/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100727.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, July 27, 2010, Vol. 14, No. 206 Headlines 621 STOCKTON: Asks for Court Okay to Use Cash Collateral 621 STOCKTON: Section 341(a) Meeting Scheduled for August 24 9339 ALONDRA: Case Summary & 7 Largest Unsecured Creditors ACACIA AUTOMOTIVE: Posts $115,700 Net Loss in Q1 2010 AFC ENTERPRISES: Morgan Stanley No Longer Holds Shares ALIMENTATION COUCHE-TARD: Moody's Reviews 'Ba1' Rating on Notes ALION SCIENCE: Ret. Gen. Hayden Elected to Board of Directors ALMATIS B.V.: Proposes Butzel Long as Special Counsel ALMATIS B.V.: Schedules & Statements Due July 30 AMERICA'S SUPPLIERS: Board Seek Replacement to Deceased CEO AMERICAN AXLE: S&P Hikes Outlook to Positive; 'B-' Rating Affirmed AMERICREDIT CORP: $3.5-Bil. GM Deal Cues Fitch's Evolving Watch AMSTED INDUSTRIES: S&P Withdraws 'BB-' Rating on Senior Facility AUTOZONE INC: Director Crowley, Tynan Report Sale of Shares AUTOZONE INC: Eddie Lampert Reports Sale of Shares AVISTAR COMMS: Posts $2.4 Million Net Loss for June 30 Quarter AXIA INC: Bankruptcy Cases Converted to Chapter 7 BALTIMORE AND CHARLES: Files for Chapter 11 Bankruptcy BAYOU GROUP: Goldman Seeks to Overturn $21MM Arbitration Award BERNARD MADOFF: Trustee Preparing Suits vs. Individual Investors BLUE WILLOW: Case Summary & 20 Largest Unsecured Creditors BOSQUE POWER: Lenders Win Bid to Cut Exclusivity Period by 60 Days BUILDERS FIRSTSOURCE: Posts $19 Million Net Loss for June 30 Qtr CABLEVISION SYSTEMS: Fitch Affirms 'BB-' Issuer Default Ratings CAPITAL GROWTH: Files for Chapter 11 Protection CHEMITEK 2006: Reorganization Case Dismissed for Bad Faith Filing CITIGROUP INC: Treasury Selling 1.5 Billion of Common Stock COEUR D'ALENE: Inks Master Lease Agreement with Mitsubishi COLONIAL BANCGROUP: SEC May Revoke Registration of Securities CONCORDIA LUTHERAN: Case Summary & 3 Largest Unsecured Creditors CONSPIRACY ENT: To Sell $600,000 Promissory Notes to Subscribers CONTINENTAL AIRLINES: Posts $233 Million Net Income for 2nd Qtr CONTINENTAL AIRLINES: Files Guidance for 3rd Qtr & Full Year 2010 CORRELOGIC OF GERMANTOWN: Files for Chapter 11 Protection COVER-ALL HOLDING: U.S. Court Recognizes Chapter 15 Proceeding CROWN EUROPEAN: S&P Assigns 'BB-' Senior Unsecured Debt Rating DELTA AIR: Inks $450 Million Equipment Notes Purchase Deal DELTA AIR: Inks Pacts to Sell Mesaba, Compass Subsidiaries DELTA AIR: Swings to $549 Mil. Net Income for Q2 2010 DENNY'S CORP: New Director Dedrick Doesn't Hold Securities DRAGON PHARMACEUTICAL: Deregisters Unsold Shares Following Merger DRAGON PHARMACEUTICAL: Datong Investment Merger Approved DREIER LLP: Judge Approves Verition, Trustee Settlement Deals DOUG VAUGHAN: Bankruptcy Trustee to Sell Mansion for $2.5 Million DT LAS VEGAS: Case Summary & 20 Largest Unsecured Creditors DUBAI WORLD: DLF Aims to Buy Half of India Realty Joint Venture E*TRADE FINANCIAL: Posts $35 Mil. Net Income for June 30 Quarter E*TRADE FINANCIAL: DBRS Rates Issuer & Senior Debt at 'B' ENRON CORP: ECRC Submits 23rd Post-Confirmation Report ENRON CORP: Newby, et al., Seek to End ESL3624 Web Site ES ENERGY: Voluntary Chapter 11 Case Summary FAIRFIELD SENTRY: Kenneth Krys & Christopher Stride as Liquidators FAIRFIELD SENTRY: Secures Chapter 15 Creditor Protection FONTAINEBLEAU L.V.: Court OKs Ch. 7 Trustee Bond Premium Budget FONTAINEBLEAU L.V.: District Court Remands Appeals on DIP Order FONTAINEBLEAU L.V.: Ex-Employees Seek Payment of Unpaid Wages FORUM HEALTH: MBIA Discovery on Buyer Partially Approved FREDE ENTERPRISES: Files for Chapter 11 Bankruptcy Protection GARLOCK SEALING: Anchor Packing Files Schedules & Statement GARLOCK SEALING: Committee Proposes Katten Muchin as Counsel GARLOCK SEALING: Submits Rule 2015.3 Report for July GARLOCK SEALING: Wins Nod to Hire Bates White as Consultant GENERAL GROWTH: Wins OK for $400 Million DIP Deal with Barclays GLIMCHER REALTY: Commences Offering of 12 Million Shares GLOBAL CASH: S&P Gives Negative Outlook; Affirms 'BB-' Rating GOLDSPRING INC: Changes Company Name to Comstock Mining GREAT ATLANTIC: Directors Acquire Phantom Stock Units GREEKTOWN HOLDINGS: Buchwald to Take Over Suit vs. Papases GREEKTOWN HOLDINGS: Enters into $30MM Exit Revolver with Comerica GREEKTOWN HOLDINGS: Names Buchwald Capital as Litigation Trustee GREEKTOWN HOLDINGS: Superholdings Sues Jim Papas for $7 Million GREENFIELD POWER: Moody's Assigns 'B1' Rating on $335 Mil. Loan GTC BIOTHERAPEUTICS: 3 Directors Receive Shares as Retainer Fees GTC BIOTHERAPEUTICS: Inks Agreement with Lundbeck Inc HOTCOPRI, LLC: Case Summary & 18 Largest Unsecured Creditors HUDSON'S FURNITURE: Gets Final Approval to Access Cash Collateral HUDSON'S FURNITURE: Plan Contemplates Consolidation of Debtors HVHC INC: S&P Affirms Counterparty Credit Rating at 'BB' INDUSTRY WEST: Promises to Pay 100% of Unsecured Creditors' Claims INNKEEPERS USA: Court Grants Interim Access to Cash Collateral INNKEEPERS USA: Hires Omni Management as Claims Agent INNKEEPERS USA: Proposes Moelis as Financial Advisor INNKEEPERS USA: Schedules Deadline Extended to September 1 IRVINE SENSORS: Inks Subscription Deal with 12 Investors JERRY MCWILLIS: BofA's Liquidating Plan OK'd; Files Amended Plan JETBLUE AIRWAYS: Earns $30 Million for Second Quarter 2010 JEVIC TRANSPORTATION: Interline Trust Fund Dispute Going to Trial JILLPLEX LLC: Case Summary & 6 Largest Unsecured Creditors KENNETH STARR: Seeks Release on $2 Million Bail LEHMAN BROTHERS: BNY Mellon Opposes Substantive Consolidation LEHMAN BROTHERS: Has Paid $873,090,000 to Advisors So Far LEHMAN BROTHERS: Insists on McIssac Testimony Against Barclays LEHMAN BROTHERS: Wins Nod of Deal With Silver Lake, et al. LEHMAN BROTHERS: Has Nod to Transfer Servicing Rights to Aurora LEHMAN BROTHERS: Wins OK to Sell New Silk Stake to Berkeley LEVI STRAUSS: Names Fernando Aguirre as Chief Executive Officer LINEAR TECHNOLOGY: Directors Acquire 3,000 Shares on July 22 LINEAR TECHNOLOGY: Posts $124.5MM Net Income for June 27 Quarter LITTLE TOKYO: Asks for Court Okay to Use Cash Collateral LITTLE TOKYO: Section 341(a) Meeting Scheduled for August 26 LODGENET INTERACTIVE: Black Horse Sells 1-Mil. Shares LODGENET INTERACTIVE: PAR Investment Reports Equity Stake LODGENET INTERACTIVE: Stockholders Elect 3 Directors MALANDRIN LLC: Case Summary & 18 Largest Unsecured Creditors METALS USA: Posts $2.5 Million Net Income for June 30 Quarter MIRAMAX FILMS: Disney Wants Buyer to Advance $40MM by Wednesday NEWLOOK INDUSTRIES: Expects to Submit Annual Report by July 31 NPS PHARMACEUTICALS: Completes Patient Randomization in Phase 3 MODOC COUNTY: California Considers Loan for Troubled County OAK SONG: Voluntary Chapter 11 Case Summary ON SEMICONDUCTOR: S&P Puts 'BB-' Rating on CreditWatch Positive PACIFIC AVENUE: Has 90 Days to File Plan to Save Company PACIFIC ENERGY: Files Liquidating Plan and Disclosure Statement PAJAAMCO FAMILY: Can Sell O&E Condominiums to Pay Rio Bank PEPPERWELL OAKS: Case Summary & 6 Largest Unsecured Creditors PICCADILLY INN: Files Voluntary Petition for Chapter 11 PMP II: to Convey Asset for a 25% Membership Interest in HKMP LLC POWER EFFICIENCY: Three Resign from Board of Directors PRIUM MEEKER: Section 341(a) Meeting Scheduled for August 18 QSGI INC: Inks Settlement Agreement with John Riconda RIALTO HEIGHTS: Voluntary Chapter 11 Case Summary RICCO INC: Bankruptcy Counsel Withdrawn from Reorganization Case RIVERHEAD PARK: Files Amended Plan of Reorganization RJ YORK: Automatic Stay Lifted on Property; Case Dismissed RMA REAL ESTATE: Involuntary Case Dismissed ROTHSTEIN ROSENFELDT: Banyon Fund & George Levin Settle ROTHSTEIN ROSENFELDT: Ex-Partner Adler Concern Over Dual Claims ROTHSTEIN ROSENFELDT: Judge to Hire Own Expert in Qtask Case SAC II: Files Amended Schedules of Assets and Liabilities SAC II: Files List of Largest Unsecured Creditors SAINT VINCENTS: Has OK to Auction Off Home Healthcare Program SEA LAUNCH: Boeing, Aker Object to Reorganization Plan SNOWFLAKE WHITE: Files for Bankruptcy to Stop Salt River SOL DE IBIZA: Sale Woes Prompt Chapter 11 Bankruptcy Filing SPECIALTY ACQUISITION: Files New Schedules of Assets and Debts SPECIALTY TRUST: Can Sell Las Vegas Property to SDMI Centennial STANDFAST INDUSTRIES: Case Summary & 19 Largest Unsec. Creditors STATION CASINOS: Further Revises Chapter 11 Plan STATION CASINOS: Wins Nod to Enter Into Insurance Pact With FIFC STATION CASINOS: Wins OK to Settle FTB Disputes for $2.8 Million STONE*WALL FARM: Case Summary & 20 Largest Unsecured Creditors SUNESIS PHARMA: Committee Approves Cash Bonuses to Executives TEXAS RANGERS: Cuban Deal May Be Like Phoenix Coyotes Scenario TRILOGY INTERNATIONAL: Moody's Assigns 'Caa1' Rating on Notes UAL CORP: Continental & UAL Reach Transition Pact with Pilots UAL CORP: Provides Financial Projections for 3rd Quarter UAL CORP: Reports First Quarterly Profit Since 2007 ULICO STANDARD: A.M. Best Withdraws B- Financial Strength Rating UNO RESTAURANT: Emerges from Chapter 11 US CONCRETE: Put Option Parties Commit to Purchase $50MM of Notes USG CORP: Posts $74 Million Net Loss for June 30 Quarter VANTAGE DRILLING: S&P Assigns 'B-' Corporate Credit Rating VIKING SYSTEMS: Directors Acquire Stock Options VIKING SYSTEMS: To Report Strategic Plan & Market Opportunities VISTEON CORP: Union Wants to Reinstate Retiree's Insurance VITERRA INC: Moody's Assigns 'Ba1' Rating on Senior Unsec. Notes WILDWING DEV'T: Unable to Obtain Funding, Wants Case Dismissed WILLIAM ROSE: Voluntary Chapter 11 Case Summary WYNN RESORTS: Moody's Affirms Corporate Family Rating at 'Ba3' XODTEC LED: Posts $614,400 Net Loss in Q1 Ended May 31 ZALE CORP: Bank Can End Deal If Credit Sales Fall Below Threshold * Florida Lawyer Gets 8 Years for $2.6 Million Fraud Scheme * Large Companies With Insolvent Balance Sheets ******** 621 STOCKTON: Asks for Court Okay to Use Cash Collateral -------------------------------------------------------- 621 Stockton DE, LLC, and Bay Citi Properties have asked for authorization from the U.S. Bankruptcy Court for the Northern District of California to use cash collateral through October 31, 2010. The Debtors and their affiliates are engaged in the business of owning and operating investment real property, including 8 separate multi-family apartment buildings within the City of San Francisco. The rental income from these properties constitute cash collateral of certain secured lenders. The apartment buildings are subject to a single, blanket senior deed of trust held and serviced by LNR Real Estate Partners and a second deed of trust held by Oxford Investments & Mortgages, for various beneficiaries. All of the properties require payment of critical operating expenses to preserve their value. John H. MacConaghy, Esq., at MacConaghy & Barnier, Plc, the attorney for the Debtors, explains that the Debtors need to use cash collateral to fund their Chapter 11 cases, pay suppliers and other parties. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/621_STOCKTON_budget.pdf To provide adequate protection to their secured creditors, the Debtors seek authority to maintain the "soft lock-box" account arrangement now in place with LNR Real Estate Partners. Pursuant to this arrangement, the resident managers of each property pay all gross rent receipts into a controlled account at Westamerica Bank, LNR Real Estate Partners authorizes periodic disbursements for critical operating expenses, and the balance is periodically swept as debt service. LNR, represented by Duane Morris LLP, does not consent to the use or expenditure of the Rents by Debtor or any other person, and any such use or expenditure is prohibited. It demands that rents be segregated and that Debtors immediately provide an accounting of the cash collateral. About 621 Stockton San Francisco, California-based 621 Stockton DE, LLC, filed for Chapter 11 bankruptcy protection on July 15, 2010 (Bankr. N.D. Calif. Case No. 10-32661). John H. MacConaghy, Esq., at MacConaghy and Barnier, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. Various affiliates, including Bay Citi Properties II DE, LLC (Case No. 10-32662), also filed for Chapter 11. Bay City estimated its assets and debts at $10,000,001 to $50,000,000. 621 STOCKTON: Section 341(a) Meeting Scheduled for August 24 ----------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of the creditors of 621 Stockton DE, LLC and Bay Citi Properties II DE, LLC, on August 24, 2010, at 10:30 a.m. The meeting will be held at San Francisco U.S. Trustee Off, Office of the U.S. Trustee, 235 Pine Street, Suite 850, San Francisco, CA 94104. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About 621 Stockton San Francisco, California-based 621 Stockton DE, LLC, filed for Chapter 11 bankruptcy protection on July 15, 2010 (Bankr. N.D. Calif. Case No. 10-32661). John H. MacConaghy, Esq., at MacConaghy and Barnier, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. Various affiliates, including Bay Citi Properties II DE, LLC (Case No. 10-32662), also filed for Chapter 11. Bay City estimated its assets and debts at $10,000,001 to $50,000,000. 9339 ALONDRA: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 9339 Alondra Blvd, LLC 156 S. Clark Drive Beverly Hills, CA 90211 Bankruptcy Case No.: 10-39725 Chapter 11 Petition Date: July 20, 2010 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Michael Jay Berger, Esq. 9454 Wilshire Boulevard, 6th Floor Beverly Hills, CA 90212-2929 Tel: (310) 271-6223 Fax: (310) 271-9805 E-mail: michael.berger@bankruptcypower.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 7 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-39725.pdf The petition was signed by Javid Somekh, managing member. ACACIA AUTOMOTIVE: Posts $115,700 Net Loss in Q1 2010 ----------------------------------------------------- Acacia Automotive, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $115,745 on $978,144 of revenue for the three months ended March 31, 2010, compared with a net loss of $37,444 on $321,650 of revenue for the same period of 2009. The Company's balance sheet at March 31, 2010, showed $2,086,986 in assets, $1,921,440 of liabilities, and $165,546 of stockholders' equity. As reported in the Troubled Company Reporter on June 8, 2010, Killman, Murrell & Company, P.C., in Odessa, Texas, 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 and has limited capital resources. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?670c Based in Ocala, Fla., Acacia Automotive, Inc. (PNK: ACCA.PK) -- http://www.acacia.bz/-- is engaged in acquiring and operating automotive auctions, including automobile, truck, equipment, boat, motor home, RV, motorsports, and other related vehicles. AFC ENTERPRISES: Morgan Stanley No Longer Holds Shares ------------------------------------------------------ Morgan Stanley disclosed that as of June 30, 2010, it no longer held shares of common stock in AFC Enterprises Inc. Atlanta, Georgia-based AFC Enterprises, Inc. (NASDAQ: AFCE) -- http://www.afce.com/-- is the franchisor and operator of Popeyes(R) restaurants, the world's second-largest quick-service chicken concept based on number of units. As of April 18, 2010, Popeyes had 1,944 operating restaurants in the United States, Puerto Rico, Guam and 27 foreign countries. At April 18, 2010, the Company had $114.6 million in total assets against $34.1 million in total current liabilities and $92.0 million in total long-term liabilities, resulting in $11.5 million in stockholders' deficit. * * * As reported by the Troubled Company Reporter on December 18, 2009, Moody's Investors Service affirmed all ratings of AFC Enterprises, including its B1 Corporate Family Rating and Ba3 rating of its senior secured credit facilities, with a stable outlook. Its Speculative Grade Liquidity rating was affirmed at SGL-3 concurrently. ALIMENTATION COUCHE-TARD: Moody's Reviews 'Ba1' Rating on Notes --------------------------------------------------------------- Moody's Investors Service is continuing to review the Ba1 senior subordinate rating of Alimentation Couche-Tard Inc. for possible downgrade. The continuance of the review follows yesterday's announcement by ACT that it has increased its initial tender offer to acquire all of the outstanding common shares of Casey's General Stores, Inc., by 2% to $36.75/share, representing an enterprise value of $1.9 billion. Moody's review will focus on ACT's plans to finance the potential transaction (committed financing is a condition to completing the transaction), including an assessment of its resulting balance sheet, liquidity profile and plans for future debt reduction. The review will also focus on ACT's integration plans for Casey's, including the potential for any cost synergies recognizing that Casey's largely rural footprint differs from ACT's current concentration in more urban areas. Finally, Moody's will consider ACT's appetite to pursue any future leveraged transactions. Moody's anticipates that it will resolve its review once the outcome of the potential transaction becomes highly likely. ACT's offer to acquire Casey's currently expires August 6, 2010. The last rating action for ACT was on April 12, 2010, when the company's senior subordinate rating was placed under review for possible downgrade. Alimentation Couche-Tard Inc., headquartered in Laval, Quebec, owns and licenses 5,878 convenience stores across North America, of which 4,408 are company operated, under the "Circle K", "Couche-Tard", "Mac's", and other banners. Revenue for the fiscal year ending April 25, 2010, totaled roughly $16.4 billion. ALION SCIENCE: Ret. Gen. Hayden Elected to Board of Directors ------------------------------------------------------------- General Michael V. Hayden, (Ret.) was elected to the Board of Directors of Alion Science and Technology Corporation and was appointed to the Registrant's Corporate Governance and Compliance Committee effective as of July 16, 2010. General Hayden is a retired United States Air Force General and is a former Director of the National Security Agency, a former Director of the Central Intelligence Agency, and a former Principal Deputy Director of National Intelligence. General Hayden entered active duty in 1969 after earning a bachelor's degree in history in 1967 and a master's degree in modern American history in 1969, both from Duquesne University. He is a distinguished graduate of the university's ROTC program. General Hayden served as Commander of the Air Intelligence Agency and as Director of the Joint Command and Control Warfare Center. He has also served in senior staff positions at the Pentagon, Headquarters U.S. European Command, National Security Council and the U.S. Embassy in the People's Republic of Bulgaria. Hayden also served as Deputy Chief of Staff, United Nations Command and U.S. Forces Korea, Yongsan Army Garrison, South Korea. He currently serves as a Distinguished Visiting Professor at George Mason University School of Public Policy and as a Principal at the Chertoff Group. About Alion Science Alion Science and Technology Corporation, based in McLean, VA, is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Particular areas of expertise include communications, wireless technology, netcentric warfare, modeling and simulation, chemical and biological warfare, program management. As of December 30, 2009, the Company had total assets of $639,046,000 against total current liabilities of $169,588,000, senior term loan payable, excluding current portion of $226,969,000, senior unsecured notes of $245,462,000, subordinated note payable of $45,715,000, redeemable common stock of $187,112,000, and accumulated deficit of $282,500,000. * * * Alion carries 'Caa3' corporate family and probability of default ratings from Moody's. Alion carries a 'B-' corporate credit rating from Standard & Poor's. ALMATIS B.V.: Proposes Butzel Long as Special Counsel ----------------------------------------------------- Almatis B.V. and its affiliated debtors seek approval from the U.S. Bankruptcy Court to employ Butzel Long as their special litigation conflicts counsel effective as of June 25, 2010. The Debtors will tap Butzel Long to represent them in litigation matters where their general bankruptcy counsel, Gibson Dunn & Crutcher LLP, has a potential conflict, says Remco de Jong, Almatis chief executive officer. Butzel Long is a full-service law firm with a strong litigation practice, the Debtors aver. The Debtors selected Butzel due to the firm's reputation in litigation matters, according to Mr. de Jong. Butzel Long has been assisting the Debtors in serving subpoenas and other items related to their ongoing litigation in connection with their proposed plan of reorganization since last month. In return for its services, Butzel Long will be paid on an hourly basis and will be reimbursed of its necessary expenses. The firm's attorneys expected to provide services and their hourly rates are: Professionals Position Hourly Rates ------------- -------- ------------ Martin Karlinsky Shareholder $675 Regina Alter Shareholder $425 Maria Caceres-Boneau Associate $325 Mr. Karlinsky, Esq., of Butzel Long assures the Court that his firm does not hold nor represent interest that is adverse to the Debtors' estates. The Court will consider approval of the proposed employment at an August 16, 2010 hearing. Any objections should be filed no later than August 6. About Almatis Group Alamtis B.V., and its affiliates filed for Chapter 11 on April 30, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308). Almatis B.V. estimated assets of US$500 million to US$1 billion and debts of more than US$1 billion as of the bankruptcy filing. Almatis, operationally headquartered in Frankfurt, Germany, is a global leader in the development, manufacture and supply of premium specialty alumina products. With nearly 900 employees worldwide, the company's products are used in a wide variety of industries, including steel production, cement production, non- ferrous metal production, plastics, paper, ceramics, carpet manufacturing and electronic industries. Almatis operates nine production facilities worldwide and serves customers around the world. Until 2004, the business was known as the chemical business of Alcoa. Almatis is now owned by Dubai International Capital LLC, the international investment arm of Dubai Holding. Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves as counsel to the Debtors in the Chapter 11 cases. Linklaters LLP is the special English and German counsel and De Brauw Blackstone Westbroek N.V. is Dutch counsel. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Almatis B.V., and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ALMATIS B.V.: Schedules & Statements Due July 30 ------------------------------------------------ Judge Martin Glenn is giving Almatis B.V. and its affiliated debtors until July 30, 2010, to file their schedules of assets and liabilities and statements of financial affairs. The Debtors earlier sought for a schedules filing extension through August 27, 2010. Judge Glenn ruled that no further extension of the deadline to file the Schedules and Statements will be granted to the Debtors. About Almatis Group Alamtis B.V., and its affiliates filed for Chapter 11 on April 30, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308). Almatis B.V. estimated assets of US$500 million to US$1 billion and debts of more than US$1 billion as of the bankruptcy filing. Almatis, operationally headquartered in Frankfurt, Germany, is a global leader in the development, manufacture and supply of premium specialty alumina products. With nearly 900 employees worldwide, the company's products are used in a wide variety of industries, including steel production, cement production, non- ferrous metal production, plastics, paper, ceramics, carpet manufacturing and electronic industries. Almatis operates nine production facilities worldwide and serves customers around the world. Until 2004, the business was known as the chemical business of Alcoa. Almatis is now owned by Dubai International Capital LLC, the international investment arm of Dubai Holding. Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves as counsel to the Debtors in the Chapter 11 cases. Linklaters LLP is the special English and German counsel and De Brauw Blackstone Westbroek N.V. is Dutch counsel. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Almatis B.V., and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICA'S SUPPLIERS: Board Seek Replacement to Deceased CEO ----------------------------------------------------------- America's Suppliers Inc.'s Board of Directors said it is now seeking to fill the vacancies caused by the death of Peter Engel, the Company's chairman, chief executive officer and president. Day to day operations of DollarDays International, the Company's wholly owned subsidiary and sole operating business, will remain unaffected with Marc Joseph continuing as President and COO and Michael Moore as CFO of DollarDays. About America's Suppliers Scottsdale, Ariz.-based America's Suppliers, Inc. through its wholly-owned subsidiary DDI Inc., develops software programs that allow the Company to provide general merchandise from third party manufacturers and suppliers for resale to businesses through the Company's Web site at http://www.DollarDays.com The Company's balance sheet as of March 31, 2010, showed $1,243,385 in assets and $1,574,646 of liabilities, for a shareholders' deficit of $331,261. As reported in the Troubled Company Reporter on March 26, 2010, MaloneBailey, LLP, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that Company has suffered an accumulated deficit of $6,949,006 as of December 31, 2009. AMERICAN AXLE: S&P Hikes Outlook to Positive; 'B-' Rating Affirmed ------------------------------------------------------------------ Standard & Poor's Ratings Services said it has revised its outlook on American Axle & Manufacturing Holdings Inc. to positive from stable and affirmed its ratings on the company, including the 'B-' corporate credit rating. "The outlook revision reflects S&P's opinion that American Axle's credit profile could support a higher corporate credit rating if the recovery in North American auto demand continues and leads to a sustainable expansion in gross margins," said Standard & Poor's credit analyst Lawrence Orlowski. The company's first-quarter results improved significantly over those of 2009. Revenue was $521.9 million, up almost 30% year over year, helped by a 25% increase in production of light trucks and SUVs in North America. S&P expects U.S. light-vehicle sales to rise this year by about 12%, to 11.5 million units, compared with the 10.3 million units sold in 2009. S&P assume the pace of economic recovery will be gradual and consumer confidence, a measure of light-vehicle sales, to be fragile. S&P's estimate of 2011 sales (13.1 million) would still be below 2008's weak levels. Still, S&P believes American Axle will generate a significant amount of positive free cash flow in 2010 because of its improved cost structure. The company has reduced its overall cost structure by 50% in the past two years. As a result of major customers' extended production shutdowns during 2009, the company hastened its restructuring actions. American Axle's revenue is heavily dependent on sales of General Motors Co.'s SUVs and pickup trucks, and GM's long-term prospects will remain a major factor in determining American Axle's future credit quality until the company achieves greater diversification in customer revenue. S&P believes credit measures could improve throughout 2010 and 2011, but a key variable will be how GM's and Chrysler Group LLC's market shares and production volumes will affect American Axle's cash flow and earnings. The outlook is positive. S&P could raise its rating if light- vehicle demand continues to rise and GM's share in the full-size pickup and large SUV markets at least remains intact, leading to a sustainable expansion in American Axle's gross margins. For example, S&P believes American Axle could benefit if GM's share of the full-size pickup segment exceeds 40% (it was 38.6% for the first six months of 2010) and if full-size pickups exceed 11% of the overall U.S. light-vehicle market (they were 10.8% for the first six months). Under such a scenario, S&P believes credit measures could improve to levels that would support a higher rating, given the company's lower breakeven point. For example, revenue growth of more than 30% and gross margins greater than 17.5% in 2010 (compared with weak levels in 2009) could result in an upgrade. S&P could revise the outlook to stable if the current increase in North American light-vehicle demand weakens or if GM's share of the light-truck market declines significantly and it appears that leverage would rise above 5x on a sustained basis into 2011. This could occur if, for instance, revenue grew less than 30% in 2010 and gross margins were below 17.5%. AMERICREDIT CORP: $3.5-Bil. GM Deal Cues Fitch's Evolving Watch --------------------------------------------------------------- Fitch Ratings has placed the ratings of AmeriCredit Corp. on Rating Watch Evolving following the announcement that General Motors would acquire the company for $3.5 billion in an all-cash transaction. The merger, which is subject to ACF shareholder approval, is expected to close in the fourth quarter of 2010. Approximately $532.6 million of ACF debt, at par, is affected by this action. Fitch has placed these ratings on Rating Watch Evolving: AmeriCredit Corp. -- Long-term Issuer Default Rating 'B+'; -- Senior debt 'BB-/RR3'. Resolution of the Rating Watch will be driven by Fitch's ability to complete an analysis of GM's credit profile and its structural relationship with ACF. While ACF is expected to maintain direct access to the capital markets, its credit ratings will be affected by the relative strength of its parent. Positive rating momentum could be driven by the determination that GM has a superior credit profile relative to ACF's existing ratings, while negative rating action would result should Fitch believe GM has a higher default probability. If Fitch is unable to complete a thorough analysis of both entities, ACF's ratings could be withdrawn upon closing of the merger transaction. ACF, based in Fort Worth, Texas, was established in 1992 as an independent subprime auto lender, originating contracts by buying loans primarily from franchised dealers. ACF had $8.8 billion in managed receivables as of March 31, 2010. The company's stock trades on the NYSE under the ticker ACF. AMSTED INDUSTRIES: S&P Withdraws 'BB-' Rating on Senior Facility ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its ratings on Chicago-based Amsted Industries Inc.'s (BB-/Stable/--) senior secured revolving credit facility at the company's request. AUTOZONE INC: Director Crowley, Tynan Report Sale of Shares ----------------------------------------------------------- AutoZone Inc. director William C. Crowley filed two Form 4s with the Securities and Exchange Commission on Friday reporting that he sold off 882 company shares between July 21 and 23. Mr. Crowley reduced his stake to 16,846 shares following those sales. Tynan, LLC, a limited liability company of which Mr. Crowley is the manager and a member, also sold off 1,269 shares during the period. Tynan reduced its stake to 24,251 shares following the sales. Mr. Crowley may be deemed to indirectly hold those Tynan shares. The sales were executed at prices ranging from $207.00 to $207.56 per Share. Mr. Crowley is also the President and Chief Operating Officer of ESL Investments, Inc., which together with various of its affiliates beneficially owns AutoZone securities. About AutoZone As of February 13, 2010, in Memphis, Tenn.