/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100525.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, May 25, 2010, Vol. 14, No. 143 Headlines 100 WEST: Case Summary & 11 Largest Unsecured Creditors ABITIBIBOWATER INC: Provides Details on Creditor Recoveries AMACORE GROUP: Posts $1.3 Million Net Loss for March 31 Quarter AMELIA ISLAND: Names Noble Investment as Stalking-Horse Bidder AUTOLIV INC: Buys Back Equity Units at a Discount AWESOME ACQUISITION: S&P Affirms Corporate Credit Rating at 'B' BARRINGTON BROADCASTING: Moody's Upgrades Default Ratings to 'B3' BEAR STEARNS: Insolvent During JPM Acquisition, Says Paulson BEAR STEARNS: M. Tannin Wants Government Docs. Unsealed BEAR STEARNS: Racetrac Wins $3.4MM from Bear Stearns Arbitration BENDA PHARMACEUTICAL: MaloneBailey Raises Going Concern Doubt BRADKEN INC: Almac Machine Deal Won't Affect Moody's 'B3' Rating BRUNDAGE-BONE: Proposes to Fund Distributions from Cash on Hand CAPROCK COMMUNICATIONS: Harris Deal Won't Move Moody's 'B2' Rating CARBON BEACH: Court Continues Plan Outline Hearing Until June 29 CHATSWORTH INDUSTRIAL: Has Until July 21 to File Chapter 11 Plan CHEMTURA CORP: D. Dickey Leaves as Executive Vice President CHEMTURA CORP: NYC Suspects PCB Contamination Near Plant CHEMTURA CORP: AgroSolutions Business Releases Progress Report CHEMTURA CORP: Amends 2009 Annual Report CIRCUIT CITY: Committee Wants to Remove Gowling Fee Cap CIRCUIT CITY: Intertan's CCAA Stay Period Extended Until Sept. 15 CIRCUIT CITY: Intertan Monitor Submits 13th Report CHRYSLER LLC: CGI Holding Repays $1.9 Billion to U.S. Treasury CHRYSLER LLC: Liquidation Trustee Obtains $250-Mil. Initial Bond CHRYSLER LLC: 1743 Sues Old Carco for Decommissioning Deficiencies CHRYSLER LLC: New Chrysler Invests $43MM in Kokomo Facilities CHRYSLER LLC: New Chrysler Names New Sr. VP for External Affairs CIT GROUP: Moody's Assigns Corporate Family Rating at 'B3' CIT GROUP: DBRS Assigns B (High) Issuer Rating CITY CAPITAL: Delays Filing of Quarterly Report on Form 10-Q COMMUNICATIONS INTELLIGENCE: Posts $1.6M Net Loss for March 31 Qtr COOPER-STANDARD: S&P Expects to Assign 'B+' to Emerged Company CRABTREE & EVELYN: Names Stephen Bestwick as President CREDITWEST CORP: U.S. Trustee Forms 5-Member Creditors Panel CREDITWEST CORP: Files Schedules of Assets and Liabilities CRESCENT RESOURCES: Wins Confirmation of Plan of Reorganization DBSD NORTH AMERICA: Asks for Plan Exclusivity Until Oct. 7 DEFI GLOBAL: Chisholm Bierwolf Raises Going Concern Doubt DELTA MUTUAL: Delays Filing of Quarterly Report on Form 10-Q DIETZE CONSTRUCTION: Economic Woes Prompt Chapter 11 Filing DON WHITE: Voluntary Chapter 11 Case Summary DUTCH GOLD: Posts $1.0 Million Net Loss in March 31 Quarter EASTON-BELL SPORTS: Posts $122,000 Net Income for April 3 Quarter EAT AT JOE'S: Posts $186,000 Net Loss for March 31 Quarter EDUCATE INC: S&P Affirms Corporate Credit Rating at 'B-' EL POLLO: S&P Junks Corporate Credit Rating From 'B-' ELITE AUTO: Case Summary & 7 Largest Unsecured Creditors EMERALD TRAILS: Case Summary & 20 Largest Unsecured Creditors ENERGAS RESOURCES: Smith Carney Raises Going Concern Doubt ESCOM LLC: Sex.com Domain Name to be Sold in Bankruptcy Court EVERGREEN GAMING: Nevada Gold Completes Mini-Casinos Acquisition FLYING J: Sparring With Plains All American Over Petroleum FORESTRY MUTUAL: A.M. Best Upgrades FSR to 'C++' FORUM NATIONAL: Swings to C$5.3 Million Net Loss in FY 2009 FX REAL ESTATE: Has $10MM Q1 Loss; Recovery from LV Unit Unlikely GAYLORD ENTERTAINMENT: To Hold Call to Discuss Restoration Effort GENERAL GROWTH: In Dispute with Lenders on Conversion Rights GENERAL GROWTH: Gets Nod for CB Richard as Sales Agent GENERAL GROWTH: Wins Approval of Tax Deal with Chicago GENERAL GROWTH: Wins Approval of Kobayashi Settlement GENERAL GROWTH: Bayside T-Shirt Asks for Chapter 11 Trustee GENERAL MOTORS: Bankruptcy Judge Cuts Fees by 1.2% GENERAL MOTORS: Asbestos Liability Analysis Is in 'Infancy' GLOBAL SHIP LEASE: PwC Raises Going Concern Doubt GOLDEN EAGLE: Delays Filing of Quarterly Report on Form 10-Q GRAPHIC PACKAGING: Fitch Affirms Issuer Default Rating at 'B' GREATER GERMANTOWN: Files Schedules of Assets and Liabilities GREEKTOWN HOLDINGS: Proposes Tax Settlement on Garage Property GREEKTOWN HOLDINGS: Committee Can Pursue Bond Avoidance Claims GREEKTOWN HOLDINGS: Parties Agree on Exculpation Provision GUIDED THERAPEUTICS: Posts $3.165 Mil. Net Loss for March 31 Qtr. HOLIDAY 360: Court Denies Hall Stay's Motion to Transfer Venue HOMELAND SECURITY: Posts $1.2-Mil. Net Income for First Quarter HOTEL 365: Court Disapproves Transfer of Case to Dallas Division HSH DELAWARE: Wants Plan Exclusivity Extended Until Sept. 20 IMH SECURED: Swings to $2.9-Million Net Loss in Q1 of 2010 INDUSTRY WEST: Hearing on Secured Lenders' Cash Use Set for June 3 INDUSTRY WEST: Court Continues Plan Hearing Until June 3 INSTACARE CORP: Earns $170,261 in First Quarter Ended March 31 INTEGRATED BIOPHARMA: Posts $1.9MM Net Loss in Q3 Ended March 31 JAMESTOWN LLC: $5 Million Loan Default Prompts Chapter 11 Filing JAYEL CORP: Court OKs Access to First National's Cash Collateral JJRS, LLC: Case Summary & 20 Largest Unsecured Creditors KASPAR TREE: Case Summary & 11 Largest Unsecured Creditors KIERNAN PLAZA: Case Summary & 2 Largest Unsecured Creditors KREUNEN DEVELOPMENT: Taps Harris Jernigan as Bankruptcy Counsel LANDRY'S RESTAURANTS: Amends Merger Deal With Fertitta LEE JUNDANIAN: Case Summary & 7 Largest Unsecured Creditors LEXICON UNITED: Meyler & Company Raises Going Concern Doubt MARSH HAWK: U.S. Trustee Forms 5-Members Creditors Committee MARSH HAWK: Files Schedules of Assets and Liabilities MECHANICAL TECHNOLOGY: Posts $1.24 Mil. Net Loss for March 31 Qtr MERIDIAN RESOURCE: Delays 10-Q Filing; Alta Mesa Merger Completed MIDWAY GAMES: Court Confirms Plan of Liquidation MIT HOLDING: Posts $201,510 Net Loss in March 31 Quarter MOUNTAIN RESORT: Files Schedules of Assets and Liabilities MOUNTAIN RESORT: U.S. Trustee Unable to Form Creditors Committee NEFF CORP: Disclosures Statement Hearing Set for July 12 NEW YORK RACING: To Lay Off 1,400 Employees by June 9 NORTEL NETWORKS: Solicits Bids for Patent Portfolio NORTEL NETWORKS: To Sell CALA GSM Business to Ericsson NORTEL NETWORKS: Seeks Nod of Genband Side Agreement NORTEL NETWORKS: Releases 2010 First Quarter Results NOWAUTO GROUP: Posts $391,415 Net Loss for March 31 Quarter O&G LEASING: Voluntary Chapter 11 Case Summary OMEGA INC: Voluntary Chapter 11 Case Summary OTTER TAIL: Court Denies Plan Exclusivity Extension PACIFIC STATE BANCORP: Posts $2.3 Million Net Loss in Q1 2010 PARKLAND PROPERTIES: Case Summary & Largest Unsecured Creditor PERFORMANCE DRILLING: Voluntary Chapter 11 Case Summary PERSONALITY HOTELS: Court Converts Case to Chapter 7 Liquidation PETTERS AVIATION: Sun Entities Want Case Converted to Chapter 7 PHAGE BIOTECHNOLOGY: Phage Pharmaceuticals Acquires Firm's Assets POWER EFFICIENCY: Posts $282,000 Net Loss for March 31 Quarter PURADYN FILTER: Delays Filing of Quarterly Report on Form 10-Q RAHAXI INC: Delays Filing on Quarterly Report on Form 10-Q RCLC INC: Delays Filing of Quarterly Report on Form 10-Q REEL 'EM IN: Case Summary & 20 Largest Unsecured Creditors RICARDO MARTINEZ: Case Summary & 20 Largest Unsecured Creditors ROBERT VANNUCCI: Case Summary & 14 Largest Unsecured Creditors SALT ISLAND: Files for Chapter 11 Bankruptcy in Orlando SANTA CLARA: Wants Access to East West's Cash Until June 2010 SMURFIT-STONE: Reaches Plan Agreement With Stockholders SMURFIT-STONE: Submits Revised Copy of ABL Revolver Document SMURFIT-STONE: Settles Voith Entities' Claims SOUTH BAY: Proposes Ajalat Polley as Taxation Counsel SOUTH BAY: Proposes PwC as Tax Advisor and Auditor SOUTH BAY: BBVA Objects to Imperial's Success Fees SOUTHERN UNITED: A.M. Best Withdraws 'bb-' ICR After Merger SPANSION INC: Acquires Distribution Business From Former Unit SUMMERFIELD PACKAGING: Case Summary & Creditors List SUN HEALTHCARE: Plans to Separate Operating & Real Property Assets TD BISTRO: Files for Chapter 11 Bankruptcy Protection TERRACE POINTE: Files Schedules of Assets and Liabilities TOMMY VARGAS: Case Summary & 20 Largest Unsecured Creditors TOUSA INC: Has Court Nod to Use Cash Collateral Until August 31 TOUSA INC: Court Allows 2nd Amendment of Newark Homes Sale Deal TOUSA INC: Sells William County Assets to H2 Land TRANSAX INT'L: Delays Filing on Quarterly Report on Form 10-Q TREY RESOURCES: Posts $401,990 Net Income for March 31 Quarter TRI TRONG DO: Case Summary & 20 Largest Unsecured Creditors TRIBUNE CO: Court to Continue Plan Outline Hearing on May 28 TRIBUNE CO: J. Allen, et al., Seek Class Certification TRIBUNE CO: Has Court OK to Reject Dun & Bradstreet Contract TRIBUNE CO: Judge Carey Okays Appointment of Klee as Examiner TRIBUNE CO: Examiner Can Demand and Issue Subpoenas TRIBUNE CO: Examiner Hires Own Firm as Legal Counsel TRIBUNE CO: Examiner Retains Saul Ewing as Delaware Counsel TRIDIMENSION ENERGY: Case Summary & 40 Largest Unsecured Creditors US AIRWAYS: Paid $1 Million in Employee Bonuses in 2009 US AIRWAYS: Reports April 2010 Traffic Results US AIRWAYS: To Hold Annual Meeting of Stockholders on June 10 US CONCRETE: Has Final Approval for $80 Million Financing VIASPACE INC: Posts $630,000 Net Loss for First Quarter 2010 VISTEON CORP: 2nd Amended Plan Outline Still Has Objections VISTEON CORP: Michigan Treasury Objects to Exculpation Provisions VISTEON CORP: WTC Says Plan Support Pact May Not be Enforceable WASHINGTON MUTUAL: Bondholders Don't Support FDIC Settlement WASHINGTON MUTUAL: Plan Outline Hearing Adjourned to June 3 WASHINGTON MUTUAL: JPM Abandons Demand for $1.4-Bil. Tax Break WESTCLIFF MEDICAL: Files for Chapter 11 to Sell to Rival WOUND MANAGEMENT: Posts $1.2 Million Net Loss in Q1 2010 * Berry Spears to Head Fulbright's Houston Bankruptcy Practice * Ben Gonzalez and GR Christon Join KPMG Restructuring Group * Large Companies With Insolvent Balance Sheets ******** 100 WEST: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 100 West Park LLC 100 West Park Avenue, Suite 204 Long Beach, NY 11561 Bankruptcy Case No.: 10-73968 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court Eastern District of New York (Central Islip) Judge: Alan S. Trust Debtor's Counsel: Roy J. Lester, Esq. 600 Old Country Road, Suite 229 Garden City, NY 11530 Tel: (516) 357-9191 Fax: (516) 357-9281 E-mail: rlester@rlesterlaw.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 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nyeb10-73968.pdf The petition was signed by Leo Zucker, managing member. ABITIBIBOWATER INC: Provides Details on Creditor Recoveries ----------------------------------------------------------- AbitibiBowater Inc. and certain of its U.S. and Canadian subsidiaries, currently under creditor protection, have filed with the U.S. Bankruptcy Court for the District of Delaware amendments to AbitibiBowater's plans of reorganization as well as related disclosure documents. Amendments to its plans of reorganization and related disclosure documents will also be filed with the Quebec Superior Court in Canada. The unsecured creditors committee supports the plans. With these developments, AbitibiBowater is aiming to emerge from creditor protection in the fall of 2010. These filings provide details on the treatment of creditor claims for the proposed plans of reorganization. If and when the plans are approved by the courts and creditors, the Company expects to emerge with a significantly improved financial position, resulting from its efforts to reduce costs, lower debt and mitigate the impact of ongoing market and currency fluctuations. The court- filed documents will be made available at http://www.abitibibowater.com/restructuringonce filings have been made in courts in both the U.S. and Canada. "The filing of these amendments to our plans of reorganization and related disclosures is an important milestone on the path towards emergence," stated David J. Paterson, President and Chief Executive Officer. "Our significant progress to date in restructuring AbitibiBowater is a testament to the resolve and dedication of our employees and business partners. Working collaboratively, we are facing our challenges and developing solutions to transform the Company. Our goal is to build an organization with a leaner financial model, a low-cost and flexible operating platform, and a diverse and innovative mix of products, capable of nimbly reacting to industry dynamics." Recovery for Creditors The filings provide greater specificity regarding recoveries by unsecured creditors, while maintaining the classifications for all Company creditors as proposed in the May 4, 2010, draft framework for the plans of reorganization. The plans of reorganization specify that non-disputed pre-petition secured, administrative and priority claims would be paid in full in cash, or satisfied as otherwise agreed, at emergence. The plans of reorganization also provide that the Company's current common stock will be cancelled and holders will receive no recoveries, while unsecured claims would receive a pro rata share of equity in the reorganized company upon emergence, subject to certain conditions. A convenience class for unsecured claims has also been established. Estimates of recoveries for unsecured creditors are detailed in the filings. Final recoveries for unsecured creditors are subject to change as a result of any future amendments to the plans of reorganization, including dilution from a potential rights offering, a management incentive program, or additional claims or adjustments to claims that may be recognized at a later date. Restructuring Efforts Since the time of the combination of Abitibi-Consolidated Inc. and Bowater Incorporated in 2007 and throughout AbitibiBowater's creditor protection proceedings, the Company has undertaken sustained and significant actions to restructure and improve long- term profitability. Strategic actions to enhance the Company's value include: significant closures of non-profitable capacity; the monetization of non-core assets; and various austerity measures and spending cuts, including a significant reduction in the Company's workforce. AbitibiBowater has streamlined its asset portfolio to focus on top-performing facilities by closing or idling 3.4 million metric tons of paper capacity, moving from an overall production capacity of 10.4 million metric tons to 7 million metric tons, since 2007. During this period, the Company has also sold aggregate assets and land for total proceeds of over $940 million. Chief among these transactions was the sale of the Company's 60% ownership interest in Manicouagan Power Company (MPCo) for C$615 million. The MPCo transaction allowed for the repayment of one of the Company's initial debtor-in-possession (DIP) financing arrangements and the partial repayment of other secured debt. Business Plan AbitibiBowater plans to emerge with a strengthened financial position by building upon the meaningful headway it has made throughout its restructuring. The Company has developed a business plan, in consultation with its creditors, stakeholders and financial advisors, which forecasts improved earning margins and cash flow. These improvements will be made possible in part by Company efforts to focus its manufacturing at highly competitive operations. The reorganized company plans to manage a more adaptive and flexible operating portfolio, designed to better capture value through market cycles and capitalize on export market opportunities. There is also potential upside, in promising growth markets, from Company innovations in new inkjet product offerings. Other prospects include current efforts to further diversify the Company's product mix by converting capacity towards other market segments. As of May 17, 2010, the Company has ceased newsprint production at its Coosa Pines (Alabama) paper mill and entered the packaging papers market with linerboard and corrugated medium as well as natural kraft and bag grades. Another example of a capacity conversion is the recent shift of 100,000 metric tons of newsprint capacity at the Company's Calhoun (Tennessee) mill to specialty grades. Next Steps Before emerging from creditor protection, the Company must obtain adequate exit financing and complete efforts to address labor costs and pension issues, as well as satisfy other conditions set forth in the plans of reorganization. AbitibiBowater has commenced a process to obtain an exit financing package that will provide sufficient capital for the emerged company to manage business operations and execute its plans. In connection with this exit financing, the Company has secured a backstop commitment from certain unsecured noteholders for a rights offering of up to $500 million along with a commitment to support the restructuring process. In this rights offering, AbitibiBowater would offer new convertible notes with a seven-year maturity from the date of closing to eligible unsecured creditors. The notes would be obtained upon exercise of the rights and convertible into common stock of the emerged company. Additional information on this rights offering has been disclosed in the court filings. Ultimately, the Company's plans of reorganization will require creditor approval and confirmation by the courts. Affected unsecured creditors who are entitled to vote will receive the court-approved disclosure and voting materials, which are expected to be mailed in July subject to court approvals. More information about AbitibiBowater's restructuring process can be found at http://www.abitibibowater.com/or by calling toll-free 888 266- 9280. International callers should dial 503 597-7698. About AbitibiBowater AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 22 pulp and paper facilities and 26 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMACORE GROUP: Posts $1.3 Million Net Loss for March 31 Quarter --------------------------------------------------------------- Amacore Group Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $1.3 million on $6.3 million of total revenues for the three months ended March 31, 2010, compared with a net income of $1.8 million on $7.4 million of total revenues during the same period a year ago. The Company's balance sheet at March 31, 2010, showed $9.3 million in total assets and $20.8 million in total liabilities, for a total stockholders' deficit of $14.3 million. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?630a About The Amacore Group Based in Maitland, Florida, The Amacore Group, Inc., (OTC BB: ACGI) -- http://www.amacoregroup.com/-- is primarily a provider and marketer of healthcare related products, including healthcare benefits, vision and dental networks, and administrative services such as billing, fulfillment, patient advocacy, claims administration and servicing. The Company primarily markets healthcare-related membership programs such as limited and major medical programs, supplemental medical and discount dental programs to individuals and families. It distributes these products and services through various distribution methods such as its agent network, direct response marketing companies, DRTV (Direct Response TV), inbound call centers, in-house sales representatives, network marketing and affinity marketing partners. The Company's secondary line of business is to place membership programs through these same marketing channels. The membership programs utilize the same back office and systems creating marketing efficiencies to provide low cost ancillary products such as pet insurance, home warranty, involuntary unemployment insurance, and accident insurance. AMELIA ISLAND: Names Noble Investment as Stalking-Horse Bidder -------------------------------------------------------------- According to Kevin Turner at The Florida Times-Union, Amelia Island Co. selected Noble Investment Group of Atlanta as stalk- horse bidder for its assets. Amelia Island Plantation owns a 1,350-acre resort on Amelia Island in Florida. The resort has 249 rooms and three golf courses. The property owes $28.4 million on a first mortgage held by an affiliate of Prudential Retirement Insurance & Annuity Co. The collateral is said by the resort to be worth $46 million. The Company filed for Chapter 11 on Nov. 13, 2009 (Bankr. M.D. Fla. Case No. 09-09601). The petition says assets and debt both exceed $50 million. AUTOLIV INC: Buys Back Equity Units at a Discount ------------------------------------------------- Autoliv, Inc. accelerated the exchange into common stock of 27% of the Company's outstanding equity units. As a result of these transactions, the Company expects to save approximately $2 million through April 2012 in interest expense. According to separate exchange agreements entered into on May 19, 2010 and May 20, 2010 with holders representing an aggregate of 1,794,880 equity units of Autoliv, the Company will now issue an aggregate of 2,337,112 treasury shares of Autoliv's common stock and pay an aggregate of $5,723,136 in cash to these holders. The remaining aggregate interest coupons for each equity unit amounts to $4, while the average cost to be paid in these transactions is $3.19 per unit, a discount of 20%. The closings of these separate transactions are scheduled to occur May 24, 2010. The Company may, from time to time, repurchase additional equity units. Each of the exchanges is exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) thereof. About Autoliv Inc. Autoliv Inc. develops and manufactures automotive safety systems for all major automotive manufacturers in the world. Together with its joint ventures, Autoliv has 80 facilities with approximately 34,000 employees in 28 vehicle-producing countries. In addition, the Company has technical centers in eleven countries around the world, with 21 test tracks, more than any other automotive safety supplier. Sales in 2008 amounted to US$6.5 billion. The Company's shares are listed on the New York Stock Exchange and its Swedish Depository Receipts on the OMX Nordic Exchange in Stockholm. * * * As reported in the Troubled Company Reporter-Europe on November 30, 2009, Standard & Poor's Ratings Services raised the junior subordinated debt rating on Autoliv's US$165 million equity units hybrid to 'BB+' from 'BB' AWESOME ACQUISITION: S&P Affirms Corporate Credit Rating at 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B' corporate credit rating on Awesome Acquisition Co. and revised the ratings outlook to positive from stable. "S&P is revising its rating outlook because AAC paid down debt and enhanced its credit metrics, despite same-store sales pressure, and because S&P expects this trend to continue in the near term", said Standard & Poor's credit analyst Charles Pinson-Rose. The speculative-grade ratings on Coppell, Texas-based Awesome Acquisition Co. reflect its participation in the highly competitive quick-service pizza restaurant industry, and its aggressively leveraged capital structure. AAC, which franchises and operates Cici's Pizza restaurants and operates a distribution business to supply the restaurants, had same-store sales declines in the past two years. S&P believes this is a result of the weak economy and high unemployment intensifying competition with the restaurant industry. Comparable-store sales were negative for much of the past two years and reached a low point in the fourth quarter of 2009, when comparables were down in the high single digits. However, the trend improved in the first quarter of this year with a comparable-store sales decline in the mid-single digits. In the near term, S&P expects further moderation and expect same-store sales to be down in the low single digit area in the next two quarters and may turn positive by the fourth quarter. BARRINGTON BROADCASTING: Moody's Upgrades Default Ratings to 'B3' ----------------------------------------------------------------- Moody's Investors Service upgraded the corporate family and probability of default ratings for Barrington Broadcasting Group LLC to B3 from Caa1. In Moody's opinion, the combination of an improved outlook for advertising spending and the debt repurchase undertaken during 2009 will facilitate continued covenant compliance even as the leverage covenant tightens and the equity cure received at the end of 2008 falls out of the calculation. Furthermore, Moody's anticipates Barrington will use the cash flow from its stronger performance in 2010 to repay debt, better positioning the company to withstand future volatility from economic and election cycles and to address its debt maturities ($25 million revolver maturing August 2012 and $140 million outstanding on term loan maturing August 2013). The stable outlook incorporates expectations that the improved outlook for advertising spending combined with cost cutting and revenue generating initiatives implemented during the downturn will enable meaningful EBITDA growth in 2010 relative to 2008. The stable outlook also assumes application of free cash flow to debt repayment, along with EBITDA growth, will enable Barrington to achieve leverage on a two-year average basis in the low 6 times debt-to-EBITDA range or better. Moody's also affirmed the SGL-3 speculative grade liquidity rating and upgraded instrument ratings as shown below. Barrington Broadcasting Group LLC -- Corporate Family Rating, Upgraded to B3 from Caa1 -- Probability of Default Rating, Upgraded to B3 from Caa1 -- Senior Subordinated Bonds, Upgraded to Caa2 from Caa3 -- Senior Secured Bank Credit Facility, Upgraded to B2 from B3 -- Affirmed SGL-3 Speculative Grade Liquidity Rating -- Outlook, Stable Barrington's B3 corporate family rating incorporates its high leverage (approximately 7.8 times debt-to-EBITDA for the trailing twelve months through March 31, 2010, and in the mid 7 times on a two year average basis) and modest free cash flow, which poses challenges for managing a business vulnerable to advertising spending cycles. Lack of scale also constrains the rating, although the company benefits from a station portfolio with diversity in terms of both geography and network affiliations. These assets combined with Barrington's continued local market focus and good margins create the capacity to generate strong unlevered cash flow, but the company faces continued competition for advertising dollars related to media fragmentation. The most recent action on Barrington occurred April 6, 2009. At that time Moody's upgraded the rating on its senior subordinated bonds to Caa3 from C. Barrington Broadcasting Group, LLC, headquartered in Hoffman Estates, Illinois, owns or programs 24 network television stations in 15 markets. Its net revenue for the year ended December 31, 2009, was approximately $100 million. BEAR STEARNS: Insolvent During JPM Acquisition, Says Paulson ------------------------------------------------------------ Henry M. Paulson, Jr., former secretary of the U.S. Department of the Treasury, insisted that Bear Stearns was insolvent during its acquisition by JPMorgan Chase in March 2008, the New York Times reported. Mr. Paulson's assertion contradicted the statement made by Alan Schwartz, former Bear Stearns chief executive, that Bear Stearns was solvent and only had a liquidity problem because the overnight repurchase market ceased lending to the firm. "We were told . . . that Bear was going to file for bankruptcy . . . if we didn't act," Mr. Paulson reportedly told the Financial Crisis Inquiry Commission, the New York Times said. "So how does a solvent company file for bankruptcy?" Peter Wallison, a member of the Commission, in response to Mr. Paulson's accusation, explained that businesses could file for bankruptcy even if they were solvent noting that one of the definitions of bankruptcy is simply that a company is unable to pay for its obligations when it comes due, the newspaper reported. Mr. Paulson, however, disagreed, asserting that bankruptcy is equal to insolvency when it comes to financial firms. According to the report, Mr. Paulson believes a potential fire sale of Bear's assets in bankruptcy might not have yielded enough cash to pay off its creditors, equating to an insolvent firm. Assets that were carried on Bear's books at 100 cents on the dollar may have only been worth a fraction of that amount, especially in the spring of 2008, the report added. The New York Times noted that Bear Stearns sold itself to JPMorgan for $10 a share, which aggregate to $2.5 billion. It further noted that part of the deal would not have been possible had the United States government not agree to bank $29 billion in potential future losses from Bear Stearns' assets. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. BEAR STEARNS: M. Tannin Wants Government Docs. Unsealed ------------------------------------------------------- In a letter addressed to the the United States District Court for the Eastern District of New York, Susan E. Brune, Esq., at Brune & Richard LLP, in New York, on behalf of former Bear Stearns fund manager Matthew Tannin, relates she learned that the United States Government has filed a motion under seal requesting that Special Assistant United States Attorney Brian Sano be permitted to litigate a parallel Securities and Exchange Commission civil enforcement case that remains after her client was acquitted. Mr. Sano, who is a SEC staff attorney, participated in the grand jury investigation that led to the indictment, Ms. Brune notes. For this reason, she says she believes the Government's application has therefore been made in the context of the Court's supervision of grand jury matters. "Although Rule 49 of the Federal Rules of Criminal Procedure and Rule 2(D) of [the Court's] Individual Motion Practices require a moving party to serve its motion on every other party, the government filed its motion ex pare and has declined a defense request for a copy of its papers." Accordingly, Ms. Brune asks that the Government's motion be unsealed or, in the alternative, the Court order the government to provide her a copy of the motion papers so that she may have an opportunity to know more about the relief that the government seeks and the legal authority on which it bases its request and, if appropriate, to oppose or consent to that relief. Government's Request Benton J. Campbell, United States Attorney for the Eastern District of New York, asks the Court to permit the disclosure of documents subpoenaed by the grand jury and transcripts of testimony before the grand jury to the SEC for use in SEC's civil action against Ralph Cioffi and Matthew Tannin. Mr. Campbell contends that Rule 6(e)(3)(E)(i) of the Federal Rules of Criminal Procedure authorizes a court to order disclosure of matters occurring before a grand jury "preliminary to or in connection with a judicial proceeding." Mr. Campbell asserts that the SEC should be able to use the Grand Jury Documents as it prepares for trial, and should be permitted to use the grand jury documents to present its case and to confront witnesses called by the defense during the civil trial. Without question, it would be unfairly prejudicial to the SEC if it had to prepare and try its case without access to the Grand Jury Documents, while the Defendants enjoyed the benefits of those same documents, Mr. Campbell further argues. Defendants Respond On behalf of Messrs. Cioffi and Tannin, Ms. Brune tells the Court that the Government's assertions are "nonsensical." She says that the Defendants are prepared to voluntarily turn over the Grand Jury Documents had the SEC simply asked. However, Ms. Brune pointed out that it's odd that during the time when the Government's Motion was under seal, the SEC characterized it to the defense as an application to permit Mr. Sano to be part of the SEC's trial team. However, she contends that the Motion does not even mention Mr. Sano. "Why all the mystery? We are not sure. In any event, we do not object to the U.S. Attorney's Office's turning over the specified items -- the telephone records and the transcripts of the testimony of the three witnesses -- to the SEC," Ms. Brune asserts. After the response of Messrs. Cioffi and Tannin, the Court granted the Government's Motion. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. BEAR STEARNS: Racetrac Wins $3.4MM from Bear Stearns Arbitration ---------------------------------------------------------------- RaceTrac Petroleum, Inc., a service station chain based in Georgia, who lost money investing in a Bear Stearns hedge fund, was awarded $3,400,000 by a securities-industry arbitration panel in December 2009, The Wall Street Journal reported. The Award is the first ruling in favor of an investor since former Bear Stearns funds managers Ralph Cioffi and Matthew Tannin were acquitted of criminal charges in November 2009. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. BENDA PHARMACEUTICAL: MaloneBailey Raises Going Concern Doubt ------------------------------------------------------------- Benda Pharmaceutical, Inc., filed on May 18, 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 incurred losses for the year ended December 31, 2009, and had a working capital deficiency at December 31, 2009. The Company reported a net loss of $2.7 million on $22.0 million of revenue for 2009, compared with a net loss of $14.5 million on $25.0 million of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $63.6 million in assets, $48.2 million of liabilities, and $15.3 million of stockholders' equity. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?62fc Based in Wuhan, Hubei Province, PRC, Benda Pharmaceutical, Inc., OTC: BPMA) through is wholly owned subsidiary Ever Leader Holdings Limited, is a pharmaceutical company that identifies, discovers, develops and manufactures both conventional medications and Traditional Chinese Medicines for the treatment of some of the largest common ailments and diseases. The Company is also dedicated to the development, manufacturing and commercialization of gene therapy products. BRADKEN INC: Almac Machine Deal Won't Affect Moody's 'B3' Rating ---------------------------------------------------------------- Moody's commented that Bradken, Inc's recent announcement that a newly formed subsidiary had entered into an Asset Purchase Agreement with Almac Machine Works Ltd. will not immediately impact Bradken, Inc's B3 corporate family rating or negative outlook. The last rating action on Bradken, Inc., was on August 21, 2009, when Moody's downgraded the CFR to B3 from B2. Bradken, Inc., headquartered in Kansas City, Missouri, is a designer and manufacturer of large, highly engineered steel and iron castings. Products include locomotive and transit trucks, mining truck frames, axle housings, valve bodies, compressor housings, pumps, Navy ship cast components, power generation turbine steel castings, and offshore platform structural parts. The company is wholly owned by Bradken Limited, an Australia based engineering company. BRUNDAGE-BONE: Proposes to Fund Distributions from Cash on Hand --------------------------------------------------------------- Brundage-Bone Concrete Pumping, Inc., and JLS Concrete Pumping, Inc., filed with the U.S. Bankruptcy Court for District of Colorado a proposed Plan of Reorganization. According to the Plan, contemplates that the Reorganized Debtors will fund distributions under the Plan with cash on hand, including cash from operations, existing assets, proceeds from the exit facility. On the Effective Date, the Reorganized Debtors will enter into the lender senior term notes, the BB Liquidating Subsidiary will enter into Lender secured trust equipment notes, and the BB Liquidating Trust will enter into Lender trust deficiency notes. If appropriate and necessary, the Reorganized Debtor will enter into secured notes with each real estate lender. Under the Plan, Class 4 GMAC Equipment Lender Claim Against Brundage-Bone will, except to the extent it agrees to a less favorable treatment, receive in exchange for the full and final satisfaction, settlement, release and discharge of the GMAC Equipment Lender Claim against Brundage-Bone, these: i) The surrender of the GMAC Equipment securing the holder's Allowed GMAC Equipment Lender Secured Claim; or ii) To the extent there is a deficiency resulting from the treatment provided for in subsection (i), the deficiency will be paid as a Class 5 general unsecured claim. Secured Claims against JLS will be treated and paid as Allowed Claims against Brundage-Bone in accordance with the treatment provided for Brundage-Bone Claims. General Unsecured Claims against Brundage-Bone and JLS will receive its pro rata share of the BB Unsecured Trust Note, which payments will be disbursed quarterly by the BB Unsecured Trustee. Intercompany Claims against Brundage-Bone and JLS will receive no distributions on account of their Intercompany Claims. Equity Interests against Brundage-Bone and JLS will be deemed canceled and extinguished, and will be of no further force and effect, whether surrendered for cancellation or otherwise. A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/BRUNDAGE-BONE_Plan.pdf The Debtor is represented by: Sender & Wasserman, P.C. Harvey Sender, Esq. John B. Wasserman, Esq. E-mail: jwass@sendwass.com David V. Wadsworth, Esq. Matthew T. Faga, Esq. 1660 Lincoln Street, Suite 2200 Denver, Colorado 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 About Brundage-Bone Concrete Pumping Brundage-Bone Concrete Pumping Inc. and JLS Concrete Pumping Inc., claim to be the largest providers of concrete pumping services in the U.S. JLS Concrete Pumping services California and Nevada from its corporate headquarters in Ventura and from satellite yards in Bakersfield, Fresno, Gardena, Lancaster, Las Vegas, Moorpark, Palm Springs, Riverside, San Diego, San Luis Obispo, Santa Clarita, Temecula, Thousand Oaks, and Ventura. Brundage-Bone and JLS filed for Chapter 11 on Jan. 18, 2010 (Bankr. D. Col. Case No. 10-10758). According to the schedules, the Company has assets of $325,708,061, and total debts of $230,277,103. CAPROCK COMMUNICATIONS: Harris Deal Won't Move Moody's 'B2' Rating ------------------------------------------------------------------ Moody's Investors Service commented that the acquisition of CapRock Communications, Inc., by Harris Corporation (Senior Unsecured, Baa1) does not affect CapRock's B2 corporate family rating or the ratings on its secured bank debt at this time. CapRock's debt will likely be repaid upon close of the transaction, at which point Moody's will likely withdraw all ratings on CapRock. Moody's most recent rating action for CapRock was on May 28, 2009. At that time Moody's changed the outlook to stable from negative and affirmed the B2 corporate family rating. CapRock Communications Inc. provides global fixed and mobile satellite communications in remote locations engineered at high levels of reliability to customers in three primary markets, Energy, Maritime, and Government. ABRY Partners acquired CapRock for approximately $200 million in February 2006, and CapRock acquired Arrowhead Global Solutions in April 2007, expanding its government division. CapRock's annual revenue is approximately $350 million. CARBON BEACH: Court Continues Plan Outline Hearing Until June 29 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has continued until June 29, 2010, at 10:00 a.m., the hearing on approval of the Disclosure Statement explaining Carbon Beach Partners, LLC's proposed Plan of Reorganization. The hearing will be held at 21041 Burbank Blvd Woodland Hills, California. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. As reported in the Troubled Company Reporter on April 5, 2010, according to the Disclosure Statement, the Plan provides for the completion of its primary asset's construction, liquidation of the asset and distribution of the proceeds to creditors in their order of priority. Payments under the Plan will be made from the Reorganized Debtor's cash on hand from post-bankruptcy financing and from cash to be generated by the sale of the condominiums. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/CarbonBeach_DS.pdf About Carbon Beach Partners, LLC Calabasas, California-based Carbon Beach Partners, LLC, filed for Chapter 11 on November 3, 2009 (Bankr. C.D. Calif. Case No. 09- 24657). Anne Wells, Esq., represents the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. CHATSWORTH INDUSTRIAL: Has Until July 21 to File Chapter 11 Plan ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California extended Chatsworth Industrial Park, LP's exclusive periods to file and solicit acceptances for the proposed Chapter 11 Plan until July 21, 2010, and September 20, 2010, respectively. The Debtor is represented by: Joseph E. Caceres, Esq. Charles Shamash, Esq. Caceres & Shamash, LLP 8200 Wilshire Blvd., Suite 400 Beverly Hills, CA 90211 Tel: (310) 205-3400 Fax: (310) 878-8308 Tarzana, California-based Chatsworth Industrial Park, LP filed for Chapter 11 on December 23, 2009 (Bankr. C.D. Calif. Case No. 09- 27368). In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. CHEMTURA CORP: D. Dickey Leaves as Executive Vice President ----------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Chemtura Corporation disclosed that David G. Dickey, Chemtura's executive vice president and group president of performance products, resigned effective April 23, 2010, to pursue other interests. Craig A. Rogerson, Chemtura's chairman, president and chief executive officer, will assume Mr. Dickey's responsibilities on an interim basis. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: NYC Suspects PCB Contamination Near Plant -------------------------------------------------------- Officials of New York City will be investigating the soil of Red Hook Park in Brooklyn for high levels of concentration of polychlorinated biphenyls resulting from effluvia from an old Chemtura Corp. plant located near the Park, American Council on Science and Health reports. PCBs are banned by the Environmental Protection Agency due to its links to a range of health problems. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: AgroSolutions Business Releases Progress Report -------------------------------------------------------------- Chemtura AgroSolutions(TM), a business of Chemtura Corporation and a debtor-in-possession, provided a progress report to its customers and the trade media on the progress the business is making despite challenging conditions in the agricultural industry worldwide. Chemtura AgroSolutions started the year by opening a new global business headquarters in Lawrenceville, Georgia, just outside of Atlanta. "This created an exciting new environment from which to grow the business, improving the effectiveness of customer and supplier communications, university relations and recruiting, all leading to the achievement of faster business decisions," said Gregory E. McDaniel, President, Chemtura AgroSolutions. Chemtura AgroSolutions also undertook a major rebranding effort, changing its name from Chemtura Crop Protection. "The new name and image better describe the direction of the business, the value it delivers today to its customers and it commits to continue to deliver, and its focus on providing more customer-aligned solutions," Mr. McDaniel said. During the first quarter of 2010, overall, the business demonstrated considerable resolve in many of the regions of the world it serves despite continuing challenging conditions in the global agricultural industry. Many regions and customers are still feeling the effects of weak economies, lower commodity prices and the continued restriction in credit availability despite the limited global economic easing that has occurred. Chemtura AgroSolutions' first-quarter results also were impacted by one-time costs associated with business start-up and an ongoing internal review of customer incentive, commission and promotional payment practices. Chemtura AgroSolutions net sales in the first quarter 2010 were just over $65 million, a modest decrease of 5 percent from the first quarter 2009 levels. Underpinning this achievement was revenue growth in three of the four regions of the world the business serves, led by North America, which demonstrated strong growth after a slow start to the season due to harsh weather conditions. Europe also saw harsh weather earlier this year but, with weaker economic conditions and credit availability concerns, it saw revenues decrease compared to the same quarter last year. In Latin America, revenues grew relative to the same period in 2009 in what is a highly competitive market, and the Asia/ Pacific region also experienced revenue growth compared to the same quarter last year, resulting largely from investment in expanded customer service and support, operational excellence, as well as the continuing development of our marketing, sales and manufacturing capabilities in India. "The business is able to withstand these difficult global conditions by listening more closely to its customers' needs, delivering the solutions and support they require, and backing these commitments with investments in people, facilities, and a platform for growth," Mr. McDaniel said. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Amends 2009 Annual Report ---------------------------------------- In a regulatory filing with the Securities and Exchange Commission dated April 29, 2010, Chemtura Corporation and its subsidiaries filed amendments to their 2009 annual report. The amendments include: -- the replacement of Part III, Items 10 through 14, of the Annual Report, which provides items on (i) Directors, Executive Officers and Corporate Governance; (ii) Executive Compensation; (iii) Security Ownership of Certain Beneficial Owners; (iv) Certain Relationships and Director Independence; and (v) Accountant Fees and Services; and -- the addition of five exhibits and updates to Item 15 of the Annual Report, which refers to information on financial schedules and exhibits. A full-text copy of the Amended 2009 Annual Report on Form 10K/A is available for free at the Securities and Exchange Commission site at http://tinyurl.com/32aaqky About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Committee Wants to Remove Gowling Fee Cap ------------------------------------------------------- As previously reported, the Bankruptcy Court has authorized the Official Committee of Unsecured Creditors in Circuit City Stores Inc.'s Chapter 11 cases to retain Gowling Lafleur Henderson LLP as its Canadian counsel, nunc pro tunc to November 18, 2008. The January 20, 2009, Agreed Order provided that the firm's compensation and reimbursement of expenses was capped at $150,000, subject to the Creditors' Committee's right to seek additional Court authorization for expenditures above the Cap Amount in the future. The Creditors' Committee now asks the Court to remove the cap on Gowling Lafleur's compensation and reimbursement. Lynn L. Tavenner, Esq., at Tavenner & Beran, P.L.C., in Richmond, Virginia, relates that in late October of 2009, the Debtors informed the Creditors' Committee for the first time that proceeding to confirmation of their First Amended Joint Plan in November 2009 as scheduled could adversely affect the repatriation of the equity proceeds from one of the Debtors' affiliates in Canada, InterTAN Canada, Ltd. Specifically, the Debtors informed the Creditors' Committee that confirmation of the Plan could have negative Canadian tax consequences, which could significantly reduce the equity proceeds which would otherwise be available for creditors of the Debtors. As a result, the Debtors and the Creditors' Committee decided to delay the hearing on confirmation of the Plan to attempt to address the Canadian tax issues in the most tax efficient manner. The unexpected news regarding InterTAN Canada tax issues required an indefinite postponement of the confirmation hearing in order to avoid any material diminution of the largest remaining asset of the Debtors' estates. Accordingly, the Committee immediately requested that Gowlings Lafleur, including Canadian tax experts, become actively involved with the Debtors, InterTAN Canada and their professionals to recommend a course of action to address the impediments to proceeding to confirmation and repatriating the equity proceeds in a tax efficient manner, Ms. Tavenner tells the Court. From November 2009 through the present, Gowlings Lafleur has worked closely with the Debtors, InterTAN Canada and the Canadian monitor and their professionals in developing a strategy to deal with InterTAN Canada and provided invaluable independent advice to the Creditors' Committee. With Gowlings Lafleur's assistance and direct involvement with the Canadian Revenue Agency, the parties have now made substantial progress and obtained favorable preliminary rulings from the CRA regarding certain proposed restructuring activities that would address the Canadian tax issues, Ms. Tavenner says. In the middle of April 2010, Gowlings Lafleur informed the Creditors' Committee that it had exceeded the Cap Amount and would be seeking compensation and reimbursement of expenses in the amount of $296,458 for the period November 1, 2009, through March 31, 2010. The firm also continues to render services to the Creditors' Committee with respect to the Canadian tax issues upon which it has been advising the Committee during the last several months, Ms. Tavenner relates. She clarifies that by this Motion, the Creditors' Committee is not seeking Court approval of the Gowlings Lafleur Additional Billings. Interim approval of those amounts will be the subject of a properly noticed application for interim compensation to be filed by Gowlings Lafleur in the future, and all parties will be able to assert any objections thereto as appropriate under the Bankruptcy Code. The Creditors' Committee is only seeking authority to eliminate the existence of the Cap Amount as a basis for objecting to the Gowling Lafleur Additional Billings or any fees and expenses incurred from and after April 1, 2010, she says. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). CIRCUIT CITY: Intertan's CCAA Stay Period Extended Until Sept. 15 ----------------------------------------------------------------- At the request of InterTAN Canada Ltd. and Tourmalet Corporation, Honorable Justice Geoffrey B. Morawetz of the Superior Court of Justice (Commercial List) for the Province of Ontario extended the Applicants' stay period to September 15, 2010. The stay was previously extended until April 30, 2010. Alvarez & Marsal Canada ULC, the appointed monitor, has made substantial progress in reviewing, reconciling and administering the proofs of claim in the Claims Processes. However, six claims still remain to be determined. There are also remaining issues with respect to potential tax liabilities to French taxing authorities. Pursuant to the First Distribution Order, the Monitor made distributions, from the proceeds of the Sale Transaction and other amounts received by or owing to InterTAN that were in the Monitor's possession, aggregating C$11,672,749, to those creditors set forth in the First Distribution Order. The amounts included interest on claims calculated at a rate of 5% per annum. The Second Distribution Order, dated January 29, 2010, authorized and directed the Monitor to distribute the further amount of C$5,784,906, to creditors specified in the Second Distribution Order, and which amounts included interest at a rate of 5% per annum. Since the Second Distribution Order was issued, 10 of the remaining claims have been settled, and the Monitor has made the applicable payments. In addition to claims settled and paid pursuant to the Second Distribution Order, a settlement has been reached with Thimens Industrial Development Corp. Ltd. The Canadian Court has approved the payment of C$207,706, representing the revised claim amount together with interest, in full and final satisfaction of the claim of Thimens against the Applicants. The Canadian Court has also approved and ratified the Cross- Border Insolvency Protocol, which ensures coordination between the Canadian Court and the U.S. Bankruptcy Court in matters related to potential equity distribution. The Protocol has also been approved by the U.S. Bankruptcy Court. In addition, Michelle Mosier has been replaced by Katie Bradshaw as Post-Closing Officer. A full-text copy of the Order, including a copy of the Protocol, is available at no charge at: http://bankrupt.com/misc/Intertan_Ord042610.pdf About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). CIRCUIT CITY: Intertan Monitor Submits 13th Report -------------------------------------------------- Honorable Justice Geoffrey B. Morawetz of the Superior Court of Justice (Commercial List) for the Province of Ontario has approved the Thirteenth Report of the monitor for InterTAN Canada Ltd. and Tourmalet Corporation. A full-text copy of the Report is available at no charge at: http://bankrupt.com/misc/Intertan_13thMonitorReport042110.pdf The Thirteenth Report was prepared by the Monitor to provide the Court and the Applicants' stakeholders with information concerning the Monitors' motion to, among other things, extend the stay period to August 31, 2010, and to make payment of C$207,706, to Thimens Industrial Development Corp. Ltd. The amount represents the revised claim amount with interest at the rate of 5% per annum for the period from May 1, 2009, to April 30, 2010. In its order dated April 26, 2010, the Court approved all the actions and activities in the Monitor's Thirteenth Report. The Monitor's fees and disbursements, and the fees and disbursements of its Canadian legal counsel, Goodmans LLP, are also approved. The Court ordered that the Monitor distribute, from the balance of the proceeds of the sale of substantially all of the assets of InterTAN and other amounts received by or owing to InterTAN that are in the Monitor's possession, the total amount of C$207,706, inclusive of interest, to Thimens. The distribution will be in full and final satisfaction of the claim of Thimens against the Applicants. Subject to the January 29, 2010 Order, the Monitor is also authorized and directed to retain all remaining funds available for distribution until further order of the Court. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). CHRYSLER LLC: CGI Holding Repays $1.9 Billion to U.S. Treasury -------------------------------------------------------------- The U.S. Department of the Treasury disclosed on May 17 that it received a $1.9 billion repayment from Chrysler Holding (CGI Holding) in settlement of one of the loans that the Treasury Department extended to finance Chrysler LLC, the "Old Chrysler" automobile company. "This repayment, while less than face value, is significantly more than the Treasury expected to recover on this loan and is greater than an independent valuation of the loan provided by investment banking firm Keefe, Bruyette and Woods, which was hired by Treasury in connection with the transaction." As a result of the repayment, CGI Holding and Chrysler Financial no longer have outstanding obligations to Treasury under the Troubled Asset Relief Program (TARP). The loan was originally made on January 2, 2009 to Chrysler Holding, the parent company of Old Chrysler, in the amount of $4 billion. The loan went into default when Old Chrysler filed for bankruptcy in April 2009. In June 2009, the assets of Old Chrysler were sold to New Chrysler pursuant to the bankruptcy court proceeding. The loan was reduced by $500 million as "New Chrysler" assumed that amount of the debt. The liquidation of Old Chrysler was recently completed and did not result in any recovery on the loan. CGI Holding was the owner of both Chrysler Financial and Old Chrysler. The loan also provided for potential recoveries from Chrysler Financial consisting of the greater of $1.375 billion or 40 percent of any distributions that Chrysler Financial made to CGI Holding. Because of the uncertainty regarding the amount and timing of any income distributions by Chrysler Financial that would be applied to the loan, Treasury had not expected a material recovery on the loan. Separate from this loan and payment, in January 2009 Treasury also provided a $1.5 billion loan to Chrysler Financial to enable it to finance the purchase of Chrysler vehicles by consumers. This loan was fully repaid with interest in July 2009. A separate debtor- in-possession loan of $1.9 billion provided by Treasury to Old Chrysler, on which Treasury had not expected any recovery, was extinguished last month in the liquidation. Treasury retains the right to recover the proceeds from the sale of specific collateral attached to that loan. CGI Holding has no ownership interest in Chrysler Group LLC, the "New Chrysler," and Treasury's investments in New Chrysler are not affected by today's repayment. Those investments consist of 9.9 percent of the equity and $7.1 billion of loans including undrawn commitments. Of the $14.3 billion in loans to Old Chrysler, New Chrysler and Chrysler Financial outstanding at various times under TARP (includes undrawn commitments), Treasury has received $3.9 billion to date. Treasury also retains the investments in New Chrysler described above. Total TARP repayments now stand at $189 billion -- well ahead of last fall's repayment projections for 2010. About Chrysler Group 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: Liquidation Trustee Obtains $250-Mil. Initial Bond ---------------------------------------------------------------- RJM I, LLC, the appointed Liquidation Trustee for the estate of Old Carco LLC, formerly known as Chrysler LLC, notifies the Court and parties-in-interest that it has obtained the initial bond with respect to the Cash to be held by the Liquidation Trust. Robert J. Manzo is the sole manager of RJM. On April 27, 2010, RJM, as principal, and Hartford Fire Insurance Company and The Hanover Insurance Company, as sureties, agreed to a bond totaling $250,000,000, to be paid to the United States of America. The Bond was effective as of April 30, 2010. Pursuant to (i) Section IV.B.3.c.iv of the Debtors' Confirmed Second Amended Joint Plan of Liquidation, and (ii) Section 13.3 of the Liquidation Trust Agreement, the Liquidation Trustee is required to: (a) immediately after the Effective Date, obtain a bond or surety with respect to the Cash held by the Liquidation Trust; and (b) notify the Bankruptcy Court and the U.S. Trustee in writing, at the time as the Liquidation Trustee obtains its initial bond. A copy of the Bond can be obtained for free at: http://bankrupt.com/misc/Chrysler_InitialBond_04272010.pdf About Chrysler Group 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: 1743 Sues Old Carco for Decommissioning Deficiencies ------------------------------------------------------------------ In connection with the winding up of Old Carco LLC and Old Carco Motors LLC's operations, in November 2009, Old Carco sold its Newark, Delaware assembly plant to 1743 Holdings LLC, as the designee of the University of Delaware, pursuant to a Bankruptcy Court-approved sale agreement. Robert W. Whetzel, Esq., at Richards Layton & Finger P.A., in Wilmington, Delaware, relates that in the Agreement, Old Carco undertook to perform certain decommissioning work prior to closing, and an escrow fund was established to secure the timely performance of the work. However, 1743 Holdings identified numerous instances in which the decommissioning work was not completed at the Property. Accordingly, 1743 Holdings provided notice to Old Carco and asserted an escrow claim but Old Carco rejected every item of the escrow claim, Mr. Whetzel says. An actual, controversy exists among the parties as to which a declaratory judgment setting forth each of the Parties' rights and obligations is necessary, Mr. Whetzel asserts. He explains that Old Carco's failure to perform the decommissioning work, or release funds from escrow, is impeding the progress of demolition and remediation of the Property. For these reasons, 1743 Holdings asks the Court to declare that it may proceed to resolve the decommissioning deficiencies and, upon completion, submit an invoice or other reasonable documentation of expense to Old Carco and Saul Ewing LLP, the escrow agent. 1743 Holding also asks the Court to declare that it is entitled to its costs, fees and expenses incurred in prosecuting the action, including attorneys' fees. In addition, 1743 Holding asks the Court to direct the Escrow Agent to disburse funds in accordance with the Escrow Agreement. About Chrysler Group 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 Invests $43MM in Kokomo Facilities ------------------------------------------------------------- Chrysler Group LLC said that it would invest $43 million in new equipment and tooling to expand its operations in Kokomo, Ind. The investment will create 399 new positions, including up to 379 to be filled by employees called back from lay-off status and 20 new hires in supervisory positions. The investment will be used to increase capacity at the Company's Kokomo Casting and Kokomo Transmission plants, adapt them to support production of the World Engine and improve processes for the 62TE transmission program. "As Chrysler Group works to implement the very robust business plan outlined on Nov. 4, 2009, our facilities in Kokomo will play an integral role in achieving those objectives," said Scott Garberding, Senior Vice President and Head of Manufacturing, Chrysler Group LLC. "This investment will keep our facilities at the forefront of innovation and advanced technology. "We want to thank the City of Kokomo for approving our tax abatement request and their continued support," said Mr. Garberding. "Over the past several years, Chrysler has shown a continued commitment to investing in Kokomo, allowing our plants to stay on the cutting edge of automotive technology," said Kokomo Mayor Greg Goodnight. "This investment is great news for Chrysler, and it's great news for our community." Chrysler Group has invested nearly $1 billion in its powertrain operations since 2007. In December 2009, the Company announced that it would invest $179 million in its Global Engine Manufacturing Alliance (GEMA) plant in Dundee, Mich., to produce the 1.4-liter, 16-valve Fully Integrated Robotized Engine (FIRE). In May 2007, Chrysler announced a $730 million investment in the Pentastar engine program, which began production at the all-new Trenton (Mich.) Engine Plant in March 2010. The World Engine is built at the GEMA facility in Dundee, Mich. GEMA produces the 2.0- and 2.4-liter I-4 for use in the Chrysler Sebring and Sebring Convertible; Jeep(R) Compass and Patriot; and Dodge Avenger, Caliber and Journey. The 62TE transmission is used in the Chrysler Sebring, Sebring Convertible and Town & Country; and the Dodge Avenger, Journey and Grand Caravan. About Chrysler Group 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 Names New Sr. VP for External Affairs ---------------------------------------------------------------- Chrysler Group LLC appointed Joseph "Jody" Trapasso to head its External Affairs activities. Mr. Trapasso is responsible for providing strategic direction on Chrysler Group's international, federal and state government relations as well as coordinating the activities of the Corporate Representative in Latin America. He will also lead the Company's community relations efforts and The Chrysler Foundation. "Jody is a strong addition to the leadership team at Chrysler," said Sergio Marchionne, Chrysler Group Chief Executive Officer. "He brings significant experience from both the public and private sector to today's dynamic and intense regulatory and public policy environment." Mr. Trapasso joins Chrysler Group from the international law firm of Crowell & Moring where he was Senior Counsel advising clients on public policy matters on both domestic and international issues. Prior to joining Crowell & Moring, Mr. Trapasso served as Senior Advisor to the Chairman of the Democratic National Committee providing strategic counsel on major donor fundraising programs and on the 2008 presidential election. He also has held various senior-level positions within the federal government, including Assistant Counsel to the President for the Office of Presidential Personnel at the White House during the Clinton Administration. Mr. Trapasso holds a Bachelor of Arts from Connecticut College and received a Juris Doctor from the University of Pennsylvania Law School. "With the announcement, I want to thank Rob Liberatore, who has served as an advisor to me, for his commitment and contribution to our Company during this search process," said Mr. Marchionne. Mr. Liberatore will stay on with the Company in order to assist with the transition. About Chrysler Group 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) CIT GROUP: Moody's Assigns Corporate Family Rating at 'B3' ---------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating to CIT Group Inc. Concurrently, Moody's assigned ratings of B1, B3, and Caa1 to CIT's first lien secured debt facilities, second lien secured notes, and senior unsecured notes, respectively. The outlook for the ratings is stable. The B3 corporate family rating incorporates the improvements to CIT's debt maturity profile and capital position that resulted from its fourth quarter 2009 pre-packaged bankruptcy reorganization. CIT recorded a significant gain in connection with the cancelation of indebtedness, boosting the company's capital levels and providing cushion for downside operating risks as the firm focuses on re-building its franchise. CIT has no meaningful scheduled debt maturities until January 2012, temporarily easing the burden on its developing but limited liquidity resources. In Moody's view, CIT's near-term default risk is relatively low as a consequence of its improved capital and liquidity positions. The rating also recognizes the significant execution risks associated with CIT's long-term operating and funding strategies. CIT emerged from bankruptcy intending to build operating momentum on the basis of its historic competitive strengths in trade finance, transportation finance, vendor finance, and corporate finance. However, the continuing effects of previous customer attrition and liquidity constraints on origination volumes, margin compression from high funding costs, and asset quality weakness are challenges to the firm's revitalization efforts. CIT made progress repairing and expanding customer relationships and volumes in the first quarter of 2010. However, Moody's expects competitive conditions for both origination volumes and personnel will increase in the sectors traditionally served by CIT, as the financial services industry recovers and banks seek new opportunities for growth. In this regard, a particular CIT challenge involves overcoming the extra caution expressed by potential customers considering doing business with CIT, given CIT's uneven performance record and the availability of financing alternatives. "CIT's brand equity has been bruised by the firm's difficulties over the past several quarters; it will take time for CIT to regain the confidence of customers, investors, and regulators," said Moody's senior analyst Mark Wasden. Moody's believes that for CIT to remain a viable independent company, it must further its strategy of transitioning to a bank- centric operating and funding model. A significant obstacle to CIT's plans is a Cease & Desist order issued by the FDIC that limits the ability of CIT Bank to increase brokered deposits. Opportunities for CIT to fully take advantage of CIT Bank as a funding platform will be limited if the order is not lifted. It is uncertain when or under what conditions the FDIC will consider lifting the Cease & Desist order. A decision by the FDIC to remove the Cease & Desist order could have positive implications for CIT's ratings. However, a continuing additional concern for Moody's is that CIT bank -- in its current form as a single-branch entity offering primarily brokered deposits -- may prove to be of insufficient stature to be the basis for a long-term, resilient funding profile for CIT's bank-centric finance businesses; CIT's longer-term efforts to expand the strength and capacity of its bank are an element of its execution risk. A further risk relates to CIT's reliance upon confidence-sensitive wholesale financing sources to procure funding not provided through CIT Bank. CIT has had some success this year reestablishing certain secured funding facilities that were terminated in 2009, but its ability to increase the breadth and stability of its funding from wholesale sources is uncertain given market conditions and the company's credit profile. CIT's strong cash balances and cash flows from asset sales and net portfolio runoff are expected to adequately provide for near-term liquidity needs. Moody's also expects that CIT will make progress repaying high cost debt during 2010, with consequential benefits to the company's operating margins and financial flexibility. However, CIT's liquidity profile will likely be characterized by constrained market access, limited liquidity alternatives, and relatively high funding costs for the foreseeable future, though low debt-repayment requirements mitigate these constraints near- term. An important aspect of CIT's transformation centers on its efforts to build critical risk management capability to a satisfactory level. Under a Written Agreement with the Federal Reserve Bank of New York, CIT is required to, among other things, implement plans for strengthening risk management and oversight policies, capital and liquidity planning functions, and credit risk assessment and loss reserve methodologies. Moody's expects that CIT will continue to make progress on these high priority initiatives. "We believe the necessary improvements CIT is making to its risk management infrastructure are beneficial to its credit profile, but there remain execution risks involving systems, processes, and people," said Moody's Wasden. Considering CIT's transition risks, Moody's believes that CIT's independence is not assured. Realistic alternate paths for CIT, such as a sale (in whole or in part) or select asset and business sales combined with portfolio servicing to liquidation, involve other potential operating and funding uncertainties that constrain the company's rating. CIT's rating also considers the firm's earnings and profitability prospects. Moody's anticipates that accretion of fresh-start accounting (FSA) adjustments over the next few years will be a meaningful component of CIT's reported profits and will therefore also benefit the firm's reported capital levels. However, Moody's expect CIT's pretax, pre-FSA earnings to be weak over the next several quarters, due to lower than historical volumes, high interest expense, and the need to provision for losses in a still difficult economic environment. An important measure of CIT's forward progress will be its asset quality performance, compared both to its historical trends as well as to expectations embedded in its FSA adjustments. A demonstration by CIT that it can sustainably produce high quality acceptable returns, in tandem with improved access to lower-cost funding, could lead to higher ratings. The stable rating outlook is based upon Moody's expectation that CIT will continue its accelerated repayment of high cost first lien debt during 2010, thus aiding operating margins and improving financial flexibility. The stable outlook also reflects Moody's view that the demands on CIT's cash resources are manageable over the outlook horizon (12-18 months). This view is balanced by continuing uncertainties associated with CIT's longer-term funding model, franchise composition and positioning, and asset quality and earnings performance. The B1 rating assigned to CIT's first lien loans is based upon strong asset coverage and loan terms, including a coverage covenant and cash sweep provisions, that support Moody's expectation that creditors would experience negligible loss severity in a default scenario. The B3 rating assigned to CIT's second lien notes is based upon their meaningful asset protections, though inferior to the first lien facilities, and the limited proportion of debt that is junior to the second lien notes. CIT's unsecured debt rating of Caa1 reflects the structural subordination of these notes to CIT's secured debt and their lengthy average maturity. CIT Group, Inc., is a commercial finance company located in New York City and Livingston, New Jersey. CIT GROUP: DBRS Assigns B (High) Issuer Rating ---------------------------------------------- DBRS has ssigned various ratings including an Issuer Rating of B (high) to CIT Group Inc. (CIT or the Company). Concurrently, DBRS has assigned a BB (high) rating to CIT"s First Lien Secured Credit Facility, a BB (low) rating to the second lien Series B Notes, a B (high) rating to the Series A Notes, a B rating to the Unsecured Long-Term Debt and a Short-Term rating of R-4. The trend on all long-term ratings is Positive. The Issuer rating considers CIT's solid and well-diversified core commercial lending franchise, the strengthened balance sheet, and CIT's near-term liquidity position. However, offsetting these positives are the significant challenges the Company faces including further diversifying and improving the funding profile, restoring underlying profitability, and improving the core franchise while reducing balance sheet size. Important to the rating, CIT's core commercial lending franchise remains solid. DBRS sees little evidence of erosion of core businesses owed to the reorganization process completed in the fall of 2009. Indeed, CIT continues to maintain top tier market positions in trade finance, transportation finance and vendor finance. Further, going forward, DBRS expects that CIT's more stabilized condition and improving funding profile will allow management to focus on restoring positive momentum in its core- businesses. The ratings consider CIT's progress in improving its liquidity profile; however, more work is needed in diversifying funding while reducing the cost of funding. Since the beginning of the year, CIT has executed a number of secured financings and disposed of two business lines generating additional liquidity. To this end, the Company has reduced its first lien credit facility by $2.25 billion since the beginning of the year. By reducing this facility, CIT not only improves leverage, but importantly improves profitability prospects. CIT has no material maturities of debt until 2013. DBRS expects continued progress on executing additional liquidity enhancing projects in the upcoming quarters. CIT intends to shift its funding model to a more "bank-centric" model and reduce reliance on wholesale funding sources. DBRS views this as a longer-term challenge, further complicated by the restrictions placed on CIT's bank subsidiary, which remains under a C&D order from the FDIC. As such, resolving regulatory concerns is necessary to the Company moving forward with its funding strategy. Success in achieving transformation of the funding profile will be viewed positively and could ultimately lead to upward rating momentum. The ratings consider the weak underlying earnings, which are largely the result of the high cost debt in the capital structure. Net earnings however, benefit from fresh start accounting. To this end, CIT's first quarter net income of $97.3 million was bolstered by $421 million of pre-tax fresh start accounting accretion income. Margins to average earning assets were 4.09% for 1Q10, however excluding fresh start accretion, finance margins declined to a very low 0.65%. CIT's success in repaying or refinancing the high cost debt will greatly assist the Company's undertaking of returning to a reasonable level of profitability. Asset quality remains acceptable, given the point in the cycle. Underlying credit performance in the pre-emergence book of business indicates stabilization. Importantly, credit risk has benefited from fresh start accounting, as assets, including the Company's loan book, were marked to fair value on December, 31, 2009. Accordingly, in the legacy portfolio, CIT only has exposure to further deterioration since the date of marking. Nonetheless, credit risk remains owed to the Company's exposure to small and middle market companies and the still uncertain economic recovery. However, the remaining $1.6 billion of non-accretable discount (marks) on the balance sheet as of March 31, 2010 limits potential exposure to losses on the pre-emergence loan portfolio. The reorganization process strengthened the balance sheet. Leverage has been reduced with debt-to-equity of 4.9x. Regulatory capital remains well-above requirements. CIT reported a Tier 1 capital of 15.5% and total capital ratio of 15.9% at the end of 1Q10. Consistent with DBRS' methodology for rating secured instruments, DBRS rates the First Lien Credit Facility three notches above the Issuer Rating. The notching reflects DBRS' view that recovery, in the case of default, will be greater than 90%. The high-recovery postulation considers the overall quality of the assets and the values of the assets have been marked-to-fair value as part of the fresh start accounting. Indeed at March 30, 2010, coverage on the First Lien Facility, at 3.2x, was well-above covenant requirements of 2.5x. Moreover, coverage has improved since quarter end given the $1.5 billion debt extinguishment on the first lien facility post quarter end. The Series B Notes receive a one-notch benefit, reflecting DBRS' view that the recovery may be less than the first lien notes. Finally, the ratings of the Series A Notes reflect DBRS' view that recovery would be less than the first lien notes and Series B Notes, but greater than the unsecured debt. The Positive trend reflects DBRS' expectations that the Company should continue to make progress in improving and diversifying its funding profile, while restoring underlying profitability. Further, DBRS anticipates CIT positively resolving the regulatory concerns at the bank, which should allow progress in the Company's shift to a "bank-centric" funding model and reduced reliance on wholesale funding markets. CITY CAPITAL: Delays Filing of Quarterly Report on Form 10-Q ------------------------------------------------------------ City Capital Corp. said it could not file its quarterly report Form 10-Q for the first quarter ended March 31, 2010, with the Securities and Exchange Commission. Franklin, Tenn.-based City Capital is a professional management and diversified holding company engaged in leveraging investments, holdings and other assets to build value for investors and shareholders. The Company's balance sheet as of September 30, 2009, showed $3,011,072 in assets and $8,450,591 of debts, for a stockholders' deficit of $5,439,519. The Company said its net loss and accumulated deficit of $16,844,167 as of September 30, 2009, raise substantial doubt as to its ability to continue as a going concern. COMMUNICATIONS INTELLIGENCE: Posts $1.6M Net Loss for March 31 Qtr ------------------------------------------------------------------ Communications Intelligence Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $1.6 million on $207,000 of total revenue for the three months ended March 31, 2010, compared with a net loss of $1.3 million on $246,000 of total revenue during the same period a year ago. The Company's balance sheet at March 31, 2010, showed $5.0 million in total assets and $5.9 million in total liabilities, for a $909,000 total stockholders' deficit. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?630b About Communication Intelligence Headquartered in Redwood Shores, California, Communication Intelligence Corporation and its joint venture is a supplier of electronic signature solutions for business process automation in the financial industry as well as the recognized leader in biometric signature verification. The Company's auditors -- GHP Horwath, P.C. in Denver, Colorado -- have expressed substantial doubt about its ability to continue as a going concern. COOPER-STANDARD: S&P Expects to Assign 'B+' to Emerged Company -------------------------------------------------------------- Standard & Poor's Ratings Services announced that it expects to assign its 'B+' corporate credit rating on Novi, Mich.-based auto supplier Cooper-Standard Automotive Inc. following the company's emergence from Chapter 11 bankruptcy protection later this month. S&P expects to assign a stable outlook. At the same time, Standard & Poor's assigned a preliminary 'B+' rating and preliminary '3' recovery rating to the company's $450 million, 8.5% senior unsecured notes due May 1, 2018. The notes were previously offered by the company. Note proceeds are subject to an escrow agreement, and the company expects the proceeds to be released at emergence. "S&P's expected corporate credit rating will reflect what S&P consider to be Cooper-Standard's aggressive financial risk profile and weak business risk profile following its emergence from bankruptcy," said Standard & Poor's credit analyst Nancy Messer. The U.S. Bankruptcy Court for the District of Delaware confirmed the company's second amended plan of reorganization on May 12, 2010. Under the terms of the plan, the company would reduce its total debt by more than 50% from pre-bankruptcy levels. The preliminary issue ratings and S&P's expected 'B+' corporate credit rating are subject to Cooper-Standard's timely emergence from bankruptcy and consummation of its plan of reorganization in line with S&P's expectations, including the release of the proceeds of its exit financing and consummation of its common stock rights offering and its convertible perpetual preferred stock offering. Any meaningful changes to the capital structure prior to or at emergence may result in Standard & Poor's assigning different ratings. If the proceeds of the notes are not released from escrow as the company expects, S&P could withdraw the preliminary ratings. The preliminary ratings and the expected 'B+' corporate credit rating are also subject to final documentation and its review of legal matters that S&P believes are relevant to its analysis, as outlined in its criteria. The company has indicated that it expects to emerge from bankruptcy by the end of May 2010. Cooper-Standard sought Chapter 11 protection when global economic weakness reduced automotive production, and the company cited this as a factor in its decision to restructure its high debt through a court-administered proceeding. In S&P's view, operational difficulties were not the main reason behind the decision to seek Chapter 11 protection. Still, as with virtually all auto suppliers, the economic downturn triggered restructuring actions and operational efficiency initiatives that S&P believes have better-positioned the company for potential margin improvements when production increases. During bankruptcy, S&P believes Cooper-Standard was blocked from bidding on new business with certain non-Michigan-based customers, although it continued to submit quotes for new business from other customers. S&P believes the lack of significant awards for future business will reduce new-business launches for Cooper-Standard in the two to three years following emergence. S&P expects to assign a stable outlook, which reflects its view that Cooper-Standard's intermediate-term financial prospects will support the 'B+' rating, in part because of the company's expected reduction of permanent debt in the capital structure. S&P also base this expected outlook on its assumption that Cooper- Standard's restructuring activities during the downturn and ongoing operating efficiency initiatives have created some sustainable margin improvement that should result in earnings and free cash generation as vehicle production rises somewhat, year over year, with expected inventory rebuilding in North America. In Europe, S&P assume the company can benefit from an improved product mix, despite S&P's expectation that auto sales there will be flat or down slightly, year over year, in 2010. S&P could raise the expected ratings if S&P believed Cooper- Standard could achieve and sustain meaningful free cash generation, but S&P currently do not expect this in 2010 or 2011. To consider raising the ratings, S&P would need to conclude that the company could achieve and sustain pension- and lease-adjusted leverage of 3.0x or less, and FFO/TD of 20% or better. For example, S&P assume Cooper-Standard could reach 3x adjusted leverage if it could achieve EBITDA of at least $200 million and sustainable EBITDA margins of 9%. S&P would also need to conclude that any use of its large cash balances would be consistent with its expectations for a higher rating. Alternatively, S&P could lower the expected ratings if S&P believed auto industry markets would not improve as S&P assume or if the economic recovery falters, thereby preventing the company from achieving the financial measures in 2010 that S&P expects for the 'B+' rating (EBITDA of about 3.5x at Dec. 31, 2010, and FFO/TD of 13.5% or better). S&P could also consider lowering the ratings if S&P believed the company would have more than $25 million in negative free cash generation in 2010 or 2011 because of lower revenues, atypically high commodity costs, unexpected higher capital spending, or impaired margins. S&P could also lower the expected ratings if Cooper-Standard makes a transforming acquisition with available cash or makes a debt-financed acquisition, or if the new board of directors adopts a radically different business strategy or financial policies. Standard & Poor's has provided the foregoing independent credit opinions based on the information that has been provided. In offering such opinions, Standard & Poor's is independent from the engaging company and any parties to the bankruptcy proceeding. S&P does not advise, advocate, or support any particular plan of reorganization, and a rating opinion does not indicate whether the plan is fair, reasonable, or appropriate or likely to be confirmed as the basis for the company's emergence from bankruptcy. The issue and recovery ratings assigned by Standard & Poor's to issues prior to exiting bankruptcy are preliminary, are S&P's current opinion of the final ratings that S&P expects to assign at a future date, and subsequent developments or changes to the plan or information considered by us in S&P's analysis could result in final conclusions that differ from the preliminary ratings. Issuer ratings provided by Standard & Poor's prior to exiting bankruptcy are its current opinion of ratings that S&P expects to assign at a future date, and subsequent developments or changes to the plan or information considered by us in S&P's analysis could result in final conclusions that differ from the expected ratings and outlook. Rating opinions provided by Standard & Poor's to a company in bankruptcy are assumed to be used in accordance with all applicable laws. CRABTREE & EVELYN: Names Stephen Bestwick as President ------------------------------------------------------ Eric Gershon at Hardford Courant reports that Crabtree & Evelyn Ltd. promoted active president Stephen W. Bestwick to president. About Crabtree & Evelyn Woodstock, Connecticut-based Crabtree & Evelyn, Ltd. -- http://www.crabtree-evelyn.com/-- has evolved from a small, family-run business, to a company with worldwide manufacturing and distribution capabilities, worldwide distribution channels and 126 retail locations in the United States, making it well-known and respected for its English-style elegance. Through a multi-channel sales strategy, including sales through retail, wholesale, export, affiliate and internet channels, it manufactures and distributes its products worldwide. The Company is a direct, wholly owned subsidiary of Crabtree & Evelyn Holdings Limited. Crabtree & Evelyn Holdings is a direct, wholly-owned subsidiary of CE Holdings Ltd., a British Virgin Islands based investment holding company. CE Holdings is a direct, wholly-owned subsidiary of KLKOI. KLKOI is a direct, wholly owned subsidiary of Kuala Lumpur Kepong Berhad, a Malaysian corporation ("KLK"). KLK is a Malaysian public limited liability company, the stock of which is publicly traded on the Kuala Lumpur stock exchange. The Company filed for Chapter 11 on July 1, 2009 (Bankr. S.D.N.Y. Case No. 09-14267). Lawrence C. Gottlieb, Esq., at Cooley Godward Kronish LLP, represents the Debtor in its restructuring efforts. The Debtor has hired employ Clear Thinking Group LLC as financial advisor; KPMG Corporate Finance LLC as real estate consultant; Epiq Bankruptcy Solutions LLC as claims agent. The Debtor had assets and debts both ranging from $10 million to $50 million as of the petition date. The U.S. Bankruptcy Court for the Southern District of New York confirmed Crabtree & Evelyn, Ltd.'s reorganization plan in January 2010. CREDITWEST CORP: U.S. Trustee Forms 5-Member Creditors Panel ------------------------------------------------------------ Sara L. Kistler, Acting U.S. Trustee for Region 17, appointed five members to the official committee of unsecured creditors in the Chapter 11 case of CreditWest Corporation. The Creditors Committee members are: 1. Giulano R. Delapa 1307 N Texas Street Fairfield, CA 94533 E-mail: rdelapa@aol.com 2. Fito's Auto Sales Attn: Fito Ramero 3566 Santa Rosa Ave. Santa Rosa, CA 95407 E-mail: fitosautosales@hotmail.com 3. Sandra L. Geary Trust Sandra L. Geary 3383 Jaylee Drive Santa Rosa, CA 95404 E-mail: sandygeary@bigplanet.com 4. Elias Tannous 901 Lake Mendocino Drive Ukiah, CA 95482 E-mail: warrantymotors@sbcglobal.net 5. Mason Or Janalyn Hoburg Trust Attn: Mason Hoburg 2514 Fulton Place Santa Rosa, CA 95401 E-mail: horburg@sonic.net Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Rohnert Park, California-based CreditWest Corporation filed for Chapter 11 bankruptcy protection on April 4, 2010 (Bankr. N.D. Calif. Case No. 10-11212). Steven M. Olson, Esq., at the Law Offices of Steven M. Olson, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. CREDITWEST CORP: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Creditwest Corporation filed with the U.S. Bankruptcy Court for the Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $14,752,863 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $6,969,087 E. Creditors Holding Unsecured Priority Claims $58,586 F. Creditors Holding Unsecured Non-priority Claims $8,390,578 ----------- ----------- TOTAL $14,752,863 $15,418,251 Rohnert Park, California-based CreditWest Corporation filed for Chapter 11 bankruptcy protection on April 4, 2010 (Bankr. N.D. Calif. Case No. 10-11212). The Company estimated its assets and debts at $10,000,001 to $50,000,000. CRESCENT RESOURCES: Wins Confirmation of Plan of Reorganization --------------------------------------------------------------- Crescent Resources has received approval from the Bankruptcy Court of its Plan of Reorganization, positioning the company to exit bankruptcy in early June. Upon emergence, Crescent will have a significantly improved capital structure, having eliminated over $1 billion of debt from its balance sheet through the restructuring process. In addition, Crescent has secured $150 million in exit financing from a group of lenders led by UBS and Aladdin Capital, the proceeds of which will refinance the company's outstanding Debtor-in-Possession borrowings, fund exit costs and provide working capital for the company's operations. Andrew Hede, Chief Executive Officer and Chief Restructuring Officer of Crescent Resources said, "We are very excited about the Court's confirmation of the plan, which effectively marks the conclusion of the restructuring process and a new beginning for Crescent Resources. We will emerge as a stronger company with less debt and greater financial flexibility, and we are very excited about the future. We have a solid underlying business model with many very attractive assets. We have a highly experienced team with strong relationships and industry-leading partners. And, importantly, we are well positioned to capitalize on the improving economic and industry environment." Hede continued, "I want to thank our customers, business partners and vendors for their cooperation and understanding as we completed the restructuring process. Most importantly, I want to thank our dedicated employees, whose continued hard work allowed us to move through this quickly and successfully while delivering the highest level of service to our customers." Significant terms of the Plan of Reorganization include: -- Holders of prepetition secured debt will receive a combination of reinstated debt and 100% of the equity of the reorganized company. -- General unsecured creditors of the company shall receive an interest in a litigation trust to be formed as part of the Plan. -- Various project level lenders shall have their existing debt reinstated. Crescent Resources, LLC filed for protection under Chapter 11 of the U.S. Bankruptcy Court in the Western District of Texas, Austin Division on June 10, 2009. Crescent filed its plan of reorganization on January 29, 2010. 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. Crescent Resources is a joint venture between Duke Energy and Morgan Stanley Real Estate Fund. Established in 1969, Crescent creates mixed-use developments, country club communities, single-family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Crescent Resources, LLC, and its debtor-affiliates filed for Chapter 11 protection on June 10, 2009, with the U.S. Bankruptcy Court for the Western District of Texas (Austin), lead case number 09-11507, before Judge Craig A. Gargotta. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., is serves as the Debtors' bankruptcy counsel. DBSD NORTH AMERICA: Asks for Plan Exclusivity Until Oct. 7 ---------------------------------------------------------- DBSD North America Inc. won confirmation of its Chapter 11 plan in November. However, it has not yet implemented the plan because it is still awaiting permission from the Federal Communications Commission to transfer licenses. According to Bloomberg News, just in case FCC approval isn't forthcoming, DBSD filed a motion last week for an extension from June 9 to Oct. 7 of the exclusive right to propose a plan. About DBSD North America Headquartered in Reston, Virginia, DBSD North America Inc. aka ICO Member Services Inc. offers satellite communications services. It has launched a satellite, but is in the developmental stages of creating a satellite system with components in space and on earth. It presently has no revenues. The Company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-13061). James H.M. Sprayregen, Esq., Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the proposed financial advisors to the Debtors. The Garden City Group Inc. is the court-appointed claims agent for the Debtors. When the Debtors sought for protection from their creditors, they listed between $500 million and $1 billion each in assets and debts. DEFI GLOBAL: Chisholm Bierwolf Raises Going Concern Doubt --------------------------------------------------------- DeFi Global, Inc., formerly Lion Capital Holdings, Inc., filed on May 18, 2010, its annual report on Form 10-K for the year ended December 31, 2009. Chisholm, Bierwolf, Nilson & Morrill, in Bountiful, Utah, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted that the Company has suffered recurring losses from operations, has a working capital deficit and is dependent of financing to continue operations. The Company reported a net loss of $3.4 million on $608,109 of revenue for 2009, compared with a net loss of $4.3 million on $37,217 of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $2.9 million in assets and $5.6 million of liabilities, for a stockholders' deficit of $2.7 million. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?62f8 Scottsdale, Ariz.-based DeFi Global, Inc. (OTC BB: LCHL) is focused on the development, operation and expansion of the business acquired with the acquisition of DeFi Mobile, Ltd. DeFi, through its Mobile subsidary, has architected, built and deployed, a Large IP Network infrastructure that can host, support and deliver Applications and Services including voice, video, gaming, multi-media, and digital content over the internet to hot spots, desktop computers and all manner of handheld devices. Called the "DeFi Global Network", this Network can provide global mobile broadband service at speed comparable to fixed wire broadband for multiple mobile Internet access devices, or IADs. DELTA MUTUAL: Delays Filing of Quarterly Report on Form 10-Q ------------------------------------------------------------ Delta Mutual Inc. said it could not files its quarterly report Form 10-Q for the period ended March 31, 2010, on time with the Securities and Exchange Commission. The Company said the management is in the process of finalizing the operating results of the first quarter of the 2010 fiscal year. About Delta Mutual Delta Mutual, Inc., invests in oil and gas properties in South America. It intends to focus its investments in the energy sector, including development of energy producing investments and alternative energy production in Latin America and North America. At December 31, 2009, the Company had total assets of $1,750,005 against total liabilities, all current, of $1,206,826, resulting in stockholders' equity of $543,179. At December 31, 2008, the Company had stockholders' deficit of $645,912. During the fiscal year ended December 31, 2009, the Company had a gain from continuing operations of $850,000. The Company has an accumulated deficit of $3,580,837 and working capital deficiency of $967,042 as of December 31, 2009. The Company said it may require additional funding to execute its strategic business plan for 2010. In its April 15, 2010 report, Jewett, Schwartz, Wolfe & Associates in Hollywood, Florida, raised substantial doubt about the Company's ability to continue as a going concern. The auditor pointed to the Company's accumulated deficit and working capital deficiency. The auditor also said the Company is not generating sufficient cash flows to meet its regular working capital requirements. DIETZE CONSTRUCTION: Economic Woes Prompt Chapter 11 Filing ----------------------------------------------------------- Tierney Plumb at Washington Business Journal reports that Dietze Construction Group Inc. filed for Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Virginia, listing both assets and debts of between $1 million and $10 million. Dietze Construction is one of the top 20 general contractors in the Washington area. "The economy has had a tremendous impact on our industry as a whole, and Dietze is no exception," said CEO Ralph Dietze. "These economic realities have forced us to file Chapter 11." Business Journal says the Chapter 11 filing means its plan to be acquired by Suffolk Construction Co. Inc., a Boston-based construction giant, will be in the hands of the bankruptcy court. Suffolk announced in January it was buying Dietze to bulk up its existing presence in the mid-Atlantic area. Terms were not disclosed. DON WHITE: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Don Grover White 2204 Paiute Meadows Drive Las Vegas, NV 89134 Bankruptcy Case No.: 10-19402 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Amy N. Tirre, Esq. Law Offices of Amy N. Tirre 3715 Lakeside Drive, Suite A Reno, NV 89509 Tel: (775) 828-0909 Fax: (775) 828-0914 E-mail: amy@amytirrelaw.com Estimated Assets: $1,000,001 to 10,000,000 Estimated Debts: $50,000,001 to $100,000,000 The Debtor did not file a list of creditors together with its petition. The petition was signed by the Debtor. DUTCH GOLD: Posts $1.0 Million Net Loss in March 31 Quarter ----------------------------------------------------------- Dutch Gold Resources, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1,035,447 for the three months ended March 31, 2010, compared with a net loss of $942,189 for the same period of 2009. The Company generated no revenue in both quarters. The Company's balance sheet as of March 31, 2010, showed $4,145,890 in assets and $5,336,775 of liabilities, for a stockholders' deficit of $1,190,885. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?62f6 About Dutch Gold Based in Atlanta, Ga., Dutch Gold Resources, Inc. (OTC: DGRI) -- http://www.dutchgoldresources.com/-- is a junior gold miner focused on developing its existing mining properties in North America and acquiring and developing new mines that can enter into production in 12 to 24 months. The Company maintains two mining projects and a milling operation near Grants Pass, in southern Oregon. Gruber & Company, LLC, in Lake Saint Louis, Mo., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. "The Company's continuance is dependent on raising capital and generating revenues sufficient to sustain operations. The Company believes that the necessary capital will be raised and has entered into discussions to do so with certain individuals and companies. However, as of the date of these consolidated financial statements, no formal agreement exists." EASTON-BELL SPORTS: Posts $122,000 Net Income for April 3 Quarter ----------------------------------------------------------------- Easton-Bell Sports Inc. filed its quarterly report on Form 10-Q, reporting a net income of $122,000 for the fiscal quarter ended April 3, 2010, compared with a net income of $975,000 during the same period a year ago. The Company had net sales of $194.1 million for the first quarter of fiscal 2010, an increase of 5.0% as compared to $184.9 million of net sales for the first quarter of fiscal 2009. Operating income was $11.7 million for the first quarter of fiscal 2010, an increase of $1.8 million, or 18.0% as compared to $9.9 million for the first quarter of fiscal 2009. The Company's balance sheet at April 3, 2010, revealed $969.0 million in total assets and $602.6 million in total liabilities, for a stockholder's equity of $366.3 million. "Overall our results were in line with expectations as we generated increased top line sales in the quarter while improving our operating margins which resulted in profit growth at a higher rate than sales," said Paul Harrington, President and Chief Executive Officer. "We are encouraged that our new product introductions were well-received by retailers and consumers as we refine and improve our go to market process across our business segments." Team Sports net sales increased $11.6 million or 10.8% in the first quarter of fiscal 2010, as compared to the first quarter of fiscal 2009, or an 8.3% increase on a constant currency basis, due to increased sales of baseball, softball and football equipment as well as gains in apparel. Action Sports net sales decreased $2.4 million, or 3.1% for the first quarter of fiscal 2010, as compared to the first quarter of fiscal 2009, or a 4.4% decrease on a constant currency basis. The decrease in Action Sports net sales reflects lower helmet and accessory sales in the specialty cycling channel, partially offset by growth in sales of snowsports helmets and strong sales of licensed cycling helmets and accessories and fitness related products in the Mass channel. The Company's gross margin for the first quarter of fiscal 2010 was 33.4%, as compared to 32.6% for the first quarter of fiscal 2009. The margin improvement related primarily to increased sales of higher margin products, lower sourced product costs, improved efficiencies in our Mexico operations, lower close-out sales and gains in foreign currency exchange rates, all of which were partially offset by higher royalties on licensed product sales and increased write-offs of specialty inventory. The Company's operating expenses for the first quarter of fiscal 2010 were 25.7% of net sales, as compared to 25.4% of net sales for the first quarter of fiscal 2009. The increase is due primarily to higher depreciation related to increased IT assets and investments in marketing and research and development, which were partially offset by reduced spending on sales support and events. The Company's Adjusted EBITDA was $20.8 million for the first quarter of fiscal 2010, an increase of $2.7 million, or 14.8%, as compared to $18.1 million of Adjusted EBITDA for the first quarter of fiscal 2009. A detailed reconciliation of Adjusted EBITDA to net income, which the Company considers to be the most closely comparable GAAP financial measure, is included in the section entitled "Reconciliation of Non-GAAP Financial Measures," Balance Sheet Items Net debt totaled $396.0 million as of April 3, 2010, an increase of $13.5 million compared to the net debt amount at January 2, 2010 of $382.5 million. The increase in net debt versus last year is due to an increase in debt and capital lease obligations of $9.1 million, and a decrease in cash of $4.4 million. Working capital as of April 3, 2010 was $216.1 million as compared to $211.2 million as of January 2, 2010. Inventories declined $8.6 million, or 6.7% during the quarter while sales increased 5.0%. The company ended 2009 with inventories that are of a higher quality which contributed to our margin improvement in the quarter as close-out sales were lower. The Company had substantial borrowing capability as of April 3, 2010, with $123.5 million of additional borrowing ability under the revolving credit facility. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?62ff About Easton-Bell Sports Easton-Bell Sports, Inc. -- http://www.eastonbellsports.com/-- designs, develops and markets innovative sports equipment, protective products and related accessories under authentic brands. The Company markets and licenses products under such well-known brands as Easton, Bell, Riddell, Giro and Blackburn. Headquartered in Van Nuys, California, the Company has 29 facilities worldwide. * * * As reported by the Troubled Company Reporter on November 24, 2009, Standard & Poor's Ratings Services lowered its rating on Easton- Bell Sports' proposed seven-year senior secured notes. S&P lowered the rating to 'CCC+' (one notch less than the counterparty credit rating on Easton-Bell) from 'B-' and revised the recovery rating to '5', which indicates S&P's expectation for modest (10% to 30%) recovery in the event of a payment default or bankruptcy, from '4'. The Company carries S&P's B-/Positive/-- Corporate credit rating. The TCR said November 18, 2009, Moody's Investors Service rated Easton-Bell's $325 million secured notes B3 and affirmed its B3 corporate family rating and B3 probability of default rating. At the same time, Easton-Bell's speculative grade liquidity rating was upgraded to SGL 3 from SGL 4. The rating outlook was revised to positive. EAT AT JOE'S: Posts $186,000 Net Loss for March 31 Quarter ---------------------------------------------------------- Eat At Joe's Ltd. filed its quarterly report on Form 10, reporting a net loss of $185,598 on $163,985 of total revenue for the three months ended March 31, 2010, compared with a net income of $51,136 on $184,145 of total revenue during the same period a year earlier. The Company's balance sheet at March 31, 2010, showed $1.6 million in total assets and $5.1 million in total liabilities, for a $3.4 million total stockholders' deficit. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?630c Scarsdale, N.Y.-based Eat at Joe's, Ltd., presently owns and operates one theme restaurant located in Philadelphia, Pennsylvania. EDUCATE INC: S&P Affirms Corporate Credit Rating at 'B-' -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Baltimore, Md.-based tutoring center operator Educate Inc. The rating outlook is stable. At the same time, S&P withdrew the 'B+' issue-level rating and '1' recovery rating on the company's first-lien credit facilities, as a result of its repayment of the first-lien term loan and termination of the revolving credit facility. S&P also revised S&P's recovery rating on Educate's second-lien term loan to '4', indicating its expectation of average (30% to 50%) recovery for lenders in the event of a payment default, from '6'. S&P raised the issue-level rating on this debt to 'B-' (at the same level as the 'B-' corporate credit rating on the company) from 'CCC', in conjunction with S&P's notching criteria for a '4' recovery rating. "Despite Educate's minimal headroom on its second-lien leverage covenant, S&P expects the company will be able to maintain positive discretionary cash flow, even if a potential amendment of its credit agreement causes its interest expense to rise," said Standard & Poor's credit analyst Deborah Kinzer. S&P's 'B-' rating reflects Educate's weak operating performance, declining same-store sales trends, and thin margin of compliance with its second-lien bank covenant. Minimal positive factors are its good market position in the highly fragmented after-school tutoring business and its modest discretionary cash flow. Educate is the nationwide franchisor of Sylvan Learning Centers. The company has a 16% market share in the highly fragmented after- school, private-pay tutoring sector. Profitability has been weak because royalty fees from the company's learning center franchisees have declined. Franchisee same-store sales contracted for the past three years. Although same-store royalties rose slightly year over year in the first quarter of 2010, this was partly because of center closures. Overall franchise sales declined because of fewer centers, and revenue per enrollment continued to fall. To reduce its debt burden, Educate sold two business units over the past two years and used the proceeds to repay term loan borrowings. The company paid down the remainder of its first-lien term loan in the first quarter of 2010. For the 12 months ending March 31, 2010, lease-adjusted coverage of interest was 3.1x, up from 2.8x in 2009 (with the divested Sch?lerhilfe European tutoring business included in discontinued operations), and lease-adjusted debt to EBITDA improved to 3.7x from 3.9x, mainly because of lower debt balances. Discretionary cash flow was positive for the 12 months ended March 2010. EBITDA conversion into discretionary cash flow was 76%, because of the company's relatively low interest expense and low capital spending. Even following repayment of the first-lien term loan and termination of the revolving credit facility, headroom under the company's looser second-lien leverage covenant remains extremely thin, with only a 2% EBITDA cushion of compliance. The second-lien leverage covenant tightens in the first quarter of 2011. S&P believes that Educate will need to continue directing its discretionary cash flow and cash balances to debt repayment in order to stay in compliance. EL POLLO: S&P Junks Corporate Credit Rating From 'B-' ----------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its unsolicited corporate credit rating on El Pollo Loco Inc. to 'CCC' from 'B-'. The rating outlook is negative. "The downgrade reflects S&P's view that performance will remain challenged in 2010, leaving the company with very tenuous liquidity in 2011," said Standard & Poor's credit analyst Charles Pinson-Rose. S&P also lowered the issue-level on the company's senior secured revolving facility to 'B-' from 'B+' and maintained a '1' recovery rating, indicating S&P's expectation of very high (90%-100%) recovery of principal in the event of default. S&P also lowered its issue-level rating on the company's second-lien notes to 'CCC+' from 'B' and maintained its '2' recovery rating, indicating its expectation of substantial (70%-90%) recovery of principal in the event of default. S&P also lowered the issue-level rating on the company's senior unsecured notes due in 2013 with $106.3 million outstanding to 'CC' from 'CCC', and maintained the '6' recovery rating, indicating its expectation of negligible (0- 10%) recovery of principal in the event of default. The deeply speculative grade rating on Costa Mesa, Calif.-based El Pollo Loco Inc. reflects S&P's view that it may have insufficient liquidity in 2011 and may need to restructure its debt, potentially leading to a selective default. ELITE AUTO: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Elite Auto Discount Group, LLC 6040 N. Camelback Manor Paradise Valley, AZ 85253 Bankruptcy Case No.: 10-15934 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Michael G. Tafoya, Esq. P.O. Box 80495 Phoenix, AZ 85060 Tel: (602) 539-2426 Fax: (866) 263-6419 E-mail: michael.tafoya@azbar.org Scheduled Assets: $2,300,001 Scheduled Debts: $1,951,602 The petition was signed by Walter Kabat, manager. Debtor's List of 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Walter Kabat $20,750 Fidelity Estate & $17,500 Financial Group, LLC Saguaro Remodeling $9,000 National Construction $8,750 Company, LLC Loans Modified $7,850 America, LLC Janusz Mielnicki $6,852 Artur Sikorski $5,900 EMERALD TRAILS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Emerald Trails, LLP 2927 Rockwall Court Davis, CA 95618 Bankruptcy Case No.: 10-43396 Chapter 11 Petition Date: May 22, 2010 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com Estimated Assets: $0 to $50,000 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/txnb10-43396.pdf The petition was signed by Ken Knutson, managing Member of General Partner. ENERGAS RESOURCES: Smith Carney Raises Going Concern Doubt ---------------------------------------------------------- Smith, Carney & Co. P.C. has expressed substantial doubt against Energas Resources Inc.'s ability as a going concern after auditing the Company's results for the fiscal year ended January 31, 2010. In its Form 10-K filed with the U.S. Securities and Exchange Commission, the Company reported a net loss of $1.9 million on $165,794 of total revenue for the year ended Jan. 21, 2010, compared with a net loss of $2.4 million on $284,297 total revenue during the same period a year ago. The Company's balance sheet for Jan. 21, 2010, showed $7.4 million in total assets and $967,392 in total liabilities, for a total stockholders' equity of $6.5 million. The Company is in the process of acquiring and developing petroleum and natural gas properties with adequate production and reserves to operate profitably. As of January 31, 2010, the Company had incurred losses for the years ended January 31, 2010 and 2009 of $1.9 million and $2.4 million, respectively. Energas said, "The Company's ability to continue as a going concern is dependent upon obtaining financing and achieving profitable levels of operations. The Company is now seeking additional funds and additional mineral interests through private placements of equity and debt instruments. There can be no assurance that its efforts will be successful." A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?630e About Energas Resources Based in Oklahoma City, Oklahoma, Energas Resources Inc. (OTC BB: EGSR) -- http://www.energasresources.com/-- is primarily engaged in the operation, development, production, exploration and acquisition of petroleum and natural gas properties in the United States through its wholly-owned subsidiary, A.T. Gas Gathering Systems Inc. In addition, the company owns and operates natural gas gathering systems located in Oklahoma, which serve wells operated by the company for delivery to a mainline transmission system. The majority of the company's operations are maintained and occur through A.T. Gas. ESCOM LLC: Sex.com Domain Name to be Sold in Bankruptcy Court ------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Escom LLC has reached a settlement with creditors regarding the sale of its key asset. The settlement calls for the sale of the "sex.com" domain under procedures to be approved by the bankruptcy court. The settlement says that Sedo.com LLC is to be the exclusive agent to market and sell the property. Terms of the marketing and sale weren't disclosed. If approved by the judge, the settlement would have net sale proceeds immediately turned over to secured creditors, with any surplus available for unsecured creditors and Escom's owners. Three creditors filed an involuntary Chapter 11 petition March 17 against Escom (Bankr. C.D. Calif. Case No. 10-13001). The petition halted foreclosure by secured creditor DOM Partners LLC, owed $4.5 million. The companies that filed the involuntary petition are controlled by an individual named Michael Mann, who is Escom's manager. According to Bloomberg, the bankruptcy court denied a motion by DOM to dismiss the petition as having been filed in bad faith. The judge also refused to allow DOM to continue foreclosure. A motion for the appointment of a Chapter 11 trustee is pending. EVERGREEN GAMING: Nevada Gold Completes Mini-Casinos Acquisition ---------------------------------------------------------------- Nevada Gold & Casinos, Inc. disclosed that the bankruptcy court bidding process for the acquisition of up to seven mini-casinos in Washington was completed on May 21. No other qualified bidders filed proposals with the Court. The sale hearing has been scheduled for May 28, 2010. "We are very pleased that the bidding process is complete and we are looking forward to the sale hearing date this Friday. We are currently in the process of acquiring the gaming and liquor board licenses for these properties and hope to close the deal on most of the casinos within 30-60 days," said Robert Sturges, CEO of Nevada Gold. "We expect that we will be acquiring these mini-casinos at an effective EBITDA multiple of between three and four times and believe that we will be able to significantly leverage our existing Washington infrastructure to seamlessly integrate these new acquisitions. The recent trends for our existing three mini- casinos in Washington have performed above our expectations for calendar year 2010 to date. We expect to put the know-how and experience we have gained so far in Washington to good use in the operation of the Evergreen mini-casinos," Mr. Sturges concluded. The casinos are currently owned by subsidiaries of Evergreen Gaming Corporation ("Evergreen"), a British Columbia corporation, which is under bankruptcy court protection due to a burdensome debt structure. The transaction will be financed by cash on hand as well as a $5.1 million note issued to Evergreen's current senior lender. 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 seven facilities have a total of approximately 100 table games including blackjack, Spanish 21 and other popular banked table games. Closing of the acquisition is subject to other customary closing conditions, including licensing, necessary lease transfers and final bankruptcy court approval, among other conditions. 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/ About Evergreen Gaming British Columbia-based Evergreen Gaming Corporation -- http://www.evergreengaming.com/-- and its affiliates own and operate 10 casinos in Washington State and a 100,000 square-foot casino in Calgary, Alberta. Deloitte & Touche Inc. filed a Chapter 15 petition for Evergreen Gaming and its affiliates on April 15, 2009 (Bankr. W.D. D.C. Case No. 09-13567). The Debtors has $1 million to $10 million in assets and $10 million to $50 million in debts. FLYING J: Sparring With Plains All American Over Petroleum ---------------------------------------------------------- Bill Rochelle at Bloomberg News reports that subsidiaries of Plains All American Pipeline LP has commenced an adversary proceeding before the Bankruptcy Court to seek judgement that they completely and properly foreclosed 180,000 barrels of petroleum before Flying J Inc. filed for Chapter 11 in December 2008. According to Bloomberg, Plains said that Flying J subsidiary Big West Oil LLC defaulted on futures contracts. Plains contends it completed foreclosure of 180,000 barrels of products that at the time were worth $21 to $31 a barrel. Plains says it was left with $15.6 million in claims that it asserted in the Chapter 11 case. Now that the price of the products has risen to $60 to $65 a barrel, Plains says Flying J asserts that the foreclosures weren't completed before bankruptcy and that Plains has violated the automatic stay by not turning over the products, according to the report. Bloomberg relates that Plains argues in its lawsuit that the bankruptcy judge should rule that the foreclosure was complete before bankruptcy and that the prices should be those at the time. Even if the foreclosure weren't complete, Plains says that 100,000 barrels involved futures contracts which have exemptions from the automatic stay and could be completed after bankruptcy. About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FORESTRY MUTUAL: A.M. Best Upgrades FSR to 'C++' ------------------------------------------------ A.M. Best Co. has upgraded the financial strength rating to C++ (Marginal) from C+ (Marginal) and issuer credit rating to "b+" from "b-" of Forestry Mutual Insurance Company (FMIC) (Raleigh, NC). The outlook for both ratings has been revised to positive from stable. The ratings reflect FMIC's increasing surplus and positive operating results as well as its expertise in loss control and safety procedures needed for the higher hazard risks the company insures. Additionally, FMIC has benefitted from management's initiatives taken in recent years to re-underwrite the business, improve FMIC's geographic diversification into neighboring states and to implement a zero tolerance for failure to comply with safety requirements. The positive outlook reflects A.M. Best's expectation that FMIC's operating performance and risk-adjusted capitalization will continue to improve in the medium term. These positive rating factors are somewhat offset by the company's limited business profile as well as by market and economic conditions that create unique challenges for a single line niche writer of workers' compensation insurance for forestry and logging related risks. In addition, while FMIC's performance has been negatively affected by an increase in large claims, overall frequency levels have significantly improved in recent years. With a lowering of FMIC's retention levels during 2009 on its reinsurance program, it is better protected from large losses; and thus, reduced volatility in earnings is expected in the future. Also mitigating the increase in larger claims is the effectiveness of FMIC's safety program and strong reserving practices. FORUM NATIONAL: Swings to C$5.3 Million Net Loss in FY 2009 ----------------------------------------------------------- Forum National Investments Ltd. filed on May 18, 2010, its annual report on Form 20-F for the year ended September 30, 2009. The Company reported a net loss of C$5.3 million on C$3.7 million of revenue for the year ended September 30, 2009, compared with a net loss of C$871,640 on C$3.7 million of revenue for the same period of 2008. Net income for the year ended September 30, 2008, included a net gain on investment in life settlement contracts of C$5.4 million, compared to C$775,207 for the year ended September 30, 2009. The Company's balance sheet as of March 31, 2010, showed C$18.5 million in assets, C$12.0 million of liabilities, and C$6.5 million of stockholders' equity. "As at September 30, 2009, the Company has an accumulated deficit of C$22.1 million and working capital of C$817,711. The Company anticipates incurring substantial expenditures to further develop its life settlement and yacht charter lines of business. Although, the Company has cash on hand of C$1.8 million and a working capital surplus as at September 30, 2009, the Company's cash flow from operating activities may not be sufficient to satisfy its obligations as they come due as well as meeting the requirements of its capital investment programs and covenants on its long term debt. These factors cast substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?62f7 Based in Vancouver, B.C., Forum National Investments Ltd. (OTC: FMNLF) -- http://www.foruminvestments.com/-- operates in one reporting segment: the travel and vacation club. All of the Company's operations, assets and employees are located in Canada. The Company also invests in life settlement contracts in the United States. However, as at September 30, 2009, the life settlement business does not constitute a clearly identifiable business segment. FX REAL ESTATE: Has $10MM Q1 Loss; Recovery from LV Unit Unlikely ----------------------------------------------------------------- FX Real Estate and Entertainment Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $10.9 million on $4.2 million of revenue for the three months ended March 31, 2010, compared with a net loss of $2.8 million on $4.6 million of revenue during the same period a year earlier. The Company's balance sheet at March 31, 2010, showed $141.3 million in total assets and $503.7 million in total current liabilities and zero long-term liabilities, for a total stockholders' deficit of $362.4 million. FX Real Estate noted that it has previously disclosed, it is in severe financial distress and may not be able to continue as a going concern. "The Company has no current cash flow and cash on hand as of May 14, 2010 is not sufficient to fund its short-term liquidity requirements, including its ordinary course obligations as they come due." A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6300 Company's Remaining LV Unit in Ch. 11 The Company's remaining Las Vegas subsidiary, namely FX Luxury Las Vegas I, LLC, filed a voluntary petition for relief under Chapter 11 (Bankr. D. Nev. Case No. 10-17015), pursuant to which the Las Vegas Subsidiary presented its pre-packaged plan in accordance with the Effective Lock Up Agreement with the first lien lenders with respect to their mortgage loan, and the Newco Entities, two corporate affiliates (LIRA Property Owner, LLC and its parent LIRA, LLC) of Robert F.X. Sillerman, Paul C. Kanavos and Brett Torino, who are directors, executive officers and/or greater than 10% stockholders of the Company. The Effective Lock Up Agreement contemplates the orderly liquidation of the Las Vegas Subsidiary in the bankruptcy case by disposing of its Las Vegas Property (approximately 17.72 contiguous acres of real property located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada) for the benefit of the Las Vegas Subsidiary's (and its predecessor entities') creditors either pursuant to an auction sale for at least $256 million or, if the auction sale is not completed, pursuant to a prearranged sale to the Newco Entities under the terms of the bankruptcy case's plan of liquidation. According to FX Real Estate, under the Liquidation Plan, it is extremely unlikely it will receive any benefit from the disposition of the Las Vegas Property. The loss of the Las Vegas Property, which is substantially the entire business of the Company, will have a material adverse effect on the Company's business, financial condition, prospects and ability to continue as a going concern. If the Company is to continue, then a new or different business will need to be developed and there is no assurance that such a business could or would be possible or that the Company could obtain the necessary financing to allow implementation of such business. Derivative Lawsuit As has previously been disclosed, on April 29, 2010, the Company was notified that it has been named as a nominal defendant in a derivative lawsuit filed on April 28, 2010 by stockholders The Huff Alternative Fund, L.P. and The Huff Alternative Parallel Fund, L.P. on behalf of the Company in the New York Supreme Court in Manhattan, New York (Index No. 650338-10) against the Company's directors Harvey Silverman, Michael J. Meyer, John D. Miller, Robert Sudack, Paul C. Kanavos and Robert F.X. Sillerman, and Brett Torino, a stockholder and former officer of the Company. The filing of the lawsuit was precipitated by the Las Vegas Subsidiary's filing of the bankruptcy case. In its lawsuit, Huff alleges that such director defendants and stockholder defendant, as a former officer of the Company, breached their fiduciary duties of care and loyalty to the Company, its creditors and its non defendant stockholders by, among other things, (i) committing or permitting acts of misconduct such as self-dealing and disloyalty, without justifiable excuse, (ii) causing the Company to be contractually bound to transfer the Las Vegas Property to the Newco Entities and (iii) usurping various corporate opportunities with respect to the Las Vegas Property for which Huff is seeking on behalf of the Company damages of not less than $100 million, plus punitive damages. In addition, Huff alleges substantially the same claims against defendants Messrs. Kanavos and Torino for which Huff is seeking on behalf of the Company damages of not less than $50 million, plus punitive damages. The Company was formally served with the lawsuit on May 5, 2010. The Company believes the lawsuit is without merit and intends to vigorously defend against it. Huff has since filed a motion in the Las Vegas Subsidiary's bankruptcy case to have a chapter 11 trustee appointed in the bankruptcy case to preempt implementation of the Liquidation Plan citing substantially the same claims alleged in Huff's foregoing lawsuit. About FX Real Estate Based in New York, FX Real Estate and Entertainment Inc. owns and operates 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. The first lien lenders had a receiver appointed on June 23, 2009, to take control of the property and as a consequence, the property is no longer being managed or operated by the Company. The Company's balance sheet at December 31, 2009, showed $141.0 million in assets and $494.1 million of debt, for a stockholders' deficit of $353.1 million. LL Bradford, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company is in default under the mortgage loan, has limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. GAYLORD ENTERTAINMENT: To Hold Call to Discuss Restoration Effort ----------------------------------------------------------------- Gaylord Entertainment Co. will hold a conference call on Wednesday, June 2, 2010 at 3:00 PM ET to update shareholders and other constituents on the Company's restoration efforts following the flood damage experienced at the Gaylord Opryland Resort and the Company's other Nashville-based facilities on May 3, 2010. Gaylord will also provide updated information on the Company's efforts to relocate customers with events scheduled at the Opryland in the next 180 days to additional Gaylord properties. "We continue to make good progress as we work to assess, repair and rebuild the damage inflicted by the historic flooding. Our Nashville-based assets have been stabilized and we have a large group of contracting and remediation experts working to get us back to business as soon as possible," said Colin V. Reed, chairman and chief executive officer of Gaylord Entertainment. "Assessment of the majority of the public spaces and guest rooms at the hotel are largely complete and restoration plans are underway. However, the mechanical, electrical, information technology, and power generating systems are much more complex and are taking longer to evaluate. While it has been our goal to be expeditious in our communications to all constituents, the nature of flood damage has required us to carefully and systemically assess these elements of our operations to fully understand what needs to be repaired and replaced, how long it will take, and how much it will cost. We believe we will be in a position on June 2nd to offer an accurate estimate of projected costs and timelines, understanding fully that this is a fluid process and that particulars may change over time. We look forward to updating everyone at that time." On May 19, 2010 Gaylord received a waiver from its lenders related to its Second Amended and Restated Credit Agreement, dated as of July 25, 2008. The waiver addresses the cessation of operations at Opryland. The waiver will expire on December 31, 2010 if the Company has not substantially completed the restoration of Gaylord Opryland and re-opened it for business. Additional details regarding the waiver are available in the related Form 8-K Filing. This call is being web cast by CCBN and can be accessed at Gaylord Entertainment's Investor Relations Web site at http://ir.gaylordentertainment.com. The web cast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password- protected event management site, StreetEvents (www.streetevents.com). About Gaylord Entertainment Gaylord Entertainment owns and operates Gaylord Hotels, its network of upscale, meetings-focused resorts and the Grand Ole Opry, the weekly showcase of country music's finest performers for 80 consecutive years. The Company's entertainment brands and properties include the Radisson Hotel Opryland, Ryman Auditorium, General Jackson Showboat, Gaylord Springs Golf Links, Wildhorse Saloon, and WSM-AM. * * * As reported in the Troubled Company Reporter on May 6, 2010, Standard & Poor's Ratings Services placed its 'B' corporate credit rating for Nashville, Tenn.-based Gaylord Entertainment Co., along with all related issue-level ratings, on CreditWatch with negative implications. GENERAL GROWTH: In Dispute with Lenders on Conversion Rights ------------------------------------------------------------ Bill Rochelle at Bloomberg News reports that the Bankruptcy Court will convene a hearing on May 27 to settle a dispute between General Growth Properties Inc. with some of the lenders over whether the mall owner waived the right to convert financing into equity as part of a reorganization plan. Lenders who provided $400 million in financing for the reorganization contend that General Growth was required to give notice of the election to convert the debt to equity when the bankruptcy court on May 7 selected a group including Brookfield Asset Management Inc. to be the lead bidder in providing equity purchase and financing commitments underpinning a reorganization plan. General Growth, Bloomberg relates, contends the lenders are misreading the loan documents. The Debtor argues that properly read, the loan documents don't require it to give notice of the conversion election until a backstop party is approved by the court. Blackstone Group LP is talking with Brookfield about contributing $500 million of the $7 billion that the group will provide General Growth in return for equity, according to Mr. Rochelle. 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: Gets Nod for CB Richard as Sales Agent ------------------------------------------------------ General Growth Properties Inc. and its units sought and obtained the Court's authority to employ CB Richard Ellis Inc. as their exclusive sales listing agent for a parcel of land known as Parcel IC, located at One Arizona Center, Van Buren & 48th Streets, Phoenix, Arizona, nunc pro tunc to August 4, 2009. As sales agent, CBRE will: (a) review the Property to determine its physical condition, relative market appeal, quality of location, market and area trends, and potential for value enhancement prior to entering the market; (b) conduct an independent review of the Property's financial performance, including an analysis of historical performance, market area, competition and project cash flows; (c) review all leases, management agreements and operating agreements, or other documents affecting the Property, which are delivered to CBRE by the Debtors; (d) develop and prepare a detailed marketing plan setting forth a comprehensive strategy for sale of the property for the Debtors' review and approval; (e) assemble and produce for the Debtors' review and approval an offering brochure and/or other marketing materials of a type which is customary for similar properties, including, as appropriate, facts about the Property, photographs, high-quality graphics, cash flow projections, market competition data, descriptive area and location information, site plan and other relevant information as available; (f) expose the property to a wide variety of purchasers via direct mail, print advertising and on the Internet, as deemed appropriate by CBRE; (g) provide prospective purchasers with information and coordinate site visits; (h) solicit and identify prospective purchasers of the Property, deliver the offering materials to these prospective purchasers and assist the Debtors in qualifying prospective purchasers prior to recommending acceptance of an offer; (i) require each prospective purchaser to execute and deliver to CBRE a confidentiality agreement; (j) make all necessary arrangements with the Debtors or their agent to permit prospective purchasers to physically inspect the Property; (k) promptly inform the Debtors of all offers and inquiries received from brokers, prospective purchasers or anyone else with respect to the Property; (l) conduct all negotiations in conjunction with the Debtors and their counsel; (m) assist the Debtors and their counsel in the preparation and execution of the closing checklist and closing documentation; (n) coordinate with the property manager for the Property to secure all documents and information required for closing; and (o) submit to the Debtors, no later than the first day and the 15th day of each month, a report on the marketing of the Property, including a list of all prospective purchasers and a summary status of any offers or negotiations. The Debtors further seek that CBRE's employment be made effective nunc pro tunc to August 4, 2009, to allow CBRE to be compensated for work performed on behalf of the Debtors on or after August 4, 2009, but prior to the submission of this Application. The Debtors will pay CBRE at a rate of 80 basis points of the gross purchase price of the Property. Gross purchase price will include any and all consideration received or receivable for the Property, including, but not limited to assumption or release of existing liabilities. The Fee will be earned for services rendered if: (a) During the 180 days after a Listing Agreement between the Debtors and CBRE is executed, (i) the Property is sold to a purchaser procured by CBRE, the Debtors or anyone else; or (ii) any contract for sale of the Property is entered into by the Debtors. (b) Within 60 calendar days after the expiration or earlier termination of the Term, the Property is sold to, or the Debtors enter into a contract of sale of the Property with, or negotiations continue or resume and thereafter continue leading directly to the sale of the Property within an additional 60 days to, any person or entity with whom CBRE had negotiated or to whom the Property has been submitted prior to the expiration or termination of the Term. The Fee will be payable at closing of escrow, recordation of deed or taking possession by the purchasers, whichever is earlier. CBRE will not receive a Fee for a sale or transfer of any of the Property to any tenant who has a right of first offer or right of first refusal with respect to the purchase of any Property. If the sale of the Property fails to close for any reason, including the Debtors' default, CBRE will not be entitled to any fee, commission or other compensation except for expenses incurred, which will not exceed $20,000. The Debtors will either make payment directly to third party vendors or will reimburse CBRE for its expenses incurred, either on a monthly basis or upon request by CBRE. As CBRE will not be paid unless it sells the Property, and will not keep time records, the Debtors propose that after the realization of any Fee, CBRE will be required to serve a statement setting forth (a) a general description of the work performed by CBRE, and (b) a description of the method CBRE used to calculate its Fee and Expenses to the Debtors, the Debtors' counsel, the Official Committee of Unsecured Creditors, the United States Trustee for Region 2, and the Official Committee of Equity Security Holders. Craig S. Henig, a senior managing director of the Arizona region of CBRE, says that his firm provided services to certain parties unrelated to the Debtors' Chapter 11 cases, a list of which is available for free at: http://bankrupt.com/misc/ggp_CBRichardClients.pdf Mr. Henig assures the Court that CBRE is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wins Approval of Tax Deal with Chicago ------------------------------------------------------ General Growth Properties, Inc., and its debtor affiliates sought and obtained the Court's approval of a settlement agreement it entered with the City of Chicago resolving certain alleged prepetition transfer taxes. In September 2008, the City issued GGP a notice of tax determination and assessment alleging that the company owed and had failed to pay certain transfer taxes for $4,616,871, including interest and penalties, pursuant to the Chicago Real Property Transfer Tax Ordinance. According to the Notice, the Transfer Tax Liability stems from GGP's purchase of The Rouse Company in November 2004. The Rouse Company had an interest in Water Tower LLC, and it was GGP's acquisition of this interest that allegedly triggered the Transfer Tax Liability. In October 2008, GGP filed a protest to the Notice in the Chicago Department of Administrative Hearings, and raised substantial defenses against the assessment of the Transfer Tax Liability. In February 2009, the Parties entered into the Settlement Agreement, which includes these salient terms: (a) The City accepts the amount of $300,920 as full and complete satisfaction and settlement of the Transfer Tax Liability. (b) GGP withdraws its Protest and waives its right to an administrative hearing on the Notice and Protest. (c) GGP agrees not to make any claim for a credit or refund, or otherwise bring or join any action to recover any amounts paid to the City under the Settlement Agreement. The City agrees not to make any further claims with respect to the Transfer Tax Liability, or interest, penalty, fines or other amounts relating to the Alleged Taxable Transfer. (d) If by April 30, 2010 (a) the Settlement Agreement is not approved by the Court, and (b) the City has not received payment of the Settlement Amount then the City may cancel the Settlement Agreement upon written notice to GGP. The total savings to the Debtors' estates and their creditors under the Settlement Agreement is $4,315,951, Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, points out. The Debtors believe that settling the Transfer Tax Liability now, under the Settlement Agreement, provides an opportunity for the their estates to realize a more favorable resolution than waiting until later in the reorganization process, he points out. The Settlement Agreement will also save time and allow the Debtors to avoid the uncertainty and expense of protracted litigation, he adds. The Debtors further ask the Court that any order granting the Settlement Agreement Motion waive the stay pursuant to Rule 6004(h) of the Federal Rules of Bankruptcy Procedure so as to facilitate timely payment of the Settlement Amount to the City. 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: Wins Approval of Kobayashi Settlement ----------------------------------------------------- Debtor Victoria Ward, Ltd., sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's permission to enter into a settlement agreement, lien waiver and release with Albert C. Kobayashi, Inc., resolving certain prepetition mechanics' lien claims. The Parties entered into a contract requiring Kobayashi to provide all labor, materials or equipment necessary to produce certain retail space and other related improvements at Ward Village Shops located in Honolulu, Hawaii. Kobayashi performed the Work at the Ward Village Project until the Debtor directed Kobayashi to suspend the Work in 2008. Since suspension of the Work, Kobayashi has alleged that it has not been paid as required under the Contract. In November 2008 Kobayashi filed an application for mechanics' and materialmen's liens and an action to enforce mechanics' lien in the First Circuit Court of Hawaii. In February 2009, the Bankruptcy Court entered the Lien Order, directing payment to lienholders, including Kobayashi for $17,652,240, with interest accruing of $3,870 per day from February 25, 2009 until the Lien is fully satisfied. In June 2009, Kobayashi filed a notice of lien for $17,652,240. In November 2009, Kobayashi filed separate proofs of claim against GGP and Victoria Ward for $17,849,622 plus interest accruing at the rate established by the Lien Order. After good faith and arm's-length negotiations, review and reconciliation of the claim asserted by Kobayashi and the Debtors' books and records, and interest owed to Kobayashi as a result of the State Court Action, the Parties have agreed that the actual prepetition balance owed to Kobayashi is $17,715,529 - - the Claim. The Parties thus entered into the Settlement Agreement, which contains these salient terms: (a) The Debtor agrees to pay Kobayashi $17,538,373 or 99% of the amount of the Claim. (b) Kobayashi will retain an allowed secured claim for 1% of the Claim or $177,155 to be satisfied pursuant to a confirmed Chapter 11 plan for the Debtor or as otherwise ordered by the Bankruptcy Court. (c) Kobayashi agrees to waive any and all present and future claims to attorneys' fees, interest and penalties associated with the Claim. (d) Victoria Ward agrees to waive all claims against Kobayashi for rental of the office space occupied by Kobayashi at the IBM building adjacent to the Ward Village Project. (e) The Debtor is negotiating several new tenant deals at the Ward Village Shopping Center and has decided to complete the Work at the Ward Village Project. Thus, the Parties agree that Kobayashi will return to the Ward Village Project as general contractor and complete the Work as outlined in the Contract after the Debtor provides notice of the final scope of the Project. (f) Kobayashi agrees to deliver, upon receipt of the settlement payment, a full lien release for the Lien as well as any liens or other claims from its subcontractors. Kobayashi will satisfy all liens of claims arising from its work at the Project against the amounts paid to it under the Settlement Agreement and will fully exonerate the Debtor from any obligation to any lien holder or claimant relating to Kobayashi's work on the Project. (g) Kobayashi agrees that it has not and will not transfer any portion of its remaining claim. (h) Kobayashi agrees to release all claims and causes of action arising out of the Contract or work in connection with the Project. (i) Kobayashi agrees to indemnify, defend and hold harmless the Debtors against any claims or cause of action asserted by Kobayashi or its subcontractors, suppliers, or other parties providing labor, materials, equipment or supplies in connection with the work performed at the Project due to claims for non-payment or tort claims due to Kobayashi's negligence. Sylvia A. Mayer, Esq., at Weil, Gotshal & Manges LLP, in New York --sylvia.mayer@weil.com -- relates that Kobayashi is a secured creditor, who may be entitled to full payment of its prepetition mechanics' lien claims, as well as potential penalty and interest costs accruing postpetition at a potential rate of $3,870 per day. Against this backdrop, the Debtor believes that settling the Kobayashi Claim now under the Settlement Agreement provides an opportunity for the Debtors' estate to realize a more favorable resolution than waiting until later in the reorganization process, she points out. Kobayashi's return to the Ward Village Project and completion of the Work will help facilitate the anticipated tenant deals thus benefiting the Debtor's creditors, she 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) GENERAL GROWTH: Bayside T-Shirt Asks for Chapter 11 Trustee ----------------------------------------------------------- Pursuant to Section 727(c)(2) of the Bankruptcy Code, a party-in- interest may ask the Court to order the trustee to examine acts and conduct of a Chapter 7 or 11 debtor in order to determine whether grounds exist for the denial of discharge, Bayside T- Shirts/Panzegna Wood tells the Court. No trustee or examiner has been appointed in the Debtors' Chapter 11 cases, Bayside T-Shirt notes. Against this backdrop, Bayside T-Shirt asks the Court to appoint a trustee to protect or preserve its claim in the Debtors' Chapter 11 cases. Bayside's request is in light of the Debtors' objection to its claim being duplicative of another claim. Bayside T-Shirt insists that its claim has only been filed once against General Growth Properties Inc. Bayside T-Shirt asserts that GGP has not provided it with any proof that the company has paid its debt, or that the claim has been filed twice against GGP. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Bankruptcy Judge Cuts Fees by 1.2% -------------------------------------------------- Bill Rochelle at Bloomberg News reports that lawyers and consultants for old General Motors Corp. and creditors sought final approval for some $35.07 million in fees covering the first four months of the case from June 1 through Sept. 30, excluding the financial advisers. At the urging of the U.S. Trustee, U.S. Bankruptcy Judge Robert E. Gerber allowed payment of 90% of approved fees, with 10% held back. In addition, the judge cut fees by 1.2% to a total of about $34.6 million. According to the report, Weil Gotshal & Manges LLP, chief bankruptcy counsel for old GM, was awarded $17.7 million for the four-month period. Kramer Levin Naftalis & Frankel LLP was approved for $4.5 million. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At December 31, 2009, GM had total assets of US$136.295 billion against total liabilities of US$107.340 billion. At December 31, 2009, total equity was US$21.249 million. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Asbestos Liability Analysis Is in 'Infancy' ----------------------------------------------------------- Bill Rochelle at Bloomberg News reports that the official representative for future asbestos claimants said that the investigation into the extent of current and future asbestos liability of old General Motors Corp. is "in its infancy." Old GM previously said it would develop a Chapter 11 plan creating and funding a trust having sole responsibility for paying asbestos claims. The representative of future claimants agrees with old GM that more time is needed to "determine the appropriate level of funding" and "develop procedures for allowing, processing and paying claims." According to Bloomberg, GM is seeking an extension of its exclusive period to propose a Chapter 11 plan. The future claims representative supports old GM's request for an extension. The official committee representing asbestos claimants likewise has no opposition to the exclusivity motion. The exclusivity motion is scheduled for hearing in the bankruptcy court in New York on May 27. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At December 31, 2009, GM had total assets of US$136.295 billion against total liabilities of US$107.340 billion. At December 31, 2009, total equity was US$21.249 million. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GLOBAL SHIP LEASE: PwC Raises Going Concern Doubt ------------------------------------------------- Global Ship Lease, Inc. filed on May 18, 2010, its annual report on Form 20-F for the fiscal year ended December 31, 2009. PricewaterhouseCoopers said in its May 10, 2010 report on the Company's financial statements for the year ended December 31, 2009, that the uncertainty related to the financial situation of the Company's charterer raises substantial doubt about its ability to continue as a going concern. "If CMA CGM is unable to accomplish a financial restructuring and ceases doing business or otherwise fails to perform its obligations under the Company's charters, Global Ship Lease's business, financial position and results of operations would be materially adversely affected as it is probable that, should the Company be able to find replacement charters, these would be at significantly lower daily rates and for shorter durations than currently in place. In this situation there would be significant uncertainty about the Company's ability to continue as a going concern." The Company reported net income of $42.4 million on $148.7 million of revenue for 2009, compared with a net loss of $36.6 million on $97.1 million of revenue for 2008. The Company's balance sheet at December 31, 2009, showed $1.027 billion in assets, $699.8 million of liabilities, and $327.6 million in stockholders' equity. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?62fb Based in London, Global Ship Lease, Inc. (NYSE: GSL) -- http://www.globalshiplease.com/-- is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies. Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at March 31, 2010, of 5.6 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.9 years. The Company has contracts in place to purchase two 4,250 TEU newbuildings from German interests for roughly $77 million each that are scheduled to be delivered in the fourth quarter of 2010. The Company has agreements to charter out these newbuildings to Zim Integrated Shipping Services Limited for seven or eight years at charterer's option. GOLDEN EAGLE: Delays Filing of Quarterly Report on Form 10-Q ------------------------------------------------------------ Golden Eagle International Inc. said it could not file its quarterly report Form 10-Q for the period ended March 31, 2010, on time with the Securities and Exchange Commission. About Golden Eagle Headquartered in Salt Lake City, Utah, Golden Eagle International, Inc., (OTCBB: MYNG) is engaged in contract gold milling operations in the state of Nevada in the United States. It has also been involved in the business of minerals exploration, mining and milling operations in Bolivia through its Bolivian-based wholly owned subsidiary, Golden Eagle International, Inc. (Bolivia); however it is engaged in no operations in Bolivia at this time as certain of those operations are suspended pending changes in the social/political and mine taxing environments in Bolivia while the Company has terminated its interest in other Bolivian projects. The Company has entered into an agreement with Queenstake Resources USA, Inc., a wholly owned subsidiary of Yukon-Nevada Gold Corp., to operate the Jerritt Canyon gold mill located 50 miles north of Elko, Nevada. Going Concern Auditors issued a going concern opinion on the Company's audited financial statements for the fiscal year ended December 31, 2008. The Company said in its Form 10-Q for the third quarter of 2009 that due to its working capital deficit of ($1,187,790) at September 30, 2009, and ($1,117,600) at December 31, 2008, it is unable to satisfy our current cash requirements for any substantial period of time through our existing capital. "If we have any liabilities that we are unable to satisfy and we qualify for protection under the U.S. Bankruptcy Code, we may voluntarily file for reorganization under Chapter 11 or liquidation under Chapter 7." At September 30, 2009, the Company had total assets of $7,204,602 against $2,971,043 in total liabilities. GRAPHIC PACKAGING: Fitch Affirms Issuer Default Rating at 'B' ------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating and the specific debt class ratings of Graphic Packaging Holding Company: -- IDR at 'B'; -- Senior unsecured bonds at 'B/RR4'; -- Senior subordinated notes at 'CCC/RR6'. In addition, Fitch has upgraded the senior secured ratings of GPK: -- Senior secured revolver to 'BB/RR1' from 'BB-/RR2'; -- Senior secured term loans to 'BB/RR1' from 'BB-/RR2'. The Rating Outlook has been revised to Stable from Negative reflecting better than expected results last year and prospective business conditions this year. The decline in energy expenses and some softening in fiber costs held manufacturing costs down last year while the prices for paperboard cartons advanced nominally. This combination produced better gross and operating income margins even though the volumes of paperboard packaging and multiwall bags sold declined. EBITDA increased year over year and working capital was freed as GPK optimized the logistics of its carton plants. The net result was better cash flow that bested Fitch's expectations. In addition, GPK received not quite $140 million from the government in the form of alternate fuel tax credits which expired in 2009 and which helped repay just over $380 million in debt. As a consequence net debt/EBITDA improved to 5.0 times from 7.3x at the end of 2008. First quarter results showed marginally better volumes of paperboard and bags sold which Fitch believes will set the pace for 2010. So far this year there have been two increases in the spot prices for coated unbleached kraft and coated recycled board. Because the vast majority of GPK's carton sales are sold under contracts with cost recapture provisions, the company will likely struggle through the year in a seesaw battle with prices lagging changes in its cost structure. However, GPK will also benefit from continued cost efficiencies wrung from combining the former operations of Altivity Packaging, LLC, with heritage GPK. The company's goal this year is to reduce its debt portfolio by another $200 million. If successful net debt would likely end the year just north of 4.0x EBITDA. Over the course of 2009, GPK refinanced all of its senior notes that would have matured in 2011 with the proceeds of a new senior notes issue maturing in 2017. This leaves only the amortizations of secured term loans (approximately $10 million per year) as required cash redemptions until the company's senior subordinated notes mature in 2013 ($425 million) along with the secured revolver ($400 million with just over $360 million available at the close of this past first quarter). Under the terms of its bank agreements, GPK is allowed to prepay an amount of senior subordinated notes equivalent to $37.5 million plus 75% of term loan prepayments. Currently, this amounts to a little over $100 million. The upgrade of GPK's senior secured debt is a product of Fitch's ongoing recovery analyses and the amortization and prepayment of the secured term loans. GPK's payment of secured term loan debt in 2009, just under $240 million, increased the recovery prospects for the remaining debt of that class to an estimated 100% from 85%, prompting a higher recovery rating, 'RR1', and a one-notch upgrade. GREATER GERMANTOWN: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Greater Germantown Housing Development Corporation filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $14,950,000 B. Personal Property $1,639,336 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $9,055,748 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $2,165,181 ----------- ----------- TOTAL $16,589,336 $11,220,929 Philadelphia, Pennsylvania-based Greater Germantown Housing Development Corporation filed for Chapter 11 bankruptcy protection on April 1, 2010 (Bankr. E.D. Pa. Case No. 10-12614). The Company estimated its assets and debts at $10,000,000 to $50,000,000. GREEKTOWN HOLDINGS: Proposes Tax Settlement on Garage Property -------------------------------------------------------------- Greektown Holdings Inc. and its units relate that in 2008 and 2009, the City of Detroit assessed a real property they owned known as the Fort Street Garage based on a value of $5,965,637. The Debtors contested the Assessed Value and filed a tax appeal with the Michigan Tax Tribunal. The Debtors argued that the value of the Garage Property was less than the Assessed Value. Daniel J. Weiner, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, tells the Bankruptcy Court that the City's assessor and the Debtors have resolved the Tax Dispute and agreed that the Garage Property has a taxable value of $3,150,000 for 2008 and $2,800,000 for 2009. He adds that as a result of the Agreed Value, the Debtors will receive a real estate tax refund of $235,947. Mr. Weiner contends that the parties' Settlement resolves all the disputes between the Debtors and the City regarding the 2008 and 2009 taxable value of the Garage Property on terms and conditions which the Debtors believe, in the exercise of their business judgment, are fair and reasonable under the circumstances. Accordingly, the Debtors ask Judge Walter Shapero to approve their entry into the tax liability settlement with the City of Detroit with respect to the Garage Property. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operate world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Committee Can Pursue Bond Avoidance Claims -------------------------------------------------------------- Bankruptcy Judge Walter Shapero accorded the Official Committee of Unsecured Creditors in Greektown Holdings' Chapter 11 case derivative standing and authority to initiate and prosecute litigation in pursuit of bond avoidance claims, under the Bankruptcy Code or other applicable law, for the benefit of the Debtors' estates. The Court overruled all objections to the Committee's request. The Creditors Committee and Deutsche Bank Trust Company Americas previously asked the U.S. Bankruptcy Court for the Eastern District of Michigan for authority to initiate and pursue litigation in pursuit of bond avoidance claims on behalf of the Debtors. Joel D. Applebaum, Esq., at Clark Hill PLC, in Birmingham, Michigan -- japplebaum@clarkhill.com -- notes that the potential defendants in Bond Avoidance Claims are insiders or former insiders of the Debtors who received, in the aggregate, more than $165 million from the Debtors without having given any discernable equivalent value in return for the exchange. The Committee and Deutsche Bank assert that Bond Avoidance Claims are colorable and valuable, and that pursuit of the Bond Avoidance Claims will generate substantial proceeds far greater than any costs incurred in pursuing them. The Debtors concurred with the Committee's Request and withdrew their prior objection. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operate world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Parties Agree on Exculpation Provision ---------------------------------------------------------- Bankruptcy Judge Walter Shapero previously confirmed the Chapter 11 Plan of Reorganization for Greektown Holdings submitted by noteholder plan proponents, which include the Official Committee of Unsecured Creditors and Indenture Trustee. The Confirmation Order provides that solely with respect to the Sault Ste. Marie Tribe of Chippewa Indians, the Court will determine by subsequent order whether the exculpation pursuant to Section 7.5 of the Plan extends to actions by certain "release parties" with respect to prepetition representations and determinations made in the filing of the Chapter 11 Cases. Subsequently, in a Court-approved stipulation, the Debtors, the Noteholder Plan Proponents, the Creditors Committee, Deutsche Bank Trust Company Americas, the Tribe, and Wells Fargo Bank, N.A., the agent of the Debtors' Prepetition Credit Agreement, agree that the Exculpation Provision does not apply to any actions or omissions of the Release Parties relating to the filing of the Chapter 11 cases. Judge Shapero clarifies that the approval of the Stipulation will not affect the finality of the Confirmation Order. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operate world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GUIDED THERAPEUTICS: Posts $3.165 Mil. Net Loss for March 31 Qtr. ----------------------------------------------------------------- Guided Therapeutics Inc. reported a net loss of $3,165,000 on $821,000 of revenue for the three months ended March 31, 2010, compared with a net loss of $1,376,000 on $181,000 of revenue during the same period a year ago. "We are pleased with the progress we made on a number of fronts in the first quarter of 2010, including simplifying our capital structure and eliminating a lien on our assets, the five presentations to the ASCCP of our clinical results and progress toward completing our FDA premarket approval application," said Mark L. Faupel, Ph.D., chief executive officer and president of Guided Therapeutics. "We have substantially completed the clinical module of the FDA filing and it is undergoing external review. We are nearing completion of the final module for manufacturing and expect to file both with the FDA during the second quarter of 2010. We also extended our licensing agreement with Konica Minolta, which brings additional revenue to the company and provides a pipeline of products." "Additionally, the board of directors nominated Dr. Jonathan M. Niloff as a director of the company. We believe that Dr. Niloff will be a key addition to the company because of his clinical background as a Harvard University Ob-GYN and his numerous professional contacts will prove invaluable in the adoption of our technology by the clinical community," Dr. Faupel said. A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?6310 About Guided Therapeutics Norcross, Georgia-based Guided Therapeutics, Inc. (Pink Sheets: GTHP) is a medical technology company focused on developing innovative medical devices that have the potential to improve health care. The Company is currently focused on completing the development of cervical cancer detection device. * * * As reported by the Troubled Company Reporter on March 29, 2010, UHY LLP of Atlanta, Georgia, expressed substantial doubt about Guided Therapeutics Inc.'s ability to continue as a going concern in its audit report on the Company's 2009 annual report. UHY noted that the Company has recurring losses from operations, accumulated deficit and working capital deficit. At December 31, 2009, the Company's balance sheet revealed $789,000 total assets and $12,764,000 total liabilities for a $11,975,000 total stockholders' deficit. HOLIDAY 360: Court Denies Hall Stay's Motion to Transfer Venue -------------------------------------------------------------- The Hon. D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas denied Hall Stay 190-Hotel DFW LLC and Hall element DFW, LLC's motion the transfer of the Chapter 11 cases of Holiday 360, Ltd., to the Dallas Division of the Northern District of Texas. Irving, Texas-based Holiday 360 Ltd. is a single asset real estate. It filed for Chapter 11 bankruptcy protection on April 5, 2010 (Bankr. N.D. Texas Case No. 10-42412). The Company estimated its assets and debts at $10,000,000 to $50,000,000. These affiliates filed separate Chapter 11 petitions on April 5, 2010: -- Hotel 635 Beltline, LP (Case No. 10-42415), estimating its assets and debts at $10 million to $50 million; and -- Stay 190, Ltd. (Case No. 10-42413), estimating its assets and debts at $10 million to $50 million. John C. Leininger, Esq., at Bryan Cave LLP, assists the Debtors in their restructuring efforts. HOMELAND SECURITY: Posts $1.2-Mil. Net Income for First Quarter --------------------------------------------------------------- Homeland Security Capital Corporation filed its quarterly report on Form 10-Q, reporting a net income of $1.2 million on $23.6 million of net contract revenue for the three months ended March 31, 2010, compared with a net loss of $1.7 million on $19.0 million of net contract revenue during the same period a year ago. The Company's balance sheet at March 31, 2010, showed $37.4 million in total assets and $38.5 million in total liabilities, for a $1.3 million total stockholders' deficit. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6301 About Homeland Security Homeland Security Capital Corporation is an international provider of specialized technology-based radiological, nuclear, environmental disaster relief and electronic security solutions to government and commercial customers. * * * At December 31, 2009, the Company had total assets of $35,815,519 against total liabilities of $38,018,448 and Warrants Payable -- Series H Preferred Stock of $169,768. Stockholders' deficit was $2,372,697 at December 31, 2009. HOTEL 365: Court Disapproves Transfer of Case to Dallas Division ---------------------------------------------------------------- The Hon. D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas denied Hall Stay 190-Hotel DFW LLC, and Hall element DFW, LLC's motion the transfer of the Chapter 11 case of Hotel 365 Beltline, LP, to the Dallas Division of the Northern District of Texas. Irving, Texas-based Hotel 635 Beltline, LP is a single asset real estate. The Company filed for Chapter 11 on April 5, 2010 (Bankr. N.D. Tex. Case No. 10-42415.) John C. Leininger, Esq. at Bryan Cave LLP assists the Debtor in its restructuring effort. In is petition, the Debtor listed assets and debts both ranging from $10,000,000 to $50,000,000. Debtor-affiliate that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Holiday 360, Ltd. 10-42412 4/5/10 Assets: $10-mil. to $50-mil. Debts: $10-mil. to $50-mil. Stay 190, Ltd. 10-42413 4/5/10 Assets: $10-mil. to $50-mil. Debts: $10-mil. to $50-mil. HSH DELAWARE: Wants Plan Exclusivity Extended Until Sept. 20 ------------------------------------------------------------ Bill Rochelle at Bloomberg News reports that HSH Delaware GP LLC is asking the Bankruptcy Court to extend its exclusive period to propose a Chapter 11 plan until Sept. 20. The Debtor said it spent the first four months in Chapter 11 in litigated disputes with secured lenders including Royal Bank of Scotland NV. A hearing on the exclusivity motion is scheduled for June 14. On June 14, the Court will also hold a trial on a request by lenders for appointment of a Chapter 11 trustee. The lenders relate that the ongoing disputes between the lenders and the Debtors' management reached a level of acrimony and distrust that there is a little likelihood of the parties reaching a consensual resolution in the Chapter 11 cases. The lenders consist of The Royal Bank of Scotland N.V. fka ABN AMRO Bank N.V., Commerzbank AG, Filiale Luxembourg, The Royal Bank of Scotland plc, Landsbanki Islands hf. Amsterdam branch, Lloyds TSB Bank plc, and Credit Agricole Corporate and Investment Bank fka Calyon. About HSH Delaware HSH Delaware GP LLC is based in Wilmington, Delaware. Nine HSH partnerships were created in 2006 to buy a 26% stake in HSH Nordbank AG, the world's largest shipping financier, from WestLB AG for about EUR1.25 billion ($1.76 billion). The partnerships received unsecured term and revolving loans of EUR375 million from ABN AMRO bank to fund the purchase of HSH Nordbank shares. As reported by the Troubled Company Reporter on September 9, 2009, creditors with claims aggregating $27.8 million filed a petition to send affiliate HSH Delaware LP to Chapter 7 liquidation (Bankr. D. Del. Case No. 09-13145). Commerzbank AG, Lloyds TSB Bank Plc, ABN Amro Bank NV, Calyon, Royal Bank of Scotland Plc and Landsbanki Islands HF filed the involuntary Chapter 7 petition. HSH Delaware filed for Chapter 11 bankruptcy protection on January 21, 2010 (Bankr. D. Delaware Case No. 10-10187). The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. HSH Delaware's affiliates -- HSH Delaware L.P.; HSH Luxembourg S.a.r.l.; HSH Luxembourg Coinvest S.a.r.l.; HSH Delaware GP LLC; HSH Alberta I L.P.; HSH Alberta II L.P.; HSH Alberta V L.P.; HSH Coinvest (Alberta) L.P.; JCF HSH (DE) GP LP; HSH Delaware L.P.; HSH Luxembourg S.a.r.l.; and HSH Luxembourg Coinvest S.a.r.l. -- also filed separate Chapter 11 petitions. John Henry Knight, Esq.; Lee E. Kaufman, Esq.; Mark D. Collins, Esq.; and Robert J. Stearn Jr., Esq., assist the Debtors in their restructuring effort. The Debtors' Canadian Counsel is McCarthy Tetrault LLP. The Debtors' Chief Restructuring Officer is H. Ronald Weissman. IMH SECURED: Swings to $2.9-Million Net Loss in Q1 of 2010 ---------------------------------------------------------- IMH Secured Loan Fund, LLC filed its quarterly report on Form 10-Q, showing a net loss of $2.9 million on $1.0 million of revenue for the three months ended March 31, 2010, compared with net income of $11.1 million on $12.0 million of revenue for the same period of 2009. The Fund's balance sheet as of March 31, 2010, showed $341.8 million, $22.8 million of liabilities, and $319.0 million of members' equity. As of March 31, 2010, the Fund's accumulated deficit aggregated $411.4 million as a direct result of provisions for credit losses and impairment charges relating to the change in the fair value of the collateral securing the Fund's loan portfolio and the fair value of real estate owned assets primarily acquired through foreclosure in prior years. At March 31, 2010, the Fund had cash and cash equivalents of $3.9 millon and undisbursed loans-in- process and interest reserves funding estimates totaling $13.8 million. As a result of the erosion of the U.S. and global credit markets during 2008 and parts of 2009, the Fund continues to experience loan defaults and foreclosures on the mortgage loans it holds in its portfolio. In addition, the Fund's manager has found it necessary to modify certain loans, which modifications have resulted in extended maturities of two years or longer, and believes it may need to modify additional loans in an effort to, among other things, protect the Fund's collateral. In addition, as allowed by the operating agreement, the Fund's manager, effective October 1, 2008, ceased accepting additional member investments in the Fund, honoring new redemptions requests, or identifying and funding new loans (although the Fund may finance new loans in connection with the sale of collateral under existing loans or the sale of real estate owned assets). Additionally, during the second quarter of 2009, the Fund suspended distributions to members. These elections were made in an effort to preserve the Fund's capital and to seek to stabilize its operations and liquid assets in order to enhance its ability to meet future obligations, including those pursuant to current loan commitments. The freeze was precipitated by increased default and foreclosure rates on the Fund's portfolio loans and a reduction in new member investment, compounded by a significant number of redemption requests submitted during the latter part of the third quarter of 2008, the payment of which it believes would have rendered it without sufficient capital necessary to fund its outstanding lending commitments. Despite the recent financial condition and status of the Fund since October 2008, the Fund's manager believes that it has developed a liquidity plan that, if executed successfully, would likely provide sufficient liquidity to finance its anticipated working capital and capital expenditure requirements and put it back into operational mode. "However, the dislocations and uncertainty in the economy, and in the real estate, credit, and other markets, have created an extremely challenging environment that will likely continue for the foreseeable future, and we cannot assure you that we will have sufficient liquidity, which raises substantial doubt about our ability to continue as a going concern." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?62fa IMH Secured Loan Fund, LLC invests and manages mortgage investments, primarily short-term commercial mortgage loans collateralized by first mortgages on real property in the United States. The Fund invests in pre-entitled land loans, entitled land loans, and construction and existing structure loans. It primarily serves Arizona, California, New Mexico, Texas, Idaho, Minnesota, Nevada, and Utah markets. Investors Mortgage Holdings, Inc. serves as the manager of the Fund. IMH Secured Loan Fund was founded in 2003 and is based in Scottsdale, Arizona. INDUSTRY WEST: Hearing on Secured Lenders' Cash Use Set for June 3 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of California will consider at a hearing on June 3, 2010, at 10:00 a.m., Industry West Commerce Center, LLC's request to access cash that secure debt to their lenders. The hearing will be held at the Santa Rosa Courtroom. The Debtor is seeking permission to access until July 31, 2010, the rental income generated by its 3 related commercial/industrial buildings located at 237 Todd Road and 256 & 258 Sutton Place, Santa Rosa, California. The secured lenders claim a lien on the rental income of these properties. The Debtor's indebtedness consists of (1) Central Pacific Bank - first deed of trust - $15,873,519; (2) Clifford James Brown, etc. - second deed of trust - $800,000; (3) Mark and Irma McClure, as Trustees of the McClure Family Trust - third deed of trust - $2,000,000. The Debtor will use the cash collateral to fund the postpetition maintenance and utility bills of the properties. The Debtor related that various secured lenders are afforded adequate protection" for the Debtor's use of cash collateral by the equity cushion in the real property. An MAI appraisal of the property in its "as-is" condition is $23,640,000 as of August 24, 2009. The Debtor added that it intends to negotiate with the senior secured lender, Central Pacific Bank, regarding an appropriate adequate protection payment to avoid the continuing accrual of unpaid interest, and may request authorization to make the payments at the time of the hearing on this motion. The Debtor is represented by: MacConaghy & Barnier, PLC John H. MacConaghy, Esq. Jean Barnier, Esq. 645 First St. West, Suite D Sonoma, California 95476 Tel: (707) 935-3205 Fax: (707) 935-7051 E-mail: macclaw@macbarlaw.com About Industry West Commerce Santa Rosa, California-based Industry West Commerce Center, LLC, a California limited liability company, filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Calif. Case No. 10-10088). John H. MacConaghy, Esq., at MacConaghy and Barnier, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. INDUSTRY WEST: Court Continues Plan Hearing Until June 3 -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California has continued until June 3, 2010, at 9:00 a.m., the hearing on the confirmation of Industry West Commerce Center, LLC' Plan of Reorganization. The hearing will be held at Santa Rosa Courtroom. As reported in the Troubled Company Reporter on April 13, 2010, the Debtor received Court approval of its disclosure statement for the proposed Plan. The Bankruptcy Court approval of the Debtor's disclosure statement allows the Debtor to commence solicitation of votes for confirmation of the Plan. According to the Disclosure Statement, the Plan seeks to restructure debts as: -- The secured debt in favor of the first, second, and third mortgage holders will be reamortized into new notes in the same priority secured by the existing deeds of trust, bearing interest at, respectively, (1) the variable rate specified in the first note; (2) 5.5% per annum as to the second note, and (3) 5% per annum as to the third note. Interest only will be payable monthly and the entire balance of these notes will be due in full in seven years. -- Unsecured creditors will be paid in full with interest at the federal judgment interest rate (0.42% per annum) in four quarterly installments commencing one year from the effective date of the Plan through a cash flow from the Debtor's property. -- any delinquent real property taxes will be cured, with statutory interest, through a five-year payment plan of semi-annual installments, starting April 10, 2010. Payments on these obligations will be funded through the rental income from the Debtor's real property. Under the Plan, if the Debtor fails to meet these requirements, the secured lenders will be permitted to foreclose and/or the case may be converted to Chapter 7 liquidation proceedings on the motion of a party in interest. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/IndustryWest_DS.pdf About Industry West Commerce Santa Rosa, California-based Industry West Commerce Center, LLC, a California limited liability company, filed for Chapter 11 bankruptcy protection on January 14, 2010 (Bankr. N.D. Calif. Case No. 10-10088). John H. MacConaghy, Esq., at MacConaghy and Barnier, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. INSTACARE CORP: Earns $170,261 in First Quarter Ended March 31 -------------------------------------------------------------- instaCare Corp. filed its quarterly report on Form 10-Q, showing net income of $170,261 on $4.1 million of revenue for the three months ended March 31, 2010, compared with net income of $96,358 on $5.1 million of revenue for the same period of 2009. The increase in net income over the comparable period in the previous year is partly attributable to a gain on debt settlement of $27,903. The increase in net income excluding this non-recurring gain was $46,840. The Company's balance sheet as of March 31, 2010, showed $4.4 million in assets, $2.3 million of liabilities, and $2.0 million of stockholders' equity. Beckstead & Watts, LLP, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations. The Company has an accumulated deficit of $17.4 million as of March 31, 2010. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?62f9 Westlake Village, Calif.-based instaCare Corp., through its subsidiary companies, is a nationwide prescription and non- prescription diagnostics and home testing products distributor. INTEGRATED BIOPHARMA: Posts $1.9MM Net Loss in Q3 Ended March 31 ---------------------------------------------------------------- Integrated BioPharma, Inc., filed its quarterly report on Form 10- Q, reporting a net loss of $1.9 million on $7.5 million of revenue for the three months ended March 31, 2010, compared with a net loss of $3.6 million on $8.3 million of revenue for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $14.5 million in assets and $18.7 million of liabilities, for a stockholders' deficit of $4.2 million. "At March 31, 2010, the Company had cash and cash equivalents of $735,000, a working capital deficit of $8.4 million, primarily attributable to the amended Notes Payable in the amount of $7.8 million, which were due on November 15, 2009, the Convertible Note Payable in the amount of $3.4 million and an accumulated deficit of $48.2 million. These factors raise substantial doubt as to the Company's ability to continue as a going concern." The Notes Payable are secured by a pledge of substantially all of the Company's assets. On March 19, 2010, the Company received a payment demand for default interest from one of the holders of the Notes Payable representing roughly 73% of the outstanding balance. The Company has engaged a financial advisory firm to assist it in developing a comprehensive strategy regarding a financial or business restructuring. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?62f3 Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.ibiopharma.com/-- together with its subsidiaries, manufactures, distributes, markets, and sells vitamins and nutritional supplements in the United States. Amper, Politziner & Mattia, LLP, in Edison, N.J., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended June 30, 2009. The independent auditors noted that the Company has a working capital deficiency and recurring net losses, is in the process of seeking additional capital, and has not yet secured sufficient capital to fund its operations. JAMESTOWN LLC: $5 Million Loan Default Prompts Chapter 11 Filing ---------------------------------------------------------------- Chris Wrinkle at Springfield Business Journal Online reports that Jamestown LLC filed for Chapter 11 bankruptcy protection on May 17 (Bankr. W.D. Missouri Case No. 10-____), a day before the Rogersville development by the same name was headed into a trustee's sale for default on a $5.05 million loan. According to the report, the Chapter 11 filing allowed developer American Equities of Missouri Inc. avoid a May 18 foreclosure sale of two tracts at the 200-acre mixed-use property east of Springfield at U.S. Highway 60 and Business Route 60. "We've put ourselves in a position now to move forward so that we can get this thing sold, keep the sales going and . . . keep our commitments to people that we've put the property under contract with," said AEMI President and Chief Operating Officer Stephen Cope, according to the report. Fifth Third Bank called its $5 million loan on Jamestown due to "default in payment of debt," according to an April 30 legal notice published in The Daily Events. JAYEL CORP: Court OKs Access to First National's Cash Collateral ---------------------------------------------------------------- The Hon. Ben T. Barry of the U.S. Bankruptcy Court for the Western District of Arkansas authorized Jayel Corporation to use the rents and profits generated from its real estate in which First National Bank of Rogers claims an interest. The bank asserts that it is owed $9,756,422, with interest costs and fees continuing to accrue thereon. The loan is secured by a lien on the majority, if not all, of the Debtor's real estate. Specifically, the Debtor will only be allowed to use the cash collateral as: a) to pay normal business expenses which include, without limitation, the things as repairs, utilities, maintenance, taxes, and overhead. b) the Debtor will not use cash collateral to pay any prepetition debt. As adequate protection, the Debtor will make an interest payment to the bank in the amount of $60,000 on or before May 17, 2010, and $40,000 on or before the 17th day of each month thereafter until the plan is confirmed. As additional adequate protection, the bank will be granted a postpetition replacement lien on the same collateral and to the same extent, validity and priority that the bank had on the petition date. Bentonville, Arkansas-based Jayel Corporation filed for Chapter 11 bankruptcy protection on March 5, 2010 (Bankr. W.D. Ark. Case No. 10-71120). Donald A. Brady, Jr., Esq., at Blair & Brady Attorneys At Law, assists the Company in its restructuring effort. JJRS, LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: JJRS, LLC 4035 Flossmoor Street Las Vegas, NV 89115-2347 Bankruptcy Case No.: 10-19368 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Timothy S. Cory, Esq. 8831 W. Sahara Avenue Lakes Business Park Las Vegas, NV 89117 Tel: (702) 388-1996 E-mail: tim.cory@corylaw.us Estimated Assets: $0 to $50,000 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/nvb10-19368.pdf The petition was signed by John Bradley, owner. KASPAR TREE: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Kaspar Tree Farms, Inc. 2151 County Road 11 Mead, NE 68041 Bankruptcy Case No.: 10-41597 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court District of Nebraska (Lincoln Office) Debtor's Counsel: David Grant Hicks, Esq. Pollak & Hicks PC 6910 Pacific St #216 Omaha, NE 68106 Tel: (402) 345-1717 E-mail: dhickslaw@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 tp $10,000,000 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/neb10-41597.pdf The petition was signed by Margaret Ann Kaspar. KIERNAN PLAZA: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Kiernan Plaza Investors, LLC 20632 Redwood Road, Suite B Castro Valley, CA 94546 Bankruptcy Case No.: 10-45827 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Leslie J. Tchaikovsky Debtor's Counsel: Ruth Elin Auerbach, Esq. Law Offices of Ruth Elin Auerbach 711 Van Ness Ave. #440 San Francisco, CA 94102 Tel: (415)673-0560 E-mail: attorneyruth@sbcglobal.net Scheduled Assets: $4,692,000 Scheduled Debts: $3,948,838 A list of the Company's 2 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-45827.pdf The petition was signed by William E. Courtney, managing member. KREUNEN DEVELOPMENT: Taps Harris Jernigan as Bankruptcy Counsel --------------------------------------------------------------- Kreunen Development Company, Inc., 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 with 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 interest in the assets and who may seek to disturb the continued operation of the4 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's personnel are: Craig M. Geno $300 Jeffrey K. Tyree $250 Melanie T. Vardaman $225 Paralegal/Legal Assistants $125 To the best of the Debtor's knowledge, Harris Jernigan is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm 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 Kreunen Development Southaven, Mississippi-based Kreunen Development Company, Inc., filed for Chapter 11 bankruptcy protection on March 31, 2010 (Bankr. N.D. Miss. Case No. 10-11600). Craig M. Geno, Esq., at Harris Jernigan & Geno, PLLC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. LANDRY'S RESTAURANTS: Amends Merger Deal With Fertitta ------------------------------------------------------ Landry's Restaurants, Inc. has entered into an amendment to the merger agreement previously signed with a company wholly-owned by Tilman J. Fertitta, Chairman, Chief Executive Officer and President of the Company. Pursuant to the amendment, the Fertitta company has agreed to acquire all of the Company's outstanding common stock not already owned by Mr. Fertitta for $24.00 per share in cash. The total value of the transaction is approximately $1.4 billion. On May 23, 2010, Mr. Fertitta beneficially owned approximately 55% of the Company's outstanding shares of common stock. The merger agreement originally entered into on November 3, 2009 provided for a purchase price of $14.75 per share in cash. The Company's Board of Directors, acting upon the unanimous recommendation of a Special Committee comprised entirely of outside, non-employee directors, has approved the amended merger agreement and has recommended that the Company's stockholders vote in favor of the amended merger agreement. The Special Committee received the opinion of Moelis & Company, financial advisor to the Special Committee, that the amended purchase price is fair from a financial point of view to the Company's stockholders, other than Mr. Fertitta and his affiliates. The merger is subject to approval by the Company's stockholders, including approval by the holders of a majority of the Company's common stock voted at the special meeting and not owned by Mr. Fertitta and the directors in the litigation described below. The Company also announced that a partial settlement has been reached to settle derivative and certain other claims against Mr. Fertitta, affiliates of Mr. Fertitta and the Company's directors in a lawsuit currently pending in Delaware. The merger is conditioned upon the dismissal with prejudice of such claims. Both the amended merger agreement and terms of the settlement with the plaintiff in the Delaware lawsuit provide, among other things, that (1) the Special Committee will conduct an active "go-shop" process for 45 days, with the option for at least a 15-day extension for due diligence if the Special Committee deems necessary, (2) the Special Committee will waive standstills, except for hostile offers or open market transactions in the Company's securities, to permit proposals during the "go-shop" process and will permit requests for waivers of standstills to be made thereafter, (3) Mr. Fertitta is not entitled to receive a termination fee upon termination of the amended merger agreement, but may be reimbursed for his actual expenses in specified circumstances, and (4) the Company will reimburse up to $500,000 in actual out-of-pocket due diligence costs incurred by the two highest bidders that submit a proposal to acquire the Company at a price in excess of $24.00 per share, if the Special Committee concludes that the proposal is reasonably likely to lead to a superior proposal. No assurances can be given that the solicitation of superior proposals will result in an alternative transaction. About Landry's Restaurants Landry's Restaurants, Inc., owns and operates mostly casual dining restaurants under the trade names Landry's Seafood House, Chart House, The Crab House, Saltgrass Steak House, and Rainforest Cafe. Landry's also owns and operates the Golden Nugget hotel and casino in Las Vegas, Nevada. Annual revenue is approximately $900 million. * * * As reported in the Troubled Company Reporter on May 10, 2010, Moody's Investors Service stated that the increased offer by Landry's Restaurant, Inc.'s Chairman to take the company private could make it more difficult for the company to maintain its current ratings. All of Landry's ratings, including its B2 Corporate Family and Probability of Default ratings, remain on review for possible downgrade. LEE JUNDANIAN: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Lee Joseph Jundanian 15 West Lenox Street Chevy Chase, MD 20815 Bankruptcy Case No.: 10-21513 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Debtor's Counsel: Kristen B. Perry, Esq. Whiteford, Taylor et al. Seven Saint Paul St., Suite 1400 Baltimore, MD 21202 Tel: (410) 347-8700 E-mail: kperry@wtplaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 7 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb10-21513.pdf The petition was signed by Lee Joseph Jundanian. LEXICON UNITED: Meyler & Company Raises Going Concern Doubt ----------------------------------------------------------- Meyler & Company LLC in Middletown, New Jersey, expressed substantial doubt against Lexicon United Incorporated's ability as a going concern after auditing the Company's results for the year ended Dec. 31, 2009. The firm said the Company continues to have negative cash flows from operations, recurring losses from operations, and has a stockholders' deficit. In its Form 10-K for full year 2009, the Company reported a net loss of $11,788 on $4,190,723 of total revenues for the year ended Dec. 31, 2009, compared with a net loss of $760,747 on $4,331,355 of total revenues during the same period a year ago. The Company's balance sheet at Dec. 31, 2009, showed $3,303,867 in total assets and $3,351,560 in total liabilities, for a stockholders' deficit of $47,693. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?6302 About Lexicon United Based in Austin, Texas, Lexicon United Incorporated (OTC BB:LXUN.OB) -- http://www.atncapital.com.br/-- is a financial services holding company specializing in collections and credit recovery. ATN, a subsidiary of the Company, is engaged in the business of managing and servicing accounts receivables for large financial institutions in Brazil and acquiring portfolios of debt assets for its own account. Revenues are primarily derived from collections related to distressed debt assets. MARSH HAWK: U.S. Trustee Forms 5-Members Creditors Committee ------------------------------------------------------------ W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, appointed creditors in the Chapter 11 case of Marsh Hawk Golf Club, LLC. The Creditors Committee members are: 1. F. Thomas Hughes 102 Gullane Williamsburg, VA 23188 2. Donald S. Baker Ford's Colony Homeowners Association 107 Formby Williamsburg, VA 23188 Represented by: Susan Tarley Tarley Robinson PLC 1313 Jamestown Road, Suite 202 Williamsburg, VA 23185 3. Sam Bowlin Country Club Membership Association 128 Meadowbrook Williamsburg, Virginia 23188 Represented by: Susan Tarley 4. Philip S. Radcliff 106 Burnham Williamsburg, VA 23188 5. James D. Neidhart, committee chairman 103 Shellbank Drive Williamsburg, VA 23185 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Williamsburg, Virginia-based Marsh Hawk Golf Club, LLC, aka Ford's Colony Country Club, filed for Chapter 11 bankruptcy protection on April 1, 2010 (Bankr. E.D. Va. Case No. 10-50632). Ross C. Reeves, Esq., at Willcox & Savage, P.C., assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,000 to $50,000,000. MARSH HAWK: Files Schedules of Assets and Liabilities ----------------------------------------------------- Marsh Hawk Golf Club, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Virginia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $25,275,806 B. Personal Property $1,639,592 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $17,755,638 E. Creditors Holding Unsecured Priority Claims $17,175 F. Creditors Holding Unsecured Non-priority Claims $486,349 ----------- ----------- TOTAL $26,915,398 $18,259,162 Williamsburg, Virginia-based Marsh Hawk Golf Club, LLC, aka Ford's Colony Country Club, filed for Chapter 11 bankruptcy protection on April 1, 2010 (Bankr. E.D. Va. Case No. 10-50632). Ross C. Reeves, Esq., at Willcox & Savage, P.C., assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,000 to $50,000,000. MECHANICAL TECHNOLOGY: Posts $1.24 Mil. Net Loss for March 31 Qtr ----------------------------------------------------------------- Mechanical Technology Inc. filed its quarterly report on Form 10- Q, reporting a net loss of $1,234,000 on $1,624,000 of revenue for the three months ended March 31, 2010, compared with a net loss of $1,244,000 million on $1,549,000 of revenue during the same period a year ago. The Company's balance sheet at March 31, 2010, revealed $3,741,000 in total assets and $1,719,000 in total liabilities, for a stockholders' equity of $2,022,000. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6306 Mechanical Technology, Incorporated, operates in two segments, the New Energy segment which is conducted through MTI MicroFuel Cells Inc., a majority-owned subsidiary, and the Test and Measurement Instrumentation segment, which is conducted through MTI Instruments, Inc., a wholly owned subsidiary. MTI Micro is developing Mobion(R), a handheld energy-generating device to replace current lithium-ion and similar rechargeable battery systems in many handheld electronic devices for the military and consumer markets. As of December 31, 2009, the Company owned approximately 61.81% of MTI Micro's outstanding common stock. MTI Instruments is a worldwide supplier of precision non-contact physical measurement solutions, condition based monitoring systems, portable balance equipment and wafer inspection tools. * * * In its March 31, 2010 report, PricewaterhouseCoopers in Albany, New York, said there is substantial doubt about the Company's ability to continue as a going concern. It noted that the Company has suffered recurring losses from operations and has an accumulated deficit. MERIDIAN RESOURCE: Delays 10-Q Filing; Alta Mesa Merger Completed ----------------------------------------------------------------- The Meridian Resource Corporation is filing this Notification of Late Filing on Form 12b-25 with respect to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010. As previously disclosed, on December 22, 2009, Alta Mesa Holdings, LP, Alta Mesa Acquisition Sub, LLC and the Company entered into an Agreement and Plan of Merger, providing for the merger of the Company with and into Alta Mesa. The closing of the Merger occurred on May 13, 2010. A Notification of Removal from Listing and/or Registration Under Section 12(b) of the Securities Exchange Act of 1934 on Form 25 was filed with the Securities and Exchange Commission on May 14, 2010. Because the efforts of the Company's management have been focused on the closing of the Merger and the other transactions contemplated by the Merger Agreement, the Company is unable, without unreasonable effort and expense, to file the Form 10-Q on a timely basis. The Company expects that the Form 10-Q will be filed no later than the fifth calendar day following the due date. About Meridian Resource Based in Houston, Texas, The Meridian Resource Corporation (NYSE:TMR) -- http://www.tmrc.com/-- is an independent oil and natural gas company engaged in the exploration, exploitation, acquisition and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high- potential wells for exploration and development. Meridian has a field office in Weeks Island, Louisiana. Meridian reported a net loss of $72,636,000 for 2009 from a net loss of $209,886,000 for 2008 and net income of $7,137,000 for 2007. Revenues were $89,254,000 for 2009 from $149,165,000 for 2008 and $152,178,000 for 2007. At December 31, 2009, the Company had total assets of $183,130,000 against total current liabilities of $119,913,000 and other debt of $22,473,000, resulting in stockholders' equity of $40,744,000. MIDWAY GAMES: Court Confirms Plan of Liquidation ------------------------------------------------ Lee E. Buchwald, president of Buchwald Capital Advisors LLC, said that Judge Kevin Gross, in Wilmington, Delaware, confirmed the Joint Chapter 11 Plan of Liquidation for Midway Games Inc. at a hearing held on May 21. Pursuant to the Plan, the Midway Liquidating Trust is being established to complete the liquidation and distribute proceeds to creditors. Buchwald Capital Advisors LLC is the Liquidating Trustee for the Trust. According to the Disclosure Statement, unsecured creditors of the parent stand to recover 16.5%. Unsecured creditors of subsidiaries should see 25%. Midway sold assets to generate $43 million cash, leaving no substantial secured claims unpaid. A copy of the Plan of Liquidation is available for free at: http://bankrupt.com/misc/Midway_POR_Entered_052110.pdf A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Midway_DS_032610.pdf A copy of the Confirmation Order is available for free at: http://bankrupt.com/misc/Midway_ConfirmationOrder.pdf About Midway Games Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink Sheets: MWYGQ) -- http://www.midway.com/-- was a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink Sheets: MWYGQ) -- http://www.midway.com/-- was a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington, Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty, Esq., at Blank Rome LLP, in New York, represent the Debtors in their restructuring efforts. Attorneys at Milbank, Tweed, Hadley & McCloy LLP and Richards, Layton & Finger, P.A. represent the official committee of unsecured creditors as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and balloting agent. On July 10, 2009, Midway and certain of its U.S. subsidiaries completed the sale of substantially all of their assets to Warner Bros. Entertainment Inc. in a sale approved by the Court. The aggregate gross purchase price was roughly $49 million, including the assumption of certain liabilities. Midway is disposing of its remaining assets. At June 30, 2009, the Debtors reported $1.39 billion in assets and $1.59 billion in liabilities. The Debtors' project that unsecured creditors will recover between 16.5% and 25% on account of their prepetition claims under the Company's Chapter 11 plan of liquidation. MIT HOLDING: Posts $201,510 Net Loss in March 31 Quarter -------------------------------------------------------- MIT Holding, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $201,510 on $1,677,136 of revenue for the three months ended March 31, 2010, compared with net income of $188,126 on $1,572,401 of revenue for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $1,117,607 in assets and $3,653,738 of liabilities, for a stockholders' deficiency of $2,536,131. Michael T. Studer CPA P.C., in Freeport, N.Y., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditor noted of the Company's inability to achieve sufficient collections on its revenues. "The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business." At March 31, 2010, the Company had negative working capital of $1,880,859. From inception, the Company has incurred a net loss of $8,807,545. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?62f5 Savannah, Ga.-based MIT Holding, Inc. (OTC BB: MITD.OB) -- http://www.mitholdinginc.com/-- through its wholly-owned subsidiaries, distributes wholesale pharmaceuticals, administers intravenous infusions, operates an ambulatory center where therapies are administered and sells and rents home medical equipment. MOUNTAIN RESORT: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Mountain Resort Properties, LLC, filed with the U.S. Bankruptcy Court for the District of Colorado its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,075,000 B. Personal Property $443,745 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $5,900,000 E. Creditors Holding Unsecured Priority Claims $40,207 F. Creditors Holding Unsecured Non-priority Claims $78,000 ----------- ----------- TOTAL $10,518,745 $6,018,207 San Diego, California-based Mountain Resort Properties, LLC, filed for Chapter 11 bankruptcy protection on April 5, 2010 (Bankr. D. Colo. Case No. 10-17709). The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. MOUNTAIN RESORT: U.S. Trustee Unable to Form Creditors Committee ---------------------------------------------------------------- Charles F. McVay, the U.S. Trustee for Region 19, notified the U.S. Bankruptcy Court for the District of Colorado that he was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Mountain Resort Properties, LLC. Mr. McVay explained that there were insufficient indications of willingness from the unsecured creditors to serve in the committee. San Diego, California-based Mountain Resort Properties, LLC, filed for Chapter 11 bankruptcy protection on April 5, 2010 (Bankr. D. Colo. Case No. 10-17709). The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. NEFF CORP: Disclosures Statement Hearing Set for July 12 -------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Neff Corp. scheduled a July 12 hearing for approval of the disclosure statement explaining its reorganization plan that was filed together with the bankruptcy petition. The plan would reduce debt by more than $400 million while giving most of the new equity to first-lien lenders owed $90 million on a term loan. Privately held Neff Corp., doing business as Neff Rental, provides construction companies, golf course developers, industrial plants, the oil industry, and governments with reliable and quality equipment that is delivered on time where it is needed. With more than 1,000 employees operating from branches coast to coast, Neff Rental is ranked by Rental Equipment Register (RER) magazine as one of the nation's 10 largest equipment rental companies. Neff Corp. and its units, including Neff Rental Inc. filed for Chapter 11 on May 17, 2010 (Bankr. S.D.N.Y. Case No. 10-12610). Based in Miami, Neff has assets of $299 million and debt of $609 million, according to the disclosure statement explaining the plan. Funded debt totals $580 million. Revenue in 2009 was $192 million. NEW YORK RACING: To Lay Off 1,400 Employees by June 9 ----------------------------------------------------- The Associated Press reports that New York Racing Association notified 1,400 workers that it might have to close the Belmont, Aqueduct and Saratoga tracks after the Belmont Stakes, which ends July 18, 2010. Employees could face layoffs as early as June 9, 2010, if it closed down, AP notes. According to AP, Gov. David Paterson said Tuesday he expects the Legislature to approve a loan of $15 million to $25 million to keep NYRA operating until it gets a share of revenue from video slot machines planned for Aqueduct. About NYRA Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The Company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represented the Debtor in its restructuring efforts. The Garden City Group Inc. served as the Debtor's claims and noticing agent. The U.S. Trustee for Region 2 appointed an Official Committee of Unsecured Creditors. Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represented the Committee. When the Debtor sought protection from its creditors, it listed assets of $153 million and debts of $310 million. NORTEL NETWORKS: Solicits Bids for Patent Portfolio --------------------------------------------------- Nortel Networks Corp. is soliciting bids for its patent portfolio while still determining whether to sell the patents or to retain ownership and monetize them through a licensing program, The Wall Street Journal reports. Nortel's patent portfolio reportedly consists of about 4,000 issued patents worldwide. The solicitation of bids is aimed at determining how much the patents might fetch in a sale. Nortel, however, will push for a licensing strategy if it does not get much interest, WSJ relates, citing people familiar with the matter. Nortel reportedly requires interested parties to sign what is being described as a very strict non-disclosure agreement. Nortel has not divulged any purchase price for the patent assets. According to market talk, however, the company is seeking as much as US$1 billion, WSJ reports. Nortel's intellectual property portfolio has elicited much interest partly because it includes patents believed to be essential to the long term evolution (LTE) cellular-network standard, which most carriers plan to adopt so a company that gains possession of essential LTE patents could demand license fees from rivals or defend itself against infringement claims, according to the report. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: To Sell CALA GSM Business to Ericsson ------------------------------------------------------ Nortel Networks Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to sell the remaining assets of their Global System for Mobile and GSM for Railways business. Nortel plans to sell the GSM/GSM-R assets in the Caribbean and Latin region to Telefonaktiebolaget LM Ericsson for $2 million. The assets include contracts with Nortel Networks (CALA) Inc., and inventory owned by Nortel CALA and other Nortel units in the region. Cash and cash equivalents, accounts receivable, bank account balances and petty cash are excluded from the sale block. Sweden-based Ericsson bought Nortel's GSM/GSM-R business in North America in late March 2010, but did not take over Nortel contracts and other assets in the Caribbean and Latin American region at that time. Under the deal, Ericsson agreed to acquire the remaining GSM/GSM-R assets in the CALA region for a base purchase price of $2 million; take over contracts, including customer agreements; and assume liabilities under those contracts. Some workers at NN CALA and other Nortel units in the region will be offered jobs at Ericsson as part of the deal. The sale is subject to approvals from the U.S. Bankruptcy Court and the Ontario Superior Court of Justice, which oversees the case of Canada-based Nortel Networks Ltd., NNI's parent company. NNL and its four affiliates in Canada have already filed a motion with the Canadian Court, seeking approval of the proposed sale of the remaining GSM/GSM-R assets. The Nortel CALA-Ericsson deal is formalized in a 75-page agreement, a copy of which is available without charge at: http://bankrupt.com/misc/Nortel_GSMCALAAgreement1.pdf http://bankrupt.com/misc/Nortel_GSMCALAAgreement2.pdf NNI's attorney, Andrew Remming, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, says the Debtors will not solicit bids for the sale of any part of the remaining GSM/GSM-R business under the deal. The Debtors already engaged in an extensive marketing of the remaining GSM assets and there is risk that their value would deteriorate if further marketing is pursued, he avers. Ernst & Young Inc., the firm appointed to monitor the assets of NNL and its Canadian affiliates, has recommended the approval of the proposed sale. In its 45th monitor report, E&Y says the proposed sale represents the best deal for the assets and that Nortel's efforts to market the assets provided a "reasonable mechanism" to determine their market value. The proposed sale, however, drew flak from Motorola Inc. and SNMP Research International Inc., both of which have existing agreements with Nortel. In a statement filed with the Bankruptcy Court, Motorola says it will not allow the assumption and assignment of its supply agreements unless Ericsson ensures that Motorola's confidential and proprietary information is protected. Meanwhile, SNMP seeks clarification from the Debtors and Ericsson if its license agreement with Nortel Networks Corp. is included in the sale. The Bankruptcy Court is set to consider approval of the proposed sale on May 24, 2010. NNI, et al., Ask Courts to Approve Side Agreement In a related development, the Debtors ask the U.S. Court and the Canadian Court to approve a side agreement with Ericsson and Kapsch CarrierCom AG in connection with the March 2010 sale of their GSM/GSM-R business. The Side Agreement requires Nortel to observe proper consultation and notification prior to amending any provision of right under the respective sale agreements. It also contains terms governing the collection and allocation of the sale proceeds, indemnification of the distribution and escrow agents, among other things. A full-text copy of the GSM Business Side Agreement is available for free at http://bankrupt.com/misc/Nortel_GSMSideAgreement.pdf Kapsch is the buyer of Nortel's GSM assets in Taiwan, Europe, Middle East and Africa, and the global assets of the GSM-R business. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Seeks Nod of Genband Side Agreement ---------------------------------------------------- Nortel Networks Inc. and its affiliates asked the U.S. Bankruptcy Court for the District of Delaware to approve a side agreement in connection with the sale of their Carrier VoIP and Application Solutions business to Genband Inc. Nortel hammered out the Side Agreement to facilitate the completion of the Carrier VOIP sale transaction. The Agreement specifically requires Nortel to observe proper consultation and notification prior to amending any provision of right under the respective sale agreements, facilitate the process for obtaining regulatory approval, and defend the sale from governmental actions, among other things. The Side Agreement also contains terms governing the allocation of the sale proceeds and any plan to terminate or amend the Agreement. A full-text copy of the Carrier VOIP Side Agreement is available for free at http://bankrupt.com/misc/Nortel_CVASSideAgreement.pdf The Court will consider approval of the Side Agreement at a May 24, 2010 hearing. In a related development, Nortel notified the Bankruptcy Court of its intention to assume and assign executory contracts to Genband as part of the sale of the CVAS business. Nortel did not provide a list identifying the contracts but said that it will provide a schedule to each party whom it executed the contracts with. Some of those agreements are customer contracts, which Genband elected to be assigned to Genband Ireland Ltd. The assumption and assignment of the contracts will take effect upon the closing of the sale. Meanwhile, Nortel Networks Corporation and its Canadian affiliates that filed for creditor protection asked for the Ontario Superior Court of Justice's approval to execute a distribution escrow agreement in connection with the sale of the CVAS business. The agreement contemplates that the proceeds from the sale will be deposited in an escrow account. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Releases 2010 First Quarter Results ---------------------------------------------------- Nortel Networks Corporation announced its results for the first quarter 2010. Results were prepared in accordance with United States generally accepted accounting principles (GAAP) in U.S. dollars. As previously announced, Nortel accounts for the results of the Europe, Middle East and Africa ( EMEA) subsidiaries, and entities they control (Equity Investees), by the equity method of accounting in its consolidated results. The equity method of accounting results in the financial position and results of operations of the Equity Investees being presented net on a single line in the balance sheet and statement of operations, respectively, versus being combined gross into each individual line item. All periods in this release are presented using the equity method of accounting as described above. The Enterprise Solutions (ES) business as well as the Nortel Government Solutions (NGS) and DiamondWare businesses are presented as discontinued operations for the periods presented. The ES business for the first quarter was comprised of the residual contracts not transferred to Avaya. The Code Division Multiple Access (CDMA), and Optical Networking and Carrier Ethernet, and Global System for Mobile communications (GSM)/GSM for Railways (GSM-R) businesses did not qualify for treatment as discontinued operations and as a result are included in continuing operations. The CDMA business for the first quarter was comprised of the residual contracts not transferred to Ericsson. Except in the Segment Revenues section, the discussion below relates to Results from Continuing Operations under U.S. GAAP and excludes the financial results of the Equity Investees. Consistent with the way we manage our business segments, the financial information in the Segment Revenues section includes the results of the Equity Investees within each segment. Therefore, in order to reconcile the financial information for the business segments discussed below to our consolidated financial information, the net financial results of the Equity Investees must be removed. Financial Summary Nortel's overall financial performance in the first quarter of 2010 was impacted by the sale of the CDMA, LTE Access and ES, NGS and DiamondWare businesses. * Revenues in the first quarter of $484 million, with declines year over year in all segments and in all regions. These revenues excluded first quarter revenues related to Equity Investees of $180 million and $10 million related to discontinued operations. * Gross margin of 27.5 percent in the first quarter, a decrease of 13.8 percentage points from the year ago quarter. * SG&A expense in the first quarter of $184 million, a decrease of 21.0 percent from the year ago quarter. SG&A expense in the first quarter excluded $70 million related to Equity Investees. * R&D expense in the first quarter of $96 million, a decrease of 58.3 percent from the year ago quarter. R&D expense in the first quarter excluded $7 million related to Equity Investees. * Cash balance as of March 31, 2010 was $1.9 billion and excluded Equity Investees cash of $788 million. The consolidated cash balance decreased slightly from the December 31, 2009 consolidated cash balance of $2.0 billion, which excluded Equity Investees cash of $815 million. Segment Revenues The financial information for our business segments includes the results of the Equity Investees as if they were consolidated, which is consistent with the way we manage our business segments, but does not include the results of discontinued operations. As a result of the divestitures of the CDMA/LTE Access and ES businesses in the fourth quarter of 2009, beginning in the first quarter of 2010, only the residual contracts related to those businesses are included in the respective reportable segments. Beginning in the second quarter of 2010, as a result of the divestitures of the Optical Networking and Carrier Ethernet and GSM/GSM-R businesses in the first quarter of 2010, only the residual contracts related to those businesses will remain in the respective reportable segments. The MEN reportable segment will also include the multiservice switching products and related services (MSS) business. The CVAS and LGN reportable segments will continue. Segment revenues from continuing operations were $662 million in the first quarter of 2010 compared to $1.3 billion for the first quarter of 2009, reflecting a reduction of 48.6% percent due to declines across all business segments. The reduction was primarily a result of the divestitures of the CDMA/LTE Access and ES businesses in the fourth quarter of 2009. Segment Revenues B/(W) Q1 2010 YoY ------- ----- Wireless Networks $168 (70%) Carrier VoIP and Appl. Solutions 154 (9%) Metro Ethernet Networks 216 (40%) LGN 122 (35%) Other 4 75% ------- ----- Total Segment Revenues from Continuing Operations $664 (48%) Discontinued Operations $10 (98%) Discontinued operations Includes revenues related to the discontinued operations of Equity Investees. WN revenues in the first quarter of 2010 were $168 million, a decrease of 70 percent compared with the year ago quarter with declines in all businesses. CDMA solutions revenues were significantly impacted by the divestiture of the CDMA business in the fourth quarter of 2009. CVAS revenues in the first quarter of 2010 were $154 million, a decrease of 9 percent compared with the year ago quarter primarily due to lower sales volumes from certain customers, partially offset by favorable foreign exchange fluctuations and an increase in services contracts in the first quarter of 2010. Metro Ethernet Networks (MEN) revenues in the first quarter of 2010 were $216 million, a decrease of 40 percent compared with the year ago quarter. Revenues were impacted by the divestiture of the Optical Networking and Carrier Ethernet business in the first quarter of 2010 and certain projects in the first quarter of 2009 that did not repeat to the same extent in 2010. LG-Nortel Co. Ltd. (LGN) revenues in the first quarter of 2010 were $122 million, a decrease of 35 percent compared with the year ago quarter. The year over year decline was primarily in LGN Carrier, mainly due to higher sales volumes related to our 3G wireless products in the first quarter of 2009 not repeated to the same extent in 2010. Discontinued operations revenues in the first quarter of 2010 were $10 million, a decrease of 98 percent compared with the year ago quarter as a result of the divesture of the ES, NGS and DiamondWare businesses in the fourth quarter of 2009. Gross Margin Gross margin was 27.5 percent of revenues in the first quarter of 2010. This compared to gross margin of 41.3 percent for the first quarter of 2009. This decrease was primarily a result of the divestiture of the CDMA/LTE Access business in the fourth quarter of 2009 and the unfavorable impacts of inventory provisions and warranty costs, partially offset by favorable foreign exchange fluctuations. Operating Expenses Operating Expenses B/(W) Q1 2010 YoY ------- ----- SG&A $184 21% R&D 96 58% ------- ----- Total Operating Expenses $280 40% A focus on reducing costs, and the divestiture of the CDMA/LTE Access and ES businesses in the fourth quarter of 2009, resulted in lower operating expenses compared to the year ago quarter. Operating expenses were $280 million in the first quarter of 2010 compared to $463 million for the first quarter of 2009. SG&A expenses were $184 million in the first quarter of 2010, compared to $233 million for the first quarter of 2009. SG&A expenses excluded $70 million in the first quarter of 2010 and $132 million in the first quarter of 2009 related to Equity Investees. R&D expenses were $96 million in the first quarter of 2010, compared to $230 million for the first quarter of 2009. R&D expenses excluded $7 million in the first quarter of 2010 and $27 million in the first quarter of 2009 related to Equity Investees. Net Earnings The Company reported net earnings in the first quarter of 2010 of $355 million compared to a net loss of $507 million in the first quarter of 2009. The net earnings in the first quarter of 2010 of $355 million included reorganization items of $497 million primarily related to the gains on the divestitures of the Optical Networking and Carrier Ethernet assets to Ciena of $549 million and the GSM/GSM-R assets to Ericsson and Kapsch of $93 million, other operating income of $60 million comprised primarily of billings under transaction services agreements and other income of $61 comprised primarily of a currency exchange gain of $44 million, partially offset by interest expense of $75 million and $12 million in income tax expense. The net loss in the first quarter of 2009 of $507 million included a loss from discontinued operations of $197 million, $122 million equity in net loss of Equity Investees, interest expense of $76 million, other expense -- net of $55 million comprised primarily of a loss of $46 million due to changes in foreign exchange rates, and a loss of $22 million due to income attributable to non-controlling interests. Cash Consolidated cash balance as of March 31, 2010 was $1.9 billion and excluded Equity Investees;' cash of $788 million and restricted cash of $2.7 billion related to the divestiture proceeds. The consolidated cash balance decreased slightly from the December 31, 2009 consolidated cash balance of $2.0 billion, which excluded Equity Investees cash of $815 million. The decrease in the consolidated cash balance was primarily due to cash used in operating activities of $76 million, the reduction of cash and cash equivalents of deconsolidated entities of $24, cash used in financing activities of $13 million primarily related to dividends paid by subsidiaries to non controlling interests, partially offset by cash from investing activities of $27 million, which included proceeds from sales of businesses largely offset by proceeds from those sales recorded as restricted cash, and a net favorable foreign exchange impact of $13 million. As previously announced, Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests. A full-text copy of Nortel Networks' First Quarter 2010 Financial Results filed in Form 10-Q with the U.S. Securities and Exchange Commission is available at http://researcharchives.com/t/s?6272 NORTEL NETWORKS CORPORATION Unaudited Condensed Consolidated Balance Sheets As of March 31, 2010 ASSETS Current assets Cash and cash equivalents $1,925,000,000 Short-term investments - Restricted cash and cash equivalents 95,000,000 Accounts receivable - net 486,000,000 Inventories - net 144,000,000 Deferred income taxes - net 15,000,000 Other current assets 272,000,000 Assets held for sale 117,000,000 Assets of discontinued operations 47,000,000 --------------- Total current assets 3,101,000,000 Restricted cash 2,695,000,000 Investments 118,000,000 Plant and equipment - net 548,000,000 Goodwill 10,000,000 Intangible assets - net 48,000,000 Deferred income taxes - net 14,000,000 Other assets 222,000,000 --------------- Total assets $6,756,000,000 =============== LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities Trade and other accounts payable $179,000,000 Payroll and benefit-related liabilities 154,000,000 Contractual liabilities 95,000,000 Restructuring liabilities 4,000,000 Other accrued liabilities 489,000,000 Liabilities held for sale 112,000,000 Liabilities of discontinued operations 46,000,000 --------------- Total current liabilities 1,079,000,000 Long-term liabilities Long-term debt 41,000,000 Investment in net liabilities of Equity Investees 514,000,000 Deferred income taxes - net 7,000,000 Other liabilities 156,000,000 --------------- Total long-term liabilities 718,000,000 Liabilities subject to compromise 7,565,000,000 Liabilities subject to compromise of discontinued operations 116,000,000 --------------- Total liabilities 9,478,000,000 SHAREHOLDERS' DEFICIT Common shares, without par value - Authorized shares: unlimited; Issued and outstanding shares: 498,206,366 as of March 31, 2010 and December 31, 2009 Respectively 35,604,000,000 Additional paid-in capital 3,623,000,000 Accumulated deficit (41,522,000,000) Accumulated other comprehensive loss (1,167,000,000) --------------- Total Nortel Networks Corporation shareholders' deficit (3,462,000,000) --------------- Noncontrolling interests 740,000,000 --------------- Total shareholders' deficit (2,722,000,000) --------------- Total liabilities and shareholders' deficit $6,756,000,000 =============== NORTEL NETWORKS CORPORATION Unaudited Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2010 Revenues: Products $408,000,000 Services 76,000,000 --------------- Total revenues 484,000,000 Cost of revenues: Products 325,000,000 Services 26,000,000 --------------- Total cost of revenues 351,000,000 --------------- Gross profit 133,000,000 Selling, general and administrative expense 184,000,000 Research and development expense 96,000,000 Amortization of intangible assets 4,000,000 Loss on sales of businesses and sales and impairments of assets 2,000,000 Other operating income - net (60,000,000) --------------- Operating loss (93,000,000) Other income (expense) - net 61,000,000 Interest expense (contractual interest expense for the three months ended March 31, 2010 was $78,000,000) Long-term debt (75,000,000) Other - --------------- Loss from continuing operations before reorganization items, income taxes and equity in net loss of associated companies and Equity Investees (107,000,000) Reorganization items - net 497,000,000 --------------- Earnings (loss) from continuing operations before income taxes, and equity in net loss of associated companies and Equity Investees 390,000,000 Income tax expense (12,000,000) --------------- Earnings (loss) from continuing operations before equity in net loss of associated companies and Equity Investees 378,000,000 Equity in net loss of associated companies - net of tax (1,000,000) Equity in net loss of Equity Investees (20,000,000) --------------- Net earnings (loss) from continuing operations 357,000,000 Net loss from discontinued operations - net of tax - --------------- Net earnings (loss) 357,000,000 --------------- Income attributable to non-controlling interests (2,000,000) --------------- Net earnings (loss) attributable to Nortel Networks Corporation $355,000,000 =============== NORTEL NETWORKS CORPORATION Unaudited Condensed Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2010 Cash flows from (used in) operating activities: Net earnings (loss) attributable to Nortel Networks Corporation $355,000,000 Net (earnings) loss from discontinued operations - net of tax - Adjustments to reconcile net earnings (loss) from continuing operations to net cash from (used in) operating activities, net of effects from acquisitions and divestitures of businesses: Amortization and depreciation 29,000,000 Non-cash portion of cost reduction activities - Equity in net loss of associated companies, net of tax 1,000,000 Equity in net loss of Equity Investees 20,000,000 Share-based compensation expense - Deferred income taxes 5,000,000 Pension and other accruals 30,000,000 Loss on sales of businesses and impairments of assets - net 2,000,000 Income attributable to non-controlling interests - net of tax 2,000,000 Reorganization items - non cash (530,000,000) Other - net 53,000,000 Change in operating assets and liabilities: Other (18,000,000) --------------- Net cash from (used in) operating activities - continuing operations (51,000,000) Net cash from (used in) operating activities - discontinued operations (25,000,000) --------------- Net cash from (used in) operating activities (76,000,000) Cash flows from (used in) investing activities: Expenditures for plant and equipment (7,000,000) Proceeds on disposals of plant and equipment - Change in restricted cash & cash equivalents (770,000,000) Decrease in short and long-term investments 24,000,000 Acquisitions of investments and businesses net of cash acquired 1,000,000 Proceeds from the sales of investments and businesses and assets - net 754,000,000 --------------- Net cash from (used in) investing activities - continuing operations 2,000,000 Net cash from (used in) investing activities - discontinued operations 25,000,000 --------------- Net cash from (used in) investing activities 27,000,000 Cash flows from (used in) financing activities: Dividends paid, including paid by subsidiaries to non-controlling interests (11,000,000) Increase in notes payable 9,000,000 Decrease in notes payable (9,000,000) Repayments of capital leases (2,000,000) --------------- Net cash used in financing activities - continuing operations (13,000,000) Net cash used in financing activities - discontinued operations - --------------- Net cash used in financing activities (13,000,000) Effect of foreign exchange rate changes on cash and cash equivalents 13,000,000 Reduction of cash and cash equivalents of deconsolidated subsidiaries (24,000,000) --------------- Net cash from (used in) continuing operations (73,000,000) Net cash from (used in) discontinued operations - --------------- Net increase (decrease) in cash and cash equivalents (73,000,000) Cash and cash equivalents at beginning of the period 1,998,000,000 Less cash and cash equivalents of Equity Investees - --------------- Adjusted cash and cash equivalents, beginning 1,998,000,000 --------------- Cash and cash equivalents, end 1,925,000,000 Less cash and cash equivalents of discontinued operations, end - --------------- Cash and cash equivalents of continuing operations, end $1,925,000,000 =============== About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NOWAUTO GROUP: Posts $391,415 Net Loss for March 31 Quarter ----------------------------------------------------------- NowAuto Group Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $391,415 on $1.2 million of total revenue for the three months ended March 31, 2010, compared with a net loss of $501,615 on $1.3 million of total revenue during the same period a year ago. The Company's balance sheet at March 31, 2010, showed $4.6 million in total assets and $12.5 million in total liabilities, for a total stockholders' deficit of $7.8 million. The Company said general economic conditions had an increased impact on auto purchasing during the March quarter. While Charge- offs and defaults increased over the prior quarter, year-to-date is still less than the prior year as a result of increased credit criteria, improved contract management and system upgrades. The Company began implementing a new financing program during the quarter that is expected to result in even stronger contracts, however it will take some time before the impact is realized. Net investment increased 24% over the past nine months. "The present condition of the sub-prime and below sub-prime auto market has continued to impact our industry and our company" said CEO Scott Miller. "Our challenge has been, and will continue to be on, collections. Our challenge in the current environment is to aggressively work with our customers to maintain active contracts. We expect a difficult environment for the foreseeable future. Our commitment to customers and shareholders alike remains; NowAuto will do whatever it can to maintain productive contracts without placing imprudent demands on our customers," Mr. Miller said. "We continue to seek new ways to meet these challenging times," said Chief Financial Officer Faith Forbis. "Progress has been made in many areas as we strive for a better performance," said Ms. Forbis. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6307 NowAuto Group, Inc., operates three buy-here-pay-here used vehicle dealerships in Arizona. The Company manages all of its installment finance contracts and purchases installment finance contracts from a select number of other independent used vehicle dealerships. O&G LEASING: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: O&G Leasing, LLC 125 South Congress St. Suite 1610 Jackson, MS 39201 Bankruptcy Case No.: 10-01851 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Neil P. Olack Debtor's Counsel: Douglas C. Noble, Esq. McCraney Montagnet & Quin, PLLC 602 Steed Road Suite 200 Ridgeland, MS 39157 Tel: (601) 707-5725 Fax: (601) 510-2939 E-mail: dnoble@mmqlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Ben A. Turnage, sole manager. The Debtor did not file its list of largest unsecured creditors when it filed its petition. OMEGA INC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Omega, Inc. 16710 Lake Shore Rd New Buffalo, MI 49117 Bankruptcy Case No.: 10-06483 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: James D. Gregg Debtor's Counsel: Steven L. Rayman, Esq. Rayman & Stone 141 E Michigan Avenue, Ste 301 Kalamazoo, MI 49007 Tel: (269) 345-5156 E-mail: courtmail@raymanstone.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Bret L. Sobecki, president. OTTER TAIL: Court Denies Plan Exclusivity Extension --------------------------------------------------- The Hon. Dennis D. O'Brien of the U.S. Bankruptcy Court for the District of Minnesota denied Otter Tail AG Enterprises, LLC's motion for a June 27, 2010, extension in its exclusive solicitation period for the proposed Plan of Reorganization. The U.S. Bank National Association as indenture trustee for the holders of the Otter Tail County, Minnesota Subordinate Exempt Facility Revenue Bonds, Series 2007, together with an ad hoc group holding a majority of the principal amount of these bonds; and the County of Otter Tail, Minnesota, objected to the Debtor's request for an extension to seek acceptances of the Plan. The Debtor's solicitation period expired on April 28, 2010. Based in Fergus Falls, Minnesota, Otter Tail AG Enterprises, LLC -- http://www.ottertailethanol.com/-- owns and operates a nameplate capacity 55 million gallon annual production plant of undenatured ethanol in Fergus Falls, Minnesota. The Company processes approximately 20 million bushels of corn into approximately 55 million gallons of ethanol each year. In addition, the Company sells distillers grains, a principal co- product of the ethanol production process. The Company filed for Chapter 11 relief on Oct. 30 (Bankr. D. Minn. Case No. 09-61250). The petition listed assets of $66.4 million against $86 million in debt, nearly all secured. The largest secured creditor is AgStar Financial Services, owed $40.9 million. PACIFIC STATE BANCORP: Posts $2.3 Million Net Loss in Q1 2010 ------------------------------------------------------------- Pacific State Bancorp filed its quarterly report on Form 10-Q, showing a net loss of $2.3 million on $2.6 million of net interest income (before provision for loan losses) for the three months ended March 31, 2010, compared with a net loss of $294,000 on $3.3 million of net interest income (before provision for loan losses) for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $322.5 million in assets, $319.2 million of liabilities, and $3.3 million of stockholders' equity. At March 31, 2010, the Company had net loans receivable of $233.2 million ($245.8 million at December 31, 2009) and deposit liabilities of $287.8 million ($322.4 million at December 31, 2009). As reported in the Troubled Company Reporter on April 21, 2010, Perry-Smith LLP, in San Francisco, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company and its subsidiary Pacific State Bank have agreed with their primary banking regulators to restrictions on certain operations and submission of a capital plan, among other things. The capital plans for the Company have not yet been accepted by their primary banking regulators. Failure to increase capital and a related decline on their capital ratios could expose the Company and the Bank to additional restrictions and regulatory actions, including being placed into a FDIC-administered receivership or conversatorship. In March, 2010, the State of California Department of Financial Institutions presented the Bank with a proposed cease and desist order requiring the Bank to raise capital and, on April 15, 2010, the Bank executed a Waiver and Consent to the Order of the CDFI. The Consent requires the Bank, within 90 days of the effective date of the Order, either to increase and to maintain tangible capital at a level equal to 10% of total tangible assets or merge with a depository institution to sell to an acquirer acceptable to the CDFI. The effective date was the date that the CDFI executed the Order which was May 3, 2010. As of March 31, 2010, the Bank had a ratio of tangible capital to assets of 3.7%, which was not sufficient to meet the higher level that the Bank would be obligated to maintain under the Consent. As a result, if by August 1, 2010, the Bank cannot comply with the Consent provisions, the Bank may be subject to further supervisory action, which could have a material adverse effect on its results of operations, financial condition and business. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?62f4 Stockton, Calif.-based Pacific State Bancorp (NASDAQ CM: PSBC) is a holding company with one bank subsidiary, Pacific State Bank, and two unconsolidated subsidiary grantor trusts, Pacific State Statutory Trusts II and III. Pacific State Bank is a California state chartered bank formed November 2, 1987. Pacific State Statutory Trusts II and III are unconsolidated, wholly owned statutory business trusts formed in March 2004 and June 2007, respectively for the exclusive purpose of issuing trust preferred securities. Pacific State Bank conducts a general commercial banking business, primarily in the five county regions that comprises Alameda, Calaveras, San Joaquin, Stanislaus and Tuolumne counties. PARKLAND PROPERTIES: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Parkland Properties LLC P.O. Box 2007 Williamsville, NY 14231-2007 Bankruptcy Case No.: 10-12213 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court Western District of New York (Buffalo) Judge: Carl L. Bucki Debtor's Counsel: Arthur G. Baumeister Jr., Esq. Amigone, Sanchez, et al 1300 Main Place Tower 350 Main Street Buffalo, NY 14202 Tel: (716) 852-1300 E-mail: abaumeister@amigonesanchez.com Estimated Assets: $1,000,001 to 10,000,000 Estimated Debts: $500,001 to $1,000,000 According to the schedules, the Company says that assets total $1,400,000 while debts total $931,253 The list of unsecured creditors filed together with its petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of Akron bank account $7,600 46 Main Street overdraft Akron, NY 14001 The petition was signed by Maryann Rizzo, managing member. PERFORMANCE DRILLING: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Performance Drilling Company, LLC 816 North College St. Brandon, MS 39042 Bankruptcy Case No.: 10-01852 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Neil P. Olack Debtor's Counsel: Douglas C. Noble, Esq. McCraney Montagnet & Quin, PLLC 602 Steed Road Suite 200 Ridgeland, MS 39157 Tel: (601) 707-5725 Fax: (601) 510-2939 E-mail: dnoble@mmqlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Ben A. Turnage, sole manager. PERSONALITY HOTELS: Court Converts Case to Chapter 7 Liquidation ---------------------------------------------------------------- The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California converted the Chapter 11 case of Personality Hotels III, LLC, to one under Chapter 7 of the Bankruptcy Code. The Chapter 11 Trustee sought for the conversion of the Debtor's case. The Court also appointed as interim trustee E. Lynn Schoenmann to serve under the blanket bond in place in the District. San Francisco, California-based Personality Hotels III, LLC, owns Hotel Frank and Vertigo Hotel in San Francisco. The Company filed for Chapter 11 bankruptcy protection on March 10, 2010 (Bankr. N.D. Calif. Case No. 10-30804). Edward C. Singer, Esq., at Lemi Group Legal Department, assisted the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. PETTERS AVIATION: Sun Entities Want Case Converted to Chapter 7 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota will consider at a hearing on June 2, 2010, at 9:30 a.m., the motion to convert Petters Aviation, LLC's Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. The hearing will be held at Courtroom 8W, U.S. Courthouse, 300 South Fourth Street, Minneapolis, Minnesota. Objections, if any, are due on May 28, 2010. Sun Minnesota Foreign Holdings, LLC, et al., parties-in-interest, sought for the conversion of the Debtor's case because the Debtor does not intend to rehabilitate its business under Chapter 11. Petters Aviation, LLC, is the owner of 84.4% of the issued and outstanding stock in MN Airline Holdings, Inc., which, in turn, owns 100% o the stock in MN Airlines, LLC dba Sun Country Airlines. Petters Aviation filed its Chapter 11 case on October 6, 2008. Both MN Airline Holdings, and MN Airlines, LLC are debtors-in- possession in Chapter 11 cases pending in the district. Petters Aviation is a wholly owned subsidiary of Thomas Petters, Inc., which is in turn owned 100% by Thomas J. Petters, individually. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the company in 1988. Petters Company, Inc. is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc. and Petters Group Worldwide, LLC, filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08- 45258, respectively). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc. listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC listed debts of not more than $50,000. As reported in the Troubled Company Reporter on Oct. 7, 2008, Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on Oct. 6, 2008 (Lead Case No. 08-45136). Petters Aviation, LLC is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. Polaroid Corp., which was owned by Petters since 2005, filed its second voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). PHAGE BIOTECHNOLOGY: Phage Pharmaceuticals Acquires Firm's Assets ----------------------------------------------------------------- Phage Pharmaceuticals, Inc., a newly formed company, and its parent company have acquired substantially all of the assets of Phage Biotechnology Corp., a debtor-in-possession in proceedings under Chapter 11 of the United States Bankruptcy Code. Coincident with this transaction, Phage Pharmaceuticals has received startup funding from its parent company, New Technologies Holding Pte. Ltd., a limited private company organized under the laws of the Republic of Singapore. Among the assets now part of Phage Pharmaceuticals is a cGMP- certified therapeutic protein manufacturing facility in San Diego, which will serve as headquarters for Phage Pharmaceuticals. This facility makes use of a proprietary production method that improves upon well-established approaches for the manufacture of proteins and results in the production of simple, properly folded therapeutic proteins at high yields. The production method results in lower manufacturing costs with fewer waste by-products and impurities compared with current conventional methods used in the manufacture of similar therapeutics. In addition, Phage Pharmaceuticals has a clinical-stage pipeline of therapeutic protein drug candidates. The management of Phage Pharmaceuticals intends to enter into strategic alliances to develop and commercialize these therapeutic proteins, while retaining manufacturing responsibilities. Management also intends to in-license additional therapeutic protein drug candidates whose manufacturing requirements are consistent with Phage Pharmaceuticals' technology and capabilities. Opportunities to commercialize the use of Phage Pharmaceuticals' technology in the food and agricultural industries, as well as for therapeutic purposes, are also being pursued by management. In connection with this transaction, Phage Pharmaceuticals entered into an agreement for management services with New York City-based BioMed Transition Partners, an affiliate of The Channel Group, LLC. Under this agreement, Robert J. Beckman was appointed CEO of Phage Pharmaceuticals, Allan R. Goldberg, Ph.D. was appointed President, and Philip N. Sussman was appointed Chief Business Officer. Each also was appointed to the company's Board of Directors, and joins current directors Frederic Chanson, Chairman and CEO of Firminvest AG, a Zurich, Switzerland-based investment boutique, who serves as Chairman of Phage Pharmaceuticals, and Richard C. Ritter, founding partner of the Zurich, Switzerland- based law firm of Ritter Attorneys at Law Ltd. "We are delighted to lead the creation of a new, exciting, and potentially ground-breaking biopharmaceutical company, Phage Pharmaceuticals," commented Mr. Beckman. "Initially we will deploy our biotechnology manufacturing expertise to pursue biosimilars, where we see tremendous opportunity to provide quality therapeutic proteins with significant cost savings. Longer term we plan to build upon the company's technology platform to create new products for Phage Pharmaceuticals and others, where our collective management experience and biopharmaceutical network will be of significant benefit." About Phage Biotechnology Phage Biotechnology Corporation (Phage) is a Delaware Corporation, incorporated in 1998 and headquartered in Las Vegas, Nevada. The company has a manufacturing plant in Irvine, California, with research and development laboratories in Kiev, Ukraine. Currently Phage has approximately 75 employees worldwide. The Company was initially formed to manufacture recombinant protein pharmaceuticals as generic drugs. POWER EFFICIENCY: Posts $282,000 Net Loss for March 31 Quarter -------------------------------------------------------------- Power Efficiency Corporation filed its quarterly report Form 10-Q, showing a net loss of $282,368 on $110,030 of revenue during the three months ended March 31, 2010, compared with a net loss of $1.1 million on $47,147 revenues for the same period a year ago. The Company's balance sheet at March 31, 2010, showed $2.5 million in total assets and $1.7 million in total liabilities, for a $758,466 million total stockholders' deficit. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?630f Las Vegas, Nev.-based Power Efficiency Corporation (OTC BB: PEFF) -- http://www.powerefficiency.com/-- is a clean technology company focused on efficiency technologies for electric motors. On February 18, 2010, Power Efficiency signed a global supply agreement with one of the largest manufacturers and service providers of elevators and escalators. The OEM tested and evaluated the Company's product for over a year. The OEM intends to include the Company's products as one of the standard motor control options for new escalators and to offer it as an energy efficiency retrofit upgrade for existing escalators. The OEM produces thousands of new escalators per year out of factories in Europe and Asia and has service contracts for tens of thousands of escalators throughout the world. The Company's balance sheet as of December 31, 2009, showed $2.8 million in assets, $2.0 million of debts, and $801,642 of stockholders' equity. Sobel & Co., LLC, in Livingston, N.J., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, and the Company has experienced a deficiency of cash from operations. PURADYN FILTER: Delays Filing of Quarterly Report on Form 10-Q -------------------------------------------------------------- PuraDyn Filter Technologies Incorporated said it could not file its annual report Form 10-Q for the period ended March 31, 2010, with the Securities and Exchange Commission. About Puradyn Filter Technologies Boynton Beach, Fla.-based Puradyn Filter Technologies Incorporated (OTC BB: PFTI) -- http://www.puradyn.com.-- designs, manufactures, markets and distributes worldwide the puraDYN(R) bypass oil filtration system for use with substantially all internal combustion engines and hydraulic equipment that use lubricating oil. The Company reported a net loss of $2,070,598 on revenue of $1,911,451 for 2009, compared with a net loss of $2,644,547 on $2,695,640 of revenue for 2008. Webb and Company, P.A., in Boynton Beach, Fla., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, its total liabilities exceed its total assets, and it has relied on cash inflows from an institutional investor and current stockholder. RAHAXI INC: Delays Filing on Quarterly Report on Form 10-Q ---------------------------------------------------------- Rahaxi Inc. said it could not file its quarterly report Form 10-Q for the period ended March 31, 2010, on time with the Securities and Exchange Commission. The Company said it is in the process of preparing and reviewing the financial and other information for the report on form 10-Q for the quarter ended March 31, 2010. Rahaxi, Inc., provides payment services and processing. Its principal offices are in Wicklow, Ireland; the Company also has offices in Helsinki, Finland; and Santo Domingo, the Dominican Republic. At December 31, 2009, the Company had total assets of $2,881,216 against total current liabilities of $6,102,244 and long-term portion of notes payable of $887,977; resulting in stockholders' deficit of $4,602,784. The Company believes that anticipated revenues from operations will be insufficient to satisfy its ongoing capital requirements for the next 12 months. RCLC INC: Delays Filing of Quarterly Report on Form 10-Q -------------------------------------------------------- RCLC Inc. said it could not file its annual report its Form 10-Q for the period ended March 31, 2010, with the Securities and Exchange Commission. The Company said it is not yet in a position to estimate the results for the most recently completed quarter ended March 31, 2010. The Company expects that the gain from the disposition of its consumer products business will more than offset losses from continuing and discontinued operations. According to the company, the loss from continuing operations in the first quarter of 2010 will be higher than the first quarter of 2009 due to increased professional fees and reductions in the amounts of expenses allocated to the discontinued operations. The loss from discontinued operations will be higher in the first quarter of 2010 than in the first quarter of 2009. About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. REEL 'EM IN: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Reel 'Em In, LLC 16012 Metcalf Avenue Suite 1 Overland Park, KS 66085 Bankruptcy Case No.: 10-21748 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court District of Kansas (Kansas City) Debtor's Counsel: Neil S. Sader, Esq. The Sader Law Firm, LLC 4739 Belleview Suite 300 Kansas City, MO 64112-1364 Tel: (816) 561-1818 Fax: (816) 561-0818 E-mail: nsader@saderlawfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ksb10-21748.pdf The petition was signed by Brian W. Studdard, managing member. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Black Angus Holdings, LLC 09-21349 04/30/09 Round 'Em Up, LLC 09-21867 06/12/09 RICARDO MARTINEZ: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Ricardo Martinez Brenda C. Martinez aka Brenda Carolina Martinez 224 W. Fernfield Dr., Monterey Park, CA 91754 Bankruptcy Case No.: 10-30668 Chapter 11 Petition Date: May 22, 2010 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Jerry A. Chad, Esq. Law Offices of Jerry A. Chad P.O. Box 358 Topanga, CA 90290 Tel: (310) 739-4616 Fax: (310) 455-3079 E-mail: jerrychadjd@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-30668.pdf The petition was signed by Ricardo Martinez and Brenda C. Martinez. ROBERT VANNUCCI: Case Summary & 14 Largest Unsecured Creditors -------------------------------------------------------------- Joint Debtors: Robert Vannucci Nancy L. Vannucci 6312 San Gagano Avenue Las Vegas, Nv 89131 Bankruptcy Case No.: 10-19357 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: H Stan Johnson, Esq. CJD Law Group, LLC 6293 Dean Martin Drive, Suite. G Las Vegas, NV 89118 Tel: (702) 823-3500 Fax: (702) 823-3400 E-mail: sjohnson@cjdnv.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Joint Debtors' list of 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb10-19357.pdf The petition was signed by the Joint Debtors. SALT ISLAND: Files for Chapter 11 Bankruptcy in Orlando ------------------------------------------------------- Sandra Pedicini at Orlando Sentinel reports that Washington-based restaurant Salt Island Chophouse Fish Market Wave Bar filed for bankruptcy under Chapter 11 in the U.S. Bankruptcy Court in Orlando, listing debts of between $100,000 and $500,000. SANTA CLARA: Wants Access to East West's Cash Until June 2010 ------------------------------------------------------------- Santa Clara Square, LLC, asks the U.S. Bankruptcy Court for the Northern District of California to approve a stipulation authorizing the use of East West Bank's cash collateral until June 2010. Pursuant to the stipulation, the Debtor is authorized to use $7,500 per month for payment of expenses arising in the months of April, May, and June 2010. East West Bank is a secured creditor as the assignee of the FDIC receivership of United Commercial Bank. The cash collateral consists of rental income generated from a multiple commercial spaces located at 3610-3700 El Camino Real East, Santa Clara, California, and are leased to the third parties. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will make $51,484 monthly payments to East West Bank through the date of confirmation. The Debtor is represented by: Lawrence A. Jacobson, Esq. Sean M. Jacobson, Esq. 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 efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SMURFIT-STONE: Reaches Plan Agreement With Stockholders ------------------------------------------------------- Smurfit-Stone Container Corporation has reached a resolution with Mariner Investment Group LLC and Senator Investment Group LP, each an investment advisor to funds under management, as holders of the Company's preferred stock, and funds and accounts managed by P. Schoenfeld Asset Management LP and Fir Tree, Inc., as holders of the Company's common stock, who were prosecuting objections to the Company's Chapter 11 Plan of Reorganization. In general, this resolution provides that certain of the new common stock of the reorganized Company that the plan previously provided for distribution to the general unsecured creditors of the Company will now be distributed to the Company's current stockholders. Specifically, 2.25 percent of the New SSCC Common Stock Pool will be distributed pro rata to the Company's existing preferred stockholders and 2.25 percent of the New SSCC Common Stock Pool will be distributed pro rata to the Company's existing common stockholders. Additionally, the resolution provides for the payment of certain of the fees and expenses of the Holders and their professionals. The resolution has the support of the Official Committee of Unsecured Creditors. "Reaching this agreement with our stockholders is a major milestone for our company and positions us to emerge from bankruptcy in the coming weeks," said Patrick J. Moore, chairman and CEO of Smurfit-Stone. "Our focus has been, and continues to be, driving value for our stakeholders and helping our customers grow their businesses." The Company will ask the United States Bankruptcy Court to approve notice procedures with respect to this resolution and to schedule a hearing to approve the resolution and related non-material modifications to the Company's Chapter 11 Plan of Reorganization. This resolution resolves all of the objections to the confirmation of the Chapter 11 plan raised by the Holders and as a result, the Company anticipates an exit from Chapter 11 by early Summer 2010. 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: Submits Revised Copy of ABL Revolver Document ------------------------------------------------------------ In a regulatory filing with the Securities and Exchange Commission on May 13, 2010, Smurfit-Stone Container Corp. and its units submitted a revised copy of the Senior Secured ABL Revolving Exit Facility. On February 3, 2010, the Company and certain of its affiliates filed a motion with the U.S. Bankruptcy Court seeking approval to enter into a senior secured asset based lending facility with Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., JPMorgan Chase Bank N.A., J.P. Morgan Securities Inc., certain other financial institutions acting, along with DBSI and JP Morgan, as "Lead Arrangers", and certain other financial institutions, together with DB, JPM and the other Lead Arrangers, as the "Agents", as well as other documents relating thereto. On April 14, 2010, the Court granted the motion and authorized the Company and certain of its subsidiaries to enter into the ABL Revolving Facility. Based on such approval, on April 15, 2010, the Company and certain of its subsidiaries entered into the ABL Revolving Facility consisting of a $550 million U.S. Facility and a $100 million Canadian Facility. The ABL Revolving Facility includes a $150 million sub-limit for letters of credit, with $112.5 million allocated to the U.S. Facility and $37.5 million allocated to the Canadian Facility. The Company previously reported on a Form 8-K dated February 22, 2010 that it and certain of its subsidiaries entered into a term loan credit facility. On the date the Company emerges from bankruptcy, the Term Loan Facility will be funded and borrowings will be available on the ABL Revolving Facility. The commitments for the ABL Revolving Facility will terminate on July 16, 2010 unless the Company's emergence from bankruptcy, funding of the Term Loan Facility and satisfaction of certain funding date conditions under the ABL Revolving Facility occur on or prior to such date. A copy of the SEC filing is available for free at: http://tinyurl.com/37bamul 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: Settles Voith Entities' Claims --------------------------------------------- Smurfit-Stone Container Corp. and its units sought and obtained the Bankruptcy Court's authority to compromise certain claims of Voith Paper Fabrics Waycross, Inc.; Voith Paper Rolls South Inc.; Voith Paper Rolls West, Inc.; Voith Paper Fabrics Appleton Inc.; and Voith Paper Fabrics US Sales Inc. Voith provides Debtors Smurfit-Stone Container Enterprises, Inc. and Smurfit-Stone Container Canada Inc. with paper machine clothing and certain other products and services which are used in the Debtors' production process. The prepetition claims filed by the Voith Entities in SSCE's Chapter 11 case are: Administrative Claim No. Unsecured Amount Expense Amount --------- ---------------- -------------- 11038 $41,733 $2,398 11039 267,031 69,436 11040 0 824 11044 152,263 0 11043 231,580 0 11042 2,441,489 755,321 11041 66,987 112,863 In addition, two claims were filed by the Voith Entities against SSC Canada: Administrative Claim No. Unsecured Amount Expense Amount --------- ---------------- -------------- 11233 81,650 41,933 13234 166,490 163,668 On March 1, 2010, SSCE and Voith Paper Fabric & Roll Systems, Inc. entered into a Paper Machine Clothing Supply Agreement and concurrently with the negotiations surrounding the Supply Agreement, the Debtors and the Voith Entities decided to reconcile all open claims by the Voith Entities. The Parties agreed that the Claims will be allowed with these modified amounts: Modified Modified Administrative Claim No. Unsecured Amount Expense Amount --------- ---------------- -------------- 11038 $40,642 $2,317 11039 270,644 65,823 11040 517 307 11042 2,526,489 718,482 11043 115,790 0 Claim Nos. 11041, 11044, 13233 and 13234 will also be allowed and will be treated in accordance with the Debtors' Chapter 11 Plan of Reorganization. The Parties' Agreement was approved by the Court after Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, certified that there were no objections filed as of March 26, 2010. 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 BAY: Proposes Ajalat Polley as Taxation Counsel ----------------------------------------------------- South Bay Expressway and affiliate, California Transportation Ventures Inc., seek the Bankruptcy Court's permission to employ Ajalat, Polley, Ayoob & Matarese as their special taxation counsel, nunc pro tunc to April 21, 2010, in accordance with the terms and conditions set forth in the parties' engagement letter, dated as of April 21, 2010. As special counsel, Ajalat will provide legal advice and representation with respect to certain of the Debtors' San Diego County property tax assessments for tax years 2007 through 2010, to the extent the advice and representation is desired or necessary. All of the services that Ajalat has provided and will provide to the Debtors will be undertaken at the Debtors' request and will be appropriately directed by the Debtors as to avoid duplicative efforts among the professionals retained in their Chapter 11 cases, Anthony G. Evans, the Debtors' chief financial officer, assures Judge Adler. The Debtors will pay Ajalat according to applicable procedures and laws, and consistent with the proposed compensation set forth in the Engagement Letter. Subject to the Court's approval, the Debtors have agreed to pay: (a) hourly fees based on actual time expended at the rate of $350 per hour for partners and $200 per hour for associates; and (b) additional contingent cash fees, payable upon the achievement and consummation of a reduction in tax assessment with respect to: * the base year value, an amount equal to 10% of the savings of tax for the first full fiscal year to which that base year value applies; plus * the 2008 tax year assessment, an amount equal to 10% of the savings of tax resulting from a reduction below the current assessed value; plus * the 2009 tax year assessment, an amount equal to 10% of the savings of tax resulting from a reduction below a $300 million value; plus * the 2010 tax year assessment, an amount equal to 10% of the savings of tax resulting from a reduction below a $300 million value. The Contingent Fees relating to any tax year will be reduced by 50% if it is determined that the property is exempt from taxation for any year. Further, the Contingent Fees plus any Hourly Fees paid to Ajalat for the period beginning September 22, 2008, through June 20, 2010, will be capped at $500,000. The Debtors will also reimburse Ajalat for its reasonable expenses incurred in connection with its retention. Prior to the Petition Date, Mr. Evans discloses, the Debtors paid Ajalat total fees of $65,624. He assures Judge Adler that any portion of the Debtors' prepetition payments to Ajalat that is not applied to prepetition fees and expenses will be detailed in Ajalat's first interim fee application, and that portion will be credited towards fees and expenses incurred by Ajalat after April 21, 2010, as allowed by the Court. Because Ajalat is being retained as special counsel under Section 327(e) of the Bankruptcy Code, Mr. Evans says that Ajalat is not required to be a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. However, Ajalat has informed the Debtors that, except as may be set forth in the declaration by Christopher J. Matarese, a partner at Ajalat, the firm says it does not hold any interest adverse to the Debtors or their bankruptcy estates in the taxation matters for which Ajalat is to be employed. U.S. Trustee Objects Tiffany L. Carroll, the Acting United States Trustee for Region 15, argues that the Application has not stated with any clarity what services Ajalat would be providing to the Debtors other than advice and representation in regard to property tax assessments. She demands that the Application should clearly state the necessity of employment, the services that the Debtors expect Ajalat to perform and the benefit of those services for the bankruptcy estates. She also objects to the arbitration clause in the Application. Ms. Carroll objects to the employment of Ajalat under Section 328 of the Bankruptcy Code, as it hinders the Court's ability to review the reasonableness of fees that would be requested by Ajalat, and would request that Ajalat's employment be subject only to Sections 327 and 330 of the Bankruptcy Code. The Application should clarify how the Debtors are substantiating the reasonableness of the contingency fee structure that Ajalat is proposing, Ms. Carroll also contends. She notes that it may also be helpful to provide an estimate of total expenses based on Ajalat's limited, discrete services. She adds that, among other things, the Application should clarify, as of the Petition Date, what portion of the prepetition fees paid to Ajalat is available for payment of postpetition services. Supplemental Declaration Filed In response to the Objection, Mr. Matarese filed with the Court a supplemental declaration. He contends that Ajalat will provide highly technical property tax legal representation for the Debtors. He asserts that the Debtors' property tax case involves complex legal and appraisal issues. The firm believes that the Debtors' toll road is currently assessed at a higher value than any other property in San Diego County. "If we are successful, the Debtors will receive a refund/offset of property taxes of up to $12 million or more," Mr. Matarese tells the Court. "The Debtors would also receive a lower 'base year value' for the Property, which would result in substantial ongoing future tax savings because the 'base year value' can generally only be increased by a maximum of 2% per annum," he continues. He points out that the savings would obviously be a significant benefit to the estate. Mr. Matarese also asserts that no portion of the Ajalat's prepetition fees remains available for payment of postpetition services. He adds that in an effort to reach agreement with the U.S. Trustee, Ajalat will remove the arbitration provision from its engagement letter. About South Bay Expressway South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10- 04516). Its affiliate, California Transportation Ventures Inc., also filed for bankruptcy. The Debtors developed and operate a four lane, nine mile express toll road in Southern California commonly referred to as the South Bay Expressway or State Road 125. Both estimated assets and debts of $500 million to $1 billion in their bankruptcy petitions. Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring effort. PricewaterhouseCoopers LLP is auditor and tax advisor. Imperial Capital LLC is financial advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The Debtors say that as of the bankruptcy filing, they have roughly $640 million in book value of total assets and roughly $570 million in book value of total liabilities. Bankruptcy Creditors' Service, Inc., publishes South Bay Expressway Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by South Bay Expressway LP and California Transportation Ventures Inc. (http://bankrupt.com/newsstand/or 215/945-7000). SOUTH BAY: Proposes PwC as Tax Advisor and Auditor -------------------------------------------------- South Bay Expressway and affiliate California Transportation Ventures Inc. seek the Bankruptcy Court's authority to employ PricewaterhouseCoopers LLP as their tax advisor and auditor, nunc pro tunc to their Petition Date, and in accordance with the terms and conditions set forth in the parties' two engagement letters: (1) the tax services engagement letter dated as of March 15, 2009; and (2) the audit engagement letter dated as of March 16, 2010. As tax advisor and auditor, PwC will prepare the U.S. Corporation Income Tax Return, Form 1120 for California Transportation Ventures Inc., and the U.S. Partnership Return of Income, Form 1065 for South Bay Expressway, L.P. PwC will also prepare and sign the required state corporate income tax returns. Pursuant to the Engagement Letters, the Debtors will pay PwC: (a) an estimated fixed fee of $33,000 for services provided pursuant to the Tax Engagement Letter; (b) an estimated fixed fee of $100,000 for services provided pursuant to the Audit Engagement Letter; and (c) on an hourly basis for additional services that arise from non-routine events, transactions and activities. PwC's hourly rates for the Additional Services are: Position Rate -------- ---- Partner $525 Managing Director $500 Director $415 Manager $335 Senior Associate $265 Associate $175 The Debtors will also reimburse PwC for any direct expenses incurred in connection with PwC's retention, including customary out-of-pocket expenses. Anthony G. Evans, the Debtors' chief financial officer, says that the PwC professionals providing the Services to the Debtors will consult with internal PwC bankruptcy retention and billing advisors to ensure compliance with the requirements of the Bankruptcy Code, as well as decrease the overall fees associated with the administrative aspects of PwC's engagement. The services provided by the PwC Retention Advisors will include assistance with: -- bankruptcy retention documents; -- disinterestedness disclosures; -- completion of the requisite fee applications; and -- compliance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and any orders of the Court. Due to the specialized nature of their services, specific billing rates have been established for the PwC Retention Advisors, Mr. Evans tells Judge Adler. The hourly rates for the PwC Retention Advisors are: Position Rate -------- ---- Partner $780 Managing Director $675 Director/Senior Manager $550 Manager $400 Senior Associate $290 Associate $225 Paraprofessional $125 - $150 Prior to the Petition Date, the Debtors paid PwC total fees of $30,000 pursuant to the Engagement Letters, Mr. Evans discloses. He notes that any portion of the payments that is not applied to prepetition fees and expenses will be detailed in PwC's first interim fee application, and that portion will be credited towards PwC's postpetition fees and expenses as allowed by the Court. As of the Petition Date, PwC did not hold a prepetition claim against the Debtors for services rendered in connection with the engagement. Steve Embry, a partner at PwC, assures the Court that PwC (i) has no connection with the Debtors, their creditors, or other parties- in-interest, except as disclosed in his declaration, (ii) does not hold any interest adverse to the bankruptcy estates for the matters for which PwC is to be employed, and (iii) is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Among the interested parties that Mr. Embry disclosed as having relationships with PwC are AIG, Banco Bilbao Vizcaya Argentaria - BBVA, Macquarie 125 Holdings Inc., and Macquarie Group. U.S. Trustee Objects Tiffany L. Carroll, the Acting United States Trustee for Region 15, asserts that PwC should provide additional disclosure regarding their present relationship with Macquarie 125 Holdings, Inc., the Debtors' parent. She also seeks clarification on why the Debtors should pay for PwC's fees if the firm is employed by Macquarie. If its fees will be billed at an hourly rate, Ms. Carroll contends that PwC should offer an estimate of the approximate cost for the PwC Retention Advisors' fees and should explain what services those advisors will provide to the Debtors that would benefit the bankruptcy estates. Ms. Carroll also contends, among other things, that PwC should disclose how much of the retainer was used prepetition and was available as of the Petition Date to apply to postpetition services, and that any clauses that would limit liability of professionals should not be part of an employment agreement at the outset of a case. S. Embry Supplements Declaration In his supplemental declaration responding to the Objection, Mr. Embry tells the Court that an initial draft of the Tax Engagement Letter, which was erroneously addressed to Macquarie, was provided to the U.S. Trustee together with the Application, the Original Declaration, and the Audit Engagement Letter. He notes that the final draft of the Tax Engagement Letter was addressed to South Bay. In accordance with the Tax Engagement Letter, he says, the Debtors, rather than Macquarie, will pay for the services PwC provides to the Debtors, and the Debtors, rather than Macquarie, paid or will pay the $25,000 due upon execution of the Engagement Letters. Mr. Embry discloses Macquarie also has retained PwC to provide federal and state income tax preparation services, pursuant to a separate engagement letter, dated March 15, 2010. PwC is providing services for a flat fee of $10,000, including $5,000 that Macquarie paid upon execution of the Macquarie Engagement Letter. The fees to be incurred by PwC Retention Advisors are not included in the fixed fees set forth in the Engagement Letters, Mr. Embry tells Judge Adler. He says that PwC intends to separately bill fees and expenses incurred by PwC Retention Advisors at their hourly rates. He notes that PwC Retention Advisors are accustomed to billing at 1/10 of an hour intervals, and will follow that practice in these cases. Although difficult to estimate, PwC anticipates that its aggregate fees will range from 5% to 20% of the approximately $133,000 of total fees anticipated to be paid by the Debtors in connection with the retention. PwC believes that the fees to be incurred by PwC Retention Advisors will be consistent with amounts approved in similar cases. Pursuant to the Engagement Letters, PwC received total fees of $25,000 in contemplation of commencing the Services pursuant to the Engagement Letters. Although retained prior to the Petition Date, PwC did not accrue any fees prepetition and, to date, has not applied any portion of the amount, Mr. Embry reveals. Accordingly, he says, the full $25,000 is available to apply to postpetition fees and expenses that accrue in PwC's provision of the Services and are approved by the Court. PwC believes that the limited indemnification and limitation of liability provisions set forth in the Engagement Letters are reasonable and permissible under the circumstances, particularly in light of the relatively low fixed-fee payments provided for by the Engagement Letters. About South Bay Expressway South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10- 04516). Its affiliate, California Transportation Ventures Inc., also filed for bankruptcy. The Debtors developed and operate a four lane, nine mile express toll road in Southern California commonly referred to as the South Bay Expressway or State Road 125. Both estimated assets and debts of $500 million to $1 billion in their bankruptcy petitions. Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring effort. PricewaterhouseCoopers LLP is auditor and tax advisor. Imperial Capital LLC is financial advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The Debtors say that as of the bankruptcy filing, they have roughly $640 million in book value of total assets and roughly $570 million in book value of total liabilities. Bankruptcy Creditors' Service, Inc., publishes South Bay Expressway Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by South Bay Expressway LP and California Transportation Ventures Inc. (http://bankrupt.com/newsstand/or 215/945-7000). SOUTH BAY: BBVA Objects to Imperial's Success Fees -------------------------------------------------- Banco Bilbao Vizcaya Argentaria, S.A., as the administrative agent under a Senior Loan Agreement, tells the Bankruptcy Court that it does not object to the employment of Imperial Capital LLC, generally, nor to the payment of the proposed monthly fee to Imperial. South Bay Expressway, L.P., and its affiliate, California Transportation Ventures Inc., seek the Court's authority to employ Imperial Capital, LLC, as their financial advisor, nunc pro tunc to their Petition Date, pursuant to an engagement letter dated as of March 1, 2010. Pursuant to the Engagement Letter, the Debtors propose to pay Imperial: -- a financial advisory fee of $150,000 per month, payable monthly in advance; -- a cash fee payable upon the closing of a restructuring transaction; and -- if the Debtors ask that Imperial undertake a financing in an amount and under terms as may be agreed between the parties, a cash fee, to be paid out of the proceeds of the financing. The Debtors will also reimburse Imperial for its reasonable expenses incurred in connection with its employment. BBVA, however, does object to the Court pre-approving any success fees requested by Imperial without first requiring an inquiry into the reasonableness of those fees and an analysis of the benefit of Imperial's services to the estate prior to awarding the fees under Section 330 of the Bankruptcy Code. The Debtors seek to have Imperial unqualifiedly appointed as financial advisors under Section 328 of the Bankruptcy Code, thereby, eliminating the Court's ability to inquire into the reasonableness of the fees and their benefit to the estate once Imperial's services have been completed, Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, in Los Angeles, California -- jhermann@orrick.com -- asserts. BBVA asks the Court that Imperial either be appointed under Section 327(a) of the Bankruptcy Code, or that the Court instead require that any success fees sought by Imperial be subject to a proper evaluation pursuant to Section 330 after the work has been completed. The employment of Imperial as the Debtors' financial advisor should be qualified as to the proposed pre-approved success fees since the unambiguous approval of a professional's employment agreement under Section 328 prevents a bankruptcy court from conducting a Section 330 inquiry into the reasonableness of fees and the benefits of services provided to the estate, Mr. Hermann further contends. BBVA, therefore, asks the Court to: (a) deny Imperial's appointment as financial advisor under Section 328, and instead appoint Imperial under Section 327(a); (b) deny Imperial an insider transaction fee and any fees in connection with a transaction with the Secured Financing Parties; (c) deny any success fees following the termination or expiration of Imperial's employment; and (d) reserve approval of the Restructuring Transaction Fee, the Transaction Fee and the Financing Fee under Section 330 until the services contemplated for the fees have been completed and the case is concluded. Parties Stipulate The Debtors, counsel for the administrative agent for the Debtors' prepetition secured term loan, and the Office of the United States Trustee agree that the deadline by which the Debtors are to file a response to objections to their application to employ Imperial Capital LLC as financial advisor is extended from May 14, 2010, to June 3, 2010. The Court approved the stipulation. About South Bay Expressway South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10- 04516). Its affiliate, California Transportation Ventures Inc., also filed for bankruptcy. The Debtors developed and operate a four lane, nine mile express toll road in Southern California commonly referred to as the South Bay Expressway or State Road 125. Both estimated assets and debts of $500 million to $1 billion in their bankruptcy petitions. Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring effort. PricewaterhouseCoopers LLP is auditor and tax advisor. Imperial Capital LLC is financial advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The Debtors say that as of the bankruptcy filing, they have roughly $640 million in book value of total assets and roughly $570 million in book value of total liabilities. Bankruptcy Creditors' Service, Inc., publishes South Bay Expressway Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by South Bay Expressway LP and California Transportation Ventures Inc. (http://bankrupt.com/newsstand/or 215/945-7000). SOUTHERN UNITED: A.M. Best Withdraws 'bb-' ICR After Merger ----------------------------------------------------------- A.M. Best Co. has withdrawn the financial strength rating (FSR) of B- (Fair) and issuer credit rating (ICR) of "bb-" of Southern United Fire Insurance Company (Southern United) (Mobile, AL) and assigned a category NR-5 (Not Formally Followed) to the FSR and "nr" to the ICR. These rating actions follow A.M. Best's confirmation that Southern United has been merged into American Service Insurance Company, Inc. (American Service) and no longer exists. American Service is a wholly owned subsidiary of Kingsway America Inc. The ultimate parent of both companies is Kingsway Financial Services Inc., a Canadian holding company whose common shares are listed on the New York and Toronto Stock Exchanges. The FSR of B- (Fair) and ICR of "bb-" for American Service are unchanged by this merger and remain under review with negative implications. SPANSION INC: Acquires Distribution Business From Former Unit ------------------------------------------------------------- Spansion Inc. disclosed that its new Japanese subsidiary, Spansion Nihon Limited, has acquired the distribution business of Spansion Japan, Spansion's former subsidiary. The applications engineering, customer service, marketing, quality and sales functions from Spansion Japan seamlessly transition to Spansion Nihon and will continue to operate from their current Kawasaki location. Leading the new organization is Shinji Suzuki, president of Spansion Nihon, who rejoins Spansion after retiring in July of 2006. "Japan is a strategic market for Spansion Inc. and we are pleased to welcome Shinji Suzuki to lead our organization," said John Kispert, Spansion president and CEO. "With the acquisition complete, Spansion Nihon will be exclusively focused on serving the unique needs of our Japanese customers." Spansion Nihon will continue to serve the Japan market primarily through the Fujitsu sales channel, extending a longstanding partnership between Spansion and Fujitsu that dates back to 2003 when AMD and Fujitsu created Spansion. Spansion Japan, located in Aizu-Wakamatsu, continues to manufacture wafers and provide sort services for Spansion on a foundry basis. "I'm honored to be working with Spansion again and look forward to providing our Japanese customers with the high levels of quality and support they have come to expect from Spansion," said Shinji Suzuki, president, Spansion Nihon. The acquisition of the Spansion Japan distribution business follows a successful corporate reorganization of Spansion Inc., which resulted in the emergence from U.S. Chapter 11 restructuring on May 10, 2010. On February 9, 2009, Spansion Japan voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. During the Chapter 11 process, Spansion separated from Spansion Japan operationally and for financial reporting purposes. As of today, Spansion continues to own the stock of Spansion Japan. Spansion Japan filed its plan of reorganization on April 26, 2010 and continues to work through approval of its plan. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and its affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion had total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Judge Kevin J. Carey confirmed Spansion's Plan of Reorganization on April 16, 2010. A group of holders of Convertible notes and equity in Spansion presented an alternative plan, which would pay senior noteholders in full and has funding commitment of in excess of $425 million, but the plan was rejected. SUMMERFIELD PACKAGING: Case Summary & Creditors List ---------------------------------------------------- Debtor: Summerfield Packaging, Inc. 1148 Vickery Lane Cordova, TN 38016 Bankruptcy Case No.: 10-25549 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court Western District of Tennessee (Memphis) Judge: David S. Kennedy Debtor's Counsel: Jonathan E. Scharff, Esq One Commerce Square, Suite 2700 Memphis, TN 38103-2555 Tel: (901) 525-1455 Fax: (901) 526-4084 E-mail: jscharff@harrisshelton.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company says that assets total $600,066 while debts total $1,783,461 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/tnwb10-25549.pdf The petition was signed by Gordon Summerfield, president. SUN HEALTHCARE: Plans to Separate Operating & Real Property Assets ------------------------------------------------------------------ Sun Healthcare Group, Inc. intends to separate the company into two separate publicly traded companies. One entity will own all of Sun's operating subsidiaries and will continue to use the Sun Healthcare Group name. The other entity will own substantially all of Sun's currently owned real property portfolio and intends to operate as a real estate investment trust under the name Sabra Health Care REIT, Inc. The Operating Company, through its subsidiaries, will continue to provide the same nursing, rehabilitative and related specialty healthcare services as are now provided by Sun and its subsidiaries at its 183 skilled nursing centers, 14 assisted and independent living centers and eight mental health centers. The Operating Company will also manage Sun's rehabilitation therapy, medical staffing services and hospice businesses. The REIT will initially own the real property assets now owned by Sun and will lease those assets to the Operating Company's subsidiaries. The REIT expects to grow through acquisitions as a broad-based healthcare real estate investment trust. As it acquires additional properties, it expects to diversify by geography and tenant within the healthcare sector. William A. Mathies, the president of SunBridge Healthcare Corporation, Sun's inpatient services subsidiary, and the chief operating officer over Sun's operating subsidiaries, will become chief executive officer of the Operating Company. Other than current Sun Chief Executive Officer, Richard K. Matros, the Sun management team will continue as the management team of the Operating Company, including Bryan Shaul continuing as the chief financial officer. The current members of Sun's Board of Directors will become the members of the board of directors of the Operating Company, except that Mr. Matros will be replaced on the board by Mr. Mathies. T he REIT will be led by Mr. Matros, who will become its chairman and chief executive officer. It is expected that the board of directors of the REIT will consist of Mr. Matros, certain members of the existing board of directors of Sun (who will also serve as Operating Company directors) and other directors not affiliated with Sun. It is also anticipated that Harold Andrews, a finance professional who has extensive experience in both the provision of healthcare and healthcare real estate, will be named chief financial officer of the REIT. The separation will be effected through a distribution to Sun stockholders of the common stock of the Operating Company. The issuance of the Operating Company common stock in the spin-off should constitute a taxable distribution to Sun's stockholders. It is expected that the distribution of the Operating Company common stock will also be a taxable transaction to Sun, with Sun recognizing gain to the extent that the fair market value of such stock exceeds Sun's basis in such stock on the date of the spin- off. Sun believes that it will not be subject to a material amount of tax as a result of the spin-off. Mr. Matros, Sun's chairman and chief executive officer, stated, "After considering a number of alternate strategies, our management and board of directors have concluded that separating our real property asset base from our operating assets is in the best interests of our stockholders because it will create two highly-focused companies. The REIT will be in a position to realize the full value of our real estate portfolio and strategically expand it. The Operating Company will have the ability to pursue the same growth strategies that it has today, albeit with significantly less debt on the balance sheet. This separation will enable us to concentrate on building a strong healthcare real property company, as well as continuing to provide quality care to residents and patients through the Operating Company. We expect that the two public companies will each provide a platform that more readily enables stockholders to realize value in their holdings than Sun does today." Mr. Matros continued, "I have known Bill Mathies for 25 years, and he has been my partner since Sun emerged from bankruptcy. He has been a key member of our leadership team and instrumental to our growth, whether organic or through acquisition, and to our overall success. And I am pleased to announce that Harold Andrews has agreed to become chief financial officer of the REIT. I have known Harold for 14 years, working with him when he was vice president-finance for Regency Health Services while I served as chief executive officer, and as a partner in CareMeridian, a privately held healthcare services and real estate holding company. For myself, I once again look forward to another opportunity to build a successful enterprise that I am confident will reward stockholders." Prior to the spin-off, Sun anticipates raising additional capital through an offering of its common stock, and, in connection with the spin-off, each of the Operating Company and the REIT is expected to enter into new credit facilities. Proceeds from the equity and debt financings and cash on hand will be used to repay Sun's outstanding 9.125 percent Senior Subordinated Notes and the outstanding term loans under Sun's existing credit facility. Additionally, in connection with the spin-off transaction, the board of directors announced today that it has adopted a Stockholder Rights Plan to establish an ownership limitation and thereby preserve potential tax benefits for the REIT stockholders. As part of the Rights Plan, the board of directors declared a dividend of one stock purchase right on each outstanding share of Sun common stock. The dividend will be paid on June 3, 2010 to stockholders of record on June 3, 2010. The dividend will not be taxable to Sun's stockholders. In light of the spin-off transaction, the Rights Plan, by limiting concentration of share ownership, is intended to enhance the ability to convert to REIT status in a timely manner. REIT status could be impaired if a single stockholder acquired more than 10 percent of Sun prior to the spin-off. The REIT will be adopting so-called "excess share provisions" in its charter, which are typical of publicly traded REITs, and which are designed to reduce the possibility of REIT disqualification by limiting concentrations of ownership in a manner substantially similar to that of the Rights Plan. The Rights Plan also will deter coercive takeover tactics, and could prevent an acquirer from gaining control of Sun without offering a fair price to all of Sun's stockholders. The Rights Plan will not prevent a takeover, but should encourage anyone seeking to acquire Sun to negotiate with the board of directors prior to attempting a takeover. The rights generally become exercisable if a person or group becomes the beneficial owner of 9.9 percent or more of the outstanding common stock of Sun, and they entitle the holder to purchase one one-thousandth of a share of a new series of junior participating preferred stock. Initially, the rights trade with Sun's common stock and do not separate or become exercisable until the 9.9 percent ownership threshold is crossed. Any person or group that owns 9.9 percent or more of Sun's outstanding common stock as of the close of business on May 24, 2010 will not trigger exercisability of the rights so long as such person or group does not thereafter acquire beneficial ownership of additional shares of common stock representing 1.0 percent or more of the then outstanding shares. The board of directors may redeem the rights at a redemption price of $0.01 per right or terminate the Rights Plan at any time prior to the rights becoming exercisable. The Rights Plan will terminate at the time of, or shortly after, the spin-off, but in any event no later than May 24, 2011. The spin-off of the Operating Company and related actions are subject to regulatory, stockholder, final board and other approvals. Sun anticipates that the transactions will be completed in the fourth quarter of 2010, and that the REIT will, for federal income tax purposes, be taxed as a real estate investment trust as of January 1, 2011. MTS Securities, LLC, an affiliate of MTS Health Partners, L.P., is serving as lead financial advisor to Sun, and Jefferies & Company, Inc. is serving as co-financial advisor, in connection with the spin-off transaction. Conference Call Sun invites investors to listen to a conference call with Sun's senior management on May 25, 2010, at 10 a.m. Pacific / 1 p.m. Eastern, to discuss the Company's proposed spin- off. To listen to the conference call, dial (800) 967-7184 and refer to Sun Healthcare Group. A recording of the call will be available from 4 p.m. Eastern on May 25, 2010, until midnight Eastern on June 25, 2010, by calling (888) 203-1112 and using access code 6945129. About Sun Healthcare Sun Healthcare Group, Inc., -- http://www.sunh.com/-- provides nursing, rehabilitative and related specialty healthcare services principally to the senior population in the United States. Its core business is providing inpatient services, primarily through 183 skilled nursing centers, 14 assisted and independent living centers and eight mental health centers. As of Dec. 31, 2009, the Company's centers had 23,205 licensed beds located in 25 states, of which 22,423 were available for occupancy. The Company's subsidiary engages in three business segments: inpatient services, primarily skilled nursing centers; rehabilitation therapy services, and medical staffing services. * * * As reported in the Troubled Company Reporter on April 12, 2010 Sun Healthcare's bank loan that will mature on April 19, 2014, carries Moody's Ba2 rating and Standard & Poor's B+ rating. TD BISTRO: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------- Gary Haber at Business Journal of Baltimore reports that T.D. Bistro Inc., which operates a restaurant, filed for chapter 11 bankruptcy protection, listing assets of less than $50,000, and liabilities of between $100,000 and $500,000. According to owner Timothy Dean, the Company fell victim to the recession and February snowstorms that kept diners home including for Valentine's Day. TERRACE POINTE: Files Schedules of Assets and Liabilities --------------------------------------------------------- Terrace Pointe Apartments I, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $5,400,200 B. Personal Property $196,375 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $11,451,178 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $616,767 ----------- ----------- TOTAL $5,596,575 $12,067,945 Tampa, Florida-based Terrace Pointe Apartments I, LLC, aka Terrace Pointe Apartments, filed for Chapter 11 bankruptcy protection on April 5, 2010 (Bankr. M.D. Fla. Case No. 10-07946). Amy Denton Harris, Esq., at Stichter, Riedel, Blain & Prosser, P.A., assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50 million. Terrace Pointe Apartments II, LLC, and Terrace Pointe Apartments III, LLC -- each disclosing assets and debts of up to $50 million -- and other affiliates also filed for Chapter 11. TOMMY VARGAS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Tommy Orlando Habibe Vargas #85 Orquidea Street Santa Maria San Juan, PR 00927 Tel: (787) 444-5550 Bankruptcy Case No.: 10-04387 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Fernando E. Longo Quinones, Esq. Berrios & Longo Law Office Capital Center Suite 900 239 Arterial Hostos San Juan, PR 00918-1478 Tel: (787) 753-0884 E-mail: flongoquinones@berrioslongo.