/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100427.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, April 27, 2010, Vol. 14, No. 115 Headlines 12 BYFIELD: Section 341(a) Meeting Scheduled for May 12 12 BYFIELD: Taps Baker & Hostetler as Bankruptcy Counsel ACCREDITED HOME: Wins Approval of Settlement with Insurers AFFINITY GROUP: Moody's Keeps Caa2 Rating Due to High Leverage AMADEUS TRUST: Section 341(a) Meeting Scheduled for May 25 AMERICAN ONE: Voluntary Chapter 11 Case Summary AMERICAN PATRIOT: Hazlett Lewis Raises Going Concern Doubt AMERICA WEST RESOURCES: MaloneBailey Raises Going Concern Doubt AMR CORP: Disagreement Arises on UAL-Continental Merger Talks AMR CORP: Fitch Affirms IDR at 'CCC' on High Debt Levels ANIXTER INC: Fitch Expects Modest Sales Growth in 2010 ASARCO LLC: El Paso to Create Plan to Examine Asarco Land ATRIUM COMPANIES: Moody's Assigns 'B3' Corporate Family Rating BAINBRIDGE SHOPPING: Files List of 5 Largest Unsecured Creditors BAINBRIDGE SHOPPING: Files Schedules of Assets & Liabilities BAINBRIDGE SHOPPING: Section 341(a) Meeting Scheduled for May 26 BAINBRIDGE SHOPPING: Wants Berger Singerman as Bankruptcy Counsel BANKRUPTCY MANAGEMENT: S&P Puts 'CCC+' Rating on Negative Watch BANKUNITED FINANCIAL: Wants FDIC Proof of Claim Disallowed BAYARD SPECTOR: Court Denies HWMG's Motion to Dismiss Case BCAC LLC: Files Schedules of Assets & Liabilities BCAC LLC: Wants to Use PNC Bank's Cash Collateral BCAC LLC: Section 341(a) Meeting Scheduled for May 17 BCAC LLC: Taps Nexsen Pruet as Bankruptcy Counsel BEST LIFE: A.M. Best Downgrades Financial Strength Rating to 'B' BFG INVESTMENTS: 5th Cir. Affirms Bankr. Court's Jurisdiction BRYCE PARK: Case Summary & 18 Largest Unsecured Creditors CENTRAL FALLS: Legislation Enacted to Allow Bankr. Filing CHENIERE ENERGY: To Sell Interest in Freeport LNG for $104MM CHRYSLER LLC: Deal Resolving Treatment of Fenton Property CHRYSLER LLC: Deal Resolving Treatment of MDNRE Property CHRYSLER LLC: GAO Says Funding for Pension Plans Uncertain CHRYSLER LLC: New Chrysler Hikes March Sales by 10% CITIGROUP INC: Inks Equity Distribution Deal with Citi Global CITIGROUP INC: Treasury Plans to Sell 1.5 Billion Shares CNH GLOBAL: S&P Puts 'BB+' Rating on CreditWatch Developing COLONIAL MANOR: Voluntary Chapter 11 Case Summary CONTINENTAL AIRLINES: Disagreement Arises on UAL Merger Talks CRESCENT RESOURCES: Secured Lender Opposes Plan DAN STANBROUGH: Case Summary & 19 Largest Unsecured Creditors DOLLAR THRIFTY: Hertz Signs Definitive Agreement to Acquire Firm DOLLAR THRIFTY: DBRS Assigns 'B' Issuer & Sr. Unsec. Debt Ratings DRUG FAIR: To Present Plan for Confirmation June 3 E*TRADE FINANCIAL: DBRS Affirms Issuer Debt Rating at 'B' ELISSEOS MERGIANOS: Case Summary & 20 Largest Unsecured Creditors ELITE PHYSICAL: Case Summary & 20 Largest Unsecured Creditors EVERGREEN GAMING: Nevada Gold to Acquire Seven Mini-Casinos EXCEL DAIRY: Files for Chapter 11 Bankruptcy Protection EXTENDED STAY: Centerbridge-Paulson Approved as Stalking Horse FAIRFIELD RESIDENTIAL: Och-Ziff Can Back Out of Investment Deal FAIRVUE CLUB: Creditors Have Until June 30 to File Proofs of Claim FIDDLER'S CREEK: Golf Member Sues Developer of Fraud FILI ENTERPRISES: Can Use BofA's Cash Collateral Until May 13 FIRSTGOLD CORP: Cedes Control of All Assets to Secured Lenders FONTAINEBLEAU LV: Converted to Chapter 7 as Assets Sold to Icahn FONTAINEBLEAU LV: District Court Issues Schedule for MDL Action FONTAINEBLEAU LV: M&M Lienholders Appeal DIP Financing Order FREEDOM PHARMACY: Case Summary & 20 Largest Unsecured Creditors GEMS TV: DirecTV on Unsecured Creditors Committee GENCORP INC: OKs Annual Cash Incentive Program for Management GENCORP INC: Registers 1,500,000 Shares Under 2009 Incentive Plan GENERAL GROWTH: Investment Pact a De Facto Plan, Say CSA Reps. GENERAL GROWTH: Macerich Raises $1.2B for Possible Bid on Malls GENERAL GROWTH: Units File 2nd Post-Confirmation Status Report GOLDSPRING INC: Names De Gasperis as Chief Executive Officer GPX INTERNATIONAL: Creditors Seek to Liquidate Remaining Assets GREEN VALLEY: Moody's Cuts PDR to 'D' After Payments Missed HARBOUR EAST: Cielo on the Bay Condo Files Chapter 11 HARBOUR EAST: Voluntary Chapter 11 Case Summary HD SUPPLY: Moody's Downgrades Corporate Family Rating to 'Caa2' HEALTH RESOURCES: AM Best Affirms 'B' Financial Strength Rating HEALTHSOUTH CORP: New CFO to Receive $525,000 Annual Base Salary HEALTHSOUTH CORP: UBS and Ernst & Young Settle Fraud Claims INFOR GLOBAL: S&P Assigns 'B+' Rating on $1.5 Bil. Notes JAPAN AIRLINES: Claimant Wants JAL Status as Employer Determined JAPAN AIRLINES: Deal Clarifying Scope of Ch. 15 Order Approved JAPAN AIRLINES: ETIC Reaches Deal on Purchase of Debt JAPAN AIRLINES: "K" Line Wants Lift Stay to Pursue Lawsuit JOEL WAHLIN: Case Summary & 6 Largest Unsecured Creditors JEFFREY VOGL: Case Summary & 17 Largest Unsecured Creditors KAINOS PARTNERS: Can Sell New York Business to DBI Stores KIM H KREUNEN: Files Schedules of Assets and Liabilities KIM H KREUNEN: Taps Harris Jernigan to Handle Reorganization Case LANDRY'S RESTAURANTS: Sells 11-5/8% Notes to Fund Oceanaire Deal LAS VEGAS MONORAIL: Wants Plan Deadline Extended Until Aug. 17 LEHMAN BROTHERS: Alvarez' Fees Reach $262MM; Weil's $164MM LILLIAN VERNON: Shutting Down in Virginia Beach LIONS GATE: Board Amends Shareholder Rights Plan MAGIC BRANDS: Wins Approval of First Day Motions MAGIC BRANDS: Sets May 10 Sale-Procedures Hearing MAGNA ENTERTAINMENT: Court Confirms MID-Backed Reorganization Plan MONEYGRAM INTERNATIONAL: Moody's Affirms 'B1' Corp. Family Rating MOTORSPORT AFTERMARKET: Moody's Changes Default Rating to Caa2/LD MW SEWALL: Energy North's $9.27-Mil. Wins Auction for Chain NETFLIX INC Moody's Comments on 2010 Quarterly Results NEW ORLEANS SEWERAGE: Fitch Takes Rating Actions on Bonds NEWPAGE CORP: To Supply Spicers with Discovery(R) Papers OCEANAIRE TEXAS: Landry's Sells 11-5/8% Notes to Fund Buyout ODYSSEY PETROLEUM: Voluntary Chapter 11 Case Summary OSI RESTAURANT: Moody's Affirms 'Caa1' Corporate Family Rating PAN AMERICAN: Moody's Assigns 'Ba2' Rating on $500 Mil. Notes PARKER DRILLING: Construction Delay Won't Affect Moody's B1 Rating PHILADELPHIA NEWSPAPERS: Revlon's Perelman Joins Toll Group POINDEXTER JB: S&P Affirms Corporate Credit Rating at 'B' PROVIDENT ROYALTIES: Plan Confirmation Hearing Set for June 8 RC LANDWORKS: Files for Chapter 11 Bankruptcy in Oregon RCC NORTH: Files List of 12 Largest Unsecured Creditors RCC NORTH: Section 341(a) Meeting Scheduled for May 18 RCC NORTH: Wants to Employ Polsinelli Shughart as Bankr. Counsel REFCO INC: Underwriters Settle Shareholder Lawsuit REGENT COMMUNICATIONS: Resilient Agrees to Drop Plan Appeal REICHHOLD INDUSTRIES: S&P Gives Stable Outlook; Keeps 'B-' Rating RICCO INC: Ch. 11 Trustee Sought to Reconstruct Records RIVER ROAD: Has Until June 9 to File Plan SAINT ALBANS: Case Summary & 7 Largest Unsecured Creditors SAINT VINCENTS: Gets Interim Nod of $78 Million DIP Facility SAINT VINCENTS: Gets Interim Nod for Cash Collateral Use SAINT VINCENTS: Proposes to Pay Obligations to Employees SANFORD JAY HOROWITZ: Files Schedules of Assets and Debts SANTA CLARA: To Pay Creditors from Sale or Refinancing SAVANNAH GATEWAY: Combined Plan Hearing Set for June 23 SEARS CANADA: Sears Canada Deal Won't Affect Moody's 'Ba2' Rating SEEQPOD: Bloson.com Acquires Remaining Assets SGD TIMBER: Can Hire Weinman & Associates as Bankruptcy Counsel SKY KING: Cash Collateral Hearing Continued Until April 28 SKY KING: Files Schedules of Assets and Liabilities SMURFIT-STONE: Fights Shareholders Over Valuation Analysis SMURFIT-STONE: Finance II Case Conversion Denied SMURFIT-STONE: Says Plan Objections Based on Meritless Claims SOUTH FINANCIAL: DBRS Cuts Issuer & Senior Debt Ratings to 'C' SPHERIS INC: MedQuist Completes Sale Transaction SRAM CORPORATION: Moody's Assigns 'Ba3' Rating on $315 Mil. Loan SRAM LLC: S&P Raises Corporate Credit Rating to 'B+' From 'B' STANDARD PACIFIC: S&P Assigns 'B-' Rating on $300 Mil. Notes STARWOOD HOTELS: Fitch Assigns 'BB+' Rating on $1.5 Bil. Loan STATION CASINOS: Boyd Gaming Opposes Auction Procedures STERLING MINING: Auction May Pay Creditors in Full STERLING MINING: Minco Silver Expects Break-Up Fee STONEYBROOK TOWNHOMES: Voluntary Chapter 11 Case Summary STRAFORD PLASTIC: Voluntary Chapter 11 Case Summary TAYLOR BEAN: Angelo Gordon Wins Auction of MBS Portfolio TAZDOG, LLC: Voluntary Chapter 11 Case Summary TECH DATE: Fitch Expects Modest Sales Growth in 2010 TERREMARK WORLDWIDE: Moody's Upgrades Corp. Family Rating to 'B2' TERREMARK WORLDWIDE: S&P Assigns 'B-' Rating on $50 Mil. Notes TEXAS HILL: Asks for Court's Nod to Use Cash Collateral TEXAS HILL: Asks for Court OK to Obtain Post-Petition Financing TEXAS HILL: Files List of 20 Largest Unsecured Creditors TEXAS HILL: Section 341(a) Meeting Scheduled for June 25 TEXAS HILL: Taps Collins May as General Counsel TISHMAN SPEYER: Stuyvesant & Peter Cooper May Be Sold Separately TRICKLE'S INCORPORATED: Case Summary & Creditors List TRULITE INC: Equus Takes Action to Collect $2.3MM From Firm UAL CORP: Disagreement Arises on Continental Merger Talks UAL CORP: Reports March 2010 Traffic Results UNITED WESTERN: Reschedules Annual Shareholders Meeting to July 30 US AIRWAYS: Disagreement Arises on UAL-Continental Merger Talks VERTIS INC: Moody's Assigns Corporate Family Rating at 'Caa1' VILLAGE AT WEST GLOUCESTER: Voluntary Chapter 11 Case Summary VISINET INC: Workers Protest Over Unpaid Salary VITOIL-SCOTTISH, LLC: Case Summary & Creditors List WAVERLY GARDENS: U.S. Trustee Wants Reorganization Case Dismissed WHITNEY LAKE: Reorganization Case Dismissed XERIUM TECHNOLOGIES: Proposes to Renew Insurance Programs XERIUM TECHNOLOGIES: Wants to Pay Prepetition Shipping Charges XERIUM TECHNOLOGIES: Wins Nod to Continue Customer Programs * Two Defaults Last Week Raise S&P Global Tally to 31 * Fannie & Freddie Funding to Cost Taxpayers $85 Billion * Fitch Gives Assessment and Outlook on I.T. Distributors * Makers of Designer Denim Brands in Financial Distress * Crowell & Moring Gains Financial Institutions Regulatory Partner * Large Companies With Insolvent Balance Sheet ********* 12 BYFIELD: Section 341(a) Meeting Scheduled for May 12 ------------------------------------------------------- The U.S. Trustee for Region 2 will convene a meeting of 12 Byfield, LLC's creditors on May 12, 2010, at 2:00 p.m. The meeting will be held at the United States Bankruptcy Court, SDNY, 300 Quarropas Street, Room 243A, White Plains, NY 10601-5008. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Redding, Connecticut-based 12 Byfield, LLC, filed for Chapter 11 bankruptcy protection on April 16, 2010 (Bankr. S.D.N.Y. Case No. 10-22740). Richard J. Bernard, Esq., at Baker & Hostetler LLP, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. 12 BYFIELD: Taps Baker & Hostetler as Bankruptcy Counsel -------------------------------------------------------- 12 Byfield, LLC, has sought permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Baker & Hostetler LLP as bankruptcy counsel, effective as of the Petition Date. Baker & Hostetler will, among other things: (a) assist in identification of assets and liabilities of the estate; (b) assist the Debtor in formulating a plan of reorganization and to take necessary legal steps in order to confirm the plan, including the preparation and filing of a disclosure statement relating thereto; (c) prepare and file on behalf of the Debtor, all necessary applications, motions, orders, reports, adversary proceedings and other pleadings and documents; and (d) appear in Court and protect the interests of the Debtor before the Court. Baker & Hostetler will be paid based on the hourly rates of its personnel: Richard J. Bernard $585 Bik Cheema $390 Partners $475-$725 Associates $250-$500 Paralegals $100-$200 Richard J. Bernard, a partner at Baker & Hostetler, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Redding, Connecticut-based 12 Byfield, LLC, filed for Chapter 11 bankruptcy protection on April 16, 2010 (Bankr. S.D.N.Y. Case No. 10-22740). The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities in its petition. ACCREDITED HOME: Wins Approval of Settlement with Insurers ---------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Accredited Home Lenders Holding Co. received approval from the bankruptcy judge to settle with two workers' compensation insurance providers. Prepetition, the Debtors obtained workers' compensation for their employees from Zurich. Zurich demanded and received an $800,000 letter of credit and was holding $94,457 in cash. Under the settlement, Zurich will take $306,933, returning $587,534 to Accredited Home. The settlement is up for hearing April 21. A settlement was also reached with Hartford Fire Insurance Co. Hartford, which cashed a $815,000 letter of credit and was holding another $41,000 cash deposit, will return the excess after deducting $308,500 to cover claims. The secured lenders' motion for conversion of the case to a liquidation in Chapter 7 was adjourned to May 20. A motion by the unsecured creditors' committee to sue owner Lone Star Funds was put back to the same date. About Accredited Home Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- is a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. AFFINITY GROUP: Moody's Keeps Caa2 Rating Due to High Leverage -------------------------------------------------------------- Moody's Investors Service concluded its review of Affinity Group Holdings Inc., confirmed its Caa2 corporate family rating and assigned B1 ratings to its subsidiary, Affinity Group Inc.'s new secured term loan. The new debt along with an unrated $22 million revolver refinances the previous secured debt at Affinity Group Inc. The ratings outlook is stable. This concludes the review of ratings for possible downgrade that was initiated on August 25, 2009. The Caa2 corporate family rating continues to reflect the high leverage of the company, limited free cash flow and restrictions on AGI's ability to upstream funds to pay interest on Affinity Group Holdings' unsecured notes. Although Moody's views the stability of the company's RV focused membership and services businesses favorably, the current debt load and restrictions on upstreaming funds limit the ratings. While Affinity Group Holdings' owner has contributed funds in the past to make interest payments on Holdings debt, the owner's support is not contractual and Moody's ratings therefore look at the company's stand alone capabilities to service its own debt. The company's RV membership and related services business held up fairly well during the downturn, however its ad driven publications and Camping World retail sales experienced significant declines. The entire RV industry saw declines during this period which directly and indirectly impacted the company's results. Early indications of RV unit shipments are up this year and 2010 is expected to show significant improvement which should in turn positively impact the company's advertising revenue and retail sales. While the company may ultimately be able to generate sufficient cash to fund all its interest payments as the economy recovers, sufficient funds may not be permitted to be upstreamed to pay Holdings interest expense until AGI's term debt is repaid or amended. AGI's new term loan explicitly limits AGI's ability to upstream funds to pay Holdings interest. These ratings were confirmed: Affinity Group Holding, Inc. * Corporate family rating: Caa2 * Probability of default rating: Caa3 * 10.875% senior notes due 2012 -- Ca, LGD5, 74% Affinity Group, Inc. * 9.0% senior subordinated notes due 2012 -- Caa2, LGD3, 40% This rating was assigned: Affinity Group, Inc. * Senior secured term loan due 2015 -- B1, LGD1, 7% This rating was affirmed: Affinity Group Holding, Inc. * Speculative Grade Liquidity rating -- SGL-4 The ratings on the new debt were determined in accordance with Moody's Loss Given Default Methodology and driven by its senior position in the capital structure. Moody's most recent communication was on September 17, 2009, for the assignment of a Caa3/LD probability of default rating following expiration of the 30-day grace period for non-payment of interest on Holdings senior notes. Affinity Group's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Affinity Group's core industry and Affinity Group's ratings are believed to be comparable to those of other issuers of similar credit risk. Affinity Group Holding, Inc., is a large member- based direct marketing, publishing and retail goods company, targeting North American recreational vehicle owners and outdoor enthusiasts. The company reported net revenue of $471 million for the fiscal year ended December 31, 2009. AMADEUS TRUST: Section 341(a) Meeting Scheduled for May 25 ---------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of Amadeus Trust LLC's creditors on May 25, 2010, at 1:15 p.m. The meeting will be held at Room 2610, 725 S Figueroa Street, Los Angeles, CA 90017. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Pacific Palisades, California-based Amadeus Trust LLC filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. C.D. Calif. Case No. 10-24450). The Company estimated its assets and debts at $10,000,001 to $50,000,000. AMERICAN ONE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: American One Rentals, Inc. 2301 N. Atlantic Boulevard Fort Lauderdale, FL 33305 Bankruptcy Case No.: 10-20865 Chapter 11 Petition Date: April 23, 2010 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B Ray Debtor's Counsel: David Marshall Brown, Esq. 330 N Andrews Avenue # 450 Fort Lauderdale, FL 33301 Tel: (954) 765-3166 Fax: (954) 765-3382 E-mail: david@brownvanhorn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Frances M. Reynolds, president. AMERICAN PATRIOT: Hazlett Lewis Raises Going Concern Doubt ---------------------------------------------------------- American Patriot Financial Group, Inc. filed on April 15, 2010, its annual report on Form 10-K for the year ended December 31, 2009. Hazlett, Lewis & Bieter, PLLC, in Chattanooga, Tenn., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses for the past three years resulting in a retained deficit of $3,638,017. "At December 31, 2009, the Company and its subsidiary were undercapitalized based on regulatory standards and has consented to an Order to Cease and Desist with its primary federal regulator that requires, among other provisions, that it achieve regulatory capital thresholds that are significantly in excess of its current actual capital levels. The Company's nonperforming assets have increased significantly during 2009 related primarily to deterioration in the credit quality of its loans collateralized by real estate. The Company, at the holding company level, has a note payable [$1,000,000] that is due June 29, 2010; however, the Company does not currently have sufficient funds to pay off this note and it is uncertain whether the lender will renew the note at that time, or whether the Company can raise sufficient capital to payoff the note. This note is securitized by 100 percent of the stock of the subsidiary." The Company reported a net loss of $4,022,669 on net interest income before provision for loan losses of $3,255,716 for 2009, compared with a net loss of $558,728 on net interest income before provision for loan losses of $3,890,042 for 2008. The Company's balance sheet as of December 31, 2009, showed $118,214,238 in assets, $113,897,948 of liabilities, and $4,316,290 of stockholders' equity. At December 31, 2009, the Company had net loans receivable of $92,562,338 and deposit liabilities of $106,509,580, compared to net loans receivable of $103,327,562 and deposit liabilities of $103,739,177 at December 31, 2008. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?60a5 Based in Greenville, Tenn., American Patriot Financial Group, Inc. is a one-bank holding company formed as a Tennessee corporation to own the shares of American Patriot Bank. The Bank is the only subsidiary of the Corporation. American Patriot Bank commenced operations as a state chartered bank on July 9, 2001. The Bank had total assets of roughly $118 million at December 31, 2009. The Bank is not a member of the Federal Reserve System. The Bank's customer base consists primarily of small to medium- sized business retailers, manufacturers, distributors, land developers, contractors, professionals, service businesses and local residents. AMERICA WEST RESOURCES: MaloneBailey Raises Going Concern Doubt --------------------------------------------------------------- America West Resources, Inc., filed on April 15, 2010, its annual report on Form 10-K for the year ended December 31, 2009. MaloneBailey, LLP, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficit and has incurred significant losses. The Company reported a net loss of $8,704,926 on $11,010,004 of revenue for 2009, compared with a net loss of $6,579,895 on $7,304,068 of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $17,587,229 in assets and $25,107,696 of debts, for a stockholders' deficit of $7,520,467. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?60a6 Based in Salt Lake City, America West Resources, Inc., is a domestic coal producer engaged in the mining of clean and compliant (low-sulfur) coal. The majority of our coal is sold to utility companies for use in the generation of electricity. The Company operates the Horizon Mine located in Carbon County, Utah. The Horizon Mine is operated through the Company's wholly owned subsidiary Hidden Splendor Resources, Inc., a Nevada corporation. This mine produces what is commonly known as "steam coal," that is, coal used to heat water to create steam which, in turn, is used to turn turbine engines to produce electricity. AMR CORP: Disagreement Arises on UAL-Continental Merger Talks ------------------------------------------------------------- The Wall Street Journal's Susan Carey and Gina Chon report that people familiar with the matter said Sunday disagreements have emerged in the merger talks between UAL Corp.'s United Airlines and Continental Airlines Inc. over which share price to use for the stock-swap deal. According to the Journal, the sources said UAL and Continental were hoping to agree on a "neutral price." The Journal also relates a person familiar with the matter said that during discussions on Friday and Saturday, the two companies' chief executives disagreed on what share price to use in the merger. The Journal says Continental thinks the fairer deal is to use the 30-day share price prior to April 7. United wants to use the price the day before the deal is signed. According to the Journal, United and Continental are in much different positions than they were two years ago when Continental ultimately spurned United's advances. Continental has a new, aggressive chief executive, both carriers are better off financially, and the industry landscape has been altered by the 2008 merger of Delta Air Lines Inc. and Northwest Airlines, among other things, the people said. Sources told the Journal that if the merger does go through, Jeff Smisek, Continental's chief executive, would become chief executive of the combined company, while Glenn Tilton, UAL's CEO, would become the nonexecutive chairman. The company would be based in Chicago, and United would be the surviving brand, the people said, according to the Journal. According to the Journal, based on the April 23 stock prices, the deal would create a company valued at $6.9 billion. Delta, currently the No. 1 carrier by traffic, is valued at $10.2 billion. The Journal also reports that United's pilots union has signaled that it may support a merger with Continental, whose pilots are represented by the same union and earn higher wages than the United aviators. Continental's pilots union hasn't commented. The Journal relates that the labor agreements on both airlines' pilot groups are open for renewal, and United and Continental may have to offer richer terms to ensure pilot approval, a key challenge in successfully meshing two airlines. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At Dec. 31, 2009, AMR reported total assets of $25.438 billion, including total current assets of $6.642 billion; against total current liabilities of $7.728 billion, long-term debt, less current maturities of $9.984 billion, obligations under capital leases, less current obligations of $599 million, other liabilities and credits of $10.616 billion; resulting in stockholders' deficit of $3.489 billion. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. 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. Reorganized 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. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As of December 31, 2009, US Airways had total assets of $7,454,000,000, including $2,331,000,000 in total current assets, against total current liabilities of $2,789,000,000 and total noncurrent liabilities and deferred credits of $5,020,000,000, resulting in $355,000,000 stockholders' deficit. US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. AMR CORP: Fitch Affirms IDR at 'CCC' on High Debt Levels -------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of AMR Corp. and its principal operating subsidiary American Airlines, Inc.: AMR Corp. -- Issuer Default Rating at 'CCC'; -- Senior Unsecured Rating at 'C/RR6'. American Airlines, Inc. -- IDR at 'CCC'. Following the pay-down of American's secured bank credit facility in 2009, Fitch has withdrawn the senior secured credit facility rating for American. The senior unsecured rating at the parent applies to approximately $885 million of outstanding debt. The affirmation of IDRs at the 'CCC' level reflects continuing concerns over the airline's ability to generate sustained improvements in free cash flow, despite the notable turnaround in the industry revenue outlook over the last few months. Like the other U.S. legacy carriers, AMR faced serious liquidity threats in 2008-2009 first as a result of the rapid spike in energy costs and later because of the collapse of premium air travel demand. With the credit markets effectively closed to airline borrowers through the summer of 2009, AMR pulled back scheduled capacity sharply and ultimately raised over $4 billion in new capital last year as management remained focused on shoring up cash balances. Consequently, any progress made toward leverage reduction at the top of the last demand cycle was reversed. AMR again needs to embark on an extended debt reduction project, but necessary FCF generation will be limited by the need to invest heavily in fleet replacement. Fitch's current base case forecast points to another year of substantially negative FCF, likely in excess of $800 million in a relatively stable jet fuel price scenario (average 2010 prices near $2.40 per gallon). While AMR's liquidity position has improved significantly over the last year, with an unrestricted cash and short-term investments balance of $4.5 billion at March 31, debt levels were forced higher through the downturn. Even in a modestly improving operating environment, lease-adjusted leverage will likely remain very high (in excess of 8 times in 2010). AMR faces scheduled debt and capital lease maturities of $1.1 billion this year and $2.3 billion in 2011, but Fitch expects little debt reduction to occur in light of the need to finance 45 new Boeing B737-800 aircraft this year and 22 Bombardier CRJ-700 regional jets through mid-2011. First quarter results highlighted the risks posed by rising jet fuel prices in 2010, which are offsetting the positive effects of gains in revenue per available seat mile. Average jet fuel prices paid, on a consolidated basis, increased 16.5% year over year to $2.23 per gallon. This change, along with rising airport and revenue-related costs, helped drive an increase of 8.5% in total operating costs per available seat mile. Fitch estimates that a 10-cent change in the price of jet fuel would drive approximately $240 million in annual operating costs. With only 33% of 2010 fuel consumption hedged (average caps at $2.43 per gallon), AMR could see a significant cash flow impact if jet fuel prices move well above their current spot level in the neighborhood of $2.40 per gallon. AMR faces some uniquely difficult challenges due to its position as the legacy carrier with the highest unit labor costs. In order to move from the bottom of the pack in margin potential and cash flow generation, it needs to either deliver a larger RASM premium relative to the other legacy carriers or push unit costs lower. Neither outcome is likely in the near term as AMR lagged the industry on RASM growth (up 6.8%) in the first quarter of 2010 (1Q'10), and management is locked in a struggle with the unions over new contracts that could push labor costs still higher. In addition to cash flow pressures linked to AMR's competitive position and weak margins, AMR must continue to invest in new aircraft to replace an aging fleet of MD-80 narrowbody aircraft. Deliveries of new aircraft will drive capex to approximately $2.1 billion this year, consuming all of the carrier's operating cash flow. Cash pension funding will continue as a major credit concern. Pension contributions for 2010 will be approximately $525 million, with that figure expected to rise in coming years. As of year-end 2009, AMR's defined benefit pension plans were under-funded by approximately $4.9 billion on a projected benefit obligation (PBO) basis. Although the 2010 cash funding level is below the annual booked pension expense of approximately $600 million, required contributions could begin to represent a net cash outflow as early as 2011 if plan asset returns are weak. AMR management and the company's three principal unions are continuing mediated discussions over new contracts, which became amendable in 2008. Despite the airline's still fragile financial condition, the unions appear unlikely to accept any reduction in pay rates or benefit levels. This will limit AMR's ability to push unit costs down to levels seen at other legacy carriers, three of which have lowered costs significantly through bankruptcy reorganizations in recent years. Absent a larger than expected increase in RASM tied to a robust global economic recovery in 2010-2011, Fitch sees little opportunity for AMR to generate the positive FCF necessary to push debt levels lower through the next industry demand cycle. Although AMR's more comfortable liquidity position makes any near- term cash crisis highly unlikely, cash balances could come under significant pressure if a fuel price spike (crude oil in excess of $100 per barrel) drives a much larger than expected annual loss in 2010. A downgrade to 'CC' or below could follow if an external shock forces unrestricted liquidity levels below $3 billion. ANIXTER INC: Fitch Expects Modest Sales Growth in 2010 ------------------------------------------------------ Fitch Ratings released a report detailing its outlook for I.T. distributors. In the report, Fitch examines industry operating performance, credit and liquidity, key industry trends and developments, individual credit and financial profiles, corporate governance and covenants. Fitch also provides quarterly and historical financial data. Fitch's outlook for IT distributors in 2010 is stable, underpinned by a more optimistic view on industry operating profiles, offset by expectations of moderate deterioration in liquidity and credit profiles as well as heightened event risk, particularly for acquisitions. The companies profiled are: -- Anixter Inc./Anixter International Inc.: 'BB+'; Outlook Stable; -- Arrow Electronics, Inc.: 'BBB-'; Outlook Stable; -- Avnet, Inc.: 'BBB-'; Outlook Stable; -- Ingram Micro Inc.: 'BBB-'; Outlook Stable; -- Tech Data Corporation: 'BB+'; Outlook Stable. Fitch expects the IT distributors to experience modest sales growth in 2010, as corporate IT demand improves, driven by a more stable economic backdrop and growth in emerging markets. Positive operating leverage and abatement of cyclical gross margin pressure will result in improved operating profitability. After generating significant cash from working capital reduction, reducing short-term debt and limiting acquisitions and share buybacks, the distributors' credit profiles are currently very strong. Fitch expects some deterioration in 2010, as M&A resumes and cash generation declines. A degree of credit deterioration from current levels is incorporated into ratings. ASARCO LLC: El Paso to Create Plan to Examine Asarco Land --------------------------------------------------------- The city of El Paso in Texas will create a new comprehensive plan to examine possible uses of ASARCO LLC's shuttered smelter and other company-owned land in the City, the El Paso Times reports. The plan would guide growth and development in El Paso for the next 15 years, and would look at development around three transportation corridors, David Burge of El Paso Times says. McClatchy-Tribune Information Services reports that the City Council voted 8-0 on April 6, 2010, to award a $606,000 contract to Dover, Kohl & Partners of Coral Gables, Fla., to do the first phase of the plan. According to the McClatchy-Tribune report, the state of Texas and the City of El Paso will both contribute $150,000 to pay for the ASARCO portion of the study, while a federal grant money will pay for the remaining $306,000. The report adds that the plan's final two phases will cost approximately $2 million and must will approved by the council. 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) ATRIUM COMPANIES: Moody's Assigns 'B3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and B3 probability of default rating to Atrium Companies, Inc., anticipating the company emerging from Chapter 11 proceedings in early-May. In a related rating action, Moody's assigned a B3 to the company's proposed first lien term loan due 2016. The rating outlook is stable. The B3 Corporate Family Rating incorporates Moody's view that Atrium's end markets will remain sluggish through the balance of 2010 and into 2011. The company derives about 50% of its revenues from the new home construction market and the balance from the repair and remodeling sector. However, Atrium's operating margins should benefit from its cost reduction program, which includes improved materials purchasing, rationalization of manufacturing facilities and work force reductions. The company will remain highly leveraged despite shedding approximately 60% of its pre- bankruptcy debt upon emergence from Chapter 11; the company's pro forma debt exceeds its tangible assets. The company's improved liquidity profile, with no near-term maturities, gives Atrium some financial flexibility to contend with economic uncertainties. The stable outlook reflects Moody's view that Atrium's liquidity profile and reduced leverage give it adequate financial flexibility to contend with a more subdued new home construction and repair and remodeling market. These rating actions were taken: * Corporate family rating assigned B3; * Probability of default rating assigned B3; and, * $185 million term loan due 2016 assigned B3 (LGD3, 44%). The last rating action was on January 21, 2010, at which time Moody's announced it would withdraw Atrium's ratings when it filed voluntary petitions of reorganization under Chapter 11 of the U.S. Bankruptcy Code. Atrium Companies, Inc., headquartered in Dallas, TX, is one of the leading manufacturers of residential vinyl and aluminum windows in North America (based on units sold) producing approximately 3.5 million windows in 2009. BAINBRIDGE SHOPPING: Files List of 5 Largest Unsecured Creditors ---------------------------------------------------------------- Bainbridge Shopping Center II, LLC, has filed with the U.S. Bankruptcy Court for the Southern District of Florid a list of its five largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MJM Property Management and Development Property 4425 Military Trail Management Unit 202 Services Jupiter, FL 33458 July 2009 - Current $85,263 Kowit & Passov Real Estate Group 6001-D Landerhaven Drive Commissions Cleveland, OH 44124 2007-2009 $53,718 Terra National Real Estate Group 29225 Chagrin Boulevard Suite 360 Market Research Beachwood, OH 44122 Services $32,000 McCarthy, Lebit, Crystal Legal Services & LIffman Co. for 2008-2009 $14,117 Thrasher, Dinsmore & Dolan Legal Services 2009 $6,959 Jupiter, Florida-based Bainbridge Shopping Center II, LLC, owns and operates the Marketplace at Four Corners shopping center in a southeastern suburb of Cleveland, Ohio. The Company filed for Chapter 11 bankruptcy protection on April 11, 2010 (Bankr. S.D. Fla. Case No. 10-19383). Arthur J. Spector, Esq., who has an office in Ft. Lauderdale, Florida, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. The Debtor's affiliate, John R. McGill, filed a separate Chapter 11 petition on May 15, 2009 (Case No. 09-19425). BAINBRIDGE SHOPPING: Files Schedules of Assets & Liabilities ------------------------------------------------------------ Bainbridge Shopping Center II, LLC, has filed with the U.S. Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $94,074 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $45,607,689 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $192,057 ----------- ----------- TOTAL $94,074 $45,799,746 Jupiter, Florida-based Bainbridge Shopping Center II, LLC, owns and operates the Marketplace at Four Corners shopping center in a southeastern suburb of Cleveland, Ohio. The Company filed for Chapter 11 bankruptcy protection on April 11, 2010 (Bankr. S.D. Fla. Case No. 10-19383). Arthur J. Spector, Esq., who has an office in Ft. Lauderdale, Florida, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. The Debtor's affiliate, John R. McGill, filed a separate Chapter 11 petition on May 15, 2009 (Case No. 09-19425). BAINBRIDGE SHOPPING: Section 341(a) Meeting Scheduled for May 26 ---------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Bainbridge Shopping Center II, LLC's creditors on May 26, 2010, at 8:30 a.m. The meeting will be held at Flagler Waterview Building, 1515 N Flagler Dr Room 870, West Palm Beach, FL 33401. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Jupiter, Florida-based Bainbridge Shopping Center II, LLC, owns and operates the Marketplace at Four Corners shopping center in a southeastern suburb of Cleveland, Ohio. The Company filed for Chapter 11 bankruptcy protection on April 11, 2010 (Bankr. S.D. Fla. Case No. 10-19383). Arthur J. Spector, Esq., who has an office in Ft. Lauderdale, Florida, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. The Debtor's affiliate, John R. McGill, filed a separate Chapter 11 petition on May 15, 2009 (Case No. 09-19425). BAINBRIDGE SHOPPING: Wants Berger Singerman as Bankruptcy Counsel ----------------------------------------------------------------- Bainbridge Shopping Center II, LLC, has asked for authorization from the U.S. Bankruptcy Court for the Southern District of Florida to employ Berger Singerman, P.A., as bankruptcy counsel, effected as of the Petition Date. Berger Singerman will: a. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Guidelines and Reporting Requirements and with the rules of the Court; b. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; c. protect the interests of the Debtor in all matters pending before the Court; and d. represent the Debtor in negotiations with its creditors and in the preparation of a plan. Arthur J. Spector, a shareholder of Berger Singerman, says that the firm will be paid based on the hourly rates of its personnel: Arthur J. Spector $525 Attorneys $330-$570 Legal Assistants $75-$195 Paralegals $75-$195 Mr. Spector assures the Court that Berger Singerman is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Jupiter, Florida-based Bainbridge Shopping Center II, LLC, owns and operates the Marketplace at Four Corners shopping center in a southeastern suburb of Cleveland, Ohio. The Company filed for Chapter 11 bankruptcy protection on April 11, 2010 (Bankr. S.D. Fla. Case No. 10-19383). The Company estimated its assets and debts at $10,000,001 to $50,000,000. The Debtor's affiliate, John R. McGill, filed a separate Chapter 11 petition on May 15, 2009 (Case No. 09-19425). BANKRUPTCY MANAGEMENT: S&P Puts 'CCC+' Rating on Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings on Irvine, Calif.-based bankruptcy management software and hardware provider Bankruptcy Management Solutions Inc., including its 'CCC+' corporate credit rating, on CreditWatch with negative implications. These actions result from the company's failure to provide its credit facility lenders with required financial statements within 105 days of BMS' Dec. 31 fiscal year-end. Although company management is engaged in discussions with its lenders, if they do not obtain a waiver or if they do not provide financial statements in a timely manner, this could lead to a default under the credit facilities. "In addition," said Standard & Poor's credit analyst Susan Madison, "S&P remain concerned about the company's ability to meet existing financial performance covenant requirements for the quarter ending on June 30, 2010." In resolving the CreditWatch S&P will monitor the company's ability to comply with its credit facility requirements, including the filing of audited year-end financial statements and its ability to meet financial performance covenants over the very near term. BANKUNITED FINANCIAL: Wants FDIC Proof of Claim Disallowed ---------------------------------------------------------- BankUnited Financial Corporation, et al., objected to the proof of claim of Federal Deposit Insurance Corporation, in its capacity as receiver for BankUnited, FSB. The Debtors assert counterclaims against the FDIC-Receiver for, without limitation, a declaratory judgment as to the Debtors' estates' ownership interest in tax refunds, turnover of property of the Debtors' estates, avoidance and recovery of preferences and fraudulent transfers, and other amounts due to them. The Debtors ask the U.S. Bankruptcy Court for the Southern District of Florida to, among other things: a) disallow the FDIC Proof of Claim; b) declare that the refunds are property of BUFC's bankruptcy estate and that the FDIC-Receiver has at most a general unsecured claim as to any amount of the Refund to which it otherwise would be entitled; and c) order the FDIC-Receiver to turn over to the Debtors the personal property and provide a complete accounting thereof. About BankUnited Financial BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors led by W.L. Ross & Co. BankUnited, FSB, had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The Company and its affiliates filed for Chapter 11 on May 22, 2009 (Bankr. S.D. Fla. Lead Case No. 09-19940). Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz, P.A., represent the Debtors as counsel. Corali Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as counsel to the official committee of unsecured creditors. In its bankruptcy petition, BankUnited Financial Corp. said it has assets of $37,729,520 against debts of $559,740,185. Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York were listed among the company's largest unsecured creditors in their roles as trustees for security issues. BankUnited estimated the Bank of New York claim tied to convertible securities at $184 million. U.S. Bank and Wilmington Trust are owed $120,000,000 and $118,171,000 on account of senior notes. BAYARD SPECTOR: Court Denies HWMG's Motion to Dismiss Case ---------------------------------------------------------- The Hon. Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida partially denied HWMG Investments, LLC's motion to dismiss the Chapter 11 case of Bayard William Spector. As reported in the Troubled Company Reporter on February 16, 2010, HWMG asked for the dismissal of the Debtor's Chapter 11 case, relating that: -- based on the Debtor's substantial lack of equity in the real property, the Debtor's lack of any disposable income and the current economic conditions affecting the real estate market, the Debtor has no reasonable hope of reorganizing this property by refinancing it or selling it for a price that will satisfy the liens; -- the real property does not produce any cash flow to pay a market rate of interest on the obligation owed to HWMG or otherwise fund a Chapter 11 plan. The Court granted HWMG complete relief from the automatic stay to pursue its in rem legal rights and remedies, including, without limitation, resetting to foreclosure sale of the property before June 30, 2010. The Court also directed the Debtor to maintain insurance on the property in compliance with the loan documents and provide proof of insurance to HWMG's counsel. Miami, Florida-based Bayard William Spector -- aka Bayard W. Spector, Bayard William Bector, Bayard W. Bector, W Bayard Spector, and Spector Bayard -- filed for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr. S.D. Fla. Case No. 09- 34183). The Debtor listed $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BCAC LLC: Files Schedules of Assets & Liabilities ------------------------------------------------- BCAC, LLC, has filed with the U.S. Bankruptcy Court for the Middle District of North Carolina its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $13,500,000 B. Personal Property $134,251 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $11,537,942 E. Creditors Holding Unsecured Priority Claims $67,169 F. Creditors Holding Unsecured Non-priority Claims $1,971,338 ----------- ----------- TOTAL $13,634,251 $13,576,449 Brookfield, Wisconsin-based BCAC, LLC, owns a 204-unit multi- family apartment complex at 23 Hiltin Place, Greensboro, Guilford County, North Carolina, which property is known as Park Place Apartments. The Company filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. M.D. N.C. Case No. 10-10709). Christine L. Myatt, Esq., who has an office in Greensboro, North Carolina, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. BCAC LLC: Wants to Use PNC Bank's Cash Collateral ------------------------------------------------- BCAC, LLC, seeks authority from the U.S. Bankruptcy Court for the Middle District of North Carolina to use the cash collateral of PNC Bank, National Association, until December 31, 2010. Christine L. Myatt, Esq., at Nexsen Pruett PLLC, the attorney for the Debtors, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at http://bankrupt.com/misc/BCAC_budget.pdf Brookfield, Wisconsin-based BCAC, LLC, owns a 204-unit multi- family apartment complex at 23 Hiltin Place, Greensboro, Guilford County, North Carolina, which property is known as Park Place Apartments. The Company filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. M.D. N.C. Case No. 10-10709). Christine L. Myatt, Esq., who has an office in Greensboro, North Carolina, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. BCAC LLC: Section 341(a) Meeting Scheduled for May 17 ----------------------------------------------------- The U.S. Trustee for the Middle District of North Carolina will convene a meeting of BCAC, LLC's creditors on May 17, 2010, at 10:00 a.m. The meeting will be held at the Creditors Meeting Room, First Floor, 101 South Edgeworth Street, Greensboro, NC 27401. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Brookfield, Wisconsin-based BCAC, LLC, owns a 204-unit multi- family apartment complex at 23 Hiltin Place, Greensboro, Guilford County, North Carolina, which property is known as Park Place Apartments. The Company filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. M.D. N.C. Case No. 10-10709). Christine L. Myatt, Esq., who has an office in Greensboro, North Carolina, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. BCAC LLC: Taps Nexsen Pruet as Bankruptcy Counsel ------------------------------------------------- BCAC, LLC, has sought permission from the U.S. Bankruptcy Court for the Middle District of North Carolina to employ Christine L. Myatt and the law firm of Nexsen Pruet, PLLC, as bankruptcy counsel. Nexsen Pruet will: a. assist in the investigation and examination of contracts, loans, leases, financing statements, and other related documents; b. advise the Debtor in the administration of its bankruptcy estate; c. assist the Debtor in proposing a plan of reorganization; and d. facilitate the consummation of the Debtor's confirmed reorganization plan. The Debtor and Nexsen Pruet didn't disclose how Nexsen Pruet will be compensated for its services. Christine L. Myatt, an attorney at Nexsen Pruet, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Brookfield, Wisconsin-based BCAC, LLC, owns a 204-unit multi- family apartment complex at 23 Hiltin Place, Greensboro, Guilford County, North Carolina, which property is known as Park Place Apartments. The Company filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. M.D. N.C. Case No. 10-10709). The Company estimated its assets and debts at $10,000,001 to $50,000,000. BEST LIFE: A.M. Best Downgrades Financial Strength Rating to 'B' ---------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to "bb" from "bbb-" of BEST Life and Health Insurance Company (BEST Life) (headquartered in Irvine, CA). The outlook for both ratings has been revised to negative from stable. The rating downgrades reflect BEST Life's unfavorable operating results in the last two years, with corresponding decreases in capital and surplus. BEST Life's net losses resulted from decreasing premium revenue and higher stop-loss claims in 2009. The company's lower profitability on its first year dental business, higher large group dental claims and higher severity and frequency of major medical claims incurred in 2008 also contributed to the net losses. BEST Life's premium revenue and net income are derived from marketing primarily dental, major medical multiple employer trust and medical stop-loss products to employer groups, mainly in the West and Midwest. Although the company implemented sizeable expense reductions over the past two years, A.M. Best expects its future operating results will be pressured by increasingly challenging markets where it competes against aggressive national and regional carriers possessing economies of scale. Additionally, the regulations and requirements of recently enacted national healthcare reform legislation will likely pressure future operating results in BEST Life's major medical multiple employer trust line of business. BFG INVESTMENTS: 5th Cir. Affirms Bankr. Court's Jurisdiction ------------------------------------------------------------- WestLaw reports that a Chapter 7 debtor's majority interest owner impliedly consented to the bankruptcy court's entry of final judgment in a removed state-court action. The owner failed to object, in the bankruptcy court, to that court's exercise of core jurisdiction after the removing party stated in the removal notice, in accordance with the governing bankruptcy rule, that the state-court case was a core proceeding. In re BFG Investments LLC, 2010 WL 607694 (5th Cir.). BFG Investments, LLC, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 05-70173) on March 1, 2005, estimating its assets and debts at less than $10 million. An affiliate, BFG Development, Inc., filed a chapter 11 petition (Bankr. S.D. Tex. Case No. 05-70332) on April 4, 2005. Both Chapter 11 cases were subsequently converted to Chapter 7 liquidation proceedings. Following the conversion, BFG Investments filed an action in state court seeking to prevent Texas State Bank from foreclosing on its real estate. The Bank removed the action to bankruptcy court, and the bankruptcy court declined BFG's request for a preliminary injunction to enjoin the foreclosures. The bankruptcy court also imposed sanctions on sanction on the debtor's majority interest owner for his conduct at the preliminary injunction hearing. More litigation followed, with the U.S. District Court affirming the Bankruptcy Court's orders. In this appeal, the Fifth Circuit affirmed the District Court's rulings. BRYCE PARK: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bryce Park, LLC Attn: Jeffrey Fransen 3318 145th Place SE Mill Creek, WA 98012 Bankruptcy Case No.: 10-14532 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Jonathan S. Smith, Esq. Advantage Legal Group 11109 Slater Avenue NE Street 101 Kirkland, WA 98033 Tel: (425) 452-9797 E-mail: jonathan@advantagelegalgroup.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-14532.pdf The petition was signed by Jeffrey Fransen, managing member. CENTRAL FALLS: Legislation Enacted to Allow Bankr. Filing --------------------------------------------------------- Richard C. Dujardin, journal staff writer at The Providence Journal, reports that the city council has voted to ask the general assembly to enact legislation to allow Central Falls and other municipalities to file for bankruptcy protection. According to the report, a person familiar with the matter said the city may not need to file for bankruptcy, but having the legislation would be an important tool for municipalities should they find they cannot meet their financial obligations. "We're looking at $3.7 million this fiscal year and another $5 million in the next fiscal year. We were just told that we will be losing another $1.5 million to $2 million in state aid. That alone is 10 percent of our $17-million budget," Mr. Dujardin quotes Finance Director Azmim Mazagonwalla as saying. CHENIERE ENERGY: To Sell Interest in Freeport LNG for $104MM ------------------------------------------------------------ Cheniere Energy, Inc., has agreed to sell its 30% limited partner interest in Freeport LNG Development L.P. to Zachry American Infrastructure, LLC, an independent member of the Zachry group of companies, located in San Antonio, Texas, and Hastings Funds Management (USA), Inc., a wholly owned subsidiary of Westpac Banking Corporation, acting on behalf of various institutional investors. The net proceeds of approximately $104 million will be used to pay down a portion of the $400 million, 9.75% term loan held by a Cheniere subsidiary. This transaction is in-line with Cheniere's financial strategy of improving its capital structure and reducing debt. The transaction is expected to close in the second quarter of 2010 subject to meeting conditions precedent including satisfactory completion of due diligence and regulatory approvals. Sagent Advisors, Inc. is providing certain financial advisory services to Cheniere in connection with the transaction. Cheniere posted a net loss for the third consecutive year, reporting a net loss of $161,490,000 for 2009 from net losses of $372,959,000 for 2008 and $196,580,000 for 2007. Total revenues were $181,126,000 for 2009 from $7,144,000 for 2008 and $647,000 for 2007. At December 31, 2009, the Company had total assets of $2,732,622,000 against total current liabilities of $66,212,000, long-term debt, net of discount of $2,692,740,000, long-term debt- related parties of $349,135,000, deferred revenue of $33,500,000 and other non-current liabilities of $23,162,000. Total deficit widened to $432,127,000 at December 31, 2009, from total deficit of $274,054,000 at December 31, 2008. 