-based AutoZone, Inc. (NYSE:AZO) sells auto and light truck parts, chemicals and accessories through 4,289 AutoZone stores in 48 U.S. states plus the District of Columbia and Puerto Rico and 202 stores in Mexico. AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AutoZone does not derive revenue from automotive repair or installation. As of February 14, 2010, the Company had $5,424,992,000 in total assets, including $2,648,713,000 in total current assets; against total current liabilities of $2,749,324,000; debt of $2,774,700,000; and other liabilities of $322,639,000; resulting in stockholders' deficit of $421,671,000. AUTOZONE INC: Eddie Lampert Reports Sale of Shares -------------------------------------------------- Edward S. Lampert filed two Form 4 documents with the Securities and Exchange Commission on Friday, disclosing his selling of 214,849 AutoZone Inc. shares between July 21 and 23. The sales were executed at prices ranging from $207.05 to $207.73 per Share. Mr. Lampert directly holds 4,073,013 shares following the sales. ESL Partners, L.P., and other funds affiliated with Mr. Lampert also sold AutoZone shares during the period. Mr. Lampert may be deemed to indirectly hold those shares. A full-text copy of Mr. Lampert's disclosure is available at no charge at: http://ResearchArchives.com/t/s?6701 http://ResearchArchives.com/t/s?6702 About AutoZone As of February 13, 2010, in Memphis, Tenn.-based AutoZone, Inc. (NYSE:AZO) sells auto and light truck parts, chemicals and accessories through 4,289 AutoZone stores in 48 U.S. states plus the District of Columbia and Puerto Rico and 202 stores in Mexico. AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AutoZone does not derive revenue from automotive repair or installation. As of February 14, 2010, the Company had $5,424,992,000 in total assets, including $2,648,713,000 in total current assets; against total current liabilities of $2,749,324,000; debt of $2,774,700,000; and other liabilities of $322,639,000; resulting in stockholders' deficit of $421,671,000. AVISTAR COMMS: Posts $2.4 Million Net Loss for June 30 Quarter -------------------------------------------------------------- Avistar Communications Corporation reported its financial results for the three and six months ended June 30, 2010. Financial highlights included: * Total revenue for the second quarter of 2010 was $1.0 million, as compared to $2.9 million for the quarter ended June 30, 2009, reflecting lower product and services revenue during a period of intense new product development. * Operating expense was $3.3 million for the second quarter of 2010, as compared to $2.8 million for the quarter ended June 30, 2009. The increase was due to additional investments in product development and engineering to develop new products in the Unified Communications and Virtual Desktop Infrastructure markets. * Net loss in the second quarter of 2010 was $2.4 million, or $0.06 per basic and diluted share, as compared to a net loss of $151,000, or $0.00 per share, in the second quarter of 2009. * Cash and cash equivalents balance as of June 30, 2010 was $1.0 million. Cash generated from operations during the six months ended June 30, 2010 was $8.4 million, compared to cash used in operations of $3.0 million for the six months ended June 30, 2009. * Adjusted EBITDA profit for the six months ended June 30, 2010 was $8.6 million compared to an adjusted EBITDA profit of $711,000 for the same period in 2009. Avistar's total debt balance was $3.7 million on June 30, 2010, a significant reduction from $11.3 million at December 31, 2009. The Company's balance sheet for June 30, 2010, showed $2.2 million in total assets and $7.4 million in total liabilities, for a stockholders' deficit of $5.1 million. Bob Kirk, CEO of Avistar, said, "This quarter saw the continued development of a new line of products for emerging UC and VDI markets. With industry analysts predicting growth of VDI adoption reaching 49 million units by 2013, our investment in the Avistar C3 Integrator solution and our completely virtualized set of software endpoints and infrastructure is a key component in our revenue growth strategy. This architecture, plus our all-software and industry-leading suite of video conferencing components, make Avistar a unique value proposition to both OEM partners who want to expand the value of their communications portfolio and businesses that need to deploy a commercial-grade, scalable and economical desktop visual communications experience." Kirk added, "Based upon our successful OEM partnerships with IBM, Logitech, LifeSize and others, and our clients, some of which are rolling out as many as 30,000 Avistar endpoints, our business has a strong foundation and we expect that the investments we've now made in our VDI and UC offerings will lead to strong growth in the quarters ahead. As we've stated in earlier releases, we expect that all these factors, combined with strong VDI and UC market growth, will propel Avistar forward and allow us to emerge as the leader in software-based, desktop visual communications." Significant recent developments included: * Avistar's Business Pro Edition was launched in June, adding Avistar's next generation of advanced bandwidth management capabilities -- the Avistar C3 Command solution, in addition to the Avistar C3 Call Control solution, delivering fully scalable endpoint registration, H.323 interoperability, call reporting and management, at a price point that is unrivaled in the video communications industry. * The Avistar C3 Integrator solution was demonstrated to key industry analysts such as Wainhouse Research at InfoComm 2010 -- marking the industry's first desktop visual communications application designed to operate and scale on a thin terminal and within a VDI environment. * The Avistar C3 Integrator solution was awarded Best of Synergy at Citrix Synergy, San Francisco. Kirk concluded, "We're seeing significant growth in our markets, and we fully intend to participate in that growth. Based upon innovative products, outstanding partnerships, and a driven sales, marketing and business development team, we see 2010 as a formative year for Avistar. I am confident that our entire team is working diligently to ensure our success." A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?6707 About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. AXIA INC: Bankruptcy Cases Converted to Chapter 7 ------------------------------------------------- Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware entered an order converting the Chapter 11 cases of Ames Holding Corp. and its affiliates to Chapter 7 liquidation, effective as of August 1, 2010, netDockets Blog reports. According to the report, the companies, which filed for chapter 11 protection on December 14, 2009, formerly designed and manufactured automatic taping and finishing (or ATF) tools used in interior drywall finishing. The report relates that the companies sold the vast majority of their assets and ceased business operations in March. The companies which are covered by Friday's order are: * AATT011, Inc. (f/k/a Ames Holding Corp.) * AATT008, Inc. (f/k/a Axia Incorporated) * AATT009, Inc. (f/k/a TapeTech Tool Co., Inc.) * AATT001, Inc. (f/k/a Ames Taping Tool Systems, Inc.) About Axia Inc. Axia Inc. and Ames Taping manufacture automatic taping and drywall finishing tools. Ames' principal business is the rental and service of its fleet of over 220,000 ATF tools under its flagship Bazooka(R) brand name through its network of over 200 Company- owned stores, franchised locations, field vans, and rental stations located throughout the U.S. and Canada. Ames also sells ATF tools in the U.S. and Canada under the broadly recognized brand name TapeTech(R) through a network of over 200 independent dealers, and internationally, under the brand name Premier International(R). The Companies are controlled by Aurora Equity Partners. Axia Inc. and three affiliates filed for Chapter 11 on Dec. 14, 2009 (In re Ames Holding Corp., Bankr. D. Del. Case No. 09-14406). Assets at Oct. 30, 2009, were $178 million. Liabilities include $69.2 million on a senior secured term loan and a $91.8 million subordinated secured term loan. Attorneys at Richards, Layton & Finger, P.A., represents the Debtors. BALTIMORE AND CHARLES: Files for Chapter 11 Bankruptcy ------------------------------------------------------ Daniel J. Sernovitz at Business Journal of Baltimore reports that Baltimore and Charles Associates LLC filed for Chapter 11 protection in the U.S. Bankruptcy Court in Baltimore. According to Mr. Sernovitz, the filing came a day before the company was due in court to defend itself from several contractors seeking $630,000 in unpaid wages on the hotel project. The Company is attempting to restructure several million dollars in debt it took out to buy and renovate its former headquarters. The Company said it owes $48 million to Capmark Bank and $11 million to National Penn Bank. Baltimore and Charles Associates LLC owner and developer of B&O building in Baltimore. Attorneys at Logan, Yumkas, Vidmar & Sweeney LLC of Annapolis represent the Company in the Chapter 11 case. BAYOU GROUP: Goldman Seeks to Overturn $21MM Arbitration Award -------------------------------------------------------------- Bankruptcy Law360 reports that Goldman Sachs Group Inc. has reportedly filed a lawsuit seeking to overturn an arbitration panel's decision requiring two Goldman units to pay $20.6 million to unsecured creditors of now-defunct hedge fund Bayou Group LLC. In a suit filed Friday in the U.S. District Court for the Southern District of New York, Goldman claims the panel "manifestly disregarded the law and exceeded its authority," according to Law360. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operated and managed hedge funds. The hedge fund that turned out to be a Ponzi scheme and a receiver was subsequently appointed. The Company and its affiliates were sent to Chapter 11 on May 30, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-22306) to pursue recoveries for the benefit of defrauded investors. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represent the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents certain investors. When the Debtors filed for protection from their creditors, they reported estimated assets and debts of more than $100 million. Bayou has filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil, Esq., at Jenner & Block, was appointed on April 28, 2006, as the federal equity receiver. The receiver commenced adversary proceedings to recover certain fraudulent transfers made by Bayou Group to investors. The Bayou fraud resulted in three guilty pleas. Daniel Marino, the head of finance, was sentence to a 20-year prison term despite his cooperation with prosecutors. James Marquez, a Bayou co-founder, was sentenced to four years and three months in prison and told to pay $6.2 million in restitution. Another founder, Samuel Israel III, was sentenced to 20 years following his guilty plea in September 2005. BERNARD MADOFF: Trustee Preparing Suits vs. Individual Investors ---------------------------------------------------------------- Michael Rothfeld at The Wall Street Journal reports that Irving Picard, the court-appointed trustee for Bernard L. Madoff Investment Securities LLC, is preparing a wave of new lawsuits seeking to wrest funds away from investors who also were duped by the Ponzi scheme. According to The Journal, Mr. Picard said in an interview he could wind up suing about half the estimated 2,000 individual investors he has called "net winners" from their dealings with Mr. Madoff. Such investors withdrew more from Mr. Madoff's firm than the amount of principal they invested. "The people who made money, who got more, have made money at the expense of the people who didn't," said Mr. Picard, according to the report. Mr. Picard must file any so-called clawback lawsuits by December, the two-year anniversary of Mr. Madoff's arrest and the filing of regulatory proceedings against him. "We're not going to wait until the last minute," Mr. Picard told the Journal. The report says Mr. Picard intends to sue several kinds of Madoff investors before the deadline. The report notes Mr. Picard has so far recovered about $1.5 billion in assets for victims of Mr. Madoff. Mr. Picard has filed about 15 civil suits seeking more than $15 billion on a combined basis from Mr. Madoff's brother and sons, investment funds that fed money to the firm, wealthy investors close to Mr. Madoff who redeemed large amounts of cash, and other defendants. Most of the defendants are resisting Mr. Picard's clawback efforts, though some have indicated they intend to settle, according to the report. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert $64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) BLUE WILLOW: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Blue Willow Inn Gift Shop, Inc. P.O. Box 465 Social Circle, GA 30025 Bankruptcy Case No.: 10-31270 Chapter 11 Petition Date: July 20, 2010 Court: U.S. Bankruptcy Court Middle District of Georgia (Athens) Judge: James P. Smith Debtor's Counsel: Martha A. Miller, Esq. Martha A. Miller, P.C. 2415 International Tower 229 Peachtree Street, NE Atlanta, GA 30303 Tel: (404) 607-9008 Fax: (404) 607-9068 E-mail: mmiller@rbspg.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by E. Louis Van Dyke, president. Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Blue Willow Inn Restaurant, Inc. 10-31267 07/20/10 Assets: $100,001 to $500,000 Debts: $1,000,001 to $10,000,000 Blue Willow Village, Inc. -- 07/20/10 E. Louis Van Dyke and Billie R. Van Dyke -- 07/20/10 According to its schedules, Blue Willow Inn Gift Shop has assets totaling $187,984 and debts totaling $3,457,509. 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/gamb10-31270.pdf According to its schedules, Blue Willow Inn Restaurant says that assets total $143,050 while debts total $3,659,544. A copy of its list of 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/gamb10-31267.pdf BOSQUE POWER: Lenders Win Bid to Cut Exclusivity Period by 60 Days ------------------------------------------------------------------ Judge Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas has granted a bid by senior lenders of Bosque Power Co. LLC to shorten the Debtor's exclusivity period for gaining support for its proposed blueprint for reorganization, ruling that the nature of the case warrants creditors being allowed an earlier choice between competing plans, according to Bankruptcy Law360. About Bosque Power Laguna Park, Texas-based Bosque Power Company, LLC, owns and operates a natural gas fired power plant with a capacity of 800 megawatts. The power-generating facility, located in Laguna Park, commenced operations as a natural-gas power plant in 2000. Bosque Power Partners owns 100% of the membership interest in Bosque Power. Bosque Power filed for Chapter 11 on March 24, 2010, (Bankr. W.D. Tex. Case No. 10-60348). Henry J. Kaim, Esq., at King & Spalding LLP, serve as bankruptcy counsel to the Debtor. The Debtor tapped Morgan, Lewis & Bockius LLP as special corporate counsel; Greenhill & Co. LLC as financial advisor; and Kurtzman Carson Consultants LLC as claims agent. In its petition, the Debtor listed assets and debts both ranging from $100,000,001 to $500,000,000. BUILDERS FIRSTSOURCE: Posts $19 Million Net Loss for June 30 Qtr ---------------------------------------------------------------- Builders FirstSource Inc. reported its financial results for the second quarter ended June 30, 2010. Net loss was $19.0 million, or $0.20 loss per diluted share, compared to net loss of $22.6 million, or $0.58 loss per diluted share. "Our sales for the second quarter of 2010 were $211.5 million, up 20.5 percent over sales of $175.5 million one year ago," said Floyd Sherman, Builders FirstSource Chief Executive Officer. "Fueled by the federal tax credit for first-time homebuyers, the seasonally adjusted annual rate for U.S. single-family starts increased to 563,000 as of April, but fell to 454,000 as of June, down 4.6 percent from one year ago, as the tax credit expired. For the current quarter, actual U.S. single-family housing starts were 142,000, up 14.8 percent from the same quarter last year, but the number of single-family units under construction fell 6.6 percent." Mr. Sherman continued, "The South Region, as defined by the U.S. Census Bureau and which encompasses our entire geographic footprint, fared slightly better as actual single- family housing starts were 72,000, up 18.0 percent from the second quarter of 2009, and single-family units under construction were up 1.1 percent over the same period." "While we enjoyed improved building activity and increased sales during the quarter, extremely volatile commodity prices coupled with intensely competitive pricing conditions had a negative impact on gross margins. Commodity prices rose over 22 percent from the end of March through the end of April, and then fell sharply, decreasing 35 percent from the end of April through the end of June. This volatility in the commodity markets, combined with excess capacity in the supply chain chasing a limited number of units under construction, contributed to our gross margins declining 4.0 percentage points compared to the second quarter of 2009. From an operating expense perspective, we continued our focus on controlling costs as selling, general and administrative expenses increased only 2.2 percent compared to a 11.2 percent increase in sales volume." Chad Crow, Builders FirstSource Senior Vice President and Chief Financial Officer, added, "We ended the quarter with approximately $125 million in cash and over $141 million of available liquidity, as we had $16.6 million of net borrowing availability under our revolver. Our cash balance at quarter-end was on forecast and our available liquidity was slightly higher than forecast. Cash used for the quarter, excluding the $33.8 million federal income tax refund we received in April, was $34.0 million. Of the $34.0 million of cash used, $15.1 million was due to an increase in working capital, $4.8 million related to capital expenditures, and the remaining $14.1 million of cash was used to fund operating losses. Our working capital management continues to be effective as accounts receivable days decreased to 34.5 days, compared to 39.1 days in the same quarter last year. Inventory turns improved to 9.8x, up from 9.2x for the second quarter of 2009, and our accounts payable days remained flat quarter-over-quarter. Our continued focus on our working capital management resulted in cash conversion days dropping to 41.1 days for the quarter, a 6.9 day improvement over the second quarter of 2009, and a slight decrease on a sequential quarter basis. Working capital expressed as a percentage of sales for the quarter was 8.8 percent compared to 9.6 percent a year ago." Liquidity and Capital Resources: * available cash at June 30, 2010 was approximately $125 million. Total liquidity at quarter-end was over $141 million, as the company has $16.6 million in borrowing availability under our revolver. * Operating cash flow was $4.5 million compared to $29.1 million for the second quarter of 2009, the primary difference being the effect of changes in working capital. Operating cash flow includes federal income tax refunds of $33.8 million and $31.8 million in the second quarters of 2010 and 2009, respectively. * Capital expenditures were $4.8 million in the current quarter and are expected to be $2.0-$3.0 million over the remainder of the year, relating primarily to buyouts of vehicle and equipment leases. Capital expenditures in the second quarter of 2009 were $0.3 million. Outlook Mr. Sherman concluded, "An extremely volatile commodity market during the quarter added to what was already one of the toughest housing markets in our nation's history. Through these challenging conditions, we remain focused on prudently managing cash and positioning the company to take advantage of a housing recovery. Our use of cash through June is consistent with forecast, and we believe seasonal reductions in working capital will help reduce our use of cash over the remainder of the year. However, it now appears building activity in the back half of 2010 may not be as strong as had been anticipated which could result in our use of cash for fiscal 2010 being somewhat higher than the $60-$70 million we originally forecasted. There still appears to be a significant amount of uncertainty in the macro-economic factors that drive our business. We will continue managing our business in the same conservative manner as we have over the past several years and will do so until greater clarity returns to the homebuilding sector." "My sincere appreciation goes out to all Builders FirstSource employees. These are extremely difficult times in our industry and our employees' dedication and positive attitude make me very grateful to be part of the Builders FirstSource team." A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?670a Headquartered in Dallas, Texas, Builders FirstSource Inc. -- http://www.bldr.com/-- is a supplier and manufacturer of structural and related building products for residential new construction. The company operates in 9 states, principally in the southern and eastern United States, and has 55 distribution centers and 51 manufacturing facilities, many of which are located on the same premises as its distribution facilities. The Company's balance sheet at March 31, 2010, showed $491.0 million in total assets and $282.4 million in total liabilities, for a $218.6 million stockholders' equity. * * * According to the Troubled Company Reporter on Jan. 28, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Dallas-based Builders FirstSource Inc., a manufacturer and supplier of building products for new residential construction, to 'CCC+' from 'SD'. The outlook is positive. CABLEVISION SYSTEMS: Fitch Affirms 'BB-' Issuer Default Ratings --------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' Issuer Default Ratings assigned to Cablevision Systems Corporation and its wholly owned subsidiary CSC Holdings LLC. In addition, Fitch has affirmed specific issue ratings assigned to CVC and CSC as outlined below. The Rating Outlook is Stable. As of March 31, 2010, CVC had approximately $11.4 billion of debt outstanding. Fitch's affirmation of CVC's ratings recognizes the solid operating profile and competitive strength of CVC's core cable business. In Fitch's opinion the operating profile of CVC's cable segment is an industry leader and has proven to be resilient to persistent competitive pressures and weak housing and employment markets. CVC's cable business consistently produces industry leading service penetration levels, average revenue per unit (ARPU), ARPU growth rates, and operating margins in an increasingly competitive operating environment. The strength of CVC's cable business is based in the company's tightly clustered subscriber base, its efficiently managed cable plant, and growing revenue and customer diversity owing to the ongoing success of CVC's commercial business segment. CVC's scale and system clustering provide the company with competitive advantages in terms of driving higher operating efficiencies through its cable plant, taking cost out of customer premise equipment, lowering programming costs growth, and positioning the company to enhance its product offerings so that it can differentiate them from the competition's offering. Innovative service offerings such as the company's deployment of a WI-FI broadband wireless network and the introduction of a remote storage digital video recorder service enhance the company's competitive position. These factors have translated into sustainable strong operating performance and free cash flow growth. Fitch's ratings incorporate the continuing strengthening of CVC's credit profile, the company's improved liquidity position and financial flexibility and Fitch's expectation of sustainable free cash flow generation. Fitch believes that CVC's credit profile is strongly positioned within the current ratings category. On a consolidated basis, CVC's leverage metric for the last 12 months ended March 31, 2010, was 4.4 times reflecting the steady improvement from 6.86x as of year-end 2006. Looking ahead, Fitch expects CVC's operating profile, characterized by modest revenue growth (relative to historical performance) stable EBITDA margins and declining capital intensity, should lead to modest improvement of CVC's credit profile. Fitch anticipates that CVC's leverage as of year-end 2010 will be consistent with current measures and expects leverage to approach 4.1x by the end of 2011. After generating nearly $383 million of free cash flow during 2008, CVC produced nearly $750 million of free cash flow during the last 12 months ended March 31, 2010. Based on Fitch's expectation of a stable operating profile and modestly declining capital intensity, Fitch believes that CVC is positioned to generate consistent levels of free cash flow during the current rating horizon. Ratings concerns center on CVC's ability to: -- Maintain its relative competitive position given the changing competitive and economic environment; -- Grow revenues beyond its core triple play service offering; and -- Efficiently manage its cable plant to maximize desirable high-definition content while balancing capital expenditures to maximize free cash flow generation. Fitch believes event risks surrounding CVC's acquisition and non- core investment strategy as well as its financial policies related to the allocation of capital to CVC shareholders is expected to remain a key rating consideration. Importantly the transaction and financing related to CVC's acquisition of Bresnan Communications LLC, the nation's 13th largest cable multiple system operator, will be structured outside of the company's core cable operations and its restricted group. Bresnan will become an unrestricted subsidiary of CVC with a financing structure that is non-recourse to CVC and CSCH. The acquisition of Bresnan does not complement CVC's existing cable service area or enhance the company's competitive position within its core markets in and surrounding New York City. The $1 billion incremental debt expected to be incurred to acquire Bresnan will modestly increase CVC's consolidated leverage metric, but Fitch believes that the company has adequate capacity at the current ratings level to accommodate this non-core investment. From Fitch's perspective the company's liquidity position and financial flexibility have strengthened when considering the company's improved free cash flow generation, access to approximately $1.4 billion of available borrowing capacity from revolvers, the company's recent refinancing activities along with the amendment of CSCH's credit facility. The amended credit facility, among other things, increased the