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 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb10-04387.pdf The petition was signed by the Debtor. TOUSA INC: Has Court Nod to Use Cash Collateral Until August 31 --------------------------------------------------------------- Judge John K. Olsen of the U.S. Bankruptcy Court for the Southern District of Florida has issued a final order granting TOUSA Inc. and its debtor-affiliates access to the cash collateral of their Prepetition Lenders from May 1, 2010, to August 31, 2010. The Court held the final hearing on the Cash Collateral Motion on May 17, 2010. The Court's recent ruling authorizes the Debtors to use the Cash Collateral based on a prepared cash flow budget for the period from May 2010 to August 2010. The Debtors' estimated total operating cash flows under the four-month period ending August 2010 are: Month ended Est. Total Operating Cash Flow -------------- ------------------------------ May 2010 ($5,439,000) June 2010 ($4,690,000) July 2010 ($2,885,000) August 2010 ($545,000) A full-text copy of the Four-Month Budget is available for free at http://bankrupt.com/misc/TOUSA_CashCollBudgettilAug2010.pdf Judge Olson also ruled that the authorized Cash Collateral use is conditioned on the Debtors' compliance with certain financial covenants. The Financial Covenants will be measured as (i) actual monthly Operating Cash Flow that must not be less than the projected monthly Operating Cash Flow set forth in the Budget minus $10 million; and (ii) cumulative Operating Cash Flow for the applicable period must be no less than the amounts set forth for the applicable period: Period Minimum Operating Cash Flow ------------------- --------------------------- 05/01/10 - 05/31/10 ($6,707,000) 06/01/10 - 06/30/10 ($6,494,000) 07/01/10 - 07/31/10 ($4,923,000) 08/01/10 - 08/31/10 ($2,468,000) Except for the Carve-Out, no administrative claims, including fees and expenses of professionals, will be assessed against or attributed to any of the Prepetition Secured Parties with respect to their interests in the Prepetition Collateral for the Cash Collateral Period or any subsequent period in which the Debtors are permitted to use Cash Collateral pursuant to the Final Cash Collateral Order and without prior written consent of the Prepetition Secured Parties. Notwithstanding the objections of the Prepetition Secured Parties, the Cash Collateral may be used by the Official Committee of Unsecured Creditors to object to or contest the Prepetition Secured Loans or the Prepetition Liens, or to assert or prosecute any actions, claims or causes of action against any of the Prepetition Secured Parties without the consent of the applicable Prepetition Secured Parties, Judge Olson averred. To address the previous objection of Red River/El Dorado 6500, L.L.C., and Rancho Sierra Vista, L.L.C., to the Third Cash Collateral Motion, Judge Olson ruled that liens granted under the First, Second, Third, Fourth and Fifth Cash Collateral Orders, including Adequate Protection Liens, do not prime the valid prepetition liens and interests, if any, of Red River and Rancho Sierra. Any language of the Cash Collateral Orders will have no effect on Red River's and Rancho Sierra's rights to defend any challenge to the validity, extent, priority, perfection or enforceability of their deeds of trust and covenants that run with their land, Judge Olson said. Judge Olson also held that the Debtors' or the Creditors Committee's professional fees must not exceed these estimated amounts for the period from December 2009 to April 2010: Period Est. Total Professional Fees ------------------- ---------------------------- May 2010 $2,187,500 June 2010 $2,724,000 July 2010 $2,958,000 August 2010 $2,843,000 A full-text copy of the Professional Fees Budget until August 2010 is available for free at: http://bankrupt.com/misc/TOUSA_ProfFeesBudgettilAug2010.pdf A full-text copy of TOUSA's Sixth Final Cash Collateral Order dated May 18, 2010, is available for free at: http://bankrupt.com/misc/TOUSA_6thFinalCashCollORD.pdf About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by TOUSA Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TOUSA INC: Court Allows 2nd Amendment of Newark Homes Sale Deal --------------------------------------------------------------- Debtor Newmark Homes, L.P., and Scott Felder Homes, LLC, sought and obtained permission from Judge John K. Olsen of the U.S. Bankruptcy Court for the Southern District of Florida to enter into a second amendment of their asset purchase agreement on the sale of certain Newmark Homes assets located in Austin, Texas. The Court-approved APA contemplated the sale of the Austin assets to Scott Felder for $11.5 million. The Second Amendment to the APA seeks to accommodate certain financial constraints articulated by Scott Felder with respect to the takedown schedule under the APA that otherwise might have led to Scott Felder to default on the APA. It specifically modifies the sale timeline and provides for the payment of interest to the Debtors in consideration of the change, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, in Miami, Florida, counsel to the Debtors, tells the Court. Essentially, the Second Amendment extends the deadline for Scott Felder to purchase the remaining lots from July 2010 to Dec. 15, 2010. In turn, Scott Felder must pay Newmark Homes 5% interest on the purchase price for lots that are purchased behind schedule as contemplated in the original timeline provided in the APA. The Second Amendment provides for these salient terms: (1) Scott Felder will be required to purchase: (i) only a minimum of the Remaining Lots on or before April 30, 2010; (ii) an additional $1,078,500 in Lots on or before July 31, 2010; (iii) an additional $1,078,500 in Lots on or before October 31, 2010; and (iv) an additional $1,078,500 in Lots on or before December 15, 2010. (2) The remaining escrow deposit will no longer be released at each closing but will be held by an escrow agent until a True-up Closing will have occurred on December 15, 2010, at which point the entire remaining Escrow Deposit will be applied to the $1,078,500 required to be paid at that closing. The Parties currently estimate the remaining Escrow Deposit to be about $403,100, which along with any accrued interest on the remaining Escrow Deposit will be applied at that closing. (3) With respect to a purchase price for the month of May, Scott Felder will pay a 5% annualized interest on the May Purchase Price from May 1, 2010 through the date of the closing on the Lots. With respect to the purchase price for the month of August, Scott Felder will pay a 5% annualized interest on the August Purchase Price from August 1, 2010 through the date of the closing on the Lots. With respect to the purchase price for the month of November, Scott Felder will pay a 5% annualized interest on the November Purchase Price from August 1, 2010 through the date of the closing on the Lots. Upon the closing of individual Lots, interest accrual will cease on the portion of the May, August and November Purchase Prices corresponding to those Lots. The Debtors believe it is prudent to provide Scott Felder with the flexibility as contemplated under the Second Amendment to avoid an unnecessary default under the APA and ensure that they ultimately receive the benefit of their bargain. While the Second Amendment provides Scott Felder with a five- month extension to purchase all the Newmark Homes assets in the Austin Division, it substantially increases the likelihood that the sale of the Austin Division ultimately will be consummated as originally agreed upon, Mr. Singerman maintains. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by TOUSA Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TOUSA INC: Sells William County Assets to H2 Land ------------------------------------------------- TOUSA Homes, Inc., asks the Court to approve the sale of certain assets found in William County, Virginia, to H2 Land Company pursuant to an asset purchase agreement. TOUSA Homes owns a real property located at 6800 Abberley Loop in Prince William County, Virginia, which consists of 1.415 acres of land in a development known as the Parks at Piedmont. The Debtors entered into an asset purchase agreement in July 2009 with Newcastle Communities for the sale of the Property. Newcastle, however, failed to close on the sale of the Property at the time of its scheduled closing in December 2009. As a result of Newcastle's failure to close and William County's belief that TOUSA Homes did not make sufficient progress towards developing the Parks at Piedmont, William County was prepared, in accordance with a development rights agreement with TOUSA Homes, to place the Parks at Piedmont project in default. A declaration of default under the Development Agreement would have permitted William County to take title to a cash escrow account with funds of $300,227, which escrowed funds are held by the County for the purpose of completing development work, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, explains. A default would have also afforded the County the ability to accelerate payment obligations with respect to a surety bond for $397,604 that secured TOUSA Homes' development obligations, he notes. Mr. Singerman asserts that a default would have a severe negative impact on TOUSA Homes. The declaration of a default would also mean that no building permits could be issued until a new developer/applicant posts a new access entry bond covering the costs of the installed improvements, he points out. A new access entry bond for the Parks at Piedmont would be valued at $1.3 million. As a result, it is extremely important for the Debtors to avoid default or to sell the Real Property as soon as possible, he tells the Court. The County ultimately allowed the project to proceed provided that certain site improvements were completed by the summer of 2010. Absent those improvements or a sale of the Real Property, the County has indicated that it again will declare a default, Mr. Singerman discloses. Against this backdrop, TOUSA Homes solicited offers from potential purchasers, including H2 Land. The Debtors believe that H2 Land seemed like a logical potential purchaser of the Property because the company had familiarized itself with the Property in connection with diligence regarding a potential purchase of the Debtors' Virginia assets. H2 Land has also a strong relationship with the County and is developing property within the County, the Debtors add. After engaging in arm's-length length negotiations, TOUSA Homes and H2 Land entered into an Asset Purchase Agreement, whereby H2 Land agreed to acquire the William County Property for $50,000. The salient terms of the Purchase Agreement are: (1) Within five business days after the effective date of the Purchase Agreement, H2 Land will provide an escrow agent with a $10,000 deposit to be deposited into an interest bearing account. Within five business days of the successful conclusion of a study period under which H2 Land notifies TOUSA Homes of its election to proceed under the Purchase Agreement, H2 Land will deliver additional cash to the Escrow Agent to increase the Deposit to $20,000. The Deposit will be credited to the Purchase Price at the closing. (2) The William County Property will be transferred to H2 Land "as is" if the Buyer elects to proceed with the purchase of the Property after the conclusion of the Study Period. (3) At the Closing, TOUSA Homes will assign to H2 Land its rights in and to (a) the architectural plans; (b) the site plans; (c) the County site development and building permits; (d) the County E&S escrow; (e) the County landscape escrow; and (f) prepaid sewer/water connection fees to County service authority. (4) All real estate tax assessments and condominium fees are to be adjusted to the date of the Closing and thereafter payable by H2 Land. TOUSA Homes will be responsible for any roll-back taxes due. TOUSA Homes will pay the cost of the preparation of the deed, the Virginia Grantor's Tax associated with the recordation of the deed and all costs related to the payoff of monetary liens and encumbrances not caused by H2 Land or its agents. H2 Land will pay all remaining recordation taxes and costs associated with the deed, mortgages and financing agreements. (5) The Purchase Agreement is expressly conditioned on H2 Land's satisfactory determination to proceed under the Purchase Agreement after a period for analysis and study of the physical, economic and development characteristics of the Property. The Study Period is the period beginning on the Effective Date and expiring 30 days thereafter. H2 Land will indemnify and hold TOUSA Homes harmless from all fees, costs, liabilities and claims, including TOUSA Homes' attorneys fees, arising out of activities of H2 Land or its agents on or about the Property. H2 Land will also pay for any damages it causes to the Property. (6) Within 60 days after the Closing Date, H2 Land will replace TOUSA Homes' performance bond for the County Project #03-00409 for $397,604 as well as execute new E&S and Landscape Escrow Agreements as required by the County. At the Closing, TOUSA Homes will assign all its rights, title and interests in these cash escrows held by the County: (i) E&S for $187,772, and (ii) Landscape Escrow for $112,455. In addition, TOUSA Homes will assign all its rights, title and interests to any and all proffers previously paid for the County Project. (7) The Closing Date on the sale will be 30 days after the expiration of the Study Period. The Debtors believe that the $50,000 purchase price for the William County Property represents fair value under the current economic circumstances. Because the projected development costs associated with the Property estimated at $470,000 are prohibitive given the market value of the Real Property, without the sale of the Property under the Purchase Agreement, the Debtors may be forced to abandon the Property, Mr. Singerman stresses. The sale of the Property pursuant to the terms and conditions in the Purchase Agreement will allow TOUSA Homes to monetize its interests in the Property and eliminate any potential ongoing obligations and related development commitments, he maintains. The Debtors further ask the Court to rule that April 2, 2010 be deemed as the effective date of any order authorizing TOUSA Homes to enter into the Purchase Agreement with H2 Land. By approving retroactive authority, the effective date of the Purchase Agreement will be April 2, 2010 and thus, the 30-day Study Period will begin on April 2, 2010. "It is important for the Study Period to begin as soon as possible because the closing cannot occur until the completion of the Study Period," Mr. Singerman points out. "Delaying the closing date increases the risk of the County placing the Parks at Piedmont project into default," he stresses. * * * Judge Olson approved the Debtors' Purchase Agreement with H2 Land, nunc pro tunc to April 28, 2010. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by TOUSA Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRANSAX INT'L: Delays Filing on Quarterly Report on Form 10-Q ------------------------------------------------------------- Transax International Limited said it could not file its quarterly report Form 10-Q for the period ended March 31, 2010, on time with the Securities and Exchange Commission. Plantation, Fla.-based Transax International Limited is an international provider of information network solutions, products and services specifically designed for the healthcare providers and health insurance companies. The Company's balance sheet as of December 31, 2009, showed $1,329,458 in assets and $8,723,045 of debts, for a stockholders' deficit of $7,393,587. The Company reported a net loss of $2,802,351 on $4,289,523 of revenue for 2009, compared with a net loss of $1,096,642 on $6,119,046 of revenue for 2008. TREY RESOURCES: Posts $401,990 Net Income for March 31 Quarter -------------------------------------------------------------- Trey Resources Inc. filed its quarterly report Form 10-Q, showing net income of $401,990 on $1.8 million of sales for the three months ended March 31, 2010, compared with a net income of $27,045 on $2.0 million of sales during the same period a year ago. The Company's balance sheet at March 31, 2010, revealed $1.2 million in total assets and $5.7 million in total liabilities, for a stockholders' deficit of $4.5 million. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6309 Livingston, N.J.-based Trey Resources, Inc. operates as a business consultant, and value-added reseller and developer of financial accounting software in the United States. * * * According to the Troubled Company Reporter on April 13, 2010, at December 31, 2009, the Company had total assets of $1,120,713 against total liabilities, all current, of $6,042,974, resulting in stockholders' deficit of $4,922,261. In its March 27, 2010 report, Friedman LLP in Marlton, New Jersey, said the Company has incurred substantial accumulated deficits and operating losses. These issues lead to substantial doubt about the Company's ability to continue as a going concern. TRI TRONG DO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Tri Trong Do Lily Cai Do aka Lily Cai Do aka Lily Cai aka TLD Investments, Inc. aka My Love Bridal 86 Arundel Drive Hayward, CA 94542 Bankruptcy Case No.: 10-45900 Chapter 11 Petition Date: May 21, 2010 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Robert C. Borris, Jr., Esq. 21550 Foothill Blvd 2nd Fl. Hayward, CA 94541 Tel: (510) 581-7111 E-mail: RBorrisjr@aol.com Scheduled Assets: $1,928,350 Scheduled Debts: $3,361,762 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-45900.pdf The petition was signed by Tri Trong Do and Lily Cai Do. TRIBUNE CO: Court to Continue Plan Outline Hearing on May 28 ------------------------------------------------------------ Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware will continue on May 28, 2010, the hearing on the approval of the Disclosure Statement explaining the Joint Plan of Reorganization of Tribune Company and its debtor affiliates. At the May 20 Disclosure Statement Hearing, holders of both senior and junior claims made it clear that Tribune Co., as owner of the Los Angeles Times, Chicago Tribune and New York's WPIX television station, faces a legal slog before it exits Chapter 11, Reuters reported. According to Reuters, the Tribune Company has proposed turning over its operations to investors holding $8.7 billion dollars in senior loans, while leaving little for other creditors holding more than $3.6 billion in claims. Those senior loan claims stem from the company's 2007 leveraged buyout transactions that put developer Sam Zell in control of the company. According to the report, Judge Carey gave Tribune another week to make changes to its Disclosure Statement to resolve various objections and allow critics to include two-page statement of their views on the LBO lawsuit settlements in the Disclosure Statement. Tribune has proposed giving broad releases from potential liabilities and in return giving a stake in the company worth about $450 million to senior bondholders, who otherwise would lose their investment, Reuters said in the report. Junior bondholders, who will get nothing from the planned reorganization, think the liability claims are worth much more and drafted a letter for creditors that warned the reorganization plan would be subject to lengthy court fights if it is not consensual, according to Reuters. "Mr. Zell and various members of Tribune's board and senior management have significant, personal interest in seeing all LBO- related litigation 'swept under the rug,' especially when the proposed settlement does not require them to pay any amounts and also shelters them from all further litigation exposure," Reuters cited a letter prepared by junior bondholders. Holders of senior loan claims have argued the company is giving too much away to head off those disputes, Reuters reported. "We're just not going to agree," Reuters quoted James Conlan, Esq., at Sidley Austin, which represents Tribune, as saying. "They're just not happy with the settlement agreement and plan structure. We'll see what happens at the ballot box." About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: J. Allen, et al., Seek Class Certification ------------------------------------------------------ James Allen, Charles Evans, Pearl Evans, Gary Grant, Loretta Grant, Bill McNair and Sean Serrao ask that the U.S. Bankruptcy Court for the District of Delaware: (A) certify a New York minimum wage class action pursuant to Rule 7023 and 9014 of the Federal Rule of Bankruptcy Procedure and Rule 23 of the Federal Rule of Civil Procedure on behalf of individuals who worked for Tribune Company or Tribune New York Newspaper Holdings, LLC, in a position in which they promoted newspapers by handing them out to people, at anytime between August 20, 2001 and December 8, 2008; and (B) grant class treatment of their class proofs of claim against Debtors Tribune Company and Tribune New York Newspaper Holdings. On August 20, 2007, J. Allen, et al., on behalf of themselves and all others similarly situated, filed a class action complaint in the New York State Supreme Court, New York County, against Tribune Company and Tribune New York Newspaper Holdings, LLC, Mitchell's Subscription Service LLC, and Morning Newspaper Delivery, Inc. J. Allen, et al., alleges that companies had failed to pay them and other similar employees the minimum wage as required under New York Labor Law and regulations. J. Allen, et al., relates that they and other potential class members of the State Court Action timely filed Proofs of Claims with the Bankruptcy Court to preserve their claims against the Debtors. Furthermore, J. Allen, et al., avers that they timely filed class proofs of claims on behalf of current and former employees of Debtors for unpaid wages. For the two class proofs of claim, J. Allen, et al., estimated the value of the class claim as $1,500,000. Class treatment of the class proofs of claim meaningfully advances the goals of bankruptcy because it permits the economical filing and efficient handling of innumerable relatively small claims having common bases that would be difficult for claimants to pursue individually, especially since members of the putative class have not received individual notice of Tribune's bankruptcy, says Adam Hiller, Esq., at Pinckney, Harris & Weidinger, LLC, in Wilmington, Delaware -- ahiller@phw-law.com -- counsel for J. Allen, et al. Mr. Hiller points out that Rule 23 permits class certification if: (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, (4) the representative parties will fairly and adequately protect the interests of the class, (5) common questions of law or fact predominate over questions affecting only individual members and (6) a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Mr. Hiller also avers that the putative class includes more than 100 persons thus numerosity is met. According to Mr. Hiller, the common questions of fact and law include: (1) what are the policies, procedures and protocols of Debtors regarding payment of minimum wage to promoters; (2) what are the policies, procedures and protocols of Debtors regarding the recording of hours worked by promoters; (3) what are the policies, procedures and protocols of Debtors regarding payment of wages for all hours worked by promoters; and (4) whether promoters were employees of Debtors under the New York minimum wage law. Mr. Hiller maintains that the J. Allen, et al., are members of the putative classes and possess the same interests, suffered the same injury and allege identical violations to other class members. Thus, he notes, the typicality requirement is met. According to Mr. Hiller, the proposed class representatives have no conflict with any class members, and will fairly and adequately protect the interests of the classes. He adds that J. Allen, et al., are adequate representatives because they were subjected to the same unlawful conduct as the class members. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Has Court OK to Reject Dun & Bradstreet Contract ------------------------------------------------------------ Tribune Company sought and obtained the Bankruptcy Court's authority to reject a master agreement dated as of January 28, 2004, and related preferred pricing plan dated January 1, 2006, with Dun & Bradstreet. Prior to the entry of the Court's order, the Debtors certified to the Court that no objections were filed as to the Motion. Dun & Bradstreet is a provider of business information, including information concerning a company's trade experience, historical finances, sales volume, trends, employee headcount, and prediction model scores. Tribune utilizes Dun & Bradstreet's software to monitor commercial information and business records to evaluate current and potential advertising customers for creditworthiness. On January 28, 2004, Tribune and Dun & Bradstreet entered into the Master Agreement, which granted Tribune a non-exclusive, non- transferrable license to use certain information and software provided by Dun & Bradstreet. Under the Master Agreement, Tribune was required to pay for Dun & Bradstreet's services at an annual rate on an installment plan for unlimited contractual usage. Tribune and Dun & Bradstreet entered into the Preferred Pricing Plan on January 1, 2006, for an initial three year term. Under the Preferred Pricing Plan, Tribune purchased an unlimited data plan for itself and certain of its subsidiaries for access to Dun & Bradstreet's services. The Preferred Pricing Plan included the right to cancel the contract if notice of intent to terminate were properly served on Dun & Bradstreet at least 30 days prior to the end of the three year term. However, if Tribune did not serve notice of intent to terminate, the Preferred Pricing Plan would automatically renew for an additional three years. Representing the Debtors, Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, relates that Tribune did not serve notice on Dun & Bradstreet that it intended to terminate the Agreement in the 30 days prior to the end of the first three year term. Under the terms of the Preferred Pricing Plan, Tribune is required to pay 112% of the preceding year's price term for each additional year under the renewed Preferred Pricing Plan. According to Mr.Reilley, Tribune paid all amounts outstanding under the 2009 term in a timely manner. Mr.Reilley tells the Court that over the past several months, Tribune has been evaluating the relative costs and benefits associated with the Agreement, as well as Tribune's ability to obtain similar services from other providers. Tribune has determined it can obtain alternative services that offer similar features and options at a much lower price, from another provider. Accordingly, the Debtor asserts, the Agreement is no longer beneficial or necessary to Tribune's or its subsidiaries' business operations. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Judge Carey Okays Appointment of Klee as Examiner ------------------------------------------------------------- Bankruptcy Judge Kevin Carey approved the appointment of Kenneth Klee as the examiner in the bankruptcy case of Tribune Company and its debtor-affiliates. Judge Carey also approved the Work and Expense Plan of the examiner. Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3, asks Judge Carey to approve the appointment of Kenneth N. Klee, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California, as examiner in the Debtors' Chapter 11 cases. The Examiner will evaluate the potential claims and causes of action held by the Debtors' estates that are asserted by parties to the LBO, which include Wells Fargo Bank, N.A., as administrative agent. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Examiner Can Demand and Issue Subpoenas --------------------------------------------------- Kenneth Klee, Esq., as the Chapter 11 Examiner in Tribune Company and its affiliates' Chapter 11 cases, sought and obtained a Bankruptcy Court order allowing him to compel and demand by way of subpoena: (i) the oral examination, under oath, of persons and entities that he believes may have information that is relevant to his investigation or that may lead him to that information; and (ii) the production of documents that may be relevant to the investigation. Mr. Klee said he wants to ensure that the investigation is timely and efficiently completed. Mr. Klee adds that the order will give him the tools he needs to deal with non-cooperation, increase the likelihood that parties will voluntarily cooperate in the first instance, and preserve the rights of parties to seek relief if they have legitimate grounds to object to any subpoena. The Debtors related that no objections were filed as to the request. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Examiner Hires Own Firm as Legal Counsel ---------------------------------------------------- The examiner in Tribune Company and its affiliates' Chapter 11 cases sought and obtained the Bankruptcy Court's authority to employ Klee, Tuchin, Bogdanoff & Stern LLP as his legal counsel nunc pro tunc to April 30, 2010. Kenneth Klee, Esq., has selected Klee Tuchin because of its unique experience and expertise that are necessary and appropriate to perform the tasks necessary to his examination and investigation. As counsel, Klee Tuchin will: (a) take all necessary actions to assist and advise him in the discharge of his duties and responsibilities under the Examiner Order, other orders of the Court, and applicable law; (b) prepare on his behalf all reports, pleadings, motions, applications, notices, orders and other documents necessary in the discharge of his duties; (c) represent and advocate his interests at all hearings and other proceedings before the Court and at all proceedings before the U.S. Trustee; (d) analyze and advise him regarding legal issues that may arise in connection with discharge of his duties; (e) assist with interviews and examinations in connection with the investigation and the drafting of a report; (f) perform all other necessary legal services on his behalf in connection with the Chapter 11 cases; and (g) assist him in undertaking any additional tasks or duties that he may determine are necessary and appropriate to the discharge of his duties. The Debtors will pay Klee Tuchin based on the firm's current hourly rates: Partners and Of-Counsel $550-$975 Associates $375-$490 Paralegals $250 The Debtors will also reimburse Klee Tuchin for its expenses including, among others, photocopying, court fees, travel expenses and long distance telephone. Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors certified to the Court that no objection was filed as to the Application. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Examiner Retains Saul Ewing as Delaware Counsel ----------------------------------------------------------- Kenneth Klee, the Chapter 11 examiner in Tribune Co.'s Chapter 11 cases, sought and obtained the Bankruptcy Court's authority to employ Saul Ewing LLP as his Delaware counsel, nunc pro tunc to April 30, 2010. The Examiner has selected Saul Ewing to serve as his Delaware counsel because its partners and associates possess extensive knowledge and considerable expertise in the fields of bankruptcy, insolvency, reorganizations, debtors' and creditors' rights, litigation, investigations, debt restructuring, and corporate reorganization, among others. As Delaware counsel, Saul Ewing will: (a) take all necessary actions to assist the Examiner in the Investigation; (b) prepare on behalf of the Examiner all reports, pleadings, applications, and other necessary documents in the discharge of his duties; (c) assist the Examiner in undertaking additional tasks that the Court may direct; and (d) perform all other necessary legal services on behalf of the Examiner in connection with the Debtors' cases. The Debtors will pay Saul Ewing in accordance with the firm's current hourly rates: Billing Category Range ---------------- ------------ Partners $335-$655 Special Counsel $275-$535 Associates $215-$390 Paraprofessionals $105-$240 The Debtors will also reimburse Saul Ewing for its expenses including, among others, mail and express charges, special or hand delivery charges, photocopying and telephone. Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors certified to the Court that no objections were filed as to the Application. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIDIMENSION ENERGY: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: TriDimension Energy, L.P. fka TriDimension Energy, LLC Ram Oil & Gas, LLC 16610 Dallas Parkway, Suite 2500 Dallas, TX 75248 Bankruptcy Case No.: 10-33565 Chapter 11 Petition Date: May 21, 2010 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Beth Lloyd, Esq. Tel: (214) 220-7824 Fax: (214) 999-7824 E-mail: blloyd@velaw.com Clayton T. Hufft, Esq. Tel: (214) 220-7742 Fax: (214) 999-7742 E-mail: chufft@velaw.com William Louis Wallander, Esq. Tel: (214) 220-7905 E-mail: bwallander@velaw.com Vinson & Elkins, L.L.P. 2001 Ross Avenue, Suite 3700 Dallas, TX 75201 Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Jason H. Downie, executive vice president. Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Tridimension Energy, L.P. 10-33565 -- TDE Property Holdings, LP 10-33567 -- Axis E&P, LP 10-33566 -- Axis Onshore, LP 10-33569 -- Axis Marketing, LP 10-33568 -- Ram Drilling, LP 10-33570 -- Tde Subsidiary GP LLC 10-33571 -- Tde Operating GP LLC 10-33572 -- Debtor's List of 40 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Weatherford U.S. LP Trade Debt $732,493 P.O. Box 1345 Houston, TX 77216-0019 Precision Energy Services, Inc Trade Debt $633,658 P.O. Box 148 Dallas, TX 75320-0698 Precision Drilling Company, LP Trade Debt $526,995 P.O. Drawer 2128, 4430 Highway 84 West Houston, TX 77042 White's T & J Oilfield Supply Inc. Trade Debt $438,611 P.O. Box 952 Jonesville, LA 71373 M-I L.L.C. (MI SWACO) Trade Debt $379,163 Gettie Sue Goss Bamburg, Office of Donald L. Kneipp, P.O. Box 2808 Houston, TX 77242-2842 E-Operating, LLC Trade Debt $314,649 P.O. Box 82006 Vidalia, LA 71373 Telluride Exploration LLC Trade Debt $283,509 P.O. Box 907 Vidalia, LA 71373 Vital Oil Well Svcs-ProdLLC Trade Debt $166,414 Miss-Lou Oil Well Supply, LLC Trade Debt $165,608 Schlumberger Technology Trade Debt $157,155 Corporation Petroleum Engineers Inc. Trade Debt $134,578 XTO Energy, Inc. Trade Debt $132,836 Baker Hughes Business Support Trade Debt $119,856 Srvcs. BJ Services Company Trade Debt $118,481 Golden West Holdings Trade Debt $117,605 X-Chem Inc. Trade Debt $88,418 Reagan Equipment Co., Inc Trade Debt $78,473 Hercules Drilling Operations Trade Debt $72,042 Weatherford Laboratories, Inc Trade Debt $69,781 Teledrift Company Trade Debt $49,389 BJM Construction, Inc Trade Debt $47,341 Reed Hycalog, L.P. Trade Debt $44,479 Stokes & Spiehler Onshore, Inc. Trade Debt $42,613 Nov National Oilwell Varco Trade Debt $40,951 Hole Opener Corporation Trade Debt $37,102 Buena Vista Corporation Trade Debt $36,900 Donald L. Kneipp, Milton Bamburg Trade Debt $35,000 W.T. Drilling Co., Inc Trade Debt $32,272 Steve Kent Trucking, Inc Trade Debt $31,863 Vital Oil Well Svcs-Const Trade Debt $31,751 Vital Oil Well Svcs-Const Trade Debt $30,895 Chess Well Service Trade Debt $25,758 Nicholas & Montgomery LLP Trade Debt $24,810 Warrior Energy Services Trade Debt $22,420 Rudy Kruger Warehouse Trade Debt $21,301 HB Rentals Trade Debt $20,512 Herring Gas (Ferriday) Trade Debt $18,950 Alton Daniels Consulting Trade Debt $18,838 Gwin, Lewis & Punches Trade Debt $15,596 Herring Gas (Jena) Trade Debt $14,353 US AIRWAYS: Paid $1 Million in Employee Bonuses in 2009 ------------------------------------------------------- Robert Isom, US Airways' executive vice president and chief operating officer, said in an interview with Christopher Elliott of the Elliot Blog, that USAir rewards employees who deliver exceptional results or demonstrate extraordinary examples of customer care through the airline's quarterly "Above & Beyond" and USAir's Chairman's awards program. In 2009, he continued, they awarded more than $1 million to employees in the "Above & Beyond" awards program, and $250,000 to employees under USAir's Chairman's Award program. According to the report, US Airways focuses on numbers -- like improvements in on-time arrivals, misplaced baggage, oversales and other metrics reported every month to the Transportation Department -- because they represent the reliability and convenience customers expect from the airline. Mr. Isom said these are also the metrics that the media most closely reports on and that all of the airlines are consistently measured against it. "Under our Triple Play Program," Mr. Isom explained, "employees receive a $50 payout for each first place finish in either on- time arrivals, baggage performance or customer complaints among the airline's Big Five network competitors (AA, CO, DL, UA and US) based on DOT results." "Employees have the potential to receive up to $150 each month if US is first in all three metrics. If we don't land in first place but still achieve an on-time departure result of 72 percent for the month, employees receive a $50 'Pinch Hitter' payout," he said. Asked on which number is the most important to US Airways, Mr. Isom answered that US Airways focuses on four key areas: on-time departures, on-time arrivals, mishandled bags, and customer complaints. He added that among the four, the most important priority is departing on time because if you don't start the operation on time each morning, and keep it running close to schedule, other performance metrics will suffer, relates the report. Mr. Isom said US Airways' 2010 goals are designed to ensure that it continues to build on its efforts to deliver reliability, convenience, and a professional appearance to its customers. 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. US AIRWAYS: Reports April 2010 Traffic Results ---------------------------------------------- US Airways Group, Inc. (NYSE: LCC) released April and year-to-date 2010 traffic results. Mainline revenue passenger miles (RPMs) for the month were 4.7 billion, down 5.0 percent versus April 2009. Mainline capacity was 5.7 billion available seat miles (ASMs), down 2.5 percent versus April 2009. Passenger load factor for the month of April was 82.7 percent, down 2.1 points versus April 2009. US Airways President Scott Kirby said, "Our April consolidated (mainline and Express) passenger revenue per available seat mile (PRASM) increased approximately 13 percent versus the same period last year while total revenue per available seat mile increased approximately 14 percent on a year-over-year basis. The revenue environment continues to improve with strengthening corporate demand and overall booked yields. "In addition, thanks to our 30,000 employees, US Airways continues to run an efficient and on-time airline. April was the best operational month in US Airways' post-merger history, setting new records for all of our operational metrics including the best on- time performance, the lowest baggage mishandling handling rate, and the highest completion factor month since the merger in September 2005." For the month of April, US Airways' preliminary on-time performance as reported to the U.S. Department of Transportation (DOT) was 88.6 percent with a completion factor of 99.6 percent. This summarizes US Airways Group's traffic results for the month and year-to-date ended April 30, 2010 and 2009, consisting of mainline operated flights as well as US Airways Express flights operated by wholly owned subsidiaries PSA Airlines and Piedmont Airlines: US Airways Mainline April 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 3,597,666 3,865,565 (6.9) Atlantic 653,874 651,277 0.4 Latin 489,444 471,420 3.8 --------- --------- Total 4,740,984 4,988,262 (5.0) Mainline Available Seat Miles (000) Domestic 4,288,633 4,458,303 (3.8) Atlantic 807,337 822,654 (1.9) Latin 639,759 603,835 5.9 --------- --------- Total 5,735,729 5,884,792 (2.5) Mainline Load Factor (%) Domestic 83.9 86.7 (2.8) pts Atlantic 81.0 79.2 1.8 pts Latin 76.5 78.1 (1.6) pts --------- --------- Total Mainline Load Factor 82.7 84.8 (2.1) pts Mainline Enplanements Domestic 3,807,560 3,969,937 (4.1) Atlantic 159,525 168,250 (5.2) Latin 367,907 375,356 (2.0) --------- --------- Total Mainline Enplanements 4,334,992 4,513,543 (4.0) Year To Date 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 13,695,390 14,437,495 (5.1) Atlantic 2,116,293 2,022,295 4.6 Latin 1,982,517 1,837,091 7.9 ---------- ---------- Total 17,794,200 18,296,881 (2.7) Mainline Available Seat Miles (000) Domestic 16,766,424 17,551,027 (4.5) Atlantic 2,928,854 2,902,590 0.9 Latin 2,619,031 2,410,288 8.7 ---------- ---------- Total 22,314,309 22,863,905 (2.4) Mainline Load Factor (%) Domestic 81.7 82.3 (0.6) pts Atlantic 72.3 69.7 2.6 pts Latin 75.7 76.2 (0.5) pts --------- --------- Total Mainline Load Factor 79.7 80.0 (0.3) pts Mainline Enplanements Domestic 14,344,616 14,946,496 (4.0) Atlantic 520,568 522,619 (0.4) Latin 1,455,027 1,453,699 0.1 ---------- ---------- Total Mainline Enplanements 16,320,211 16,922,814 (3.6) US Airways Express (Piedmont Airlines, PSA Airlines) April 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 177,180 176,142 0.6 Express Available Seat Miles (000) Domestic 250,056 258,343 (3.2) Express Load Factor (%) Domestic 70.9 68.2 2.7 pts Express Enplanements Domestic 662,942 655,694 1.1 Year To Date 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 633,680 646,499 (2.0) Express Available Seat Miles (000) Domestic 957,803 1,019,764 (6.1) Express Load Factor (%) Domestic 66.2 63.4 2.8 pts Express Enplanements Domestic 2,333,556 2,409,580 (3.2) Consolidated US Airways Group, Inc. April 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 3,774,846 4,041,707 (6.6) Atlantic 653,874 651,277 0.4 Latin 489,444 471,420 3.8 --------- --------- Total 4,918,164 5,164,404 (4.8) Consolidated Available Seat Miles (000) Domestic 4,538,689 4,716,646 (3.8) Atlantic 807,337 822,654 (1.9) Latin 639,759 603,835 5.9 ---------- ---------- Total 5,985,785 6,143,135 (2.6) Consolidated Load Factor (%) Domestic 83.2 85.7 (2.5) pts Atlantic 81.0 79.2 1.8 pts Latin 76.5 78.1 (1.6) pts ---------- ---------- Total 82.2 84.1 (1.9) pts Consolidated Enplanements Domestic 4,470,502 4,625,631 (3.4) Atlantic 159,525 168,250 (5.2) Latin 367,907 375,356 (2.0) ---------- ---------- Total 4,997,934 5,169,237 (3.3) Year To Date 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 14,329,070 15,083,994 (5.0) Atlantic 2,116,293 2,022,295 4.6 Latin 1,982,517 1,837,091 7.9 ---------- ---------- Total 18,427,880 18,943,380 (2.7) Consolidated Available Seat Miles (000) Domestic 17,724,227 18,570,791 (4.6) Atlantic 2,928,854 2,902,590 0.9 Latin 2,619,031 2,410,288 8.7 ---------- ---------- Total 23,272,112 23,883,669 (2.6) Consolidated Load Factor (%) Domestic 80.8 81.2 (0.4) pts Atlantic 72.3 69.7 2.6 pts Latin 75.7 76.2 (0.5) pts ---------- ---------- Total 79.2 79.3 (0.1) pts Consolidated Enplanements Domestic 16,678,172 17,356,076 (3.9) Atlantic 520,568 522,619 (0.4) Latin 1,455,027 1,453,699 0.1 ---------- ---------- Total 18,653,767 19,332,394 (3.5) US Airways is also providing a brief update on notable company accomplishments during the month of April: * Converted seasonal service from Philadelphia to both Brussels and Zurich and Charlotte, N.C. to Paris (Charles de Gaulle) to new, year-round service, providing our customers with more full-year trans-Atlantic options. * Began operating both international and domestic flights at Philadelphia International Airport's (PHL) Terminal A-East upon the relocation of Delta to Terminal D. The airline now has full or shared access to all international gates at PHL, which reduces operational challenges and provides a better airport experience for our customers. * Moved to a cashless cabin for purchases on board mainline domestic flights. By accepting credit and debit cards only in-flight expedites the cabin service process and reduces back-end processing time and costs. * At month's end, 39 out of 51 (or 76 percent) of the airline's Airbus A321s had Gogo(R) Inflight Internet installed. By June 1, all 51 aircraft will be equipped with this new wireless Internet product. 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. US AIRWAYS: To Hold Annual Meeting of Stockholders on June 10 ------------------------------------------------------------- Douglas W. Parker, chairman of the Board chief executive officer of US Airways Group, Inc., disclosed that the Annual Meeting of Stockholders will be held at the offices of Latham & Watkins LLP, located at 555 11th Street, N.W., Suite 1000, in Washington, D.C., on June 10, 2010 at 9:30 a.m., local time. Among the agenda for the meeting are: (a) A proposal to elect three directors in Class II to serve until the 2013 Annual Meeting of Stockholders; (b) A proposal to ratify the appointment of KPMG LLP as the independent registered public accounting firm of US Airways Group, Inc. for the fiscal year ending December 31, 2010; (c) A proposal to consider and vote upon a stockholder proposal relating to cumulative voting; and (d) Other business as properly may come before the Annual Meeting or any adjournments. 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. US CONCRETE: Has Final Approval for $80 Million Financing --------------------------------------------------------- Bill Rochelle at Bloomberg News reports that U.S. Concrete, Inc., received final approval from the bankruptcy court on May 21 for $80 million in secured financing. A syndicate of lenders led by JPMorgan Chase Bank, N.A., as administrative agent, has committed to provide up to $80 million of postpetition financing consisting of a $45 million term loan facility and a $35 million revolving asset based loan facility. The DIP facility will mature on April 30, 2011, subject to a three-month extension to July 30, 2011, by the Debtors provided certain conditions precedent are satisfied. The DIP facility will incur interest: (i) if a CBFR loan, CB Floating Rate plus 4.25% if a term loan or 2.50% if a revolving loan; or (ii) if a Eurodollar loan, an adjusted LIBOR plus 5.25% if a term loan or 3.50% if a revolving loan. In the event of default, the Debtors will pay an additional interest of 2.0% per annum. The Debtors' obligations under the DIP facility are secured by substantially all of the Debtors' assets. Prepackaged Plan According to Bloomberg, U.S. Concrete has a June 3 hearing for approval of the disclosure statement explaining the prepackaged reorganization plan negotiated before the Chapter 11 filing on April 21. The plan reduces debt by $285 million through conversion of 8.325 percent subordinated notes into the new equity. About U.S. Concrete Houston, Tex.