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?5f8a Houston, Texas-based Cheniere Energy, Inc. (NYSE Amex: LNG) -- http://www.cheniere.com/-- is developing a network of three LNG receiving terminals and related natural gas pipelines along the Gulf Coast of the United States. Cheniere is pursuing related business opportunities both upstream and downstream of the terminals. Cheniere is also the founder and holds a 30% limited partner interest in a fourth LNG receiving terminal. CHRYSLER LLC: Deal Resolving Treatment of Fenton Property --------------------------------------------------------- Chrysler LLC and the State of Missouri, and the Missouri Department of Natural Resources agree that if the Liquidation Trust receives approval from the Court to abandon a real property and certain fixtures located at 1001 North Highway Drive and 1050 Dodge Drive, in Fenton, Missouri: (a) the St. Louis Property will be abandoned, and the deed thereto conveyed to an entity entitled to receive the abandoned property under applicable state law; and (b) concurrently with the abandonment, the Liquidation Trust will pay a certain allocated amount directly to a designated account established by the MDNR for the sole purpose of funding administrative expenses for the St. Louis Property and environmental clean-up at, or of contamination released from, the St. Louis Property. Upon any abandonment of the St. Louis Property and the transfer of the Allocated Amount to the Site Specific Account, the Liquidation Trust and the Liquidation Trustee will have no further obligations or liabilities to any party, including, but not limited to, the MDNR, with respect to the St. Louis Property. The Allocated Amount will remain in the Site Specific Account and be used solely by the MDNR for funding administrative expenses for the St. Louis Property and environmental clean-up at, or of contamination released from, the St. Louis Property until a time as the MDNR and the U.S. EPA determine that no further environmental clean-up is required under applicable state or federal law. The MDNR will not be required to provide an accounting to the Liquidation Trust of its expenditures from the Site Specific Account, nor will the Liquidation Trust be entitled to any unused portion of the funds held in the Site Specific Account under any circumstances. Any unused funds remaining in the Site Specific Account will go to the MDNR. Simultaneously with the abandonment and immediately prior to the conveyance of the St. Louis Property, the Liquidation Trust will execute and record an easement of access in gross providing the MDNR and the U.S. EPA with the right of access to the St. Louis Property for the purpose of performing response activities. Upon any abandonment, the Liquidation Trust also will (a) provide the Legal Transferee, the MDNR and the U.S. EPA with any keys in its possession to any gates or locked portions of the St. Louis Property; and (b) leave "as is" all monitoring wells, and if the monitoring wells are locked, provide the Legal Transferee, the MDNR and the U.S. EPA with keys to the locks that are in its possession. If the St. Louis Property is not abandoned, then the MDNR will not be entitled to any portion of the Allocated Amount. If the Liquidation Trust enters into an agreement to sell or transfer ownership of the St. Louis Property, in whole or in part, it will provide the MDNR with written notice of the prospective transfer, together with a copy of the executed asset purchase agreement, within three business days of the Purchase Agreement having been fully executed by the parties thereto. The MDNR covenants not to bring a civil judicial or civil administrative action or take any other civil action against the Debtors, the Liquidation Trust or the Liquidation Trustee, including, without limitation, seeking injunctive relief for remediation of the St. Louis Property. The MDNR agrees that, in the event the Court approves an abandonment of the St. Louis Property, neither the Liquidation Trust nor the Liquidation Trustee will have any obligation to provide any additional funding, or take any other action, with respect to the St. Louis Property other than completing the transfer of the Allocated Amount, except as provided herein. Any Claims filed by or on behalf of the MDNR against the Debtors' Estates, on account of the St. Louis Property, including, but not limited to, Administrative Claims or Priority Claims, will be deemed fully and finally satisfied upon (a) the Court's entry of an order approving the abandonment of the St. Louis Property and (b) the transfer of the Allocated Amount to the Site Specific Account. The MDNR agrees not to oppose Confirmation of the Plan. The MDNR expressly agrees with the proposed treatment of the St. Louis Property under the Plan. The MDNR agrees not to oppose any abandonment motion filed by the Liquidation Trust with respect to the St. Louis Property, provided that the Allocated Amount is transferred to the Site Specific Account in connection with any abandonment and the other terms and conditions of their Settlement are satisfied. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Deal Resolving Treatment of MDNRE Property -------------------------------------------------------- Chrysler LLC and its units currently own certain real property and related fixtures located at 6700 Lynch Road in Detroit, Wayne County, Michigan. Prior to the Petition Date, the Debtors conducted manufacturing operations at a facility located on the Property, which operations included the use of potentially hazardous substances and materials. The Debtors' Chapter 11 Plan of Liquidation establishes a liquidation trust to, among other things, hold certain assets, including the Property, and make distributions. The Property is first lien collateral and is subject to treatment as a "Designated Owned Property" under the Plan. If the Property is not sold or transferred to a third party and becomes an Excluded First Lien Asset, the Liquidation Trust is authorized to seek the abandonment of the Property pursuant to the terms of the Plan. On or before the effective date of the Plan (a) the Environmental Reserve will be established as a Trust Account; and (b) the Owned Property Reserve will be established as a sub-account of the Environmental Reserve. The funds contained in the Owned Property Reserve will be available to fund environmental cleanup work at Designated Owned Properties. Under the Plan, a specific amount of cash in the Owned Property Reserve will be allocated to each Designated Owned Property. The amount of the Owned Property Reserve that will be reserved for the Property under the Plan is $500,000. The Michigan Department of Natural Resources and Environment alleges that Old Carco may have liability under Part 201 of Michigan's Natural Resources and Environmental Protection Act and the NREPA's rules for response activities or response activity costs with respect to the Property. However, the Debtors' Plan, as filed on January 22, 2010, did not provide for the performance of response activities to address any contamination at the Property. Accordingly, MDNRE filed an objection to the Plan. Subsequently, the Debtors and MDNRE agreed to the treatment of the Property and any related claims. In a Court-approved stipulation, the Parties agreed that: * if the Liquidation Trust receives approval from the Bankruptcy Court to abandon the Property: (a) the Property will be abandoned and treated consistent with applicable state law; and (b) concurrently with the abandonment, the Liquidation Trust will pay the Allocated Amount directly to a "Site Specific Account" established by MDNRE for the sole purpose of funding environmental clean-up at, or of any contamination released from, the Property and other MDNRE costs incurred with respect to the Property; * upon any abandonment of the Property and the transfer of the Allocated Amount to the Site Specific Account, the Liquidation Trust and the Liquidation Trustee will have no further obligations or liabilities to any party, including, but not limited to, MDNRE, with respect to the Property; * MDNRE agrees that, in the event that the Bankruptcy Court approves an abandonment of the Property, neither the Liquidation Trust nor the Liquidation Trustee will have any (i) obligation to provide any additional funding, or take any other action under environmental law, with respect to the Property other than completing the transfer of the Allocated Amount or (ii) liabilities in any way related to or arising out of MDNRE's performance of response activities at the Property subsequent to the execution of the Easement; * if the conditions that trigger payment of the Allocated Amount to MDNRE, the Liquidation Trust will pay the Allocated Amount directly into the State of Michigan's Environmental Response Fund; * if the Property is not abandoned, then MDNRE will not be entitled to any portion of the Allocated Amount; * by the Plan's effective date, to the extent not already provided, the Debtors will turn over to MDNRE all non- privileged files and records (or copies of the information) in their possession pertaining to the environmental conditions at or associated with the Property, including site-specific data prepared by the Debtors' consultants; * MDNRE agrees not to oppose any abandonment motion filed by the Liquidation Trust with respect to the Property, provided that the Allocated Amount is transferred to the Site Specific Account in connection with any abandonment; * simultaneously with the abandonment, the Liquidation Trust will execute and record the easement of access to the Property. If the Liquidation Trust seeks to abandon the Property, any proposed order submitted to the Bankruptcy Court will provide MDNRE with a right of access to the Property; * in the case of any abandonment of the Property, the Liquidation Trust (i) will leave "as is" any monitoring wells, including off-site monitoring wells to the extent permitted by any access agreement between the Debtors and the owner of the property on which the monitoring wells are located; and (ii) if the monitoring wells are locked, will provide MDNRE with keys to the locks that are in the Debtors' possession; (iii) will provide to MDNRE copies of any agreements in its possession that the Liquidation Trust or the Debtors have entered into for the installation of, and access to, off-site monitoring wells; and (iv) will provide MDNRE with any keys in its possession to gates for any locked portion of the Property; and * any Claims filed by or on behalf of MDNRE on account of the Property, including, but not limited to, Administrative Claims or Priority Claims, will be deemed fully and finally satisfied upon (a) the Court's entry of an order approving the abandonment of the Property and (b) the transfer of the Allocated Amount to the Site Specific Account. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: GAO Says Funding for Pension Plans Uncertain ---------------------------------------------------------- The future of Chrysler Group LLC's pension plans remains uncertain and will depend on whether the automaker returns to profitability, according to a report released by the Government Accountability Office. Officials at the Department of Treasury expect the auto maker to return to profitability, in which case Chrysler Group could likely make the required payment and prevent its pension plan from being terminated. The recovery, however, depends on the overall economy and improvement in U.S. employment, the report said. According to GAO's report, the funded status of Chrysler Group's pension plan has been declining since 2008 due, in part, to the economic downturn. The auto maker projects it may need to make large contributions to its plan to comply with federal minimum funding requirement within the next five years. Chrysler Group's funding projections reveal that about $3.4 billion in contributions may be needed to meet its funding requirements over the 2009 to 2015 period. Chrysler Group intends to use credit balances to offset the contribution requirements for some of its plans. As of end-of- year 2009, the auto maker had credit balances of about $3.5 billion for its United Auto Workers Pension Plan and about $1.9 billion across the other eight plans for which it provided funding information. In addition, Chrysler Group also has $600 million in payments from Daimler to help meet its funding requirements over the next few years. If Chrysler Group fails to return to profitability and its pension plan is terminated, Pension Benefit Guaranty Corp. would be hit hard both financially and administratively, the GAO report said. In early 2009, prior to Chrysler Group and General Motor assuming sponsorship of their pension plans, PBGC estimated its exposure to potential losses for the automakers' plans to be about $14.5 billion. The PBGC, a federal corporation, provides limited payments to workers when employers shut down their pension plans. The agency is funded by insurance premiums paid by firms that sponsor pensions. A copy of the Government Accountability Office's report is available at http://www.gao.gov/new.items/d10492.pdf Chrysler Group's chances of returning to profitability should become clearer when Fiat S.p.A., presents its five-year business plan on April 21, 2010, according to an April 19 report by Detroit Free Press. Fiat, an Italy-based automaker, acquired most of the assets of Chrysler LLC in a government-backed deal after the Michigan-based auto maker filed for bankruptcy protection. Fiat acquired stake in Chrysler Group, the new company that was created under the deal, in return for technology for new vehicles that Chrysler Group needs. Chrysler Group's chances of earning a profit, repaying taxpayer loans and becoming a stable employer depend on the success of its engineering and production work with Fiat. A plan to more than double Chrysler Group's annual sales from 1.3 million last year to 2.8 million by 2013 depends on the integration of global production, engineering and sales of the auto maker and Fiat, Detroit Free Press reported. Chrysler Group is also set to release its financial results for the latter part of 2009 and the first quarter of this year in a separate statement on Wednesday. It is not clear, however, how much detail the auto maker will provide, according to the report. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler Hikes March Sales by 10% --------------------------------------------------- Chrysler Group LLC announced promising March sales results, posting a 10 percent increase compared with February. All-new and improved vehicles lead the way with both month-over-month and year-over-year sales increases. "New products like the 2010 Ram Heavy Duty pickup truck and Dodge Caliber with an all-new interior are resonating with consumers, resulting in increasing sales," said Fred Diaz, President and Chief Executive Officer ?- Ram Truck Brand and Lead Executive for the Sales Organization in an April 1, 2010 statement. "Consumer confidence indicators are up this month and traffic in dealership showrooms continues to grow." The company reported total U.S. sales for March of 92,623 units, a decrease of 8 percent compared with March 2009 (101,001 units) and an increase of 10 percent compared with last month (84,449 units). Chrysler Group finished the month with a 58-day supply (207,510 units) of inventory, a 41 percent decline compared with March 2009. Overall industry figures for March are projected to come in at an estimated 12.0 million SAAR. "Chrysler Group is pleased with the month-over-month and retail sales improvements, we believe it is an indicator of the company's health," said Mr. Diaz. "Last year at this time, the old company was buying market share with high incentives in an effort to stave off bankruptcy; this year consumers are purchasing our products for the quality, value and industry-leading features." March U.S. Sales Highlights * Ram Heavy Duty pickup truck sales post a 20 percent increase compared with the same time last year and climb 56 percent versus February * Chrysler Brand sales (19,780 units) post an 1 percent increase versus March 2009 and a 17 percent increase compared with last month * Chrysler Town & Country and Chrysler Sebring (sedan and convertible) all post year-over-year and month-over-month sales increases * Jeep(R) Brand sales (24,393 units) increase 3 percent versus the same time period last year and 5 percent compared with last month * Jeep Compass, Jeep Patriot, Jeep Grand Cherokee and Jeep Commander sales increase compared with March 2009 * Dodge Challenger (3,211 units) post year-over-year sales increases of 36 percent and 50 percent month-over-month * Dodge Caliber sales (2,932 units) increase 30 percent compared with last month Incentives Chrysler Group also announced April kicks off the company's "Minivan Event." The company has expanded the "Minivan Pledge" to any consumer purchasing a 2010 model year Chrysler Town & Country or Dodge Grand Caravan. The "Minivan Pledge" allows a consumer purchasing a new 2010 model year Dodge Grand Caravan or Chrysler Town & Country minivan to return the vehicle, no questions asked, within 60 days if they aren't happy with the vehicle, or the customer can choose $500 bonus cash in lieu of the 60-day "Minivan Pledge." Consumers should see their participating local Chrysler, Jeep, Dodge and Ram Truck dealer for full program rules. "0 percent PLUS" continues through May 3 on most 2010 model year vehicles. Chrysler Brand 0 percent financing for 36 months plus $1,000 consumer cash is available on most 2010 model year Chrysler vehicles. In addition to the "Minivan Pledge," qualified customers purchasing a 2010 Chrysler Town & Country are eligible for 0 percent financing for up to 60 months, or consumer cash of up to $1,500 Consumers purchasing a Chrysler 300 can choose 0 percent financing for up to 60 months plus $1,000 consumer cash, or consumer cash of up to $2,000 Qualified customers purchasing a 2010 Chrysler PT Cruiser can choose 0 percent financing for 36 month, or consumer cash of up to $2,000 Consumers purchasing a Chrysler Sebring can choose 0 percent financing for up to 60 months or 1.9 percent financing for 72 month, or consumer cash of up to $2,000 Dodge Car Brand 0 percent financing for 36 months plus up to $1,000 consumer cash is available on most 2010 model year Dodge car vehicles. * In addition to the "Minivan Pledge," consumers purchasing a 2010 Dodge Grand Caravan can choose 0 percent financing for 60 months, or consumer cash of up to $1,000. Attractive financing rates are available for longer terms * Consumers purchasing a 2010 Charger can choose 0 percent financing for up to 60 months plus $1,000 consumer cash, or consumer cash of up to $2,000 * Qualified customers purchasing a 2010 Dodge Challenger are eligible for 1.9 percent financing for up to 60 months * Consumers purchasing a 2010 Dodge Journey can choose 0 percent financing for 36 months plus up to $1,000 consumer cash, or consumer cash of up to $1,500. Attractive financing rates are available for longer terms * Qualified customers purchasing a 2010 Dodge Avenger or Dodge Nitro can choose 0 percent financing for up to 60 months, 1.9 percent financing for 72 months or $2,000 consumer cash Jeep Brand Jeep Brand * Consumers purchasing a 2010 Jeep Wrangler can choose 0 percent financing for 36 months or consumer cash of $750. Attractive financing rates are available for longer terms * Consumers who purchase a 2010 model year Jeep Liberty, Grand Cherokee or Commander can choose 0 percent financing for up to 60 months or 1.9 percent financing for 72 months plus bonus cash of up to $1000 from GMAC (with the purchase of a Liberty, Grand Cherokee or Commander) or consumer cash of up $4,000 Ram Truck Brand * Consumers who purchase the all-new 2010 Ram Heavy Duty can choose attractive financing rates through GMAC Financial Services of 1.9 percent financings for up to 60 months or 3.9 percent financing for 72 months or $1,000 consumer cash * Consumers who purchase a 2010 model year Ram 1500 can receive a "no charge" HEMI(R) engine, or $500 bonus cash towards the purchase of a Ram 1500 with a 3.7L or 4.7L engine. In addition, they can choose 2.9 percent financing for up to 60 months or up to $2,500 consumer cash * Consumers purchasing a 2010 Dodge Dakota can choose 0 percent financing for up to 60 months or 1.9 percent financing for 72 months or consumer cash of up to $2,000 Leasing Chrysler Group is offering attractive lease rates on several 2010 model year vehicles. The incentives announced are valid through April 30, 2010. Chrysler Canada Reports Record Sales Chrysler Canada reported another exceptionally strong sales month, with 19,470 units sold in March, an increase of 22 per cent over the same month in 2009. For the fourth consecutive month, Chrysler Canada retail sales posted an increase of greater than 20 per cent, with March retail sales gaining 36 per cent for the month. "We made more records in March than Motown has in the last 10 years," Reid Bigland, President and CEO of Chrysler Canada said in an April 1, 2010 statement. "Our Ram Trucks, Dodge Grand Caravan, Dodge Journey and legendary Jeep(R) Wrangler were all big hits last month, posting record sales." Sales Highlights Two of the Top Five-selling nameplates in Canada were Chrysler Canada vehicles: the Dodge Grand Caravan and the Ram pickup. Sales of the Ram Heavy Duty pickup, the Motor Trend Truck of the Year, helped propel the Ram Truck to its best March ever, with a gain of 101 per cent on sales of 4,841 units. "Pickup trucks are the second most popular vehicles in Canada," said Dave Buckingham, Vice President of Sales, Chrysler Canada. "It's no surprise that with Motor Trend's 2010 Truck of the Year in our corner, our Ram sales more than doubled in March over last year." Canada's No. 1 selling crossover, the Dodge Journey, posted an all-time sales record in March. Dodge Journey sales rose 66 per cent on 2,239 units sold. An all-time record for the month of March was also posted by the legendary Jeep Wrangler with 1,160 units sold, an increase of 81 per cent compared with March 2009. The Dodge Grand Caravan and Chrysler Town & Country continued their impressive sales performance with combined sales up 43 per cent (5,774 units), also an all-time high for the month of March. Better than eight out of every ten Canadian minivan shoppers chose a Chrysler minivan in March. April Incentive Program For the month of April, Chrysler Canada is launching the all-new incentive program "Why Canada Drives Chrysler, Jeep(R), Dodge and Ram Vehicles." Canadians are encouraged to visit one of the company's 440 dealerships to experience the company's incredible lineup of industry-leading vehicles and find out why so many Canadians drive Chrysler, Jeep, Dodge and Ram models. From April 1 to April 30, dealers across Canada will be showcasing our award-winning and segment-leading products such as the all-new 2010 Motor Trend Truck of the Year - Ram Heavy Duty; the country's No. 1 selling minivan - Dodge Grand Caravan; Canada's No. 1 selling crossover - the Dodge Journey; and the most fuel-efficient and affordable 4x4 in Canada - the Jeep Patriot. In addition, during this exclusive one-month promotion, customers will be eligible for $500 in "Why Canada Drives" Bonus Cash towards the purchase of virtually any new 2010 Chrysler, Jeep, Dodge or Ram model. Customers will also be eligible for up to $7,500 in Consumer Cash Discounts on nearly every 2010 Chrysler, Jeep, Dodge and Ram vehicle. In addition, Canadians can also receive $1,000 in Jeep Bonus Cash, providing customers even further value on the legendary Jeep lineup, including the 2010 Jeep Patriot, Jeep Compass, Jeep Wrangler and Wrangler Unlimited, Jeep Liberty, Jeep Commander and Jeep Grand Cherokee. Chrysler Canada continues to offer the most compelling purchase finance options in the industry, which are combinable with all retail discounts: the industry-first variable prime rate of 2.25 per cent up to 84 months or zero per cent up to 36 months on nearly every 2010 Chrysler, Jeep, Dodge, and Ram vehicle. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITIGROUP INC: Inks Equity Distribution Deal with Citi Global ------------------------------------------------------------- Citigroup Inc. has entered into a continuous offering program equity distribution agreement with Citigroup Global Markets Inc. relating to up to 125,000,000 shares of common stock, par value $0.01 per share. Citigroup may offer and sell shares of Common Stock from time to time through Citigroup Global Markets, as sales agent. The shares of Common Stock to be offered and sold represent tax withholding obligations from stock compensation received by certain Citigroup employees on or about April 21, 2010, as part of their 2009 compensation package pursuant to the issuance of $1.7 billion of common stock equivalents to employees in lieu of cash they would have otherwise received, as previously announced by Citigroup on December 14, 2009. Sales of the shares, if any, will be made by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices, in block transactions or as otherwise agreed with Citigroup Global Markets. Citigroup Global Markets will not charge Citigroup a commission for any sales of Common Stock hereunder. Citigroup Global Markets is not required to sell any specific number or dollar amount of shares of Common Stock but will use its reasonable efforts, as agent and subject to the terms of the equity distribution agreement, to sell the shares offered, as instructed by Citigroup. The offering of Common Stock pursuant to the equity distribution agreement will terminate upon the earlier of (i) the sale of all shares of Common Stock subject to the equity distribution agreement and (ii) the termination of the equity distribution agreement by either party. A full-text copy of Citi's prospectus supplement is available at no charge at http://ResearchArchives.com/t/s?60a9 Citigroup also disclosed that stockholders, upon recommendation of the Board of Directors, approved on April 20, 2010, amendments to the Citigroup 2009 Stock Incentive Plan, which was first approved by stockholders on April 21, 2009. The amendments to the 2009 Plan (i) increase by a total of 1.15 billion shares the number of shares of Citigroup Inc. common stock, par value $.01 per share, that may be issued pursuant to awards under the 2009 Plan, and (ii) change the manner of counting available shares. The increase in the shares authorized for grant resulted from approval of two separate amendments. The first amendment increased the number of shares authorized for grant by 800 million shares. This amendment also changed the method of counting available shares by removing a provision in the 2009 Plan that counted each share subject to an award other than a stock option or stock appreciation right as 2.3 shares. The second amendment related to a specific authorization to immediately issue up to 850 million shares in settlement of approximately $1.7 billion common stock equivalent awards granted to more than 5,500 employees on January 19, 2010 and February 26, 2010. The CSE Awards were denominated in U.S. dollars and provided for settlement in stock in April 2010, subject to stockholder approval. As authorized by the second amendment, no more than 346.24 million shares were issued in settlement of the CSE Awards, based on the average of the high and low prices of Citigroup common stock on the New York Stock Exchange on April 21, 2010 ($4.93 per share). Because the shares issued in settlement of the CSE Awards were immediately vested, this second amendment also exempted these stock payments from the three-year minimum vesting requirement generally applicable to awards under the 2009 Plan. Neither the principal executive officer, the principal financial officer, nor any named executive officer of Citigroup Inc. received a CSE Award, and no award previously made to any such person under the 2009 Plan, nor under any other compensatory plan, contract or arrangement covering any such person, will be affected by the amendments to the 2009 Plan approved by stockholders on April 20, 2010. Citigroup also disclosed that at its Annual Meeting of Stockholders held on April 20, 2010: (1) 15 persons were elected to serve as directors of Citigroup; (2) the selection of KPMG LLP to serve as the independent registered public accounting firm of Citigroup for 2010 was ratified; (3) a proposal to approve amendments to the Citigroup 2009 Stock Incentive Plan (to increase authorized shares) was approved; (4) a proposal to approve the TARP repayment shares (and related amendments to the Citigroup 2009 Stock Incentive Plan) was approved; (5) a proposal to approve Citigroup's 2009 Executive Compensation was approved; (6) a proposal to ratify the Tax Benefits Preservation Plan was approved; (7) a proposal to approve the reverse stock split extension was approved; (8) a stockholder proposal requesting that Citigroup affirm its political non-partisanship was defeated; (9) a stockholder proposal requesting that Citigroup provide a semi-annual report disclosing political contributions was defeated; (10) a stockholder proposal requesting a report concerning over-the-counter derivatives trades was defeated; (11) a stockholder proposal requesting that stockholders holding 10% or more of Citigroup's common stock have the right to call special shareholder meetings was defeated; (12) a stockholder proposal requesting that executive officers retain 75% of the shares acquired through compensation plans for two years following termination of employment was defeated; and (13) a stockholder proposal requesting reimbursement of expenses incurred by a stockholder in a contested election of directors was defeated. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: Treasury Plans to Sell 1.5 Billion Shares -------------------------------------------------------- The U.S. Department of the Treasury on Monday unveiled the next steps in its plan to sell approximately 7.7 billion shares of Citigroup common stock. To enable such sales, Citigroup has filed a prospectus supplement with the Securities and Exchange Commission covering Treasury's sale of the common stock. Treasury will begin selling its common shares in the market in an orderly fashion under a pre-arranged written trading plan with Morgan Stanley, Treasury's sales agent. Initially, Treasury will provide Morgan Stanley with discretionary authority to sell up to 1.5 billion shares under certain parameters. Treasury expects to provide Morgan Stanley with authority to sell additional shares after this initial amount. On April 23, 2010, the last reported sale price for Citi's Common Stock on the New York Stock Exchange was $4.86 per share. Pursuant to the prospectus, the aggregate offering price with respect to the sale of 7.7 billion shares would be $36,807,692,306.22. A full-text copy of the prospectus is available at no charge at http://ResearchArchives.com/t/s?60b1 Treasury received the shares of common stock last summer as part of the exchange offers conducted by Citigroup to strengthen its capital base. Treasury exchanged the $25 billion in preferred stock it received in connection with Citigroup's participation in the Capital Purchase Program for common shares at a price of $3.25 per common share. Treasury required Morgan Stanley to provide opportunities for participation by small broker-dealers, including minority- or women-owned broker-dealers. Small dealers interested in participating in the program should submit their firm's name and address, Central Registration Depository Number, and primary and secondary contact details (e-mail and phone number) to Morgan Stanley at ustdisposition@morganstanley.com by 5:00 PM EDT on April 27 for further information. These sales do not cover Treasury's holdings of Citigroup trust preferred securities or warrants for its common stock, which will be disposed of separately. The offering will be made only by means of a prospectus. Morgan Stanley & Co. Incorporated is acting as a sales agent to Treasury. Copies of the prospectus supplement and accompanying prospectus relating to the offering may be obtained from Morgan Stanley & Co. Incorporated, Attn: Prospectus Department, 180 Varick Street, New York, NY 10014, by emailing prospectus@morganstanley.com or by calling toll-free in the United States 1-866-718-1649. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CNH GLOBAL: S&P Puts 'BB+' Rating on CreditWatch Developing ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB+' corporate credit rating, on CNH Global N.V. on CreditWatch with developing implications. Earlier, S&P placed the ratings on parent Fiat SpA on CreditWatch with negative implications. "The CreditWatch placement follows the demerger announcement by majority owner Fiat SpA, whereby it would split the company's automotive and industrial businesses by the end of this year," said Standard & Poor's credit analyst Dan Picciotto. Under the proposed structure, a newly formed holding company to be named Fiat Industrial SpA will own CNH, as well as Italy-based truck manufacturer Iveco SpA, and certain other businesses. "The CreditWatch developing reflects the potential for Standard & Poor's to either raise or lower its ratings on CNH, depending on S&P's assessment of the financial risk profile under the proposed new structure," he continued. Standard & Poor's expects to resolve the CreditWatch listing after the company completes the demerger and in conjunction with a review of the capital structure and operating prospects for the company. S&P could revise the CreditWatch implications to positive or negative as more information related to the proposed financial profile emerges. If S&P expects the company to pursue moderate financial policy and consider liquidity adequate, S&P could raise the corporate credit rating. For this to occur, S&P would expect adjusted equipment operations funds from operations to total adjusted debt to exceed 30% over the cycle and for the company to retain comfortable access to funding sources. Conversely, if operating performance is weak, the financial policy appears likely to be more aggressive, or S&P does not consider liquidity adequate, S&P could lower the ratings. S&P could also affirm the existing ratings if S&P still consider the company's financial risk profile significant after the demerger. COLONIAL MANOR: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Colonial Manor, LLC 2555 Marshall Road, Suite E Biloxi, MS 39531-4705 Bankruptcy Case No.: 10-50923 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court Southern District of Mississippi (Gulfport Divisional Office) Judge: Neil P. Olack Debtor's Counsel: William J. Little, Jr., Esq. Lentz & Little, P.A. P.O. Box 927 Gulfport, MS 39502 Tel: (228) 867-6050 Fax: (228) 867-6077 E-mail: littlewj@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Todd Delano, managing member. CONTINENTAL AIRLINES: Disagreement Arises on UAL Merger Talks ------------------------------------------------------------- The Wall Street Journal's Susan Carey and Gina Chon report that people familiar with the matter said Sunday disagreements have emerged in the merger talks between UAL Corp.'s United Airlines and Continental Airlines Inc. over which share price to use for the stock-swap deal. According to the Journal, the sources said UAL and Continental were hoping to agree on a "neutral price." The Journal also relates a person familiar with the matter said that during discussions on Friday and Saturday, the two companies' chief executives disagreed on what share price to use in the merger. The Journal says Continental thinks the fairer deal is to use the 30-day share price prior to April 7. United wants to use the price the day before the deal is signed. According to the Journal, United and Continental are in much different positions than they were two years ago when Continental ultimately spurned United's advances. Continental has a new, aggressive chief executive, both carriers are better off financially, and the industry landscape has been altered by the 2008 merger of Delta Air Lines Inc. and Northwest Airlines, among other things, the people said. Sources told the Journal that if the merger does go through, Jeff Smisek, Continental's chief executive, would become chief executive of the combined company, while Glenn Tilton, UAL's CEO, would become the nonexecutive chairman. The company would be based in Chicago, and United would be the surviving brand, the people said, according to the Journal. According to the Journal, based on the April 23 stock prices, the deal would create a company valued at $6.9 billion. Delta, currently the No. 1 carrier by traffic, is valued at $10.2 billion. The Journal also reports that United's pilots union has signaled that it may support a merger with Continental, whose pilots are represented by the same union and earn higher wages than the United aviators. Continental's pilots union hasn't commented. The Journal relates that the labor agreements on both airlines' pilot groups are open for renewal, and United and Continental may have to offer richer terms to ensure pilot approval, a key challenge in successfully meshing two airlines. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At Dec. 31, 2009, AMR reported total assets of $25.438 billion, including total current assets of $6.642 billion; against total current liabilities of $7.728 billion, long-term debt, less current maturities of $9.984 billion, obligations under capital leases, less current obligations of $599 million, other liabilities and credits of $10.616 billion; resulting in stockholders' deficit of $3.489 billion. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. 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. Reorganized 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. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As of December 31, 2009, US Airways had total assets of $7,454,000,000, including $2,331,000,000 in total current assets, against total current liabilities of $2,789,000,000 and total noncurrent liabilities and deferred credits of $5,020,000,000, resulting in $355,000,000 stockholders' deficit. US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. CRESCENT RESOURCES: Secured Lender Opposes Plan ----------------------------------------------- Bill Rochelle at Bloomberg News reports that Five Mile Capital Partners LLC filed an emergency motion asking for permission to send a letter urging secured lenders to vote against the reorganization plan of Crescent Resources LLC. Five Mile now wants creditors to vote "no" because corporate governance documents filed after approval of the disclosure statement provide that the board of the reorganized company will have "no fiduciary duty of care or fiduciary duty of loyalty" to the Company. The deadline for voting is May 10. The hearing for confirmation of the plan is set for May 20. Crescent Resources LLC filed an amended reorganization plan on March 11. Significant terms of the Amended Plan include: -- Holders of prepetition secured debt will receive a combination of reinstated debt and 100% of the equity of the reorganized company. Holders of the prepetition lenders claims aggregating $1.55 billion will recover 38% of their claims. -- General unsecured creditors owed a total of $305.4 million will receive an interest in a litigation trust to be formed as part of the Plan. -- Various project level lenders will have their existing debt reinstated. Lazard estimates the Reorganized Debtors' enterprise value to range from $588 million to $665 million, with a midpoint of roughly $626 million. The Reorganization Value was based on the estimated enterprise value of the operations and assets of the Reorganized Debtors through the application of, among other analyses, a discounted cash flow valuation methodology of the Debtors' operations using a range of discount rates from 15% to 20%, which imputed a present value of free cash flows of those operations over the life of the business. Black-lined versions of the Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Crescent_AmendedDS.pdf http://bankrupt.com/misc/Crescent_AmendedPlan.pdf The Official Committee of Unsecured Creditors is opposing the Plan. It believes that a Chapter 7 liquidation will yield higher recoveries for unsecured creditors. About Crescent Resources Crescent Resources, LLC -- http://www.crescent-resources.com/-- is a land management and real estate development company with interests in 10 states in the southeastern and southwestern United States. Based in Charlotte, North Carolina, Crescent Resources is a joint venture between Duke Energy and the Morgan Stanley Real Estate Funds. Established in 1969, Crescent creates mixed-use developments, award-winning country club communities, single- family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Crescent Resources and 120 affiliates filed separate chapter 11 petitions on June 10, 2009 (Bankr. W.D. Tex. Lead Case No. 09- 11507). The Hon. Craig A. Gargotta presides over the case. Attorneys at Weil Gotshal Manges LLP represent the Debtors in their Chapter 11 cases. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., serves as the Debtors' co-counsel. Garden City Group serves as claims and notice agent. The Debtors disclosed more than $1 billion each in assets and debts when they filed for bankruptcy. DAN STANBROUGH: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Dan Stanbrough, L.C. aka Keck City Center 600 - 42nd Street Des Moines, IA 50312 Bankruptcy Case No.: 10-02061 Chapter 11 Petition Date: April 23, 2010 Court: U.S. Bankruptcy Court Southern District of Iowa (Des Moines) Judge: Anita L. Shodeen Debtor's Counsel: Jerrold Wanek, Esq. 835 Insurance Exchange Building 505 Fifth Avenue Des Moines, IA 50309 Tel: (515) 243-1249 Fax: (515) 244-4471 E-mail: wanek@dwx.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's list of 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/iasb10-02061.pdf The petition was signed by Daniel J. Stanbrough, manager. DOLLAR THRIFTY: Hertz Signs Definitive Agreement to Acquire Firm ---------------------------------------------------------------- Hertz Global Holdings, Inc. and Dollar Thrifty Automotive Group signed a definitive agreement providing for Hertz to acquire Dollar Thrifty for a purchase price of $41.00 per share, in a mix of cash and Hertz common stock, based on Friday's closing stock price. When completed, Hertz anticipates that the transaction will be immediately accretive to annual adjusted earnings per share. Mark P. Frissora, Hertz's Chairman and Chief Executive Officer, said, "Combining Hertz and Dollar Thrifty is an excellent strategic fit. Dollar Thrifty is a $1.6 billion business with more than 1,550 corporate and franchise rental locations worldwide which, when combined with our global network, will serve rental customers on six continents from approximately 9,800 locations. Together we will be able to compete even more effectively and efficiently against other multi-brand car rental companies, offering customers a full range of rental options in the U.S. between the Hertz, Dollar, Thrifty and Advantage brands. Dollar Thrifty also has a strong international presence, complementing our global footprint, which enables us to utilize a recognized brand to accelerate our leisure rental strategy in Europe and other markets. Financially, we believe the deal is attractive, accretive to earnings and structured to maintain Hertz's strong credit profile. We've identified at least $180 million of synergies already, primarily in fleet, IT systems and procurement, enabling our companies to operate at an even lower cost," he added. Scott L. Thompson, Dollar Thrifty's President and Chief Executive Officer, said, "The combination of Dollar Thrifty with a larger company like Hertz will provide Dollar Thrifty with greater resources and the technology needed to expand our value focused leisure brands. We see the combination of our brands with Hertz's brands as very compelling." Under the terms of the definitive agreement, the $41.00 per share purchase price is comprised of 80% cash consideration and 20% stock consideration. The cash portion will be paid in two components; (1) a $200 million special cash dividend representing approximately $6.88 per share, to be paid by Dollar Thrifty immediately prior to the transaction closing and (2) $25.92 per share to be paid by Hertz at the closing. The stock is at a fixed exchange ratio of 0.6366 per share, based upon a Hertz common stock closing price of $12.88 per share on April 23, 2010. The $41.00 per share purchase price represents approximately a 19% premium to the 30-day average closing price of Dollar Thrifty's common stock. At the closing, Hertz will issue an aggregate of approximately 18 million shares of its common stock (excluding shares issuable upon the exercise of options that are being converted to Hertz options) and pay an aggregate of approximately $750 million in cash (excluding the special $200 million Dollar Thrifty dividend). Hertz intends to fund the cash portion of the purchase price with existing liquidity from the combined company. Hertz will also assume or refinance Dollar Thrifty's existing fleet debt, outstanding at closing. Upon the close of the transaction, Dollar Thrifty stockholders will own approximately 5.5% of the combined company on a diluted basis. Dollar Thrifty will become a wholly-owned subsidiary of Hertz and Dollar Thrifty common stock will cease trading on the NYSE. The transaction is subject to customary closing conditions, regulatory approvals, approval by Dollar Thrifty stockholders and payment of the special dividend. The transaction is not conditioned on receipt of financing by Hertz. Barclays Capital acted as lead financial advisor to Hertz and Bank of America Merrill Lynch also provided advice. Hertz also worked with the law firms Debevoise & Plimpton LLP and Jones Day. Dollar Thrifty was advised by J.P.Morgan and Goldman, Sachs & Co. and the law firm of Cleary Gottlieb Steen & Hamilton LLP. About Dollar Thrifty Dollar Thrifty Automotive Group, Inc., is headquartered in Tulsa, Oklahoma. Driven by the mission "Value Every Time," the Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value- conscious travelers in over 70 countries. Dollar and Thrifty have over 600 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,400 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. The Company's balance sheet at Dec. 31, 2009, showed $2.64 billion in total assets and $2.25 billion in total liabilities. In November 2009, Standard & Poor's Ratings Services raised its corporate credit rating of Dollar Thrifty to 'B-' from 'CCC', in light of the Company's improved operating and financial performance that began in mid-2009. Moody's Investors Service also upgraded Dollar Thrifty's Probability of Default Rating to 'B3' from 'Caa2' and Corporate Family Rating to 'B3' DOLLAR THRIFTY: DBRS Assigns 'B' Issuer & Sr. Unsec. Debt Ratings ----------------------------------------------------------------- DBRS has assigned an Issuer Rating of B (high) and a Senior Unsecured Debt rating of B to Dollar Thrifty Automotive Group, Inc. (DTAG or the Company). The trend on all ratings is Stable. The ratings reflect the Company's strengthening balance sheet metrics, the acceptable financial performance, and the overall stable franchise. The ratings also consider the Company's reliance on secured sources of funding and limited diversification of revenues. DBRS views DTAG's improving financial performance, in the difficult operating environment, as a factor supporting the ratings. During 2009, DTAG recorded net income of $45.0 million, a significant improvement over the $346.7 million loss recorded in 2008. Importantly, corporate adjusted EBITDA increased to $99.4 million as compared to a loss in 2008. Additionally, 4Q09 was the fourth consecutive quarter of year-over-year improvement in EBITDA. While pricing and volumes improved, profitability benefited from the large net gains on disposition of vehicles owed to recovery in the used vehicle market. The Company benefits from the flexibility derived from the significant presence of variable costs in the overall cost structure. In 2009, DTAG removed 13.5% of direct operating costs by reducing average fleet size by almost 15%, while also extending the average age of the fleet. The improved balance sheet metrics are a considerable factor in the rating. During 2009, the Company reduced vehicle related debt by $740.4 million. Meanwhile, the balance sheet also benefited from $120.6 million of new equity raised in October 2009. At December 31, 2009, debt-to-equity, including vehicle related debt, was a low 4.4x. Importantly, the Company has no net corporate debt. DTAG's overall solid business franchise is underpinned by the Company's strategy of focusing on the value-priced leisure travel market. DTAG has maintained consistent market share through various business cycles evidencing strength in the brand and an ability to defend the franchise in an intensely competitive industry. Although, the Company continues to be successful in its niche, DBRS sees the Company's narrow focus as limiting market share growth and revenue diversification. While DBRS recognizes the recent actions taken by the Company to improve the funding profile, the secured wholesale funding concentration is considered a weakness. As of December 31, 2009, the Company had $570 million of vehicle-related debt scheduled to mature in 2010, and an additional $500 million due to mature in both 2011 and 2012. DBRS views this refinancing as manageable and notes that the Company has sufficient available unrestricted cash on its balance sheet to meet 2010 maturities, excluding 2010 operating cash flows. Moreover, the secured financing markets continue to improve. To this end, DTAG completed a $200 million two year, asset-backed note issuance in April 2010, refinancing a portion of the 2010 vehicle related debt maturities. The one- notch differential between the Issuer Rating and the Senior Unsecured Debt rating reflects the dominance of secured debt in the debt stack The trend is Stable. DBRS anticipates DTAG's profitability will continue to improve as 2010 progresses, as the operating environment for the daily rental car industry recovers. The Stable trend also reflects DBRS's view that DTAG will continue to be successful in rolling its vehicle debt at maturity at increasingly more cost-effective terms. DRUG FAIR: To Present Plan for Confirmation June 3 -------------------------------------------------- Bill Rochelle at Bloomberg News reports that Drug Fair Group Inc. has received approval of the disclosure statement explaining its Chapter 11 plan. It is now scheduled to present the plan for confirmation on June 3. According to the report, unsecured creditors are expected to recover 0.5% under the Plan. Secured creditors, with about $64.5 million in claims, were fully paid by the store sales and liquidations. The Company now is holding some $2.5 million for distribution to unsecured creditors that resulted from a settlement with the lenders. In June, the Official Committee of Unsecured Creditors reached a settlement with secured lenders designed to insure a distribution to unsecured creditors. About Drug Fair Group Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. -- http://www.drugfair.com/or http://www.costcuttersonline.com/-- fka Community Distributors, Inc., operates pharmacies and general merchandise stores in northern and central New Jersey. The Company, with stores in central and northern New Jersey, is indirectly owned by Sun Capital Partners Inc., a private-equity investor based in Boca Raton, Florida. Drug Fair and CDI Group, Inc., filed for Chapter 11 protection on March 18, 2009 (Bankr. D. Del. Lead Case No. 09-10897). Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers, represent the Debtors in their restructuring efforts. Warren J. Martin, Jr., Esq., and Brett S. Moore, Esq., at Porzio Bromberg & Newman, P.C., represent the official committee of unsecured creditors as counsel. Norman L. Pernick, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the creditors committee as Delaware counsel. J.H. Cohn LLP is the creditors committee's financial advisors and forensic accountants. Epiq Bankruptcy Solutions, LLC, is the Debtors' notice and claims agent. The Debtors listed assets of $50 million to $100 million and debts of $100 million to $500 million. After commencing the Chapter 11 cases, the Debtors began going out of business sales at approximately 24 locations. On April 27, 2009, the Court approved the sale of 31 remaining stores to Walgreen Co. for about $54 million. The Debtors are winding down assets not included in the transactions. E*TRADE FINANCIAL: DBRS Affirms Issuer Debt Rating at 'B' --------------------------------------------------------- DBRS has commented that its ratings of E*TRADE Financial Corporation (E*TRADE or the Company) remain unchanged after the Company's 1Q10 earnings announcement. DBRS rates E*TRADE's Issuer & Senior Debt at B (high) and E*TRADE Bank's Deposits & Senior Debt (the Bank) at BB. All ratings, except the Short-Term Instruments of the Bank, have a Negative trend. The Company reported a net loss of $48 million in the quarter, following a net loss of $67 million in 4Q09 and a net loss of $233 million in 1Q09. While still not generating sufficient operating income before provisions and taxes (IBPT) to absorb still elevated provisions, DBRS views positively the Company's continued strength in online brokerage, improving trends in loan credit, and strengthened financial condition. The much improved earnings performance year-over-year was largely driven by strength in net interest income combined with a 41% decline in loan loss provisions. Net interest income rose to $320 million, up 15% versus 1Q09. This increase was driven by a 62 basis point improvement in E*TRADE's enterprise net interest spread to 2.96%, even as average interest earning assets declined by 5%. On the asset side, spread improvement was helped by the rolling off of the loan portfolio and investing in agency securities. Additionally, higher yielding margin balances were up in 1Q10. On the funding side, a shift in deposit mix into brokerage cash from bank cash and the rolling off of long-term repos at higher funding rates has lowered E*TRADE's cost of funding. Improved net interest income drove increased operating IBPT of $242 million, up 18% on a linked quarter basis and 19% year-over-year. Despite improved revenues and cost control, operating IBPT covered just 90% of still elevated provisions. Though improving, credit performance still remains E*TRADE's biggest challenge. Positively, provisions are declining as the Company continues to work with third parties to combat delinquencies and restructure loans in its loan portfolios. At-risk delinquencies declined by 8% on a linked quarter basis, driven by a decline in home equity at-risk delinquencies of 13%. E*TRADE's largest loan portfolio, one-to-four family loans of $9.8 billion, saw a decline in at-risk delinquencies of 5% quarter-over-quarter. Net charge-offs, while still elevated at $288 million, declined by 11% versus 4Q09. The Company continues to reduce its balance sheet by running off its loan portfolios, which declined by $1.0 billion in the quarter, of which approximately $700 million was due primarily to prepayments and with a portion of the decline from principal reductions. Despite the continued quarterly losses, DBRS sees the Company having success with the strengthening of its core brokerage franchise, as indicated by its strong business performance. The Trading and Investment segment, which is largely the online brokerage franchise, generated net income of $186 million in 1Q10, compared to $191 million in 4Q09 and $140 million in 1Q09. Though daily average revenue trades (DARTS) in the U.S. declined by 2% from the prior quarter and 11% year-over-year, the Company still achieved DARTS of 155,000 in the quarter. While brokerage accounts were virtually flat quarter-over-quarter at $2.6 million, new brokerage assets were $2.2 billion in the quarter, demonstrating a focus on increasing the quality of accounts rather than quantity. E*TRADE continues to pursue its focused strategy of expanding its customer relationships with long-term investors. DBRS views E*TRADE as well-capitalized in the current environment, with a Tier 1 capital to risk-weighted assets ratio of 13.08% at March 31, 2010, up from 10.53% a year ago. Positively, the Bank was a capital generator in the quarter rather than a user of capital, bringing excess risk-based capital in the Bank to $947 million from $444 million a year ago. E*TRADE expects to generate capital in the Bank for the full year 2010. Through its successful debt exchange offer in 2009, the Company more than halved its corporate interest expense to $41 million. The Company stated that it expects to make a cash payment for its May 31 coupon on its Springing Lien Notes, which E*TRADE has the option to pay-in- kind or in cash. While DBRS maintains a Negative trend on the rating, indicating the pressure of negative earnings, elevated credit costs, and maintaining sufficient capitalization, DBRS views positively management's success with its restructuring and its focus on the core client franchise. The Company's return to profitability later in 2010 remains a possibility, which bodes well from a ratings perspective. ELISSEOS MERGIANOS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Elisseos NMN Mergianos aka Saki Mergianos Elliseos Mergianos 320 Southlake Road Columbia, SC 29223 Bankruptcy Case No.: 10-02889 Chapter 11 Petition Date: April 22, 2010 Court: United States Bankruptcy Court District of South Carolina (Columbia) Debtor's Counsel: Reid B. Smith, Esq. Price Bird Smith & Boulware PA 1712 St Julian Place, Suite 102 Columbia, SC 29204 Tel: (803) 779-2255 E-mail: reid@pricebirdlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Debtor says that assets total $465,830 while debts total $1,099,981. A copy of the Debtor's list of 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/scb10-02889.pdf The petition was signed by the debtor. ELITE PHYSICAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Elite Physical Therapy, Inc. 235 Newbury Street Danvers, MA 01923 Bankruptcy Case No.: 10-14373 Chapter 11 Petition Date: April 23, 2010 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Henry J. Boroff Debtor's Counsel: Lawrence R Plavnick, Esq. McLane, Graf, Raulerson & Middleton 300 TradeCenter, Suite 6400 Woburn, MA 01801 Tel: (781) 904-2693 Fax: (781) 904-2701 E-mail: lawrence.plavnick@mclane.