size of CSCH's revolver by $410 million, extended the commitment termination date with respect to $820 million of revolver commitments and extended the final maturity date and amortization schedule related to certain term loans. A key priority for the company entering 2010 was to lengthen its maturity profile and to reduce the volume of maturities in the 2012 and 2013 timeframe, which as of year end 2009 totaled approximately $4.9 billion. Fitch estimates that maturities during the 2012 and 2013 timeframe have been reduced by over $2.6 billion or nearly 54%. As of March 31, 2010, after considering refinancing activities and the credit facility amendment, Fitch estimates that remaining 2010 maturities total approximately $295 million (including monetization contracts) and 2011 and 2012 maturities total $742 million and $1.1 billion respectively. Signaling a shift of management's focus away from its debt structure and maturity schedule, Cablevision's board of directors has authorized a $500 million stock repurchase program. While no timeframe for the timing of the execution of the stock buyback was provided by management, Fitch believes that the company has sufficient financial flexibility within the current rating category to accommodate share repurchases that are funded primarily through free cash flow generation. The Stable Rating Outlook reflects Fitch's expectation that the company's operating profile will remain relatively consistent during the near term recognizing competitive pressures and weak economic conditions. Additionally, the ratings recognize that ARPU, revenue and EBITDA growth rates will slow relative to historical growth rates. Further, the Stable Outlook considers the company accommodating non-core acquisitions, and investments in a credit neutral manner and the absence of other leveraging transactions. Key considerations that can lead to positive rating actions include further strengthening of the company's credit profile and reduction of leverage to levels approaching 4x while demonstrating that its operating profile will not materially decline in the face of competition and the poor housing and employment environment. Negative ratings actions would likely coincide with the company's decision to leverage the company to repurchase shares, fund a large dividend or fund a non-core investment or acquisition. Fitch has affirmed these ratings with a Stable Outlook: Cablevision Systems Corporation -- IDR at 'BB-'; -- Senior Unsecured Debt at 'B-'. CSC Holdings LLC -- IDR at 'BB-' -- Senior Secured Credit Facility at 'BB+' -- Senior Unsecured Debt at 'BB' CAPITAL GROWTH: Files for Chapter 11 Protection ----------------------------------------------- Capital Growth Systems and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-12302), BankruptcyData.com reports. The Company, which offers telecommunications information and logistics, is represented by Francis A. Monaco, Jr. of Womble Carlyle Sandridge & Rice. The Company states that the Chapter 11 "process will enable [it] to emerge as a stronger, more profitable company that is well positioned to continue delivering the products and services that customers and the market have come to expect..Through this process, the Company is expected to substantially strengthen its balance sheet, organizing its debt obligations and past due trade payables. These changes will enable the Company to drive organic growth and to further invest in innovation. The process is expected to complete prior to year end." The Company secured a commitment for a capital infusion (debtor-in-possession financing), which will be used to organize and satisfy payables to critical vendors and fund working capital. "As we have stated to the market over the last several quarters, the number one concern that Global Capacity has as a company is our balance sheet, and specifically the amount of trade payables, convertible debentures, and senior debt that sit on the balance sheet. Customers and suppliers have made it very clear to the Company that addressing those balance sheet concerns is an absolute requirement," says Patrick Shutt, Company .C.E.O. "Entering a formal restructuring process is not something the Company takes lightly, and is a course of last resort. However, the Company's attempts to restructure the balance sheet in an informal process over the past 14 months have been unsuccessful, and we were left with no choice but to pursue a formal process to organize the payables, reduce or eliminate the debt, and provide the Company with a balance sheet strong enough to enable the business to grow." About Capital Growth Systems Headquartered in Chicago, Illinois, Capital Growth Systems, Inc., and its subsidiaries operate in one reportable segment as a single source telecom logistics provider in North America and the European Union. The Company helps customers improve efficiency, reduce cost, and simplify operations of their complex global networks -- with a particular focus on access networks. As of December 31, 2009, the Company was not in compliance with the EBITDA covenant under a loan agreement with ACF CGS, L.L.C., and a forbearance agreement was obtained. That forbearance expired April 12, 2010. On May 3, 2010, Pivotal Global Capacity, LLC, an affiliate of the Pivotal Group of companies engaged in the private equity business and based in Phoenix, Arizona, acquired all rights and obligations of ACF CGS with respect to the Loan. Asher & Company, Ltd., in Philadelphia, Pa., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's recurring operating losses, negative cash flows from operations, net working capital deficiency, shareholders' deficit and debt covenant violations and related penalties. CHEMITEK 2006: Reorganization Case Dismissed for Bad Faith Filing ----------------------------------------------------------------- The Hon. Donald H. Steckroth of the U.S. Bankruptcy Court for the District of New Jersey dismissed the Chapter 11 cases of Chemitek 2006, LLC and Palisades Park Plaza North, Inc., for engaging in bad faith and other wrongful conduct in connection with the Chapter 11 proceeding. As reported in the Troubled Company Reporter on May 4, 2010, the Court issued an order resolving PRIF II Chemtek, LLC, and P II River Vale GC Funding, LLC's motions to dismiss the Debtor's Chapter 11 case or, alternatively, grant relief from the automatic stay provisions of Section 362(d) of the U.S. Bankruptcy Code. TCR reported on February 16, that the mortgagees said that the dispute arose from two separate judicial foreclosure proceedings against the Debtors. According to the mortgagees, it is those foreclosure proceedings which precipitated the bad faith filings by Debtors as a means to stonewall and delay the exercise of the Mortgagees' unequivocal right to foreclose. The outstanding mortgage debt is $21,132,339 as of February 1, which exceeds the value of the mortgaged property. This deficiency will only continue to increase unless the mortgagees are permitted to proceed with their foreclosure and pursue a sale of the property at public auction. About Chemitek 2006, LLC River Vale, New Jersey-based Chemitek 2006, LLC, dba River Vale Country Club, filed for Chapter 11 bankruptcy protection on February 5, 2010 (Bankr. D. N.J. Case No. 10-13393). Vincent F. Papalia, Esq., at Saiber, LLC, assisted the Debtor 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. CITIGROUP INC: Treasury Selling 1.5 Billion of Common Stock ----------------------------------------------------------- The U.S. Department of the Treasury on Friday announced its continued sale of its holdings of Citigroup common stock. Treasury has entered into a third pre-arranged written trading plan under which Morgan Stanley, as Treasury's sales agent, will have discretionary authority to sell 1.5 billion shares of Citigroup common stock under certain parameters. Treasury received 7.7 billion shares of Citigroup common stock last summer as part of the exchange offers conducted by Citigroup to strengthen its capital base. Treasury exchanged the $25 billion in preferred stock it received in connection with Citigroup's participation in the Capital Purchase Program for common shares at a price of $3.25 per common share. Treasury currently owns approximately 5.1 billion shares of Citigroup common stock and expects to continue selling its shares in the market in an orderly fashion. On July 1, Treasury announced the completion of its sale of a total of approximately 2.6 billion shares of Citigroup common stock across two trading plans and its receipt of approximately $10.5 billion in gross proceeds from the sale. As part of the disposition program, Morgan Stanley agreed to provide opportunities for involvement by small broker-dealers, including minority-, women-, and veteran-owned broker-dealers. Morgan Stanley has entered into agreements with the following 12 broker-dealers: Cabrera Capital Markets, LLC; Great Pacific Securities, Inc.; Guzman & Company; Kaufman Bros., L.P.; Loop Capital Markets; M. Ramsey King Securities, Inc.; Mischler Financial Group; M.R. Beal & Company; Sturdivant & Co. Inc.; Valdes and Moreno, Inc.; The Williams Capital Group, L.P.; and Wm Smith & Co. Because Treasury will not sell shares during the blackout period set by Citigroup in advance of its third quarter earnings release, which period is expected to begin on October 1, this third trading plan will terminate on September 30 even if all shares have not been sold by that time. The offering will be made only by means of a prospectus. Morgan Stanley & Co. Incorporated is acting as a sales agent to Treasury. Copies of the prospectus supplement and accompanying prospectus relating to the offering may be obtained from Morgan Stanley & Co. Incorporated, Attn: Prospectus Department, 180 Varick Street, New York, NY 10014, by e-mailing prospectus@morganstanley.com or by calling toll-free in the United States 1-866-718-1649 COEUR D'ALENE: Inks Master Lease Agreement with Mitsubishi ---------------------------------------------------------- Coeur d'Alene Mines Corporation is party to a Master Lease Agreement dated December 18, 2008, establishing a gold lease facility with Mitsubishi International Corporation. Pursuant to this facility, the Company may lease amounts of gold from MIC and is obligated to deliver the same amounts back to MIC and to pay specified lease fees to MIC that are equivalent to interest at current market rates on the value of the gold leased. The facility is intended to increase the Company's liquidity. As of July 22, 2010, the Company is leasing approximately 15,000 ounces of gold under the facility. Pursuant to a Second Amended and Restated Collateral Agreement, the Company's obligations under the facility are secured by certain collateral. The collateral agreement specifies the maximum amount of gold the Company may lease from MIC, as well as the amount and type of collateral. On July 16, 2010, the Company and MIC entered into an Amendment No. 4 to the Second Amended and Restated Collateral Agreement to increase the availability under the facility. Under the amended agreement, the maximum amount the Company may lease under the facility, aggregated with lease fees, is $49.5 million. In addition, the amended agreement provides for a customary commitment fee. The Company agreed to secure its obligations under the facility with up to $29.7 million of collateral. The initial collateral consists of silver and gold inventory held at a specified refiner. The amendment also requires the Company to lease at least an additional 10,000 ounces of gold within 30 days. The collateral agreement contains usual and customary covenants and agreements, including limitations on the Company's ability to sell or grant liens in the collateral, as well as covenants as to cooperation, payment of charges and protection of security. The collateral agreement and the master lease agreement governing the gold lease facility both contain customary events of default. A full-text copy of the Two-Way Metal Lease Agreement is available for free at: http://ResearchArchives.com/t/s?6703 A full-text copy of the Second Amended and Restated Collateral Agreement is available for free at: http://ResearchArchives.com/t/s?6704 A full-text copy of the 4th Amended to Second Amended and Restated Collateral Agreement is available for free at: http://ResearchArchives.com/t/s?6705 Based in Coeur d'Alene, Idaho, Coeur d'Alene Mines Corporation is primarily a silver producer with a growing gold production profile. The Company is engaged, through its subsidiaries, in the operation and ownership, development and exploration of silver and gold mining properties and companies located primarily within South America (Chile, Argentina and Bolivia), Mexico (Chihuahua), United States (Nevada and Alaska) and Australia (New South Wales). At December 31, 2009, the Company had total assets of $3,054,035,000 against total current liabilities of $188,608,000 and total non-current liabilities of $872,222,000, resulting in stockholders' equity of $1,993,205,000. * * * As reported by the Troubled Company Reporter on August 11, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Coeur D'Alene Mines to 'B-' from 'CCC' and raised the ratings on the Company's US$180 million senior unsecured notes due 2024 (US$106 million outstanding) and US$230 million senior unsecured notes due 2028 (US$150 million outstanding) to 'CCC+' from 'CCC-'. In January 2010, S&P withdrew its ratings on the Company, including its 'B-' corporate credit rating, at the Company's request. COLONIAL BANCGROUP: SEC May Revoke Registration of Securities ------------------------------------------------------------- The Securities and Exchange Commission has instituted an administrative proceeding to revoke the registration of The Colonial BancGroup, Inc.'s securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, pursuant to an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, dated July 14, 2010, Commission Release No. 62497. A hearing in this Administrative Proceeding has been scheduled for August 9, 2010, and the Company expects to file an Answer to the Order prior to that date. The Company believes that it is likely that the Securities and Exchange Commission will revoke the registration of the Company's securities in connection with the Administrative Proceeding. Colonial BancGroup's common stock is registered with the Commission pursuant to Exchange Act Section 12(g) and is quoted on the "Pink Sheets" under the symbol "CBCGQ" or "CBCGQ.PK." Colonial BancGroup has not filed an annual report since March 2, 2009, and has not filed quarterly reports since May 8, 2009. A full-text copy of the Order is available for free at: http://researcharchives.com/t/s?66ff Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc. (NYSE: CNB) was holding company to Colonial Bank, N.A, its banking subsidiary. Colonial bank -- http://www.colonialbank.com/ -- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection on August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark Watson, Esq., at Balch & Bingham LLP and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, assist the Company in its restructuring effort. The Company listed $45,000,000 in assets and $380,000,000 in debts in its bankruptcy filing. CONCORDIA LUTHERAN: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Concordia Lutheran Church of the Lutheran Church Missouri Synod 7424 North Second Street Machesney Park, IL 61115 Bankruptcy Case No.: 10-73608 Chapter 11 Petition Date: July 20, 2010 Court: U.S. Bankruptcy Court Northern District of Illinois (Rockford) Judge: Manuel Barbosa Debtor's Counsel: Stephen G. Balsley, Esq. Barrick, Switzer, Long, Balsley, et al 6833 Stalter Drive Rockford, IL 61108 Tel: (815) 962-6611 E-mail: sbalsley@bslbv.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 3 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb10-73608.pdf The petition was signed by Charles O'Brien, president. CONSPIRACY ENT: To Sell $600,000 Promissory Notes to Subscribers ---------------------------------------------------------------- Conspiracy Entertainment Holdings Inc. a entered into a Subscription Agreement, dated June 30, 2010, pursuant to which it agreed to sell subscribers up to $600,000 of principal amount of promissory in one or more closings and issue the Subscribers one Class A Warrant for each two shares which would be issued upon the full conversion of the Promissory Notes. Under the Subscription Agreement, the Company issued and sold secured convertible notes in the aggregate principal amount of $300,000 to the Subscribers and issued warrants to purchase 7,500,000 shares of the Company's Common Stock at $.02 per share. On July 16, 2010 pursuant to the Subscription Agreement, the Company sold an additional Subscriber a Note having a principal amount of $125,000 and issued the Subscriber a Warrant to purchase 3,125,000 shares of the Company's common stock at $.02 per share. Immediately following the closing, there were 25,069,701 outstanding shares of the Company's common stock. Pursuant to the terms of the Notes, the Subscribers have the right, so long as the Notes are not fully repaid, to convert the Notes into shares of the Company's common stock at a conversion price per share that is equal to the lesser of $.02, or $70% of the average of the five lowest closing bid prices for the Company's Common Stock as reported by Bloomberg L.P. for the Principal Market for the ten trading days preceding the date the Subscriber gives the Company notice of conversion, as may be adjusted. The Notes mature two years from when they are issued and contain anti-dilution provisions, including but not limited to if the Company issues shares of its common stock at less than the then existing conversion price, the conversion price of the Notes will automatically be reduced to such lower price. The Notes and Warrants contain limitations on conversion, including the limitation that the holder may not convert its Note to the extent that upon conversion the holder, together with its affiliates, would own in excess of 4.99% of the Company's outstanding shares of common stock. The Notes are secured by a security interest in certain assets of the Company. About Conspiracy Entertainment Holdings Based in Santa Monica, California, Conspiracy Entertainment Holdings, Inc., develops, publishes and markets interactive entertainment software. The Company currently publishes titles for many popular interactive entertainment hardware platforms, such as Sony's PlayStation, Nintendo 64 and Nintendo's Game Boy Color and Game Boy Advance as well as the next generation hardware platforms such as Sony's PlayStation 2, Sony's PSP, Nintendo GameCube, Nintendo's DS, Microsoft's Xbox, and also for the PC. * * * The Company's balance sheet at March 31, 2010, showed $4.1 million in total assets and $9.1 million in total liabilities, for a total stockholders' deficit of $4.9 million. CONTINENTAL AIRLINES: Posts $233 Million Net Income for 2nd Qtr --------------------------------------------------------------- Continental Airlines reported second quarter 2010 net income of $233 million. Excluding $24 million of merger-related costs and other special charges, Continental recorded second quarter net income of $257 million. Operating income for the second quarter of 2010 was $328 million, up $482 million compared to the same period of 2009. "I want to thank my co-workers for delivering solid second-quarter profitability," said Jeff Smisek, chairman, president and chief executive officer. "Their hard work and continued focus on running a clean, safe and reliable airline give us great momentum as we head into the second half of the year." Second Quarter Revenue and Capacity Total revenue for the second quarter of 2010 was $3.7 billion, an increase of 18.6 percent compared to the same period in 2009. Passenger revenue for the second quarter rose 19.7 percentcompared to the same period in 2009. Consolidated revenue passenger miles for the second quarter of 2010 increased 2.0 percent while capacity remained flat year-over- year, resulting in a record second quarter consolidated load factor of 84.6 percent. Consolidated yield for the quarter increased 17.3 percent year- over-year. Combined with the 1.9 point year-over-year increase in consolidated load factor, second quarter 2010 consolidated passenger revenue per available seat mile) increased 19.9 percent. Continental's mainline yield increased 16.3 percent in the second quarter over the same period in 2009. Mainline load factor of 85.0 percent was also a second quarter record, up 1.8 points year- over-year. Second quarter 2010 mainline RASM increased 18.8 percent year-over-year. Mainline RPMs in the second quarter of 2010 increased 1.5 percent on a mainline capacity decrease of 0.7 percent year-over-year. Second Quarter Operations Continental's employees earned a total of $6 million in cash incentives for on-time performance during the quarter. The company recorded a DOT on-time arrival rate of 83.1 percent and a systemwide mainline segment completion factor of 99.3 percent during the quarter, despite record load factors and flight disruptions due to the volcanic ash plume that closed European airspace for several days during the quarter. Notable Accomplishments and Product Update Continental announced service to new international destinations during the quarter. The company plans to begin nonstop Boeing 787 flights to Auckland, New Zealand and Lagos, Nigeria, from its Houston hub. Both routes are expected to start in November 2011 and are subject to government approval. In addition, Continental announced nonstop Boeing 777 flights to Cairo, Egypt, from its New York hub at Newark Liberty International Airport, beginning May 2011, subject to government approval. "We are proud to be the first airline in the world to announce specific route plans for the 787 Dreamliner, as it will allow us to meet the business demand for new international destinations," said Jim Compton, Continental's executive vice president and chief marketing officer. "Our participation in Star Alliance and investment in our product continue to bring benefits to our customers and will help ensure success of these new markets." Continental continued to install new flat-bed BusinessFirst seats on its Boeing 777 and 757-200 aircraft during the quarter, with 25 aircraft now completed. The flat-bed seats will also be installed on substantially all of Continental's Boeing 767-400 aircraft and on the Boeing 787 fleet as the new aircraft are delivered to the company. In addition, Continental continued to install DIRECTV on its aircraft during the quarter, with the service now offered on 123 narrowbody aircraft. The company has completed installation of DIRECTV on its Boeing 737-900ER fleet and will install DIRECTV on substantially all of its Boeing 737 Next-Generation and 757-300 aircraft. Continental completed extensive renovations at its Houston hub in the second quarter. The company expanded the Terminal C ticketing lobby and check-in area and made improvements to the baggage claim and surrounding curbside areas. Continental also completed installation of winglets on all 21 of its Boeing 757-300 aircraft during the quarter, and now has winglets installed on its entire narrowbody fleet. Second Quarter Costs and End of Quarter Cash Continental's mainline cost per available seat mile increased 3.9 percent in the second quarter 2010 compared to the same period last year. Mainline fuel prices for the second quarter increased 8.7 percent compared to the second quarter of 2009, while mainline fuel consumption declined 1.1 percent year-over-year on 0.7 percent less mainline capacity. Holding fuel rate constant and excluding special charges and merger-related costs, second quarter 2010 mainline CASM increased 2.2 percent compared to the second quarter of 2009. "These results represent another quarter of strong operational performance and cost control by the entire Continental team," said Zane Rowe, Continental's executive vice president and chief financial officer. "While there is still a lot of work ahead in order to sustain profitability, we are pleased with this quarter's results." Through June 30, 2010, the company has accrued $18 million under its current year profit sharing plan. The actual amount of profit sharing that the company will distribute to eligible employees in February 2011 depends on the company's full year financial results. During the second quarter of 2010, Continental contributed $40 million to its defined benefit pension plans. The company contributed an additional $38 million to its defined benefit plans earlier this month, bringing its total year-to-date contributions to $112 million. In the second quarter of 2010, Continental recorded $18 million of merger-related costs, relating to financial advisor, legal, accounting and consultant fees and communication costs. The company also had $6 million of special charges in the second quarter of 2010, primarily related to a change in the company's reserve for unused space at its maintenance facility in Denver. Continental ended the second quarter with $3.5 billion in unrestricted cash, cash equivalents and short-term investments. Merger with United In May, Continental and United announced a merger of equals, bringing together two of the world's premier airlines to create a combined company that will be well-positioned to succeed in an increasingly competitive global aviation environment. The merger is expected to deliver $1.0 billion to $1.2 billion in net annual synergies by 2013, including between $800 million and $900 million of incremental annual revenues, in large part from expanded customer options resulting from the greater scope and scale of the network, and additional international service enabled by the broader network of the combined carrier. The companies continue to make good progress with merger integration planning and have achieved important milestones on their path toward closing the merger, including making required filings with the Department of Justice, the Department of Transportation and the European Commission, and launching functional teams to oversee and implement integration planning. The companies remain on track to close the merger in the fourth quarter of 2010. "I look forward to working together with all the employees of the combined carrier as we create the world's leading airline," Smisek said. A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?670d About Continental Airlines Houston, Texas-based Continental Airlines (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,700 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance, which overall offers more than 21,050 daily flights to 1,167 airports in 181 countries through its 27 member airlines. With more than 40,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on May 5, 2010, Fitch Ratings has affirmed the Issuer Default Rating for Continental Airlines, Inc., at 'B-' and the senior unsecured rating at 'CC/RR6' following the announcement of the planned merger between CAL and UAL Corp. The Rating Outlook for CAL is Stable. The TCR on May 5, 2010, also said Standard & Poor's Ratings Services placed its 'B' corporate credit rating on Continental Airlines, and S&P's ratings on its secured and unsecured debt, on CreditWatch with negative implications. S&P also placed its ratings on Continental's enhanced equipment trust certificates on CreditWatch with developing implications. Although S&P's recovery ratings on selected Continental unsecured debt are unaffected by the rating action, S&P will review them as well. CONTINENTAL AIRLINES: Files Guidance for 3rd Qtr & Full Year 2010 ----------------------------------------------------------------- Continental Airlines provided information on its guidance for the third quarter and full year 2010, as well as certain historical information pertaining to the second quarter of 2010 on a standalone basis, and does not take into account any changes that could result from the proposed merger with United. Advanced Booked Seat Factor Compared to the same period last year, for the next six weeks, mainline domestic advanced booked seat factor is down 1 to 2 points, mainline Latin advanced booked seat factor is down 2 to 3 points, Transatlantic advanced booked seat factor is flat to up 1 point, Pacific advanced booked seat factor is up 10 to 11 points, and regional advanced booked seat factor is flat to down 1 point. Last year at this time, due to declining business mix and weakness in leisure yields, the Company made more domestic leisure inventory available for sale earlier in the booking curve. This year the Company has seen a modest improvement in business demand and stronger leisure yields and, therefore, has returned to a more normal management of its domestic leisure inventory, thus affecting the domestic booking curve. For the third quarter of 2010, the Company expects both its consolidated and mainline load factors to be flat to up slightly year-over-year compared to the same period in 2009. Unrestricted Cash, Cash Equivalents and Short Term Investments Balance The Company anticipates ending the third quarter of 2010 with an unrestricted cash, cash equivalents and short-term investments balance of approximately $3.5 billion. Cargo, Mail, and Other Revenue The Company's