in 2008. This study includes industrials, utilities, financial institutions (which includes banks, brokerages, asset managers, and other financial entities), and insurance companies around the world with long-term local-currency ratings. All default rates reported are calculated on an issuer-weighted basis. Notwithstanding the record number of defaults, the Gini ratio -- a key measure of the relative ability of ratings to differentiate risk -- rose to 82.7% in 2009 from an all-time low of 64.9% a year earlier. For the entire 29-year time horizon, the average one- year Gini was 82.07%. The high Gini ratio for 2009 indicates that ratings ably differentiated between defaulters and nondefaulters in a year characterized by very high defaults. By sector, 11 out of 13 sectors recorded default rates that were in excess of the long-term weighted averages. The only two sectors that failed to pierce the mean in 2009 were utilities and insurance. Broken out by rating, we note that nine out of 17 rating categories recorded default rates that were in excess of the long-term average. A copy of the report, which contains a list of the Companies that have defaulted in 2009, is available for free at: http://researcharchives.com/t/s?5c0e * S&P Says Rushed Bankruptcy Exits Can Hurt Credit Quality ---------------------------------------------------------- According to Reuters, Standard & Poor's said that companies' decision to hasten their exit from bankruptcy is creating credit quality risk. "While hastened restructurings may be to the advantage of some investors in bankrupt companies, they may also increase the risk that the emergence will be short-lived," S&P said, according to Reuters. An increasing numbers of companies are turning prepackaged or prearranged bankruptcies. Prepack or prepack bankruptcies allow companies drastically cut costs, reduce concerns about the company's longevity and allow the company to quickly cut debt, S&P said. But S&P warned that some companies may still hold too much debt, citing decorative lighting company Generation Brands, formerly known as Quality Home Brands Holdings LLC [QTYHB.UL], as an example. S&P assigned Generation Brands, which emerged 53 days following its bankruptcy filing, a low-speculative-grade CCC+ corporate rating. "In our view, many of the quick fixes that we have seen effected through restructurings, either in court or out of court, may be highly susceptible to another downturn," said S&P, Reuters reports. * Law360 Calls Akin Gump's Philip Dublin as Rising Star ------------------------------------------------------- At 37 years old, Akin Gump Strauss Hauer & Feld LLP's Philip Dublin has managed to forge a cohesive group out of disparate creditors in the bankruptcy of global chemical maker Chemtura Corp. - just part of the reason he earned a place among Law360's 10 bankruptcy attorneys under 40 to watch. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Jamestown Properties, LLC Bankr. Ariz. Case No. 10-06992 Chapter 11 Petition Filed March 16, 2010 Filed As Pro Se In Re Brian C. Dudley Bankr. C.D. Calif. 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Case No. 10-11991 Chapter 11 Petition Filed March 17, 2010 See http://bankrupt.com/misc/vaeb10-11991.pdf In Re James Frank Kennedy, Jr. Bankr. E.D. Va. Case No. 10-31824 Chapter 11 Petition Filed March 17, 2010 See http://bankrupt.com/misc/vaeb10-31824.pdf In Re Wild West Cars and Trucks Inc. Bankr. W.D. Wash. Case No. 10-12930 Chapter 11 Petition Filed March 17, 2010 See http://bankrupt.com/misc/wawb10-12930.pdf In Re Sierra Vista Diner, LLC Bankr. Ariz. Case No. 10-07456 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/azb10-07456.pdf In Re Sandra J. Scher dba Flower by Scher Design Bankr. C.D. Calif. Case No. 10-20001 Chapter 11 Petition Filed March 18, 2010 Filed As Pro Se In Re T & C Restaurant Group, Inc. dba At My Place Bankr. C.D. Calif. Case No. 10-17777 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/cacb10-17777.pdf In Re Paloma Avenue, LLC Bankr. N.D. Calif. Case No. 10-10934 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/canb10-10934.pdf In Re Baker Anderson Christie, Inc. Bankr. Del. Case No. 10-10928 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/deb10-10928.pdf In Re CRDE Corp. fka ATS Universal, LLC fka Medical People Health Corp. Bankr. Del. Case No. 10-10929 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/deb10-10929.pdf In Re Proverbs 21:13, LLC dba Cabell's American