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company says that assets total $0 while debts total $1,496,555. A copy of the Company's list of 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mab10-14373.pdf The petition was signed by Edward Harding, officer. EVERGREEN GAMING: Nevada Gold to Acquire Seven Mini-Casinos ----------------------------------------------------------- Nevada Gold & Casinos, Inc., has reached an agreement to acquire seven mini-casinos in the state of Washington for $11.1 million. The casinos are currently owned by subsidiaries of Evergreen Gaming Corporation, a British Columbia corporation, which is under bankruptcy court protection. The transaction will be financed by cash on hand as well as a $5.1 million note issued to Evergreen's current senior lender. "This is an attractive acquisition opportunity that includes many of the attributes we are currently looking for in deals, including an attractive purchase price and financing from the seller's current senior lender. Upon closing, Nevada Gold will be the largest operator of mini-casinos in the state of Washington. As we stated during our recent earnings call, recent trends at our Washington casinos have been strong. We believe this acquisition will integrate seamlessly into our existing management infrastructure and the additional mini-casinos will benefit from many of the changes we have implemented at our current facilities," said Robert Sturges, CEO of Nevada Gold. The seven casinos are The Silver Dollar Seatac, The Silver Dollar Renton, The Silver Dollar Mill Creek, The Silver Dollar Tukwila, Club Hollywood, located in Shoreline, the Royal Casino located in Everett and The Golden Nugget Casino located in Tukwila. All of the casinos are located in western Washington. Combined, the facilities have a total of 138 table games including blackjack, Spanish 21 and other popular banked table games. Closing of the acquisition is subject to the bankruptcy court process which commenced April 22, 2010. About Nevada Gold Nevada Gold & Casinos, Inc. of Houston, Texas is a developer, owner and operator of gaming facilities in Colorado and Washington. The Colorado Grande Casino in Cripple Creek, Colorado, the Crazy Moose Casino in Pasco, Washington, the Coyote Bob's Roadhouse Casino in Kennewick, Washington and the Crazy Moose Casino in Mountlake Terrace, Washington are wholly owned and operated by Nevada Gold. The Company has an interest in Buena Vista Development Company, LLC which is working with the Buena Vista Rancheria of Me-Wuk Indians on a Native American casino project to be developed in the city of Ione, California. For more information, visit http://www.nevadagold.com/ EXCEL DAIRY: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Thief River Falls Times & Northern Watch reports that Excel Dairy made a voluntary filing under Chapter 11. The Company has until Aug. 5, 2010, to file a plan of reorganization and disclosure statement. According to the report, in January, the Minnesota Pollution Control Agency Citizen issued a notice of intent to deny the reissuance of the company's National Pollutant Discharge Elimination System and State Disposal System permit. The notice stated that Excel Dairy failed to comply with all applicable state and federal pollution control statutes and rules administered by the MPCA or the conditions of the permit. Excel Dairy operates a dairy facility in Thief River Falls. EXTENDED STAY: Centerbridge-Paulson Approved as Stalking Horse -------------------------------------------------------------- Extended Stay Inc. has received Bankruptcy Court approval of bidding procedures that will govern an auction to select an investor to sponsor its proposed plan of reorganization. The company is moving forward with the auction process, pursuant to which bids are due on May 17. The auction will take place on May 27. "The Court's decision to approve the bidding procedures will enable Extended Stay to maximize value for the benefit of the Debtors' estates," said Ari Lefkovits of Lazard Freres & Co., L.L.C., the company's financial advisor. "The auction will facilitate the competitive process already underway and be open to any qualified party, with the goal of developing a plan of reorganization that provides the Debtors' estates with the greatest recovery. Moreover, it will establish a transparent process by which the company can select a plan sponsor and emerge from bankruptcy expeditiously." Gary DeLapp, the chief executive officer of HVM, L.L.C., which manages the business, added, "We are looking forward to working with all potential plan sponsors and intend to provide assistance to all interested parties so that the highest value can be realized." On April 2, 2010, Extended Stay executed a commitment letter with Centerbridge Partners LP and Paulson & Co. Inc. to sponsor and fund a plan of reorganization. Extended Stay is soliciting competing proposals that provide greater value than the current offer. According to the approved bidding procedures, those wishing to participate in the auction must submit a binding and committed proposal in writing to Lazard, along with a $150 million deposit on or before May 17, 2010 at 3:00 p.m. (Eastern Time). An auction will be held May 27 at the offices of Weil, Gotshal & Manges LLP in Manhattan to consider the proposals and select the successful bid. A copy of the Notice of Auction, which includes the contact information for Lazard, is attached. Mr. DeLapp said that while operations at Extended Stay's 666 hotel properties have continued without interruption throughout the restructuring and sale process, HVM, L.L.C. looks forward to the Debtors finalizing the terms of their plan of reorganization. Terms of the Auction According to Bill Rochelle at Bloomberg News, the Company is precluded from negotiating a higher offer after the May 27 auction unless the bankruptcy judge rules that Extended Stay's reorganization plan won't be confirmed. Extended Stay will pay as much as $20 million in expense reimbursement if the winner of the auction never is able to complete the transaction because the plan isn't confirmed. The right to a fee doesn't become firm until the bankruptcy court approves the disclosure statement approving the reorganization plan. During the past month, Starwood Capital Group LLC, on one hand, and Centerbridge Partners LP and Paulson & Co., on the other, have presented counter offers to be the lead bidder at the auction. Extended Stay eventually selected Centerbridge and Paulson after the group matched $905 million offered by Starwood while deleting a $19.5 million fee and other Starwood provisions. Centerbridge and Paulson also made a $150 million deposit. The judge has approved Extended Stay's selection of Centerbridge-Paulson as stalking-horse bidder at the auction. 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). FAIRFIELD RESIDENTIAL: Och-Ziff Can Back Out of Investment Deal --------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Fairfield Residential LLC has obtained court approval for a settlement that allows Och-Ziff Capital Management to back out of a $119.5 million deal to invest in the apartment-complex owner. As reported by the Troubled Company Reporter on April 22, 2010, the Debtors sought approval of the settlement agreement entered among California State Teachers' retirement System and Och-Ziff Real Estate Acquisitions LP. The terms of the settlement include, among other things: a. Acquisitions will immediately withdraw as a new money investor pursuant to the Plan; b. The parties' March 5 agreement will be terminated; and c. CalSTRS will irrevocably and unconditionally release Acquisitions from any and all charges. CalSTRS and Acquisitions served as new money investors, agreeing to invest, in the aggregate, $119.5 million in the Debtors' reorganization. To facilitate the complex series of transactions, CalSTRS and Acquisitions entered into the Och-Ziff Real Estate/CalStrs Proposed Investment in Fairfield/Newco letter agreement dated as of March 5, 2010. One of the key provisions had the effect of locking-up CalSTRS with Acquisitions through June 30, 2010. The Debtors relate that after the approval of their Disclosure Statement, they reviewed Acquisitions' communications with potential third party investors and determined to withdraw Acquisitions from the Chapter 11 process. The Debtors believe that the settlement will allow third party investors to conduct due diligence, move forward with an alternative transaction and facilitate the Debtors' emergence from Chapter 11. About Fairfield Residential San Diego, California-based Fairfield Residential LLC is a fully integrated multifamily housing company that through its various subsidiaries provides a diverse mix of services to a wide range of investors, joint venture partners and clients. FFR either directly or indirectly acts as a general partner or managing member of, and owns varying stakes in, a number of project level operating companies. The Company and its affiliates -- FF Development, Inc., et al. -- filed for Chapter 11 bankruptcy protection on December 13, 2009 (Bankr. D. Delaware Case No. 09-14378). Daniel J. DeFranceschi, Esq.; Lee E. Kaufman, Esq.; Paul Noble Heath, Esq.; and Travis A. McRoberts, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Brett H. Miller, Esq., Stefan W. Engelhardt, Esq., and Melissa A. Hager, Esq., at Morrison & Foerster LLP; and William E. Chipman Jr., Esq., Kerri K. Mumford, Esq., and Kimberly A. Brown, Esq., at Landis Rath & Cobb LLP. Fairfield Residential listed $100,000,001 to $500,000,000 in assets and more than $1,000,000,000 in liabilities. Dow Jones says Fairfield listed assets worth $958 million and liabilities of nearly $835 million. FAIRVUE CLUB: Creditors Have Until June 30 to File Proofs of Claim ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Tennessee has established June 30, 2010, as the last day for any individual or entity to file proofs of claim against Fairvue Club Properties, LLC. Gallatin, Tennessee-based Fairvue Club Properties, LLC, filed for Chapter 11 (Bankr. M.D. Tenn. Case No. 09-13807) on December 1, 2009. William L. Norton, III, Esq., at Bradley Arant Boult Cummings LLP, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and liabilities as of the Petition Date. FIDDLER'S CREEK: Golf Member Sues Developer of Fraud ---------------------------------------------------- Aisling Swift at Naples News reports that Matthew Suffoletto, Raymond David, Steven Taub and Stephen Shulman who purchased golf memberships at Fiddler's Creek sued developer Aubrey Ferrao in the U.S. District Court in Fort Myers, accusing Mr. Ferrao of pocketing $10 million in membership fees that were to be held in escrow. The lawsuit seeks compensatory damages under claims that include corporate conversion, breach of fiduciary duty and piercing the corporate veil. About Fiddler's Creek Fiddler's Creek, LLC, et al., each own, operate and/or are otherwise affiliated with the premier, fully integrated, master planned residential community known as "Fiddler's Creek" in southwestern Florida. Fiddler's Creek is located in Collier County, Florida, approximately 12 miles southeast of the City of Naples and six miles north of Marco Island. The Fiddler's Creek development is comprised of nearly 4,000 zoned acres of prime land in Naples, Florida, and is planned for and capable of accommodating up to 6,000 residences upon projected build-out, which is estimated to be in 2020. Fiddler's Creek contains five distinctive neighborhoods known as: Fiddler's Creek, Veneta, Aviamar, Marsh Cove and Meadow Run. Naples, Florida-based Fiddler's Creek, LLC, filed for Chapter 11 bankruptcy protection on February 23, 2010 (Bankr. M.D. Fla. Case No. 10-03846). The Company estimated assets and debts at $100,000,001 to $500,000,000. FILI ENTERPRISES: Can Use BofA's Cash Collateral Until May 13 ------------------------------------------------------------- The Hon. Peter W. Bowie of the U.S. Bankruptcy Court for the Southern District of California authorized Fili Enterprises, dba Daphne's Greek Cafe, to use cash collateral securing the Debtor's obligation to Bank of America, N.A., until May 13, 2010. The Debtor would use the cash collateral to fund its business operations. As reported in the Troubled Company Reporter on March 26, 2010, Bank of America asserted that the cash collateral constitute: (a) certain prepetition obligations owed to Bank of America were, as of the petition date, secured by liens on and security interests in substantially all of the Debtor's personal property and other assets; and (b) the cash proceeds on hand as of the petition date and the cash proceeds generated from the postpetition use and sale of the prepetition collateral. To secure the adequate protection claims, the Court grants BofA (1) adequate protection payments; and (2) replacement security interests in, and liens upon, the prepetition collateral, all postpetition proceeds and all postpetition assets of the Debtor. San Diego, California-based Fili Enterprises, Inc. -- dba Daphne's Greek Cafe, aka Daphne's Greek Express -- filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. S.D. Calif. Case No. 10-00324). Brendan Collins, Esq., and Natasha Johnson, Esq., at DLA Piper LLP (US), assist the Company in its restructuring effort. In its schedules of assets and liabilities, the Company disclosed total assets of $16,723,356 and total liabilities of $16,335,468. FIRSTGOLD CORP: Cedes Control of All Assets to Secured Lenders -------------------------------------------------------------- Firstgold Corp. on January 27, 2010 voluntarily filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. The filing was made in the United States Bankruptcy Court, District of Nevada. Since the date of that filing Firstgold's current management continued to operate the Company as debtor-in- possession subject to the supervision and orders of the Bankruptcy Court. Additionally, Firstgold's management has held discussions with several groups in an attempt to establish and fund a reorganization plan for Firstgold. Unfortunately, management was unable to establish a reorganization plan that would timely fund the recommencement of operations and satisfy the secured creditor obligations. At a bankruptcy hearing held on April 20, 2010, Firstgold's management reported its inability to timely develop a reorganization plan to restart business operations. In light of the foregoing, Firstgold stipulated to allowing its primary secured lenders, Platinum Long Term Growth, LLC and Lakewood Group, LLC, to pursue their contractual and state law rights and remedies to foreclose and take possession of all collateral securing their debt obligations with Firstgold pursuant to their security interests. The collateral securing their debt obligations includes substantially all of Firstgold's assets including the Relief Canyon Mine property and all improvements to the mine property. In addition, Firstgold agreed to relinquish possession of the collateral to allow Platinum and Lakewood to preserve and protect such collateral as of April 21, 2010. Platinum and Lakewood may now choose to foreclose on their security interest and take possession of the collateral or may attempt to sell such assets in place. Upon a sale of the collateral Platinum and Lakewood would be entitled to full payment of their debt obligation, which currently exceeds $19.3 million. Unsecured creditors and stockholders will not realize any further value from the Firstgold assets unless and until the obligations of the secured creditors have been satisfied. "A disappointing finish... we had hoped to be able to restructure but unfortunately given the circumstances we were not able to achieve our objective. The CFIUS decision to reject the Northwest offer really set us back and unfortunately we have never recovered," commented Firstgold CEO Terry Lynch. Firstgold will continue in a Chapter 11 status which will allow Firstgold's management to pursue a possible reorganization of the corporate entity with another company. The next status conference hearing relating to the Firstgold corporate entity is set for May 11, 2010. FONTAINEBLEAU LV: Converted to Chapter 7 as Assets Sold to Icahn ---------------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, and its debtor-affiliates sought and obtained an order from the U.S. Bankruptcy Court for the Southern District of Florida converting their Chapter 11 cases to ones under Chapter 7 of the Bankruptcy Code. To recall, the Court approved the sale of substantially all of the Debtors' assets to Icahn Nevada Gaming Acquisition, LLC, on January 29, 2010. The sale closed on February 18. The Debtors pointed out that Section 1112(a) of the Bankruptcy Code affords a debtor the absolute right to convert a Chapter 11 case to a case under Chapter 7 at any time. They added that each of them meets all of the requirements for conversion as set forth in Sections 1112(a)(1) to (3). At the Debtors' behest, the Court directed their banks to honor postpetition checks issued prior to entry of the order converting their cases. As of April 9, 2010, the Debtors have 19 outstanding checks: Account No. Amount ----------- ------ 352 $32,754 354 27,400 279 9,000 10178 8,121 353 6,430 10177 4,418 10038 3,297 358 2,256 10180 1,802 10182 1,747 10172 1,633 10179 1,633 10181 1,177 359 614 357 500 356 99 10035 89 10174 89 355 39 Court's Conditional Approval Deemed Final Prior to the Court's final approval of the conversion, Judge A. Jay Cristol entered an order on April 12, 2010, conditionally converting the bankruptcy cases to Chapter 7 cases subject to negative notice. Judge Cristol said in his ruling that if any party-in-interest has an objection to the conversion, it may file a motion to vacate the Conditional Order by April 19, 2010. Because no Motion to Vacate has been timely filed, Judge Cristol ruled on April 19, 2010, that the Conditional Order is deemed final. He directed the United States Trustee to appoint a Chapter 7 Trustee for the Debtors. Accordingly, the Office of the United States Trustee appointed Soneet Kapila as the Debtors' Chapter 7 Trustee. Judge Cristol directed the Debtors to: (a) upon the Order becoming final, turnover to the Chapter 7 trustee all records and property of the bankruptcy estate under their custody and control as required by Rule 1019(4) of the Federal Rules of Bankruptcy Procedure; (b) within 30 days of the Order becoming final, file an accounting of all receipts and distributions made. A copy of the report must be served on the U.S. Trustee; and (c) file, within 14 days of the Order becoming final: * a schedule of unpaid debts incurred after the Petition Date and a supplemental matrix and certification in the format required by Local Rule 1019-1(B); * notify creditors; and * file statements and schedules. Moreover, the Debtors' attorney, any examiner appointed by the Court, or any other professional person employed under Section 327 or 1103 of the Bankruptcy Code, will file within 90 days after the date of the post-conversion meeting, an application for compensation for outstanding fees and expenses incurred during the Chapter 11 administration. Any retainers received, which are not approved will be subject to turnover to the Chapter 7 trustee. Judge Cristol held that in no event will any trustee be entitled to compensation based on a percentage of the receipt of the approximate $102 million of proceeds from the sale of the Debtors' assets to Icahn Nevada Gaming Acquisition, LLC, as these funds are already in the estate and will not have been acquired by the trustee. However, he noted, the trustee and his counsel are entitled to reasonable compensation for ordinary and necessary work performed in the administration of the estate and distribution of the approximate $102 million. Parties Seek Clarification The Debtors, the U.S. Trustee, the M&M Lienholders and the Contractor Claimants have asked the Court to modify or clarify its Conditional Order. At the Debtors' behest, the Court clarified that the Conditional Order also cover payment of checks issued by the Debtors prior to the date of conversion of the cases rather than the date of the Conditional Order. Donald F. Walton, the United States Trustee for Region 21, ask the Court to modify the Conversion Order to provide for allowance of payment of the Chapter 7 Trustee's professionals from the sale proceeds. He asserted that the language in the Conditional Order may unintentionally deprive the Chapter 7 Trustee from fair compensation. The M&M Lienholders and the Contractor Claimants ask the Court to modify the Order to include provisions regarding the preservation of documents, data and tangible things, which may be relevant in their adversary proceeding entitled Wilmington Trust, FSB, as Administrative agent v. A1 Concrete Cutting & Demolition, et al. The M&M Lienholders believe that numerous documents, which are relevant to the claims and defenses of the adversary proceeding parties are in the possession, custody or control of the Debtors. Wilmington Trust FSB, as administrative agent; Term Lender Steering Group; and TracTel, LTD., filed separate joinders in support of the relief requested in the Motion to Modify. Debtors Object The Motion to Modify is an ill-conceived attempt to hold the Debtors and their counsel hostage in Chapter 11 proceedings, which have no prospects for the confirmation of a plan of either reorganization or liquidation, Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, in Miami, Florida -- sbaena@bilzin.com -- alleges. He points out that the Federal Rules of Bankruptcy Procedure and the Conversion Order already require the Debtors to turnover to the Chapter 7 trustee all records and property of the bankruptcy estate under their custody and control. "It appears the Motion seeks to condition the Debtors' unconditional right to convert their cases to chapter 7 upon their compliance with discovery requests the Court has already abated, in an adversary proceeding in which the Debtors are not parties, concerning property which the [M&M Lienholders] assuredly claim is not property of the Debtors' estates," adds Mr. Baena. The Court will convene a hearing today, to consider the U.S. Trustee's, the M&M Lienholders' and the Contractor Claimants' requests. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of approximately $150 million. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU LV: District Court Issues Schedule for MDL Action --------------------------------------------------------------- Three actions involving Fontainebleau Las Vegas Holdings, LLC, and its debtor-affiliates are consolidated under a multidistrict litigation before Judge Alan S. Gold of the United States District Court for the Southern District of Florida. The MDL action, with case number 1:09-md-02106-ASG, is entitled Fontainebleau Las Vegas Contract Litigation. The MDL actions are: (a) 09-CV-21879-GOLD -- Fontainebleau Las Vegas LLC v. Bank of America, N.A. et al; (b) 09-CV-23835-GOLD -- Avenue CLO Fund, Ltd. et al v. Sumitomo Mitsui Banking Corporation et al.; and (c) 09-cv-08064 -- ACP Master, Ltd., et al. v. Bank of America, N.A., et al., S.D. New York. The MDL proceeding is referred to Magistrate Judge Ted E. Bandstra. As previously reported, Fontainebleau's adversary proceeding against BofA, et al., and the Avenue action were closed so they can be litigated as part of the MDL proceeding. Judge Robert L. Miller, Jr., acting chairman of the United States Judicial Panel on Multidistrict Litigation, said in his transfer order that the MDL Panel finds that the actions involve common questions of fact, and that centralization under Section 1407 of the Judiciary and Judicial Procedures Code in the Court will serve the convenience of the parties and witnesses, as well as promote the just and efficient conduct of the litigation. The MDL actions involve alleged breaches by various lenders of their commitments to provide financing for the Fontainebleau Las Vegas, a $3.1 billion resort casino project under construction on the Las Vegas Strip. Centralization under Section 1407 will eliminate duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel and the judiciary, Judge Miller maintained. MDL Parties The Consolidated Plaintiffs of the MDL action are: Fontainebleau Las Vegas LLC Bank of Scotland PLC Venture V CDO Limited Symphony CLO III, Ltd. Duane Street CLO III, Ltd. Grayson CLO, Ltd. Avenue CLO V, Ltd. Highland Loan Funding V, Ltd. Caspian Corporate Loan Fund, LLC Duane Street CLO V, Ltd. Venture VIII CDO Limited Gleneagles CLO, Ltd. Avenue CLO VI, Ltd. Venture II CDO 2002, Limited Venture IV CDO Limited Eastland CLO, Ltd. Duane Street CLO 1, Ltd. Venture III CDO Limited Armstrong Loan Funding, Ltd. Avenue CLO Fund, Ltd. Venture IX CDO Limited Venture VI CDO Limited Westchester CLO, Ltd. Genesis CLO 2007-1 Ltd. Aberdeen Loan Funding, Ltd. Avenue CLO II, Ltd. Southfork CLO, Ltd. Encore Fund LP Primus CLO II, Ltd. Symphony CLO I, Ltd. Venture VII CDO Limited Nuveen Senior Income Fund Orpheus Funding LLC Loan Star State Trust Vista Leveraged Income Fund LFC2 Loan Funding LLC Sands Point Funding Ltd. Battalion CLO 2007-I Ltd. Avenue CLO III, Ltd. Green Lane CLO Ltd. ING Senior Income Fund Symphony CLO II, Ltd. Copper River CLO Ltd. Jasper CLO, Ltd. Brentwood CLO, Ltd. Duane Street CLO II, Ltd. Rockwall CDO Ltd. Stratford CLO, Ltd. 1888 Fund, Ltd. Veer Cash Flow CLO, Limited ING Prime Rate Trust Red River CLO, Ltd. Symphony CLO V, Ltd. Greenbriar CLO, Ltd. Rockwall CDL II, Ltd. Primus CLO I, Ltd. Symphony CLO IV, Ltd. Loan Funding VII LLC Orpheus Holdings, LLC Duane Street CLO IV, Ltd. Kennecott Funding Ltd. Avenue CLO IV, Ltd. Mariner LDC Carlyle Loan Investment, Ltd. Canyon Capital Advisors, LLC Fortissimo Fund Liberty CLO, Ltd. Aurelius Capital Master, Ltd. Cantor Fitzgerald Securities Loan Funding IV LLC ACP Master, Ltd. Olympic CLO I Ltd. Shasta CLO I Ltd. Whitney CLO I Ltd. San Gabriel CLO I Ltd. Sierra CLO II Ltd. Caspian Capital Partners, L.P. Rosedale CLO II Ltd. Mariner Opportunities Fund, LP Stone Lion Portfolio L.P. Canpartners Investments IV, LLC SPCP Group, LLC Venor Capital Master Fund, Ltd. Rosedale CLO, Ltd. Canyon Special Opportunities Master Fund (Canyon), Ltd. Carlyle High Yield Partners VI, Ltd. ING International (II) - Senior Bank Loans USD ING Investment Management CLO IV, Ltd. Highland Offshore Partners, L.P. ING Investment Management CLO V, Ltd. Highland Credit Opportunities CDO, Ltd. Nuveen Floating Rate Income Fund ING International (II) - Senior Bank Loans Euro Caspian Select Credit Master Fund, Ltd. Carlyle High Yield Partners VIII, Ltd. Carlyle High Yield Partners VII, Ltd. ING Investment Management CLO I, Ltd. Symphony Credit Opportunity Fund, Ltd. Jay Street Market Value CLO I, Ltd. Carlyle High Yield Partners 2008-1, Ltd. ING Investment Management CLO II, Ltd. Ares Enhanced Loan Investment Strategy III, Ltd. NZC Opportunities (Funding) II Limited Brigade Leveraged Capital Structures Fund, Ltd. Carlyle High Yield Partners IX, Ltd. Nuveen Floating Rate Income Opportunity Fund Carlyle High Yield Partners X, Ltd. The Consolidated Defendants of the MDL action are: Bank of America, N.A. Merrill Lynch Capital Corporation JP Morgan Chase Bank, N.A. Barclays Bank PLC Deutsche Bank Trust Company Americas The Royal Bank of Scotland PLC Sumitomo Mitsui Banking Corporation HSH Nordbank AG, New York Branch MB Financial Bank, N.A. ING Investment Management CLO III, Ltd. Royal Bank of Scotland PLC Bank of Scotland Camulos Master Fund, L.P. HSH Nordbank AG BofA Term Lenders MDL Schedules As previously reported, the Court issued these schedules governing the MDL proceeding: Date Action ---- ------ May 13, 2010 at Oral argument on any Motions to 3:15 p.m. Dismiss. May 13, 2010 Document productions in response to initial Requests for Production to be completed. July 1, 2010 Commencement of fact depositions. September 15, 2010 All non-dispositive, non-discovery related pretrial motions will be filed. Any motion to amend or supplement the pleadings filed pursuant to Fed. R.Civ. P. 15(a) or 15(d) will comport with S.D. Fla. L.R. 15.1 and will be accompanied by the proposed amended or supplemental pleading and a proposed order as required. September 30, 2010 Plaintiffs will furnish opposing counsel with a written list containing the names and addresses of all expert witnesses intended to be called at trial and only those expert witnesses so listed will be permitted to testify. November 1, 2010 Defendants will furnish opposing counsel with a written list containing the names and addresses of all expert witnesses intended to be called at trial and only those expert witnesses so listed will be permitted to testify. January 31, 2011 Final date to exchange written discovery demands. April 15, 2011 Conclusion of fact discovery. May 2, 2011 The parties will comply with S.D. Fla. L.R. 16.1(K) concerning the exchange of expert witness summaries and reports. This date will supersede any other date in Local Rule 16.1(K). June 1, 2011 Rebuttal expert reports will be filed. July 15, 2011 All expert discovery, including depositions, will be completed. July 29, 2011 All dispositive pretrial motions, including motions to strike in whole or in part expert testimony, and memoranda of law must be filed. August 30, 2011 Opposition to any dispositive motions to be filed. September 15, 2011 Replies, if any, to dispositive motions to be filed. November 18, 2010 Oral argument will be heard on any at 9:00 a.m. motions for summary judgment that may be filed. December 13, 2011 Pretrial Stipulation and Motions in Limine. The joint pretrial stipulation will be filed pursuant to Local Rule 16.1(E) of the U.S. District Court for the Southern of Florida. In conjunction with the Joint Pretrial Stipulation, the parties will file their motions in limine. Lenders Seek to Dismiss Amended Complaint Defendants Bank of America, N.A.; Merrill Lynch Capital Corporation; JPMorgan Chase Bank, N.A.; Barclays Bank PLC; Deutsche Bank Trust Company Americas; The Royal Bank of Scotland plc; Sumitomo Mitsui Banking Corporation; Bank of Scotland plc; HSH Nordbank AG; MB Financial Bank, N.A.; and Camulos Master Fund, L.P., also known as the Revolving Lenders, jointly ask the Court to dismiss the amended complaints filed in the Avenue Action and the ACP Master or Aurelius Action for failure to state a claim upon which relief can be granted. The Avenue and Aurelius Actions arise out of the same Credit and Disbursement Agreements and substantially the same circumstances that were the subject of the Court's August 26, 2009 decision and order denying partial summary judgment to Fontainebleau Las Vegas LLC in its lawsuit against the Revolving Lenders. The Amended Complaints are predicated on the same two flawed theories on which Fontainebleau based its motion for partial summary judgment that the Court rejected in the August 26 Decision, John B. Hutton, Esq., at Greenberg Traurig, P.A., in Miami, Florida -- huttonj@gtlaw.com -- tells the Court. "These theories -- that 'fully drawn' means 'fully requested' rather than 'fully funded' and that Fontainebleau's prior material breaches of the Credit Agreement did not relieve the Revolving Lenders of their obligation to loan money under the Credit Agreement -- are even less viable here than they were in the Fontainebleau Action," Mr. Hutton argues. Hence, he insists, the Amended Complaints fail to state a claim for relief and should be dismissed. The Plaintiffs lack standing to assert a claim against the Revolving Lenders for breach of any lending commitment to Fontainebleau, Mr. Hutton contends. He asserts that Fontainebleau's Notices of Borrowing dated March 2 and 3, 2009, did not comply with the Credit Agreement, which provides that the outstanding balance under the revolving loan facility cannot exceed $150 million "unless the Total Delay Draw Commitments have been fully drawn." Mr. Hutton further argues that the claim by the Avenue Plaintiffs for breach of the covenant of good faith and fair dealing is facially deficient. He contends that this claim is duplicative of the Avenue Plaintiffs' breach of contract claim and seeks to impose obligations beyond those contained in the Credit Agreement. BANA Seeks to Dismiss Amended Complaints Bank of America, N.A., asks the Court to dismiss certain counts of the Amended Complaints relating to disbursement claims filed in the Avenue and Aurelius Actions. The Term Lenders are sophisticated financial institutions, many of whom first acquired their interests in the Term Loans after some or all of the events alleged in the Amended Complaints, Craig V. Rasile, Esq., at Hunton & Williams LLP, Miami, Florida -- crasile@hunton.com -- tells Judge Gold. He contends that the Term Lenders were all fully capable of reading and understanding the Master Disbursement Agreement. "But now, ignoring the Disbursement Agreement's unambiguous terms, the Term Lenders allege that BANA should somehow have prevented Fontainebleau from accessing funds that the Term Lenders had already committed to lend," Mr. Rasile argues. "The Term Lenders' baseless attempt to hold BANA responsible for the Term Lenders' own ill-fated loans to the now-bankrupt Fontainebleau should be rejected," he asserts. The Term Lenders' claims that BANA breached the Disbursement Agreement by approving Fontainebleau's advance requests fail because BANA's obligations with respect to the Advance Requests were limited to determining whether (i) Fontainebleau had submitted "all required documentation," and (ii) the Advance Requests included all of the representations, warranties and certifications necessary to satisfy conditions precedent to an advance, Mr. Rasile contends. He points out, among other things, that the Amended Complaints do not allege that the Advance Requests were missing any required documentation or failed to include the necessary representations regarding the required conditions. The Avenue Plaintiffs' tag-along claim that the same alleged misconduct breached the implied covenant of good faith and fair dealing must also be dismissed because (i) it improperly duplicates their deficient breach of contract claim, and (ii) it impermissibly seeks to impose obligations on BANA that are contrary to the Disbursement Agreement's provisions, Mr. Rasile argues. Avenue and Aurelius Parties File Statement Plaintiffs and Defendants in the Avenue and Aurelius Actions jointly file a statement summarizing current discovery dispute and the Parties' positions relating to the dispute. A. Defendants' Statement The Defendants contend that the Debtors' refusal to negotiate search terms or other aspects of discovery in the MDL because of the conversion of the bankruptcy cases is unjustified and highly prejudicial to the Defendants. The appointment of a Chapter 7 trustee does not excuse Fontainebleau from its obligations under the MDL Scheduling Order, John B. Hutton, Esq., at Greenberg Traurig, P.A., in Miami, Florida, contends. He asserts that when a trustee is appointed, he or she will be bound by the Debtors' conduct and positions to date. He insists that Fontainebleau's suggestion that it can stop making decisions or taking necessary actions because a trustee may be appointed is completely unfounded. "Fontainebleau's position frustrates the MDL proceeding's primary purpose -- coordinating pretrial discovery," Mr. Hutton says. "Moreover, Defendants should not have to incur the burden and expense of conducting multiple and costly searches for electronic documents, just because Fontainebleau will neither negotiate search terms nor agree to be bound by the terms negotiated by the other parties," he continues. The Defendants, hence, ask the Court to direct Fontainebleau to participate in discovery, notwithstanding its conversion motion. They also seek a 60-day extension of the deadline for the production of documents. The Defendants contend that the delay occasioned by Fontainebleau's actions has undermined the ability of all parties to comply with the Court-ordered May 13, 2009 deadline. The Defendants further ask 60-day extension of the commencement of fact depositions and identification of expert witnesses. B. Term Lender Plaintiffs' Position The Term Lender Plaintiffs ask the Court to direct Fontainebleau to participate in discovery, notwithstanding its conversion motion. Given Fontainebleau1s refusal to participate in discovery to date, the Term Lenders say that they regrettably concur with the Defendants that a 60-day extension of the deadlines for the production of documents, the commencement of fact depositions and identification of expert witnesses is required. C. Fontainebleau's Position Fontainebleau says that it agrees, subject to Court approval, to the 60-day extension of deadlines now sought by all parties. Fontainebleau also is agreeable to any search terms that the Defendants may agree to with the Term Lender Plaintiffs, albeit without waiver of and expressly preserving the rights of a Chapter 7 Trustee to seek additional discovery. Fontainebleau asserts that it is not in a position to agree to search terms with respect to its own documents at this time because those documents will shortly become the property of a Chapter 7 Trustee. Upon appointment of a Chapter 7 trustee, Fontainebleau tells the Court, its documents will become property of the trustee, and its counsel cannot bind a trustee to search terms that could cost the estate hundreds of thousands of dollars without prior consultation. Fontainebleau explains that its election not to negotiate search terms at this time did not "bring everything to a grinding halt." Fontainebleau contends that nothing in the MDL Scheduling Order requires the parties to agree to search terms, and Fontainebleau recognizes fully that in the event those deadlines are not extended, it will be required to complete its document production on May 13, 2010. Fontainebleau assures the Court that it intends to continue to comply with its obligations. * * * The Court directed all the parties in the MDL proceeding to negotiate search terms no later than April 21, 2010, which search terms will be binding on any Chapter 7 Trustee that may be appointed by the Bankruptcy Court. Judge Gold ruled that should Fontainebleau refuse to negotiate search terms in good faith, the refusal will be construed as a waiver of any objections Fontainebleau may have to the search terms upon which the remaining parties agree. He also directed the parties to file by April 22, 2010, a request for extension of Pre-Trial Deadlines specifically identifying the pre-trial deadline modifications the parties are requesting. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of approximately $150 million. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU LV: M&M Lienholders Appeal DIP Financing Order ------------------------------------------------------------ Several parties-in-interest took an appeal to the United States District Court for the Southern District of Florida from Judge A. Jay Cristol's interim orders (i) authorizing Fontainebleau Las Vegas Holdings, LLC, and its debtor-affiliates to obtain secured postpetition financing on super-priority priming lien basis and modifying the automatic stay, and (ii) authorizing the Debtors to repay used cash collateral and unused cash collateral: (a) The Contractor Claimants -- Desert Fire Protection, a Nevada Limited Partnership, Bombard Mechanical, LLC, Bombard Electric, LLC, Warner Enterprises, Inc. dba Sun Valley Electric Supply Co., Absocold Corporation dba Econ Appliance, Austin General Contracting, Powell Cabinet and Fixture Co., Safe Electronics, Inc, SAMFET, and Union Erectors, LLC; and (b) Cashman Equipment Company, Crescent Electric Supply Company, Derr and Gruenewald Construction Co., Greybar Electric Company, Inc., Hilti, Inc., Integrated Mechanical Group, LLC, Morris Shea Bridge Company, Inc., Quality Cabinet & Fixture Company, Sierra Glass & Mirror, Inc., Tracy & Ryder Landscape, Inc., Water FX, LLC, Z Glass, Inc., ZETIAN SYSTENS. The Appellants also asked the District Court to verify whether the Bankruptcy Court erred in: (a) authorizing the Debtors to incur secured, first-priority, super-priority postpetition financing without providing adequate protection to the Appellants; and (b) approving the secured, first-priority, super-priority postpetition financing on the ground that the funds to be expended are necessary for preservation of the collateral. Jeffrey R. Truitt, the duly appointed examiner in the Debtors' Chapter 11 cases filed with the Court a consolidated designation of record relating to the Appeals, a copy of which is available for free at http://bankrupt.com/misc/FB_ApsConsolidatedDOR.pdf About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of approximately $150 million. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FREEDOM PHARMACY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Freedom Pharmacy, Inc. 3051 El Tuque Industrial Park Carr. 591, Suites 102-103, Calle B Ponce, PR 00728-2201 Bankruptcy Case No.: 10-03299 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Charles Alfred Cuprill, Esq. Charles A Curpill, PSC Law Office 356 Calle Fortaleza, Second Floor San Juan, PR 00901 Tel: (787) 977-0515 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to 10,000,000 According to the schedules, the Company says that assets total $0 while debts total $4,958,074. A copy of the Company's list of 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb10-03299.pdf The petition was signed by Allan Cohen, president. GEMS TV: DirecTV on Unsecured Creditors Committee ------------------------------------------------- Bill Rochelle at Bloomberg News reports that Gems TV (USA) Ltd. has an official unsecured creditors' committee with seven members. DirecTV Inc., scheduled to have an unsecured claim for almost $2.7 million, is on the panel. Reno, Nevada-based Gems TV (USA) Limited, aka Gems TV, is a television retailer of gemstone jewelry products. Its parent is Gems TV Holdings Ltd., which owns and operates jewelry home shopping TV channels in the U.S., U.K. and Japan. The Company filed for Chapter 11 bankruptcy protection on April 5, 2010 (Bankr. D. Del. Case No. 10-11158). Robert S. Brady, Esq., and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt & Taylor, assist the Company in its restructuring effort. Focus Management Group is the Company's financial advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. The Company listed $10,000,000 to $50,000,000 in assets and $100,000,000 to $500,000,000 in liabilities. GENCORP INC: OKs Annual Cash Incentive Program for Management ------------------------------------------------------------- Each year, the Board of Directors of GenCorp Inc., upon the recommendation and approval of the Organization & Compensation Committee, approves an annual cash incentive program for the Company's management, including the Company's named executive officers. The target annual cash bonus is intended to provide a competitive level of compensation when specific individual or business performance objectives are achieved. On April 2, 2010, the Board of Directors of GenCorp unanimously approved the 2010 Annual Incentive Plan. The performance objectives as outlined in the Plan include contract profit, cash flow, pre-tax earnings, awards and personal factors, as defined therein, each of which are weighted differently. The Compensation Committee has discretion to adjust these payments. With input from the Company's Chief Executive Officer and Chief Financial Officer, bonuses are paid based upon the Compensation Committee's assessment of both individual and Company-wide actual performance against these established performance objectives. The potential payouts under the Plan range from 0% to 175% of an individual's target bonus. Target bonuses represent a percentage of an eligible Plan participant's base salary. About GenCorp Inc. Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the re-zoning, entitlement, sale, and leasing of the Company's excess real estate assets. The Company's balance sheet as of February 28, 2010, showed $1.019 billion in assets, $1.287 billion of debts, and $5.5 million of redeemable common stock, for a stockholders' deficit of $273.5 million. * * * On March 26, 2010, Moody's Investors Service upgraded both GenCorp Inc.'s Corporate Family Rating to B2 from B3 and Probability of Default ratings to B2 from Caa1. In addition, the senior secured credit facilities were upgraded to Ba2 from Ba3, as well as the convertible subordinated notes to Caa1 from Caa2. The 9-1/2% senior subordinated notes were confirmed at B1. On January, 22, 2010, Standard & Poor's Ratings Services raised its ratings of GenCorp Inc. to B- from CCC+ and removed all ratings from CreditWatch. GENCORP INC: Registers 1,500,000 Shares Under 2009 Incentive Plan ----------------------------------------------------------------- GenCorp Inc. filed with the Securities and Exchange Commission its Form S-8 Registration Statement under the Securities Act of 1933 to register 1,500,000 of Common stock, par value $0.10 per share that may be issued pursuant to the GenCorp Inc. Amended and Restated 2009 Equity and Performance Incentive Plan. The Proposed Maximum Aggregate Offering Price is $8,835,000. GenCorp previously registered 500,000 shares of its common stock pursuant to the Plan, filed on Form S-8 Registration Statement (File No. 333-158870). GenCorp's stockholders approved an amendment to the Plan for the purpose of adding an additional 1,500,000 shares of common stock, at the annual meeting of stockholders on March 24, 2010. A full-text copy of the Registration Statement is available at no charge at http://ResearchArchives.com/t/s?60aa On April 9, 2010, GenCorp filed a Current Report on Form 8-K with the Securities and Exchange Commission to reflect certain accounting changes with respect to the financial information contained in its Annual Report on Form 10-K for the year ended November 30, 2009. The information contained in the Current Report on Form 8-K is not an amendment to or restatement of the 2009 Form 10-K. As of December 1, 2009, the Company adopted the new accounting standards which apply to convertible debt securities that, upon conversion, may be settled by the issuer, fully or partially, in cash. The guidance is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2008, and is to be applied retrospectively to all past periods presented -- even if the instrument has matured, converted, or otherwise been extinguished as of the effective date of this guidance. The Company's adoption of this guidance affects its 2-1/4% Convertible Subordinated Debentures. This guidance requires the issuer of convertible debt instruments to separately account for the liability (debt) and equity (conversion option) components of such instruments and retrospectively adjust the financial statements for all periods presented. The fair value of the liability component was determined based on the market rate for similar debt instruments without the conversion feature and the residual between the proceeds and the fair value of the liability component is recorded as equity at the time of issuance. Additionally, the pronouncement requires transaction costs to be allocated to the liability and equity components on the same relative percentages. The Company's adoption of this guidance results in higher non-cash interest expense for fiscal 2005 through fiscal 2011, assuming the holders will require the Company to repurchase the 2-1/4% Debentures at a cash price equal to 100% of the principal amount plus accrued and unpaid interest on November 20, 2011, the earliest date when the holders can exercise such right. A full-text copy of the Company's Current Report on Form 8-K is available at no charge at http://ResearchArchives.com/t/s?60ab A full-text copy of the Company's Selected Financial Data is available at no charge at http://ResearchArchives.com/t/s?60ac A full-text copy of the Company's Management's Discussion and Analysis of Financial Condition and Results of Operations is available at no charge at http://ResearchArchives.com/t/s?60ad A full-text copy of the Company's Quantitative and Qualitative Disclosures about Market Risk is available at no charge at http://ResearchArchives.com/t/s?60ae A full-text copy of the Company's Consolidated Financial Statements and Supplementary Data is available at no charge at http://ResearchArchives.com/t/s?60af A full-text copy of the Company's Financial Statement Schedules is available at no charge at http://ResearchArchives.com/t/s?60b0 About GenCorp Inc. Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the re-zoning, entitlement, sale, and leasing of the Company's excess real estate assets. The Company's balance sheet as of February 28, 2010, showed $1.019 billion in assets, $1.287 billion of debts, and $5.5 million of redeemable common stock, for a stockholders' deficit of $273.5 million. * * * On March 26, 2010, Moody's Investors Service upgraded both GenCorp Inc.'s Corporate Family Rating to B2 from B3 and Probability of Default ratings to B2 from Caa1. In addition, the senior secured credit facilities were upgraded to Ba2 from Ba3, as well as the convertible subordinated notes to Caa1 from Caa2. The 9-1/2% senior subordinated notes were confirmed at B1. On January, 22, 2010, Standard & Poor's Ratings Services raised its ratings of GenCorp Inc. to B- from CCC+ and removed all ratings from CreditWatch. GENERAL GROWTH: Investment Pact a De Facto Plan, Say CSA Reps. -------------------------------------------------------------- General Growth Properties, Inc., and its debtor affiliates seek authority from Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York to enter into investment agreements for more than $6.5 billion in equity capital commitments. The $6.5 billion investment commitment is composed of: -- a cornerstone agreement with REP Investments LLC, to invest $2.625 billion in GGP's standalone emergence plan; -- an agreement with Fairholme Capital Management, LLC, to invest $2.8 billion; and -- an agreement with Pershing Square Capital Management, L.P., to invest $1.1 billion in reorganized GGP. "By their Bidding Procedures Motion, the Debtors are proposing a non-confirmable de facto plan of reorganization and seeking to improperly transfer an outstanding amount of value to parties of the $6.5 billion investment agreements, including to Pershing Square Capital Management, L.P., an insider of General Growth Properties, Inc.," Platt W. Davis III, David G. Elkins and David R. Lummis complain. Mr. Davis, et al., are representatives under a Contingent Stock Agreement dated January 1, 1996, executed by GGP in favor of holders under the CSA and the Representatives. The Investment Agreements provide for a transfer of value to the Commitment Parties through the issuance of Warrants for 120 million shares of common stock of GGP. The value of the Warrants however likely exceeds $884 million, or a staggering and unprecedented 14.0% of the proposed investment, the CSA Representatives' counsel, Steven T. Hoort, Esq., at Ropes & Gray LLP, in New York, points out. More importantly, while the Commitment Parties are potentially investing $6.3 billion in GGP for 630 million shares, their proposed investment in General Growth Opportunities or GGO is a mere $250 million in the contemplated rights offering for 50 million GGO shares, he argues. This proposed investment structure has the potential to result in a further windfall to the Commitment Parties at the expense of GGP's equity holders, he contends. Small deviations from GGP's or GGO's assumed value upon emergence would result in the Commitment Parties being awarded significantly more value than disclosed in the Bidding Procedures Motion, he stresses. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Macerich Raises $1.2B for Possible Bid on Malls --------------------------------------------------------------- Macerich Co. raised about $1.23 billion in equity in the largest ever secondary offering on record by a real estate investment trust, A.D. Pruitt of Dow Jones Newswires reported on April 15. The stock sale is said to give Macerich a $2.2 billion war chest to position it to bid on some of General Growth Properties Inc.'s malls and other properties by rivals, Arthur Coppola, chief executive officer of Macerich, told Dow Jones Newswires. "To the extent that there are spin offs of General Growth we wanted to be in a position where we had the capital to participate in some of the spin-offs if it were to happen," Mr. Coppola was quoted by Dow Jones Newswires as saying. He also said Macerich has no aspirations to make a bid on the entire company, Dow Jones Newswires noted. "That's just too large of a deal for a company our size," he commented, Dow Jones Newswires stated. Mr. Coppola did not comment on whether Macerich has been in discussions with GGP on possible asset sales, but disclosed his company is partnering with Simon Property Group Inc., Dow Jones Newswires related. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Units File 2nd Post-Confirmation Status Report -------------------------------------------------------------- Affiliates of General Growth Properties Inc. that have emerged from bankruptcy filed with the U.S. Bankruptcy Court for the Southern District of New York on April 15, 2010, their second post-confirmation status report detailing the actions they have taken and the progress they made toward consummation of their Joint Plan of Reorganization since March 11, 2010. A list of the reporting Plan Debtors is available for free at http://bankrupt.com/misc/ggp_ReportingDebtors.pdf Since the filing of the First Post-Confirmation Report dated March 11, 2010, the Court has confirmed the Plan for 32 Plan Debtors, a list of which is available for free at: http://bankrupt.com/misc/ggp_MarConfirmedDebtors.pdf As of April 15, 2010, the Court has confirmed 258 Plan Debtors to restructure 105 loans totaling $13.8 billion in secured project- level indebtedness, James H.M. Sprayregen, P.C. Esq., at Weil, Gotshal & Manges LLP, in New York, notes. In addition, nine Plan Debtors have consummated their Plans, namely: * Beachwood Place Holding, LLC * Beachwood Place Mall, LLC * Stonestown Shopping Center Holding L.L.C. * Stonestown Shopping Center L.L.C. * Stonestown Shopping Center, L.P. * White Marsh General Partnership * White Marsh Mall Associates * White Marsh Mall, LLC * White Marsh Phase II Associates As of April 15, 2010, 220 of the 258 Plan Debtors have consummated their Plans and emerged from bankruptcy, restructuring 99 loans totaling $12 billion in secured project-level indebtedness. A list of the Emerged Plan Debtors is available for free at: http://bankrupt.com/misc/ggp_EmergedPlanDebtors.pdf Mr. Sprayregen discloses that the remaining 38 Plan Debtors continue to work towards consummating their Plans. A list of the 38 Plan Debtors is available for free at: http://bankrupt.com/misc/ggp_RemainingPlanDebtors.pdf The Plan Debtors are analyzing and reconciling the outstanding claims filed against them, Mr. Sprayregen adds. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GOLDSPRING INC: Names De Gasperis as Chief Executive Officer ------------------------------------------------------------ GoldSpring, Inc. has Corrado De Gasperis as its Chief Executive Officer and President, effective immediately. Mr. De Gasperis will also serve as its principal financial officer. "Corrado is a proven senior executive and one of the most focused managers I have encountered in any industry," stated William J. Nance, Chairman of the Board. "He has demonstrated operational and project management skills and the strategic focus to position GoldSpring as a significant producer in the U.S. mining industry over the next three years. He is also a thoughtful leader that the Board believes will accelerate the delivery of known value while positioning us to realize the greater potential from our Comstock properties." "The Board thanks Robert Reseigh for stepping in as Interim CEO, and Robert Faber for his service as President and the contributions each has made to GoldSpring's success over the last 5 years. Bob, Rob and I look forward to working directly with Corrado to ensure a smooth transition for the Company and its employees and a successful implementation of our business plan," stated Mr. Nance. Mr. De Gasperis brings more than 20 years of manufacturing, metals and mining operational and financial management, construction project management, and capital markets experience to the Company. Most recently, he served as the Chief Executive Officer of Barzel Industries Inc. Barzel operated a network of 15 manufacturing, processing and distribution facilities in the United States and Canada that offered a wide range of metal solutions to a variety of industries, from construction and industrial manufacturing to transportation, infrastructure development and mining. Mr. De Gasperis resigned from Barzel in September 2009, after it reached agreement to sell substantially all of its assets to a Canadian- based steel company in a planned transaction that was consummated in a sale pursuant to Section 363 of the U.S. Bankruptcy Code following a multiple party bidding process with suitors focused on both in-court and out-of-court transactions. From 2001 to 2005, he served as Chief Financial Officer of GrafTech International Ltd., a global manufacturer of industrial graphite and carbon- based materials, in addition to his duties as Vice President and Chief Information Officer, which he assumed in 2000. He served as Controller of GrafTech from 1998 to 2000. From 1987 to 1998, Mr. De Gasperis was a certified public accountant with KPMG LLP, an international provider of accounting, tax and other advisory services. As a Senior Assurance Manager in the Manufacturing, Retail and Distribution Practice, he served clients such as General Electric Company and Union Carbide Corporation. KPMG announced his admittance, as a Partner, effective July 1, 1998. He holds a BBA from the Ancell School of Business at Western Connecticut State University, with honors. Mr. De Gasperis has served as a director of GBS Gold International Inc., where he was Chairman of the Audit, and Governance Committee and the Compensation Committee and a member of the Nominations and Advisory Committees. Mr. De Gasperis is also a Member of the Prospectors and Developers Association of Canada. "Corrado has already worked with our team and facilitated, along with the Board, development of a strategic plan designed to deliver shareholder value by commencing commercial mining and processing operations by late 2010 and early 2011, respectively, with annual production rates increasing to 20,000 gold equivalent ounces and by validating qualified resources and reserves of 3,250,000 gold equivalent ounces by 2013," stated Mr. Nance. "The new plan is intended to recapitalize the Company and position it to realize the greater potential from our Comstock properties." The recapitalization and balance sheet restructuring phase of the plan is currently expected to include: -- a 200:1 reverse stock split, thereby reducing the common shares outstanding to approximately 18.3 million and eliminating the Company's current default under its convertible indebtedness due to lack of sufficient authorized and unissued common shares; -- a debt-for-equity exchange with the holders of its convertible indebtedness, thereby eliminating the majority of the Company's current indebtedness; -- the issuance of new senior secured convertible indebtedness with less onerous terms than the existing convertible indebtedness in exchange for the rights to two integral parcels of land for exploration and to facilitate operations on the Company's existing parcels; -- a restructuring of the Company's bridge loans, possibly including the issuance of senior equity rights in exchange for additional extensions of credit; and the raising of new equity capital. The Company anticipates completing these recapitalization and balance sheet restructuring transactions by about mid-year 2010. About Goldspring, Inc. Virginia City, Nev.-based Goldspring, Inc. a North American precious metals mining company with significant land holdings in the Comstock Gold-Silver District of Nevada. GoldSpring was incorporated in Florida in 1999 and redomiciled in Nevada in 2008. * * * As reported in the Troubled Company Reporter on April 15, 2010, Goldspring, Inc. filed on April 12, 2010, its annual report on Form 10-K for the year ended December 31, 2009. The Company's balance sheet as of December 31, 2009, showed $4,925,154 in assets and $32,098,438 of debts, for a stockholders' deficit of $27,173,284. The Company reported a net loss of $6,064,669 on $0 revenue for 2009, compared with a net loss of $16,487,683 on $0 revenue for 2008. Jewett, Schwartz, Wolfe & Associates expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has operating and liquidity concerns and has incurred historical net losses approximating $55,000,000 as of December 31, 2009. The Company also used cash in operating activities of $3,564,779 in 2009. GPX INTERNATIONAL: Creditors Seek to Liquidate Remaining Assets --------------------------------------------------------------- Bankruptcy Law360 reports that GPX International Tire Corp. and its unsecured creditors have filed their proposed disclosure statement and reorganization plan, seeking to liquidate what's left of the Company after having sold off most assets in three separate sales. According to Law360, the disclosure statement was filed Thursday in the U.S. Bankruptcy Court for the District of Massachusetts to continue the "orderly liquidation" of GPX's remaining assets. About GPX International GPX International Tire Corporation was one of the largest independent global providers of specialty "off-the-road" tires for the agricultural, construction, materials handling and transportation industries. GPX is a worldwide company, headquartered in Malden, Massachusetts, with operations in NorthAmerica, China, Canada, and Germany. A third generation family-owned business, GPX and its predecessor companies have been in business since 1922. GPX International filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Mass. Case No. 09-20170). GPX is represented in U.S. Bankruptcy Court by attorneys Harry Murphy of Hanify & King, P.C., and Peggy Farrell of Hinckley Allen & Snyder LLP as corporate counsel. TM Capital Corp. serves as investment banker to GPX in connection with these transactions and Argus Management Corporation serves as restructuring advisor to GPX. The petition says assets and debts range from $100 million to $500 million. GREEN VALLEY: Moody's Cuts PDR to 'D' After Payments Missed ----------------------------------------------------------- Moody's Investors Service lowered Green Valley Ranch Gaming, LLC's Probability of Default Rating to D from Caa3. The rating action reflects GVR's failure to make the scheduled interest payments on its first and second lien term loans due 2014 within the allowed grace periods. The outlook remains negative. GVR did not make these payments within the relevant grace periods: 1) the March 15, 2010 interest payment on its second lien term loan, and 2) the March 30, 2010 principle and interest payment on its first lien term loan. The negative outlook reflects uncertainty regarding GVR's viability as a going concern given its highly leveraged capital structure. Given the severe challenges faced by the gaming industry and by GVR in particular, Moody's used a fundamental approach to determine a family recovery rate of 40% rather than the 50% mean family recovery rate. These ratings were lowered: * Probability of Default Rating to D from Caa3 * First lien term loan due 2014 to Ca (LGD 3, 45%) from Caa3 (LGD 3, 45%) * Second lien term loan due 2014 to C (LGD 6, 92%) from Ca (LGD 6, 92%) This rating was affirmed: * Corporate Family Rating at Ca The last rating action on GVR occurred on April 21, 2009, when Moody's lowered the company's Probability of Default Rating to Caa3 and Corporate Family Rating to Ca. GVR owns and operates the Green Valley Ranch Resort Spa Casino in Henderson, Nevada. The company generates about $245 million of net revenue. HARBOUR EAST: Cielo on the Bay Condo Files Chapter 11 ----------------------------------------------------- Harbour East Development Ltd., filed for Chapter 11 in Miami on April 22 (Bankr. S.D. Fla. Case No. 10-20733). Harbour East disclosed assets and debts of $10,000,000 to $50,000,000. According to Bloomberg News, Harbour East owns the Cielo on the Bay condominium project in North Bay Village, Florida. The project has 35 units, some with view of Miami Beach and Biscayne Bay. Harbour East, according to a Bloomberg News report, said it was unable to sell units because the construction lender refused to allow price reductions for purchasers who already signed contracts. The Company believes it could have repaid most if not all of the secured debt were it able to reduce prices to "realistic market levels." The Company also says its financing problems in part are due to the refusal of the lender to allow leasing or rent-to-own programs. The construction loan, with $14 million now owing, was sold. The owner believes the new holder of the loan will say the remaining collateral is worth $8 million. HARBOUR EAST: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Harbour East Development, Ltd. 7935 East Drive Harbor Island North Bay Villae, FL 33141 Bankruptcy Case No.: 10-20733 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Michael L Schuster, Esq. 100 SE 2 Street 44 Floor Miami, FL 33131 Tel: (305) 349-2300 E-mail: mschuster@gjb-law.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Mario Egozi, manager and member. HD SUPPLY: Moody's Downgrades Corporate Family Rating to 'Caa2' --------------------------------------------------------------- Moody's Investors Service downgraded HD Supply's Corporate Family Rating and Probability of Default Rating to Caa2 from Caa1. In a related rating action Moody's assigned a B1 rating to the company's amended and extended asset-based senior secured revolving credit facility due 2014 and a Baa1 to its amended and extended senior secured term loan due 2014. The senior secured revolving credit facility due 2013 downgraded to B3 from B1 and senior subordinated PIK notes due 2015 lowered to Ca from Caa3. The senior unsecured notes due 2014 are affirmed at Caa2. HDS' speculative grade liquidity rating was lowered to SGL-3 from SGL- 2. A negative rating outlook was assigned. The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt. Moody's believes that HDS is addressing its cost structure and improving working capital management, but the levels of improvement are not sufficient to overcome required debt service. HDS' leverage is very high and its credit metrics will likely remain very weak over the long term. At fiscal-year end 2010 (ended January 31, 2010), debt-to-EBITDA was 14.4 times, EBIT-to-cash interest was below 0.25 times and free cash flow-to- debt was 0.2% (all ratios adjusted per Moody's methodology). Although HDS recently extended the maturity of approximately $2.6 billion of committed debt by about nineteen months, which is a credit positive over the intermediate term, the company now has about $5 billion of committed facilities due in 2014, creating a long-term untenable debt structure. Moody's believes that a capital restructuring will be needed over the longer term to reduce debt, bringing the company's capital structure more in-line with the operating performance that has been below expectations relative to anticipated performance when HDS became an independent company in mid-2007. The change in the speculative grade liquidity rating incorporates Moody's belief that operating performance and free cash flow generation will continue to be stressed due to the ongoing weakness in the construction industry. However, existing cash on hand and combined availability under HDS' revolving credit facilities aggregating to about $900 million at 4Q10 should be sufficient to manage potential operating short falls, near-term obligations and working capital requirements. The negative outlook reflects HDS' weak credit metrics, which are inhibiting its financial flexibility as it contends with weak prospects in the construction industry. Moody's believes that HDS' cash flow and liquidity may not be sufficient to meet its long-term obligations. The ratings on the amended and extended asset-based revolving credit due 2014 and senior secured term loan due 2014 reflect the claim these debt instruments have on the company's assets relative to HDS' unsecured and subordinated notes. The asset-based revolver, rated B1, is secured by the company's most marketable assets, its receivables and inventory, and also benefits from the various credit-friendly protections common to well-structured asset-based loans. The Baa1 rating on the senior secured term loan due 2014 reflects the guarantee provided by The Home Depot (Baa1 senior unsecured rating). Proceeds from these bank credit facilities were used to reduce outstandings under the existing asset-based revolving credit facility due 2012 and the existing senior secured term loan due 2012. These ratings/assessments were affected by this action: * Corporate Family Rating lowered to Caa2 from Caa1; * Probability Default Rating lowered to Caa2 from Caa1; * $1.8 billion asset-based senior secured revolving credit facility due 2014 rated B1 (LGD1, 7%); * $304 million asset-based senior secured revolving credit facility due 2012 affirmed at B1 (LGD1, 7%); * $300 million senior secured revolving credit facility due 2013 lowered to B3 (LGD2, 24%) from B1; * $873 million senior secured term loan due 2014 rated Baa1, reflecting the guarantee provided by The Home Depot, Inc.; * $74 million senior secured term loan due 2012 affirmed at Baa1, reflecting the guarantee provided by The Home Depot, Inc.; * $2.5 billion senior unsecured notes due 2014 affirmed at Caa2 (LGD4, 60%); and * $1.4 billion senior subordinated PIK notes due 2015 lowered to Ca (LGD6, 91%) from Caa3. The company's speculative grade liquidity rating is lowered to SGL-3. The last rating action was on October 12, 2009, at which time Moody's downgraded HDS' Corporate Family Rating to Caa1. HDS' ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of HDS, such as i) the business risk and competitive position of the company versus others within its industry, ii) capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of HDS' core industry and HDS' ratings are believed to be comparable to those of other issuers of similar credit risk. HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations ("MRO") services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. Revenues for the last twelve months through January 31, 2010, totaled approximately $7.4 billion. HEALTH RESOURCES: AM Best Affirms 'B' Financial Strength Rating --------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating (FSR) of B (Fair) and issuer credit rating (ICR) of "bb+" of Health Resources, Inc. (Health Resources) (Evansville, IN). The outlook for both ratings is stable. Concurrently, A.M. Best has withdrawn the ratings at the company's request and assigned an NR-4 to the FSR and an "nr" to the ICR. These rating actions reflect the decision of Health Resources management to withdraw from the A.M. Best interactive rating process. Health Resources reported an underwriting and net loss through third quarter 2009. While the loss was less than $500,000 and improved in third quarter 2009, it follows a period of several years of favorable operating performance. The loss is largely due to an increase in the ratio of benefits paid to net premiums written. Health Resources has been able to grow membership and premium during 2008 and through third quarter 2009, despite the current economic recession. The company maintains a competitive advantage in its core market due to a good network and ownership by dental providers. HEALTHSOUTH CORP: New CFO to Receive $525,000 Annual Base Salary ---------------------------------------------------------------- HealthSouth Corporation on April 15, announced the appointment of Douglas E. Coltharp as executive vice president and chief financial officer of the Company, effective May 6, 2010. Mr. Coltharp, 48, has been a partner at Arlington Capital Advisors and Arlington Investment Partners, LLC, a boutique investment banking firm and private equity firm, since May 2007. Prior to that, Mr. Coltharp served 11 years as executive vice president and chief financial officer for Saks Incorporated and its predecessor organization. In that role, he was responsible for recapitalizing the company and guiding it through a series of acquisitions and organic growth strategies that transformed it from a small cap, regional department store operator to a Fortune 1000 national retailer. Mr. Coltharp currently serves as a member of the board of directors of Ares Capital Corporation, Under Armour, Inc. and Rue 21, Inc. The Company has not entered into a written employment agreement with Mr. Coltharp. The compensation committee of the board of directors of the Company has approved Mr. Coltharp's initial compensation arrangement. His annual base salary will be $525,000. His 2010 target cash incentive opportunity under the Company's senior management bonus plan will be 60% of his base salary. On his start date, Mr. Coltharp will receive a signing bonus consisting of a grant of restricted stock with a fair value of $100,000 vesting one-third per year over three years. Beginning in 2011, he will participate in the Company's equity incentive plan under which he may receive grants of stock options and performance share units with an aggregate targeted fair value of 150% of his base salary, assuming the 2011-2012 performance objectives are achieved for the performance period ending December 31, 2012. Additionally, Mr. Coltharp will participate in the executive severance and change in control benefits plans under the same terms as the Company's other executive vice presidents. Otherwise, Mr. Coltharp's compensation, including incentive awards, and benefits are subject to the same terms and conditions as our other executive officers. About HealthSouth Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of December 31, 2009, the Company had total assets of $1.681 billion against total liabilities of $2.191 billion and convertible perpetual preferred stock of $387.4 million. HEALTHSOUTH CORP: UBS and Ernst & Young Settle Fraud Claims ----------------------------------------------------------- The Associated Press reports that Swiss bank UBS AG and accounting firm Ernst & Young agreed to pay $250 million to settle claims over the financial fraud that nearly wrecked HealthSouth Corp. The AP, citing federal court filings Thursday, reports that UBS insurers will pay $117 million to HealthSouth shareholders and another $100 million to bondholders, while Ernst & Young agreed to pay $33.5 million to bondholders. Ernst & Young in 2009 agreed to a $109 million settlement with HealthSouth stockholders. The AP says both companies denied any wrongdoing and said they were settling because of the continued expense of fighting lawsuits in federal court. The AP recalls an investigation of HealthSouth revealed a long- running scheme to overstate earnings by more than $2.5 billion. About HealthSouth Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of December 31, 2009, the Company had total assets of $1.681 billion against total liabilities of $2.191 billion and convertible perpetual preferred stock of $387.4 million. INFOR GLOBAL: S&P Assigns 'B+' Rating on $1.5 Bil. Notes -------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B+' rating to Infor Global Solutions Holdings Ltd.'s approximately $1.5 billion of U.S. dollar-dominated and EUR503 million of euro- denominated first-lien term loans that participated in the company's recent amendment to extend the maturity date of the loans to July 28, 2015. The recovery rating on that debt (issued by co-borrowers Infor Global Solutions European Finance S.? R.L. and Infor Enterprise Solutions Holdings Inc.) is '1', indicating S&P's expectation for very high (90%-100%) recovery in the event of a payment default. The 'B-' corporate credit rating and stable outlook on Infor remain unchanged. Ratings List Infor Global Solutions Holdings Ltd. Corporate Credit Rating B-/Stable/-- Ratings Assigned Infor Enterprise Solutions Holdings Inc. Infor Global Solutions European Finance S.a.r.l. $1.5 bil. of U.S. dollar-dominated and eur503 mil. of euro- denominated 1st-lien term loans B+ Recovery Rating 1 JAPAN AIRLINES: Claimant Wants JAL Status as Employer Determined ---------------------------------------------------------------- Martin Ventress asks the U.S. Bankruptcy Court for the Southern District of New York to compel the U.S. Trustee for Region 2 to determine whether Debtor Japan Airline was his employer or co- employer. Mr. Ventress says he is filing this motion in order to establish: (i) his creditor priority status; (ii) JAL's Tax Liability pursuant to Section 505(3) of the U.S. Bankruptcy Code; (iii) JAL's violations of the statute that "Prohibits an employer from retaliating against an employee for disclosing information to a Government or Law Enforcement Agency, where the employee has reasonable cause to believe that information discloses a violation of state for federal statute, or a violation or non-compliance with a state of federal regulation." Mr. Ventress also tells the Court that his request is not limited to the revocation or suspension of JAL's Federal Aviation Administration Operating Certificate for various FAA violations and breach of U.S. laws once it is established that in fact the Debtor was Mr. Ventress employer or co-employer. As earlier reported, Mr. Ventress had signed an employment contract with Hawaii Aviation Contract Services, Inc., where he was signed in to fly planes for JALways Co. Ltd. He later asserted a claim and filed a lawsuit against JAL, JALways and HACS arising from a "wrongful termination" of his service. Mr. Ventress believes that part of the U.S. Trustee's duties is to oversee proofs of claim. In light of these, he asks the U.S. Trustee to investigate whether JAL was his employer or co- employer, since JAL argued this from the time his claim had been filed. 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: Deal Clarifying Scope of Ch. 15 Order Approved -------------------------------------------------------------- The foreign representative of Japan Airlines Corp. received approval from the U.S. Bankruptcy Court of a stipulation with plaintiffs to antitrust actions, clarifying the scope of the automatic stay and the Chapter 15 recognition order. 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. Responses Various parties aired objections to the Stipulation. Eiji Katayama, Esq., the foreign representative of the Debtors, Responded that the Stipulation is consistent with the Court's recognition order. The Foreign Representative asserted that the objecting parties have in no way demonstrated or justified that sufficient "cause" necessary to lift or modify the stay, as to the Debtors, exists. Accordingly, the Foreign Representative avers, the Court should overrule the Objections to the extent they request lifting of the stay as to actions against the Debtors. Following a hearing, Judge Peck approved the Stipulated Order, as originally filed on the Court's docket. Judge Peck notes that the Recognition Order does not stay any actions or proceedings against any other party other than the Debtors. The Objections to the Stipulation are overruled with prejudice. 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: ETIC Reaches Deal on Purchase of Debt ----------------------------------------------------- The Enterprise Turnaround Initiative Corporation of Japan ("ETIC"), following its decision to provide support to Japan Airlines Corporation and related companies, reached on the purchase decision of debt owed by the JAL Companies. The decision is subject to approval by the Tokyo District Court of the business revitalization plan to be submitted by the corporate trustee under Corporate Rehabilitation procedures currently filed by the JAL Companies. The agreement on the purchase of debt means that ETIC determined that it met the conditions stipulated in the ETIC Act so that all relevant financial institutions either (1) applied to ETIC to sell debt that fell within the scope of debt stipulated under the corporate rehabilitation plan, with an application price for the total debt obligation, or (2) agreed to the administration or disposal of the debt, in accordance with the business revitalization plan. Implementation of the purchase of debt by ETIC remains subject to the business revitalization plan being approved, a statement from JAL related. ETIC, as the corporate rehabilitation administration of the JAL Companies appointed under Corporate Rehabilitation procedures, will develop the business revitalization plan and continue to support the rehabilitation of the JAL Companies. The principal value of total debt, as held by financial institutions as reorganization claims, to be purchased by the ETIC is JPY710.318 billion. The principal value of debt to be purchased is JPY190.853 billion and the principal value of debt for which financial support to be provided by financial institutions is JPY519.465. The revitalization program, according to JAL, comprises a combination of ETIC support and Corporate Reorganization procedures. Because of this, the amount of debt forgiveness to be provided by creditor financial institutions (i.e. the book value of debt minus the amount of debt remaining after the change in ownership under the revitalization plan) will be determined during Corporate Reorganization procedures and cannot be confirmed at this stage. All trade and lease creditors continue to be paid as usual under the revitalization program. Other general credits (credit extended by financial institutions or others that is outside the scope of this decision to purchase) will be handled in accordance with Corporate Rehabilitation procedures. Japan's Minister of Economy, Trade and Industry, commented, "[a]irline operations are the foundations of people's lifestyles and a nation's economic activities. I trust that sufficient consideration should continue to be given so that no barriers arise to the continuing operation of Japan Airlines and that the business revitalization process should not impact on the businesses partners." Japan's Minister of Health, Labour and Welfare, said, "I have no objection to the plan. However, I ask that in advising on and guiding the implementation of the corporate revitalization plan, ETIC should ensure compliance with related laws and regulations and secures ample opportunities for discussions with the workforce." Other Creditors Not Content with Cost-Cutting Steps Other JAL creditors like the Development Bank of Japan, Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp., are having reservation at providing aid because they have not yet seen sufficient cost-cutting progress, which they hope to see through the reduction of long-haul flights to Europe and the United States and to cater instead to the Asian markets. JAL's Cost-Cutting Measures In view of its endeavor for more funds to hedge it out of bankruptcy, JAL is seeking an effective, convincing plan to assure its creditor banks of its survival in order to get more cash from these lending institutions, The Japan Times reported. According to The Japan Times, JAL has until the end of June to come up with a feasible restructuring approach. JAL and the ETIC have drafted a plan which JAL hopes, would gain the financial support of its prospect creditor banks. The plan, in an effort to cut on costs, is looking at the airline's withdrawal sometime after October of this year of 31 domestic and 16 international routes which are unprofitable. The plan also contemplates on cutting 16,452 jobs or nearly one- third of its workforce by the end of fiscal 2010. The previous plan announced the axing of only 31 routes and cutting 15,661 jobs over three years, The Japan Times said. JAL has been reported by the Yomiuri Newspaper to be dropping 29 international flights by the end of this fiscal year, 13 flights more than the 16 international flight cuts the airline had earlier announced. Yomiuri said that the flight cuts involve trips from Tokyo's Narita Airport to Sao Paulo and Milan and from Japan's Kansai area to Bangkok and Beijing. The airline will also drop 30 domestic flights in the same period, Yomiuri added. In Los Angeles, JAL President Masaru Onishi has told Bloomberg News that the airline is considering various alternatives to increase job cuts as the company struggles to regain profitability. Bloomberg further said that JAL is contemplating on severing 15,700 positions over the next three years. The Nikkei Daily Newspaper, reported however, that instead of a three-year span, JAL will put the ax on one-third, approximately 16,450 of its workforce by March 2011. In a meeting with the pilot's union in Tokyo, JAL's pilots opted to take the company's proposed 5% pay reduction for full-time employees, Nikkei said. JAL is also said to consider reducing its pilot force, Nikkei reported. When asked to comment on this matter, the union declined, Nikkei added. JAL is also planning to suspend its Kona, Hawaii route in an effort to cut costs. In light of this, Hawaii Tourism Authority President Mike McCartney has schedule a trip to Japan to meet with JAL executives regarding the continuation of the direct Japan-Kona flight asserting that the halting of the flights is "critical" because it generates annual revenue of $120 million. 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: "K" Line Wants Lift Stay to Pursue Lawsuit ---------------------------------------------------------- "K" Line Logistics, Ltd., and "K" Line Logistics (USA), Inc., ask Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay imposed by operation of Section 1520 of the Bankruptcy Code solely to allow the pending case of Allianz Marine & Aviation Versicherungs AG v. Japan Airlines Int'l Co., Ltd. et al., 2:09-cv-03911-JFW-CW, to proceed in the U.S. District Court for the Central District of California. Pursuant to air waybill KKS-132 388, dated June 1, 2007, KLL and KLLUS undertook to transport a TEL Telius SP SCCM Etching System in 16 crates from Tokyo to Los Angeles. In order to perform the actual transportation of the Cargo from Japan to the United States, KLL and KLLUS retained Japan Airlines, which, in turn, issued air waybill 131 2769 3551 for the shipment. The Cargo was received by Japan Airlines on June 2, 2007, at which time two of the 16 packages were loaded on pallet PMC25173JL. The Cargo was then loaded on Flight JL69I6. After arriving at Los Angeles International Airport, the Cargo was deplaned and transported to Japan Airlines' facility at LAX. During the course of breaking down pallet PMC25I73JL, one of the crates was damaged when the blades of a forklift caught the end of the crate and caused it to topple over. The crate was determined to be a total loss. KLLUS filed a Preliminary Claim with Japan Airlines, dated June 11, 2007, which was later followed by a Formal Claim. Moreover, the consignee's underwriters paid a claim in the amount of US$792,805, net of a US$250,000 deductible. In June 2009, the subrogated underwriters, Allianz Marine & Aviation Versicherungs AG and Allianz Corporate & Specialty AG, filed suit against KLL, KLLUS and Japan Airlines International Co., Ltd., for damage to cargo as common carriers of goods for hire by international air. In turn, KLL and KLLUS asserted cross- claims against the Debtor for indemnity in the event that the district court found them liable to Allianz for the cargo damage. At the time of the loss, several Japan Airlines entities, including JAL, were insured under an airline aviation policy issued by Tokio Marine & Nichido Fire Insurance Co, Ltd., covering damage to cargo, Justine M. Heilig, Esq., at Hill Rivkins LLP, in New York -- jheilig@hillrivkins.com -- relates. Mr. Heilig asserts that it is undisputed that JAL's underwriters have assumed the defense of the California action. It is likewise certain that coverage exists for the cargo loss under JAL's airline aviation policy. JAL would thus not be prejudiced by a lifting of the automatic stay since Allianz, KLL, and KLLUS seek nothing more than respective declarations of liability and indemnity to serve as a predicate for recovery against JAL's underwriters, Mr. Heilig says. Mr. Heilig avers that the Central District of California would be an expeditious forum for the resolution of the disputes among Allianz, KLL, KLLUS, and JAL since the parties have already proceeded to mediation and in principle have agreed, subject to the lifting of the stay, to a potential resolution of the matter. Finally, Mr. Heilig says, the impact of the stay and the potential harm to KLL and KLLUS are greater than any detriment that JAL would suffer if the stay were lifted. Foreign Representative Objects Eiji Katayama, the Debtors' Foreign Representative, ask the Bankruptcy Court to deny the Lift Stay Motion in its entirety on the ground that "K" Line has not shown justifiable cause to obtain the relief it seeks. Granting the Lift Stay Motion would cause the Debtors to expend additional time and significant resources in addressing discovery requests in the District Court Litigation, Mr. Katayama asserts. Further, other litigants situated similarly to the "K" Line may be emboldened by an order granting the Lift Stay Motion, he adds. This result clearly would undermine the Debtors' attempts to restructure and, thus the District Court Litigation should not be allowed to continue, he maintains. 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) JOEL WAHLIN: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Joel K. Wahlin 22 Crooked Ear Court Sandpoint, ID 83864 Bankruptcy Case No.: 10-20479 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court District of Idaho (Coeur dAlene) Judge: Terry L. Myers Debtor's Counsel: Stephen Brian McCrea, Esq. P.O. Box 1501 Coeur d'Alene, ID 83816-1501 Tel: (208) 666-2594 E-mail: mccreaecf@cda.twcbc.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company says that assets total $13,021,669 while debts total $6,164,172. The petition was signed by the Debtor. Debtor's List of 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kootenai Excavators Inc. -- $898,259 31656 HWY 200 E, Suite A Ponderay, ID 83852 BF Builders Inc. -- $145,000 65109 Highway 2 Bonners Ferry, ID 83805 CitiBusiness Card -- $45,406 P.O. Box 6235 Sioux Falls, SD 57117-6235 James A Sewell and Associates LLC -- $36,738 US Bank -- $11,784 American General Finance Services -- $10,000 JEFFREY VOGL: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Jeffrey Lowell Vogl 6170 Darby Avenue . Las Vegas, NV 89146 Bankruptcy Case No.: 10-17125 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Charles T. Wright, Esq. Piet & Wright 3130 s. Rainbow Boulevard, Street. 304 Las Vegas, NV 89146 Tel: (702) 566-1212 Fax: (702) 566-4833 E-mail: todd@pietwright.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to 10,000,000 A copy of the Debtor's list of 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb10-17125.pdf The petition was signed by the Debtor. KAINOS PARTNERS: Can Sell New York Business to DBI Stores --------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized Kainos Partners Holding Company LLC, et al., to sell a substantial portion of the assets and business operations and related assets to DBI Stores LLC. The buyer won the March 30 auction for the Debtor's assets including the property located at 2939 Vineyard Drive, Dunkirk, New York. As reported in the Troubled Company Reporter on April 7, 2010, Bill Rochelle at Bloomberg News reported that Dunkin bought most of the stores for $3.5 million cash. There were no competing bids. Greer, South Carolina-based Kainos Partners Holding Company, LLC -- http://www.kainospartners.com/-- operates the "donut-and- coffee" franchises. The Company and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. D. Del. Lead Case No. 09-12292). Two of its affiliates filed for separate Chapter 11 petitions on Sept. 15, 2009 (Bankr. D. Del. Case Nos. 09-13213 to 09-13214). An affiliate filed for separate Chapter 11 petition on Sept. 23, 2009 (Bankr. D. Del. Case No. 09-13285). Attorneys at the Law Offices of Joseph J. Bodnar represent the Debtors in their restructuring efforts. The Debtor did not file a list of 20 largest unsecured creditors. In its petition, the Debtors listed assets and debts both ranging from $10 million and $50 million. KIM H KREUNEN: Files Schedules of Assets and Liabilities -------------------------------------------------------- Kim H. Kreunen filed with the U.S. Bankruptcy Court for the Northern District of Mississippi its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $4,875,000 B. Personal Property $5,670,592 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $3,309,635 E. Creditors Holding Unsecured Priority Claims $34,740 F. Creditors Holding Unsecured Non-priority Claims $16,532,376 ----------- ----------- TOTAL $10,545,592 $19,876,751 Kim H. Kreunen -- dba Kreunen Real Estates, LLC; Kreunen Inc.; Kreunen Development; Kreunen Construction, Inc.; Stewart and Kreunen, LLC; Kreunen Development Group, LLC; Lyon Plantation, LLC; and O.B. Warehousing Distribution Inc. -- filed for Chapter 11 bankruptcy protection on March 5, 2010 (Bankr. N.D. Miss. Case No. 10-11108). Craig M. Geno, Esq., at Harris Jernigan & Geno, PLLC, assists the Debtor in her restructuring effort. The Debtor estimated her assets and debts at $10,000,001 to $50,000,000. KIM H KREUNEN: Taps Harris Jernigan to Handle Reorganization Case ----------------------------------------------------------------- Kim H. Kreunen asks the U.S. Bankruptcy Court for the Northern District of Mississippi for permission to employ Harris Jernigan & Geno, PLLC, as counsel: Harris Jernigan will, among other things: -- advise and consult the Debtor-in-possession regarding questions arising from certain contract negotiations which will occur during the operation of business; -- evaluate and attack claims of various creditors who may assert security interests in the assets and who may seek to disturb the continued operation of the business; and -- appear in, prosecute, or defend suits and proceedings, and to take all necessary and proper steps and other matters and things involved in or connected with the affairs of the estate of the Debtor. The hourly rates of Harris Jernigan personnel are: Graig M. Geno $300 Jeffrey K. Tyree $250 Melanie T. Vardaman $225 Paralegal/Legal Assistants $125 Mr. Geno tells the Court that Harris Jernigan received a $26,039 retainer to be applied to fees and expenses in the Chapter 11 case. Mr. Geno assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Geno can be reached at: Harris Jernigan & Geno, PLLC 587 HighLand Colony Parkway (39157) P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (601) 427-0048 Fax: (601) 427-0050 About Kim H. Kreunen Kim H. Kreunen -- dba Kreunen Real Estates, LLC; Kreunen Inc.; Kreunen Development; Kreunen Construction, Inc.; Stewart and Kreunen, LLC; Kreunen Development Group, LLC; Lyon Plantation, LLC; and O.B. Warehousing Distribution Inc. -- filed for Chapter 11 bankruptcy protection on March 5, 2010 (Bankr. N.D. Miss. Case No. 10-11108). Craig M. Geno, Esq., at Harris Jernigan & Geno, PLLC, assists the Debtor in her restructuring effort. The Debtor estimated her assets and debts at $10,000,001 to $50,000,000. LANDRY'S RESTAURANTS: Sells 11-5/8% Notes to Fund Oceanaire Deal ---------------------------------------------------------------- Landry's Restaurants, Inc., on Friday priced an offering of an additional $47.0 million aggregate principal amount of 11-5/8% senior secured notes due 2015. The Additional Notes will yield net proceeds to the Company of approximately $49.8 million. The Company plans to use a portion of the net proceeds of the Additional Notes to finance the acquisition of all of the stock of The Oceanaire, Inc., in accordance with a plan of reorganization submitted by the unsecured creditors of Oceanaire in the U.S. Bankruptcy court. The plan provided for the sale of all of the stock of Oceanaire pursuant to an auction process after the Company submitted a stalking horse bid of $23.6 million and entered into a stock purchase agreement with Oceanaire. The auction concluded on April 13, 2010, and the Company was the successful bidder. Confirmation of the plan is scheduled for April 26, 2010. If the plan is confirmed, the Company expects to close the purchase of Oceanaire's stock shortly thereafter. According to the Troubled Company Reporter on April 21, 2010, Ron Ruggless at Nation's Restaurant News said the sale deal includes $6.6 million for the restaurant locations and assumption of $17 million in debt. Landry's said the remaining net proceeds, or all of the net proceeds in the event that the acquisition of Oceanaire is not consummated, will be used to repay existing revolver balances and for general corporate purposes. The offering of the Additional Notes was led by Jefferies & Company, Inc., as sole book-running manager. The Company completed an offering of $406.5 million aggregate principal amount of 11-5/8% senior secured notes due 2015 on November 30, 2009. The Additional Notes have the same terms and will be part of the same series as the Initial Notes, including being secured and guaranteed by certain of the Company's subsidiaries. The closing of the sale of the Additional Notes is expected to occur on April 28, 2010. The Additional Notes are being offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended and outside the United States pursuant to Regulation S under the Securities Act. The Company and certain of the Company's subsidiaries also entered into an amendment to its $235.6 million Second Amended and Restated Credit Agreement dated November 30, 2009. The amendment (a) allows for the issuance of the Additional Notes and (b) subject to compliance with size and specific financial covenants, allows acquisitions by the Company and its restricted subsidiaries of entities located in the United States. The Additional Notes have not been registered under the Federal Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. About Landry's Restaurants Based in Houston, Texas, Landry's Restaurants, Inc. (NYSE: LNY) owns and operates full-service, casual dining restaurants, primarily under the names of Rainforest Cafe, Saltgrass Steak House, Landry's Seafood House, Charley's Crab, The Chart House, and the Signature Group of restaurants. The Company also owns and operates select hospitality businesses, including the Golden Nugget Hotel & Casinos in Las Vegas and Laughlin, Nevada. * * * Landry's Restaurants continues to carry S&P's (B/Watch Neg/--) Corporate Credit Rating; and Moody's 'B2' Corporate Family and Probability of Default Ratings. About Oceanaire The Oceanaire Texas Restaurant Company, L.P., dba The Oceanaire Seafood Room, and five affiliates, including Oceanaire Inc., filed for Chapter 11 on July 5, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 34262). Mark Joseph Elmore, Esq., and Robert Dew Albergotti, Esq., at Haynes and Boone, LLP, represent the Debtor in their Chapter 11 effort. Oceanaire's petition estimated assets of $1,000,001 to $10,000,000 against debts of $10,000,001 to $50,000,000 as of the filing. LAS VEGAS MONORAIL: Wants Plan Deadline Extended Until Aug. 17 -------------------------------------------------------------- The Associated Press reports that Las Vegas Monorail is asking the Bankruptcy Court to extend until August 17 its exclusive period to proposed a Chapter 11 plan. The Company's current deadline is set to expire on May 19. Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company listed $10,000,001 to $50,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. LEHMAN BROTHERS: Alvarez' Fees Reach $262MM; Weil's $164MM ---------------------------------------------------------- Lehman Brothers Holdings Inc. disclosed in a regulatory filing that it has paid $731,577,000 in fees to bankruptcy professionals and the United States Trustee since filing for bankruptcy until March 2010. For March 2010 alone, Lehman paid $51,939,000 in bankruptcy fees. In February 2010, Lehman paid $36,532,000 in bankruptcy fees. Alvarez & Marsal LLC, which provides Interim Management services to the Debtors' estate, was paid $15,508,000 for its work in March. So far, Alvarez & Marsal has received $262,166,000 since the petition date. A&M's Bryan Marsal serves as Lehman's chief executive officer. Weil Gotshal & Manges LLP, Lehman's lead bankruptcy counsel, billed $7,248,000 for March work. It has so far collected $164,782,000 from the estate since the petition date. Lazard Freres & Co., Lehman's Investment Banking Advisor, was paid $3,042,000 for its March work. Lazard has so far billed $21,692,000 since the cases were started. Jones Day, which acts as Lehman's Special Counsel for Asia and Domestic Litigation matters, billed $2,343,000. Jones Day has collected $20,483,000 thus far. Curtis, Mallet-Prevost, Colt & Mosle LLP, which serves as Lehman's Conflicts Counsel, was paid $1,426,000 in March, and has so far billed $15,838,000. Lehman's bankruptcy estate also pays for the professionals hired by the official committee of unsecured creditors. According to the Debtors' report, Milbank Tweed Hadley & McCloy LLP, the Committee's Lead Counsel, was paid $5,309,000 for its March services. Milbank has so far collected $47,680,000 in the case. FTI Consulting Inc., the Committee's Financial Advisor, charged $4,013,000 for its March services. FTI has so far racked up $26,411,000 in fees. Duff & Phelps LLC, the Chapter 11 examiner's Financial Advisor, was paid $2,983,000 for March services. It has so far billed $36,235,000. Jenner & Block LLP, the examiner's counsel, was paid $6,355,000 for its March services. The firm has collected $48,401,000 thus far. Lehman examiner Anton Valukas chaired Jenner & Block. Mr. Valukas has submitted to the Court a 2,200-page report on the collapse of Lehman. A full-text copy of Lehman's fees disclosure -- part of its March 2010 Monthly Operating Report -- is available at no charge at: http://ResearchArchives.com/t/s?60a2 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LILLIAN VERNON: Shutting Down in Virginia Beach ----------------------------------------------- WTKR reports that Lillian Vernon will be shutting down its distribution center in Virginia Beach in August 2011. According to the report, about 200 warehouse and call center employees will lose their jobs. The Company blames a drop in sales as the reason for the closing. The company was bought by Current USA Inc. after Lillian Vernon filed for bankruptcy. About Lillian Vernon Based in Virginia Beach, Virginia, Lillian Vernon Corp. -- http://www.lillianvernon.com/-- and its affiliates are direct mail specialty catalog and online companies concentrating on the marketing of gifts, holiday products, toys and children's products, personal and home accessories, kitchen and houseware products and garden and outdoor products. They have developed a proprietary customer database containing information about its customers, including such data as order frequency, size and date of last order and type of products purchased. The database contains information with respect to over 27 million customers, gift recipients and people who have requested its catalogs. In the fiscal year ended Feb. 22, 2003, they published 33 catalog editions and mailed approximately 150,000,000 catalogs to past and prospective customers. They also offer products over the Internet. The company and six of its affiliates filed for Chapter 11 protection on Feb. 20, 2008 (Bankr. D. Del., ase No. 08- 10323). Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney, Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the Debtors in their restructuring efforts. Lillian Vernon's parent, Sun Capital Partners Inc., a privately held investment company with offices in Boca Raton, Fla., is not included in the bankruptcy filing. The U.S. Trustee for Region 3 has appointed creditors to serve on an Official Committee of Unsecured Creditors in these cases. The company listed assets of $1 million to $100 million and debts of $1 million to $100 million in its bankruptcy filing. LIONS GATE: Board Amends Shareholder Rights Plan ------------------------------------------------ Lionsgate announced that its Board of Directors, after careful consideration, including consideration of the unanimous recommendation of the Special Committee of the Board and in consultation with its financial and legal advisors, has amended its Shareholder Rights Plan, previously implemented by the Board on March 12, 2010. The amended Shareholder Rights Plan provides that the shares held by Carl Icahn and certain of his affiliated entities will be taken into account in the vote at the Special Meeting of Shareholders held on May 4, 2010. Originally, the voting threshold for confirming the Shareholder Rights Plan was a vote of the majority of independent shares represented at the Special Meeting, and now it is a majority of all shares represented at the meeting. The amended Shareholder Rights Plan is currently in effect, subject to confirmation through a vote of shareholders at the Special Meeting. Shareholders of record as of March 23, 2010 are entitled to vote at the Special Meeting. The Company noted that the Icahn Group, as part of its unsolicited tender offer to purchase up to all of Lionsgate common shares for U.S.$7.00, reserves the right to waive the minimum tender condition. By doing so, the Icahn Group could be able to buy a smaller number of shares that could give it effective control. To date, the Icahn Group refuses to make the minimum tender condition irrevocable, which Lionsgate believes is unfair to its shareholders and risks depriving them of making a meaningful, value-driven decision to accept or reject the offer. Lionsgate respectfully believes that RiskMetrics Group's (Canada) policy to vote against shareholder rights plans that do not allow for partial permitted bids is misguided. Lionsgate believes that partial bids are inherently coercive and that the Shareholder Rights Plan is fair to all shareholders. Lionsgate agrees with Glass Lewis & Co.'s and Egan-Jones Proxy Services' recommendations that shareholders vote FOR the Shareholder Rights Plan and that its provisions "may serve to protect shareholder interests in the event that a takeover bid does not reflect the full value of the Company's shares" and that the approval of the Shareholder Rights Plan "is in the best interest of the Company and its shareholders."* In conjunction with the amended Shareholder Rights Plan, the Company filed proxy statement supplements in the U.S. and Canada. 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. MAGIC BRANDS: Wins Approval of First Day Motions ------------------------------------------------ Magic Brands, LLC, parent of the Fuddruckers and Koo Koo Roo restaurant brands, announced that its has received Bankruptcy Court approval to, among other things, pay pre-petition employee wages, salaries and benefits during its voluntary restructuring under Chapter 11. The Company also received permission to honor its various customer programs, including use of gift cards. The Court also approved on an interim basis financing from Wells Fargo Capital Finance, Inc., which will provide the Company with sufficient liquidity to continue operations, pay employees, and purchase goods and services going forward. Fuddruckers Chief Executive Officer Peter Large said he was pleased with the Bankruptcy Court's prompt approval of its "first- day" motions and interim DIP financing. "Approval of our first-day motions sets the Company on a very strong footing. This relief ensures that normal operations will continue at all Fuddruckers restaurants," said Mr. Large. "Our restaurants are open and running as usual. Vendors will be paid for all goods furnished and services provided after the April 21, 2010 filing date. Employee wages and benefit programs will continue as before." As previously announced, Magic Brands LLC signed an asset purchase agreement with Tavistock Group to sell substantially all of its assets in a $40-million going concern transaction. As required under the agreement and to facilitate the sale, the Company filed voluntary petitions for reorganization in the District of Delaware in Wilmington on April 21, 2010. About Tavistock Group Tavistock Group is an international private investment company founded by Joe Lewis. The company provides creative capital structured for each investment opportunity and looks to deploy between $25 million to $1 billion behind established businesses which benefit from its capital, flexibility, management expertise and global network of resources. Tavistock Group invests for the long-term and focuses on improving all aspects of its investments, striving to generate strong returns and achieve excellence in every industry in which it competes. Through Tavistock Restaurants, Tavistock Group holds a diverse collection of restaurant brands, with concepts ranging from fast casual to fine dining. Tavistock Restaurants owns and operates Austin-based FREEB!RDS World Burrito, with 32 locations open and an additional 20 expected to open in 2010. Other Tavistock Restaurants brands include ZED451, Cafe del Rey, Napa Valley Grille, Blackhawk Grille, California Cafe and Sapporo. For more information on Tavistock Group, visit www.tavistock.com. For more information on Tavistock Restaurants, please visit http://www.tavistockrestaurants.com/ About Magic Brands Magic Brands, LLC is the parent of the Fuddruckers and Koo Koo Roo restaurant brands. Fuddruckers -- http://www.fuddruckers.com/-- was founded in 1980 in San Antonio, Texas, with the goal of serving hamburgers that are cooked to order and made with fresh ingredients. Magic Brands, based in Austin, Texas, purchased the chain in 1998 and has sought to broaden its appeal by expanding its menu. Magic Brands, LLC, and its operating units filed for Chapter 11 on April 21, 2010 (Bankr. D. Del. Lead Case No. 10-11310). It disclosed assets of up to $10,000,000 and debts of $10,000,001 to $50,000,000. Affiliate Fuddruckers, Inc., also filed, listing assets and debts of $50,000,000 to $100,000,000. FocalPoint Securities, LLC serves as investment banker to Magic Brands and Goulston & Storrs serves as lead bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. MAGIC BRANDS: Sets May 10 Sale-Procedures Hearing ------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on May 10 to consider approval of the sale process proposed by Magic Brands LLC. Magic Brands, parent of the Fuddruckers and Koo Koo Roo restaurant brands, has signed an Asset Purchase Agreement with Tavistock Group to sell substantially all of its assets in a $40 million going concern transaction. About Magic Brands Magic Brands, LLC is the parent of the Fuddruckers and Koo Koo Roo restaurant brands. Fuddruckers -- http://www.fuddruckers.com/-- was founded in 1980 in San Antonio, Texas, with the goal of serving hamburgers that are cooked to order and made with fresh ingredients. Magic Brands, based in Austin, Texas, purchased the chain in 1998 and has sought to broaden its appeal by expanding its menu. Magic Brands, LLC, and its operating units filed for Chapter 11 on April 21, 2010 (Bankr. D. Del. Lead Case No. 10-11310). It disclosed assets of up to $10,000,000 and debts of $10,000,001 to $50,000,000. Affiliate Fuddruckers, Inc., also filed, listing assets and debts of $50,000,000 to $100,000,000. FocalPoint Securities, LLC serves as investment banker to Magic Brands and Goulston & Storrs serves as lead bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. MAGNA ENTERTAINMENT: Court Confirms MID-Backed Reorganization Plan ------------------------------------------------------------------ MI Developments Inc.'s Plan of Reorganization in respect of Magna Entertainment Corp. and certain of its subsidiaries, jointly proposed by MEC, MID and the Official Committee of Unsecured Creditors of MEC, has been confirmed by order of the United States Bankruptcy Court for the District of Delaware. The original litigation settlement, to be implemented by the Plan, was announced by MID on January 11, 2010. "We are thankful that the bankruptcy process is drawing to a close and we have recovered value for our loans," stated Dennis Mills, MID's Vice-Chairman and Chief Executive Officer. "As we proceed to take ownership of the acquired assets, we look forward to implementing individual plans for each asset to improve and maximize their economic values." Under the terms of the Plan, in exchange for the dismissal with prejudice of the action commenced by the Creditors Committee in the Bankruptcy Court and releases of MID, its affiliates, and all current and former officers and directors of MID and MEC and their respective affiliates, the unsecured creditors of MEC will receive US$89 million in cash plus US$1.5 million as a reimbursement for certain expenses in connection with the action. In addition, under the terms of the Plan and in full satisfaction and release of all MID's claims against the MEC and its debtor subsidiaries, certain assets of MEC will be transferred to MID, including among other assets, Santa Anita Park, Golden Gate Fields, Gulfstream Park (including MEC's interest in The Village at Gulfstream Park, a joint venture between MEC and Forest City Enterprises, Inc.), The Maryland Jockey Club, AmTote International, Inc. and XpressBet, Inc. With respect to the non-real estate related MEC assets that will be transferred to MID as contemplated by the Plan, MID intends to later announce certain forbearance terms or funding limitations or other restrictions to be approved by the Special Committee with respect to any future investments by MID in, or funding to be made by MID in respect of, such assets. The Plan will not become effective unless and until the conditions set forth in the Plan have been satisfied or waived, including the receipt by MID and MEC of regulatory approvals pursuant to the Plan. MID expects the effective date of the Plan to occur on April 30, 2010. The Associated Press reports that financial advisers of Magna Entertainment Corp. said creditors will fare better in the Company's plan of reorganization than they would from more sales of assets. 