-based U.S. Concrete, Inc., aka RMX Industries, Inc., is a major producer of ready-mixed concrete, precast concrete products and concrete-related products in select markets in the United States. The Company filed for Chapter 11 bankruptcy protection on April 29, 2010 (Bankr. D. Del. Case No. 10-11407). Patrick J. Nash Jr., Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis LLP, assist the Company in its restructuring effort as bankruptcy counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, is the Company's co-counsel. Epiq Bankruptcy Solutions is the Company's claims agent. According to the schedules, the Company says that assets total $389,160,000 while debts total $399,351,000. The Debtor's affiliates, Alberta Investments, Inc., et al., filed separate Chapter 11 petitions on April 29, 2010. VIASPACE INC: Posts $630,000 Net Loss for First Quarter 2010 ------------------------------------------------------------ VIASPACE Inc. released its financial results for the first quarter ended March 31, 2010. Total revenue for the quarter was $927,000 and included $757,000 from Inter-Pacific Arts and $170,000 from U.S. military contracts for security products. Total revenue for first-quarter 2009 was $820,000 and included $591,000 from IPA, $174,000 from U.S. military contracts for security products, and $55,000 from a commercial fuel-cell contract with Samsung. Net loss for the quarter was $630,000 compared to a net loss in first-quarter 2009 of $851,000. Net loss for first-quarter 2010 was less than $0.01 per share; net loss for first-quarter 2009 was less than $0.01 per share. The company's balance sheet showed $18.8 million total assets and $6.8 million total current liabilities, for a $12.0 million total stockholders' equity. For the quarter, cost of revenues was $676,000, compared to $526,000 in first-quarter 2009; the increase due to higher volumes and manufacturing costs related to IPA. Gross profit for the quarter was $251,000, compared to gross profit of $294,000 for first-quarter 2009. Total operating expenses for the quarter were $922,000, including $894,000 of selling, general and administrative expense and $28,000 for operations. SG&A included $289,000 in stock-based compensation. Total operating expenses for first-quarter 2009 were $1.075 million and included $1.07 million in SG&A and $9,000 for operations. SG&A in 2009 included $572,000 in stock-based compensation. Operating loss for the quarter was $671,000, compared to an operating loss of $781,000 in first-quarter 2009. For first-quarter 2010 other income, net, was $51,000, compared to other expense, net, of $125,000 for first-quarter 2009. VIASPACE Chief Executive Dr. Carl Kukkonen commented: "First- quarter results reflect the ongoing contribution of IPA to revenues as well as cash flow to support the continuing development of our renewable energy business, including acreage expansion, Giant King Grass cultivation, and construction of our grass processing facility. In addition, our efforts to control operating expenses in certain areas are helping to offset the expected increases in expenses and capital investment related to our energy business. As a result, net loss narrowed from last year, and net cash used for operations also declined." A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6311 About VIASPACE Inc. Irvine, Calif.-based VIASPACE Inc. (OTC Bulletin Board: VSPC - News) -- http://www.VIASPACE.com/-- is a clean energy company providing products and technology for renewable and alternative energy that reduce or eliminate dependence on fossil and high- pollutant energy sources. Through its majority-owned subsidiary VIASPACE Green Energy Inc., the Company grows Giant King Grass as a low carbon fuel for electricity generating power plants and as a feedstock for cellulosic biofuels. VISTEON CORP: 2nd Amended Plan Outline Still Has Objections ----------------------------------------------------------- Judge Christopher S. Sontchi of the U.S Bankruptcy Court for the District of Delaware further postponed the hearing to consider the adequacy of the Debtors' Disclosure Statement to May 24, 2010. The Disclosure Statement Hearing was originally scheduled for January 28, 2010, and has since been moved to February 18, 2010, March 16, 2010, April 13, 2010, April 30, 2010 and most recently to May 12, 2010. Visteon recently filed a Second Amended Plan of Reorganization and Disclosure Statement on May 6, 2010. The revised Plan embodies a "Toggle Plan," consisting of a rights offering plan and a claims conversion plan. Visteon's original Chapter 11 Plan and Disclosure Statement was filed last December 17, 2009, as subsequently amended on March 15, 2010. Ad Hoc Equity Committee Objects to Second Amended Disclosure Statement The Ad Hoc Committee of Equityholders in the Debtors' cases continues to assert that the Second Amended Disclosure Statement dated May 7, 2010 cannot be approved because the Second Amended Plan is unconfirmable on its face. The Ad Hoc Equity Committee complains that the Second Amended Plan: -- does not provide the term lenders the indubitable equivalent of their secured claim; -- violates Section 1123(a)(4) of the Bankruptcy Code because the treatment of Classes F and G are not the same; -- is a sub rosa and illegal substantive consolidation; -- illegally circumvents the absolute priority and unfair discrimination rules with respect to the treatment of intercompany claims; and -- illegally provides for post-confirmation sales of non- estate property under Section 363 of the Bankruptcy Code. The Ad Hoc Equity Committee also reiterates that Second Amended Disclosure Statement fails to provide adequate information on expected recoveries; a full disclosure of the Debtors' valuation; the total enterprise value estimate; an explanation of the Debtors' cash position; NOL valuation and analysis; discussion on debt capacity; and description of the Debtors' unconsolidated joint ventures, among others. Aurelius Capital, et al., Oppose to 2nd Amended Disclosure Statement Aurelius Capital Master, Ltd., a holder of 6,360,000 shares or 4.87% of the common stock of Visteon Corporation; ACP Master, Ltd., a holder of 5,218,092 shares or 4.00% of Visteon common stock; and Aurelius Convergence Master, Ltd., a holder of 1,131,906 shares of Visteon common stock ask the Court to deny approval of the Second Amended Disclosure Statement because the Second Amended Joint Plan of Reorganization is patently unconfirmable. According to the Aurelius Entities, the Second Amended Plan provides zero recovery for equity holders, who are therefore deemed to reject the Second Amended Plan. The Aurelius Entities relate that when an impaired class rejects a plan, the plan may only be confirmed if, among other things, the plan is "fair and equitable" and does not discriminate unfairly with respect to the rejecting class. The Aurelius Entities also complain that the Plan grossly overcompensates the Debtors' creditors to the detriment of the prepetition equity holders. The Aurelius Entities maintain that that the Disclosure Statement is deficient in two principal respects: It fails to provide adequate information as to the valuation on which the Second Amended Plan is predicated, or the incentive compensation -- potentially in the hundreds of millions of dollars -- to be provided to the Debtors' management. Ad Hoc Trade Committee Also Balks at Outline The Ad Hoc Trade Committee, consisting of certain holders of general unsecured claims, asserts that the proposed Disclosure Statement does not contain adequate information. According to the Ad Hoc Trade Committee, the Proposed Disclosure Statement fails to provide crucial information required in order to properly evaluate the Proposed Plan by Class H. While the Proposed Disclosure Statement provides both low and high-end ranges of recovery estimates for all classes, it fails to disclose a range for Class H, the Ad Hoc Trade Committee asserts. The disparate treatment of Class F and Class H claims so patently violates the Bankruptcy Code as to make the Proposed Plan unconfirmable, the Ad Hoc Trade Committee contends. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of US$4,561,000,000 and debts of US$5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Michigan Treasury Objects to Exculpation Provisions ----------------------------------------------------------------- The Department of Treasury for the state of Michigan asserts that to the extent exculpation and injunction provisions under the Second Amended Joint Plan of Reorganization are attempts to limit or enjoin the collection of tax debts due from non-debtors, those provisions violate the Tax Injunction Act. Accordingly, the Michigan Treasury Dept. asks Judge Sontchi to deny confirmation of the Plan. The Michigan Treasury Dept filed an administrative claim for $51,972 and a priority claim for $2,634,578. VISTEON CORP: WTC Says Plan Support Pact May Not be Enforceable --------------------------------------------------------------- Wilmington Trust FSB, as administrative agent under the Debtors' senior secured term loan facility, is concerned that the proposed Plan Support Agreements provide no enforceable commitment from the Investors to raise the capital necessary for the Rights Offering Sub Plan, nor from the Investors or Bondholders to support the toggle to the Claims Conversion Sub Plan. "If, under these complex and confusing arrangements, the Investors fail to raise the necessary funds in the indefinite time given them to do so, they can either walk away, or freeze the confirmation process by challenging the performance of scores of covenants, representations and warranties that the Proposed Agreements would impose on the Debtors," Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware -- dbutz@mnat.com -- asserts. The only binding commitments in the proposed Plan Support Agreements are those to be imposed on the Debtors, in the form of new contract obligations and fee and expense reimbursement obligations, Mr. Butz points out. "[The proposed Plan Support Agreements] would also impose on the Debtors' estates a $43.75 million disincentive against the Debtors' pursuit of an alternative course, including the more advantageous arrangements proposed by the Term Loan Lenders." As previously reported, the Term Loan Lenders offered (1) an option approach on April 16, 2010, that would remove the toggle concept and mirror the Claims Conversion Sub Plan, and (2) an approach on May 7, 2010, that would have the Term Loan Lenders provide a backstopped rights offering without any investor fees. Wilmington Trust contends that given the plain defects of the Toggle Plan approach, and the available and costless other alternatives, no business reason justifies approval of the proposed Plan Support Agreements and the massive and unnecessary obligations they impose on the Debtors' estates. Ad Hoc Equity Committee: Plan Support Pacts Violate Bankruptcy Code The Ad Hoc Committee of Equityholders in the Debtors' cases is concerned that the Plan Support Agreements seem to ignore multiple provisions of the Bankruptcy Code. Mona Parikh, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware -- mona.parikh@bip.com -- points out that: -- the Plan Support Agreement violates Section 1125(c) by locking up the Noteholders' votes; -- the Equity Committee Agreement requires the Debtors to pay extraordinary fees and expenses often imposed to prevent the proposal of any plan having distributions to shareholders; -- the Plan Agreements frustrate any purported fiduciary out; and -- the Plan Agreements either (a) fail to state claims under Section 363 of the Bankruptcy Code due to lack of marketing and auction, or (b) constitute illegal plan treatment because they cause creditors in the same class to be treated differently in violation of Section 1123(a)(4) of the Bankruptcy Code. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of US$4,561,000,000 and debts of US$5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) WASHINGTON MUTUAL: Bondholders Don't Support FDIC Settlement ------------------------------------------------------------ Senior bondholders of Washington Mutual Bank reacted to the announcement by the Federal Deposit Insurance Corporation on Friday of its approval of a proposed settlement among the FDIC, Washington Mutual Inc., and JP Morgan Chase, of claims relating to the WMB receivership estate and WMI's bankruptcy proceedings. "This proposed settlement by the FDIC would represent an enormous loss to the WMB estate," said William Isaacson of Boies, Schiller & Flexner. "The FDIC is signing off on a several billion dollars windfall to WMI and JPMC, including by affording them WMB-driven tax refunds made permissible by the 2009 stimulus legislation and giving effect to questionable reallocations by WMI of intercompany loans during the week prior to WMB's failure. Moreover, the proposed settlement would provide for vastly inferior treatment of the claims against WMI asserted by bank bondholders compared to the treatment afforded to the claims of the WMI noteholders, without any adjudication of the respective claims. The dramatically superior recovery of bondholders at the parent company level - under the proposed settlement, virtually all of the WMI noteholders including subordinated holders, will be paid in full, whereas senior WMB noteholders will not receive anything close to payment in full - will deliver the negative message to the marketplace to beware of investment in bank bonds because the FDIC will not protect bank creditors even where, as here, the assets were at the bank and the holding company noteholders were told at the time they purchased their notes that, in the case of an insolvency of the bank and the holding company, their recovery would be subordinate to that of bank creditors. This raises serious questions about the FDIC's ability to handle the collapse of large institutions and manage apparent conflicts of interest which pervade their statutory authority." Isaacson added "our clients do not support this proposed settlement. They will seek to vindicate their rights and claims, including their claims in the WMI bankruptcy proceedings, until a decision on the merits is reached." The settlement announced Friday follows a similar announcement by WMI last March of a purported settlement at that time. The FDIC reversed course then and rejected the earlier March proposed settlement, which quickly derailed after it was publicly disclosed that JPMC would receive billions in tax refunds from stimulus monies to which it was not entitled. A comparison of WMI's March proposal with its announcement last Friday reveals that this same central flaw continues to infect this new proposed plan. The major change is that JPMC is allocated $300 million of additional value primarily from the first tax refund (attributable to WMB's operating losses post- sale). Furthermore, the FDIC has allowed JPMC to reserve its rights to seek further consideration related to those same liabilities that were the subject of controversy in the March proposal. Indeed, the FDIC has agreed in the new plan to provide several hundreds of millions less to the WMB receivership estate than the previous plan rejected by the FDIC. WMI's share of the second tax refund (attributable to the 2009 stimulus package) is increased by nearly $700 million, thereby improving the recoveries of WMI noteholders by nearly $400 million. The FDIC agreed to this dramatic increase even though the FDIC had previously acknowledged in court that WMI had no claim at all to the WMB tax refunds. Contrary to the FDIC's statutory responsibility to the WMB receivership, it has given up substantial value for no consideration. WMI withdrew nearly $13.0 billion in dividends from WMB during 2006 and 2007, a time period in which the housing market was beginning to deteriorate and loan delinquencies were escalating. The WMB senior bonds provided essential financing and liquidity in order to facilitate these dividends. By the end of 2007, given all the cash it had taken out of WMB, WMI began to reinvest in WMB to keep it afloat. However, WMI's investments came in slowly and constituted only a fraction of the dividends it had earlier taken out. On the heels of those questionable dividend payments, WMI later withdrew from WMB approximately $4.0 billion in so-called "deposit funds" during the week before WMB's demise, when WMI should have been acting as a "source of strength" for WMB. Curiously, the settlement approved by the FDIC permits WMI to retain that windfall even in light of the subsequent announcement by the Office of Thrift Supervision that the primary cause of WMB's failure was the loss of $16.7 billion in deposits creating a run on the bank. In Friday's announcement, the FDIC argued that by settling now it would avoid costly litigation which could last for years, implying some benefit to the taxpayers. However, the WMB receivership has $1.9 billion of non-taxpayer funds to support the pursuit of claims, more than enough to cover any conceivable legal budget. It appears that the FDIC's motivation for entering into this proposed settlement may, at least in some measure, have been to avoid further scrutiny of how it handled this matter. Despite assurances from senior FDIC officials during the fall of 2008 that all potential assets of the receivership would be aggressively pursued, the reality provides a stark contrast. Far from serving as an instrument to maximize WMB receivership estate value, the FDIC has failed to safeguard and promote the interest of the principal remaining creditors of the receivership and has failed to maximize estate value. This has been exacerbated by the FDIC's inability to effectively navigate the bankruptcy process. Washington Mutual is the biggest bank failure ever. It will be a benchmark for how creditors are treated in large bank failures, and the message that will be delivered to investors, if this proposed settlement is consummated without significant improvement in the treatment of the WMB senior noteholders, is to avoid investments in bank-issued bonds. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with responsibility for the litigation. Brian Rosen, Esq., at Weil, Gotshal & Manges LLP served as legal counsel to WMI with responsibility for the chapter 11 case. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: Plan Outline Hearing Adjourned to June 3 ----------------------------------------------------------- Washington Mutual, Inc. and WMI Investment Corp. submitted to Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware a Second Amended Chapter 11 Plan of Reorganization and Disclosure Statement on May 21, 2010. "There were not significant changes to the Disclosure Statement," Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, argued a May 19, 2010, hearing, reports The Associated Press. The changes "relate only to nuances of the [Global] [S]ettlement [A]greement and objections to the Disclosure Statement," Mr. Rosen noted, according to AP. The Global Settlement Agreement refers to that pact reached among (i) the Debtors; (ii) JPMorgan Chase Bank, N.A.; (iii) the Federal Deposit Insurance Corporation in its capacity as receiver for Washington Mutual Bank; (iv) the FDIC, in its corporate capacity; (v) certain "noteholders;" and (vi) the Official Committee of Unsecured Creditors for the resolution of certain disputed accounts, the division of certain tax refunds and the ownership of certain trust preferred securities, among others. The Settling Noteholders include Appaloosa Management L.P.; Centerbridge Partners, L.P.; Owl Creek Asset Management, L.P.; and Aurelius Capital Management LP, each on behalf of certain of their affiliates. The terms of the Global Settlement were first announced on March 12, 2010. The Settlement terms were subsequently modified as reflected in filings with the Bankruptcy Court on each of March 26, 2010 and May 16, 2010, and additional modifications are reflected in the most recent version of the WaMu Plan and Disclosure Statement dated May 21, 2010. "We are trying to get this case out of Chapter 11 as quickly as possible," Mr. Rosen told Judge Walrath. The Second Amended Plan, the Second Amended Disclosure Statement, and the revised Global Settlement have the full support of the FDIC, JPMorgan and the Creditors Committee. In an official statement, WaMu said it is pleased to have reached an agreement with the FDIC and JPMorgan, and appreciate the strong support of the Creditors' Committee. WaMu noted it has worked diligently over the last 20 months to maximize the value of its bankruptcy estate and is confident that the Second Amended Plan will accomplish the objective of providing substantial recoveries for its creditors. The Second Amended Plan and Disclosure Statement were signed by WaMu Chief Restructuring Officer William C. Kosturos. A hearing will be held before Judge Walrath on June 3, 2010, at 10:30 a.m. Eastern Time to determine whether the Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. Objections to the Disclosure Statement, if any, must be filed no later than May 28, 2010, at 4:00 p.m. Eastern Time. Revised Global Settlement As previously reported, the Global Settlement contemplates the repayment of cash from JPMorgan of approximately $4 billion, which represents the funds in the Disputed Accounts. The Global Settlement also provides for the favorable allocation of certain Tax Refunds. Under the Second Amended Plan, the parties' expected net Tax Refunds total $5.5 to $5.8 billion, from a previous estimate of $5.4 to $5.8 billion. Thus, the Debtors also have a revised estimate of their share of the total Tax Refunds at $2.365 to $2.425 billion, from a previous estimate of $2.3 to $2.6 billion. That estimate of the Debtors' tax refund share is inclusive of any distribution that may be payable on account of Non-Subordinated Bank Bondholder Claims. The allocation of the "first portion" of the Tax Refund remains the same as in previous plan versions -- with 20% to be allocated to the Debtors and 80% to JPMorgan. The Tax Refund First Portion refers to the amount of net Tax Refunds that are or may be received absent the Federal Deposit Insurance Act's extension of the federal NOL carryback period. The allocation of the "second portion" of the Tax Refunds, however, is revised under the Second Amended Plan. Any additional net Tax Refunds will be allocated 65.178% [from a previous 68.5%] to WaMu, and 34.822% [from a previous 31.5%] will be allocated to the FDIC Receiver. Moreover, the Second Amended Plan specifically notes that: * If the Class of Non-Subordinated Bank Bondholder Claims votes to accept the Plan, then their Claims will be deemed allowed against the Debtors and each holder of a Non- Subordinated Bank Bondholder Claim will receive their pro rata share of "BB Liquidating Trust Interests," which interests, in the aggregate, represent a right to receive 5.357% [as opposed to a previous 5.5%] of the Tax refunds -- specifically the Homeownership Carryback Refund Amount, as defined in the Global Settlement Agreement -- subject to a $150 million cap. * If the class of Non-Subordinated Bank Bondholder Claims votes to reject the Plan, then the Debtors will only reserve for distribution to those Holders the BB Liquidating Trust Interests, if, pursuant to a final order of the Bankruptcy Court, the claims are determined to be allowed as against the Debtors. The Debtors currently estimate that the Second Portion of the Tax Refunds will be approximately $2.8 billion, approximately $1.825 billion of which is expected to be allocated to their estates, including any distribution that may be payable on account of Non- Subordinated Bank Bondholder Claims. The Second Amended Plan further clarifies that the FDIC Receiver will not be entitled to receive distributions on account of its proof of claim filed against the Debtors or otherwise. The Global Settlement also provides a resolution of the causes of action and claims the settling parties have asserted against each other, a turnover proceeding, and a Rule 2004 exam request. Accordingly, the Second Amended Disclosure Statement reflects that under the Global Settlement, the Settling Parties will seek rulings from the U.S. District Court for the District of Delaware, the Bankruptcy Court, or the relevant appellate court enjoining: (a) the plaintiffs in the 2009 action captioned American Nat'l Inc. Co., et al. v. JPMC Chase & Co., et al. and any other plaintiffs who have brought or may in the future bring claims from taking any action inconsistent with the Debtors' and the FDIC Receiver's ownership and exclusive control over claims and causes of action. The American National Action is all about the plaintiffs' assertion of various causes of action against JPMorgan in relation to its acquisition of WMB's assets; and (b) any other person from instituting or prosecuting any claims on behalf of WaMu, Washington Mutual Bank or the Receivership. The Global Settlement Parties agree that all of the rights of the WaMu Entities in and to trademarks, patents, domain names and copyrighted materials, that were used by WMB or were available for WMB's use prior to the Petition Date will be deemed to have been transferred by WaMu Entities to JPMorgan or its designee. The Parties further agree that: (i) with respect to the first $60 million of coverage under the Washington Mutual Financial Institution Blended Liability Program and related excess policies for the policy period May 1, 2007 to May 1, 2008, WaMu and its present and former officers and directors and employees, as Insured Parties, will be entitled to a priority recovery for all claims made by or on behalf of any Insured Party against the policies and bonds in the 2007- 08 Blended Tower, that priority amount to be used in connection with the defense and settlement of the Buus Litigation and the ERISA Litigation, as defined under the Second Amended Plan; and (ii) to the extent payment is made by one of the insurers in the 2007-08 Blended Tower to any party other than WaMu, prior to the reconciliation and determination of all other claims made by any Insured Party, present and former officers and directors and employees, the Funds paid and received will be deemed held by that Party in trust for the benefit of WaMu. To the extent JPMorgan assumes litigation liabilities pursuant to the Global Settlement, which may be the subject of the Tower Insurance Programs, the JPMorgan payments will be treated pari passu with the claims of WaMu, the FDIC Receiver, the FDIC Corporate, and WaMu's present and former D&Os and employees against the Tower Insurance Programs. On the effective date of the Global Settlement and solely to the extent that a final non-appealable judgment has not been entered previously against the plaintiffs in the American National Litigation, WaMu, the FDIC Receiver, and FDIC Corporate will take any and all actions to dismiss, with prejudice, the Litigation. Other Plan Provisions Aside from the Revised Global Settlement, the Second Amended Plan also provides further disclosure of other plan terms, which include rights offering, treatment of claim, description of a subordination model, and information on the reorganized common stock, among others: A. Rights Offering Reorganized WaMu will issue 5,600,000 shares of duly authorized common stock, with a par value of $25 per share on the Plan Effective Date. B. Treatment of Claims The Second Amended Plan still designates 21 classes of claims. The treatment of certain specified classes of claims were revised or supplemented, specifically Class 2, 3, 12, 14, 15 and 17 Claims. Each holder of a Class 2 Allowed Senior Notes Claim may only elect to receive percentage of Reorganized Common Stock that equals the Holder's Pro Rata Share of all Allowed Senior Notes Claims and Allowed General Unsecured Claims. If all Allowed Senior Notes Claims and Postpetition Interest Claims on account of Allowed Senior Notes Claims are paid in full in cash on the Effective Date, then holders of Allowed Senior Notes Claims who elected to receive Reorganized Common Stock will not receive the Stock and their election rights will automatically be deemed cancelled. To the extent all Class 2 Allowed Senior Notes Claims and/or Postpetition Interest Claims on account of Allowed Senior Notes Claims are not paid in full in cash on the Effective Date, holders of Allowed Senior Notes Claims who elected to receive Reorganized Common Stock will only be entitled to receive Reorganized Common Stock with an aggregate value equal to any unpaid portion of their Allowed Senior Notes Claims and Postpetition Interest Claims. Each holder of a Class 2 Allowed Senior Notes Claim may only elect to receive that percentage of Reorganized Common Stock that equals its pro rata share of (i) all Allowed Senior Notes Claims and Allowed General Unsecured Claims plus (ii) all Postpetition Interest Claims with respect of Allowed Senior Notes Claims and Allowed General Unsecured Claims. Each holder of Class 3 Allowed Senior Subordinated Notes Claims and Class 12 General Unsecured Claims may only elect to receive that percentage of Reorganized Common Stock that equals that Holder's Pro Rata Share of all Allowed Claims. Each holder of a Class 14 Allowed CCB-1 Guarantees Claims and Class 15 CCB-2 Guarantees Claims may only elect to receive that percentage of Reorganized Common Stock that equals the Holders Pro Rata Share of all Allowed CCB-1 Guarantees Claims and Allowed CCB-2 Guarantees Claims. If Holders of Class 17 Non-Subordinated Bank Bondholder Claims vote to accept the Plan, the Non-Subordinated Bank Bondholder Claims will be deemed Allowed Claims. Each Holder will receive a Pro Rata Share of BB Liquidating Trust Interests, which represent a right to receive 5.357% of the Homeownership Carryback Refund Amount, subject to a cap of $150,000,000, and subject to contractual subordination rights among the holders of Non-Subordinated Bank Bondholder Claims. If Class 17 rejects the Plan, the sole amount of reserve for distribution to the holders of Non-Subordinated Bank Bondholder Claims will be the BB Liquidating Trust Interests if the Bankruptcy Court determines the Claims to be Allowed. C. Subordination Model The Second Amended Disclosure Statement also describes a Subordination Model developed by Alvarez & Marsal North America, LLC, the Debtors' restructuring advisors, which implements the Debtors' interpretation of the respective subordination provisions in the Senior Subordinated Notes Indenture, CCB-1 Guarantee Agreements, CCB-2 Guarantee Agreements, Junior Subordinated Notes Indenture and PIERS Guarantee Agreement. D. Transfer of Reorganized Common Stock and Additional Common Stock Under the Second Amended Plan, the Debtors disclose that "a liquid trading market for the Reorganized Common Stock and Additional Common Stock may not develop." As of the Plan Effective Date, neither the Reorganized Common Stock nor the Additional Common Stock will be listed for trading on any stock exchange or trading system. Consequently, the trading liquidity of the Reorganized Common Stock and the Additional Common Stock may be limited as of the Effective Date. In addition, as of the Plan Effective Date, without the approval of the Board of Directors of Reorganized WaMu, no person will be permitted to acquire shares of Reorganized WaMu to the extent that after giving effect to the proposed acquisition: (1) the purported transferee or, as a result of the proposed acquisition, any other person, would hold at least 4.75% of Reorganized WaMu's shares; or (2) a person who already holds at least 4.75% of Reorganized WaMu's shares would hold a higher percentage of shares. E. Subscription Rights Pursuant to the Second Amended Plan, each holder of an Allowed PIERS Claim will receive certain Subscription Rights, entitling the Holder to purchase its Pro Rata Share of Additional Common Stock if the Holder -- based on its Pro Rata Share of Subscription Rights -- is entitled to subscribe for shares of Additional Common Stock for an aggregate Subscription Price of at least $2,000,000. Full-text clean copies as well as blacklined versions of the WaMu Second Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/WaMu_2ndAmendedDS.pdf http://bankrupt.com/misc/WaMu_2ndAmendedPlan.pdf http://bankrupt.com/misc/WaMu_Blacklined2ndAmendedDS.pdf http://bankrupt.com/misc/WaMu_Blacklined2ndAmendedPlan.pdf About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with responsibility for the litigation. Brian Rosen, Esq., at Weil, Gotshal & Manges LLP served as legal counsel to WMI with responsibility for the chapter 11 case. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: JPM Abandons Demand for $1.4-Bil. Tax Break -------------------------------------------------------------- J.P. Morgan Chase & Co. is ditching its demand for a $1.4 billion tax break in exchange for a bigger upfront share of a Washington Mutual Inc. bankruptcy settlement, The Wall Street Journal's Dan Fitzpatrick reports, citing people familiar with the talks. JPMorgan was reportedly "in discussions" with the Federal Deposit Insurance Corp. and bondholders about an accord that will allow it to benefit from the $1.4 billion tax refund. Upon approval of bondholders, a federal judge, a bankruptcy judge and the boards of the FDIC and JPMorgan, the agreement under discussion was said to enable JPMorgan to claim tax refund as part of a larger settlement with bondholders. Approximately $1.55 billion of the refund would be used by the FDIC to cover JP Morgan's potential losses on legal claims. Subsequently, JPMorgan can make a claim for as much as $1.4 billion of those funds. On the other hand, the potential settlement with bondholders covers an additional $11 billion in disputed deposits and other assets. JPMorgan's tax refund springs by a provision in the 2009 economic-stimulus bill that allows companies to apply losses from 2008 or 2009 against taxes paid in the previous five years, instead of the previous two years. Washington Mutual Bank, which JPMorgan acquired in September 2008, is eligible for about $2.6 billion in tax refunds due to the big losses it incurred in 2008, according to the Journal. The Journal notes, however, that the tax refund "specifically excluded any companies that received bank-bailout aid from getting the tax refunds" -- including JPMorgan that received $25 billion in 2008. The Wall Street Bank had argued, among other things, that the bailout ban wouldn't apply because Washington Mutual -- and not JP Morgan -- was the taxpayer. Moreover, the Refund would be held by the FDIC in receivership and JPMorgan could access the funds if sued over Washington Mutual-related issues, the report noted. In addition, the proposed tax break under the deal did not have the approval of certain parties involved in the Washington Mutual case, including the FDIC and bank bondholders. The Journal noted that based on its analysis of securities filings, JPMorgan would have been one of more than 250 companies that are expecting to get approximately $12 billion in federal tax refunds under the law. The Joint Committee on Taxation had estimated the provision would cost $33 billion in its first year. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with responsibility for the litigation. Brian Rosen, Esq., at Weil, Gotshal & Manges LLP served as legal counsel to WMI with responsibility for the chapter 11 case. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WESTCLIFF MEDICAL: Files for Chapter 11 to Sell to Rival -------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Westcliff Medical Laboratories Inc. is in bankruptcy, intending to sell the company quickly to competitor Laboratory Corp. of America. The sale price hasn't been disclosed. Santa Ana, California-based Westcliff Medical is a provider of clinical testing and pathology services at 170 locations in California. Westcliff filed a Chapter 11 petition on May 19 in Santa Ana, California (Bankr. C.D. Calif. Case No. 10-16743). The petition said that assets and debts range from $50,000,001 to $100,000,000. Parent BioLabs Inc. also filed for Chapter 11. The parent has no assets aside from owning Westcliff. Westcliff said in a court filing that it was "simply not able to operate sufficiently profitably to enable the debtors to repay their debts." There haven't been any payments on $56 million in three secured term loans since early 2009. Revenue of $97 million in 2009 resulted in a $13 million net loss. In 2008, the net loss was $87 million on net revenue of $84 million, according to a court filing. WOUND MANAGEMENT: Posts $1.2 Million Net Loss in Q1 2010 -------------------------------------------------------- Wound Management Tedhnologies, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $1.2 million on $66,690 of revenue for the three months ended March 31, 2010, compared with a net loss of $509,257 on $53,428 of revenue for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $6.2 million in assets, $3.6 milion of liabilities, and $2.6 million of stockholders' equity. Pritchett, Siler & Hardy, P.C., in Salt Lake City, expressed substantial doubt aobut the Company's abiity to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted that the Company has incurred substantial losses and has a working capital deficit. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?62fd Fort Worth, Tex.-based Wound Management Technologies, Inc., through its subsidiary, Wound Care Innovations, LLC, distributes collagen-based wound care products in the United States. * Berry Spears to Head Fulbright's Houston Bankruptcy Practice -------------------------------------------------------------- Fulbright & Jaworski L.L.P. has named Berry D. Spears, a prominent bankruptcy partner with extensive nationwide restructuring experience in the financial, manufacturing, telecommunications, real estate, retail and oil and gas industries, as the leader of the Bankruptcy and Insolvency practice in Houston. "Berry is a proven leader with a strong track record of success," said Michael Conlon, the head of Fulbright's Houston office. "He is perfectly poised to lead our experienced group of bankruptcy lawyers as they guide our clients through the complexity of today's bankruptcy landscape." Spears moved from the firm's Austin office to Houston this year. He has significant experience in bankruptcy and insolvency matters, including most recently, as a member of the Fulbright team that steered Idearc. Inc. and its affiliates, the largest bankruptcy case ever filed in Texas (with assets of over $10 billion), through a successful restructuring in approximately nine months. Spears has a broad and diverse client base, representing lenders, companies and committees across the country in all aspects of bankruptcy law. With valuable experience in the highly regulated electric utility industry, Spears has worked with cooperatives and independent power producers in a variety of complex matters. He also led the country's first successful restructuring of a significant "roll- up" in the residential and commercial plumbing, heating, ventilation and air conditioning (HVAC) market. "Berry's skill, experience, knowledge, commitment to maximizing value to his clients and national client base make him the perfect person to lead our Houston practice group," said Louis Strubeck, the head of Fulbright's Bankruptcy and Insolvency Department. Spears has served on the advisory board for The Helping Hand Home for Children, an Austin-based residential facility for abused, neglected and abandoned children. He also has served as a board member and executive committee member of the Capital Area United Way; Chair of the Bankruptcy Law Section of the State Bar of Texas and as the Chair of both the Unsecured Trade Creditors' Committee and the Real Estate Committee of the American Bankruptcy Institute. He is a Fellow of the American College of Bankruptcy and for years has been included in listings maintained by Chamber Partners USA and Best Lawyers in America. "Our seamless approach, which utilizes the right lawyer for the right task, is what enables our team to best represent a diverse range of clients with interests in a variety of industries," said Spears. "I look forward to building new relationships in Houston while continuing to work shoulder-to-shoulder with our capable, dedicated and impressive team of lawyers, all of whom bring a broad array of experience in both the transactional and litigation aspects of bankruptcy and insolvency matters." Spears received his J.D. from The University of Texas School of Law in 1982 and his B.A. from Austin College in 1979. Fulbright & Jaworski L.L.P. Founded in 1919, Fulbright & Jaworski L.L.P. is a leading full- service international law firm, with nearly 1,000 lawyers in 16 locations in Austin, Beijing, Dallas, Denver, Dubai, Hong Kong, Houston, London, Los Angeles, Minneapolis, Munich, New York, Riyadh, San Antonio, St. Louis and Washington, D.C. Fulbright provides a full range of legal services to clients worldwide. The 2009 BTI survey of FORTUNE 1000 general counsel chose Fulbright as "The BTI Client Service 30" and Corporate Board Member magazine named Fulbright among the top 20 corporate law firms in the U.S. in their survey of board members of public companies. For more information, please visit: www.fulbright.com * Ben Gonzalez and GR Christon Join KPMG Restructuring Group ------------------------------------------------------------ KPMG LLP disclosed that two senior industry executives have joined the firm's Restructuring Services group. Ben Gonzalez, principal, and George "GR" Christon, managing director, will work with companies to help them improve performance and recover value in stressed and distressed situations. "Ben and GR bring significant debtor and senior lender restructuring experience to KPMG's growing Restructuring Advisory practice, strengthening our position as a significant global and U.S. restructuring advisor," said Drew Koecher, KPMG's U.S. leader for Restructuring Services. "Their proven track record assisting debtors and senior creditors with improving value recovery - across a variety of industries - enhances our restructuring team's ability to serve our clients." Prior to joining KPMG, Gonzalez served as a principal in Grant Thornton LLP's Corporate Advisory and Restructuring Services practice. He has deep experience advising companies, lenders, and other stakeholders on financial restructuring alternatives and working with both healthy and distressed organizations on mergers, acquisitions, and recapitalizations. Ben started his career as a credit analyst for InterFirst Bank in Texas, working in the industry for 10 years before becoming a restructuring advisor. He earned a bachelor's degree from The University of Texas, and an MBA from the Harvard Business School. Before his arrival at KPMG, Christon was a senior director with Alvarez & Marsal. He specializes in leading debtor turnarounds, financial & operational restructurings, business plan development and valuations in connection with insolvency proceedings. He holds a bachelor's degree from Auburn University, and a master's degree and a joint Juris Doctorate / MBA degree from Southern Methodist University. "We are pleased to welcome Ben and GR to our growing team of Restructuring Services professionals," said Dan Tiemann, U.S. leader for KPMG's Transactions & Restructuring group. "With the ability to deliver a full range of restructuring solutions, including troubled debt advisory through Corporate Finance, tax restructuring, distressed M&A, valuation services, litigation support, and fresh start accounting capabilities, Ben and GR are well-equipped to deliver end-to-end services to our large- and middle-market clients." About KPMG's Global Restructuring Services KPMG's Global Restructuring Services comprises teams of dedicated restructuring partners and professionals from the network of member firms of KPMG International. These teams work globally with companies, lenders and other stakeholders to help provide stability, restore confidence and improve performance and recovery in stressed and distressed situations. KPMG's network of restructuring partners and professionals have considerable experience in performance improvement, turnarounds, insolvency, mergers and acquisitions, transaction structuring, tax, valuation, real estate, forensic investigations and technical accounting services. KPMG's restructuring teams assist clients in developing and evaluating business turnaround scenarios, improving cash and liquidity, assessing capital structuring alternatives and enhancing recovery options out of court and in bankruptcy. About KPMG LLP KPMG LLP, the audit, tax and advisory firm, is the U.S. member firm of KPMG International Cooperative. KPMG International's member firms have 140,000 professionals, including more than 7,900 partners, in 146 countries. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Share- Total Working Holders' Assets Capital Equity Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- -------- ACCO BRANDS CORP ABD US 1,062.7 240.1 (118.0) AFC ENTERPRISES AFCE US 116.6 (2.7) (18.2) ALEXZA PHARMACEU ALXA US 67.1 24.2 (18.8) ALLIANCE DATA ADS US 7,919.8 3,352.2 (53.6) AMER AXLE & MFG AXL US 1,967.6 (0.3) (545.4) AMR CORP AMR US 25,525.0 (1,407.0) (3,892.0) ARIAD PHARM ARIA US 50.4 (8.2) (110.8) ARRAY BIOPHARMA ARRY US 131.5 21.5 (109.5) ARVINMERITOR INC ARM US 2,769.0 345.0 (877.0) AUTOZONE INC AZO US 5,425.0 (100.6) (421.7) BLUEKNIGHT ENERG BKEP US 303.6 (15.3) (147.2) BOARDWALK REAL E BEI-U CN 2,378.3 - (45.0) BOARDWALK REAL E BOWFF US 2,378.3 - (45.0) CABLEVISION SYS CVC US 7,364.2 54.8 (6,201.5) CARDTRONICS INC CATM US 449.3 (36.6) (2.3) CC MEDIA-A CCMO US 17,400.0 1,279.2 (7,054.8) CENTENNIAL COMM CYCL US 1,480.9 (52.1) (925.9) CENVEO INC CVO US 1,563.5 212.7 (180.6) CHENIERE ENERGY CQP US 1,883.2 37.6 (491.7) CHENIERE ENERGY LNG US 2,736.6 212.8 (468.7) CHOICE HOTELS CHH US 360.6 (6.3) (115.0) CINCINNATI BELL CBB US 2,589.6 (3.3) (634.6) COMMERCIAL VEHIC CVGI US 276.8 105.5 (10.7) CONSUMERS' WATER CWI-U CN 895.2 (5.3) (254.9) CUMULUS MEDIA-A CMLS US 323.1 (32.4) (372.3) DENNY'S CORP DENN US 313.7 (24.7) (119.0) DISH NETWORK-A DISH US 8,689.0 305.1 (1,850.3) DOMINO'S PIZZA DPZ US 427.6 92.8 (1,290.0) DUN & BRADSTREET DNB US 1,699.5 (454.1) (778.3) EASTMAN KODAK EK US 7,178.0 1,588.0 (53.0) EPICEPT CORP EPCT SS 6.3 0.2 (12.7) EXELIXIS INC EXEL US 284.2 (32.7) (199.3) FORD MOTOR CO F US 195,485.0 (7,269.0) (5,437.0) FORD MOTOR CO F BB 195,485.0 (7,269.0) (5,437.0) GENCORP INC GY US 1,018.7 114.6 (268.0) GLG PARTNERS-UTS GLG/U US 403.5 155.5 (285.9) GRAHAM PACKAGING GRM US 2,126.4 187.6 (629.0) GREAT ATLA & PAC GAP US 2,827.2 201.3 (396.4) HALOZYME THERAPE HALO US 65.2 48.9 (3.2) HEALTHSOUTH CORP HLS US 1,716.1 90.6 (474.5) HOVNANIAN ENT-A HOV US 2,100.2 1,222.4 (110.7) IDENIX PHARM IDIX US 61.0 16.8 (20.7) INCYTE CORP INCY US 502.7 332.9 (114.4) INTERMUNE INC ITMN US 190.9 102.8 (21.3) IPCS INC IPCS US 559.2 72.1 (33.0) JAZZ PHARMACEUTI JAZZ US 106.7 (31.2) (69.0) JUST ENERGY INCO JE-U CN 1,387.1 (387.0) (356.5) KNOLOGY INC KNOL US 641.7 30.9 (28.3) LIBBEY INC LBY US 776.9 128.0 (18.3) LIN TV CORP-CL A TVL US 780.6 22.9 (164.2) LINEAR TECH CORP LLTC US 1,615.8 742.7 (50.7) LORILLARD INC LO US 2,902.0 718.0 (37.0) MAGMA DESIGN AUT LAVA US 123.3 (3.4) (7.2) MAGUIRE PROPERTI MPG US 3,517.3 - (830.6) MANNKIND CORP MNKD US 243.3 8.5 (100.9) MEAD JOHNSON MJN US 1,996.7 319.9 (583.7) METALS USA HOLDI MUSA US 655.4 294.1 (43.0) MOODY'S CORP MCO US 2,003.3 (138.9) (534.0) NATIONAL CINEMED NCMI US 620.4 106.9 (462.7) NAVISTAR INTL NAV US 9,126.0 1,277.0 (1,622.0) NEUROGESX INC NGSX US 43.6 28.7 (8.3) NEWCASTLE INVT C NCT US 3,471.2 - (1,117.8) NEXSTAR BROADC-A NXST US 619.8 36.9 (176.3) NPS PHARM INC NPSP US 140.4 95.2 (227.6) PALM INC PALM US 1,007.2 141.7 (6.2) PDL BIOPHARMA IN PDLI US 358.3 (83.5) (501.1) PETROALGAE INC PALG US 7.1 (9.8) (43.8) PRIMEDIA INC PRM US 236.5 (2.2) (103.3) PROTECTION ONE PONE US 562.9 (7.6) (61.8) QWEST COMMUNICAT Q US 19,362.0 (585.0) (1,120.0) REGAL ENTERTAI-A RGC US 2,588.9 (168.9) (260.7) REVLON INC-A REV US 765.8 63.9 (1,027.2) RSC HOLDINGS INC RRR US 2,669.6 (66.1) (9.8) RURAL/METRO CORP RURL US 286.2 38.7 (100.9) SALLY BEAUTY HOL SBH US 1,531.5 366.1 (553.1) SANDRIDGE ENERGY SD US 2,971.7 (33.9) (171.3) SEALY CORP ZZ US 1,011.9 173.1 (92.3) SINCLAIR BROAD-A SBGI US 1,576.6 48.1 (187.8) SOUTHGOBI ENERGY 1878 HK 560.7 388.8 (2.8) SOUTHGOBI ENERGY SGQ CN 560.7 388.8 (2.8) SUN COMMUNITIES SUI US 1,173.3 - (118.3) TALBOTS INC TLB US 825.8 (261.9) (185.6) TAUBMAN CENTERS TCO US 2,572.3 - (494.8) TEAM HEALTH HOLD TMH US 797.4 52.1 (58.6) TENNECO INC TEN US 3,034.0 203.0 (14.0) THERAVANCE THRX US 249.9 196.6 (113.0) UAL CORP UAUA US 19,952.0 (1,019.0) (2,887.0) UNISYS CORP UIS US 2,711.8 320.6 (1,221.7) UNITED RENTALS URI US 3,584.0 30.0 (48.0) US AIRWAYS GROUP LCC US 7,808.0 (445.0) (447.0) VECTOR GROUP LTD VGR US 743.1 231.5 (13.4) VENOCO INC VQ US 799.5 10.6 (127.6) VIRGIN MOBILE-A VM US 307.4 (138.3) (244.2) WABASH NATIONAL WNC US 249.0 (154.6) (62.4) WARNER MUSIC GRO WMG US 3,752.0 (557.0) (116.0) WEIGHT WATCHERS WTW US 1,093.0 (408.5) (700.1) 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) WR GRACE & CO GRA US 3,957.9 1,177.5 (234.4) ********* 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 ***