Bar & Grill Bankr. N.D. Fla. Case No. 10-40242 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/flnb10-40242.pdf In Re SP Investments, H, LLC Bankr. S.D. Ind. Case No. 10-03543 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/insb10-03543.pdf In Re John Glen Kuntz Bankr. Mont. Case No. 10-60501 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/mtb10-60501.pdf In Re Travis Alan Kuntz Bankr. Mont. Case No. 10-60500 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/mtb10-60500.pdf In Re Next Generation Technology, Inc. Bankr. S.D. N.Y. Case No. 10-11416 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/nysb10-11416.pdf In Re Heavy Transport, Inc. Bankr. Puerto Rico Case No. 10-02119 Chapter 11 Petition Filed March 18, 2010 See http://bankrupt.com/misc/prb10-02119.pdf In Re J&L Properties, LLC Bankr. N.D. Ala. Case No. 10-81114 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/alnb10-81114.pdf In Re Calin Rus Augusta Rus Bankr. Ariz. Case No. 10-07534 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/azb10-07534.pdf In Re Kyle Mark Mccain Lindsay Marie Mccain Bankr. Ariz. Case No. 10-07544 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/azb10-07544.pdf In Re Samuel Michael McCline Ellanita Liani McCline Bankr. Ariz. Case No. 10-07586 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/azb10-07586.pdf In Re T-Bone Steakhouse, Inc. Bankr. Ariz. Case No. 10-07587 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/azb10-07587.pdf In Re Two Guys Auto Center, LLC Bankr. Ariz. Case No. 10-07673 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/azb10-07673.pdf In Re Westside Dental dba Smile Fitness Dental Center Bankr. Ariz. Case No. 10-07581 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/azb10-07581.pdf In Re David Lack Bankr. C.D. Calif. Case No. 10-11315 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/cacb10-11315.pdf In Re David Lack General Contractor Inc, a Corporation dba Lack Construction Bankr. C.D. Calif. Case No. 10-11314 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/cacb10-11314.pdf In Re Kerrys Medical, Inc. Bankr. E.D. Calif. Case No. 10-26818 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/caeb10-26818.pdf In Re Aum Shree of Tampa, LLC fdba Choice Hotels dba Comfort Inn Bankr. M.D. Fla. Case No. 10-06231 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/flmb10-06231.pdf In Re The Living Truth Ministries, Inc. aka The Living Truth Christian Center aka Living Truth Evangelistic aka Central Florida Mass aka The Living Truth Ministry Bankr. M.D. Fla. Case No. 10-02227 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/flmb10-02227.pdf In Re Simien & Simien, L.L.C. Bankr. M.D. La. Case No. 10-10365 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/lamb10-10365.pdf In Re Bedford Town Condominium Association aka The Marylander Bankr. Md. Case No. 10-15831 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/mdb10-15831.pdf In Re B.K.V., Inc. dba Tello's Bankr. Mass. Case No. 10-12855 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/mab10-12855.pdf In Re Progressive Fitness & Recreation LLC dba Nitro Fitness Bankr. N.J. Case No. 10-18177 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/njb10-18177.pdf In Re Carolina Mailboxes, Inc. Bankr. W.D. N.C. Case No. 10-30755 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/ncwb10-30755.pdf In Re Miller Dental Associates Inc. Bankr. N.D. Ohio Case No. 10-31711 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/ohnb10-31711.pdf In Re Young's Bakery Bankr. W.D. Pa. Case No. 10-21914 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/pawb10-21914.pdf In Re White House Builders' Lumber & Supply, LLC dba White House Home Center Bankr. M.D. Tenn. Case No. 10-02979 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/tnmb10-02979.pdf In Re Librado's Enterprises, L.L.C. Bankr. W.D. Texas Case No. 10-51031 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/txwb10-51031.pdf In Re Everett MRI & Diagnostic Center, LLC Bankr. W.D. Wash. Case No. 10-13057 Chapter 11 Petition Filed March 19, 2010 See http://bankrupt.com/misc/wawb10-13057.pdf In Re Vintage Properties, LLC Bankr. D.C. Case No. 10-00264 Chapter 11 Petition Filed March 19, 2010 Filed As Pro Se In Re Alfredo Melero Amado Bankr. Puerto Rico Case No. 10-02159 Chapter 11 Petition Filed March 20, 2010 See http://bankrupt.com/misc/prb10-02159.pdf ********* 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 ***