Cargo, Mail, and Other Revenue for the third quarter of 2010 is expected to be between $370 and $380 million. A full-text copy of the Company's investor update is available for free at http://ResearchArchives.com/t/s?670e About Continental Airlines Houston, Texas-based Continental Airlines (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,700 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance, which overall offers more than 21,050 daily flights to 1,167 airports in 181 countries through its 27 member airlines. With more than 40,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on May 5, 2010, Fitch Ratings has affirmed the Issuer Default Rating for Continental Airlines, Inc., at 'B-' and the senior unsecured rating at 'CC/RR6' following the announcement of the planned merger between CAL and UAL Corp. The Rating Outlook for CAL is Stable. The TCR on May 5, 2010, also said Standard & Poor's Ratings Services placed its 'B' corporate credit rating on Continental Airlines, and S&P's ratings on its secured and unsecured debt, on CreditWatch with negative implications. S&P also placed its ratings on Continental's enhanced equipment trust certificates on CreditWatch with developing implications. Although S&P's recovery ratings on selected Continental unsecured debt are unaffected by the rating action, S&P will review them as well. CORRELOGIC OF GERMANTOWN: Files for Chapter 11 Protection --------------------------------------------------------- Robert Rand at Maryland Community Newspaper Online reports that Correlogic of Germantown filed for Chapter 11 bankruptcy protection, listing assets and debts of between $1 million and $10 million. Most of the Company's debt is $1.1 million in back wages owed to its employees, including $414,663 to the Company's CEO and co-founder Peter J. Levine. According to the report, the bankruptcy court granted a motion to reject two contracts filed by the Company. One of the contracts was with one of the company's investors, Quest Diagnostics of Teterboro, N.J., which owns 2.89 million shares of B preferred stock. Correlogic of Germantown develops software for blood assays. COVER-ALL HOLDING: U.S. Court Recognizes Chapter 15 Proceeding -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania ordered that: -- the CCAA Termination order in the Chapter 15 cases of Cover- All Holding Corp. and its debtor-affiliates, is given full force and effect in the United States, and Ernst & Young, Inc., will be afforded all of the rights and benefits of the CCAA Tennination order in the United States; and -- the receivership order is given full force and effect in the U.S., and PricewaterhouseCoopers Inc., as foreign representative, will be afforded all of the rights and benefits of the receivership order in the U.S. Saskatoon, SK, Canada-based Cover-All Holding Corp. with its debtor-affiliates, filed for Chapter 15 on March 25, 2010 (Chapter 15 E.D. Penn. Case No. 10-20835.) Morton R. Branzburg, Esq., at Klehr Harrison Harvey Branzburg & Ellers, assists the Debtor in the Chapter 15 proceeding. In its petition, the Debtor listed assets and liabilities both ranging from $50,000,001 to $100,000,000. CROWN EUROPEAN: S&P Assigns 'BB-' Senior Unsecured Debt Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB-' senior unsecured debt rating (one notch below the corporate credit rating) and a recovery rating of '5' to Crown European Holdings S.A.'s Eur500 million notes due 2018. These ratings indicate S&P's expectation for modest (10% to 30%) recovery in the event of a payment default. Crown intends to use the note proceeds to repay all or a portion of the remaining EUR150 million of senior secured notes due 2011, repay $200 million of senior unsecured notes due 2013, and for general corporate purposes. At the same time, S&P affirmed its 'BB' corporate credit rating on Crown as well as its ratings on the company's unsecured debt. The outlook is positive. In addition, S&P is raising its senior secured debt rating on Crown to 'BBB-' (two notches above the corporate credit rating) with a recovery rating of '1' from 'BB+' with a recovery rating of '2'. The new ratings indicate S&P's expectation of very high (90% to 100%) recovery for senior secured lenders in the event of a payment default. The upgrade is a result of S&P's expectation that following the planned refinancing there will be less senior secured debt outstanding at the time of default. "S&P believes that continued strong operating performance and moderate further debt reduction could lead to sufficient strengthening of the financial profile to warrant a one-notch upgrade during the next few quarters," said Standard & Poor's credit analyst Cynthia Werneth. For S&P to consider a higher rating, funds from operations to adjusted total debt would have to consistently meet or exceed 20%. The factors that would most likely slow down the improvement in credit metrics are a larger-than-expected debt-funded acquisition or larger-than-expected shareholder rewards. The probability of a downgrade appears remote at this time. Following the planned debt issue and refinancing, S&P expects adjusted debt to total about $4 billion. S&P adjusts debt to include about $1 billion of tax-effected unfunded postretirement and asbestos liabilities and capitalized operating leases. DELTA AIR: Inks $450 Million Equipment Notes Purchase Deal ---------------------------------------------------------- Delta Air Lines Inc., informed the U.S. Securities and Exchange Commission that on July 2, 2010, it entered into a Note Purchase Agreement with U.S. Bank Trust National Association, as Subordination Agent and Pass Through Trustee under the pass through trust newly formed by the Company; U.S. Bank National Association, as Escrow Agent under the Escrow Agreement; and U.S. Bank Trust National Association as Paying Agent under the Escrow Agreement. Delta Vice President and Chief Financial Officer Hank Halter relates that the Note Purchase Agreement provides for future issuance by the Company of Series A equipment notes in the aggregate principal amount of $450,000,000 secured by the 2000-1 Aircraft, which were delivered new to the Company in 1999 and 2000, as well as the 2010 Aircraft, which were delivered new to the Company in 2010. As previously reported, on June 28, 2010, Delta entered into an underwriting agreement with Goldman, Sachs & Co. and Credit Suisse Securities (USA) LLC, as representatives of the underwriters in connection with the issuance and sale of a total of $450,000,000 of Pass Through Certificates, Series 2010-1A. The Certificates are being offered pursuant to the Prospectus Supplement dated June 28, 2010, which forms a part of the Company's automatic shelf registration statement on Form S-3, filed with the Securities and Exchange Commission. The Underwriting Agreement contains customary representations, warranties, covenants and closing conditions. It also contains provisions pursuant to which the Company agrees to hold harmless and indemnify the Underwriters against damages under certain circumstances, which are customary for a transaction of this type, according to Mr. Halter. Delivery of the Certificates was made under the Underwriting Agreement on July 2, 2010 with an interest rate of 6.20% per annum. The Certificates were issued by a Pass Through Trust, from which the Underwriters purchased Certificates at 100% of the principal amount. The Pass Through Trust will use the proceeds from the sale of Certificates to acquire equipment notes from the Company. The equipment notes will be secured by 24 Boeing aircraft owned by the Company. Payments on the equipment notes held in the pass through trust will be passed through to the certificate holders of the Trust. The Company expects to use the proceeds from the issuance of the equipment notes to refinance, in part, 22 aircraft currently supporting its outstanding 2000-1 EETC after the final maturity in November 2010 and to finance, in part, 2 aircraft delivered earlier in 2010. The Company will use any proceeds not used in connection with the refinancing or financing to pay fees and expenses related to the offering and for general corporate purposes. Mr. Halter explains that from time to time in the ordinary course of their business, the Underwriters and certain of their affiliates have engaged, and in the future may engage in, investment and commercial banking or other transactions of a financial nature with the Company and its affiliates, including the provision of certain advisory services, making loans to the Company and its affiliates and serving as counterparties to certain fuel hedging arrangements. The Underwriters and their affiliate have received, and in the future may receive, customary fees and expenses and commissions for these transactions, according to Mr. Halter. The Note Purchase Agreement also provides for the possible future issuance of another series of equipment notes to be secured by the Aircraft. Pursuant to the Note Purchase Agreement, the Trustee will purchase the Series A Equipment Notes by December 31, 2010, with respect to the 2000-1 Aircraft and within 90 days of the date of the execution of the Note Purchase Agreement with respect to the 2010 Aircraft. The Series A Equipment Notes will be issued under an Indenture and Security Agreement with respect to each Aircraft to be entered into by the Company and U.S. Bank Trust National Association, as Loan Trustee, Mr. Halter disclosed. Each Indenture contemplates the issuance of Series A Equipment Notes, bearing interest at the rate of 6.20% per annum in the aggregate principal amount, once all the Series A Equipment Notes have been issued, equal to $450,000,000. The Series A Equipment Notes will be purchased by the Trustee, using the proceeds from the sale of the Certificates. Pending the purchase of the Series A Equipment Notes, the proceeds from the sale of the Certificates were placed in escrow by the Trustee pursuant to an Escrow and Paying Agent Agreement, dated as of July 2, 2010, among U.S. Bank National Association; Goldman, Sachs & Co.; Credit Suisse Securities (USA) LLC; Citigroup Global Markets Inc.; Deutsche Bank Securities Inc.; and Banc of America Securities LLC; and the Trustee. The escrowed funds were deposited with the Bank of New York Mellon, under a Deposit Agreement, according to Mr. Halter. The interest on the escrowed funds is payable on January 2, 2011, and interest on the Series A Equipment Notes is payable semi- annually on each January 2 and July 2, beginning on January 2, 2011. The principal payments on the Series A Equipment Notes are scheduled on January 2 and July 2 of certain years, beginning on January 2, 2011. The final payments will be due on July 2, 2018. Maturity of the Series A Equipment Notes may be accelerated upon the occurrence of certain events of default, including failure by the Company to make payments under the applicable Indenture when due or to comply with certain covenants, as well as certain bankruptcy events involving the Company. The Series A Equipment Notes issued with respect to each Aircraft will be secured by a lien on the Aircraft and will also be cross-collateralized by the other Aircraft financed pursuant to the Note Purchase Agreement, Mr. Halter told the SEC. DELTA AIR: Inks Pacts to Sell Mesaba, Compass Subsidiaries ---------------------------------------------------------- Delta Air Lines, Inc., has entered into definitive agreements dated July 1, 2010, to sell two of its wholly owned regional airline subsidiaries, Mesaba and Compass Airlines. Mesaba has been sold to Memphis, Tennessee-based Pinnacle Airlines Corp. for $62.0 million, and Compass has been sold to St. Louis-based Trans States Holdings, Inc., for $20.5 million. Pinnacle and Trans States are both large and experienced regional airline operators, with Pinnacle currently serving as one of Delta's largest regional carriers. Under the terms of the agreements, Mesaba and Compass will continue to serve Delta customers with long-term, extendable agreements, ranging from seven to 12 years depending on aircraft type. Both Mesaba and Compass will continue to be headquartered in Minneapolis-St. Paul with current presidents John Spanjers and Tim Campbell, respectively, leading the airlines under new ownership. In an official statement, Delta Connection Senior Vice President Don Bornhorst noted that the Agreements "[reflect] our continued focus on streamlining the portfolio of Delta Connection carriers serving our customers to ensure each partner airline is independently positioned for success with a competitive cost structure and an industry-leading focus on safety, reliability and customer service." "In recent years, the Delta Connection carriers have made substantial progress in creating a consistent customer experience across our brand with more First Class cabins, enhanced food service, jetbridge boarding and other amenities Delta customers expect when they fly Delta or Delta Connection flights. This transaction is another step in positioning our regional airlines for future success and we look forward to delivering even more improvements to customers in the more than 260 communities our partners serve," Mr. Bornhorst added. The structure of the Mesaba and Compass transactions provides for long-term competitive cost structures at both airlines, as well as incentives to reward Mesaba and Compass for operational excellence and cost improvement. Customer Service and Routes In conjunction with the sale of both carriers, Delta will enter into new Delta Connection agreements under which Mesaba and Compass Airlines will continue to serve as Delta Connection carriers. Current plans are for Mesaba and Compass Airlines to operate as wholly owned subsidiaries of Pinnacle Airlines Corp, Inc. and Trans States Holdings, Inc. The transactions are not expected to result in any changes in flight schedules or locations served. Compass and Mesaba's combined fleet of nearly 130 aircraft will continue to be dedicated to flying Delta routes. Compass and Mesaba's new owners -- Pinnacle and Trans States ?- are long-standing regional airline operators with years of experience working with Delta and other major airlines. Pinnacle Airlines Corp., an airline holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Pinnacle Airlines, Inc. operates a fleet of 142 regional jets under the Delta Connection brand. Colgan Air, Inc. operates a fleet of 48 regional turboprops as Continental Connection, United Express and US Airways Express. Trans States Holdings, Inc. is the parent company of two regional airlines -- Trans States Airlines and GoJet Airlines. Together, Trans States Holdings' regional airlines' 1,400 employees serve nearly five million passengers annually to 69 cities on 330 daily flights. Trans States currently operates flights as United Express and US Airways Express. The proceeds from these transactions will be used by Delta for general corporate purposes. DELTA AIR: Swings to $549 Mil. Net Income for Q2 2010 ----------------------------------------------------- Delta Air Lines reported on July 19, 2010, financial results for the June 2010 quarter. Key points include: * Delta's net income for the June 2010 quarter was $549 million, or $0.65 per diluted share, excluding special items. This is a $748 million improvement year over year. * Delta's net income was $467 million, or $0.55 per diluted share, for the June 2010 quarter. * Results include $90 million in profit sharing expense, in recognition of Delta employees' achievements toward meeting the company's financial targets. * Delta generated more than $1 billion in operating cash flow and ended the June 2010 quarter with $6.0 billion in unrestricted liquidity. "Delta's profit this quarter is our best result in a decade and proof that our plan has positioned us well as the economy begins its recovery," said Richard Anderson, Delta's chief executive officer. "These results would not have been possible without the dedication and determination of Delta people. We're happy to recognize our employees' contributions with $90 million in profit sharing." Revenue Environment Delta's operating revenue grew $1.2 billion, or 17% in the June 2010 quarter compared to the 2009 quarter. * Passenger revenue increased 19%, or $1.1 billion, compared to the prior year period on 1% lower capacity. Passenger unit revenue (PRASM) increased 19.4%, driven by a 17% improvement in yield and a 1.9 point improvement in load factor. * Cargo revenue increased 22%, or $38 million, on higher cargo volume and yield. * Other, net revenue increased 3%, or $24 million, primarily due to increased baggage fees. Comparisons of revenue-related statistics are: Increase (Decrease) 2Q10 versus 2Q09 ------------------------------- Change Unit Passenger Revenue 2Q10 ($M) YOY Revenue Yield Capacity ------------------------------------------- Domestic $3,152 15.7% 14.1% 14.2% 1.4% Atlantic 1,358 19.4% 30.1% 25.1% (8.2)% Pacific 634 52.3% 36.2% 22.5% 11.8% Latin America 336 16.9% 11.9% 10.4% 4.5% ---------- Total mainline 5,480 20.0% 19.9% 17.3% 0.1% Regional 1,529 14.2% 19.4% 16.7% (4.4)% ---------- Consolidated $7,009 18.7% 19.4% 16.7% (0.6)% "We are seeing strong improvements in these early stages of the economic recovery and believe there's room for more revenue growth as the economy continues to stabilize," said Ed Bastian, Delta's president. "We anticipate double-digit year over year unit revenue gains for the September quarter." Cost Performance In the June 2010 quarter, Delta's operating expense increased $317 million year over year due to higher fuel price and profit sharing expense, which were partially offset by incremental merger cost synergies. Consolidated unit cost (CASM(2)), excluding fuel expense, profit sharing and special items, was flat in the June 2010 quarter on a year-over-year basis, despite 1% lower capacity. Consolidated CASM increased 5% due to higher fuel price and profit sharing expense. Fuel Price and Related Hedges Delta hedged 51% of its fuel consumption for the June 2010 quarter, for an average fuel price of $2.32 per gallon. The fuel hedges Delta had in place as of July 16, 2010 are: 3Q10 4Q10 2011 --------------------------- Call options 29% 20% 21% Collars 16% 20% 7% Swaps 5% 10% 0% --------------------------- Total 50% 50% 28% Average crude call strike $82 $83 $85 Average crude collar cap 81 87 88 Average crude collar floor 72 75 74 Average crude swap 84 89 78 Liquidity Position As of June 30, 2010, Delta had $6.0 billion in unrestricted liquidity, including $4.4 billion in cash and $1.6 billion in undrawn revolving credit facilities. During the quarter, the company prepaid its $914 million revolving credit facility, which is now fully undrawn and available for future cash needs. Operating cash flow during the June 2010 quarter was $1 billion, driven by the company's profitability and advance ticket sales, and free cash flow was $778 million. In the June quarter, Delta contributed nearly $500 million to its pension plans and completed its required 2010 pension funding. Year to date, Delta has generated $2.0 billion in operating cash flow and $1.4 billion in free cash flow. Capital expenditures during the quarter were $283 million, which included $154 million for investments in aircraft, parts and modifications. Subsequent to the end of the quarter, Delta completed its $450 million 2010-1A enhanced equipment trust certificate (EETC) offering. The certificates will be secured by 22 aircraft that are currently included in Delta's 2000-1 EETC, which matures in November 2010, and two 777LR aircraft which were delivered in March 2010. Total debt payments in the June 2010 quarter were $345 million, of which $70 million was paid before scheduled maturity. At June 30, Delta's adjusted net debt was $15.6 billion, an $800 million reduction from March 31, 2010. "Delta exhibited strong cost performance this quarter as merger synergies and productivity offset cost pressures in the business. Synergies have exceeded our expectations and will be a key factor as we strive to keep our non-fuel unit costs flat for the full year," said Hank Halter, Delta's chief financial officer. "In addition, we continue to make excellent progress in delivering our balance sheet -- generating nearly $800 million in free cash flow this quarter and reducing adjusted net debt to $15.6 billion." Company Highlights Delta has a strong commitment to employees, customers and the communities it serves. Key accomplishments in 2010 to date include: * Accruing $90 million in employee profit sharing, in recognition of the achievements of all Delta employees toward meeting the company's financial targets; * Bolstering Delta's trans-Atlantic joint venture with Air France-KLM with the addition of Alitalia, Italy's flag carrier; * Increasing Delta's global reach through alliance and codeshare partnerships, including plans to codeshare with GOL airlines, a Brazilian carrier, and the 10-year anniversary celebration of the SkyTeam global airline alliance with the addition of Vietnam Airlines and TAROM, Romania's flag carrier; * Selling Mesaba and Compass Airlines, two wholly owned regional airline subsidiaries, to Pinnacle Airlines Corp. and Trans States Holdings, Inc.; * Obtaining approval from the U.S. Department of Transportation to offer customers nonstop service between Tokyo's Haneda Airport and Detroit and Los Angeles as well as between Sao Paulo, Brazil and Detroit; * Furthering Delta's efforts to become the leading airline of New York with the launch of Delta Shuttle service between New York-LaGuardia and Chicago-O'Hare International airports; * Committing to expand First Class availability to all domestic markets longer than 750 miles, or about two and one-half hours of flight time, beginning this fall; * Allowing customers to book scheduled commercial flights and on-demand private jet service in a single transaction through Delta AirElite; * Partnering with American Express to offer select Delta SkyMiles Credit Card members the opportunity to check a first bag free for up to nine people in the same reservation; and * Raising $1 million for the Martin Luther King Jr. National Memorial in Washington, D.C., with the support of our employees and customers. Special Items Delta recorded special items totaling $82 million in the June 2010 quarter, including: * $46 million in merger-related expenses; and * $36 million in asset impairment charges related to aircraft retirements. Delta recorded $58 million in merger-related expense items in the June 2009 quarter. September 2010 Quarter Guidance Delta's projections for the September 2010 quarter are: 3Q 2010 Forecast ---------------- Fuel price, including taxes& hedges $2.33 Operating margin 10 - 12% Capital expenditures $250 million Total liquidity at end of period $6.3 billion 3Q 2010 Forecast (compared to 3Q 2009) -------------------- Consolidated unit costs, excluding fuel expense and profit sharing Flat Mainline unit costs, excluding fuel expense and profit sharing Up 0 - 2% System capacity Up 0 - 2% Domestic Up 0 - 2% International Up 2 - 4% Mainline capacity Up 1 - 3% Domestic Up 1 - 3% International Up 2 - 4% DELTA AIR LINES, INC. Selected Balance Sheet Data As of June 30, 2010 Cash and cash equivalents $4,434,000,000 Short-term investments - Restricted cash and cash equivalents (short-term and long-term) 447,000,000 Total assets 43,809,000,000 Total debt and capital leases, including current maturities 15,783,000,000 Total stockholders' equity 199,000,000 DELTA AIR LINES, INC. Unaudited Consolidated Statements of Operations Three Months Ended June 30, 2010 Consolidated Operating Revenue: Passenger Mainline $5,480,000,000 Regional Carriers 1,529,000,000 --------------- Total Passenger Revenue 7,009,000,000 Cargo 211,000,000 Other, net 948,000,000 --------------- Total Operating Revenue 8,168,000,000 Operating expenses: Aircraft fuel and related taxes 1,960,000,000 Salaries and related costs 1,702,000,000 Contract carrier arrangements 972,000,000 Aircraft maintenance materials & outside repairs 395,000,000 Depreciation and amortization 379,000,000 Contracted services 366,000,000 Passenger commissions & other selling expenses 377,000,000 Landing fees and other rents 324,000,000 Passenger service 165,000,000 Aircraft rent 101,000,000 Profit sharing 90,000,000 Restructuring and merger-related items 82,000,000 Other 403,000,000 --------------- Total operating expense 7,316,000,000 --------------- Operating Income 852,000,000 Other (expense) income: Interest expense (315,000,000) Interest expense 3,000,000 Miscellaneous, net (72,000,000) --------------- Total other expense, net (384,000,000) --------------- Income (Loss) before income taxes 468,000,000 Income tax provision (1,000,000) --------------- Net Income (Loss) $467,000,000 =============== About Delta Air Lines Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. The Company's route network is centered on the hub system it operate at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo- Narita. The hub operations include flights, which gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The network is supported by a fleet of aircraft, which is varied in terms of size and capabilities. On December 31, 2009, the Company's wholly owned subsidiary Northwest Airlines, Inc., merged with and into Delta. The wholly owned subsidiary of the Company is Northwest Airlines Corporation. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. Delta Air carries a 'B-' issuer default rating from Fitch Ratings. DENNY'S CORP: New Director Dedrick Doesn't Hold Securities ---------------------------------------------------------- Gregg R. Dedrick disclosed in a Form 3 filing with the Securities and Exchange Commission that he doesn't hold any securities in Denny's Corporation. Denny's appointed Mr. Dedrick to its Board of Directors on July 15. Mr. Dedrick, 51, was a co-founder of Whole Strategies, an organizational consulting firm, in 2009. Prior to that, he was President and Chief Concept Officer at KFC for five years where he led the development of the company's grilled chicken product. He previously served as EVP, People and Shared Services at Yum Brands; Chief People Officer at Yum Brands; and SVP Human Resources for Pizza Hut and KFC. About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- is one of America's largest full-service family restaurant chains, consisting of 1,322 franchised and licensed units and 237 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. According to the Troubled Company Reporter on June 14, 2010, Moody's Investors Service stated that the B2 Corporate Family and Probability of Default ratings and the Stable rating outlook for Denny's Holdings, Inc., will not immediately be affected by the departure of Nelson Marchioli as Chief Executive Officer. DRAGON PHARMACEUTICAL: Deregisters Unsold Shares Following Merger ----------------------------------------------------------------- Dragon Pharmaceutical Inc. filed with the Securities and Exchange Commission a Post-Effective Amendment No. 1 relating to the Registration Statement on Form S-8 (File No. 333-55794) filed on February 16, 2001 with respect to a total of 3,050,000 shares of the Company's voting common stock, par value $0.001 per share, issued or reserved for issuance to directors, technical advisors and employees of the Company under stock option agreements. The Post-Effective Amendment No. 1 is being filed to remove from registration all securities that were registered but that remain unsold under the Registration Statement. On July 22, 2010, pursuant to the Agreement and Plan of Merger dated as of March 26, 2010, by and among the Company, Chief Respect Limited, a Hong Kong corporation, Datong Investment Inc., a Florida corporation, and Mr. Yanlin Han, the MergerSub merged with and into the Company, with the Company being the surviving corporation. The Merger was approved by the Company's shareholders at a special meeting of the Company's shareholders held on July 20, 2010 and became effective on July 22, 2010, upon acceptance of the Articles of Merger for filing by the Florida Secretary of State. Pursuant to the Merger Agreement, at the Effective Time, (a) each share of Common Stock (other than shares owned by Mr. Han and shares held by any of the Company's shareholders who are entitled to and who properly exercised their appraisal rights under Florida law) was converted into the right to receive $0.82 per share in cash, without interest, less any applicable withholding taxes, (b) each option to purchase shares of Common Stock outstanding under the Plan was cancelled and was converted into the right to receive a cash amount (without interest and net of any applicable withholding taxes) equal to (i) the excess, if any, of $0.82 over the per share exercise price of the option, multiplied by (ii) the total number of shares subject to the option immediately prior to the Effective Time. As a result of the Merger, the offering of securities of the Company pursuant to the Registration Statement has been terminated. The Company has withdrawn the Registration Statement, including all amendments and exhibits to the Registration Statement, with respect to all unsold shares of Common Stock registered under the Registration Statement. The Company also filed a Form 15 to cancel the registration of its common stock. About Dragon Pharmaceutical Headquartered in Vancouver, Canada, Dragon Pharmaceutical Inc. (TSX: DDD; OTC BB: DRUG) - http://www.dragonpharma.com/- is a manufacturer and distributor of a broad line of high-quality antibiotic products including Clavulanic Acid, an API to combine with Amoxicillin to fight resistance, and 7-ACA, a key intermediate to produce cephalosporin antibiotics, and formulated cephalosporin antibiotic drugs. The Company's balance sheet as of March 31, 2010, showed $200.1 million in assets, $132.9 million of liabilities, and $67.2 million of stockholders' equity. * * * As reported in the Troubled Company Reporter on April 5, 2010, Chang Lee LLP, in Vancouver, Canada, said that the Company's recurring working capital deficiency raises substantial doubt about its ability to continue as a going concern. DRAGON PHARMACEUTICAL: Datong Investment Merger Approved -------------------------------------------------------- Dragon Pharmaceutical Inc. reported, at its Special Meeting of Shareholders, that its shareholders, including those shareholders holding a majority of the outstanding shares excluding Mr. Han, voted to approve the merger of Datong Investment Inc. with and into the Company, pursuant to the Agreement and Plan of Merger dated March 26, 2010, by and among Dragon, Chief Respect Limited, a Hong Kong corporation, Datong Investment Inc., a Florida corporation and subsidiary of Chief Respect Limited, and Mr. Yanlin Han. The Merger is expected to be consummated on or about July 22, 2010, subject to the satisfaction of customary closing conditions. At the effective time of the Merger, the separate corporate existence of Datong Investment Inc. will cease, and the Company will survive with Mr. Han and Chief Respect Limited at its sole shareholders. Pursuant to the Agreement and Plan of Merger, at the effective time of the Merger, each outstanding share of the voting common stock, par value $0.001 per share, of the Company will be cancelled and converted into the right to receive $0.82 per share in cash, without interest and less any applicable withholding taxes. In connection with the Merger, the Company will be seeking to terminate its listing on the OTCBB and TSX on or about July 22, 2010. About Dragon Pharmaceutical Headquartered in Vancouver, Canada, Dragon Pharmaceutical Inc. (TSX: DDD; OTC BB: DRUG) - http://www.dragonpharma.com/- is a manufacturer and distributor of a broad line of high-quality antibiotic products including Clavulanic Acid, an API to combine with Amoxicillin to fight resistance, and 7-ACA, a key intermediate to produce cephalosporin antibiotics, and formulated cephalosporin antibiotic drugs. The Company's balance sheet as of March 31, 2010, showed $200.1 million in assets, $132.9 million of liabilities, and $67.2 million of stockholders' equity. * * * As reported in the Troubled Company Reporter on April 5, 2010, Chang Lee LLP, in Vancouver, Canada, said that the Company's recurring working capital deficiency raises substantial doubt about its ability to continue as a going concern. DREIER LLP: Judge Approves Verition, Trustee Settlement Deals ------------------------------------------------------------- A judge has approved two settlements in the bankruptcies of disgraced former attorney Marc S. Dreier and his defunct law firm, giving a Chapter 11 trustee control over most funds at issue in both cases and signing off on a $9 million agreement with Verition Fund Management LLC, according to Bankruptcy Law360. About Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On December 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier has been charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085-JSR). Dreier LLP sought chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been retained as counsel. The Debtor listed assets between $100 million and $500 million, and debts between $10 million and $50 million in its filing. Wachovia Bank National Association, Sheila M. Gowan as trustee for Dreier LLP's Chapter 11 Estate, and Steven J. Reisman as post- confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DOUG VAUGHAN: Bankruptcy Trustee to Sell Mansion for $2.5 Million ----------------------------------------------------------------- According to koat.com, a bankruptcy trustee is selling Doug Vaughan's Tanoan community home for $2.5 million to recover some of the investors' money Mr. Vaughan is accused of stealing. Douglas F. Vaughan sought chapter 11 protection (Bankr. D. N.M. Case No. 10-10763) on Feb. 22, 2010. A copy of the Debtor's Chapter 11 petition is available at http://bankrupt.com/misc/nmb10-10763.pdf A federal judge later converted the Chapter 11 case of Doug Vaughan to Chapter 7 liquidation proceeding. DT LAS VEGAS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: DT Las Vegas I, L.P. 401 N. 28th Street Las Vegas, NV 89101 Bankruptcy Case No.: 10-23470 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: David A. Colvin, Esq. Marquis & Aurbach 10001 Park Run Drive Las Vegas, NV 89145 Tel: (702) 382-0711 E-mail: dcolvin@marquisaurbach.com Estimated Assets: $0 to $50,000 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/nvb10-23470.pdf The petition was signed by James Markel of DT Las Vegas I Management, LLC, Debtor's general partner. DUBAI WORLD: DLF Aims to Buy Half of India Realty Joint Venture --------------------------------------------------------------- Dow Jones Newswires' Anirban Chowdhury reports that a senior DLF Ltd. executive said Monday the firm is aiming to buy Dubai World's stake in their equally held India realty joint venture for 2 billion rupees ($42.6 million). "DLF and Dubai World have jointly applied to the Foreign Investment Promotion Board so that DLF can buy out its partner's stake," the executive, who didn't want to be identified, told Dow Jones Newswires. "Both partners invested 2 billion rupees each in the project, but it never took off since the government couldn't provide land," Dow Jones quotes the executive as saying. "The appeal has been made so that Dubai World can get its investment back" he added. New Delhi-based DLF is India's biggest property developer by sales. The joint venture with Dubai World was formed to construct residential project Bidadi Knowledge City in the southern state of Karnataka. Restructuring Deal According to the Troubled Company Reporter on June 2, 2010, The Wall Street Journal said Dubai World reached a broad agreement to pay off its creditors and reduce its $23.5 billion of debt. Aidan Birkett, chief restructuring officer of Dubai World, told Zawya Dow Jones that Dubai World will now seek a final deal with all of its creditors by the end of June. Under the deal, creditors will be repaid in full but the payment period will be extended, while the government of Dubai would convert debt into equity and help fund the restructuring. According to The Journal, the first portion, or tranche, of $4.4 billion will be paid in five years, with 1% annual interest in cash but no shortfall government guarantee. The second tranche of $10 billion will be paid over eight years, with 1% interest plus varying payment-in-kind interest and shortfall guarantees. Lenders will have to choose between three options, depending on their exposure and on their priorities in regard to the shortfall guarantee and payment in kind. The government of Dubai will convert $8.9 billion of debt and claims into equity in Nakheel, the real-estate arm of Dubai World, and commit to fund as much as $500 million of Nakheel's expenses and an interest facility of as much as $1 billion while maintaining 100% ownership of the Company. As part of the deal, Nakheel's trade creditors were offered repayment through a mix of 40% cash and 60% in a sukuk-a bond structured to comply with Islamic law-with a 10% annual return. Nakheel paid a $980 million Islamic bond. The Journal said the agreement with the creditors' coordinating committee accounts for about 60% of Dubai World's bank lenders. The remaining creditors holding 40% of the group's debt have yet to accept the deal. 6-Month Standstill In November 2009, the Troubled Company Reporter ran a story about Dubai World seeking a six-month standstill on its debt obligations. The government of Dubai said it would restructure Dubai World and has appointed Deloitte LLP to lead the restructuring effort, naming an executive at the consultancy as the group's "chief restructuring officer." Bloomberg News' Arif Sharif and Laura Cochrane said Dubai World has US$59 billion in liabilities. Bloomberg said Dubai accumulated US$80 billion of debt by expanding in banking, real estate and transportation before credit markets seized up last year. The Wall Street Journal said Standard & Poor's in an October report estimated Dubai World could be responsible for as much as 50% of Dubai's total government and corporate debt load of some US$80 billion to US$90 billion. About Dubai World Dubai World -- http://www.dubaiworld.ae/-- is Dubai's flag bearer in global investments. As a holding company it operates a highly diversified spectrum of industrial segments and plays a major role in the emirate's rapid economic growth. Dubai World's investment spans four strategic growth areas of 21st Century commerce namely, Transport & Logistics, Drydocks & Maritime, Urban Development and Investment & Financial Services. Dubai World's portfolio includes DP World, one of the largest marine terminal operators in the world; Drydocks World & Dubai Maritime City designed to turn Dubai into a major ship-building and maritime hub; Economic Zones World which operates several free zones around the world including Jafza and TechnoPark in Dubai; Nakheel the property developer behind iconic projects such as The Palm Islands and The World among others; Limitless the international real estate master planner with current development projects in various parts of the world; Leisurecorp a global sports and leisure investment group, reshaping the industry by unlocking value across investment, development and brand opportunities; Dubai World Africa which oversees the regional development and portfolio of investments in the African continent; and Istithmar World, the group's investment arm that has a global footprint in finance, capital, leisure, aviation and various other business ventures. E*TRADE FINANCIAL: Posts $35 Mil. Net Income for June 30 Quarter ---------------------------------------------------------------- E*TRADE Financial Corporation reported results for its second quarter ended June 30, 2010, reporting net income of $35 million, or $0.12 per share, compared with a net loss of $48 million, or $0.25 loss per share, in the prior quarter and a net loss of $143 million, or $2.16 loss per share, in the second quarter of 2009. The Company reported total net revenue of $534 million for the second quarter, compared with $537 million in the prior quarter and $621 million in the year ago period. The Company's balance sheet for June 30, 2010, showed $44.3 billion in total assets and $40.2 billion in total liabilities, for a $4.1 billion in total stockholders' equity. "The second quarter marked an important milestone for E*TRADE as we reported our first quarterly profit in three years," said Steven Freiberg, Chief Executive Officer of E*TRADE Financial Corporation. "Our results were supported by strength in our brokerage business, including growth in DARTs, new accounts, and margin receivables; continued improvement in loan performance trends; prudent expense management; and effective balance sheet strategies in an environment of declining interest rates." Freiberg continued, "We are proud of our second quarter performance and remain focused on positioning the Company for sustainable profitability and growth. At the same time, our significant progress increases our flexibility to invest in products, services, and technologies that should enhance our customer franchise and allow us to better realize growth opportunities to drive shareholder value." E*TRADE reported DARTs of 170,000 during the quarter, a 10 percent increase from the prior quarter and a 16 percent decrease versus the same quarter a year ago. At quarter end, the Company reported 4.2 million customer accounts, which included 2.6 million brokerage accounts. Net new brokerage accounts were 18,000 during the quarter, compared with 2,000 in the prior quarter. Excluding 3,000 accounts closed in connection with the Company's international restructuring, the Company added 21,000 net new brokerage accounts during the quarter. The Company ended the quarter with $144 billion in total customer assets, compared to $159 billion in the prior quarter and $128 billion in the prior year. During the quarter, net new brokerage assets were positive $2.1 billion, totaling $4.3 billion year to date. Brokerage-related cash decreased by $1.1 billion to $20.7 billion during the period, while customers were net buyers of approximately $3.4 billion of securities. Customer security holdings decreased by eight percent, or $8.1 billion, as the markets declined between 10 and 12 percent during the quarter. Margin receivables increased 26 percent sequentially from $3.8 billion to $4.8 billion. Net new customer assets were positive $0.8 billion, reflecting $2.1 billion in net new brokerage assets, offset by a $1.3 billion decline in savings and other bank-related customer deposits. Total net revenue of $534 million declined $3 million from the prior quarter and $87 million versus the year ago period. Net operating interest income for the second quarter was $302 million, reflecting a net interest spread of 2.89 percent on average interest-earning assets of $41.0 billion. The $18 million sequential decrease in net interest income resulted from a $1.4 billion decline in average interest-earning assets and a seven basis point decline in the net interest spread. Commissions, fees and service charges, principal transactions, and other revenue in the second quarter were $195 million, compared with $196 million in the first quarter. This reflected the sequential increase in trading activity offset by a $0.33 decline in the average commission per trade, from $11.38 to $11.05. Total net revenue this quarter also included $37 million of net gains on loans and securities, including a net impairment of $12 million. Total operating expense decreased seven percent, or $20 million, to $276 million from the prior quarter, including lower compensation, advertising, and restructuring costs. The Company continued to make progress during the second quarter in reducing balance sheet risk as its loan portfolio contracted by $1.2 billion from the prior quarter, including $0.2 billion in loan securitizations and $0.7 billion related to prepayments or scheduled principal reductions. Second quarter provision for loan losses decreased $102 million from the prior quarter to $166 million. Net charge-offs in the quarter were $225 million, a decrease of $63 million from the prior quarter. These declines included a $15 million benefit of a legal settlement related to purchased loans. The allowance for loan losses declined by $59 million to $1.1 billion, or six percent of gross loans receivable, at quarter end. "We are particularly pleased with the progress made during the quarter in reducing the balance sheet and mitigating risk," Freiberg commented. "In addition to the prepayments and scheduled principal reductions, we securitized or sold $232 million in loans, accelerating the decline of the loan portfolio. Furthermore, continued efforts to put back loans to sellers resulted in a $20 million legal settlement of loan claims which contributed $15 million to the reduction in the second quarter provision and net charge-offs." For the Company's entire loan portfolio, special mention delinquencies (30-89 days) declined by 14 percent and at-risk delinquencies (30-179 days) declined by 13 percent in the quarter. During the quarter, the Bank generated $142 million of Tier 1 capital and $61 million of risk-based capital. As of June 30, 2010, the Company reported Bank Tier 1 capital ratios of 7.27 percent to total adjusted assets and 13.39 percent to risk- weighted assets. The Bank had excess risk-based total capital of $1.0 billion at quarter end. A full-text copy of the company's earnings release is available for free at http://ResearchArchives.com/t/s?670f About E*Trade Financial The E*TRADE FINANCIAL (NASDAQ: ETFC) family of companies provides financial services including trading, investing and related banking products and services to retail investors. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. * * * At the end of April 2010, DBRS said it has retained E*TRADE's Issuer & Senior Debt at B (high) and E*TRADE Bank's Deposits & Senior Debt (the Bank) at BB. In March 2010, Standard & Poor's Ratings Services raised its long- term counterparty credit rating on E*TRADE to 'CCC+' from 'CCC'. At the same time, S&P raised its long-term counterparty credit rating on its subsidiary, E*TRADE Bank, to 'B' from 'B-'. The outlook on both is stable. E*TRADE FINANCIAL: DBRS Rates Issuer & Senior Debt at 'B' --------------------------------------------------------- DBRS has today commented that its ratings of E*TRADE Financial Corporation (E*TRADE or the Company) remain unchanged after the Company's 2Q10 earnings announcement. DBRS rates E*TRADE's Issuer & Senior Debt at B (high) and E*TRADE Bank's Deposits & Senior Debt (the Bank) at BB. All ratings, except the Short-Term Instruments rating of the Bank, have a Negative trend. The Company reported net income of $35 million in the quarter, its first quarter of profitability since 2Q07. Following net losses of $48 million in 1Q10 and $143 million in 2Q09, DBRS views the Company's swing to positive earnings as an important step from a ratings perspective. The much improved earnings performance was largely driven by a decline in loan loss provisions, which could be somewhat volatile in the near-term due to uncertain market conditions. Nonetheless, the long-term trend indicates that provisions are declining. Importantly, E*TRADE generated operating income before provisions and taxes (IBPT) of $258 million to sufficiently absorb provisions of $166 million, driven by continued strength in revenue generation and controlled costs. Net interest income declined marginally quarter-over-quarter (QoQ) driven by a decline in average earning assets and a tighter net interest spread. The Company continued to roll off its loan portfolio, which was down by 6% QoQ, through loan prepayments and principal reductions, as well as securitizing and selling loans to accelerate the decline. While E*TRADE has been reducing assets outside of its non-core business activity, such as mortgage loans and its investment portfolio, it has focused on gaining market share by offering new products and enhancements for active traders. The success of this drive can be evidenced by the growth in higher yielding margin balances by an impressive 26% QoQ to $4.8 billion, or 11% of total assets. DBRS views positively that the Company continues to invest in its business, particularly though marketing and improvements in technology. E*TRADE continued to control costs, with operating expenses down 7% on a linked quarter basis to $276 million on reduced compensation, advertising and restructuring costs. DBRS sees the Company having success in its core brokerage franchise, as indicated by its strong business performance. The Trading and Investment segment, which is largely the online brokerage franchise, generated net income of $203 million in the quarter, up from $186 million in 1Q10 and flat as compared to 2Q09. Daily average revenue trades (DARTS) improved by 10% QoQ and remain at a high level historically. While new brokerage accounts were up marginally, E*TRADE added $2.1 billion of new brokerage assets in the quarter, helping to offset asset value declines. DBRS views this as demonstrating the Company's continued focus on increasing the quality of accounts rather than quantity. Pursuing its focused strategy, E*TRADE looks to drive future growth by building on its active trader franchise and expanding its customer relationships with long-term investors, while increasing the quality of its customer accounts and reducing the brokerage account attrition rate. Despite a positive IBPT cushion for the first time in three years, provisions continued to absorb a large percentage of IBPT (90% in 2Q10), indicating that credit performance still remains E*TRADE's biggest challenge. At-risk delinquencies declined by 13% on a linked quarter basis and 30% year-over-year, driven by declines across all loan types. E*TRADE's largest loan portfolio, one-to- four family loans of $9.3 billion, had delinquencies of 17% of total loans, while home equity delinquencies were 6% of total loans and consumer and other loans had delinquencies of just 2% of total loans. The Company continues to work with third parties to combat delinquencies and restructure loans in its loan portfolios. DBRS views E*TRADE as having built up a more comfortable cushion over the minimums to be well-capitalized, with a Tier 1 capital to risk-weighted assets ratio of 13.4% at June 30, 2010, up from 12.6% a year ago. Positively, the Bank was a capital generator for the second consecutive quarter, bringing excess risk-based capital in the Bank to $1.0 billion. The Company's ability to build capital has largely been constrained by the parent's annual interest payments, which were approximately halved following the debt exchange in 2009, but still remain a burden on the parent. A large part this expense is due to the high coupon on the Company's Springing Lien Notes (SLNs). DBRS views positively that the Company opted to make a cash payment for its May 31, 2010 coupon on its SLNs, thereby not increasing the already burdensome $160 million annual corporate interest expense. Given that the Bank has substantial excess risk-based capital, the Company could upstream this capital from the Bank to the parent to pay down some of this debt. DBRS would view the redemption of any outstanding corporate debt favorably from a ratings perspective, provided that capitalization at the Bank remains appropriate. While DBRS maintains a Negative trend on the rating, indicating the continued pressure on earnings and uncertainty of credit costs, DBRS views positively the Company's continued strength in online brokerage, improving trends in loan credit, and strengthened financial condition. Additionally, the Company's return to profitability bodes well from a ratings perspective. ENRON CORP: ECRC Submits 23rd Post-Confirmation Report ------------------------------------------------------ Enron Creditors Recovery Corp., formerly Enron Corp., and its reorganized debtor affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York, on July 15, 2010, their Twenty-third Post-Confirmation Status Report. A. Distributions John S. Delnero, Esq., at K&L Gates LLP, in Chicago, Illinois, relates that as of July 15, 2010, approximately $21,686,000,000 in Cash, PGE Common Stock and PGE Common Stock equivalents have been distributed to holders of Allowed Claims, including $267,000,000 of interest, capital gains and dividends. All Disputed Claims have been resolved and all reserves previously held in the Disputed Claims Reserve, including interest, dividends and gains have been released. The General Unsecured Creditors of Enron have received 52.4% return on allowed claim amounts compared to original estimates in the Disclosure Statement of 17.4% and the Creditors of Enron North America Corp have received 52.0% compared to original estimates in the Disclosure Statement of 20.1%. The combined rate of return for ENA Creditors who also hold an Enron Guaranty claim is 94.1%, excluding gains, interest and dividends. There are a limited number of pending litigation and collection matters, which could potentially add up to approximately $150 million in value, that continue to affect the timing of the closure of the Enron bankruptcy case and payment of remaining funds to creditors. The $150 million of value yet to be collected relates primarily to the Reorganized Debtors' share of the proceeds of litigation in which the plaintiff received summary judgment in the United States District Court for the District of New York and which has been pending on appeal to the Second Circuit Court of Appeals, referred to as the "Bammel Litigation." The Reorganized Debtors are monitoring the Bammel Litigation and expect a resolution of the appeal in the near term. Based upon the likely timing of the expected resolution of these remaining matters, the costs of making distributions and the funds on hand at this time, the Plan Administrator will distribute the remaining available funds and the collections related to the remaining matters at the time of closure of the Enron bankruptcy case in lieu of further interim distributions. In addition, the Reorganized Debtors are currently litigating on the United States District Court the appeal of the denial by the Bankruptcy Court of a motion filed by National City Bank, which would require the payment of certain additional funds in the approximate amount of $8.6 million to creditors holding the Allowed ETS Debenture Claim under an agreement which NCB purports to provide most favored nations status in these particular circumstances which the Reorganized Debtors have opposed. The timing of the resolution of the NCB matter is uncertain, Mr. Delnero says. B. Claims Resolution Process More than 25,000 proofs of claim were filed against the Debtors. The Reorganized Debtors and, prior to the Effective Date, the Debtors, have worked diligently to review, reconcile, and resolve these claims, Mr. Delnero tells the Court. In the third quarter of 2008, all Disputed Claims were resolved. Of more than 25,000 proofs of claim filed, approximately 5,653 have been ordered allowed and approximately 2,333 have been allowed as filed. The remaining filed claims have been expunged, withdrawn, subordinated, or otherwise resolved. C. Settlements and Recoveries The Reorganized Debtors collected approximately $4,198,000 since the Twenty-Second Post-Confirmation Status Report. These amounts were primarily attributable to settlements and the return of other deposits belonging to the Reorganized Debtors. D. Other Activities The Reorganized Debtors continue to oversee additional various Enron activities including: a. Document Administration and Disposal. The Reorganized Debtors have completed their document destruction efforts in accordance with numerous orders entered by the Bankruptcy Court and an order entered by the District Court for the Southern District of Texas. As of January 1, 2010, all of the remaining 43,000 boxes eligible for destruction and all electronic storage devices have been destroyed. Approximately 2,600 boxes have been sent to long-term storage in accordance with regulatory requirements, and the Reorganized Debtors have created electronic tape media to store the Litigation Document Library. b. Dissolution of Corporate Entities. There are four remaining entities, of which one is a Debtor, one is a non- Debtor, and two are Post-Final Distribution Trusts. The Debtor and non-Debtor are taking great care to ensure all liabilities are satisfied prior to dissolution and that those dissolutions are in accordance with the governing laws. Additionally, the foreign entities have additional complexities and time components that the Debtor and non- Debtor are working through to ensure orderly dissolutions. In conjunction with the dissolution of the remaining corporate entities, Enron Dissolution Corp., a Delaware corporation, was formed solely for the purposes of winding up Enron and Enron Net Works, LLC. Enron and Enron Net Works, LLC were merged with and into Enron Dissolution Corp. effective on December 18, 2009. Enron Dissolution Corp. was thereafter dissolved effective on December 19, 2009. c. Tax Return Compliance. For 2009, approximately seven returns for two entities remain to be filed. In addition, there is one foreign entity with potential filing obligations. d. Resolution of Outstanding Litigation. Twenty cases remain pending. e. The Reorganized Debtors continue to be sponsors of prepetition benefit plans, which are entitled to receive distributions from the settlement of certain class actions securities cases, Tittle, et al. v. Enron Corporation, et al. and Newby, et al. v. Enron Corporation, et al., related to the Enron estate. The Reorganized Debtors are working to transition the responsibility for the administration of the benefit plans and the associated distribution process to independent third parties to allow for the closure at the appropriate time of the Enron Case. The timing of the distribution of class action settlement funds to the benefit plans is uncertain and the Reorganized Debtors lack control over such distribution to those plans. Moreover, the Reorganized Debtors continue to perform the necessary accounting, control and reporting work required to effect closure of the Case promptly. Two remaining headcount and engaged professional firms (a) support litigation, (b) handle accounting, tax, cash management and reporting for the four remaining entities, (c) calculate and control creditor distributions, (d) perform claims management, (e) complete disposition of remaining litigation (f) oversee wind- up of employee matters and benefit plans, and (g) oversee IT and corporate services providers and non-litigation matters, Mr. Delnero discloses. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures that caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on November 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ENRON CORP: Newby, et al., Seek to End ESL3624 Web Site ------------------------------------------------------- Mark Newby, et al., sought and obtained permission from the U.S. District Court for the Southern District of Texas to discontinue the use of the http://www.esl3624.com/Web site. The Court entered an order, in June 2002, regarding service of papers and notice of hearings via independent Web site. Roger B. Greenberg, Esq., at Robbins Geller Rudman & Dowd LLP, in San Diego, California, lead counsel for Mark Newby, et al., related that since that time, the parties in Mark Newby, et al., vs. Enron Corp., et al., Tittle and consolidated or coordinated cases have served pleadings and notices on each other via the http://www.esl3624.comweb site which was established and maintained by Lead Counsel. Undoubtedly, Mr. Greenberg maintained, the Web site for service in these cases reduced wasted paper and facilitated communications among numerous counsel involved in these actions. Now, however, Mr. Greenberg noted, the vast bulk of the Enron- related cases have been terminated. In addition, the Court has implemented its own electronic service so that when documents are filed, counsel in the relevant case receives service electronically from the Court, he stated. Therefore, Mr. Greenberg asserted, there is no need to continue the Web site established by the Order. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures that caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on November 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ES ENERGY: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: ES Energy Solutions, LP 2828 Routh Street, Suite 500 Dallas, TX 75201 Bankruptcy Case No.: 10-35004 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Gerrit M. Pronske, Esq. Pronske & Patel, P.C. 2200 Ross Avenue, Suite 5350 Dallas, TX 75201 Tel: (214) 658-6500 Fax: (214) 658-6509 E-mail: gpronske@pronskepatel.com Estimated Assets: $500,001 to $1,000,000 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 Ballard Castleman, president of EFO Energy, Inc., Debtor's general partner. Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- McCommas LFG Processing Partners, LP 07-32219 05/07/07 McCommas Landfill Partners, LP 07-32222 05/07/07 FAIRFIELD SENTRY: Kenneth Krys & Christopher Stride as Liquidators ------------------------------------------------------------------ Messrs Kenneth Krys and Christopher Stride of Krys & Associates (BVI) Limited, the Liquidators of Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited obtained cross-border recognition as foreign main proceedings by the United States Bankruptcy Court for the Southern District of New York of the Funds' insolvency proceedings, pending in the British Virgin Islands. Fairfield Sentry Limited was the largest "feeder fund" to Bernard L. Madoff Investment Securities LLC, and invested approximately 95% of its assets with BLMIS. BLMIS was placed into liquidation proceedings in the United States in December 2008, after it was revealed that Bernard Madoff operated BLMIS as a Ponzi scheme for many years. Fairfield Sigma Limited and Fairfield Lambda Limited were both feeder funds of Fairfield Sentry Limited, and invested all of their assets with Fairfield Sentry Limited. On 14 June 2010, the Liquidators, represented by their U.S. Counsel, Brown Rudnick LLP, sought cross-border recognition of the Funds' British Virgin Islands based insolvency proceedings as foreign main proceedings under Chapter 15 of the United States Bankruptcy Code as part of the Liquidators' efforts to realize upon and maximize recoveries available for distribution to the Funds' stakeholders. A contested hearing on the Liquidators' Chapter 15 petitions was held by the Bankruptcy Court on 22 July 2010. Ruling from the bench, United States Bankruptcy Judge Burton R. Lifland granted "foreign main recognition" to the Funds' British Virgin Islands based insolvency proceedings under section 1517(b)(1) of the Bankruptcy Code. In granting the relief sought by the Liquidators, the Court observed that "non-recognition where recognition is due may forestall needed inter-nation cooperation." As part of the relief granted, a lawsuit brought derivatively on behalf of Fairfield Sentry Limited by purported shareholders in Fairfield Sentry Limited was stayed. The filings relating to the funds' Chapter 15 petitions, including the Bankruptcy Court's 22 July 2010 Order, have been uploaded to: http://www.fairfieldsentry.comhttp://www.fairfieldsigma.com http://www.fairfieldlambda.com Krys & Associates is a firm dedicated to Corporate Recovery, Insolvency, Forensic Accounting and Business Advisory Services. The Firm's Chief Executive Officer and Founder is Kenneth Krys, who has over 20 years of experience dealing with complex international assignments. * * * As reported in the Troubled Company Reporter - Latin America on June 17, 2010, Bloomberg News said that Fairfield Sentry Ltd., the biggest feeder fund in Bernard Madoff's fraudulent investment business, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on June 14, 2010 (Bankr. S.D.N.Y. Case No. 10-13164). Bloomberg noted Fairfield Sentry seeks U.S. recognition of the bankruptcy case filed in the British Virgin Islands in April 2009. Bloomberg, citing the bankruptcy petition, related Fairfield Sentry took money from non-U.S. residents and some U.S.-based tax- exempt entities to be invested with Madoff. Bloomberg related that, according to the court filing, 95% of Fairfield Sentry's assets were invested with Bernard L. Madoff Investment Securities LLC. Account statements showed $7 billion of Fairfield Sentry assets Madoff claimed to hold in October 2008, it said. FAIRFIELD SENTRY: Secures Chapter 15 Creditor Protection -------------------------------------------------------- Dow Jones Daily Bankruptcy Review reports that Fairfield Sentry Ltd., an investment fund that collapsed in the wake of Bernard Madoff's Ponzi scheme, secured Chapter 15 protection after fending off an objection from an investor that had launched a lawsuit on behalf of Fairfield Sentry. Fairfield Sentry is the biggest feeder fund in Bernard Madoff's fraudulent investment business. It filed a petition under Chapter 15 of the U.S. Bankruptcy Code on June 14, 2010 (Bankr. S.D.N.Y. Case No. 10-13164), to seek U.S. recognition of the bankruptcy case filed in the British Virgin Islands in April 2009. The Chapter 15 petition was filed by petitioners Kenneth Krys and Christopher Stride. Judge Arthur J. Gonzalez presides over the case. David Molton, Esq., at Brown Rudnick LLP in New York, serves as counsel to the Chapter 15 petitioners. Fairfield Sentry listed between $100 million and $500 million in assets and no more than $500,000 in debts in its Chapter 15 petition. Fairfield Sigma Ltd. and Fairfield Lambda Ltd., two funds that channeled money to Fairfield Sentry for investment with Madoff, also filed for Chapter 15 protection. Fairfield Sentry is facing a lawsuit by Irving Picard, the court- appointed trustee in the Madoff firm's bankruptcy, to recover billions paid to the fund in the six years before the suit. FONTAINEBLEAU L.V.: Court OKs Ch. 7 Trustee Bond Premium Budget --------------------------------------------------------------- Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida approved Soneet R. Kapila's request for pro rata allocation of the Chapter 7 Trustee's bond premium based on cash and marketable securities in the estate bank accounts. Mr. Kapila is the Debtors' Chapter 7 Trustee. The Court authorized Mr. Kapila to pay the pro rata share of the Bond Premium from each of the Estate Accounts as: Pro Rata Pro Rata Share of Nature of Account Amount Percentage Premium ----------------- ------ ---------- ------- Proceeds, cash or $100,553,896 0.09653 $160,354 securities derived from sale of the Casino Hotel to Icahn, which funds are subject to liens Unencumbered funds in 3,315,629 0.03183 5,287 operating accounts Security deposits 25,000 0.00024 39 Customer deposits 274,469 0.00263 437 ----------- ---------- ------- Totals $104,168,994 1.00 $166,119 Judge Cristol also authorized Mr. Kapila to allocate future bond premiums pro rata among the then-existing balances in the Estate Accounts. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of approximately $150 million. The bankruptcy case was subsequently converted to Chpater 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU L.V.: District Court Remands Appeals on DIP Order --------------------------------------------------------------- Judge Cecilia M. Altonaga of the U.S. District Court for the Southern District of Florida has remanded the consolidated appeals of contractor claimants, lien claimants and the M&M Lienholders in Fontainebleau Las Vegas Holdings' cases of 11 orders of the U.S. Bankruptcy Court for the Southern District of Florida. Judge Altonaga said that the Bankruptcy Court must craft a remedy consistent with her Remand Order. To recall, the Statutory Lienholders took an appeal from Bankruptcy Judge A. Jay Cristol's interim orders (i) authorizing the Debtors to obtain secured postpetition financing on super- priority priming lien basis and modifying the automatic stay, and (ii) authorizing the Debtors to repay used cash collateral and unused cash collateral. A group of prepetition lenders, known as the Term Lenders, had financed much of the Debtors' casino-hotel resort project, in Las Vegas, Nevada, in accordance with a June 2007 credit agreement. The loan was secured by a first lien on substantially all the Debtors' assets. The Project was not yet finished when the Debtors filed for bankruptcy, and it was subsequently sold. The Term Lenders and the Statutory Lienholders fight over certain issues relating to the Project, including the issue of priority of their interests. In her 67-page order, Judge Altonaga noted that she expresses no opinion regarding the issue about the priority of the Statutory Lienholders' and the Term Lenders' claims against the Debtors because that will be decided in one or more adversary proceedings in the Bankruptcy Court. Instead, Judge Altonaga tackled the issue of adequate protection with respect to the Statutory Lienholders' interests. Judge Altonaga opined that the Bankruptcy Court erred in entering the Interim Orders over the Statutory Lienholders' objections on three grounds. She explained that the Bankruptcy Court erred by authorizing: (1) the Debtors to use the Term Lenders' cash collateral on a priming basis under Section 364(d) of the Bankruptcy Code, and further erred by failing to ensure that the Statutory Lienholders' interests in the Fontainebleau Las Vegas Project were adequately protected; (2) the Examiner to be paid on a priming basis, again without ensuring that the Statutory Lienholders' interests were adequately protected; and (3) the Debtors to obtain postpetition financing from Icahn Nevada Gaming Acquisition LLC under section 364(d) -- again without ensuring that the Statutory Lienholders' interests were adequately protected. In the Eleventh Circuit, as in most circuits, Judge Altonaga noted, a determination of equitable mootness does require dismissal. But these appeals are not moot, equitably or otherwise, she continued. Hence, she ruled that the appeals are remanded to the Bankruptcy Court. Judge Altonaga maintained that at bottom, the financing orders decreased the value of the Statutory Lienholders' interests in the Project by the amount of the priming lien granted to Icahn Nevada. She noted that under those orders, funds were disbursed to the Term Lenders, the Examiner and other professionals. "Although the bankruptcy court cannot recover all the funds, it may and must recover the funds distributed to the Term Lenders, the Examiner, and the professionals pending a determination of the issue of priority -- not to exceed any amount the Statutory Lienholders have requested," Judge Altonaga ruled. "Any compensation to which the Examiner and other professionals may be entitled must be made in accordance with law," she added. Judge Altonaga also (i) dismissed the Term Lenders' request to dismiss the appeals, (ii) closed the appeal case, and (iii) denied all pending motions in the case as moot. Judge Altonaga, however, maintained that nothing in the Remand Order affects Icahn Nevada, who is "carved out." Gregory E. Garman, Esq., at Gordon Silver Ltd., in Las Vegas, Nevada, said that the $25,000,000 disbursed to the Term Lenders, the Examiner and other professionals will be added to the nearly $100,000,000 being held after the Project was sold in February 2010, Las Vegas Review-Journal reports. Mr. Garman is one of the Statutory Lienholders' lawyers. "We're going to be back in litigation in bankruptcy court on the priority issue," Mr. Garman was quoted by Las Vegas Review-Journal as saying. "This [Remand O]rder simply means more money is available for the payment of whoever is in first position and we strongly believe that is the lienholders," he continued. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of approximately $150 million. The bankruptcy case was subsequently converted to Chpater 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU L.V.: Ex-Employees Seek Payment of Unpaid Wages ------------------------------------------------------------- Nine of Fontainebleau Las Vegas' former employees ask the Court, in separate requests, to allow the payment of their administrative expenses and unpaid debts for earned compensation incurred postpetition. According to the Debtors' Schedule of Unpaid Debts incurred after the Petition Date, these are the amounts owed to the Claimants: Employee Amount -------- ------ Mark Lefever $26,965 Audrey Oswell 16,317 Whitney Thier 10,659 Frances Kneisc 10,386 Tanis Snyder 5,852 Patrick Burrus 4,640 Milo Sager 3,749 Lynn T. Katz 3,238 Gregory Pierce 3,185 Jaclyn Miller 2,650 Joel Bloom 2,104 Gary S. Vicchairelli 1,822 The Unpaid Debts are listed in the Debtors' Schedule of Unpaid Debts as required by Rule 1019(5) of the Federal Rules of Bankruptcy Procedure and the order converting the cases under Chapter 11 to cases under Chapter 7 of the Bankruptcy Code. The Court will convene a hearing on August 19, 2010, to consider the requests. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of approximately $150 million. The bankruptcy case was subsequently converted to Chpater 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FORUM HEALTH: MBIA Discovery on Buyer Partially Approved -------------------------------------------------------- George Nelson at Business Journal Daily reports that a federal bankruptcy judge gave MBIA Insurance Corp. two of its eight requests for discovery from Forum Health's buyer Ardent Health Services. The judge order Ardent Health to produce the documents within seven calendar days. About Forum Health Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, serve as lead counsel to the Debtors. The Debtors have also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. At the time of its filing, Forum Health estimated that it had assets and debts both ranging from $100 million to $500 million. FREDE ENTERPRISES: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Larry Thomas at Furniture Today reports that FreDe Enterprises LLC filed for bankruptcy under Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Florida, listing both assets and debts of between $1 million and $10 million. The Company said it filed for bankruptcy to force the reopening of a store that a landlord had locked down, relates Mr. Thomas. A person familiar with the filing said the company is trying to renegotiate a lease it could live with long-term. According to Furniture Today, the company owes $127,225 to Sealy; $3,651, HomeLine Furniture; and $11,130, Montage Furniture Services. FreDe Enterprises LLC operates five Ashley Furniture HomeStores. GARLOCK SEALING: Anchor Packing Files Schedules & Statement ----------------------------------------------------------- A. Real Property $0 B. Personal Property B.2 Bank Accounts Bank of America Disbursements 25,835 B.16 Accounts receivable Garlock Sealing Technologies LLC Intercompany Receivables 32,526 TOTAL SCHEDULED ASSETS $58,361 =========================================================== C. Property Claimed as Exempt n/a D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims 0 F. Creditors Holding Unsecured Non-priority Claims Garlock Sealing Technologies LLC -- Intercompany Payable 2,025,298 Garrison Litigation Management -- Intercompany Note 1,324,219 See http://bankrupt.com/misc/AnchorSchedFClaims.pdf TOTAL SCHEDULED LIABILITIES $3,349,517 =========================================================== Statement of Financial Affairs Paul L. Grant, president of The Anchor Packing Company, relates that the Debtor made payments totaling $4,685 to various creditors within 90 days immediately before the Petition Date. A schedule of the creditor payments is available for free at: http://bankrupt.com/misc/AnchorCreditorPayments.pdf Anchor Packing is or was a party within one year immediately preceding the Petition Date to several lawsuits, a schedule of which is available for free at: http://bankrupt.com/misc/AnchorLawsuitsList.pdf Elizabeth Barry is the Debtors' bookkeeper from June 2008 to present. Stockholders who directly or indirectly own, control or hold 5% or more of the voting or equity securities of Anchor Packing are: Percentage of Name Title Stock Ownership ---- ----- --------------- Paul L. Grant President & 0% Director Timothy Hennessy Vice President, 0% Secretary & Director Brian Henzel Assistant Secretary 0% & Director Garrison Litigation 100% Management Group, Ltd. Elizabeth Barry Treasurer 0% Christopher Drake, director and assistant secretary of Anchor Packing terminated his relationship with Anchor Packing in February 2010. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Committee Proposes Katten Muchin as Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors for Garlock Sealing Technologies LLC seeks permission from the U.S. Bankruptcy Court for the Western District of North Carolina to retain Katten Muchin Rosenman LLP as its counsel. As the Creditors Committee's counsel, Katten Muchin will: (a) provide the Committee legal advice with respect to its powers and duties in the Debtors' Chapter 11 cases; (b) take all necessary action on behalf of the Creditors Committee to protect and preserve the collective interests of the unsecured creditors in the Debtors' estates; (c) prepare and file on behalf of the Creditors Committee all applications, answers, orders, reports, motions and notices in the Debtors' Chapter 11 cases; (d) appear before the Court, and other courts as may be appropriate, to represent the interests of the Creditors Committee in matters that require representation and to represent and assist the Committee in negotiations with other parties-in-interests in the Debtors' Chapter 11 cases; and (f) perform other legal services for the Creditors Committee as may be necessary in the Debtors' bankruptcy cases. The Debtors will pay Katten Muchin's professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Partner $405 to $540 Associates $220 to $365 Counsel & Special Staff $465 Of Counsel $525 to $540 Paralegals $105 to $215 Deborah L. Fletcher, a partner at Katten Muchin, will be the lead attorney to the Creditors Committee. Ms. Fletcher's billable rate is $450 per hour. The Debtors will reimburse Katten Muchin for expenses incurred. Ms. Fletcher -- deborah.fletcher@kattenlaw.com -- discloses that Katten Muchin represents Bank of America and certain of its affiliates in matters wholly unrelated to the Debtors and their bankruptcy cases. Katten also represents Cleaver Brooks, Inc., Scapa Dryer Fabrics, Inc., and certain affiliates of Scapa Group, Inc., in North Carolina asbestos litigation, which are pending before the U.S. District Court for the Eastern District of Pennsylvania. Neither Cleaver Brooks, Inc., Scapa Dryer Fabrics, Inc., and certain affiliates of Scapa Group, Inc., assert any claims against the Debtors, she says. Despite those disclosures, Ms. Fletcher asserts that Katten Muchin is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Submits Rule 2015.3 Report for July ---------------------------------------------------- Garlock Sealing Technologies LLC seeks and its units filed with the Court on July 20, 2010, a report on the value, operations and profitability of entities in which it holds a substantial or controlling interest, as required by Rule 2015.3 of the Federal Rules of Bankruptcy Procedure. Specifically, Garlock holds a substantial or controlling interest in these entities: Garlock's Entity Interest Value ------ --------- ----- Garlock International Inc. 100% $13,888,000 Garlock de Mexico, S.A. 99.9% $19,961,000 Garlock Pty Limited 100% $34,949,000 Garlock Overseas Corporation 100% $19,981 Garlock Valqua Japan, Inc. 49% $1,387,000 Donald G. Pomeroy, II, vice president and chief financial officer of Garlock, explains that the valuation estimates for each entity are made as of a date not more than two years before July 20, 2010. Garlock also appended in the report a balance sheet, a statement of income, a statement of cash flows and general notes for the period ending December 31, 2009. Balance Sheet for Direct Subsidiaries of Garlock Sealing Technologies LLC Entity Total Assets Total Liabilities ------ ------------ ----------------- Garlock International Inc. $18,254,000 $18,254,000 Garlock de Mexico, S.A. 7,230,000 7,230,000 Garlock Pty Limited 22,699,000 22,699,000 Garlock Overseas Corporation 484,000 484,000 Statement of Income for Direct Subsidiaries of Garlock Sealing Technologies LLC Entity Net Income ------ ---------- Garlock International Inc. $389,000 Garlock de Mexico, S.A. 2,285,000 Garlock Pty Limited 1,887,000 Garlock Overseas Corporation - Statement of Cash Flows for Direct Subsidiaries of Garlock Sealing Technologies LLC Entity Cash and cash equivalents at end of year ------ ---------------------------- Garlock International Inc. $458,000 Garlock de Mexico, S.A. 948,000 Garlock Pty Limited 316,000 Garlock Overseas Corporation - A full-text copy of the Rule 2015.3 report is available for free at http://bankrupt.com/misc/Garlock_Jul20Rule2015.3Report.pdf About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Wins Nod to Hire Bates White as Consultant ----------------------------------------------------------- Garlock Sealing Technologies LLC and its units received the Court's permission to employ Bates White, LLC, as their consultant. As the Debtors' consultant, Bates White will render services, including: (a) estimating the number and resolution cost of present and future asbestos bodily injury claims; (b) rendering expert testimony as required by the Debtors and as necessary in their Chapter 11 cases; (c) assisting the Debtors in preparing expert testimony or reports, and in the evaluation of reports and testimony by other experts and consultants; and (d) other advisory services as may be requested by the Debtors. The Debtors will pay Bates White's professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Senior Partner $850 Partner $625 to $850 Principal $425 to $525 Manager $375 to $395 Senior Consultant $325 to $350 Consultant II $275 to $295 Consultant I $255 Project Coordinator $225 Project Assistant $200 Research Assistant $160 The Debtors will reimburse Bates White for expenses incurred. In the 12 months prior to the Petition Date, Bates White received payments totaling $235,000 for services rendered from the Debtors or their affiliates, including the payment on May 17, 2010, of a $50,000 retainer fee from Garlock Sealing Technologies LLC to secure the payment of fees and expenses. As of June 4, 2010, $16,853 of the retainer remained. Dr. Charles Bates -- charle@bateswhite.com -- a member of Bates White, discloses that his firm previously or currently provides consulting services to certain parties in matters unrelated to the Debtors' Chapter 11 cases, a list of which is available for free at: http://bankrupt.com/misc/Garlock_BatesClients.pdf Despite these disclosures, Mr. Bates assures the Court that Bates White is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wins OK for $400 Million DIP Deal with Barclays --------------------------------------------------------------- Bankruptcy Law360 reports that General Growth Properties Inc. has won its bid to enter into a new $400 million debtor-in-possession financing agreement with Barclays Bank PLC, a move the bankrupt mall owner said would save it $2.7 million per month in interest payments. Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York approved the deal Thursday, allowing GGP to enter into an agreement, Law360 says. 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) GLIMCHER REALTY: Commences Offering of 12 Million Shares -------------------------------------------------------- Glimcher Realty Trust has commenced an offering of approximately 12,500,000 common shares for sale to the public. The Company expects to grant the underwriters an option to purchase up to 15 percent of additional common shares. The Company intends to use the net proceeds to reduce the outstanding principal amount under its corporate credit facility, which will provide the Company with additional capacity to borrow funds in the future for joint venture opportunities and property acquisitions, as well as maintenance, renovation and expansion of existing properties. The Company continues to evaluate joint venture opportunities and property acquisitions in the ordinary course of business. Goldman, Sachs & Co. and Wells Fargo Securities, LLC are serving as the joint bookrunning managers for the offering. The common shares will be sold pursuant to a prospectus supplement and accompanying prospectus filed as part of an existing shelf registration statement filed with the Securities and Exchange Commission on Form S-3 that is effective. Any offer of common shares will be made by means of the prospectus supplement and accompanying prospectus. When available, copies of the prospectus supplement and accompanying prospectus can be obtained by contacting: Goldman, Sachs & Co., Attn: Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1.866.471.2526, facsimile: 1.212.902.9316, email: prospectus-ny@ny.email.gs.com, or Wells Fargo Securities, LLC, Attn: Equity Syndicate Department, 375 Park Avenue, New York, NY 10152, telephone: 1.800.326.5897, email: equity.syndicate@wellsfargo.com. About Glimcher Realty Trust Headquartered in Columbus, Ohio, Glimcher Realty Trust (NYSE: GRT) is a real estate investment trust, which owns, manages, acquires and develops regional and super-regional malls. The company is a component of both the Russell 2000(R) Index, representing small cap stocks, and the Russell 3000(R) Index, representing the broader market. * * * As reported in the Troubled Company Reporter on May 2, 2010, Glimcher carries a B+/Negative/-- corporate credit rating from Standard & Poor's Ratings Services. GLOBAL CASH: S&P Gives Negative Outlook; Affirms 'BB-' Rating ------------------------------------------------------------- Standard & Poor's Rating Services said it revised its outlook on Las Vegas-based Global Cash Access Inc. to negative from stable. At the same time, S&P affirmed the company's 'BB-' corporate credit rating and 'B' issue-level rating on the 8.75% senior subordinated notes 2012. The outlook revision follows GCA's announcement that it does not intend to renew its ATM and credit card cash access services contract with its largest customer, Harrah's Operating Co. Inc. The Harrah's contract represented approximately 14% of GCA's consolidated 2009 revenue. It does not expire until Nov. 30, 2010, and the company believes that the expiration of the agreement will not materially affect its financial performance for its 2010 fiscal year. "However," said Standard & Poor's credit analyst Susan Madison, "S&P believes that the loss of the contract, coupled with the ongoing weakness in the U.S. gaming market, could cause the company to experience reduced EBITDA generation in 2011, potentially reducing headroom under the covenants in its senior secured credit agreement." While S&P believes that GCA generates good discretionary cash flow and has sufficient cash on hand that it could use to repay borrowings to prevent a breach of covenants, the use of this cash would diminish the company's financial flexibility and hamper growth prospects. "The potential loss of any other major contract could also erode GCA's cash position," added Ms. Madison. Furthermore, the company faces the maturity of its entire capital structure in the next 18 months. GOLDSPRING INC: Changes Company Name to Comstock Mining ------------------------------------------------------- GoldSpring Inc. has changed its name from GoldSpring, Inc. to Comstock Mining Inc. Comstock's common stock, $0.000666 par value, will continue to trade on the OTC Bulletin Board under the new ticker symbol "LODE." The Company has received all required approvals from the Financial Industry Regulatory Authority for this corporate action and the name change and the new ticker symbol will become effective with the opening of the market on Wednesday, July 21, 2010. The Company also announced a new logo -- a three-dimensional gold crystalline lattice structure -- complementing its new name. The new logo reflects the pervasive role of gold in the Comstock's history, and depicts the Company's organizational design today and the science-based management approach of its future. The Company's organizational design, like the lattice, operates as a fully connected system, meaningful only in its entirety and strengthened by its interdependencies. "The name change, our new symbol and new logo reflect who we are today and what our team is methodically achieving," stated Corrado De Gasperis, Comstock's President and Chief Executive Officer. "We operate as one system fully aligned with our goal." About GoldSpring Inc. Virginia City, Nev.