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. MONEYGRAM INTERNATIONAL: Moody's Affirms 'B1' Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family rating for MoneyGram International Inc and revised the rating outlook to stable from negative. The revision of the outlook to stable is based on solid performance of the money transfer business amidst the global recession and the stabilization of the Financial Paper Products segment. For FY2009, MoneyGram experienced an increase in money transfer revenues of 3% while transaction volume increased 6% compared to the prior year. Transaction was well ahead of the World Bank's estimate of about 6% decline in global remittances during 2009. In addition, while Moody's expects the FPP segment profitability will likely remain significantly lower than historical periods, FPP will generate stable, albeit modest, profitability due to a more conservative investment portfolio and revised fee structure. The outlook revision to stable also considers the long-term growth prospects of the Global Funds Transfer business and its potential to more than offset the FPP profit decline. MoneyGram's B1 corporate family rating reflects the company's strong market position in its core money transfer business and Moody's long-term positive outlook for the worldwide money transfer industry. The money transfer business has shown resiliency during the global economic downturn and despite the distractions caused by the company's investment losses in 2007 and 2008. MoneyGram's consistent cash flow generation and operating profitability, excluding nonrecurring investment losses and one- time items, also supports the overall rating. However, the rating is restricted by the significant leverage the company has added from the 2008 recapitalization with Thomas H. Lee Partners, L.P. and affiliates of Goldman, Sachs & Co. Also constraining the rating is the company's geographic and business line concentration. The stable rating outlook reflects that in a base-case scenario of 2-3% GDP growth in the U.S. for 2010 (with higher growth rates in developing countries and slightly lower growth in Europe), MoneyGram will generate improved free cash flow (excluding convertible preferred PIK interest) and maintain its #2 market share within the worldwide money transfer industry, which is expected to grow over the long-term. Despite the challenging global economic environment, Moody's expect the company's performance to remain steady over the intermediate term given its strong global brand, breadth of agent locations worldwide, and continued expansion of new products and opportunities abroad. The last rating action for MoneyGram was on April 18, 2008, when Moody's confirmed the B1 CFR and assigned a negative rating outlook. With $1.2 billion in total revenues for the twelve months ended December 31, 2009, MoneyGram International, Inc., located in Minneapolis, Minnesota, is a leading global transaction processor of official check, money order, and money transfer services. MOTORSPORT AFTERMARKET: Moody's Changes Default Rating to Caa2/LD ----------------------------------------------------------------- Moody's Investors Service revised the Probability of Default Rating for Motorsport Aftermarket Group, Inc., to Caa2/LD from Caa2. Moody's added the "LD" designation to signify its view of a limited default event on the unrated Senior Subordinated Notes due 2016. Moody's believes there has been an exchange of some of the subordinated notes. Moody's consider the cumulative exchange as a restructuring due to the amount of debt involved, potential non- compliance with financial maintenance covenants, and the company's weak credit profile. The "LD" designation will be removed and the PDR will revert to Caa2 in approximately three days. The Caa2 Corporate Family Rating continues to reflect Moody's concerns about the sustainability of MAG's capital structure amidst a prolonged weak operating environment in the motorcycle industry. Moody's believe continued demand weakness and significant debt servicing obligations likely will limit the company's ability to reduce its leverage significantly over the near term (nearly 10.0x adjusted debt-to-EBITDA at 12/31/09). The ratings favorably reflect modestly improved liquidity as a result of a bank credit agreement amendment completed in April 2009. The amendment reduced the revolving commitment to $30 million from $60 million, but restored access to the facility through revising financial maintenance covenant levels. The negative rating outlook reflects Moody's concerns about refinancing debt ahead of maturities starting in 2012. A downgrade could result from the absence of improved operating performance, a contraction of liquidity, or changes to the company's capital structure. These ratings were impacted by the action: Motorsport Aftermarket Group, Inc. -- Probability of Default Rating, revised to Caa2/LD from Caa2 -- Corporate Family Rating, affirmed at Caa2 -- $180 million Senior Secured Bank Credit Facilities, affirmed at B3 (point estimate revised to LGD2, 27% from LGD3, 31%) -- Outlook, Negative The last rating action for Motorsport Aftermarket Group, Inc., occurred on July 6, 2009, when Moody's downgraded the Corporate Family Rating to Caa2 from Caa1. Motorsport Aftermarket Group, Inc., headquartered in Irvine, CA, is a holding company with investments in subsidiaries which design, manufacture and market parts and accessories for the motorcycle and ATV industries. MW SEWALL: Energy North's $9.27-Mil. Wins Auction for Chain ----------------------------------------------------------- Times Record, citing papers filed with the court, reports that Energy North Inc. made a winning bid for M.W. Sewall & Co.'s Clipper Mart convenience store chain at $9.27 million plus the value of the store's inventory, surpassing Cumberland Farms Inc.'s $8.5 million offer. A hearing is set for April 28, 2010, to consider approval of the sale. Headquartered in Bath, Maine, M.W. Sewall & Co. is a family business that operates convenience stores, gas stations, carwashes, and service centers; sells and delivers heating oil and propane; and sells and services heating equipment. The Debtor filed for Chapter 11 protection on March 27, 2009 (Bankr. D. Maine Case No. 09-20400). George J. Marcus, Esq. at Marcus, Clegg & Mistretta, PA represents the Debtor in its restructuring efforts. The Debtor estimated assets of $10 million to $50 million and debts of $10 million to $50 million in its chapter 11 petition. NETFLIX INC Moody's Comments on 2010 Quarterly Results ------------------------------------------------------ Moody's Investors Service commented that Netflix Inc. (Ba2 Corporate Family Rating) reported another stunning quarter of growth in gross and net subscriber additions for Q1 2010. With nearly 14 million subscribers now, on nearly 1.7 net additions in Q1 (35% growth over the Q1 2009 subscriber base), and with the growth trajectory expected to continue its upward trend, Moody's believes that the company's breakout performance will result in its dominance of the physical rental marketplace in the US at the expense of rival competitors and at the expense of physical DVD retail sales. "We believe that the accelerating trend is hastening the secular decline in physical DVD sales, if not the leading cause for the steady decline," stated Moody's Investors Service Senior Vice President Neil Begley. Since physical DVD sales are the largest component of theatrical film revenues, Moody's believes that it is highly likely that studios will become more engaged in confronting consumer habits and driving relationships to maintain both their profitability and support multiple channels of distribution. "The goal would be to avoid a single dominant distributor gaining leverage so powerful that they can dictate pricing and economics like iTunes essentially has done to the music industry," stated Mr. Begley. Moody's also believes that Netflix's declining churn rate from 4.2% in Q1 2009 to 3.8% for Q1 2010 suggests an improving trend of lower subscriber volatility. This phenomenon may be driven by the combination of consumer habits such as Netflix's growing inventory of instant-streaming product and growing percentage of subscribers utilizing it (55% in Q1 2010 versus 36% in Q1 2009), a reduction of consumer DVD purchases and the consolidation of subscribers to Netflix as opposed to competing services such as Blockbuster or Hollywood Video. While Netflix's debt-to-EBITDA leverage remains quite low for its credit rating and trending lower, the Ba2 CFR reflects the risks associated with the company's relatively young history, business concentration, low barriers to entry and the potential for disintermediation from alternative forms of content delivery as technology transitions from physical discs to instant streaming either via the Internet or within closed cable systems over the longer-term. Moody's believes that the company is presently a contributing driver of such a shift, somewhat reducing the risk of disintermediation for the company, but uncertainty surrounding the evolution, which Moody's believe will occur over the next decade, remains. Though Netflix is the largest DVD rental company in the US, with almost 14 million subscribers, comparing its base against the nation's 110 million households suggests that there is still substantial growth opportunity to increase market share. Though the rating remains constrained by the still substantial level of competition in the distribution of content in general. The company's rating continues to consider the company's predisposition for share repurchases, relatively low EBITDA margins compared to traditional media, and significant though improving subscriber churn. The last rating action was on October 28, 2009, when Moody's assigned an initial Ba2 CFR to Netflix and Ba2 to its new notes issuance. Netflix's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Netflix's core industry and believes Netflix's ratings are comparable to those of other issuers with similar credit risk. Netflix, Inc., with its headquarters in Los Gatos, California, is the largest online movie rental subscription service in the United States with 2009 annual revenues of approximately $1.67 billion. NEW ORLEANS SEWERAGE: Fitch Takes Rating Actions on Bonds --------------------------------------------------------- Fitch Ratings takes this rating action on the New Orleans Sewerage and Water Board, LA's utility system revenue bonds as part of its continuous surveillance effort: -- Approximately $184.1 million sewer system revenue bonds, affirmed at 'BBB-'. -- Approximately $36.8 million water system revenue bonds, affirmed at 'B'. The Rating Outlook is Stable. Fitch will recalibrate the ratings on the sewer revenue bonds on April 30, 2010, as described in the March 25, 2010 report 'Recalibration of U.S. Public Finance Ratings', available at 'www.fitchratings.com'. At that time the ratings will be revised: -- The rating on the sewer revenue bonds will be revised to 'BBB+' with a Stable Outlook. Rating Rationale: -- The financial profile of the water system remains weak, although 2009 results are expected to be better due to a FEMA reimbursement for prior years' expenditures. -- The sewer system has recovered more quickly financially than the water system, although results for 2008 showed an unexpected decline in sewer revenues; staff reports this drop was the result of numerous account closures and adjustments made during the year. -- Staff reports that the working relationship with FEMA has improved, and they report that the timing and amounts of reimbursements have improved. -- The economic recovery in New Orleans has been negatively affected by the recession, but employment totals have been increasing in recent months as residents and businesses return to the city, and the city's unemployment rate remains below the U.S. average. -- Significant amounts of money still are coming into New Orleans for various infrastructure projects; many are still in the design stage, and transition to construction should provide some positive economic momentum. Key Rating Drivers: -- Staff anticipates that a series of recently adopted water rate increases (annual hikes from 2007-2011) will enable the water system to establish self sufficiency by 2010 and eliminate the need for financial support from the sewer and drainage systems. -- As the area continues to recover -- albeit at an uneven pace -- Fitch anticipates that further population gains will help restore customer counts and needed cash flow to the board's operations. -- Capital needs for the water and sewer systems are extremely large, and the task of funding needed improvements will remain daunting for an extended period. Security: The sewer revenue bonds are secured by a gross pledge of revenues of the board's sewer utility system, and the water revenue bonds are secured by a net pledge of revenues of the board's water utility system. Credit Summary: The financial position of the sewer fund is strengthening as the New Orleans' recovery continues. This improvement has been the result largely of a series of sewer rate hikes, beginning in 2003, which have aided cash flow as the board has struggled to recover from the effects of Hurricane Katrina in fall 2005. Although 2008 results were weaker than expected, Fitch anticipates continued improvement in the sewer fund as management continues its expenditure control efforts and population and customer base return. Meanwhile, the water fund continues to struggle as recurring revenues fall short of meeting both operational and debt service requirements. While water system working capital remains negative, liquidity turned positive in 2008, with cash and investments totaling $5.1 million. Management reports that 2009 water fund results will be aided by a nearly $17 million FEMA reimbursement for operational outlays since 2005. The one-time reimbursement revenues, which are unrestricted, should generate positive operating results for the year and solid debt service coverage. The rebound in sewer revenues since 2005 has enabled the system to meet its obligations and increase liquidity over this period. Available revenues (after operating expenses) generated debt service coverage of 1.1 times in 2008 (based on audited figures; using cash receipts, coverage was 1.56x); cash and investments totaled $22.1 million or the equivalent of 189 days of expenditures. Preliminary 2009 results suggest sewer revenues will cover expenses and marginally cover debt service. Fitch has cited liquidity as a credit concern for both the water and sewer systems historically; as recently as 2004 sewer system cash and investments totaled only $5.3 million at year-end. The sewer rate increases consisted of 15% hikes in both 2003 and 2004, and 14% increases in 2005 and 2006. Despite the improved financial position, Fitch notes that both the sewer and water systems are not generating surplus revenues sufficient to make a significant contribution towards the sizable capital needs of each system. As capital needs are deferred, the potential for service interruptions and increased costs in the future climbs. Going forward, management recognizes the need to align recurring sewer and water utility revenues with expenses, build up liquidity, and generate funds for capital projects. Toward that end, the board has selected an outside consultant soon to conduct a comprehensive financial plan and rate study for the water, sewer and drainage systems (drainage tax bonds rated 'BBB' with a Positive Outlook by Fitch); the project is expected to be completed during the fourth quarter of 2010. This action follows a series of water rate increases approved by the board in March, 2007 that by 2011 will boost water charges by more than 50% cumulatively. Although Fitch believes that a combination of rate hikes and a steady increase in customer count eventually will stabilize water system operations, utility charge affordability may be a concern given the relatively low wealth levels in the city. All three systems have large future capital needs, which result from a combination of storm damage and aging infrastructure. Estimated capital costs for the water system through 2014 total roughly $240 million, with anticipated funding from board resources projected to cover slightly less than two-thirds of the costs. Capital costs for all three systems total $2.9 billion through 2014. The largest component is drainage with $2.26 billion in needs; funding for drainage projects will be financed largely with federal monies -- currently projected at nearly $1.7 billion. The current customer base of roughly 120,000 has shown steady growth since June 2008 when a program to aggressively pursue and close inactive accounts peaked, and the customer count now is approximately 85% of the pre-Katrina total of more than 140,000. Recessionary forces have affected News Orleans' tourism business and retail activity, dampening the positive effect of ongoing reconstruction activity in the city. Despite the weakened economic climate, the city is registering employment gains and numerous large-scale infrastructure projects are either in design or under construction. Fitch believes that the large amount of recovery and rebuilding money flowing into the city and surrounding area over the near term will provide a certain level of support to economic activity and will establish a solid foundation for future economic growth. While progress continues, Fitch notes that much work remains to be done in the critical areas of housing, healthcare, education and public infrastructure; the city still faces years of recovery ahead. The most recent estimates put the city's population at between 310,000-330,000, or roughly 70% of the pre-storm total. Employment registered some moderate improvement in 2007 and 2008, and February 2010 totals indicate a 20% increase in employment over the same period in 2009. Despite the recent gains, employment in the metro area remains about 15% below pre-Katrina levels. The latest city unemployment rate of 7.9% (February 2010) was up from last year but trailed the national (10.4%) average for the month. NEWPAGE CORP: To Supply Spicers with Discovery(R) Papers -------------------------------------------------------- NewPage Corporation and Spicers Paper on Friday unveiled a definitive agreement for NewPage to supply Spicers Paper with a private label brand of coated papers, Discovery(R), effective immediately. Discovery is a recognized and long standing Spicers Paper brand that is the foundation of the company's exclusive Advantage Grade family of coated paper products. Discovery, supplied by NewPage, offers an enhanced value proposition to customers who will benefit from a domestically-produced product that is widely available and produced across an efficient and flexible paper manufacturing infrastructure. Charlie Whitaker, president of Spicers Paper commented, "Spicers Paper is excited to partner with a leading United States fine paper manufacturer such as NewPage. The future of our coveted Discovery brand, a key component of our Advantage Grade portfolio of coated products, is in very capable hands. This change represents an enhanced value proposition to our customers on many fronts including Sustainable Forestry Initiative(R) certification and a long-term sustainable source of supply for Discovery." "We are very pleased to be teaming up with Spicers Paper to supply a domestically-produced and environmentally sound product to the print community," said Barry Nelson, senior vice president, sales for NewPage. "Print will continue to play a vital role in our economy, and our relationship with Spicers Paper will help us achieve our growth objectives in the sheet segment while providing Spicers a continuing source of supply for this brand. We are excited about this opportunity to serve the North American paper market from North American paper mills." The new agreement between NewPage Corporation and Spicers Paper is effective immediately and steps are underway to transition the Discovery product into Spicers Paper locations across the United States. About Spicers Paper Headquartered in Santa Fe Springs, California, Spicers Paper, Inc. -- http://www.spicers.com/-- is a diversified, full service distribution company with operations extending from the west coast to the upper Midwestern regions of the United States. Spicers Paper is the only distribution company in the United States with an extensive investment in custom sheeting Centers of Excellence that now total twelve sheeters across seven U.S. locations. Spicers Paper is a part of PaperlinX and PaperlinX North America. PaperlinX is a fine paper merchant with businesses in Australia, New Zealand, Asia, North America and Europe. PaperlinX North America is made up of Spicers Paper and Kelly Paper in the United States and Spicers Canada and Coast Paper covering all markets across Canada. About NewPage Corporation Headquartered in Miamisburg, Ohio, NewPage Corporation -- http://www.NewPageCorp.com/is the largest coated paper manufacturer in North America, based on production capacity, with $3.1 billion in net sales for the year ended December 31, 2009. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.4 million tons of paper, including approximately 3.2 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage Corp. reported $4.0 billion in total assets, $468.0 million, $3.0 billion in long term debt, and $493.0 in long-term obligations resulting to a $14.0 million stockholders' equity as of Dec. 31, 2009. * * * As reported by the Troubled Company Reporter on October 7, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on NewPage Corp. to 'CCC+' from 'SD' (selective default). The outlook is negative. S&P raised the issue-level rating on the company's second-lien floating- and fixed-rate notes due 2012 to 'CCC-' (two notches below the corporate credit rating) from 'D'. The recovery rating on these notes remains at '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. S&P also raised the issue-level rating on the company's subordinated notes to 'CCC-' from 'CC'. The recovery rating is unchanged at '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. OCEANAIRE TEXAS: Landry's Sells 11-5/8% Notes to Fund Buyout ------------------------------------------------------------ Landry's Restaurants, Inc., on Friday priced an offering of an additional $47.0 million aggregate principal amount of 11-5/8% senior secured notes due 2015. The Additional Notes will yield net proceeds to the Company of approximately $49.8 million. The Company plans to use a portion of the net proceeds of the Additional Notes to finance the acquisition of all of the stock of The Oceanaire, Inc., in accordance with a plan of reorganization submitted by the unsecured creditors of Oceanaire in the U.S. Bankruptcy court. The plan provided for the sale of all of the stock of Oceanaire pursuant to an auction process after the Company submitted a stalking horse bid of $23.6 million and entered into a stock purchase agreement with Oceanaire. The auction concluded on April 13, 2010, and the Company was the successful bidder. Confirmation of the plan is scheduled for April 26, 2010. If the plan is confirmed, the Company expects to close the purchase of Oceanaire's stock shortly thereafter. According to the Troubled Company Reporter on April 21, 2010, Ron Ruggless at Nation's Restaurant News said the sale deal includes $6.6 million for the restaurant locations and assumption of $17 million in debt. Landry's said the remaining net proceeds, or all of the net proceeds in the event that the acquisition of Oceanaire is not consummated, will be used to repay existing revolver balances and for general corporate purposes. The offering of the Additional Notes was led by Jefferies & Company, Inc., as sole book-running manager. The Company completed an offering of $406.5 million aggregate principal amount of 11-5/8% senior secured notes due 2015 on November 30, 2009. The Additional Notes have the same terms and will be part of the same series as the Initial Notes, including being secured and guaranteed by certain of the Company's subsidiaries. The closing of the sale of the Additional Notes is expected to occur on April 28, 2010. The Additional Notes are being offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended and outside the United States pursuant to Regulation S under the Securities Act. The Company and certain of the Company's subsidiaries also entered into an amendment to its $235.6 million Second Amended and Restated Credit Agreement dated November 30, 2009. The amendment (a) allows for the issuance of the Additional Notes and (b) subject to compliance with size and specific financial covenants, allows acquisitions by the Company and its restricted subsidiaries of entities located in the United States. The Additional Notes have not been registered under the Federal Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. About Landry's Restaurants Based in Houston, Texas, Landry's Restaurants, Inc. (NYSE: LNY) owns and operates full-service, casual dining restaurants, primarily under the names of Rainforest Cafe, Saltgrass Steak House, Landry's Seafood House, Charley's Crab, The Chart House, and the Signature Group of restaurants. The Company also owns and operates select hospitality businesses, including the Golden Nugget Hotel & Casinos in Las Vegas and Laughlin, Nevada. * * * Landry's Restaurants continues to carry S&P's (B/Watch Neg/--) Corporate Credit Rating; and Moody's 'B2' Corporate Family and Probability of Default Ratings. About Oceanaire The Oceanaire Texas Restaurant Company, L.P., dba The Oceanaire Seafood Room, and five affiliates, including Oceanaire Inc., filed for Chapter 11 on July 5, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 34262). Mark Joseph Elmore, Esq., and Robert Dew Albergotti, Esq., at Haynes and Boone, LLP, represent the Debtor in their Chapter 11 effort. Oceanaire's petition estimated assets of $1,000,001 to $10,000,000 against debts of $10,000,001 to $50,000,000 as of the filing. ODYSSEY PETROLEUM: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Odyssey Petroleum Corp. (US) 1000 Pan Southern Drive Puckett, MS 39151 Bankruptcy Case No.: 10-01482 Chapter 11 Petition Date: April 23, 2010 Court: U.S. Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Neil P. Olack Debtor's Counsel: John D. Moore, Esq. 301 Highland Park Cv, Street B (39157) P.O. Box 3344 Ridgeland, MS 39158-3344 Tel: (601) 853-9131 Fax: (601) 853-9139 E-mail: john@johndmoorepa.com Estimated Assets: $0 to 50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Whitney Pansano, president. OSI RESTAURANT: Moody's Affirms 'Caa1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed the corporate family and probability of default ratings of OSI Restaurant Partners, Inc., at Caa1. In addition, Moody's upgraded the company's Speculative Grade Liquidity rating to SGL-2 from SGL-3. The outlook was changed to stable from negative. The change in outlook to stable reflects Moody's view that although Moody's expect debt protection metrics will only marginally improve from current levels Moody's believe they will remain within a range appropriate for the current ratings. In addition, the outlook also expects that OSI maintains good liquidity. The SGL-2 speculative grade liquidity rating indicates good liquidity and reflects Moody's view that OSI will be able to fund all of its cash requirements through internal cash flows and cash balances. The rating also expects OSI will maintain an adequate cushion with regards to its financial covenants. The affirmation of the Caa1 Corporate Family Rating reflects OSI's significant leverage, weak consumer demand trends, and continued intense competition in the casual dining segment. The ratings also incorporate the company's large scale, good diversification, and good liquidity. Ratings affirmed are; * Corporate Family Rating at Caa1 * Probability of Default Rating at Caa1 * $150 million working capital revolver expiring 2013 at B3 (LGD3, 39%) * $100 million pre-funded revolver expiring 2013 at B3 (LGD3, 39%) * $1.310 billion term loan B due 2014 at B3 (LGD3, 39%) * $550 million ($248 million outstanding) senior unsecured notes due 2015 at Caa3 (LGD5, 89%) Rating upgraded is; * Speculative Grade Liquidity rating upgraded to SGL-2 from SGL-3 The outlook was changed to stable from negative. Moody's last rating action for OSI occurred on April 7, 2009, when the company's Probability of Default Rating was raised to Caa1/LD from Ca, its senior unsecured notes were raised to Caa3 from C, its Corporate Family Rating and secured bank loan ratings were confirmed, and the speculative grade liquidity rating was affirmed. OSI Restaurant Partners, Inc., owns and operates casual dining restaurants throughout the US. Annual revenues are approximately $3.6 billion. PAN AMERICAN: Moody's Assigns 'Ba2' Rating on $500 Mil. Notes ------------------------------------------------------------- Moody's Investors Service assigned a Ba2 foreign currency bond rating to up to US$500 million of medium-term notes to be issued by Pan American Energy LLC, Argentine Branch under the company's US$1.2 billion medium-term note program. The notes issued under the program are guaranteed by Pan American Energy LLC. At the same time, Moody's affirmed PAE's Ba1 global local currency issuer rating. The outlook for the ratings is stable. PAE's ratings are supported by its substantial and growing reserve and production profile, low cost structure, and conservative financial leverage metrics, which, viewed alone, would be indicative of a low investment-grade rated E&P company. The company has a strong market position in Argentina and has demonstrated consistently sound financial and operating performance relative to its peers, with a track record of maintaining low financial leverage while growing production at competitive costs. However, PAE's ratings are constrained by the geographic concentration of its reserves and production and by its exposure to economic instability and political risks in Argentina and to a lesser extent in Bolivia. The instability of the region and the high risk of government interference in the oil and gas sector of Argentina could have negative effects on PAE's ability to economically exploit its reserves, book additional proven reserves, as well as require the company to make future negative reserve revisions. PAE's Ba2 foreign currency rating reflects its Ba1 local currency rating, as well as its strong track record in servicing its foreign currency debt obligations during the Argentine financial crisis, its substantial exports and ability as an oil and gas company operating in Argentina to keep up to 70% of its export proceeds offshore, and the fact that it has a strong majority owner that operates outside of Argentina. At the same time, the Ba2 rating takes into account Argentina's B2 long-term foreign currency ceiling and B3 foreign currency bond rating, which indicate a high degree of foreign currency convertibility and transfer risk. The bulk of PAE's debt is denominated in foreign currency, and the risk of increased capital controls in Argentina could impact its ability to service this debt. Moody's note that the company maintains a healthy foreign currency cash balance offshore and exports account for approximately 71% of its total revenues. Moody's stable rating outlook assumes that PAE will continue to maintain conservative financial policies. Key to maintaining the stable outlook and current ratings will be PAE's ability as a joint venture to maintain a flexible dividend policy that is managed in line with its internal capital requirements and the maintenance of low financial leverage as it seeks to grow its oil and gas reserves and production. PAE's ratings can accommodate less leverage than its peers in North America, as Moody's generally attribute a lower value to PAE's reserves due to their concentration in an economically and politically unstable region. The last rating action was on October 24, 2007, when Moody's upgraded PAE's global local currency rating to Ba1 from Ba2 and its foreign currency bond rating to Ba2 from Ba3. Pan American Energy LLC is a holding company owned 60% by BP plc (Aa1, Stable) and 40% by Bridas Corporation (not rated). The company engages in the exploration and production of oil and gas in the Southern Cone region of South America and is headquartered in Buenos Aires, Argentina. In March of this year, CNOOC Ltd (A1, Positive) announced that it was purchasing a 50% stake in Bridas Corporation. PARKER DRILLING: Construction Delay Won't Affect Moody's B1 Rating ------------------------------------------------------------------ Moody's Investors Service considers Parker Drilling Company's (Parker, B1 Corporate Family Rating, Stable Outlook) announcement that it is delaying the construction and delivery of Rigs 272 and 273 to its customer BP Exploration (Alaska), Inc., as modestly negative and will not impact its ratings. The last rating action affecting Parker occurred on March 9, 2010, when Moody's affirmed the company's ratings and assigned a B1 rating to Parker's senior unsecured notes offering. Parker Drilling Company is headquartered in Houston, Texas. PHILADELPHIA NEWSPAPERS: Revlon's Perelman Joins Toll Group ----------------------------------------------------------- Ronald Perelman, the billionaire financier and chairman of cosmetics company Revlon Inc., has joined Philly Papers L.L.C. -- which is made up of two previous investors in Philadelphia Newspapers, Bruce Toll, vice chairman of Toll Bros. Inc., and the Carpenters Union pension fund; and philanthropist David Haas -- to buy the Philadelphia Inquirer and the Philadelphia Daily News out of bankruptcy protection. The Wall Street Journal's Shira Ovide the Perelman group and two other parties are slated to participate in a court-mandated auction scheduled today. Bruce Toll who was part of an original investor group that bought the newspapers in 2006. According to the Journal, a spokesman said two other groups in the deal mix include some of the existing holders of the newspapers' debt, and Stern Partners, a Vancouver investment firm that owns a string of Canadian newspapers. The Troubled Company Reporter, citing The Philadelphia Inquirer, said on April 22, 2010, that the auction is central to the Debtors' plan to settle $318 million in debt to its senior lenders, who include Angelo, Gordon & Co., the CIT Syndicated Loan Group, Credit Suisse, and Eaton Vance Management. The Philadelphia Inquirer last week reported Philly Papers, the so-called stalking horse bidder, has offered $35 million in cash and a $17 million letter of credit to purchase everything but the Debtors' North Broad Street headquarters, which would go to the lenders. The auction will start at 11 a.m. at the New York offices of Proskauer Rose L.L.P., one of the Debtors' two law firms. As reported by the Troubled Company Reporter on April 13, 2010, the U.S. Court of Appeals for the Third Circuit denied a request by lenders to halt the auction for Philadelphia Newspapers' assets. The secured lenders wanted the auction put off pending further review by the Court of Appeals or the Supreme Court with respect to the Court of Appeals' ruling that barred lenders from submitting a credit bid at the auction. As reported by the TCR on March 23, the Court of Appeals, in a 96-page opinion, has allowed Philadelphia Newspapers to pursue a sale process that would bar credit bidding by secured lenders. A copy of the Third Circuit Ruling is available for free at http://bankrupt.com/misc/PhillyPapers_AppealsCourt_Ruling.pdf The Chapter 11 Plan Philadelphia Newspapers has already obtained approval of the disclosure statement explaining the Plan and is now soliciting votes on the Plan. The Plan is based upon a sale of all of the Debtors' business to Bruce E. Toll-led Philly Papers LLC, subject to higher and better offers. According to the disclosure statement explaining the Plan, with the sale of the Debtors' business to Bruce Toll, holders of secured claims, including $66 million, senior secured claims, will recover 100 cents on the dollar. Holders of $350 million prepetition unsecured debt claims will recover less than 1% of their claims. Holders of prepetition unsecured trade claims will recover up to 6%. The Plan allocates $750,000 liquidating trust in favor of general unsecured trade creditors and a 3% distribution of equity interests in Philly Papers to holders of unsecured prepetition claims other than general trade creditors. A copy of the Debtors' Disclosure Statement is available for free at http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf A copy of the Debtors' Insider Chapter 11 Plan is available for free at http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf About Philadelphia Newspapers Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Mark K. Thomas, Esq., and Paul V. Possinger, Esq., at Proskauer Rose LLP in Chicago, Illinois; and Lawrence G. McMichael, Esq., Christie Callahan Comerford, Esq., and Anne M. Aaronson, Esq., at Dilworth Paxson LLP, in Philadelphia, Pennsylvania, serve as bankruptcy counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc., serves as claims and notice agent. Ben Logan, Esq., at O'Melveny & Myers LLP in Los Angeles, California; and Gary Schildhorn, Esq., at Eckert Seamans Cherin & Mellott, LLC in Philadelphia, represent the Official Committee of Unsecured Creditors. Fred S. Hodara, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York, represent the Steering Group of Prepetition Secured Lenders. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. POINDEXTER JB: S&P Affirms Corporate Credit Rating at 'B' --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Houston, Texas-based Poindexter (J.B) & Co. Inc., including the 'B' corporate credit rating. At the same time, S&P revised the outlook to stable from negative. "The ratings affirmation and outlook revision reflect S&P's expectation that Poindexter's credit measures will recover gradually in 2010 and that the company will maintain adequate liquidity for the ratings," said Standard & Poor's credit analyst Gregoire Buet. "This is despite potentially increasing working capital requirements," he continued. The ratings on privately held Poindexter reflect the company's high leverage, exposure to cyclical and midsize end markets, and historically variable cash flows. The company's leading niche market positions only partially mitigate these risks. While Standard & Poor's expects credit measures to remain somewhat weak compared with S&P's expectations, with adjusted financial leverage likely to remain above 6x in 2010, S&P expects credit measures to start to improve in the second half of 2010. Considering current excess cash balances, S&P expects that the company will be able to accommodate potentially increasing working capital requirements and maintain an adequate liquidity position. If these requirements or other cash needs cause the cash balance to fall below $20 million while leverage remains elevated, or if the company does not maintain a committed credit facility, S&P could potentially lower the ratings. If Poindexter's operating performance improves and leverage trends back to about 4x to 5x, S&P could raise the ratings on the company. PROVIDENT ROYALTIES: Plan Confirmation Hearing Set for June 8 ------------------------------------------------------------- The Hon. Harlin D. Hale of the U.S. Bankruptcy Court for the Northern District of Texas will consider at a hearing on June 8, 2010, at 1:30 p.m. (prevailing Central Time,) the confirmation of the Plan of Liquidation for Provident Royalties, LLC, et al. The hearing will be held at the U.S. Bankruptcy Court, 1100 Commerce Street, 14th Floor, Dallas, Texas. The Court approved the Disclosure Statement proposed by Dennis L. Roossien, Jr., Chapter 11 trustee. The deadline for the receipt of ballots and objections to the confirmation of the Plan is fixed as May 28, 2010, at 5:00 p.m. C.T.) According to the Disclosure Statement, the Plan is designed to accomplish the orderly liquidation of the Debtors' estates and distribution of the proceeds of such liquidation to the beneficiaries of the estates through (i) significant predicate settlements and compromises among the Chapter 11 Trustee, the Committees, the Sinclair Entities, and other parties; (ii) the Chapter 11 Trustee as the Plan Agent for the purpose of administering the Plan with respect to unclassified Claims and Claims in Classes 1 through 5 under the Plan (excluding the Sinclair Allocation), orderly and efficiently resolving Disputed Claims, and making Distributions to holders of Allowed Claims; and (iii) the creation of the PR Liquidating Trust. Under the Plan, the PR Liquidating Trust will receive all assets of the Debtors and their estates remaining after, and not required for, the administration and payment of unclassified claims against the Debtors and all claims in Classes 1 through 5 of the Plan (excluding the Sinclair Allocation). Treatment of Claims Class Estimated Percentage Recovery ----- ----------------------------- 1 - Secured Claims ($1.6MM) 100% 2 - Priority Non-Tax Claims ($150,000) 100% 3 - General Unsecured Claims 100% ($13.9MM - $20.1MM) 4 - Sinclair Claim ($25MM) Unknown 5 - Subordinated Claims 100% 6 - Preferred Stock Unknown 7 - Other Equity Interests None A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/ProvidentRoyalties_DS.pdf About Provident Royalties Based in Dallas, Texas, Provident Royalties LLC owns working interests in oil and gas properties primarily in Oklahoma. Provident and its affiliates filed for Chapter 11 on June 22, 2009 (Bankr. N.D. Tex. Case No. 09-33886). Judge Harlin DeWayne Hale presides over the case. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The United States Trustee for the Northern District of Texas appointed nine members to the Official Committee of Unsecured Creditors. On July 2, 2009, the Securities and Exchange Commission filed, under seal, a complaint in District Court for the Northern District of Texas against the Debtors and certain of their principals and managing partners on allegations that they sold stock and limited partnership interest to over 7,700 investors as part of a $485 million Ponzi scheme. On July 2, 2009, the District Court for the Northern District of Texas appointed Dennis L. Roossien, Jr., at Munsch Hardt Kopf & Harr P.C. in Dallas, Texas, as receiver for the Debtors. On July 20, 2009, the Bankruptcy Court appointed the receiver as the Debtors' Chapter 11 trustee. Mr. Roossien, Jr., has taken possession and control of the Debtors' property and business. Mr. Roossien, Jr., has selected Patton Boggs, LLP, as his special counsel. Patton Boggs, LLP, was Debtors' counsel before the appointment of Mr. Roossien, Jr., as Chapter 11 trustee. Mr. Roossien, Jr., has selected Munsch Hardt Koph & Harr, P.C., as counsel. Gardere, Wynne, Sewell, LLP represents the official committee of unsecured creditors. Rochelle McCullough, LLP represents the official investors committee. The Company, in its petition, listed between $100 million and $500 million each in assets and debts. RC LANDWORKS: Files for Chapter 11 Bankruptcy in Oregon ------------------------------------------------------- Business Journal of Portland says RC Landworks Inc. filed for Chapter 11 protection in the U.S. Bankruptcy Court in Oregon, listing both assets and debts of between $500,000 and $1,000,000. Nicholas Henderson of Motschenbacher & Blattner LLP of Portland represents the Company. RC Landworks Inc. is in the construction and hardware business. RCC NORTH: Files List of 12 Largest Unsecured Creditors ------------------------------------------------------- RCC North LLC has filed with the U.S. Bankruptcy Court for the District of Arizona a list of its 12 largest unsecured creditors: Entity Claim Amount ------ ------------ Eye Level Holdings, LLC 15111 N. Pima Road Suite 200 Scottsdale, AZ 85260 $125,373 APS P.O. Box 53933 Sta. 3200 Phoenix, AZ 85072-3933 $36,752 Creative Design Flooring Inc. 7891 E. McClain Dr., #105 Scottsdale, AZ 85260-1675 $6,582 Caretakers Building Maintenance $6,516 ACS Janitorial $3,560 Maximum Quality Landscape, LLC $3,153 DB Water Technologies $1,069 Detection Logic, Inc. $260 Ironwood Custom Finishing $188 Epic Sign Group, Inc. $150 All Lighting Products, Inc. $145 Oliver Plant Company $172 Scottsdale, Arizona-based RCC North LLC filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11078). Philip R. Rudd, Esq., at Polsinelli Shughart PC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $50,000,001 to $100,000,000. RCC NORTH: Section 341(a) Meeting Scheduled for May 18 ------------------------------------------------------ The U.S. Trustee for Region 14 will convene a meeting of RCC North LLC's creditors on May 18, 2010, at 12:00 p.m. The meeting will be held at the US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, AZ (341-PHX). This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Scottsdale, Arizona-based RCC North LLC filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11078). Philip R. Rudd, Esq., at Polsinelli Shughart PC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $50,000,001 to $100,000,000. RCC NORTH: Wants to Employ Polsinelli Shughart as Bankr. Counsel ---------------------------------------------------------------- RCC North, LLC, has asked for authorization from the U.S. Bankruptcy Court for the District of Arizona to employ Polsinelli Shughart PC as bankruptcy counsel. PS will: a. prepare pleadings and applications and conduct examinations incidental to the administration of the bankruptcy case and estate; b. advise the Debtor of its rights, duties, obligations under Chapter 11 of the Bankruptcy Code; c. take any and all other necessary action incident to the proper preservation and administration of the Chapter 11 estate; and d. advise the Debtor in the formulation and presentation of a plan pursuant to Chapter 11 of the U.S. Bankruptcy Code, and the accompanying disclosure statement. PS will be paid $135 to $600 per hour for its services. To the best of the Debtor's knowledge, PS is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Scottsdale, Arizona-based RCC North LLC filed for Chapter 11 bankruptcy protection on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11078). The Company estimated its assets and debts at $50,000,001 to $100,000,000. REFCO INC: Underwriters Settle Shareholder Lawsuit -------------------------------------------------- A group of underwriters have agreed to pay $49.5 million to settle a consolidated shareholder lawsuit over the collapse of Refco Inc. into bankruptcy in 2005, American Bankruptcy Institute reports. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REGENT COMMUNICATIONS: Resilient Agrees to Drop Plan Appeal ----------------------------------------------------------- netDockets reports that Regent Communications, Inc., and Resilient Capital Management, LLC, have reached a settlement of Resilient's attempt to have an Official Committee of Equity Security Holders and its challenge to Regent's plan of reorganization. The settlement was approved by Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware. Resilient has agreed to withdraw its appeals of the order denying appointment of an equity committee and the order confirming Regent's plan of reorganization. netDocket says the settlement agreement also discloses that Resilient had informed Regent that it intended to seek a stay of the confirmation order to preclude Regent from consummating the plan pending the appeals and also file a motion seeking allowance of Resilient's fees and expenses as a substantial contribution claim. As consideration for withdrawing the appeals and releasing all of its claims and interests, Resilient is receiving a $125,000 payment. According to netDockets, the motion suggests that the payment is approximately equal to the fees and expenses that Resilient would have sought as a substantial contribution claim. Resilient said in court papers filed in March that it holds 6.6% of the common stock of Regent Communications. As reported by the Troubled Company Reporter on April 16, 2010, Resilient objected to the Debtors' plan. Under the proposed plan, general unsecured claims would be paid in full but existing equity would be canceled. Existing equity holders would receive their pro rata share of $5.5 million (almost 13 cents per share), which is characterized as a "gift" because the Debtors assert that existing equity is out of the money. The Debtors' assertion regarding the value of existing equity is supported by a valuation prepared by Oppenheimer & Co. Inc. Resilient argued that Oppenheimer's valuation is "artificially depressed" due to several aspects of Oppenheimer's valuation methodology. Resilient said "there is a substantial likelihood that there is sufficient equity value in the Debtors to distribute to the common equity holders." Resilient argued that appointment of an equity committee was necessary because common shareholders "will not be adequately represented in these cases without the appointment of an official committee." About Regent Communications Headquartered in Cincinnati, Ohio, Regent Communications, Inc., is a radio broadcasting company that acquires, develops, and operates radio stations. There are 47 subsidiary entities with 62 radio stations in markets in Colorado, Illinois, Indiana, Kentucky, Louisiana, Michigan, Minnesota, New York, and Texas. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. D. Del. Case No. 10-10632) with an agreement in principal with its lenders for a consensual financial restructuring that will result in the elimination of $87 million of the Company's debt. On April 14, the Bankruptcy Court has confirmed the Company's Plan of Reorganization. Regent expects its Plan to become effective by April 27. The plan will allow Regent to emerge from Chapter 11, after only 60 days. All outstanding shares of the Company's common stock will be extinguished on the Plan's effective date. Senior debtholders will convert their holdings into a new series of equity in the Company, while current public equity shareholders will receive by early to mid-May 12.8 cents for each share they own. Regent Communications is advised by Oppenheimer & Co., Inc., in connection with its financial restructuring. Latham & Watkins LLP and Young Conaway Stargatt & Taylor, serve as bankruptcy counsel. As of January 31, 2010, the Company had $166,506,000 in assets and $211,282,000 in liabilities. REICHHOLD INDUSTRIES: S&P Gives Stable Outlook; Keeps 'B-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised the outlook on Reichhold Industries Inc. to stable from negative. At the same time, S&P affirmed the 'B-' corporate credit rating and the 'CCC+' issue-level rating on Reichhold's senior unsecured debt. The recovery rating on Reichhold's senior unsecured notes remains unchanged at '5', which indicates S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. "The outlook revision reflects Reichhold's improved financial performance during the past several quarters," said Standard & Poor's credit analyst Henry Fukuchi. "The company mitigated reduced volumes and lower selling prices through cost reduction efforts and benefited from favorable raw material costs." S&P expects operating trends to stabilize in 2010 supported by a rebound in volumes within Reichhold's composites segment, improving economic conditions, and the benefits of cost reductions. These trends should offset ongoing concerns related to weak operating margins. The company is likely to face somewhat higher raw material costs as economic conditions improve. The stable outlook incorporates S&P's expectation of raw material and energy costs going up in the near term, however, at a moderate rate relative to 2008 and 2009 levels. RICCO INC: Ch. 11 Trustee Sought to Reconstruct Records ------------------------------------------------------- W. Clarkson McDow, Jr., U.S. Trustee for Region 4, asks the U.S. Bankruptcy Court for the Northern District of West Virginia to appoint a Chapter 11 trustee in the Chapter 11 case of Ricco, Inc. The U.S. Trustee said that Ricco has failed to maintain any written accounting records since at least 2003. Ricco's failure to maintain necessary accounting records, failure to file required tax returns, failure to maintain bank accounts and failure to practice fundamental accounting principals to account for the repayment of loans and receipt of account receivables constitute gross mismanagement. The U.S. Trustee adds that the appointment of a Chapter 11 Trustee is in the best interest of creditors so that an independent party can make the necessary inquiries for the benefit of creditors and pursue any potential causes of action necessary to maximize the assets available to the estate. The Debtor is represented by: Todd Johnson, Esq. Johnson Law, PLLC Post Office Box 519 Morgantown, WV 26507-0519 Tel: (304) 292-7933 Fax: (304) 292-7931 Email: johnsonlawoffice@gmail.com About Ricco, Inc. Elk Garden, West Virginia-based Ricco, Inc. -- aka Amico Partners, Ambizioso Partners, Lupo Tana Partners, and Tre Manichinos Partners -- filed for Chapter 11 bankruptcy protection on January 7, 2010 (Bankr. N.D. W.V. Case No. 10-00023). Todd Johnson, Esq., at Johnson Law, PLLC, assists the Company in its restructuring effort. The Company has assets of $15,162,600, and total debts of $4,093,674. RIVER ROAD: Has Until June 9 to File Plan ----------------------------------------- Bill Rochelle at Bloomberg News reports that River Road Hotel Partners LLC received an extension of the exclusive right to propose a Chapter 11 plan until June 9. The judge, according to the report, previously said that any extension is contingent upon River Road's submission to secured lenders of a "written, specific and detailed restructuring proposal" by April 9. Although a proposal was delivered on time, the lender said it was "wholly unacceptable." River Road Hotel Partners LLC is the owner of the InterContinental Chicago O'Hare airport hotel. Affiliate RadLAX Gateway Hotel LLC owns the Radisson hotel at Los Angeles International Airport. Both are ultimately controlled owned by Harp Group. River Road and RadLAX filed Chapter 11 in Chicago in August 2009 (Bankr. N.D. Ill. Case No. 09-30029). Based in Oak Brook, Illinois, River Road listed assets of as much as $100 million and debt of as much as $500 million. SAINT ALBANS: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Saint Albans Outreach Day Care Center, Inc 109-53 Farmers Boulevard Saint Albans, NY 11412 Bankruptcy Case No.: 10-43454 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong Debtor's Counsel: John W Freeman, Esq. 135-49 234th Street. Jamaica, NY 11422 Tel: (347) 581-4485 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to 10,000,000 A copy of the Company's list of 7 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nyeb10-43454.pdf The petition was signed by Cheryl A. Dunn, executive director. SAINT VINCENTS: Gets Interim Nod of $78 Million DIP Facility ------------------------------------------------------------ Judge Cecelia Morris of the U.S. Bankruptcy Court for the Southern District of New York authorized Saint Vincents Catholic Medical Centers of New York and its debtor affiliates to borrow, on an interim basis, $50 million of the $78 million postpetition loan from General Electric Capital Corporation, as lender and as agent for the lenders, and TD Bank, N.A., as lender. The Debtors will have the option to request an increase in the aggregate commitments to an amount not to exceed $85,000,000, which increase will be in the sole discretion of the DIP Agent and DIP Lenders. The proceeds of the DIP Facility may be used to pay the full amount of the prepetition secured revolving loan obligations owing to Prepetition Agent and Prepetition Lenders, and fund general financial requirements of the Debtors under the Chapter 11 cases subject to the limitations set forth in the DIP Credit Agreement. Proceeds of the DIP Facility will be used in accordance with a 13- week cash flow budget available for free at: http://bankrupt.com/misc/svcmccashflow.pdf Material Terms Interest * Non-Default Interest Rate: Base Rate plus 3% Rates: per annum, payable in arrears on the first day of each month. * Default Interest Rate: Base Rate plus 5% per annum, payable on demand of the DIP Agent. Fees: * Loan Fee -- a loan fee in the amount of 1% of the Aggregate Commitment amount, payable at closing. * Agent Fee -- an agency fee to the DIP Agent, as set forth in a confidential side letter. * Unused Line Fee -- an unused commitment fee equal to the average daily balance of the Aggregate Commitment during the preceding calendar month, less the sum of the average daily balance of the DIP Loans outstanding during the preceding calendar month, multiplied by one-half of 0.50% per annum. Treatment of The Debtors must reimburse the DIP Agent and the Lenders' the DIP Lenders for all fees, costs and Expenses: expenses incurred in connection with the negotiation, preparation and filing and recordation of the DIP Loan Documents. Those fees and expenses are secured by the DIP Collateral and may be paid by the DIP Agent by making a loan advance under the DIP Facility to pay those Fees and Expenses. Carve-Out: The claims of the professionals retained by the Debtors and the Official Committee of Unsecured Creditors that have been approved by the Court for unpaid fees and expenses which were incurred (A) on and after the Petition Date and before the Carve-Out Trigger Date in amounts not in excess of the amounts set forth in the DIP Budget and (B) on and after the Carve-Out Trigger Date in the aggregate amount not exceeding $2 million, for all retained professionals and Committee Member expenses. In the event the Chapter 11 Cases are converted to Chapter 7, there will be a separate carve- out of $100,000 in the aggregate that may be used for the reasonable fees and expenses of a Chapter 7 trustee and the separate Trustee Carve-Out will have the same priorities as the Carve-Out. DIP Liens & The DIP Agent is granted these liens to secure priority: the obligations owing pursuant to the DIP Facility: * Section 364(d)(1) Lien -- a priming security interest in and lien pursuant to Section 364(d)(1) of the Bankruptcy Code on all encumbered property of the Borrowers, subject only to (a) the Carve-Out, and (b) prepetition liens on property of the Borrowers that are valid, perfected, not avoidable, and senior in priority to the Prepetition Liens of the Prepetition Agent on that property, and (c) the Prepetition Liens of the Prepetition Agent. * Section 364(c)(2) Liens -- a first priority security interest and lien pursuant to Section 364(c)(2) on all unencumbered property of the Borrowers, which will be subject only to the Carve Out. * Section 364(c)(3) Liens -- a junior security interest and lien pursuant to Section 364(c)(3) on all property of the Borrowers and that is subject to a Permitted Prior Senior Lien. Liens on DIP Liens will extend to the proceeds of all Proceeds of claims and causes of actions under Chapter 5 Avoidance of the Bankruptcy Code, including, without Actions: limitation, those under Sections 502(d), 544, 545, 547, 548, 549, 550, 552(b) and 553, and state laws of similar import. The Revolver Upon entry of the Interim Order, the Debtors Roll-Up are authorized and directed to use the DIP Payment: Facility and Cash Collateral to repay in full the $43.19 million in prepetition secured obligations in respect of the prepetition revolving loan facility, using $22 million proceeds of the Interim Amount and $21.19 million of the Cash Collateral to pay those obligations. Superpriority The DIP Agent will have a superpriority Admin. Claim administrative expense claim status pursuant Status: to Section 364(c)(1) with priority over all all other administrative expenses pursuant to, among others, Sections 105(a), 326, 328, 330, 331, 503(b), 506(c), 507, 546(c), 552(b), 726 and 1114 of the Bankruptcy Code. General Electric and the Debtors entered into a Transaction Side Letter, which sets forth deadlines in connection with the Debtors' disposition of assets. As an additional condition to the DIP Loan, the Debtors are obliged to comply with the terms of the Transaction Side Letter until the full and indefeasible payment and satisfaction of the DIP Obligations. The Debtors and General Electric agree that it would be detrimental to Debtors' ability to market and sell the Non- Hospital Assets if the terms of the Transaction Side Letter were known to the general public or to potential purchasers. Accordingly, the Debtors, General Electric and Lenders agree to keep the terms and conditions of the Transaction Side Letter confidential and not to disclose those terms to any third party; provided, however, that the Transaction Side Letter: (a) may, upon execution of an appropriate confidentiality agreement, be shared with the United States Trustee and the Official Committee of Unsecured Creditors; and (b) will, if required by the Bankruptcy Court, be filed under seal or otherwise disclosed to the Bankruptcy Court in a manner that maintains the confidentiality of the Transaction Side Letter. The Debtors assert that the DIP Facility is the only source of financing available to them at this time. Despite their efforts, the Debtors relate that they have been unable to obtain financing (i) in the form of unsecured credit allowable under Section 503(b)(1) of the Bankruptcy Code, (ii) solely as an administrative expense under section 364(a)(b), or (iii) solely in exchange for the grant of a superpriority administrative expense claim pursuant to Section 364(c)(1). Indeed, the Debtors point out, the proposed financing under the DIP Facility was the only viable postpetition financing option available to them. The DIP Budget, which has projections through December 31, 2010, contemplates that the proceeds of the DIP Loans -- including the $28 million of new postpetition advances during the Interim Period -- and the Cash Collateral would provide the Debtors with sufficient funds to consummate an orderly shut-down of the Hospital Services, to operate, market and sell the Non-Hospital Assets, to wind down the remainder of the Debtors' estates, and to pay the administrative expenses that the Debtors reasonably anticipate to incur during the course of their Chapter 11 Cases. A full-text copy of the Interim DIP Order is available for free at http://bankrupt.com/misc/Vincents_DIPOrdinterim.pdf A final hearing will be held on May 6, 2010. Objection deadline is April 30. About Saint Vincents Catholic Medical Centers St. Vincents Catholic Medical Centers returned to bankruptcy court by filing another Chapter 11 petition April 14, 2010, in New York (Bankr. S.D.N.Y. Case No. 10-11963). The new petition listed assets of $348 million against debt totaling $1.09 billion. Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtor in its Chapter 11 effort. Although the hospitals emerged from the prior reorganization in July 2007 with a Chapter 11 plan said to have a "a realistic chance" of paying all creditors in full, the bankruptcy left the medical center with more than $1 billion in debt. The new filing occurred after a $64 million operating loss in 2009 and the last potential buyer terminated discussions for taking over the flagship hospital. Saint Vincents Catholic Medical Centers -- http://www.svcmc.org/- - is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Saint Vincent Catholic Medical Centers of New York and six of its affiliates first filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). SAINT VINCENTS: Gets Interim Nod for Cash Collateral Use -------------------------------------------------------- Judge Cecilia Morris authorized Saint Vincents Catholic Medical Centers of New York and its debtor affiliates to use cash collateral on an interim basis. The Cash Collateral includes all cash as defined by Section 363(a) of the Bankruptcy Code. Cash Collateral will also include all of the cash proceeds of the Prepetition Collateral in which the Prepetition Agent or the Prepetition Lenders have an interest, whether that interest existed as of the Petition Date or arises thereafter pursuant to the Interim Order. The Debtors assert that the use of Cash Collateral will help to stave off an immediate liquidation, provide them with access to much needed liquidity, enable them to complete the transfer of the Hospital's patients to other providers, and implement the Closure Plan. In addition, the Debtors maintain, the use of Cash Collateral will permit them to continue the sale, marketing and orderly disposition of their assets and keep their non-Hospital services operational pending their sale. The Debtors have a complex prepetition debt structure consisting of various layers of secured debt, Kenneth H. Eckstein, Esq., Kramer Levin Naftalis & Frankel LLP, in New York -- keckstein@kramerlevin.com -- says. He relates that, as of the Petition Date, the Debtors have at least $408 million of outstanding secured indebtedness owing to the various prepetition secured parties, which includes: * approximately $313 million in principal owing to the Prepetition Agent and Prepetition Lenders in respect of the senior secured revolving facility and term loan; * approximately $30 million in principal owing to the Dormitory Authority of the State of New York in respect of a certain settlement, certain new loan advances and proceeds of public bonds; * approximately $5 million owing to the Pension Benefit Guaranty Corporation in respect of a quarterly contribution payment that the Debtors failed to make in February 2010; * approximately $60 million in principal owing to Sun Life Assurance Company of Canada (U.S.) in respect of two promissory notes; and * approximately $113 million owing to three medical malpractice trusts, a significant portion of which is unsecured. As Adequate Protection, valid, binding, enforceable and perfected security interests and replacement liens will be granted to each of the Prepetition Agent to secure the Prepetition Obligations of, without duplication, the aggregate diminution, if any, subsequent to the Petition Date, in the value of the Prepetition Collateral, which will be subordinated to the Carve-Out, Permitted Prior Senior Liens, DIP Obligations, DIP Liens and DIP Superpriority Claims. To the extent the Prepetition Agent will hold claims allowable under Sections 503(b) and 507(a)(2) of the Bankruptcy Code, notwithstanding the provision of Adequate Protection hereunder, the Prepetition Agent is granted, for the ratable benefit of the Prepetition Lenders, an administrative expense claim pursuant to Section 507(b) with priority over all other administrative expenses, but in all cases subject and subordinate to the Carve- Out, Permitted Prior Senior Liens, DIP Obligations, DIP Liens and DIP Superpriority Claims. The Borrowers will, in accordance with the DIP Budget, (a) with respect to the Prepetition Agent and Prepetition Lenders: (i) promptly pay all reasonable fees and expenses under the Prepetition Loan Documents incurred by the Prepetition Agent, whether incurred prior to or following the Petition Date, and (ii) pay all other payments payable when and as due under the Prepetition Loan Documents, including all payments of principal, interest, fees and charges, and (b) make regularly scheduled principal and interest payments due to the Dormitory Authority of the State of New York pursuant a note issued by Debtor Bishop Francis J. Mugavero Center for Geriatric Care, Inc., subject to any party's right to request recharacterization of the payments as payments of principal. Cash Collateral will be used in accordance with the 13-week cash flow budget, available for free at: http://bankrupt.com/misc/svcmccashflow.pdf Judge Morris, however, ruled that the use of Cash Collateral for the operations of the Debtors' Nursing Homes is not subject to the limitations of the DIP Budget, and the funds generated by the Nursing Homes may be used for the operations of the Nursing Homes. The final hearing will be held on May 6, 2010. Objection deadline is April 30. About Saint Vincents Catholic Medical Centers St. Vincents Catholic Medical Centers returned to bankruptcy court by filing another Chapter 11 petition April 14, 2010, in New York (Bankr. S.D.N.Y. Case No. 10-11963). The new petition listed assets of $348 million against debt totaling $1.09 billion. Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtor in its Chapter 11 effort. Although the hospitals emerged from the prior reorganization in July 2007 with a Chapter 11 plan said to have a "a realistic chance" of paying all creditors in full, the bankruptcy left the medical center with more than $1 billion in debt. The new filing occurred after a $64 million operating loss in 2009 and the last potential buyer terminated discussions for taking over the flagship hospital. Saint Vincents Catholic Medical Centers -- http://www.svcmc.org/- - is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Saint Vincent Catholic Medical Centers of New York and six of its affiliates first filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). SAINT VINCENTS: Proposes to Pay Obligations to Employees -------------------------------------------------------- Prepetition Saint Vincents Catholic Medical Centers of New York and its debtor affiliates employed approximately 5,900 employees, composed of approximately 4,200 union and 1,700 non-union employees. Prior to the Petition Date, the Debtors gave Worker Adjustment and Retraining Notification Act notices terminating the employment of thousands of employees. For a short period of time postpetition, however, the services of many of these Employees will be required to implement the Hospital's Plan of Closure. Other Employees did not receive WARN Notices because they are part of the Debtors on-going non-Hospital operations. In the ordinary course of the Debtors' businesses, Employees are paid biweekly, in two separate groups in alternating weeks with each payroll being made 14 days in arrears. The aggregate amount of wages paid to the Employees is approximately $15.2 million every two weeks. As of the Petition Date, the only unpaid wage and salary obligations owed by the Debtors to the Employees would be in the approximate aggregate amount of $12.7 million. In addition to payroll obligations, the Debtors, as of the Petition Date, estimate that the aggregate amount of all Paid Time Off Leaves is approximately $20 million10 for Union and Non-Union Employees. The very public process of the Hospital's unsuccessful efforts to save its acute-care services, together with the attendant uncertainty as to the future of the other non-Hospital services, has created tremendous anxiety among employees, Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, tells the Court. He relates that the employees are the "lifeblood" of the Debtors' businesses where the employees are charged directly or indirectly with patient care and safety and the efficient running of a major New York City hospital system. Employee relations are paramount to the safe and orderly closure of the Hospital and the sale of the Medical Centers' on-going healthcare services, he says. The Debtors must take immediate action to stabilize the already shaken morale of their employees while they implement their Plan of Closure and continue to operate their non- Hospital services. The Debtors ask that those Employees who are part of their on- going operations receive their unpaid prepetition wages and continue to receive their ordinary course prepetition benefits during the course of their employment with the Medical Centers. These Employees are part of a longer process for these Chapter 11 Cases, Mr. Rogoff says. The Debtors also require the continued services and dedication of numerous other employees, who are only required for a very short period of time -- about two to three weeks -- to continue implementing the closure of the Hospital's inpatient services and, if they are unable to be transferred, the related outpatient clinics. The Debtors also seek the customary relief for all employees to pay amounts required by law for trust fund taxes, deductions, and withholdings to the appropriate government agencies and benefit providers. The Debtors further seek permission to pay certain prepetition amounts to various third-party home health care aides and therapists who provide services to patients through the Debtors' home health services, which are part of the going-concern services to be sold during these Chapter 11 Cases. Without the continuing services of these independent contractors, the home healthcare patients will be at risk of not receiving any medical care from the Debtors and the value of their home health services will be virtually destroyed, Mr. Rogoff tells the Court. * * * The Court gave interim authority for the Debtors to pay, in accordance with the pospetition DIP financing budget: (i) all unpaid prepetition Wages, subject to the caps in Sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code for any individual Employee; (ii) all unpaid Withholdings; (iii) all unpaid Self- Funded Benefits; and (iv) all unpaid Prepetition Expenses. The Court also authorized the Debtors to continue the benefits programs and policies on a postpetition basis and to alter, modify, or discontinue such programs and policies as they deem necessary or appropriate in the ordinary course of business, without further notice to or order of the Court; provided, however, that nothing in the Order the Debtors' obligations under Section 1113 of the Bankruptcy Code. The Debtors are also authorized (a) to continue to honor Benefits programs and policies in the ordinary course of their postpetition business operations and the applicable Employees' continued and postpetition employment by the Debtors and are not authorized to cash out any Employee Benefits, and (b) to continue to allow Employees to use their accrued prepetition and postpetition PTO Leave in the ordinary course of the Debtors' postpetition business operations and during the applicable Employees' continued postpetition employment by the Debtors. Each Employee will be required to use any accrued postpetition time first and, thereafter, any accrued prepetition time would be applied. The Debtors are not authorized to cash out any PTO Leave for Employees and all requests for PTO Leave must be coordinated and approved by the Employees' Supervisors, consistent with past practices, so as not to disrupt the Debtors' business operations. Notwithstanding the foregoing, to the extent that relief is granted in the Interim Order authorizing the payment of any amount that is otherwise required by applicable non-bankruptcy law to be paid, like the payment of a trust fund tax, the Debtors will comply with applicable non-bankruptcy law in the exercise of their discretion. The Debtors are authorized to continue to allocate and distribute the Withholdings in accordance with their stated policies and prepetition practices or as required by applicable federal, state and local law, without regard to whether those amounts arose before or after the Petition Date. To the extent that checks are issued to Employees or other entities in connection with the Obligations, the Banks are authorized to honor those checks upon presentation. All applicable Banks are authorized to receive, process, honor, and pay any and all checks evidencing amounts paid by the Debtors under the Interim Order whether presented prior to or after the Petition Date. Those banks and financial institutions are authorized and directed to rely on the representations of the Debtors as to which checks are issued or authorized to be paid pursuant to this Interim Order. Notwithstanding anything in the Interim Order to the contrary, the payment of any claims pursuant to the Interim Order and other honoring of the Employee Obligations will neither (a) make the obligations administrative expenses of the estates entitled to priority status under Sections 503 and 507 of the Bankruptcy Code nor (b) constitute approval by the Court of any employee plan or program, including any incentive plans, under any section of the Bankruptcy Code, including Section 503(c). Nothing contained in the Interim Order will be deemed to be an assumption or adoption of any policy, procedure, or executory contract. The Debtors retain the discretion to not make the payments contemplated by the Interim Order or the Motion for particular Employees and nothing in the Interim Order will, in and of itself, constitute a promise or guarantee of any payment to any Employee. Judge Morris will hold a hearing on May 6, 2010, at 2:00 p.m. Eastern Time, to consider final approval of the request. Objections are due April 26. About Saint Vincents Catholic Medical Centers St. Vincents Catholic Medical Centers returned to bankruptcy court by filing another Chapter 11 petition April 14, 2010, in New York (Bankr. S.D.N.Y. Case No. 10-11963). The new petition listed assets of $348 million against debt totaling $1.09 billion. Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtor in its Chapter 11 effort. Although the hospitals emerged from the prior reorganization in July 2007 with a Chapter 11 plan said to have a "a realistic chance" of paying all creditors in full, the bankruptcy left the medical center with more than $1 billion in debt. The new filing occurred after a $64 million operating loss in 2009 and the last potential buyer terminated discussions for taking over the flagship hospital. Saint Vincents Catholic Medical Centers -- http://www.svcmc.org/- - is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Saint Vincent Catholic Medical Centers of New York and six of its affiliates first filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). SANFORD JAY HOROWITZ: Files Schedules of Assets and Debts --------------------------------------------------------- Sanford Jay Horowitz filed with the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $5,390,000 B. Personal Property $17,590,596 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $3,956,101 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,842,579 ----------- ----------- TOTAL $22,980,596 $5,798,680 Based in Calabasa, California, Sanford Jay Horowitz aka Sandy Horowitz filed for Chapter 11 protection on Nov. 3, 2009 (Bankr. C.D. Calif. Case No. 09-24651). Peter M. Lively, Esq., at The Law Offices of Peter M Lively, represents the Debtor. In its petition, the debtor listed assets of between $10 million and $50 million, and debts of between $1 million and $10 million. SANTA CLARA: To Pay Creditors from Sale or Refinancing ------------------------------------------------------ Santa Clara Square, LLC, filed with the U.S. Bankruptcy Court for the Northern District of California a Disclosure Statement explaining its proposed Plan of Reorganization. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for a five year Plan term. The Plan also provides that Debtor may extend the term of the Plan. At the conclusion of the five year term, if Debtor is current in its interest payments on the C-2 Claim of East West Bank, and is otherwise in compliance with the terms of this Plan, Debtor has the option to automatically extend the term of the Plan for two additional years. The Debtor will pay claims through a process of (a) continued rental of the property located at 3610 - 3700 El Camino Real, Santa Clara, California, and collection of rents from tenants; (b) the sale of the property; (c) funding pursuant to a refinance; (d) development of the property by obtaining an equity partner, joint venturer, or other financing, followed by the sale or rental of the commercial and residential units to be developed; and (e) disbursement of Litigation Proceeds. The Debtor will also use the shareholder loan funds to pay claims in Classes A and B. Under the Plan, Class A and B claims will be paid in full on the effective date, in cash from the shareholder loan funds, unless other treatment is agreed upon. The Plan did not provide for the estimated percentage recovery by holders of Class C-1 and C-2 claims. The Plan provides for payment of the Santa Clara County Tax Collector amounting to $399,465 upon the sale of any property subject to a lien for property taxes, from litigation proceeds, or from the refinance of the property. The Claim of East West Bank amounting to $14,500,000 will be satisfied, in whole or in part, from the offset or payment due on account of the interference claims. The Plan provides for the payment of the claim from the sale of the property valued at $19,000,000. General unsecured claims claims will be paid no later than the end of the term of the plan from the surplus remaining from litigation proceeds, from net profits, from shareholder loan funds, and from cash balances, after payment of other claims according to their priorities. The Plan also provides that the Class D-2 claimants may also be paid from the remaining proceeds from the sale of the property, or the refinance of the property. The Plan did not provide for the estimated percentage recovery by holders of unsecured claims. The shareholder loan claims will be subordinated. Provided that claims in Classes A, B, C, and D-2 are paid in full, Class D-1 claims will be repaid, with interest at the rate of 10%, from any remaining assets upon conclusion of the term of the Plan. Holders of Class E equity interests will receive, all the services required for the consummation of the Plan, exclusive of the daily management functions performed by Alpha Investments and property management, but otherwise including without limitation the leasing and management services for the property; engaging professionals for the design and construction of the development; engaging contractors and subcontractors to perform the development; supervising the construction and completion of the development; the procurement of permits necessary for sales or leasing. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/SantaClara_DS.pdf The Debtor is represented by: Lawrence A. Jacobson Sean M. Jacobson Cohen and Jacobson, LLP 900 Veterans Boulevard, Suite 600 Redwood City, California 94063 Tel: (650) 261-6280 Fax: (650) 368-6221 Los Altos, California-based Santa Clara Square, LLC, filed for Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. N.D. Calif. Case No. 09-61196). Lawrence A. Jacobson, Esq., at the Law Offices of Cohen and Jacobson, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and liabilities in its petition. SAVANNAH GATEWAY: Combined Plan Hearing Set for June 23 ------------------------------------------------------- The Hon. Arthur B. Briskman of the U.S. Bankruptcy Court for the Middle District of Florida will consider at a hearing on June 23, 2010, at 11:00 a.m., Savannah Gateway West, LLC's Disclosure Statement and Plan of Reorganization. The hearing will be held at Courtroom A 5th Floor, 135 West Central Blvd., Orlando, Florida. The Court conditionally approved the Debtor's explanatory Disclosure Statement. Ballots accepting or rejecting the Plan and objections to the Disclosure Statement or confirmation of the Plan are due seven days prior to the hearing date. According to the Disclosure Statement, the Plan provides that the Reorganized Debtors will continue operating their respective reorganized businesses, with low operating expenses. The Plan also contemplates that the Debtors will execute new mortgage agreements with RBC and Gulfstream. The Plan designates seven separate classes of claims and interests, and contemplates paying these classes of claims over time. Holders of Allowed Secured Claims in Classes 1 to 3 will receive payment equal to 100% of their Allowed Secured Claims, over time. Holders of Allowed Unsecured Claims in Class 4 will receive payment equal to 100% of their Allowed Unsecured Claims, over time. In full satisfaction of the Allowed Class 4 Claims, holders of the claims will receive their pro rata share of 20% of any net profit of any future sales of parcels after the mortgages held by RBC and Gulfstream are paid, up to their Allowed Secured Claim amount. Classes 5, 6 and 7 of Equity Interests -- Upon the effective date, equity holders will provide new value in the form of an infusion of capital in exchange for retaining their equity interests in the Debtors. The infusion of capital will be used to fund an interest. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/SavannahGateway_DS.pdf Orlando, Florida-based Savannah Gateway West, LLC, operates a real estate business. The Company filed for Chapter 11 bankruptcy protection on October 30, 2009 (Bankr. M.D. Fla. Case No. 09- 16576). R Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SEARS CANADA: Sears Canada Deal Won't Affect Moody's 'Ba2' Rating ----------------------------------------------------------------- Moody's Investors Service said that Sears Holdings' acquisition of an additional 17.3% stake in Sears Canada for approximately $560 million would not immediately impact the ratings of either company. The acquisition will increase Sears Holdings' ownership of Sears Canada to slightly over 90%. The last rating action for Sears Holding was the downgrades of the Corporate Family Rating to Ba2 and other debt ratings to their current levels on March 23, 2009. The last rating action for Sears Canada was the lowering of its senior bond rating to Ba1. Sears Holdings is a holding company that owns both the Sears and Kmart banners, as well as an 80.1% stake in Orchard Supply Hardware. Through its subsidiary Sears Roebuck, it also owns 73% of Sears Canada. Sears Holdings generated annual revenues of about $44 billion in the year ended January 30, 2010. SEEQPOD: Bloson.com Acquires Remaining Assets --------------------------------------------- Bloson.com has reached an agreement to purchase the remaining assets of SeeqPod. SeeqPod, originally a project of the Lawrence Berkeley National Lab, was a music search engine specializing in playable search results that filed for bankruptcy in 2009 after several licensing issues. It boasted powerful technology that was able to search the web for any available song and enabled users to play them on- site, indexing almost 12 million songs. Bloson.com delivers fresh content to users and monetizes their daily activities to benefit the different charities that the site currently works to support. Users are able to listen to an unlimited selection of music, watch thousands of movies or TV shows, and shop, all while raising money for their favorite participating causes. Whenever they share music or videos with their friends, or buy products at partner retailers they receive points. These points are later assigned to one of the fifteen social causes that users choose to support, including Fighting Global Warming and Animal Welfare. Several times a year, Bloson.com totals up all the accumulated points earned for each cause and makes a proportional donation to the number of points. "Seeqpod was a guiding force in online music search and recommendation," said Antonio Marzo, CEO of Bloson.com. "And its millions of fans will now be able to play free and licensed music while helping a cause at Bloson.com." While specific terms of the transaction have not been disclosed, the transaction is waiting for approval of the trustee from the San Jose bankruptcy court. About Bloson.com Located in Cambridge, Massachusetts, Bloson.com is an online portal that converts everyday social activities into financial aid for charitable causes. Bloson.com officially launched at the DEMO conference in March 2010, and is currently running in open Beta. SGD TIMBER: Can Hire Weinman & Associates as Bankruptcy Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized SGD Timber Canyon, LLC, to employ Weinman & Associates, P.C. as counsel. Weinman & Associates will represent the Debtor in the Chapter 11 proceedings. To the best of the Debtors knowledge, Weinman & Associates is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Parker, Colorado-based SGD Timber Canyon, LLC, filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Colo. Case No. 10-12804). The Company estimated its assets and debts at $10,000,001 to $50,000,000. SKY KING: Cash Collateral Hearing Continued Until April 28 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California has continued until April 28, 2010, at 10:00 a.m., the hearing on Sky King, Inc.'s access to cash collateral in which The Internal Revenue Service; the State of California; W.W. Grainger, Inc.; and/pr Mercury Air Group, Inc., assert interest in. The Internal Revenue Service and the Debtor entered into a stipulation extending the Debtor's use of cash collateral until April 28. The Debtor would use the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on March 18, 2010, the Debtor said that the replacement liens will provide the required adequate protection to the prepetition lenders and the very act of preserving the value of the business operations will continue to generate replacement revenues, well as preserve the integrity of the estate. Sacramento, California-based Sky King, Inc., is a charter airline specializing in transporting professional basketball and hockey teams. Sky King has a fleet of nine Boeing 737 aircraft. The Company filed for Chapter 11 bankruptcy protection on March 9, 2010 (Bankr. E.D. Calif. Case No. 10-25657). Matthew R. Eason, Esq., who has an office in Sacramento, California, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. SKY KING: Files Schedules of Assets and Liabilities --------------------------------------------------- Sky King, Inc., filed with the U.S Bankruptcy Court for the Eastern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $1,100,000 B. Personal Property $3,219,154 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $6,540,864 E. Creditors Holding Unsecured Priority Claims $12,581,902 F. Creditors Holding Unsecured Non-priority Claims $7,572,859 ----------- ----------- TOTAL $4,319,154 $26,695,625 Sacramento, California-based Sky King, Inc., is a charter airline specializing in transporting professional basketball and hockey teams. Sky King has a fleet of nine Boeing 737 aircraft. The Company filed for Chapter 11 bankruptcy protection on March 9, 2010 (Bankr. E.D. Calif. Case No. 10-25657). Matthew R. Eason, Esq., who has an office in Sacramento, California, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. SMURFIT-STONE: Fights Shareholders Over Valuation Analysis ---------------------------------------------------------- Smurfit-Stone Container Corp. began a court fight on Tuesday with its shareholders over whether the company can cancel its current stock as part of its reorganization plan, reports Steven Church of Bloomberg News. Shareholders claim that Smurfit-Stone managers based their financial projections on the recent economic crisis, which makes them too pessimistic about the company's future, says the report. Under the Plan, the Debtors contemplate canceling all common stock and issuing 100,000,000 shares of new common stock. The Debtors propose to distribute 92% of the New SSCC Common Stock to Debtor Smurfit-Stone Container Enterprise's general unsecured creditors primarily consisting of unsecured bondholders -- and issuing the remaining eight percent extraordinary grant of New SSCC Common Stock to management pursuant to the management incentive plans. Shareholders: Debtors' Valuation Analysis is Wrong In separate filings, holders of Smurfit-Stone Container's common stock represented by investment advisors: Fir Tree, Inc., P. Schoenfeld Asset Management LP, Mariner Investment Group LLC and Senator Investment Group LP, have asserted that though solvent, the Debtors seek to disenfranchise the "current owners" of the company by handing over all the stock of the reorganized SSCC to management and the unsecured creditors. In behalf of Fir Tree and P. Schoenfeld, Mark Minuti, Esq. at Saul Ewing LLP, in Wilmington, Delaware -- mminuti@saul.com -- contended that the Debtors bear the burden to show, by a preponderance of the evidence, that equity is not legally entitled to a recovery, which they have not done and cannot do so. For this reason, he argues that the Debtors cannot "cram- down" the plan on Common Stock holders because the Plan is not fair and equitable within the meaning of Section 1129(b) of the Bankruptcy Code. Mr. Minuti added that the Plan also unfairly discriminates against the Common Stock holders by stripping them of their rightful value. He points out that at the crux of the Debtors' failed attempt to meet their confirmation burdens are (a) a set of projections tabulating adjusted earnings before interests, taxes, depreciation, and amortization numbers for the years 2010 to 2014 through a so-called "Levin Model" came up by the Debtors' financial adviser: The Levin Group, and (b) a derivative valuation analysis by Lazard Freres & Co., the Debtors' investment banker. The Lazard Valuation, erroneous in its own right, builds upon the wrong SSCC Projections and then miscalculates the supposed Distributable Value to satisfy obligations through the Plan, Mr. Minuti argues. Christopher P. Simon, Esq., at Cross & Simon LLC, in Wilmington, Delaware -- kmann@crosslaw.com -- who represents Mariner Investment and Senator Investment asserts that the Debtors' projections systematically ignore, downplay, or misrepresent sources of value. The Equity Objectors argued that the Debtors' Projections are both inaccurate and unreliable and the Lazard Valuation "is wrong." They point out that the Debtors "vastly understate" the amount that could be distributed to common stockholders at approximately $3,559,000,000. They further note that the Debtors' unsecured bonds have traded as high as $89.50, which demonstrates the market's acceptance that the Debtors are worth substantially more. No Value to Distribute to Equity Holders Counsel for the Debtors, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, insists that there is no value to distribute to equity holders. Mr. Conlan contends that the Debtors' valuation is based on carefully developed and rigorously tested financial projections and the straightforward application of standard valuation methodologies, which were prepared in good faith after an extensive and thorough process. The projections are reliable and are the Debtors' best estimate of the future performance of the Reorganized Debtors, Mr. Conlan asserts. He adds that the Financial Projections and the valuation performed by Lazard Freres, based on those projections simply do not support a view that there is any distributable value available to the Equity Objectors. Similarly, the valuation prepared by Richard Braun of FTI Consulting, who was retained by The Official Committee of Unsecured Creditors shows that the range of "total distributable value" falls well short of the claims amount, Mr. Conlan points out. "In an attempt to avoid the inevitable -- or, more candidly, to act as gatekeepers and extract whatever they can from the Debtors as a toll to be paid in order to exit bankruptcy -- the Equity Objectors commissioned their own valuations of the Debtors," Mr. Conlan says. The Equity Objectors rely upon patently defective valuations that artificially inflate and distort the Debtors' Financial Projections and abuse standard valuation techniques to try to push Total Distributable Value above the claims amount, Mr. Conlan argues. For these reasons, he asserts that the Equity Objectors' valuations and their related criticism of the Debtors' Financial Projections and valuation cannot be credited. "There should be no surprise that the Debtors did not conduct a valuation earlier during the bankruptcy process. It was then -- and remains now -- clear that the equity interests were and are 'out of the money'," Mr. Conlan notes. Creditors Committee and WTC Support Debtors The Creditors Committee and, Wilmington Trust Company, tell the Court that projections prepared in good faith by a company's management should be accorded substantial deference on the sound basis that management obviously knows the business better than "hired-gun experts" who have spent no more than a few weeks trying to "pick nits" in management's work. Section 1129(b) of the Bankruptcy Code requires that creditors be paid in full before holders of equity receive any distribution, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware -- ljones@pszjlaw.com -- reminds the Court. Ms. Jones explains that one of the functions of Section 1129(b) is assure that the investment securities distributed as compensation under a Chapter 11 plan have a value at least roughly equivalent to the value of the claim surrendered. "The reviewing court is therefore required to make a comparison of the new securities allotted to the claimant with the old securities which he exchanges to determine whether the new are the equitable equivalents of the old," Ms. Jones adds. Since the question before the Court is whether the minority stock interests that will be distributed to unsecured creditors under the Plan are worth less than the full amount of those creditor claims, the only relevant issue is how much minority shares will be worth upon emergence, Ms. Jones contends. For this reason, she argues that it is entirely inappropriate to include a control premium in the valuations, as the experts put forward by the equity holders seek to do. "While [stockholders] are sure to make a lot of noise at trial about so-called 'flaws' in Debtors' projections, the evidence will demonstrate that these amount to nothing more than arrant attempts to substitute the untethered subjective judgments of their own 'experts' for those of the management that has been ruling this business for years," Ms. Jones says. For these reasons, the Creditors Committee and WTC ask the Court to overrule the Objections and confirm the Debtors' Plan. Experts Support Equity Objectors Four experts submitted declarations in support of the Equity Objectors' assertions that there are amounts that should be distributed to the Debtors' equity holders. Stephen R. Read, who said he has been asked to provide "expert opinion" on the pulp and paper industry on behalf of Fir Tree and P. Schoenfeld in connection with the Plan, wrote in his declaration that the projections submitted by the Debtors materially understates the annualized EBITDA levels and overall earnings potential value of the Debtors. He stated that the Debtors' EBITDA levels should increase to $957,300,000 in 2014, instead of the $666,400,000 in EBITDA that the Debtors project. A copy of Mr. Read's expert report is available for free at: http://bankrupt.com/misc/SmrftReadRep.pdf Roberts Brokaw III, an independent provider of corporate finance advisory services, said the Debtors' business enterprise value available for distribution to creditors and equity holders is at least $5,600,000,000 by using three traditional and widely accepted methodologies. Mr. Brokaw tells the Court that by using a "weighted analysis" the total value of the Debtors' operating assets available to creditors after payments to pension plans is $4,900,000,000. Under the Plan, the Debtors will emerge from bankruptcy with a material unfunded pension liability, Mr. Brokaw notes. The Debtors reported that the present value of its liability for defined benefit plans was $3,570,000,000. Against that amount, the Debtors had $2,441,000,000 of assets to satisfy the defined benefit plans' obligations. Mr. Brokaw, therefore, contends that as of December 31, 2009, the Debtors' pension plans were underfunded by $1,129,000,000. "For valuation purposes, however, the liability is much lower because contributions to the pension plans are fully tax deductible," Mr. Brokaw notes. J. Soren Reynertson, a managing general partner of GLC Advisors & Co. LLC, an investment banking firm, says that Jonathan Mishkin of Sanabe & Associates LLC initially contacted him regarding the possibility of conducting a valuation of the Debtors. Mr. Mishkin is the head of the paper and packaging group at Donaldson Lufkin & Jenrette. Mr. Reynertson says that he utilized three valuation methodologies for his valuation: the Comparable Company Approach, the Precedent Transaction Approach, and the Discounted Cash Flow Approach, based on which he estimated that the total enterprise value of the Debtors is in the range of $4,100,000,000 to $5,000,000,000. Based on the TEV range, and adding amounts of available cash and potential non-core and non-operating asset sales set forth in the Debtors' valuation expert report, Mr. Reynertson concludes that the distributable value of the Debtors is in the range of $4,825,000,000 to $5,725,000,000. Mr. Reynertson notes that the DV exceeds the claims pool by $113,000,000 to $1,013,000,000 if contract rate interest is applied and by $339,000,000 to $1,239,000,000 if federal judgment rate interest is applied. For these reasons, he believes that there is recovery available for the holders of equity interests in Smurfit-Stone. Mr. Mishkin said he concurs with the other Experts. In his declaration, he contends that the Debtors' projections and the valuations substantially underestimate the Debtors' future performance because the valuations ignore the cyclical nature of the business and the importance that historical performance has in predicting future success. He adds that the lack of industry knowledge of the experts who valued the Debtors impaired their ability to arrive at a fair valuation of the Debtors. Mr. Mishkin points out that the Debtors only used 2009 as the basis for their projections and valuations when the economy was experiencing a recession. Similarly, Rachel Strickland, a professional at Willkie Farr & Gallagher who represents another group of shareholders, said in an interview with Bloomberg News that the Debtors' management is not experienced with multi-year projections because the Debtors had never had a well-established process to forecast cash. "You can't pick the trough and say for the next five years the world will be that way," Ms. Strickland told U.S. Bankruptcy Court Judge Brendan Linehan Shannon. "The debtor's projections are unreliable," she maintained. The confirmation hearing on Smurfit's Plan commenced on April 15, 2010, and is scheduled to run for 10 days. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly US$7.450 billion in total assets and US$5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Finance II Case Conversion Denied ------------------------------------------------ Judge Shannon denied the request made by Aurelius Capital Management LP and Columbus Hill Capital Management, L.P., to convert the Chapter 11 Case of Stone Container Finance Company of Canada II to a case under Chapter 7 of the Bankruptcy Code because they have not established that "cause" exists for a conversion. Judge Shannon says that there has not been a substantial or continuing loss or diminution of the Debtor's estate because Finance II is not an operating company and its only assets are certain claims and causes of action. He notes that the causes of action are either preserved or addressed under the Debtors' Chapter 11 Plan of Reorganization and "thus are not presently suffering loss or diminution." At the bottom, Aurelius Capital's and Columbus Hill's Request is "predicated upon dissatisfaction with the treatment of their claims" as proposed under the Debtors' Plan, Judge Shannon says. Aurelius Asks Court to Reconsider Decision Counsel for Aurelius Capital and Columbus Hill, Scott D. Cousins, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware -- cousinss@gtlaw.com -- tells the Court that the Debtors told his clients at an April 2, 2010 telephonic status conference that the Plan cannot be confirmed as to Finance II. Mr. Cousins notes that Aurelius Capital and Columbus Hill has voted to reject the Plan and as a result, there is no impaired accepting class at Finance II pursuant to Section 1129(a)(10) of the Bankruptcy Code. Nevertheless, although there is no justification for Finance II remaining in Chapter 11, it appears the Debtors intend for Finance II to continue to languish in Chapter 11 while they use the confirmation process to control Finance II's claims against the other Debtors, Mr. Cousins argues. Accordingly, Aurelius Capital and Columbus Hill asks the Court to reconsider the Denial Order "to avoid a manifest justice." Mr. Cousins further contends that with no rehabilitation process in sight and no independent fiduciary to assert Finance II's claims, Finance II and its creditors are left to languish on the vine while its assets "rot on the ground." Debtors Object In behalf of the Debtors, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, argues that Aurelius Capital's and Columbus Hill's Reconsideration Request is another attempt to "create urgency where none exists and re-litigate an issue already decided by the Court." Mr. Conlan points out that the basis of the Reconsideration Request is the Debtors' acknowledgement that they did not obtain sufficient votes to confirm the Finance II plan of reorganization. However, he argues that confirmation of the Finance II plan was not a lynchpin of the Denial Order, and the Debtors' decision not to pursue its plan regarding Finance II does not constitute "new evidence" that would satisfy the stringent standard for reconsideration of the Denial Order. Mr. Conlan relates that while the Debtors do not expect Finance II to remain in Chapter 11 without a reasonable possibility of confirming a plan, the Debtors are entitled and obligated to consider all potential alternatives for Finance II. Among other things, the Debtors are considering to dismiss Finance II's case in the United States and allowing any wind-up to occur in Canada, Mr. Conlan reveals. He contends that against this backdrop, the Debtors should be afforded a reasonable timeframe for considering its plan and other alternatives for Finance II. The Official Committee of Unsecured Creditors joins in the Debtors' Objection. * * * Judge Shannon has denied the Reconsideration Request. He reiterated that records in the case do not support a finding of gross mismanagement of Finance II requiring conversion of the case to Chapter 7. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly US$7.450 billion in total assets and US$5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Says Plan Objections Based on Meritless Claims ------------------------------------------------------------- Aurelius Capital Management LP and Columbus Hill Capital Management L.P. and Manufacturers and Traders Trust Company asked the Court not to confirm Smurfit-Stone Container Corp.'s Chapter 11 Plan of Reorganization. In response, on behalf of the Debtors, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, contends that the Objections constitute yet another attempt by the Objectors to extract additional value from the Debtors' estates based upon two meritless claims held by Stone Container Finance Company of Canada II. Mr. Conlan notes that throughout the Chapter 11 cases and the CCAA Proceedings, the Objectors have complained about decisions made by Stone FinCo II with respect to the two claims -- an intercompany Claim against Smurfit-Stone Container Canada, Inc. and a wind-up Claim against Smurfit-Stone Container Enterprises, Inc. He adds that the Objectors' Plan objections follow the same reasoning -- Stone FinCo II's judgment not to pursue Plan objections is improper, so the Objectors will pursue the objections directly. Mr. Conlan tells the Court that a number of the Objectors' Plan issues have been addressed by the withdrawal of the Stone FinCo II reorganization from the Plan. He notes that although Stone FinCo II remains in Chapter 11 and under CCAA protection, Stone FinCo II likely will be liquidated under applicable law in the United States or in Canada and the Objectors' rights relating to Stone FinCo II will be addressed in any proceeding and are not impacted by confirmation of the Plan because the Plan only affects Stone FinCo II in its status as a creditor of SSCE and SSC Canada. The Plan is overwhelmingly accepted by general unsecured creditors and even by creditors of SSC Canada who will only have an estimated 30% recovery, Mr. Conlan notes. He adds that the Plan is also endorsed by Deloitte and Touche LLP, the monitor in the CCAA Proceedings. For these reasons, Mr. Conlan asserts that the Plan satisfies requirements for confirmation of a Chapter 11 plan under the Bankruptcy Code. The Debtors' Response is supported by the Official Committee of Unsecured Creditors and Wilmington Trust Company. They contend that the sale of the Canadian Debtors' assets is reasonable and provides fair value to creditors and the treatment of the Intercompany Claim is appropriate and there is an appropriate mechanism for allowance of the Wind-Up Claim. The Creditors Committee tells the Court that Aurelius Capital's and Columbus Hill's objection to the lack of a formal marketing of the Canadian Assets is without merit because a formal marketing process will only cause unnecessary delay and likely diminish, rather than enhance, distributions to Canadian unsecured creditors. "Because these [Canadian] creditors voted in favor of the Plan, they made the choice that the certainty of payment under the Plan was better than pursuing a formal marketing process," Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, says. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly US$7.450 billion in total assets and US$5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SOUTH FINANCIAL: DBRS Cuts Issuer & Senior Debt Ratings to 'C' -------------------------------------------------------------- DBRS has downgraded the ratings for The South Financial Group, Inc. (The South or the Company) and its bank subsidiary, Carolina First Bank, including the Company's Issuer & Senior Debt ratings to C from CC and maintained its Short-Term Instruments rating at R-5. All ratings were placed on Negative trend. Subsequent to the downgrade, DBRS withdrew the Company's ratings. The rating actions followed the Company's release of 1Q10 operating results, which reflected a loss attributable to common shareholders of $86 million. At the request of the issuer, DBRS decided to discontinue the Company's ratings. Today's rating actions conclude a Review with Negative Implications initiated by DBRS in January 2010. The rating actions and Negative trend reflects DBRS view that The South's tangible common equity position is weak and its ability to absorb potential future credit losses is limited. Indeed, the Company's ability to remain a going concern is likely dependent on its ability to augment its capital position over the short term. DBRS comments that there likely remains significant loss content within The South's loan portfolios, which will continue to erode capital. It is DBRS's perception that substantial amounts of potential losses remain embedded within the Company's loan portfolios, especially given the low real estate valuations and high unemployment within its geographic footprint. The South's residential construction portfolio, which represented the largest component of net charge-offs during 2009 remains problematic. Furthermore the commercial development portfolio remains strained, with 10% of the portfolio on nonaccrual status. At March 31, 2009, The South's non-performing assets represented a high 6.35% of loans, up from 6.13% at December 31, 2009. Meanwhile, 1Q10 net charge-offs declined, yet represented a high 4.32% of average loans, down from 6.52% for the prior quarter. DBRS notes that The South's core earnings (income before provisions and taxes), provides only a modest level of loss absorption capacity for the Company, especially when compared to recent quarterly provisions for loan loss reserves, which are likely to remain elevated over the near term. As such, DBRS anticipates capital invasion to continue. DBRS notes that The South's tangible common equity ratio is now at a very low 2.90%, down from 3.67% at December 31, 2009. From a regulatory standpoint, the Company is "well capitalized", as reflected by its estimated Tier 1 and Total risk based capital ratios of 9.52% and 10.83%, respectively. However, DBRS expects regulatory capital to contract over the near term, due to additional quarterly losses. The regulatory capital metrics include $347 million in TARP capital. At this point, liquidity is acceptable. The Company has excess liquidity, including roughly $2.2 billion in cash and free securities. Parent company liquidity needs were much reduced when the Company suspended dividend payments on all remaining outstanding equity and capital instruments, including subordinated debentures to various trusts with applicable outstanding trust preferred securities, REIT preferreds and TARP preferred stock. Although the suspension will preserve $4.5 million in capital on a quarterly basis, the impact on capital will be limited. Indeed, the suspension will further reduce the Company's financial flexibility as it tries to raise additional capital, especially given its low stock price and the disrupted market, which makes it difficult to sell assets. SPHERIS INC: MedQuist Completes Sale Transaction ------------------------------------------------ MedQuist Inc. said Friday it has completed the purchase of the domestic business of Spheris Inc. Simultaneously, CBay Inc., MedQuist's majority owner, has acquired the stock of Spheris India Private Limited, a subsidiary of Spheris. Together, the combined companies will offer unprecedented opportunities for healthcare providers to improve their clinical documentation and drive toward EHR adoption faster and at a lower cost, through the advanced technology and domestic and global services now available. As reported by the Troubled Company Reporter on April 19, 2010, the United States Bankruptcy Court for the District of Delaware approved the sale of substantially all of Spheris' assets to MedQuist and CBay. The purchase price is $98,833,900 in cash and an unsecured subordinated promissory note issued by MedQuist Transcriptions, Ltd. in an aggregate principal amount of $17,500,000. Bankruptcy Law360 noted that the approved $116.3 million bid is a substantial premium over the $75 million the stalking horse bidders initially proposed. MedQuist CEO Peter Masanotti comments, "This is a very exciting development for the clinical documentation industry and the healthcare facilities we serve. We are pleased to welcome Spheris customers and employees to MedQuist. We pursued this transaction knowing that Spheris' resources and experience would perfectly complement our suite of services and technologies to deliver cost- effective, high quality clinical documentation." He adds, "Our recent results have demonstrated that the market has been very receptive to MedQuist technologies and services, and we expect that new synergies with Spheris will only help us to increase our momentum and enhance our offerings to current and prospective customers. We look forward to leading the way in innovation and customer care as a strong, financially stable, fully integrated organization." Both MedQuist and Spheris are coordinating customer communications and ongoing services to assure that historical high service levels and customer satisfaction are continued in a seamless manner, supporting their customers' patient care mission. About MedQuist MedQuist Inc. (Nasdaq: MEDQ) -- http://www.medquist.com/-- provides medical transcription services, and a leader in technology-enabled clinical documentation workflow. MedQuist's enterprise solutions -- including mobile voice capture devices, speech recognition, Web-based workflow platforms, and global network of medical editors -- help healthcare facilities improve patient care, increase physician satisfaction, and lower operational costs. About CBay Holdings CBay Holdings, together with its subsidiaries and equity investees, provides technology-enabled medical transcription services and related revenue cycle solutions. CBay Holdings partners with healthcare providers to deliver outsourced transcription solutions designed to improve the quality and timeliness of clinical data and information, reduce operational costs, increase physician satisfaction, and enhance revenue cycle performance. The Company serves more than 2,400 health systems, hospitals, and physician groups in the U.S. CBaySystems Holdings Ltd is composed of a portfolio of businesses, including CBay Systems & Services Inc, CBay Systems (India) Private Ltd, Mirrus Systems Inc. and a majority shareholding of approximately 69.5% percent in MedQuist Inc. CBaySystems Holdings Ltd trades under the CBAY symbol on the AIM market of the London Stock Exchange. About Spheris Based in Franklin, Tennessee, Spheris Inc. -- http://www.spheris.com/-- is a global provider of clinical documentation technology and services. Spheris Inc., along with five affiliates, filed for Chapter 11 on Feb. 3, 2010 (Bankr. D. Del. Case No. 10-10352). 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. SRAM CORPORATION: Moody's Assigns 'Ba3' Rating on $315 Mil. Loan ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the company's proposed $315 million senior secured bank credit facility consisting of a $25 million revolving credit facility and a $290 million term loan. At the same time, Moody's affirmed the B2 CFR and revised the outlook to positive from stable. The ratings on the existing credit facility will be withdrawn when the transaction closes. The $290 million of proceeds from the amended and extended credit facility plus around $10 million of cash will be used to repay the existing term loan and subordinated notes. While the proposed refinancing is essentially leverage neutral, it will reduce annual interest expense by more than $10 million and will extend the maturity date of the senior credit facility by one year to 2015. "The positive outlook reflects Moody's view that the good business fundamentals in the cycling sector combined with SRAM's strong brand name, leading market share in bicycle component parts and cost rationalization efforts has helped it weather a severe consumer led recession and should enable it to improve its profitability as the economic recovery continues to take shape" said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. Moody's expectation that revenue and backlog will continue their recent positive trends after declining for most of 2009 is also reflected in the positive outlook as is the company's good liquidity position. The PDR was downgraded to B3 from B2 in accordance with Moody's LGD methodology as the company will have only first lien bank debt in its capital structure. The Ba3 rating on the amended and extended credit facility is the same as the exiting rating despite the elimination of the subordinated notes. This is because Moody's applied a one notch override to the LGD methodology to avoid potential rating volatility, which could occur if the CFR is upgraded to B1 in the near to mid-term. The Ba3 rating on the secured facility would likely not be upgraded if the CFR is upgraded to B1. The B2 corporate family rating reflects SRAM's modest scale with $400 million of revenue, narrow product focus, and relatively high, albeit moderating, financial leverage at just under 5x. The ratings are also constrained by the company's history of shareholder friendly activity as well as by the potential for future shareholder favored transactions and by the potential for future acquisitions. SRAM's ratings benefit from its: 1) strong operating margins in the high teens; 2) strong market position within the bicycle component industry; 3) extensive product portfolio within the premium segment; and 4) strong brand recognition among bike enthusiasts and dealers. The ratings also benefit from the company's good liquidity profile, ability to improve operating and gross margins despite the double digit revenue declines throughout the recession, geographic diversification, and stable industry dynamics. These ratings/assessments were assigned: * $25 million Senior Secured Revolving Credit Facility due 2015 at Ba3 (LGD2, 22%) * $290 million Senior Secured Term Loan due 2015 at Ba3 (LGD2, 22%) This rating was affirmed: * Corporate family rating at B2; This rating was downgraded: * Probability-of-default rating to B3 from B2 The last rating action was on August 22, 2008, where Moody's assigned a B2 corporate family rating with a stable outlook. Based in Chicago, Illinois, SRAM Corporation is a global manufacturer and marketer of premium branded bicycle components with brand names such as Rock Shock and TruVativ. Revenue for the twelve months ended December 2009 was approximately $400 million. SRAM LLC: S&P Raises Corporate Credit Rating to 'B+' From 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Chicago, Ill.-based bicycle components manufacturer SRAM LLC to 'B+' from 'B'. The rating outlook is stable. In addition, S&P assigned its issue-level and recovery ratings to the company's proposed $315 million senior secured credit facilities due in 2015, consisting of a $25 million revolving credit facility and a $290 million term loan. S&P rated the credit facilities 'BB-' (one notch higher than the 'B+' corporate credit rating) with a recovery rating of '2', indicating S&P's expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. S&P will withdraw its ratings on SRAM's existing senior secured credit facilities when the new facility transaction closes. "The one-notch upgrade of the corporate credit rating reflects SRAM's relatively good performance in the recession and improvements in key credit metrics," said Standard & Poor's credit analyst Andy Liu. Pro forma for the proposed transaction, lease-adjusted total debt to EBITDA decreased to 3.1x (or 4.6x including preferred stock) for the year ended Dec. 31, 2009 -- down meaningfully from 3.6x (or 4.9x including preferred) at the end of 2008. Similarly, pro forma EBITDA coverage of interest for the year ended Dec. 31, 2009 was 6.2x (2.3x including preferred), up meaningfully from 2.8x (2.3x including preferred). The limited participating preferred stock was issued to Trilantic Partners in 2008, representing about 37% of ownership of SRAM. The preferred provides a 10% cumulative, annual noncash dividend, accruing quarterly. The preferred does not have a maturity date. However, the preferred holder has the right to force a sale of the company or an IPO at or after late 2013. S&P's 'B+' corporate credit rating reflects SRAM's sales concentration in components for the midrange to high-end bicycle market, its intense competition against a market dominant player, and some technology and fashion risk. The company's good market position in several segments of this market and its long-term non- exclusive relationships with major bicycle original equipment manufacturers (OEMs) are some positive factors. SRAM has good EBITDA margins. For the year ended Dec. 31, 2009, the EBITDA margin was 23.1% -- a marked improvement from 20.5% at the end of 2008, despite lower overall sales. The margin gain benefited from the company's various cost-containment measures implemented in 2009, which increased its gross margin and decreased selling, general, and administrative expenses. However, it is uncertain whether SRAM can further reduce its costs if the economy and demand weaken again. The company generated good cash flow in 2009, converting about 53% of EBITDA into discretionary cash flow (most of which was used to reduce debt). STANDARD PACIFIC: S&P Assigns 'B-' Rating on $300 Mil. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' rating to the $300 million 8.375% senior notes due May 15, 2018, issued by Standard Pacific Corp. The '5' recovery rating reflects S&P's expectation for a modest (10%-30%) recovery in the event of default. The company plans to use proceeds from the offering to fund a tender offer for its 7.75% senior notes due 2013 ($121.2 million outstanding balance), to call its 2010 and 2011 senior notes ($63.7 million combined balance), and repay other debt. Irvine, Calif.-based Standard Pacific is a moderately sized homebuilder with operations in the western, southwestern, and southeastern U.S. Conditions in these markets remain challenging, but S&P expects that recent improvements in the company's cost structure should contribute to near-breakeven net earnings in 2010, even at lower sales levels. This was the case in Standard Pacific's first fiscal quarter (ended March 31, 2010), when the company reported a $5 million loss -- compared with a $50 million loss during the previous year -- on a 22% drop in closings, to just 537 homes. S&P expects the company's leverage to remain high at about 11x debt-to-EBITDA in 2010, but its near-term maturities are manageable, in S&P's view, particularly after adjusting for these new notes and the tender offer. Ratings List Standard Pacific Corp. Corporate credit B/Stable/-- Ratings Assigned Standard Pacific Corp. $300 mil. senior notes due 2018 B- Recovery rating 5 STARWOOD HOTELS: Fitch Assigns 'BB+' Rating on $1.5 Bil. Loan ------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Starwood Hotels & Resorts Worldwide Inc.'s new $1.5 billion unsecured credit facility. The Rating Outlook is Stable. The credit facility rating is in line with the 'BB+' rating on Starwood's unsecured notes and the company's Issuer Default Rating, as the credit facility ranks pari passu with the unsecured notes and there is minimal secured mortgage debt in the company's capital structure. Fitch affirmed Starwood's ratings last month and noted that refinancing of the credit facility at reasonable terms was likely and did not present any credit concerns. The new 3.5-year, multi-currency revolving credit facility expires on Nov. 15, 2013 and has $1.5 billion of capacity. The new facility was downsized and shortened from the previous $1.875 billion, 5-year facility that would have matured on Feb. 11, 2011. Pricing on the revolver is leverage and ratings based, ranging from LIBOR+175 basis points to LIBOR+300 bps, with current pricing at LIBOR+235 bps. The commitment fee ranges from 25 bps to 50 bps, with current pricing of 40 bps. Maintenance financial covenant levels were generally maintained relative to the previous facility, which includes a 2.5 times interest coverage requirement and a leverage covenant that is currently at 5.5x through June 30, 2011, before stepping down periodically to 4.5x in 2013. Restrictions on dividends and share buybacks will burn off following (1) a return to an investment grade rating, (2) maintaining leverage below 4x for two consecutive quarters, or (3) Starwood electing to permanently reset the leverage covenant to 4.5x. The lien carveout, which was reduced to 5% of Consolidated Net Tangible Assets in an April 2009 amendment to the previous credit facility that provided some financial covenant relief, was set back to 10% in the new credit facility. Lodging Demand Continues To Improve: The recovery in lodging demand has accelerated faster than Fitch's expectations over the past several months. As a result, Fitch's base case outlook now incorporates industrywide RevPAR in the U.S. to be flat to +2% in 2010, which is up from its outlook in early March of a 1%-3% decline, and Fitch's initial view on Dec. 2, 2009 of a 3%-5% decline. This follows a 17% U.S. RevPAR decline in 2009. While the demand improvement is encouraging, Fitch notes that the year-over-year comparisons are relative to a very weak travel demand period and it remains to be seen if the improvement will be sustained when comparisons become more difficult in the second half of 2010 and as global economic stimulus packages roll off in upcoming quarters. Fitch's base case for 2011 has also improved to incorporate low- to-mid single digit RevPAR growth in 2011 (up from previous expectations of a low-single digit increase), amid a slow, but improving macro-economic recovery characterized with high unemployment levels through next year. Lodging credit profiles and ratings would be under pressure if the economic trends pointed to a double-dip recession, although that is not in Fitch's current outlook. Domestically, Starwood has greatest exposure to the luxury, upper upscale, and urban market segments. RevPAR performance in upper upscale and urban markets has been consistently outperforming the broader hotel market for six months, while the luxury segment has been consistently outperforming for four months. In addition, Starwood has more international exposure than many of its U.S. peers, and hotel demand internationally is stronger than the U.S. with the sharpest pace of recovery in Asia. Yesterday, Marriott raised its company-specific worldwide 2010 RevPAR outlook to a 3-6% increase, from its previous outlook of - 2% to +2%, which was indicated on Feb. 11, 2010. The noted demand improvement bodes well for Starwood, which indicated a 2010 RevPAR outlook of flat to +5% on Feb. 4, 2010. Importantly, the recent demand improvement has been partially driven by the business segment. Initial demand stabilization last year was driven by flattening occupancy, as leisure travelers were attracted by lower prices. Recently, more profitable business transient demand has improved. Further improvement in lodging credit profiles and Fitch's demand outlook will result when pricing strengthens and booking windows extend. At this point, industrywide pricing in the luxury, upper upscale and urban segments has only recently started to pick up, as the RevPAR improvement is still largely occupancy driven. A sustained improvement in pricing will be another positive indicator of the lodging recovery gaining traction. Notable Credit Improvement Since Downgrade: Fitch downgraded Starwood's IDR out of investment grade on Feb. 4, 2009. Despite significant operating pressure last year, Starwood reduced debt by over $1 billion in 2009, resulting in a year-end debt balance of below $3 billion, which was a level of debt reduction that exceeded Fitch's original 2009 base case projections. The company demonstrated strong capital market access through two unsecured bond issuances and two timeshare receivable note sales. In addition, the company executed on multiple non-core asset sales and received cash through an amended points agreement with American Express. These actions resulted in $1.6 billion of proceeds in 2009 that were used to repay debt including $1.375 billion of term loans due in 2009-2011, and to complete a tender offer for $300 million of notes due in 2012- 2013. These actions significantly improved its liquidity and maturity profiles, as Starwood has no bond maturities until 2012 and a minimal balance on the new $1.5 billion credit facility. As of Dec. 31, 2009, Fitch calculates unadjusted leverage (debt/EBITDA) of 3.9x and slightly higher on an adjusted basis. Although this is slightly high relative to the 'BB+' IDR, mitigating factors include the improving fundamentals in a recovering cyclical industry, ample liquidity, and a solid free cash flow profile. Despite the operating pressure in 2009, Starwood generated $210 million of FCF last year as the company repositioned its timeshare business and was able to execute two receivable note sales. Going forward, the FCF profile will be enhanced by a significantly reduced dividend ($35 million in 2010 vs. $165 million in 2009), continued execution on its asset light strategy, and a less capital intensive timeshare business. The Stable Outlook incorporates Fitch's expectation that unadjusted comparable leverage will remain relatively flat in 2010, so the improving operating outlook could support faster than expected deleveraging and support an Outlook revision to Positive, if the demand improvement sustains and/or accelerates further. Starwood's next bond maturity to address is the 2012 notes, which had $605 million outstanding as of year-end 2009. Fitch anticipates the company will be opportunistic with respect to refinancing decisions, and current ratings incorporate that capital allocation decisions remain focused on balance sheet improvement. Securitized timeshare receivable debt will be coming back on balance sheet in 2010, which will result in roughly a $445 million increase in liabilities and a $400 million increase in assets. Pretax earnings are expected to increase by $20-$23 million and EBITDA by $40-$45 million, however, there is no change to cash flow and there is no change to the economics of the securitizations. As Fitch has previously noted, ratings are not affected by the accounting change and will issue additional guidance as it relates to adjusted credit metrics going forward. STATION CASINOS: Boyd Gaming Opposes Auction Procedures ------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Boyd Gaming Corp. said that Station Casinos Inc.'s proposed procedures for selling its assets slant "the playing field in favor of the insider" while inflicting "blatant harm on the Opco estate." Boyd says that the current procedures would "chill competitive bidding." Boyd reiterated its $2.45 billion offer from December to buy Station Casinos with cash and assumed debt. Station Casinos has announced an agreement where a group including current owners Frank and Lorenzo Fertitta will be the lead bidder at an auction with its $772 million offer for substantially all of the businesses. The Bloomberg report adds that Boyd is opposing Station's request for an extension until May 24 of the exclusive right to propose a Chapter 11 plan. Hearings are scheduled for May 5 on the exclusivity and auction- procedure motions. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. The Company owns and operates Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Rancho and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Wildfire Boulder, Gold Rush Casino and Lake Mead Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Aliante Station Casino and Hotel, Barley's Casino & Brewing Company, The Greens and Wildfire Lanes in Henderson, Nevada and a 6.7% interest in the joint venture that owns the Palms Casino Resort in Las Vegas, Nevada. In addition, the Company manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STERLING MINING: Auction May Pay Creditors in Full -------------------------------------------------- Bill Rochelle at Bloomberg News reports that Sterling Mining Co. said in a bankruptcy court filing that the $24 million offered by the winning bidder at the auction "possibly" would pay creditors in full, and may leave remaining cash to make distributions for shareholders. Silver Opportunity Partners LLC won the auction for Sterling Mining's assets at an auction last week. The initial bid was t $11.7 million. According to the report, with the advent of a sale that may pay creditors in full, the Company withdrew the reorganization plan that was on file and said it would file another. About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. Sterling is engaged in the business of acquiring, exploring, developing and mining mineral properties primarily those containing silver and associated base and precious metals. Sterling operates the Sunshine Silver Mine in Idaho and has exploration projects in Idaho, U.S.A. Sterling was incorporated under the laws of the State of Idaho on February 3, 1903 and its common shares are currently listed on the OTCBB: SRLMQ and Frankfurt Stock Exchange: SMX. Sterling is currently a debtor-in-possession in Chapter 11 Bankruptcy in the District of Idaho, U.S.A. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered represents the Debtor as counsel. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. In its schedules, the Debtor listed total assets of $11,706,761 and total debts of $14,159,010. STERLING MINING: Minco Silver Expects Break-Up Fee -------------------------------------------------- Minco Silver Corporation said it was unsuccessful in its bid to acquire 100% of the shares of Sterling Mining Company during a bankruptcy auction held on April 21, 2010. As a result, the Company expects to receive the repayment of all amounts advanced and incurred on the Sterling matter, with interest, in the aggregate amount of approximately US$11.76 million, secured by all assets of Sterling. Minco Silver will also seek to obtain the termination fee, or "break fee", in the amount of US$2.75 million pursuant to the "Amended and Restated Letter Agreement" entered into between Sterling and Minco Silver on July 30, 2008. The receipts of the funds are expected to take place on May 14, 2010, the closing date for the acquisition by the winning bidder. "We are pleased to see that the proceeding is coming to a conclusion. With the funding by the Company pre and post bankruptcy of Sterling over the past two years, we ensured the well-being and upkeep of the historical and legendary Sunshine Mine and protected the assets of Sterling for all the creditors. We are pleased to see that the Sunshine Mine will be opening a new chapter going forward and wish them the best in their future endeavors," commented Dr. Ken Cai, Chairman & CEO of Minco Silver. "With over C$21 million working capital after the repayment from Sterling, Minco Silver will continue to focus on bringing its flagship Fuwan Silver Project into production while continuing to seek valuable global mining opportunities." The Company is also pleased to announce that it has closed the second tranche of its non-brokered private placement totaling 327,500 units at a price of C$1.71 per unit for gross proceeds of C$560,025. Each unit consists of one (1) common share in the capital of the Company and one-half of one common share purchase warrant ("Warrant"). Each Warrant will entitle the holder to purchase one common share in the capital of Minco Silver at an exercise price of C$2.15 for a period of twelve (12) months from the closing of the Offering. The Company will pay a 5% finders' fee in connection with the Offering subject to the Toronto Stock Exchange approval. The proceeds of the Offering will be used for general corporate purposes. About Minco Silver Minco Silver Corporation is a TSX listed company focusing on the acquisition and development of silver dominant projects. The Company owns 90% interest in the world class Fuwan Silver Deposit, situated along the northeast margin of the highly prospective Fuwan Silver Belt. About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. Sterling is engaged in the business of acquiring, exploring, developing and mining mineral properties primarily those containing silver and associated base and precious metals. Sterling operates the Sunshine Silver Mine in Idaho and has exploration projects in Idaho, U.S.A. Sterling was incorporated under the laws of the State of Idaho on February 3, 1903 and its common shares are currently listed on the OTCBB: SRLMQ and Frankfurt Stock Exchange: SMX. Sterling is currently a debtor-in-possession in Chapter 11 Bankruptcy in the District of Idaho, U.S.A. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered represents the Debtor as counsel. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. In its schedules, the Debtor listed total assets of $11,706,761 and total debts of $14,159,010. STONEYBROOK TOWNHOMES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Stoneybrook Townhomes, LLC 734 Ordnance Drive Church Hill, TN 37642 Bankruptcy Case No.: 10-51017 Chapter 11 Petition Date: April 22, 2010 Court: United States Bankruptcy Court Eastern District of Tennessee (Greeneville) Judge: Marcia Phillips Parsons Debtor's Counsel: Fred M. Leonard, Esq. 27 Sixth Street Bristol, TN 37620 Tel: (423) 968-3151 E-mail: fredmleonard@earthlink.net Estimated Assets: $1,000,001 to 10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company says that assets total $2,608,250 while debts total $2,078,637. The Company did not file a list of creditors together with its petition. The petition was signed by Chris Monet, managing member. STRAFORD PLASTIC: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Stratford Plastic Components Corp. 753 Ontario Street Stratford, ON N5A 847 Bankruptcy Case No.: 10-32792 Chapter 11 Petition Date: April 23, 2010 Court: U.S. Bankruptcy Court Northern District of Ohio (Toledo) Judge: Richard L. Speer Debtor's Counsel: Jose Bartolomei, Esq. E-mail: bartolomei@millercanfield.com Marc N. Swanson, Esq. E-mail: swansonm@millercanfield.com Stephen S. LaPlante, Esq. Miller Canfield Paddock&Stone PLC 150 W. Jefferson Avenue #2500 Detroit, MI 48226 Tel: (313) 496-7591 Estimated Assets: $1,000,001 to 10,000,000 Estimated Debts: $1,000,001 to 10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Eugene P. Migus, senior vice-president, BDO Canada LTD. TAYLOR BEAN: Angelo Gordon Wins Auction of MBS Portfolio -------------------------------------------------------- Judge Jerry A. Funk of the U.S. Bankruptcy Court in Jacksonville, Florida, will hold a hearing today to approve the sale by Taylor Bean & Whitaker Mortgage Corp. of a portfolio of marked-down mortgage-backed securities. AG Mortgage Value Partners Master Fund, a Cayman Islands- registered hedge fund run by Angelo Gordon & Co., won the auction with its $9.675 million offer. AG Mortgage was the "stalking horse" bidder, initially offering $8.76 million for the portfolio. According to Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review the portfolio once valued at more than $30 million. Centerbridge Credit Partners L.P., and the Diocese of Rockville Centre Lay Pension Plan submitted rival bids. Rockville's $9,625,000 bid -- plus the Court-approved $275,000 Break-up Fee -- emerged as the second highest bid after seven rounds of bidding. Rockville has acknowledged that it is obligated to hold open its bid in the event that AG Mortgage fails to close. Dow Jones notes that Lewis Ranieri, a former Salomon Brothers' vice chairman known as the father of mortgage securitization, is a member of the pension plan's investment committee. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company that grew from a small Ocala-based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Taylor Bean filed under Chapter 11 three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean has more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors, according to the bankruptcy petition. TAZDOG, LLC: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Tazdog, LLC 2777 Darlington Road Beaver Falls, PA 15010 Bankruptcy Case No.: 10-22965 Chapter 11 Petition Date: April 23, 2010 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Gary William Short, Esq. 436 Seventh Avenue 2317 Koppers Building Pittsburgh, PA 15219 Tel: (412) 765-0100 Fax: (412) 765-2211 E-mail: gwshort@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Edward Cline, authorized agent. TECH DATE: Fitch Expects Modest Sales Growth in 2010 ---------------------------------------------------- Fitch Ratings released a report detailing its outlook for the I.T. Distributors. In the report, Fitch examines industry operating performance, credit and liquidity, key industry trends and developments, individual credit and financial profiles, corporate governance and covenants. Fitch also provides quarterly and historical financial data. Fitch's outlook for IT distributors in 2010 is stable, underpinned by a more optimistic view on industry operating profiles, offset by expectations of moderate deterioration in liquidity and credit profiles as well as heightened event risk, particularly for acquisitions. The companies profiled are: -- Anixter Inc./Anixter International Inc.: 'BB+'; Outlook Stable; -- Arrow Electronics, Inc.: 'BBB-'; Outlook Stable; -- Avnet, Inc.: 'BBB-'; Outlook Stable; -- Ingram Micro Inc.: 'BBB-'; Outlook Stable; -- Tech Data Corporation: 'BB+'; Outlook Stable. Fitch expects the IT distributors to experience modest sales growth in 2010, as corporate IT demand improves, driven by a more stable economic backdrop and growth in emerging markets. Positive operating leverage and abatement of cyclical gross margin pressure will result in improved operating profitability. After generating significant cash from working capital reduction, reducing short-term debt and limiting acquisitions and share buybacks, the distributors' credit profiles are currently very strong. Fitch expects some deterioration in 2010, as M&A resumes and cash generation declines. A degree of credit deterioration from current levels is incorporated into ratings. TERREMARK WORLDWIDE: Moody's Upgrades Corp. Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service upgraded Terremark Worldwide, Inc.'s corporate family rating and probability of default rating, each to B2 from B3, due to the reduced project and execution risk following the company's near completion of new space at its Virginia and Silicon Valley data centers. As a result, the ratings on the existing 12% senior secured notes, due 2017 were upgraded to B1. Moody's notes that the company is seeking to raise an additional $50 million (gross proceeds) under the 2017 notes indenture, which would bring the face amount of the notes to $470 million. The company will use the add-on note issuance proceeds largely for general corporate purposes, which will include the acceleration of the build-out of its data centers. The SGL-2 liquidity assessment is affirmed, indicating good liquidity. Issuer: Terremark WorldWide, Inc. Upgrades: -- Corporate Family Rating, Upgraded to B2 from B3 -- Probability of Default Rating, Upgraded to B2 from B3 -- $470 million Senior Secured Notes Due 2017, Upgraded to B1, LGD3 - 42% from B2, LGD3 - 42% Although the company's financial leverage (Moody's adjusted Debt/EBITDA, including capitalized operating leases) remained relatively constant during 2009, due to the ongoing expansion and the wait time for new facilities to come online, Moody's expects the company's adjusted leverage to fall to about 5.9x at fiscal year end 2011 from about 7.2x at December 31, 2009. The reduction in leverage will be driven by the operating benefits that will accrue to Terremark, as the company begins to generate revenues from the leases on the new space. The company has indicated that a good portion of the 55,000 square foot colocation capacity that is coming online in fiscal 2011 has already been presold. Nevertheless, Terremark's B2 CFR reflects the significant continuing execution risk from the company's ongoing expansion, increasingly competitive environment as the company grows its managed service business, high leverage, and the high capital intensity inherent in the company's business plans. Moody's believes Terremark plans to build out roughly 40 thousand square feet of additional rentable space over the next year. Furthermore, the rating agency recognizes that Terremark's key credit metrics will remain in a state of transition through the end of fiscal year ending in March of 2012, as during that time Moody's expects the company's leverage to fall from over 7x pro- forma for the pending financing to roughly 4.5x, given the expected rapidly improving EBITDA once the announced build-outs are complete. Moody's also notes that if the company undertakes additional expansion projects, the expected deleveraging may be further delayed. Finally, Terremark's rating reflects the favorable near-term trends for server hosting capacity in the US and the unique position of the company's cornerstone data center in Florida, and its growing relationship with the Federal government, which Moody's believe somewhat reduces the uncertainty of future cash flows. Terremark's SGL-2 liquidity rating indicates good liquidity. Over the 4-quarter horizon to March 31, 2011 Terremark's main source of liquidity is expected to be cash on hand, which pro-forma for the $50 million debt raise would be roughly $110 million. Against this, Terremark's main use of cash will be its likely cash burn of roughly $80 million to support its expansion plans over this 4- quarter period. Moody's notes that the company's liquidity position enables it to execute its expansion only up to the announced levels. Should the company proceed to add more space than what it has announced, it will need to raise additional debt or equity capital. The stable outlook reflects Moody's view that no significant changes to Terremark's credit profile, which is likely to be quite weak initially, are expected over the rating horizon of roughly 2 years as the company focuses on its expansion plans. Moody's most recent rating for Terremark was in June 2009, when the rating agency assigned a B2 rating to the senior secured note issuance, along with a B3 CFR and a B3 PDR. Headquartered in Miami, FL, Terremark is a data company which operates four domestic and five international data centers, totaling about 207,000 square feet of rentable data center space. TERREMARK WORLDWIDE: S&P Assigns 'B-' Rating on $50 Mil. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B-' issue rating and '4' recovery rating to Miami-based data center operator and managed service provider Terremark Worldwide Inc.'s $50 million add-on to its 12% senior secured notes due 2017, to be issued under Rule 144A with registration rights. The company will use the proceeds for general corporate purposes. S&P also affirmed the company's 'B-' corporate credit rating and 'B-' issue rating on its existing $420 million of senior secured notes due 2017, leaving the '4' recovery rating on the notes unchanged. S&P also revised the outlook to positive from stable. The outlook revision to positive reflects the company's strong growth in revenue and EBITDA over the last 12 months and expectation that, at this continued pace, it will be able to achieve leverage of under 7x on an ongoing basis over the next year, which would be supportive of an upgrade. "The rating on Terremark reflects the company's highly leveraged capital structure, negative free cash flow, and significant growth rate," said Standard & Poor's credit analyst Catherine Cosentino. While Standard & Poor's believes that Terremark's colocation business has attractive gross profit margins and low churn, its business plan does require significant upfront capital investment to support growth through data center expansion; thus, S&P expects high leverage and net free cash flow deficits over the near term. "Moreover," added Ms. Cosentino, "the company's managed services business represents a material part of its current revenue base, and S&P believes that this segment, while less capital intensive than colocation, has less certain demand prospects and potential for higher churn and pricing pressures." TEXAS HILL: Asks for Court's Nod to Use Cash Collateral ------------------------------------------------------- Texas Hill Enterprises, GP, and Texas Hill Diamante Cooling, L.L.C., seek authority from the U.S. Bankruptcy Court for the District of Arizona to use the cash collateral securing their obligation to their prepetition lenders. Farm Credit Services Southwest may claim liens on the Debtors' real estate, equipment and cash in the approximate amount of $5,021,546. The Debtors assert that their debts, including debts to Farm Credit, total approximately $13.5 million. The alleged secured claims of Farm Credit and Rabobank, N.A., and Rabobank AgFinance total approximately $11 million. The two Rabobank entities are secured by first and second liens against the Debtors' real property. Daniel P. Collins, Esq., at Collins, May, Potenza, Baran & Gillespie, P.C., the attorney for the Debtors, explains that the Debtors need the money to fund their Chapter 11 cases, pay suppliers and other parties. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/TEXAS_HILL_budget.pdf In exchange for using the cash collateral, the Debtors are willing to grant Farm Credit post-petition replacement liens. Farm Credit is further adequately protected by the Debtors' continuation and preservation of the going concern value of the business. Adequate protection is also provided to Farm Credit by the equity cushion in the Debtors' hard assets. Roll, Arizona-based Texas Hill Enterprises, GP, dba Texas Hill Farms, filed for Chapter 11 bankruptcy on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11121). Daniel P. Collins, Esq., and Allysse M. Medina, Esq., at Collins, May, Potenza, Baran & Gillespie, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. TEXAS HILL: Asks for Court OK to Obtain Post-Petition Financing --------------------------------------------------------------- Texas Hill Enterprises, GP (THE) and Texas Hill Diamante Cooling, L.L.C., seek authority from the U.S. Bankruptcy Court for the District of Arizona to obtain post-petition super-priority secured credit in the amount of $200,000 from Kristi L. Ricard and unsecured credit of $150,000 from Forest A. Braden. The Debtors have received an offer from Ms. Ricard to open a $200,000 line of credit for THE, to mature on July 15, 2010. Interest will accrue at a rate of 10% per annum. In exchange for the extension of credit, the Debtors propose to grant Ms. Ricard an administrative priority and a super-priority lien on all existing crops. The Debtors have also received an offer from Mr. Braden to lend THE $150,000, which loan is to be repaid by July 15, 2010. Interest will accrue at a rate of 10% per annum. In exchange for the loan, Mr. Braden will be granted an administrative priority. Daniel P. Collins, Esq., at Collins, May, Potenza, Baran & Gillespie, P.C., the attorney for the Debtors, explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The Debtors say that over the next two months, the projected monthly revenues generated by the Debtors cannot cover the expenses. The Debtors say that the post-petition financing agreements are being drafted and will be filed shortly hereafter. Roll, Arizona-based Texas Hill Enterprises, GP, dba Texas Hill Farms, filed for Chapter 11 bankruptcy on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11121). Daniel P. Collins, Esq., and Allysse M. Medina, Esq., at Collins, May, Potenza, Baran & Gillespie, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. TEXAS HILL: Files List of 20 Largest Unsecured Creditors -------------------------------------------------------- Texas Hill Enterprises, GP, has filed with the U.S. Bankruptcy Court for the District of Arizona a list of its 20 largest unsecured creditors. The three largest unsecured creditors are: Entity Claim Amount ------ ------------ The Dune Company of Yuma, LLC Attn: Mike Snyder P.O. Box 5149 Yuma, AZ 85304 $666,776 Ricard Hay Forage P.O. Box 115 Tacna, AZ 85352 $219,346 Fertizona Roll LLC Attn: Mike Espil 4212 South Avenue 39E Roll, AZ 85347 $102,450 A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/azb10-11121.pdf Roll, Arizona-based Texas Hill Enterprises, GP, dba Texas Hill Farms, filed for Chapter 11 bankruptcy on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11121). Daniel P. Collins, Esq., and Allysse M. Medina, Esq., at Collins, May, Potenza, Baran & Gillespie, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. TEXAS HILL: Section 341(a) Meeting Scheduled for June 25 -------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of Texas Hill Enterprises, GP's creditors on June 25, 2010, at 10:30 a.m. The meeting will be held at U.S. District Court Building, 325 West 19th St., Yuma, AZ (YUMA). This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Roll, Arizona-based Texas Hill Enterprises, GP, dba Texas Hill Farms, filed for Chapter 11 bankruptcy on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11121). Daniel P. Collins, Esq., and Allysse M. Medina, Esq., at Collins, May, Potenza, Baran & Gillespie, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. TEXAS HILL: Taps Collins May as General Counsel ----------------------------------------------- Texas Hill Enterprises, GP, has asked for authorization from the U.S. Bankruptcy Court for the District of Arizona to employ Collins, May, Potenza, Baran & Gillespie, P.C., as general counsel, effective as of April 15, 2010. CMPBG will, among other things: a. analyze the Debtors' financial situation, and render advice to the Debtors in determining course of action necessary to reorganize effectively; b. prepare and file the petition, statement of affairs, schedule of assets and liabilities, and plan of reorganization; c. represent the Debtors at the meeting of creditors and confirmation hearing, and any adjourned hearings thereof. CMPBG will be paid based on the hourly rates of its personnel: Attorneys $180-$360 Law Clerks $150 Paralegals $75-$165 Other Legal Assistants $75-$165 To the best of the Debtors' knowledge, CMPBG is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Roll, Arizona-based Texas Hill Enterprises, GP, dba Texas Hill Farms, filed for Chapter 11 bankruptcy on April 15, 2010 (Bankr. D. Ariz. Case No. 10-11121). Daniel P. Collins, Esq., and Allysse M. Medina, Esq., at Collins, May, Potenza, Baran & Gillespie, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. TISHMAN SPEYER: Stuyvesant & Peter Cooper May Be Sold Separately ---------------------------------------------------------------- Kaja Whitehouse at the New York Post reports that sources familiar with the matter said CW Capital and Bank of America are asking a judge for permission to sell the Stuyvesant Town-Peter Cooper Village separately. The Post says CW Capital and Bank of America made the request so that they had available to them all possible sale scenarios -- and to shield them from claims they didn't do everything to get the best possible price for the complex. The Post says few expect the two parcels to be sold separately. The Post notes CW is obligated to offer the property for sale "in all the possible combinations," said a person familiar with the deal, who also characterized the chances of a split as "extremely unlikely." CW oversees the two complexes on behalf of lenders. StuyTown includes 35 buildings, while Peter Cooper Village has 21 buildings. Combined, the development totals 11,000 apartments. Tishman Speyer and BlackRock paid $5.4 billion for the complex in 2006, with plans of converting the regulated apartments to market- rate apartments. As reported by the Troubled Company Reporter on February 26, 2010, Charles V. Bagli at The New York Times' City Room said the most recent appraisal of Stuyvesant Town and Peter Cooper Village put the worth of the complexes at about $1.8 billion. But many analysts and investors say that the complexes, which contain more than 11,000 apartments, will be worth far more in the future. The NY Times also said the Stuyvesant Town-Peter Cooper Village Tenants Association is pursuing a restructuring plan that would allow some tenants to purchase their apartments, while ensuring that thousands of other units remain affordable under the state's rent regulations. In February 2010, David Tepper's Appaloosa Management objected to a decision by CW to foreclose on the owners of Stuyvesant Town and Peter Cooper Villages. According to the NY Times, Appaloosa said a foreclosure could cost as much as $200 million in transfer taxes. Appaloosa said CW should have pushed the owners to go into bankruptcy court, thereby avoiding the necessity of paying those taxes. Appaloosa also argued that CW has "irreconcilable conflicts of interest" because it is both the "servicer" for the mortgage and an important debtholder. The NY Times said Appaloosa has acquired control of more than $750 million of $3 billion in mortgages in the complexes. About Tishman Speyer Tishman Speyer Properties lays claim to two of the most famous slices of the Big Apple -- New York City's Chrysler Building and Rockefeller Center. The property company invests in, develops, and/or operates commercial real estate. Other well known holdings include Berlin's Q 205 project (the first post-reunification development in the city's center) and Chicago's Franklin Center (one of the city's largest office properties). The company owns or has developed more than 115 million sq. ft. in Asia, Europe, South America, and the US since it was founded in 1978. The company also has projects in India, China, and Brazil, and owns some 92,000 residential units around the world. Stuyvesant Town-Peter Cooper Village comprises 56 multi-story buildings, situated on 80 acres, and includes a total of 11,227 apartments. The loan sponsors, Tishman Speyer Properties, LP and BlackRock Realty, acquired the property with the intent of converting rent-stabilized units to market rents as tenants vacated the property; however, the conversion of units has since been determined to be illegal by the New York State Court of Appeals. In addition to the $3 billion securitized balance, there is an additional $1.5 billion of mezzanine debt held outside the trust. TRICKLE'S INCORPORATED: Case Summary & Creditors List ----------------------------------------------------- Debtor: Trickle's Incorporated dba Western Mailing Services 530 e. Pamalyn Avenue, Suite C Las Vegas, NV 89119 Bankruptcy Case No.: 10-17235 Chapter 11 Petition Date: April 23, 2010 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike k. Nakagawa Debtor's Counsel: David J. Winterton, Esq. 211 N. Buffalo Drive #A Las Vegas, NV 89145 Tel: (702) 363-0317 E-mail: david@davidwinterton.com Estimated Assets: $1,000,001 to 10,000,000 Estimated Debts: $1,000,001 to 10,000,000 A copy of the Company's list of 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb10-17235.pdf The petition was signed by Barbara L Trickle, president. TRULITE INC: Equus Takes Action to Collect $2.3MM From Firm ----------------------------------------------------------- Equus Total Return, Inc. announced that on April 22, 2010, it had taken action to collect $2.3 million owing from Trulite, Inc., a portfolio company of Equus. The loan to Trulite was originated by Paula Douglass (who until March 2010 had been an officer of the Fund and a member of the Fund's Investment Committee). Trulite defaulted on the Loan from Equus on January 26, 2010. "We are very disturbed that Jonathan H. Godshall, CEO of Trulite, John D. White, Chairman of Trulite, and Paula Douglass, a Director of Trulite, have been put forward by the 'Committee to Enhance Equus' (The Douglass Committee) as nominees for Directors for your Fund," said Richard Bergner, Chairman of the Fund. "The appointment of these proposed nominees would not be in the best interest of the Fund's shareholders, as these Directors would have a clear conflict in their duty to protect the interest of the Fund's shareholders versus their duty to protect the assets of Trulite, which is in default on a $2.3 million loan from the Fund." In early 2007, Trulite commenced trading on the OTC Bulletin Board and on March 31, 2008 had a market capitalization in excess of $14 million. In July 2008, Paula Douglass was appointed to the Board of Trulite. By June 2009, Trulite's stock price declined and last traded at a penny per share in July 2009 with a market capitalization of approximately $200,000. About Equus The Fund is a business development company that trades as a closed-end fund on the New York Stock Exchange, under the symbol "EQS". Additional information on the Fund may be obtained from the Fund's website at http://www.equuscap.com/ UAL CORP: Disagreement Arises on Continental Merger Talks --------------------------------------------------------- The Wall Street Journal's Susan Carey and Gina Chon report that people familiar with the matter said Sunday disagreements have emerged in the merger talks between UAL Corp.'s United Airlines and Continental Airlines Inc. over which share price to use for the stock-swap deal. According to the Journal, the sources said UAL and Continental were hoping to agree on a "neutral price." The Journal also relates a person familiar with the matter said that during discussions on Friday and Saturday, the two companies' chief executives disagreed on what share price to use in the merger. The Journal says Continental thinks the fairer deal is to use the 30-day share price prior to April 7. United wants to use the price the day before the deal is signed. According to the Journal, United and Continental are in much different positions than they were two years ago when Continental ultimately spurned United's advances. Continental has a new, aggressive chief executive, both carriers are better off financially, and the industry landscape has been altered by the 2008 merger of Delta Air Lines Inc. and Northwest Airlines, among other things, the people said. Sources told the Journal that if the merger does go through, Jeff Smisek, Continental's chief executive, would become chief executive of the combined company, while Glenn Tilton, UAL's CEO, would become the nonexecutive chairman. The company would be based in Chicago, and United would be the surviving brand, the people said, according to the Journal. According to the Journal, based on the April 23 stock prices, the deal would create a company valued at $6.9 billion. Delta, currently the No. 1 carrier by traffic, is valued at $10.2 billion. The Journal also reports that United's pilots union has signaled that it may support a merger with Continental, whose pilots are represented by the same union and earn higher wages than the United aviators. Continental's pilots union hasn't commented. The Journal relates that the labor agreements on both airlines' pilot groups are open for renewal, and United and Continental may have to offer richer terms to ensure pilot approval, a key challenge in successfully meshing two airlines. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At Dec. 31, 2009, AMR reported total assets of $25.438 billion, including total current assets of $6.642 billion; against total current liabilities of $7.728 billion, long-term debt, less current maturities of $9.984 billion, obligations under capital leases, less current obligations of $599 million, other liabilities and credits of $10.616 billion; resulting in stockholders' deficit of $3.489 billion. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. 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. Reorganized 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. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As of December 31, 2009, US Airways had total assets of $7,454,000,000, including $2,331,000,000 in total current assets, against total current liabilities of $2,789,000,000 and total noncurrent liabilities and deferred credits of $5,020,000,000, resulting in $355,000,000 stockholders' deficit. US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. UAL CORP: Reports March 2010 Traffic Results -------------------------------------------- United Air Lines, Inc., reported its preliminary consolidated traffic results for March 2010. Total consolidated revenue passenger miles (RPMs) increased in March by 3.2% on a decrease of 2.7% in available seat miles (ASMs) compared with the same period in 2009. This resulted in a reported March consolidated passenger load factor of 83.5%, an increase of 4.8 points compared to 2009. For March 2010, consolidated passenger revenue per available seat mile (PRASM) is estimated to have increased 21.5% to 23.5% year over year. Consolidated PRASM is estimated to have increased 3.2% to 5.2% for March 2010 compared to March 2008, approximately 3.0 percentage points of which were due to growth in ancillary revenues. United reported a U.S. Department of Transportation on-time arrival rate of 83.8% in March. Average March 2010 mainline fuel price, including gains or losses on settled fuel hedges and excluding non-cash, mark-to-market fuel hedge gains and losses, is estimated to be $2.21 per gallon. Including non-cash, mark-to-market fuel hedge gains and losses, the estimated fuel price is $1.67 per gallon for the month. 2010 2009 Percent Mar. Mar. Change ----- ----- ------- Revenue passenger miles ('000) North America 4,966,354 5,097,832 (2.6%) Pacific 1,852,884 1,743,576 6.3% Atlantic 1,413,349 1,310,329 7.9% Latin America 298,506 320,117 (6.8%) Total International 3,564,739 3,374,022 5.7% Total Mainline 8,531,093 8,471,854 0.7% Regional Affiliates 1,361,805 1,110,137 22.7% Total Consolidated 9,892,898 9,581,991 3.2% Available seat miles ('000) North America 5,829,540 6,156,076 (5.3%) Pacific 2,145,324 2,408,069 (10.9%) Atlantic 1,763,555 1,751,709 0.7% Latin America 375,100 400,442 (6.3%) Total International 4,283,979 4,560,220 (6.1%) Total Mainline 10,113,519 10,716,296 (5.6%) Regional Affiliates 1,732,849 1,464,583 18.3% Total Consolidated 11,846,368 12,180,879 (2.7%) Load factor North America 85.2% 82.8% 2.4 pts Pacific 86.4% 72.4% 14.0 pts Atlantic 80.1% 74.8% 5.3 pts Latin America 79.6% 79.9% (0.3 pts) Total International 83.2% 74.0% 9.2 pts Total Mainline 84.4% 79.1% 5.3 pts Regional Affiliates 78.6% 75.8% 2.8 pts Total Consolidated 83.5% 78.7% 4.8 pts Revenue passengers boarded ('000) Mainline 4,681 4,958 (5.6%) Regional Affiliates 2,432 2,078 17.0% Total Consolidated 7,113 7,036 1.1% Cargo ton miles (000) Freight 159,679 107,064 49.1% Mail 16,004 17,203 (7.0%) Total Mainline 175,683 124,267 41.4% GAAP to Non-GAAP Reconciliations Pursuant to SEC Regulation G, United has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis. Since United does not apply cash flow hedge accounting, the company believes that the net fuel hedge adjustments provide management and investors with a better perspective of its performance and comparison to its peers because the adjustments reflect the economic fuel cost during the periods presented and many of our peers apply cash flow hedge accounting. March 2010 ---------- Mainline fuel price per gallon excluding non-cash, net mark-to-market gains and losses $2.21 Add: Non-cash, net mark-to-market (gains) and losses per gallon (0.54) ---------- Mainline fuel price per gallon $1.67 ========== 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. Reorganized 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. UNITED WESTERN: Reschedules Annual Shareholders Meeting to July 30 ------------------------------------------------------------------ United Western Bancorp, Inc.'s Annual Meeting of Shareholders originally scheduled to be held on May 13, 2010 has been rescheduled to July 30, 2010. In addition, the March 10, 2010 record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting has been changed to May 31, 2010. The Company chose to reschedule the Annual Meeting to better accommodate shareholder schedules and encourage shareholder participation in the Company's Annual Meeting. Denver, Colo.-based United Western Bancorp, Inc. (NASDAQ: UWBK) -- http://www.uwbancorp.com/-- is a unitary thrift holding company that operates a community-based bank. The Holding Company's UW Trust Company subsidiary provides deposit services to institutional customers and custodial, administrative, and escrow services. At Dec. 31. 2009, the Company's balance sheet showed $2.5 billion in assets and $2.3 billion in liabilities, and the company reported a $42 million loss in 2009. * * * As reported in the Troubled Company Reporter on April 6, 2010, United Western Bancorp, Inc., has elected to defer regularly scheduled interest payments on all of the Company's outstanding junior subordinated debentures, totaling approximately $30.4 million, relating to its trust preferred securities issued by Matrix Bancorp Capital Trust II, VI and VIII for a period of 20 consecutive quarters on each Security. The terms of the Securities and the indenture documents allow the Company to defer payments of interest for the Deferral Period without default or penalty. US AIRWAYS: Disagreement Arises on UAL-Continental Merger Talks --------------------------------------------------------------- The Wall Street Journal's Susan Carey and Gina Chon report that people familiar with the matter said Sunday disagreements have emerged in the merger talks between UAL Corp.'s United Airlines and Continental Airlines Inc. over which share price to use for the stock-swap deal. According to the Journal, the sources said UAL and Continental were hoping to agree on a "neutral price." The Journal also relates a person familiar with the matter said that during discussions on Friday and Saturday, the two companies' chief executives disagreed on what share price to use in the merger. The Journal says Continental thinks the fairer deal is to use the 30-day share price prior to April 7. United wants to use the price the day before the deal is signed. According to the Journal, United and Continental are in much different positions than they were two years ago when Continental ultimately spurned United's advances. Continental has a new, aggressive chief executive, both carriers are better off financially, and the industry landscape has been altered by the 2008 merger of Delta Air Lines Inc. and Northwest Airlines, among other things, the people said. Sources told the Journal that if the merger does go through, Jeff Smisek, Continental's chief executive, would become chief executive of the combined company, while Glenn Tilton, UAL's CEO, would become the nonexecutive chairman. The company would be based in Chicago, and United would be the surviving brand, the people said, according to the Journal. According to the Journal, based on the April 23 stock prices, the deal would create a company valued at $6.9 billion. Delta, currently the No. 1 carrier by traffic, is valued at $10.2 billion. The Journal also reports that United's pilots union has signaled that it may support a merger with Continental, whose pilots are represented by the same union and earn higher wages than the United aviators. Continental's pilots union hasn't commented. The Journal relates that the labor agreements on both airlines' pilot groups are open for renewal, and United and Continental may have to offer richer terms to ensure pilot approval, a key challenge in successfully meshing two airlines. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At Dec. 31, 2009, AMR reported total assets of $25.438 billion, including total current assets of $6.642 billion; against total current liabilities of $7.728 billion, long-term debt, less current maturities of $9.984 billion, obligations under capital leases, less current obligations of $599 million, other liabilities and credits of $10.616 billion; resulting in stockholders' deficit of $3.489 billion. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. 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. Reorganized 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. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As of December 31, 2009, US Airways had total assets of $7,454,000,000, including $2,331,000,000 in total current assets, against total current liabilities of $2,789,000,000 and total noncurrent liabilities and deferred credits of $5,020,000,000, resulting in $355,000,000 stockholders' deficit. US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. VERTIS INC: Moody's Assigns Corporate Family Rating at 'Caa1' ------------------------------------------------------------- Moody's Investors Service assigned Vertis, Inc., a Caa1 Corporate Family Rating, Caa1 Probability of Default Rating and SGL-3 Speculative Grade Liquidity rating. Moody's also assigned a B3 rating to Vertis' proposed $600 million first-lien senior secured debt due 2015 that may be allocated between notes and a term loan. The ratings are assigned in connection with Vertis' proposed out- of-court restructuring and refinancing that will reduce its debt by approximately 20% to $935 million (excluding an incremental $100 million of PIK preferred stock that Moody's considers to be debt-like) through conversion of existing senior PIK notes to common stock and exchange of existing senior secured second lien notes for new secured notes, cash and preferred stock. Vertis plans to utilize the net proceeds from the first lien debt offering to repay existing bank debt and second lien notes and for transaction fees and expenses. The restructuring and refinancing favorably extend the maturity profile and reduce total interest expense, but also significantly increase Vertis' cash interest costs. The rating outlook is stable. Assignments: Issuer: Vertis, Inc. -- Corporate Family Rating, Assigned Caa1 -- Probability of Default Rating, Assigned Caa1 -- Speculative Grade Liquidity Rating, Assigned SGL-3 -- Senior Secured Bank Credit Facility, Assigned a B3, LGD3 - 42% -- Senior Secured Regular Bond/Debenture, Assigned a B3, LGD3 - 42% Outlook Actions: Issuer: Vertis, Inc. -- Outlook, Changed to Stable from Rating Withdrawn Vertis' Caa1 CFR reflects the company's high leverage, thin coverage of total interest costs, and long-term price and volume pressure on the print-based advertising and direct marketing products and services that comprise the majority of the company's revenue. The proposed transactions would be a second restructuring closely on the heels of Vertis' 2008 bankruptcy reorganization. Moody's believes the risk of another restructuring over the intermediate term will remain elevated unless debt-to-EBITDA leverage (approximately 7.3x pro forma FY 2009 incorporating Moody's standard adjustments and reducing EBITDA by $24 million of synergy and restructuring costs) is reduced from what is still a very high level, notwithstanding the proposed conversion of debt to common/preferred stock and new secured notes. Vertis' sizable revenue and modest cash flow generation, significant scale and broad geographic reach within the U.S. and long-term customer relationships provide a foundation from which the company could improve its credit profile. Further, the company's ability to adjust its cost structure coupled with adequate near-term liquidity provides some flexibility to execute growth initiatives and Vertis' consolidation strategy. Failure to execute on these fronts will severely limit Vertis' ability to reduce leverage, which in Moody's view, would likely lead to another balance sheet restructuring. The stable rating outlook reflects Moody's expectation that Vertis will continue to aggressively manage costs to maintain its earnings base and keep an adequate liquidity position for the next 12-18 months. The liquidity position provides Vertis some near- term flexibility to execute its business plan to further stream line costs and stabilize revenues through growth initiatives and the beneficial effect on client spending from an economic recovery. The company's SGL-3 speculative grade liquidity rating reflects adequate liquidity for the next 12 months supported by sufficient free cash flow to cover modest term loan amortization as well as unused capacity on the proposed $200 million asset based revolving credit facility. Moody's estimates that the company will generate sufficient free cash flow to fund the 1% required annual amortization on the term loan, although this is largely a function of paying PIK interest on approximately 17% of the debt structure. Expiration of the PIK interest periods from 2011-2014 will create incremental cash debt service needs and liquidity pressure, although the company will retain an option to pay interest in kind on a small portion of the instruments. The $90-110 million of projected unused availability within the borrowing base (after drawdowns and letters of credit) on the proposed revolver provides an additional liquidity cushion. Moody's expects the facility's covenant levels will be structured to provide Vertis with an adequate EBITDA cushion relative to the company's plan. The proposed term loan and notes will be secured by a first lien on substantially all the assets of Vertis, the company's parent,Vertis Holdings, Inc. and its subsidiaries and guaranteed by substantially all of its current and future domestic subsidiaries as well as Vertis Holdings, Inc. The unrated revolver is also secured by a first lien on the company's assets but it will have first priority only with respect to certain current assets and other related assets. The term loan and notes will have second priority with respect to such current assets and first priority with respect to all other assets including fixed assets and intellectual property. The book value of such other assets is higher than the current assets. However, Moody's considers the collateral coverage of the revolver to be better than on the proposed term loan/notes and has ranked the revolver ahead of the term loan/notes in the loss given default notching model. The proposed term loan and notes are ranked the same in Moody's loss given default modeling template based on the pari-passu nature of their senior secured first lien claims, but the term loan facility is expected to contain covenants that could improve recovery prospects relative to the notes. Vertis' proposed notes do not contain maintenance financial covenants, mandatory amortization or an excess cash flow sweep, all of which are expected to be present in the term loan. Maintenance covenants provide the term loan lenders an ability to modify the terms of the credit facility, which could result in paydowns and/or higher interest margins as a condition to amending the facility. Repayments reduce the term loan lenders' exposure over time. The restructuring/refinancing transactions are subject to a number of conditions including minimum participation requirements on the company's exchange offerings. Moody's assumes these conditions are met but ratings are subject to a review of the final results of the company's restructuring and the terms and conditions of the debt instruments. Moody's last rating actions for Vertis and American Color Graphics, Inc., were on July 15, 2008, when the PDRs were lowered to D from Ca following the companies announcements that they had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The ratings for both companies were subsequently withdrawn on August 12, 2008. Vertis' ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Vertis' core industry and Vertis' ratings are believed to be comparable to those of other issuers of similar credit risk. Vertis, headquartered in Baltimore, MD, provides advertising, direct marketing and interactive products and services to clients across North America. Vertis merged with ACG in October 2008 upon the emergence of both companies from July 2008 pre-packaged bankruptcy filings. Avenue Capital will control a majority of the equity and the board of directors upon completion of the proposed refinancing/restructuring. Revenue was approximately $1.3 billion in FY 2009. VILLAGE AT WEST GLOUCESTER: Voluntary Chapter 11 Case Summary ------------------------------------------------------------- Debtor: The Village at West Gloucester, LLC 58 Rhodes Road Princeton, MA 01541 Bankruptcy Case No.: 10-42000 Chapter 11 Petition Date: April 23, 2010 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: John M. McAuliffe, Esq. McAuliffe & Associates, P.C. 430 Lexington Street Newton, MA 02466 Tel: (617) 558-6889 E-mail: mcauliffeassociates@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Brian P. Lever, manager. VISINET INC: Workers Protest Over Unpaid Salary ----------------------------------------------- The Associated Press reports that 30 former employees of Visinet Inc. held a protest amid the uncertainty surrounding their final paychecks. Employees said they were not getting paid for their last three weeks of work. Based in Omaha, Nebraska, Visinet Inc. filed for Chapter 11 protection on April 8, 2010 (Bankr. D. Ne. Case No.10-81044). Angela L. Burmeister, Esq., at Berkshire & Burmeister, represents the Debtor. The Debtor listed both assets and debts of between $1 million and $10 million. VITOIL-SCOTTISH, LLC: Case Summary & Creditors List --------------------------------------------------- Debtor: Vitoil-Scottish, LLC 11170 Aqua Vista Avenue Studio City, CA 91602 Bankruptcy Case No.: 10-14734 Chapter 11 Petition Date: April 22, 2010 Court: U.S. Bankruptcy Court Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Ron Bender, Esq. 10250 Constellation Boulevard, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 E-mail: rb@lnbrb.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Serge Gharibian, CMB, MBA, president. Debtor's List of 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ South Bay Construction -- $6,000,000 170 Knowles Drive Los Gatos, CA 95032 Kevin C. Kello -- $90,000 1299 Ocean Avenue, Suite 900 Santa Monica, CA 90401 Alfatech Cambridge 97 E Brokaw Road, Suite 300 -- $68,000 San Jose, CA95112 Quality Built -- $48,000 TRC Lowney -- $41,000 John Oberman -- $38,000 Sweeney, Mason, Wilson & -- $38,000 Bosomworth Kier & Wright -- $34,000 Belden Consulting Engineers -- $29,000 San Jose Water Company -- $21,000 Water Boards -- $12,000 Anita Blumenthal -- $10,000 Law Office of J.G. Wagner -- $10,000 US Approvals, LLC -- $10 WAVERLY GARDENS: U.S. Trustee Wants Reorganization Case Dismissed ----------------------------------------------------------------- Richard F. Clippard, the U.S Trustee for Region 8, asks the U.S. Bankruptcy Court for the Western District of Tennessee to dismiss Waverly Gardens of Memphis, LLC, and Kirby Oaks Integra, LLC's Chapter 11 cases. The U.S. Trustee said that the Debtors failed to file monthly operating reports since December 31, 2009, until the present. The U.S. Trustee adds that without timely operating reports, he cannot determine the exact amount of quarterly fees due, because this amount is calculated based upon information contained in the monthly operating reports. As reported in the Troubled Company Reporter on October 17, 2008, The U.S Trustee also sought for the dismissal of the Debtors' case because of their failure to file: (i) schedules of assets and liabilities; (ii) statement of financial affairs; (iii) attorney fee disclosure statement; and (iv) list of equity security holders. Memphis, Tennessee-based Waverly Gardens of Memphis, LLC and Kirby Oaks Integra, LLC -- http://www.waverlygardens.com/-- operate two senior living facilities consisting of a total of 248 units. Waverly Gardens consists of 196 rental units and is located at 6539 Knight Arnold Road, Memphis, Tennessee 38115. Kirby Oaks consists of 52 rental units and is located at 6551 Knight Arnold Road, Memphis, Tennessee 38115. The Debtors filed separate petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W.D. Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., and Robert Campbell Hillyer, Esq., at Butler, Snow, O'Mara, Stevens & Cannada, represent the Debtors as counsel. When Waverly Gardens filed for protection from its creditors, it listed assets of between $10 million to $50 million, and debts of $1 million to $10 million. When Kirby Oaks filed for protection from its creditors, it listed between $1 million and $10 million each in assets and debts. WHITNEY LAKE: Reorganization Case Dismissed ------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina dismissed the Chapter 11 case of Whitney Lake, LLC. The trustee filed a consolidated report of investigation and motion to dismiss case. Based in Johns Island, South Carolina, Whitney Lake, LLC -- http://www.whitneylake.com/-- is a townhouse subdivision developer. The Company filed for Chapter 11 relief on September 18, 2008 (Bankr. D. S.C. Case No. 08-05729). Kevin Campbell, Esq., and Michael Conrady, Esq., at Campbell Law Firm, P.A., represent the Debtor as counsel. When the Company filed for protection from its creditors, it listed total assets of $22,807,654, and total debts of $21,197,259. XERIUM TECHNOLOGIES: Proposes to Renew Insurance Programs --------------------------------------------------------- Xerium Technologies Inc. and its units are required to maintain the Workers' Compensation Program, which provides certain benefits for their employees for claims arising from or related to their employment with the Debtors. The Workers' Compensation Program covers claims asserted by employees of the Debtors based in the United States. Obligations relating to the Workers' Compensation Program arise under a single Workers' Compensation Policy maintained by Xerium with Pennsylvania Manufacturers' Association Insurance. The Debtors pay the premiums under the Workers' Compensation Policy, and PMAI administers the Debtors' employees' claims for reimbursement under the Workers' Compensation Program. As of the Petition Date, there are five open Workers' Compensation Claims, each of which is fully insured by PMAI and does not exceed the coverage limits of the Workers' Compensation Policy, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates. The Workers' Compensation Policy provides coverage for a term of one year, which typically begins in April. At the commencement of each term, Xerium pays an amount equal to two months of the annual premium amount, followed by monthly payments in equal installments for the remainder of the term. The Workers' Compensation Obligations are paid by Xerium from a central operating account that funds services shared by certain Debtor and non-Debtor affiliates at JPMorgan Chase Bank, N.A. The Workers' Compensation Policy is subject to an annual "true-up" whereby at the end of its term, an audit is performed to reconcile the actual number of employees insured by the Debtors with the estimated premium amounts assessed at the commencement of the policy. Pursuant to a true-up, Xerium would be entitled to recover from PMAI if its premium payments were in excess of actual audited amounts. Xerium would have to pay additional amounts to PMAI if the insurance policy estimates were too low. On average, the Debtors pay approximately $769,118 to PMAI for a one year insurance policy for the Workers' Compensation Program. Subject to the true-up in July 2010 or August 2010 following the end of the current policy in March 2010, the Debtors believe that as of the Petition Date, there are no premiums, retention amounts, deductibles or other prepetition amounts accrued and unpaid under the Workers' Compensation Program. The Debtors renewed the Workers' Compensation Policy for a three- month term, which commences on April 1, 2010, and expires on July 1, 2010. The amount of the premium necessary for the three- month renewal period of the Workers' Compensation Policy is approximately $181,300, which was paid by the Debtors prior to the Petition Date, Mr. Collins says. In addition to the Workers' Compensation Program, the Debtors have procured and negotiated various Liability and Property Insurance Programs, which provide the Debtors with insurance coverage for liabilities relating to, among other things, general liability, property, excess liability, fiduciary, automobile, directors' and officers' liability, and marine cargo liability. The Debtors are required to pay premiums under the Liability and Property Insurance Programs based upon fixed rates established by the applicable Insurance Carrier. Xerium pays approximately $3.5 million in total premiums with respect to the Liability and Property Insurance Programs on an annual basis. As of the Petition Date, there are no prepetition amounts accrued and unpaid under any of the Liability and Property Insurance Programs. According to Mr. Collins, several of the Debtors' insurance policies in connection with Liability and Property Insurance Programs must be renewed on either April 1, 2010 or May 16, 2010. The Debtors renewed an auto insurance policy and a general liability insurance policy with PMAI for a three-month term, which commences on April 1, 2010 and expires on July 1, 2010. Mr. Collins says that the amount of the premiums necessary for the three-month renewal period of the auto insurance policy and the general liability insurance policy is approximately $22,279 and $11,300, respectively, which was paid by the Debtors prior to the Petition Date. The aggregate amount of annual premiums necessary to renew the remaining insurance policies that expired on April 1, 2010, is approximately $1,520,988. The aggregate amount of annual premiums necessary to renew the insurance policies that expire on May 16, 2010, is approximately $789,668. The Debtors employ insurance brokers, insurance consultants and other third parties to assist them with the procurement, placement, negotiation of their Insurance Programs and other related services. Each of the Insurance Service Providers is paid a fee by the Debtors or a commission by the Insurance Carriers or a combination of both. Accordingly, there will be fees or commissions due to the Insurance Service Providers associated with policy renewals, and such fees and commissions will be paid as part of the premiums associated with such renewals. The Debtors pay approximately $225,000 annually to Insurance Service Providers for insurance- related services. As of the Petition Date, the Debtors are not aware of any other fees or commissions accrued and unpaid to the Insurance Service Providers. Accordingly, the Debtors sought and obtained the Court's authority to (a) continue or renew the Insurance Programs on an uninterrupted basis and (b) pay any undisputed prepetition obligations under the Insurance Programs, including premiums, deductibles, fees payable to Insurance Service Providers, any true-up amounts, and other related fees and costs. Judge Carey also modified the automatic stay to permit employees with valid Workers' Compensation Claims to proceed in the appropriate non-bankruptcy judicial or administrative forum. The Court further authorized all banks and other financial institutions to receive, process, honor, and pay any and all checks and drafts drawn, or electronic funds transferred. About Xerium Technologies Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE: XRM), manufactures and supplies two types of consumable products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 32 manufacturing facilities in 13 countries around the world, Xerium has approximately 3,300 employees. Xerium Technologies and certain subsidiaries filed for Chapter 11 on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.; George A. Davis, Esq.; and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners, LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux and Daniel Gilligan at Rothschild Inc. serve as the Debtors' investment bankers. Garden City Group Inc. is the Debtors' claims agent. Xerium Technologies disclosed total assets of $693,511,000 and total debts of $813,168,000 in its petition. Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Xerium Technologies and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) XERIUM TECHNOLOGIES: Wants to Pay Prepetition Shipping Charges -------------------------------------------------------------- Prior to the Petition Date, Xerium Technologies Inc. and its units used and made payments to domestic and foreign commercial common carriers, movers, shippers, freight forwarders, consolidators, delivery services, customs brokers, shipping auditing services, deconsolidators, logistics management companies, and other third party service providers to ship, transport, import, facilitate the movement of goods through customs, and deliver goods, as well as a network of third party warehouses to store goods . The Debtors rely heavily on their Shippers and Warehousemen to obtain essential raw materials, parts, machinery, and equipment, and to transport and store certain finished goods. In connection with the importation of Goods, the Debtors engage certain Shippers to take all actions necessary to obtain possession of imported Goods, including making payments on the Debtors' behalf of customs duties, import-related taxes, and other incidental import expenses to the U,S, Customs and Border Protection Agency and to non-U,S customs authorities. According to Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, there are countless shipments en route to and from the Debtors' various facilities and myriad Goods in storage at third party warehouses. Consequently, certain Shippers and Warehousemen currently are in possession of Goods that are vital to the Debtors' operations, In light of the Prepetition Date, certain Shippers and Warehousemen may refuse to release Goods in their possession pending receipt of payment for their prepetition services. Under some state laws, a Shipper or Warehouseman may have a lien on the respective Goods in its possession, which secures the charges or expenses incurred in correction with the transportation or storage of such Goods. Additionally, the Shippers and Warehousemen may assert that they are holders of possessory liens entitled to adequate protection pursuant to Section 363(e) of the Bankruptcy Code. The Debtors estimate that, as of the Petition Date, approximately $323,000 in Shipping and Warehouse Charges remain outstanding to Shippers and Warehousemen in possession of Goods having a value of approximately $2,000,000. Of the total amount of Shipping and Warehouse Charges outstanding as of the Petition Date, $313,000 will be due and payable during the first 21 days following the Petition Date. Mr. Collins says the Debtors rely on timely shipments to prevent interruptions in their business operations. Because the Debtors manufacture highly specialized products as and when ordered by customers, and thus, maintain few inventory reserves, even one delayed shipment of raw materials could impede the Debtors' ability to respond to customer needs in a timely fashion. Against this backdrop, the Debtors seek authority to pay outstanding prepetition Shipping and Warehouse Charges that the Debtors determine, in the exercise of their business judgment, are necessary or appropriate. Mechanics Lien Charges The Debtors also transact business with other third parties, which provide repair, maintenance, and related services to, among other things, repair certain machinery and equipment used in their manufacturing operations. Where an entity has performed the Services, applicable state laws may grant the Mechanic a lien against the real or personal property of the Debtors that was the subject of the Services. At any given time, there are Mechanics that may assert liens against the Debtors' property or otherwise refuse to release the property that is vital to the Debtors' business operations. Additionally, in connection with their service and repair of customers' roll covers, the Debtors frequently subcontract with Mechanics who perform certain specialty repair work. The Debtors estimate that the Mechanics Lien Charges outstanding as of the Commencement Date aggregate approximately $1,816,000. Of this amount, approximately $1,175,000 will be due and payable during the 21 days following the Petition Date In this regard, the Debtors seek authority to pay Mechanics Lien Charges in an aggregate amount not to exceed $2,156,000. Pending the Court's entry of the Final Order, the Debtors seek to pay Mechanics Lien Charges in an aggregate amount not to exceed the Mechanics Lien Charges Interim Amount. About Xerium Technologies Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE: XRM), manufactures and supplies two types of consumable products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 32 manufacturing facilities in 13 countries around the world, Xerium has approximately 3,300 employees. Xerium Technologies and certain subsidiaries filed for Chapter 11 on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.; George A. Davis, Esq.; and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners, LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux and Daniel Gilligan at Rothschild Inc. serve as the Debtors' investment bankers. Garden City Group Inc. is the Debtors' claims agent. Xerium Technologies disclosed total assets of $693,511,000 and total debts of $813,168,000 in its petition. Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Xerium Technologies and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) XERIUM TECHNOLOGIES: Wins Nod to Continue Customer Programs ----------------------------------------------------------- Xerium Technologies Inc. and its units sought and obtained the Court's authority to (i) continue to implement customer programs and policies designed to ensure customer satisfaction, promote customer loyalty, create goodwill for the Debtors and their products and services, and respond to competitive pressures, (ii) honor prepetition obligations with respect to the Customer Programs, and (iii) honor prepetition customer billing practices. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that in the ordinary course of business and as is customary in their industry, the Debtors engaged in certain activities to foster and maintain a positive reputation and relationship with their customers. The Customer Programs are vital to the Debtors' efforts to reorganize and revitalize their businesses, and ultimately, to maximize value for the Debtors' stakeholders. In order to preserve invaluable customer relationships, it is imperative that the Debtors assure customers of their ability to continue the Customer Programs and honor their prepetition obligations, Mr. Collins says. As part of their Customer Programs, and to cultivate customer relationships and protect their reputation for manufacturing high- quality products, the Debtors offer a number of warranties on their products. The specific terms and conditions of these warranties vary depending on the type of product sold, the country in which the product is sold, and the arrangements with the customer. Generally, the Debtors warranty their products up to the invoiced amount. The Debtors also may perform on-site inspections or servicing of products purchased by their customers, or pay the shipping charges for returned products. As part of honoring their warranties, the Debtors provide refunds or credits for returns and allowances for products sold. The Debtors also may provide similar accommodations with respect to products not otherwise covered under a warranty in circumstances where accommodations are common practice in the industry or where the Debtors believe in their business judgment that those accommodations are otherwise appropriate. On a quarterly basis, the Debtors estimate the costs that may be incurred under their warranties and record a liability for those costs. The Debtors estimate that the cost of honoring warranties under all of their warranty programs during the three months following the Petition Date is approximately $803,220. Continuing the warranty programs is critical to maintaining the Debtors' reputation for manufacturing reliable, high-quality products and reserving the Debtors' customer relationships. If the Debtors are not authorized to honor their warranties to customers, the Debtors' customer relationships would suffer, threatening the Debtors' business operations and the success of the Chapter 11 cases. Absent assurance that the Debtors will continue to honor their warranties, existing customers may decline to continue doing business with the Debtors and the Debtors' ability to attract new customers would be seriously compromised. Billing Practices Mr. Collins adds that in the ordinary course of their business operations, the Debtors routinely correct billing errors by crediting customers' accounts with the amount of any overpayment or by reimbursing customers for that amount. The Debtors need to maintain normal billing procedures and preserve their essential customer relationships during the pendency of the Chapter 11 cases. The Billing Procedures are practices that an integral part of the Debtors' Customer Programs and ordinary course business operations, and accordingly, are equally critical to maintaining strong customer relationships during the pendency of the Chapter 11 cases. The Debtors estimate that, as of the Commencement Date, the amount of potential billing error-related refunds and credits that may be honored is approximately $20,000, and thus, is de minimis, Mr. Collins notes. About Xerium Technologies Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE: XRM), manufactures and supplies two types of consumable products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 32 manufacturing facilities in 13 countries around the world, Xerium has approximately 3,300 employees. Xerium Technologies and certain subsidiaries filed for Chapter 11 on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.; George A. Davis, Esq.; and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners, LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux and Daniel Gilligan at Rothschild Inc. serve as the Debtors' investment bankers. Garden City Group Inc. is the Debtors' claims agent. Xerium Technologies disclosed total assets of $693,511,000 and total debts of $813,168,000 in its petition. Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Xerium Technologies and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Two Defaults Last Week Raise S&P Global Tally to 31 ----------------------------------------------------- Two global corporate issuers defaulted last week, bringing the 2010 year-to-date tally of global corporate defaults to 31, said an article published y Standard & Poor's titled "Global Corporate Default Update (April 16 - April 22, 2010) (Premium)." "By region, the current year-to-date default tallies are 22 in the U.S., two in Europe, two in the emerging markets, and five in the Other Developed region," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. (The Other Developed region comprises Australia, Canada, Japan, and New Zealand.) So far this year, Chapter 11 filings and distressed exchanges have accounted for 10 defaults each, missed interest or principal payments were responsible for six, regulatory directives and receiverships accounted for one each, and the remaining three defaulted issuers are confidential. Of the global corporate defaulters in 2010, 38% of issues with available recovery ratings had recovery ratings of '6' (indicating S&Ps expectation for negligible recovery of 0%-10%), 12% of the issues had recovery ratings of '5' (modest recovery prospects of 10%-30%), 12% had recovery ratings of '4' (average recovery prospects of 30%-50%), and 19% had recovery ratings of '3' (meaningful recovery prospects of 50%-70%). And for the remaining two rating categories, 15% of the issues had recovery ratings of '2' (substantial recovery prospects of 70%-90%), and 4% of issues had recovery ratings of '1' (very high recovery prospects of 90%- 100%). For more details on recovery, see "Bank Loan Ratings (BLRs) And Recovery Ratings (Comprehensive List)," published April 13, 2010. Ultimate recovery rates displayed considerable cyclicality in 2009, in sync with the ebb and flow of liquidity. A particular instrument's position in the capital structure, its security and collateral, company-specific issues, and economic and credit market conditions are the main factors that influence a recovery rate. Preliminary data for 2009 suggest that the shock to liquidity from events such as the Lehman Brothers' bankruptcy in the fall of 2008 severely affected exit valuations of defaulted securities as well as the values of nondefaulted securities. Recoveries, which had experienced a golden age of extremely high rates during 2003-2007, dropped precipitously in 2009, in line with our expectations. (For more details, see "U.S. Recovery Study: Beguilingly High 2007 Performance Overstates Recovery Prospects," published Dec. 4, 2007.) By early 2009, recovery rates dropped to 39% for loans and revolving credit facilities and 34% for bonds (on a mean discounted basis in the first four months) from 74% and 51%, respectively, for all of 2008. The rebound in capital market sentiment boosted recovery rates later in the year, and by July 2009, recovery rates began to increase from these troughs. For more information, see "U.S. Recovery Study: Increased Defaults And Low Liquidity Depressed Recovery Rates In Early 2009 (Premium)," published Feb. 24, 2010. S&P's year-end 2010 baseline projection for the U.S. corporate speculative-grade default rate is now 5.0%, with alternative scenarios of 6.9% at the pessimistic end and 4.3% at the optimistic. The baseline is lower than the 6.9% projection we forecasted for the third quarter of 2010. This does not mean that corporate default risks are permanently lower. S&P notes that the ranks of surviving low-rated companies remain large by historical standards. The extent of decline in risk premiums for lower-rated borrowers and the return of what we view as questionable practices in some recent deals--such as raising bond funds to pay out shareholder dividends or sponsors--further raise concerns that the optimism might be overdone. Without a revival in top-line earnings and growth, many of the surviving leveraged issuers originated during 2003-2007 could face renewed default risk beyond the forecast horizon unless they significantly reduce their debt burdens * Fannie & Freddie Funding to Cost Taxpayers $85 Billion -------------------------------------------------------- The New York Post reports that U.S. Treasury Secretary Timothy F. Geithner said -- in a letter Friday to the Democratic and Republican leaders in the Senate and House of Representatives -- the Troubled Asset Relief Program will lose about $117 billion, and funding related to Fannie Mae and Freddie Mac will cost taxpayers another $85 billion. The Post says Mr. Geithner also wrote that the government bailouts, including funds for Citigroup Inc. and American International Group Inc., will cost taxpayers about $87 billion. Mr. Geithner also wrote that the government expects to make about $115 billion on Federal Reserve programs, including the purchase of mortgage-backed securities. The Post says that, according to the letter, the Treasury a year ago estimated that bailout costs could reach $500 billion. Congress authorized $700 billion for TARP in October 2008 to prevent a collapse of the U.S. financial system. * Fitch Gives Assessment and Outlook on I.T. Distributors --------------------------------------------------------- Fitch Ratings released a report detailing its outlook for the I.T. Distributors. In the report, Fitch examines industry operating performance, credit and liquidity, key industry trends and developments, individual credit and financial profiles, corporate governance and covenants. Fitch also provides quarterly and historical financial data. Fitch's outlook for IT distributors in 2010 is stable, underpinned by a more optimistic view on industry operating profiles, offset by expectations of moderate deterioration in liquidity and credit profiles as well as heightened event risk, particularly for acquisitions. The companies profiled are: -- Anixter Inc./Anixter International Inc.: 'BB+'; Outlook Stable; -- Arrow Electronics, Inc.: 'BBB-'; Outlook Stable; -- Avnet, Inc.: 'BBB-'; Outlook Stable; -- Ingram Micro Inc.: 'BBB-'; Outlook Stable; -- Tech Data Corporation: 'BB+'; Outlook Stable. Fitch expects the IT distributors to experience modest sales growth in 2010, as corporate IT demand improves, driven by a more stable economic backdrop and growth in emerging markets. Positive operating leverage and abatement of cyclical gross margin pressure will result in improved operating profitability. After generating significant cash from working capital reduction, reducing short-term debt and limiting acquisitions and share buybacks, the distributors' credit profiles are currently very strong. Fitch expects some deterioration in 2010, as M&A resumes and cash generation declines. A degree of credit deterioration from current levels is incorporated into ratings. * Makers of Designer Denim Brands in Financial Distress ------------------------------------------------------- According to Jacqueline Palank at Dow Jones' Daily Bankruptcy Review, experts say the explosion of designer denim brands is facing its day of reckoning. Ms. Palank relates a few makers of name-brand jeans are experiencing financial distress, and experts expect more to hit rough patches over the next year. As reported by the Troubled Company Reporter, Rock & Republic filed for Chapter 11 bankruptcy protection on April 1, 2010 (Bankr. S.D.N.Y. Case No. 10-11728). Dow Jones says the Company sought bankruptcy protection when it didn't have the funds to pay a loan coming due. Rock & Republic listed $50,000,000 to $100,000,000 in assets and $10,000,000 to $50,000,000 in liabilities. The Company's affiliate, Triple R, Inc., filed a separate Chapter 11 petition on April 1, 2010 (Case No. 10-11729). Dow Jones also notes Miss Sixty, whose British unit went through the U.K. equivalent of bankruptcy, last week announced it would shutter half its 20 U.S. stores. "How many $250 pair jeans is the consumer going to buy? It's only a given number." said Scott Avila, a managing partner director at turnaround firm CRG Partners, in an interview Friday, according to Dow Jones. "The demand didn't grow with the amount of supply on the market." Dow Jones also relates Eric Tracy, a senior vice president specializing in consumer research at FBR Capital Markets & Co., predicts now that designer denim's period of "hyper growth" has come to an end, weaker brands may be snapped up by competitors or will simply fade away. "Some of these smaller, less relevant brands will die or will go away," Mr. Tracy said Friday. "You'll see the premium denim category pricing start to come down a bit," Dow Jones further quotes Mr. Tracy as saying. * Crowell & Moring Gains Financial Institutions Regulatory Partner ------------------------------------------------------------------ Crowell & Moring LLP is pleased to disclosed the addition of partner Mark A. Egert to the firm's New York office. Egert will draw upon 15 years of in-house counsel experience to spearhead the firm's regulatory and compliance practice serving broker-dealers, banks, asset management firms, and a variety of alternative investment clients. Egert, who joins from his role as Managing Director & Chief Compliance Officer of Cowen Group, Inc., is also the former Vice President & Associate General Counsel of the Securities Industry and Financial Markets Association (SIFMA) and Executive Director & Chief Legal Officer for the Wholesale North America Region of ABN AMRO Bank, N.V. Egert will be a partner in the firm's Corporate and Financial Services groups, leading the firm's financial institutions regulatory area, as well as a member of the firm's White Collar & Regulatory Enforcement Group. His significant experience managing regulatory risk, advising on complex legal issues, structuring transactions and creating and implementing sophisticated compliance programs will help Crowell & Moring's financial services clients navigate the changing regulatory climate. "Mark brings incredible in-house counsel and industry experience to Crowell & Moring's financial services clients, who are faced with complex regulatory, trading and market issues. They're looking for a problem solver, for the kind of practical advisor who can tell them what's coming next and how best to manage it. They get that at the highest level with Mark," said James R. Stuart, chair of Crowell & Moring's Corporate Group. Through his involvement with SIFMA and other industry groups, Egert has been at the forefront of many cutting-edge issues, commenting on and helping to shape rule proposals and advocating policy initiatives with regulatory authorities and legislative officials. With the government's continued focus on financial regulatory reform, Egert is well positioned to provide timely and insightful guidance to a broad range of financial institutions. He has worked with investment banks, securities firms, hedge funds, registered and unregistered investment companies, asset managers, investment advisors and other alternative investment managers, and appeared before the SEC, FINRA, other self-regulatory organizations and state securities authorities. At Crowell & Moring, Egert will offer regulatory counsel to U.S. and foreign-based financial institutions on various matters, including advising on transactions, drafting and implementing policies and written supervisory procedures regarding, among other areas, insider trading, information barriers and conflicts of interest, research independence, anti-money laundering, surveillance and detecting and preventing fraud, and improving and auditing internal controls and compliance programs. Additionally, he will assist clients on CEO certifications and annual reviews, regulatory inquiries and investigations, and defending enforcement actions. According to Egert, "I am extremely excited to join Crowell & Moring because of the entrepreneurial nature of building a regulatory practice. The firm's Corporate, Financial Services and White Collar & Regulatory Enforcement groups offer an impressive platform. I look forward to bringing to bear my capital markets and in-house experience in senior legal and compliance positions to help clients seamlessly complete their transactions, effectively manage regulatory risk, enhance their internal controls and address and resolve their regulatory concerns." Before joining SIFMA, Egert began his legal career in private practice. He joined ABN AMRO in 1997 before being named Chief Legal Officer in 2001, became Legal & Compliance Director at RBC Capital Markets in 2003 and was appointed as Chief Compliance Officer at Cowen in 2005. Egert earned his J.D., cum laude, from George Washington University Law School, where he served as Notes Editor for the George Washington University Law Review. He received a B.A. degree, magna cum laude, from the University of Delaware, where he was invited into Phi Beta Kappa. Crowell & Moring's Corporate Group has recently been ranked by Chambers USA and other leading national and international directories for its transactional and complex agreement work. In recent years, the Group has been ranked among the top 16 law firms in the United States for corporate transactions in the BTI Consulting Group's "Masters of the Deal" report. The firm's Financial Services Group offers an extensive scope of services in a variety of areas, including commercial lending, structured finance, real estate finance, bankruptcy and creditors' rights, and financial institutions litigation. About Crowell & Moring Crowell & Moring LLP is an international law firm with more than 500 lawyers representing clients in litigation and arbitration, regulatory, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity. The firm has offices in Washington, DC, New York, Los Angeles, San Francisco, Orange County, Anchorage, London, and Brussels. * Large Companies With Insolvent Balance Sheet ---------------------------------------------- Total Total Share- Total Working Holders' Assets Capital Equity Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- -------- AUTOZONE INC AZO US 5,425.0 (100.6) (421.7) SOUTHGOBI ENERGY 1878 HK 560.7 388.8 (2.8) DUN & BRADSTREET DNB US 1,749.4 (99.5) (734.0) MEAD JOHNSON MJN US 2,070.3 235.9 (664.3) NAVISTAR INTL NAV US 9,126.0 1,277.0 (1,622.0) INTERMUNE INC ITMN US 114.7 59.5 (105.8) BOARDWALK REAL E BEI-U CN 2,378.3 - (45.0) BOARDWALK REAL E BOWFF US 2,378.3 - (45.0) TAUBMAN CENTERS TCO US 2,606.9 - (474.7) CHOICE HOTELS CHH US 340.0 (3.9) (114.2) UNISYS CORP UIS US 2,956.9 308.6 (1,271.7) LINEAR TECH CORP LLTC US 1,615.8 742.7 (50.7) DEX ONE CORP DEXO US 4,498.8 (402.9) (6,919.0) WR GRACE & CO GRA US 3,968.2 1,134.0 (290.5) WEIGHT WATCHERS WTW US 1,087.5 (336.1) (733.3) MOODY'S CORP MCO US 2,003.3 (223.1) (596.1) SUN COMMUNITIES SUI US 1,181.4 - (111.3) PETROALGAE INC PALG US 7.1 (9.8) (43.8) CABLEVISION SYS CVC US 9,325.7 (14.9) (5,143.3) IPCS INC IPCS US 559.2 72.1 (33.0) UAL CORP UAUA US 18,684.0 (1,368.0) (2,811.0) DISH NETWORK-A DISH US 8,295.3 188.7 (2,091.7) HEALTHSOUTH CORP HLS US 1,681.5 34.8 (510.2) METALS USA HOLDI MUSA US 627.8 279.1 (43.7) NATIONAL CINEMED NCMI US 628.2 92.8 (493.1) CHENIERE ENERGY CQP US 1,859.5 37.3 (480.3) REGAL ENTERTAI-A RGC US 2,637.7 32.4 (246.9) TEAM HEALTH HOLD TMH US 940.9 17.4 (92.3) VECTOR GROUP LTD VGR US 735.5 240.2 (4.7) TALBOTS INC TLB US 825.8 (261.9) (185.6) REVLON INC-A REV US 794.2 94.3 (1,033.6) THERAVANCE THRX US 181.4 123.1 (189.0) SOUTHGOBI ENERGY SGQ CN 560.7 388.8 (2.8) VENOCO INC VQ US 739.5 (20.6) (174.5) DOMINO'S PIZZA DPZ US 453.8 59.2 (1,321.0) EPICEPT CORP EPCT SS 7.5 (6.5) (9.1) ARVINMERITOR INC ARM US 2,499.0 98.0 (1,112.0) INCYTE CORP INCY US 712.4 523.2 (102.4) LIBBEY INC LBY US 794.8 139.9 (66.9) JUST ENERGY INCO JE-U CN 1,387.1 (387.0) (356.5) KNOLOGY INC KNOL US 646.9 26.2 (33.9) FORD MOTOR CO F US 197,890.0 (8,112.0) (6,515.0) CARDTRONICS INC CATM US 460.4 (47.3) (1.3) GRAHAM PACKAGING GRM US 2,126.3 167.2 (763.1) PROTECTION ONE PONE US 571.9 (18.4) (59.1) WORLD COLOR PRES WC CN 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WCPSF US 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WC/U CN 2,641.5 479.2 (1,735.9) AMER AXLE & MFG AXL US 1,986.8 71.1 (559.9) AFC ENTERPRISES AFCE US 116.6 (2.7) (18.2) DEXCOM DXCM US 46.9 18.1 (18.4) BLOUNT INTL BLT US 483.6 149.5 (6.7) UNITED RENTALS URI US 3,859.0 244.0 (19.0) JAZZ PHARMACEUTI JAZZ US 107.4 (22.3) (72.8) EXTENDICARE REAL EXE-U CN 1,668.1 122.8 (50.9) FORD MOTOR CO F BB 197,890.0 (8,112.0) (6,515.0) BLUEKNIGHT ENERG BKEP US 310.7 (10.8) (142.2) CENVEO INC CVO US 1,525.8 162.5 (176.5) SALLY BEAUTY HOL SBH US 1,529.7 360.6 (580.2) AMR CORP AMR US 25,438.0 (1,086.0) (3,489.0) COMMERCIAL VEHIC CVGI US 250.5 75.8 (37.8) GREAT ATLA & PAC GAP US 3,025.4 248.7 (358.5) CENTENNIAL COMM CYCL US 1,480.9 (52.1) (925.9) LIN TV CORP-CL A TVL US 790.5 20.4 (169.2) QUALITY DISTRIBU QLTY US 279.6 19.0 (138.9) WARNER MUSIC GRO WMG US 3,934.0 (599.0) (97.0) ACCO BRANDS CORP ABD US 1,106.8 238.2 (117.2) EASTMAN KODAK EK US 7,691.0 1,407.0 (33.0) SANDRIDGE ENERGY SD US 2,780.3 30.4 (195.9) US AIRWAYS GROUP LCC US 7,454.0 (458.0) (355.0) LODGENET INTERAC LNET US 508.4 (4.9) (71.0) RURAL/METRO CORP RURL US 275.4 35.2 (105.3) SINCLAIR BROAD-A SBGI US 1,597.7 23.1 (202.2) MANNKIND CORP MNKD US 247.4 8.8 (59.2) NEXSTAR BROADC-A NXST US 619.8 36.9 (176.3) ZYMOGENETICS INC ZGEN US 319.3 110.1 (4.0) PDL BIOPHARMA IN PDLI US 338.4 22.3 (416.0) NPS PHARM INC NPSP US 159.6 71.3 (222.8) EXELIXIS INC EXEL US 343.4 22.9 (163.7) CALLON PETROLEUM CPE US 228.0 (39.9) (80.9) PALM INC PALM US 1,007.2 141.7 (6.2) GENCORP INC GY US 1,018.7 114.6 (268.0) VIRNETX HOLDING VHC US 2.2 (2.5) (2.4) HOVNANIAN ENT-A HOV US 2,100.2 1,222.4 (110.7) QWEST COMMUNICAT Q US 20,380.0 (483.0) (1,178.0) VIRGIN MOBILE-A VM US 307.4 (138.3) (244.2) CHENIERE ENERGY LNG US 2,732.6 220.1 (432.1) CUMULUS MEDIA-A CMLS US 334.1 (3.5) (372.5) CYTORI THERAPEUT CYTX US 24.7 9.9 (3.7) IDENIX PHARM IDIX US 76.7 33.2 (5.5) CC MEDIA-A CCMO US 18,047.1 2,114.7 (6,844.7) CONEXANT SYS CNXT US 273.7 65.8 (66.7) MAGUIRE PROPERTI MPG US 3,667.7 - (857.0) ARIAD PHARM ARIA US 65.0 8.2 (89.0) SEALY CORP ZZ US 1,011.9 173.1 (92.3) DENNY'S CORP DENN US 312.6 (33.8) (127.5) WAVE SYSTEMS-A WAVX US 6.3 (2.0) (1.9) DYAX CORP DYAX US 64.8 34.1 (38.6) ENERGY COMPOSITE ENCC US - (0.0) (0.0) NEWCASTLE INVT C NCT US 3,514.6 - (1,640.7) PRIMEDIA INC PRM US 239.7 (3.3) (102.2) GLG PARTNERS-UTS GLG/U US 500.8 167.4 (283.6) MAGMA DESIGN AUT LAVA US 123.3 (3.4) (7.2) MONEYGRAM INTERN MGI US 5,929.7 (174.2) (18.7) GLG PARTNERS INC GLG US 500.8 167.4 (283.6) CINCINNATI BELL CBB US 2,064.3 (2.8) (654.6) ALEXZA PHARMACEU ALXA US 46.2 (3.8) (7.1) ARRAY BIOPHARMA ARRY US 147.0 25.6 (97.6) ********* 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 ***