-based Goldspring, Inc. (OTC BB: GSPG) is a North American precious metals mining company, focused in Nevada, with extensive, contiguous property in the Comstock Lode District. * * * The Company's balance sheet as of March 31, 2010, showed $4,886,495 in assets and $33,865,489 of liabilities, for a stockholders' deficit of $28,978,994. GREAT ATLANTIC: Directors Acquire Phantom Stock Units ----------------------------------------------------- Several directors of Great Atlantic & Pacific Tea Co. disclosed that on July 16 they each acquired 22,784 units of Phantom Stock: -- Terrence J. Wallock, -- Maureen Tart Bezer, -- Dan Kourkoumelis, and -- Frederic F. Brace The Stock units were acquired under the Company's 2004 Non- Employee Director Compensation Plan and convert to Common Stock following the director's termination from the Board. The Phantom Stock converts to a common stock on a one-for-one basis. On June 30, Mr. Lewis acquired 569 stock equivalent units, which convert to a common stock on a one-for-one basis. The Stock units were acquired under the Company's 2004 Non-Employee Director Compensation Plan and convert to Common Stock following the director's termination from the Board. He holds 26,832 stock units. Greg Mays on June 30 acquired 954 stock equivalent units. He holds 19,773 stock units. Meanwhile, directors Edward Lewis, Bobbie Gaunt, Jens-juergen Boeckel disclosed that on July 16 they each acquired 22,784 shares of the Company's common stock as annual award under the 2004 Non- Employee Director Compensation Plan. Mr. Lewis now holds 68,188 shares directly. Mr. Gaunt raised his stake to 34,176 shares. Mr. Boeckel raised his stake to 52,729 shares. Director John D. Barline disclosed that on July 16 he acquired 11,392 shares of common stock as annual award under the 2004 Non- Employee Director Compensation Plan. He also acquired 11,392 units of Phantom Stock acquired under the Company's 2004 Non- Employee Director Compensation Plan. Mr. Barline directly holds 42,021 common shares and 46,596 Phantom units following the transactions. About A&P Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP), founded in 1859, is one of the nation's first supermarket chains. The Company operates 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a- Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. At February 27, 2010, the Company had total assets of $2,827,217,000 against total liabilities of $3,223,663,000 and Series A redeemable preferred stock of $132,757,000, resulting in stockholders' deficit of $529,203,000. GREEKTOWN HOLDINGS: Buchwald to Take Over Suit vs. Papases ---------------------------------------------------------- Buchwald Capital Advisors LLC is taking over the prosecution of a complaint originally commenced by the Official Committee of Unsecured Creditors against Dimitrios Papas and Viola Papas, Ted Gatzaros and Maria Gatzaros, Barden Development, Inc., Lac Vieux Desert Band of Lake Superior Chippewa Indians, Sault Ste. Marie Tribe of Chippewa Indians, Kewadin Casinos Gaming Authority and Barden Nevada Gaming LLC. Buchwald Capital is the designated trustee of the Litigation Trust established under the confirmed Chapter 11 Plan of Greektown Holdings LLC and its debtor affiliates effective as of the June 30, 2010 Plan Effective Date. The Creditors Committee filed the Original Complaint against the Papas Defendants in the U.S. Bankruptcy Court for the Eastern District of Michigan in May 2010 to avoid and recover fraudulent transfers, aggregating $177,331,741, made by Greektown Holdings in 2005 for the benefit of the Defendants. Lee Buchwald, president of the Buchwald Capital firm, noted that Mark N. Parry, Esq., at Moses & Singer LLP, in New York -- Mparry@mossessinger.com -- has been instrumental in identifying the causes of action set forth in the Complaint. Moses & Singer represented Deutsche Bank Trust Company Americas, the indenture trustee for certain prepetition notes issued by Greektown Holdings LLC and Greektown Holdings II, Inc., in the Debtors' Chapter 11 cases. Tribe Defendants Seek Complaint Dismissal Defendants Sault Ste. Marie Tribe of Chippewa Indians and Kewadin Casinos Gaming Authority ask the Bankruptcy Court to dismiss the Complaint on grounds that the Tribe Defendants' sovereign immunity bar claims like those asserted under the Complaint. On behalf of the Tribe Defendants, Douglas L. Lutz, Esq., at Frost Brown Todd LLC, in Cincinnati, Ohio -- dlutz@fbtlaw.com -- discloses that the Plaintiff failed to properly serve the Complaint on the Tribe Defendants. "Indian tribes are not subject to suit even for off-reservation commercial conduct unless Congress has authorized the suit or the tribe has waived its immunity," Mr. Lutz points out. The Creditors Committee, as the original plaintiff, has made no allegation that Congress has authorized the lawsuit; it only alleged that the Tribe Defendants waived their defense of sovereign immunity because they participated in the Debtors' bankruptcy proceedings by filing numerous plan objections, among others, Mr. Lutz contends. The Tribe Defendants assert that their participation in Greektown Casino's bankruptcy proceedings has at all times been pursuant to their repeated, unequivocal reservation of all rights and defenses available to them. Moreover, Mr. Lutz notes that the Bankruptcy Court specifically provided in its order confirming the Plan that the Tribe Defendants will not be deemed or construed to have waived, released or relinquished their right to defend and attack any bond avoidance action on all possible procedural or substantive grounds. Mr. Lutz reveals that the Creditors Committee attempted service of the Complaint to the Tribe and Kewadin Authority at 523 Ashmun, Sault Sainte Marie, in Michigan, 49783. He, however, points out that no officer or official of the Tribe or Kewadin Authority was identified or listed in the certificate of service, thus the Committee failed to effectuate proper service of process on the Tribe Defendants. For these reasons, the Tribe Defendants ask the Bankruptcy Court to dismiss the Complaint. Gatzaroses, Papases, & Barden Answer Complaint In separate responsive filings, the Gatzaroses, the Papases, Barden Nevada, and Barden Development generally asserted that the subject transfers made by Greektown Holdings in 2005 are not fraudulent. With regard to specific allegations, the Responding Defendants made general statements that they neither admit nor deny the allegations for lack of knowledge or information sufficient to form a belief on the allegations. The Responding Defendants further ask the Bankruptcy Court to dismiss the Complaint with prejudice and award them costs and attorneys' fees in relation to their defense of the Complaint. They also demand a jury trial. On behalf of the Papases and Gatzaroses, Patrick M. McCarthy, Esq., at Howard & Howard Attorneys PLLC, in Ann Arbor, Michigan -- pmm@h2law.com -- contends that the Defendants have the right to a jury trial pursuant to the Seventh Amendment of the U.S. Constitution, which provides that "in Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . ." Defendants Seek Withdrawal of Reference In subsequent filings, the Papases and Gatzaroses ask the Bankruptcy Court to withdraw the reference of the Adversary Complaint to the U.S. District Court for the Eastern District of Michigan. Barden Development, Barden Nevada, and the Tribes then joined in the request for a withdrawal of the reference of the Complaint. Mr. McCarthy relates that Section 157(e) of the Judiciary and Judicial Procedure authorizes the Bankruptcy Court to conduct jury trials only if authorized by the District Court and if all parties consent. The Defendants clarify that they timely asked for a jury trial, but they do not consent to a jury trial in the Bankruptcy Court. The Defendants clarify that they timely asked for a jury trial but do not consent to a jury trial in the Bankruptcy Court. For this reason, Section 157(e) mandates that the District Court withdraw the reference of the Adversary Complaint, Mr. McCarthy insists. Mr. McCarthy adds that Section 158(d) of the Judiciary and Judicial Procedure requires withdrawal of the reference because the Adversary Complaint requires interpretation and consideration both of the Bankruptcy Code and at least two bodies of non- bankruptcy federal law regulating organizations or affecting interstate commerce: namely, the federal law of tribal sovereign immunity and the federal securities law. The Tribe Defendants filed a motion to dismiss based on their sovereign immunity in June 2010. In connection with this, Mr. McCarthy asserts that withdrawal of the reference is mandatory because a court will necessarily have to consider and interpret both the Bankruptcy Code and federal non-bankruptcy law of tribal sovereign immunity in order to rule on tribal sovereign immunity. In addition, Mr. McCarthy recounts that the Michigan Gaming Control Board approved the 2005 Transactions as being financially proper. Accordingly, he reasons, the case also involves constitutional issues including comity, federalism, and the preclusive effect of state agency decisions, which should be decided by the District Court. Especially in light of the very large amount in controversy, the Defendants emphasize that they are entitled to litigate the Adversary Complaint "from start to finish in one court." "It is inappropriate and an inefficient use of judicial resources for the Bankruptcy Court to handle the pretrial matters when that Court is statutorily prevented from conducting the trial in the case," Mr. McCarthy says. "Immediate withdrawal of the reference is warranted," he thus insists. 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. 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. The Joint Plan of Reorganization for Greektown Holdings LLC and five of its debtor affiliates proposed by certain noteholder entities, the Official Committee of Unsecured Creditors of the Debtors, and Deutsche Bank Trust Company Americas, as indenture trustee, has been declared effective on June 30, 2010. Greektown Casino Hotel clinched its way to the June 30 finish line when it obtained a unanimous approval from the Michigan Gaming Control Board on June 28, 2010, of the transfer of the Company's ownership from the Sault Ste. Marie Tribe of Chippewa Indian to new investors. 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: Enters into $30MM Exit Revolver with Comerica ----------------------------------------------------------------- Greektown Superholdings, Inc., entered into a credit agreement on June 30, 2010, with Comerica Bank, which provides for a three and one-half year revolving credit facility in an aggregate principal amount initially of up to $20 million, including $5 million for the issuance of standby letters of credit. The Revolver Facility is one of the exit financing transactions Greektown Superholdings -- the new reorganized company -- and its subsidiaries consummated upon the effective date of the Second Amended Joint Plans of Reorganization of Greektown Holdings LLC and its debtor affiliates. The Revolver Facility can be increased to $30 million upon the discharge and release of existing mortgages on the "Trappers Parcel" securing indebtedness owed by third parties. The Trappers Parcel refers to a small parcel of real property underlying a portion of Greektown's casino operations and is encumbered by mortgages, which secure indebtedness owed to Greektown Casino LLC and third parties. The maximum expiration of individual letters of credit is 12 months after the issuance or, if earlier, the maturity of the Revolving Credit Facility. In a Form 8-K filing with the U.S. Securities and Exchange Commission, Clifford J. Vallier, Greektown Superholdings president, chief financial officer and treasurer, enumerated the other salient terms of the Revolving Credit Agreement: Security and Guarantees. The Revolving Credit Facility will be secured by a perfected first priority lien and security interest on all the assets of the Company and all its subsidiaries, excluding, among other things, the Company's gaming license. Interest and Fees. Borrowings under the Revolving Credit Facility initially will bear interest at an annual rate of The London Interbank Offered Rate plus 3.50% or the higher of Comerica Bank's prime reference rate or 2.5% plus 0.75%. Upon the Trappers Mortgage Release, the Revolving Credit Facility will bear interest at an annual rate of LIBOR plus 1.75% or 2.25% or at an annual rate of (a) the higher of (i) Comerica Bank's prime reference rate, and (ii) 2.50% minus (b) 0.50% or 1%. There is a facility fee of 0.50% per annum on the aggregate revolving credit commitment amount payable quarterly in arrears commencing on July 1, 2010, and on the first day of each fiscal quarter thereafter. There is also a non- refundable letter of credit fee of 1.75% or 2.25% per annum on the face amount of each letter of credit payable quarterly in advance. Adjustments to applicable margin and the applicable letter of credit fee rate will be implemented quarterly based on the Leverage Ratio and both will be set at 3.50% until the Trappers Mortgage Release, following which both will be set to 1.75% until the first day of the first month following the delivery of Greektown's financial statements for the fiscal quarter ending June 30, 2011. Prepayment. The Revolving Credit Facility requires mandatory prepayments in an amount equal to (i) 100% of the net proceeds of the permitted sale of assets, (ii) 100% of the net proceeds of any recovery from insurance arising from an event of loss, and (iii) 100% of the net proceeds for the issuance of any debt or equity securities. Except with respect to certain asset sales, mandatory prepayments will not reduce revolving credit commitments. Certain Covenants and Events of Default. The Revolver Credit Agreement also contains a number of covenants that, among other things, restrict, subject to certain exceptions and materiality thresholds, the ability of Greektown Superholdings and its subsidiaries to sell assets and property; incur additional indebtedness; create liens on assets; make investments, loans, guarantees or advances; make distributions, dividends or payments on account of, or purchase, redeem or otherwise acquire, any of Greektown's capital stock; prepay certain indebtedness; engage in acquisitions, mergers or consolidations; engage in transactions with affiliates; amend agreements governing Greektown's indebtedness, including the Notes; make capital expenditures; enter into negative pledges; change fiscal year; and change the Company's or any Subsidiary's name, jurisdiction of incorporation or location at which any Collateral is stored. Greektown has also agreed to complete the Trappers Mortgage Release within one year following the date of the Revolving Credit Facility. In addition, the Credit Agreement contains a financial covenant pursuant to which the Company must maintain as of each Test Date, a Fixed Charge Coverage Ratio of not less than 1.05 to 1. Event of Default. An event of default under the Revolving Credit Facility will occur if Greektown or one of its direct and indirect subsidiaries, among other things, (i) fails to pay principal, reimbursement obligations with respect to any letter of credit, interest, fees or other amounts when due; (ii) breaches any covenants which are not cured within a stated cure period or any representations and warranties in any material adverse respect; (iii) defaults under certain other indebtedness; (iv) is subject to certain judgments for the payment of money; (v) fails to keep any material provision of any loan document valid, binding and enforceable; (vi) is subject to any change of control; (vii) becomes bankrupt or insolvent; (viii) loses any of its gaming licenses to the extent such loss is reasonably likely to cause a material adverse effect; (ix) becomes the subject of an enforcement action taken by a holder of an encumbrance on the Trappers Parcel if the enforcement action has not been dismissed or terminated within 60 days after commencement; or (x) is prohibited from conducting gaming activities for a period of greater than thirty consecutive days. A default could result in, among other things, a termination of the revolving credit commitment and acceleration of amounts outstanding under the Revolving Credit Facility. A copy of the Greektown-Comerica Revolver Credit Agreement is available for free at: http://ResearchArchives.com/t/s?66f2 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. 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. The Joint Plan of Reorganization for Greektown Holdings LLC and five of its debtor affiliates proposed by certain noteholder entities, the Official Committee of Unsecured Creditors of the Debtors, and Deutsche Bank Trust Company Americas, as indenture trustee, has been declared effective on June 30, 2010. Greektown Casino Hotel clinched its way to the June 30 finish line when it obtained a unanimous approval from the Michigan Gaming Control Board on June 28, 2010, of the transfer of the Company's ownership from the Sault Ste. Marie Tribe of Chippewa Indian to new investors. 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: Names Buchwald Capital as Litigation Trustee ---------------------------------------------------------------- Buchwald Capital Advisors LLC has been named as trustee for the liquidating trust established pursuant to the Second Amended Joint Plan of Reorganization for Greektown Holdings LLC and its debtor affiliates proposed by plan proponents, which include certain noteholder of Greektown, the Official Committee of Unsecured Creditors and Indenture Trustee. Buchwald Capital's contact information is: Buchwald Capital Advisors LLC 380 Lexington Avenue 17th Floor New York, NY 10168-1799 Attn: Lee E. Buchwald, President lbuchwald@buchwaldcapital.com The engagement of Buchwald Capital is embodied by a litigation trust agreement executed by the parties on June 30, 2010. The Litigation Trust Agreement is also deemed effective as of the June 30 Greektown Plan Effective Date. The Litigation Trust is created on behalf of, and for the sole benefit of, the holders of Allowed General Unsecured Claims and Allowed Bond Claims of Greektown Casino and certain other beneficiaries. As of the Plan Effective Date, Reorganized Greektown Casino will have made a $375,000 cash loan to the Litigation Trust to fund the fees, expenses and costs of the Litigation Trust. The Litigation Trust Loan will accrue simple interest at the rate of 8% annually. In furtherance of and consistent with the purpose of the Litigation Trust and the Plan, the Litigation Trustee is obligated to: (i) hold the Litigation Trust Assets for the benefit of the Litigation Trust Beneficiaries; (ii) make distributions of Litigation Claim Proceeds and other Litigation Trust Assets in accordance with the Litigation Distribution Schedule; and (iii) have the power and authority to resolve any Avoidance Claims and Unsettled Bond Avoidance Action Claims. To the extent that any action has been taken to prosecute or otherwise resolve any Avoidance Claims prior to the June 30 Effective Date by the Debtors, the Creditors' Committee, and/or any other party, the Litigation Trustee will be substituted for that particular prosecuting party. The Litigation Trustee will make all distributions in accordance with the Litigation Distribution Schedule, as follows: * First, to pay Litigation Claims Costs; * Second, to Reorganized Greektown Casino to pay back the Litigation Trust Loan, principal first and then interest; * Third, 90% of the remaining Litigation Claims Proceeds after payment of Litigation Claims Costs and the Litigation Trust Loan to the Holders of the Holdings Litigation Trust Interest; and * Fourth, 10% of the remaining Litigation Claims Proceeds after payment of Litigation Claims Costs and the Litigation Trust Loan to the Holders of the Casino Litigation Trust Interest. The Litigation Trustee will be compensated for its services at its hourly rate in effect at the time of engagement, as may be adjusted from time to time. The Litigation Trustee's present hourly rate is $500. Subject to obtaining the prior written approval of the Trust Governing Board, the Litigation Trustee may retain independent experts and advisors as it deems necessary to aid it in the performance of its duties and responsibilities. The Litigation Trust Agreement also provides the creation of a "Trust Governing Board." It will initially consist of these individuals: 1. Arthur N. Calavritinos MFC Global Investment Management (U.S.), LLC 101 Huntington Avenue Boston, MA 02199-7603 2. Gent K. Culver Credit/Collections Manager 9295 Prototype Dr. Reno, Nevada 89521 3. Neal P. Goldman Brigade Capital Management 399 Park Avenue 16th Floor New York, NY 10022 The Trust Governing Board will have the authority and responsibility to oversee, review, and guide the activities and performance of the Litigation Trustee. It will also have the authority to (i) monitor and review the fairness of settlement, abandonment and other disposition proposals proposed to or agreed to by the Litigation Trustee with respect to the Litigation Claims, and (ii) monitor and oversee the administration of the Litigation Trust, among others. 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. 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. The Joint Plan of Reorganization for Greektown Holdings LLC and five of its debtor affiliates proposed by certain noteholder entities, the Official Committee of Unsecured Creditors of the Debtors, and Deutsche Bank Trust Company Americas, as indenture trustee, has been declared effective on June 30, 2010. Greektown Casino Hotel clinched its way to the June 30 finish line when it obtained a unanimous approval from the Michigan Gaming Control Board on June 28, 2010, of the transfer of the Company's ownership from the Sault Ste. Marie Tribe of Chippewa Indian to new investors. 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: Superholdings Sues Jim Papas for $7 Million --------------------------------------------------------------- Newly emerged Greektown Casino, which is now known as Greektown Superholdings Inc., commenced a lawsuit against Dimitrios "Jim" Papas in the Wayne County Circuit Court on July 9, 2010, seeking to recover $7,000,000 in debts and other amounts, according to Christine MacDonald of The Detroit News. The report notes that Greektown Casino specifically seeks, among others: -- at least $1,500,000 in unpaid gambling debts owed by Mr. Papas, which was alleged to have been incurred when he established a line of credit for wagering in December 2000; -- $2,000,000 from a promissory note Mr. Papas allegedly signed in 2005, which he agreed to repay in March 2009 plus a 6% interest; and -- another $3,000,000 in damages. Greektown Casino failed to recover the unpaid gambling debts from Mr. Papas' checking account because it had "insufficient funds," The Detroit News reports. Mr. Papas is one of Greektown Casino's original investors along with partner, Ted Gatzaros. The report notes that the state of Michigan does not allow investors to gamble at casinos, but Mr. Papas' credit line for wagering was established in 2000 after he sold his stake in Greektown Casino. The report adds that Mr. Papas sold his Greektown stake after regulators refused to grant them a license. In an interview with The Detroit News, Mr. Papas said the lawsuit is baseless and that Greektown Casino isn't "going to get anything." In yet another interview by The Detroit Free Press, Henry Brennan, Esq., Mr. Papas' lawyer, said his client was "snookered" by Greektown Casino when he agreed to take promissory notes for money the Casino owed him. Mr. Brennan told the news source that Mr. Papas returned the notes to satisfy his debts, but the Casino then asked him to pay in cash and keep the notes until later. After Mr. Papas did so, the Casino filed for bankruptcy, making the notes worthless, the lawyer added. 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. 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. The Joint Plan of Reorganization for Greektown Holdings LLC and five of its debtor affiliates proposed by certain noteholder entities, the Official Committee of Unsecured Creditors of the Debtors, and Deutsche Bank Trust Company Americas, as indenture trustee, has been declared effective on June 30, 2010. Greektown Casino Hotel clinched its way to the June 30 finish line when it obtained a unanimous approval from the Michigan Gaming Control Board on June 28, 2010, of the transfer of the Company's ownership from the Sault Ste. Marie Tribe of Chippewa Indian to new investors. 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) GREENFIELD POWER: Moody's Assigns 'B1' Rating on $335 Mil. Loan --------------------------------------------------------------- Moody's Investors Service assigned a senior secured rating of B1 to Greenfield Power South Corporation's proposed $335 million term loan due 2015. The outlook is stable. Proceeds from the credit facility will be used to finance the construction of a 293 MW combined cycle facility near Toronto, Ontario. The term loan will be denominated in US dollars and revenues will be earned in Canadian dollars. The Project will have foreign exchange (FX) hedging requirements in order to protect against a decrease in the value of the Canadian dollar relative to the US dollar through the term of the debt. An equity contribution has been made in the form of cash and engineering and design work which includes cash and unbilled management and engineering services. Additional equity will be contributed after the closing date in the form of engineering and project management services by the Sponsor. The total equity contribution will be C$69.7 million, 35.9 of which will be in the form of cash and $33.8 million in the form of services. The B1 rating reflects the risk associated with the construction phase, the atypical structure of the Project agreements, the inexperience of the Sponsors with a project of this size and type, and the projected financial metrics during the operational phase. The rating is also influenced by the structure of and accordingly, the value of, the offtake contract with OPA (Aa1, stable), which extends 20 years from the commercial operation date and which includes a pass-through of fuel costs. The rating considers the financing structure with approximately 83% debt and 17% of sponsor equity, which consists of cash and services. There will be a six-month debt service reserve account (DSRA), a major maintenance reserve account pre-funded with C$10 million, and various cash-collateralized LCs to support commitments to OPA and the Project's gas transportation counter- parties. There will also be a C$37 million cash contingency reserve to support any potential delays or cost overruns during construction. The rating reflects the projected credit metrics after COD, which are very low compared to other power projects, an effect which is primarily caused by the large debt component. Offsetting the low credit metrics in the operational phase is the lack of merchant exposure and the low availability threshold in the offtake contract. The stable outlook incorporates the expectation that construction will be completed on time and on budget, and that the Project will reach commercial operation such that the offtake agreement with OPA remains intact. The rating could be adversely affected in the event of cost overruns and/or significant delays, especially in the event that either circumstance affects the presence of the offtake contract with OPA, which is one of the Project's most valuable assets. GTC BIOTHERAPEUTICS: 3 Directors Receive Shares as Retainer Fees ---------------------------------------------------------------- Alan W. Tuck, director at GTC Biotherapeutics Inc., disclosed that on July 2, 2010, he acquired 3,261 company shares, raising his stake to 12,109 shares. The shares were acquired at Mr. Tuck's election to receive common stock in lieu of the quarterly cash payment of his 2010 director retainer fees and issued pursuant to GTC's 2002 Equity Incentive Plan. He directly holds those shares. Mr. Tuck indirectly holds 700 shares. Director Pamela W. McNamara disclosed acquiring 2,174 company shares on July 2, raising her stake to 8,494 shares. The shares were acquired at Ms. McNamara's election to receive common stock in lieu of the quarterly cash payment of her 2010 director retainer fees and issued pursuant to GTC's 2002 Equity Incentive Plan. She directly holds those shares. Director Francis J. Bullock disclosed acquiring 4,076 shares on July 2, raising his stake to 15,367 shares. The shares were acquired at Dr. Bullock's election to receive common stock in lieu of the quarterly cash payment of his 2010 director retainer fees and issued pursuant to GTC's 2002 Equity Incentive Plan. About GTC Biotherapeutics Based in Framingham, Massachusetts, GTC Biotherapeutics, Inc. (OTCBB: GTCB) -- http://www.gtc-bio.com/-- develops, supplies and commercializes therapeutic proteins produced through transgenic animal technology. ATryn(R), GTC's recombinant human antithrombin, has been approved for use in the United States and Europe. ATryn(R) is the first and only therapeutic product produced in transgenic animals to be approved anywhere in the world. GTC is also developing a portfolio of recombinant human plasma proteins with known therapeutic properties. GTC's intellectual property includes a patent in the United States through 2021 for the production of any therapeutic protein in the milk of any transgenic mammal. On November 5, 2009, the Company implemented a restructuring plan to enable it to meet the requirements of key programs and maximize the impact of its cash resources. The restructuring plan, which is expected to provide savings of $5 million to $6 million on an annualized basis, included a reduction in workforce from 154 to 109 employees. At April 4, 2010, the Company had $26.950 million in total assets against total liabilities of $54.098 million, resulting in stockholders' deficit of $27.148 million. In its Form 10-Q report, the Company noted that it has operated at a net loss since inception in 1993, and it used $5.9 million of net cash in its operating cash flows during the first three months of 2010. The Company also has negative working capital of $13.1 million as of April 4, 2010. "We are entirely dependent upon funding from equity financings, partnering programs and proceeds from short and long-term debt to finance our operations until we achieve commercial success in selling and licensing our products and positive cash flow from operations. Based on our cash balance as of April 4, 2010, as well as potential cash receipts from existing programs, we believe our capital resources will be sufficient to fund operations to the end of the second quarter of 2010. Our recurring losses from operations and our limited available funds raise substantial doubt about our ability to continue as a going concern," the Company said. GTC BIOTHERAPEUTICS: Inks Agreement with Lundbeck Inc ----------------------------------------------------- GTC Biotherapeutics Inc. entered into an agreement with Lundbeck, Inc. that terminates its Acquisition, Licensing, Development and Supply Agreement dated June 22, 2008 with ATIII LLC, and Lundbeck, Inc. The company said, "As part of the termination agreement, we reacquired from Lundbeck the U.S. commercialization rights for ATryn, our recombinant form of human antithrombin. We also agreed to purchase all of Lundbeck's ATryn inventory for a purchase price of $400,000 and agreed to pay Lundbeck a royalty on net sales beginning in two years, with a predefined cumulative maximum." "In connection with the termination agreement, we also will pay Lundbeck to perform certain services on our behalf for a transition period of up to six months to ensure that ATryn will continue to be available to physicians and their patients in an uninterrupted fashion as commercialization responsibilities are transitioned to us from Lundbeck," the company said. http://researcharchives.com/t/s?66d6 Framingham, Mass.-based GTC Biotherapeutics, Inc. (OTC BB: GTCB) -- http://www.gtc-bio.com/-- develops, supplies and commercializes therapeutic proteins produced through transgenic animal technology. ATryn(R), GTC's recombinant human antithrombin, has been approved for use in the United States and Europe. ATryn(R) is the first and only therapeutic product produced in transgenic animals to be approved anywhere in the world. In addition to ATryn(R), GTC is developing a portfolio of recombinant human plasma proteins with known therapeutic properties. These proteins include recombinant forms of human coagulation factors VIIa and IX, which are being developed for the treatment of patients with hemophilia, and recombinant alpha- fetoprotein, which is being developed for the treatment of myasthenia gravis and multiple sclerosis. * * * According to the Troubled Company Reporter on July 22, 2010, GTC Biotherapeutics, Inc. has negative working capital of US$13.1 million as of April 4, 2010. The Company had negative working capital of US$16.1 million as of January 3, 2010. HOTCOPRI, LLC: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Hotcopri, LLC c/o John T. Hamilton, Esq. Gess Mattingly & Atchison, PSC Lexington, KY 40507 Bankruptcy Case No.: 10-52315 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Judge: Tracey N. Wise Debtor's Counsel: John Thomas Hamilton, Esq. 201 W Short Street Lexington, KY 40507-1231 Tel: (859) 252-9000 E-mail: jhamilton@gmalaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kyeb10-52315.pdf The petition was signed by Audrey L. Haisfield, managing member. HUDSON'S FURNITURE: Gets Final Approval to Access Cash Collateral ----------------------------------------------------------------- The Hon. the Hon. Karen S. Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida authorized, in a final order, Hudson's Furniture Showroom, Inc., to use cash collateral of Furniture Brands International, Inc., and LA-Z-BOY, Incorporated and its subsidiaries. The Debtor would use the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on April 28, 2010, as adequate protection to FBI's rights and interests, FBI will be granted a replacement lien on all of the assets and property, except the LAZBOY cash collateral, acquired by the Debtor's estate or by the Debtor (the Post-Petition Collateral) on and after the date on which the Debtor filed its voluntary petition. The post- petition lien and security interest in the Post-Petition Collateral granted to FBI will be to the same extent, validity, priority as its existing lien and will be a valid and perfected lien and security interest, effective as of the Petition Date, without the need for the execution or filing of any future document or instrument otherwise required to be executed or filed under applicable non-bankruptcy law. The Debtor will provide to FBI and LAZBOY regular financial reports including: (i) a weekly inventory report due by each Friday for results through the prior Friday (ii) weekly cash results in the form of the Budget which compares actual to budget (also due by Friday for results through the prior Friday); and (iii) all debtor-in-possession reports (when filed). As additional adequate protection, LAZBOY will have a purchase money security interest which will be a first lien on all inventory and other goods (and proceeds thereof) acquired by Debtor from LAZBOY. The lien will be a valid and perfected first priority lien and security interest, effective as of the Petition Date, without the need for the execution or filing of any future document or instrument, or notice to any prior secured party otherwise required to be executed, delivered, or filed under applicable non-bankruptcy law. The lien related to post-petition will secure all post-petition obligations. As of the date of the petition, FBI has suspended credit privileges to the Debtor. FBI may re-establish the Debtor's credit privileges post-petition; however, it reserves the right to extend credit on terms and conditions that may vary from the terms and conditions extended prepetition. The Debtor's access to the cash collateral is conditioned upon the Debtor: (i) filing a plan of reorganization on or before June 30; and (ii) confirming said plan of reorganization on or before November 30. If the Debtor fails to file a plan by June 30, or to confirm said plan by November 30, the Debtor's use of cash collateral terminates immediately and without the need for notice. In a separate filing, the Debtor filed a Plan of Reorganization on June 30. About Hudson's Furniture Showroom, Inc. Sanford, Florida-based Hudson's Furniture Showroom, Inc., owns and operates several retail furniture stores in Florida, including stores in the cities of Sarasota, Lakeland, Pinellas Park, Tampa, Brandon, Melbourne, Ormond Beach, Altamonte Springs, Ocoee, Orlando and Clearwater, Florida. The Company filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. M.D. Fla. Case No. 10-03322). Justin M. Luna, Esq.; Mariane L. Dorris, Esq.; and Victoria I. Minks, Esq., at Latham Shuker Eden & Beaudine LLP, assists the Company in its restructuring effort. The Company estimated its assets and liabilities at $10,000,001 to $50,000,000. The Company's affiliates -- A&J Rentals, LLC; Hud Twenty-Five Ocoee, LLC; Hud Twenty-Three Tampa, LLC; and Hud-Five, LLC -- filed separate Chapter 11 petitions on October 13, 2009. HUDSON'S FURNITURE: Plan Contemplates Consolidation of Debtors -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida will consider on August 11, 2010, at 11:00 a.m., the approval of a Disclosure Statement explaining Hudson's Furniture Showroom, Inc., and its debtor-affiliates' Plan of Reorganization. The hearing will be held at Courtroom B, 5th Floor, 135 W. Central Blvd., Orlando, Florida. Objections, if any, may be filed with the Court at any time before or at the hearing. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for the Reorganized Debtors to continue operating their furniture showrooms with low operating expenses. The Reorganized Debtor will transfer, or caused to be transferred, certain of the Debtors' mortgaged properties. The Reorganized Debtor will execute new notes, mortgages, and security agreements with its secured creditors based, in part, on adjusted property values that more accurately reflect the reduced market value of the each lender's secured interest its collateral. The Debtors believe the cash flow generated from core operations along with a reduction in cash flow demands from the New Secured Obligations will be sufficient to cover the respective Reorganized Debtors' Plan Payments. Under the Plan, the Holder of Allowed Secured Claims in Classes 1 to 9 to the extent they have Allowed Claims, will receive payment equal to 100% of their Allowed Secured Claims, over time. All Allowed Unsecured Claims will be classified in one unsecured class, Class 10, and will receive a pro rata beneficial interest in the Performance Allocation over a five year period. The Performance Allocation will be an amount equal to 50% of the amount actual operating results for each quarter exceeds budgeted operating results for the same period. Classes 12 through 18 of Interests will be cancelled upon the effective date; and new equity in the Reorganized Debtor will be issued. In summary, the Plan contemplates the consolidation of the Debtors into HFS, which will emerge as the sole Reorganized Debtor. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/Hudson'sFurniture_DS.pdf About Hudson's Furniture Showroom, Inc. Sanford, Florida-based Hudson's Furniture Showroom, Inc., owns and operates several retail furniture stores in Florida, including stores in the cities of Sarasota, Lakeland, Pinellas Park, Tampa, Brandon, Melbourne, Ormond Beach, Altamonte Springs, Ocoee, Orlando and Clearwater, Florida. The Company filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. M.D. Fla. Case No. 10-03322). Justin M. Luna, Esq.; Mariane L. Dorris, Esq.; and Victoria I. Minks, Esq., at Latham Shuker Eden & Beaudine LLP, assists the Debtor in its restructuring effort. The Debtor estimated its assets and liabilities at $10,000,001 to $50,000,000. The Company's affiliates -- A&J Rentals, LLC; Hud Twenty-Five Ocoee, LLC; Hud Twenty-Three Tampa, LLC; and Hud-Five, LLC -- filed separate Chapter 11 petitions on October 13, 2009. HVHC INC: S&P Affirms Counterparty Credit Rating at 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB' counterparty credit rating and stable outlook on HVHC Inc. Subsequently, S&P withdrew the rating at the company's request. At the same time, S&P withdrew S&P's debt ratings on HVHC's senior secured credit facilities because the debt was repaid in December 2009. HVHC, a wholly owned subsidiary of Highmark Inc., is a vertically integrated vision company that engages in optical retail, managed vision care, and eyewear design and distribution. HVHC's adequate competitive position in its core markets and a relatively stable earnings profile (in spite of current recessionary pressures) support the company's credit profile. Rating weaknesses include a large amount of intangibles that weakens balance sheet quality and the highly competitive and fragmented U.S. vision care market. INDUSTRY WEST: Promises to Pay 100% of Unsecured Creditors' Claims ------------------------------------------------------------------ Industry West Commerce Center, LLC, filed with the U.S. Bankruptcy Court for the Northern District of California a Plan of Reorganization, amended as of July 12, 2010. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for the Reorganized Debtor to operate its business without further supervision or control by the Bankruptcy Court and free of any restrictions imposed by the Bankruptcy Code. Specifically, and without limitation, the Reorganized Debtor may sell, lease, or refinance its properties without further order of Court. The Reorganized Debtor will continue to be managed by Rizzo & Associates, LLC. On or before the effective date, the Debtor's members will make a $200,000 capital contribution to the Debtor. The funds will be used exclusively for the payment to the Class 2 creditor - Todd JBRE, LLC as successor to Clinton James Brown, as Trustee for certain individuals and entities. Allowed general unsecured claims will be paid 100% of the amount of the claims, with interest at the legal rate from the petition date. Allowed Class 7 Claims will receive an immediate dividend of 50% of their claims on the effective date, with the balance paid in four equal quarterly installments commencing one year from the effective date. A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/IndustryWest_AmendedPlan.pdf The Debtor is represented by: MacConaghy & Barnier, PLC John H. MacConaghy, Esq. Jean Barnier, Esq. 645 First St. West Sonoma, CA 95476 Tel: (707) 935-3205 Fax: (707) 935-7051 Email: macclaw@macbarlaw.com About Industry West Commerce Center, LLC 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. INNKEEPERS USA: Court Grants Interim Access to Cash Collateral -------------------------------------------------------------- Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York granted, on an interim basis, the request of Innkeepers USA Trust and its 91 Debtor affiliates to continue to use the Cash Collateral. All objections to the request that have not been withdrawn or resolved are overruled on their merits. Notwithstanding any provision of the Bankruptcy Code or the Bankruptcy Rules to the contrary, the Interim Order will take effect immediately upon entry, nunc pro tunc to the Petition Date, and will remain in effect as to all of the Debtors until the occurrence and continuation of a Termination Event at which point the effectiveness of the Interim Order will terminate only as to the Cash Collateral of the relevant Debtors as to whom the Termination Event applies. Judge Chapman maintained that the Interim Order is without prejudice: (i) to the rights of each of the Fixed Rate Representative, the Floating Rate Lender, the Anaheim Lender, the Capmark Mission Valley Lender, the Capmark Garden Grove Lender, the Capmark Ontario Lender, the Merrill Washington D.C. Lender, the Merrill Tysons Corner Lender, the Merrill San Antonio Lender, and applicable special servicers at any time to seek a modification of the Order, or a different cash collateral order, including a request for additional or other adequate protection or the termination of the applicable Debtor's right to use Cash Collateral, after notice and hearing; and (ii) to the rights of the Debtors at any time to seek modification and extension of the Interim Order, including an increased use of Cash Collateral and a modification of adequate protection, or a different order, after notice and hearing. Notwithstanding anything in the Interim Order, no Adequate Protection Party will be entitled to adequate protection, and no Adequate Protection Obligations will arise, with respect to any diminution in value of the Adequate Protection Party's interest in its Prepetition Collateral resulting from any successful Avoidance Action against, or Avoidance Action proceeds recovered from, the Adequate Protection Party, or from or as a result of the payment of any costs, fees or expenses included as part of adequate protection. A copy of the Interim Cash Collateral Order is available for free at http://bankrupt.com/misc/IKU_CashCollateral_InterimOrder.pdf The Final Cash Collateral hearing will be held on August 12, 2010, at 2:00 p.m. Objections are due August 5. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). INNKEEPERS USA: Hires Omni Management as Claims Agent ----------------------------------------------------- Innkeepers USA Trust and its 91 debtor affiliates sought and obtained the Court's permission to employ Omni Management Group, LLC, as their noticing and claims agent in accordance to an engagement letter, dated as of June 10, 2010. As claims agent, Omni has agreed to, among other things: (a) prepare and distribute required notices in the Debtors' cases to all potential creditors and parties-in-interest; (b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known potential creditors and the amounts owed; (c) provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in the cases without charge during regular business hours, if necessary; (d) furnish a notice of the last date for the filing of proofs of claim and a form for the filing of a claim, after the notice and form are approved by the Court; and (e) file with the Clerk's Office an affidavit or certificate of service. The Debtors will pay Omni at its normal hourly rates, which range from $35 to $295. They will also reimburse Omni for reasonable expenses in accordance with the terms of the Engagement Letter. On June 16, 2010, the Debtors paid Omni a retainer of $50,000. Brian Osborne, a member of Omni, assures the Court that Omni is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). INNKEEPERS USA: Proposes Moelis as Financial Advisor ---------------------------------------------------- Innkeepers USA Trust and its 91 debtor affiliates seek the Court's authority to employ Moelis & Company LLC as their financial advisor and investment banker, nunc pro tunc to the Petition Date. As financial advisor, Moelis will: a. undertake, in consultation with members of management of the Debtors, a comprehensive business and financial analysis of the Debtors; b. evaluate the Debtors' debt capacity and assist in the determination of an appropriate capital structure for the Debtors; c. as deemed desirable by the Debtors, identify, initiate, review, negotiate, and evaluate any Restructuring Transaction, and, if directed, develop and evaluate alternative proposals for a Restructuring Transaction; d. assist the Debtors in developing strategies to effectuate any Restructuring Transaction; e. advise and assist the Debtors in the course of their negotiation of any Restructuring Transaction and participate in those negotiations, as requested; f. evaluate indications of interest and proposals regarding any Restructuring Transaction from current or potential lenders, equity investors, or strategic partners; g. determine and evaluate the risks and benefits of considering, initiating, and consummating any Restructuring Transaction; h. determine values or ranges of values (as appropriate) for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Restructuring Transaction; i. be available at the Debtors' request to meet with Debtors' management, board of directors/trustees/managers, creditor groups, equity holders, any official committees appointed in the Chapter 11 Cases to discuss any Restructuring Transaction and provide such parties with information about the Debtors' assets, properties, or businesses as may be appropriate and acceptable to the Debtors, subject to customary business confidentiality agreements in form and substance approved by the Debtors; j. assist the Debtors in the development, preparation, and distribution of selected information, documents, and other materials to facilitate the consummation of any Restructuring Transaction; k. if requested by the Debtors, participate in hearings before the Court and provide relevant testimony; and l. other financial advisory and investment banking services as may be agreed upon by Moelis and the Debtors, and that is within the scope of the Engagement Letter. The Debtors will pay Moelis in accordance with an agreed-upon Fee Structure: a. Monthly Fee: $200,000 in cash for each of the first five monthly payments due under the Engagement Letter and a cash fee of $175,000 per month during the remainder of the term of the Engagement Letter. Fifty percent of all Monthly Fees will be credited against the Restructuring Fee. b. Restructuring Fee: A cash fee of $6,000,000 to be paid immediately upon the consummation of a Restructuring Transaction. The Debtors will also reimburse Moelis for all reasonable expenses incurred in connection with the Engagement Letter, up to a $300,000 aggregate expense cap. Under the terms of the Engagement Letter, the Debtors have agreed to indemnify and hold harmless Moelis and its divisions, directors, officers, and employees under certain circumstances specified in the Engagement Letter. William Q. Derrough, Managing Director of Moelis, discloses that during the 90 days prior to the Petition Date, Moelis received approximately $851,370 for professional services performed and expenses incurred. Mr. Derrough assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). INNKEEPERS USA: Schedules Deadline Extended to September 1 ---------------------------------------------------------- Innkeepers USA Trust and its 91 Debtor affiliates sought and obtained an extension until September 1, 2010, of the deadline by which they must file schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs. Pursuant to Section 521 of the Bankruptcy Code and Rule 1007(c) of the Federal Rules of Bankruptcy Procedure, the Debtors ordinarily would be required to file the Schedules and Statements within 14 days after the Petition Date. The Debtors estimate they have more than 5,000 potential creditors and other parties-in-interest. Further, the conduct and operation of the Debtors' business operations require them to maintain voluminous records and complex accounting systems, relates James H.M. Sprayregen, P.C., Esq., at Kirkland & Ellis LLP, in New York. Due to the nature of the Debtors' business, the pressure incident to the commencement of the Chapter 11 cases, and the fact that certain prepetition invoices have not yet been received or entered into the financial accounting system, the Debtors have begun, but have not yet completed, compiling the information required to complete the Schedules and Statements, Mr. Sprayregen explains. Because of the complexity and diversity of their operations and the numerous critical operational matters that their accounting and legal personnel must address in the early days of the cases, the Debtors anticipate they will be unable to complete the Schedules and Statements in the time required under Rule 1007(c). Adding to the difficulties in compiling the Schedules and Statements is the nature of the Debtors' business, which consists of operating 72 individual hotel properties scattered across 19 states and the District of Columbia, among the Debtor entities, Mr. Sprayregen asserts. He points out that while the Debtors' consolidated ownership and management of the 72 properties allows them to benefit from economies of scale by eliminating many of the duplicative processes and costs that would otherwise apply to properties owned and managed on an individual basis, it also comes with its own burdens, especially with respect to compiling the Schedules and Statements. The substantial size, scope and complexity of the cases and the volume of material that must be compiled and reviewed by the Debtors' personnel to complete the Schedules and Statements for each entity during the initial days of the cases provides ample cause for justifying the requested extension, Mr. Sprayregen further contends. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). IRVINE SENSORS: Inks Subscription Deal with 12 Investors -------------------------------------------------------- Irvine Sensors Corporation entered into Subscription Agreements with 12 accredited investors, pursuant to which the Company sold and issued to the Investors an aggregate of 15,672.51 common stock units at a purchase price of $12.825 per Unit in an additional closing of a private placement. The Unit Price was equal to 100 shares of the Company's Common Stock multiplied by 75% of the last consolidated closing bid price of the Company's Common Stock as determined in accordance with Nasdaq rules immediately preceding the Company entering into the binding Subscription Agreements. The $201,000 aggregate purchase price for these Units was paid in cash to the Company. Each Unit is comprised of (i) 100 shares of the Company's Common Stock and (ii) a five-year warrant to purchase 20 shares of the Company's Common Stock. The exercise price applicable to the Investor Warrants is $0.21 per share, which was greater than the last consolidated closing bid price of the Company's Common Stock as determined in accordance with Nasdaq rules immediately preceding the Company entering into the binding Subscription Agreements. A total of 1,567,243 Shares were issued and the total number of shares of Common Stock issuable upon exercise of the Investor Warrants at the exercise price is 313,444 in the aggregate. The Company may at its option expand this Private Placement. In consideration for services rendered as the lead placement agent in the Private Placement, on July 15, 2010, the Company paid the placement agent cash commissions, a management fee and an expense allowance fee aggregating $26,130, which represents 13% of the gross proceeds of the initial closing of the Private Placement, and the Company issued to the placement agent a five-year warrant to purchase an aggregate of 203,743 shares of the Company's Common Stock at an exercise price of $0.21 per share, which was greater than the last consolidated closing bid price of the Company's Common Stock as determined in accordance with Nasdaq rules immediately preceding the Company entering into such warrant. The Investor Warrants and Agent Warrant may be exercised in cash or pursuant to a net exercise provision if the Company does not register the shares of Common Stock issuable upon exercise of the Investor Warrants or Agent Warrant on or prior to the six-month anniversary of the issuance date of the warrants. The Investor Warrants and the Agent Warrant cannot be exercised for a period of 6 months and one day following the date of their issuance. The exercise price of the Investor Warrants and the Agent Warrant is subject to adjustment for stock splits, stock dividends, recapitalizations and the like. The Investor Warrants and Agent Warrant also are subject to a blocker that would prevent each holder's Common Stock ownership at any given time from exceeding 4.99% of the Company's outstanding Common Stock. None of the Units, Shares, Investor Warrants or Agent Warrant, or the Common Stock issuable upon exercise thereof, has been registered under the Securities Act of 1933 and none may be offered or sold absent registration or an applicable exemption from registration. The Company does not plan to register the Units, Shares, Investor Warrants or Agent Warrant, or the Common Stock issuable upon exercise thereof. The number of shares of the Company's Common Stock outstanding immediately after the closing of the Private Placement was 26,944,800 shares. About Irvine Sensors Irvine Sensors Corporation -- http://www.irvine-sensors.com/-- headquartered in Costa Mesa, California, is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low- power analog and mixed-signal integrated circuits for diverse systems applications. At March 28, 2010, the Company had total assets of $6,184,700 against total liabilities of $13,111,400, and non-controlling interest of $324,400, resulting in stockholders' deficit of $6,926,700. Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. JERRY MCWILLIS: BofA's Liquidating Plan OK'd; Files Amended Plan ---------------------------------------------------------------- Jerry A. McWillis and Janet Kaye McWillis filed with the U.S. Bankruptcy Court for the District of Utah amended Plan of Reorganization. As reported in the Troubled Company Reporter on April 21, the Debtors' Plan contemplates the sale of the Debtors' real property, which includes the Commerce Drive properties (Parcels A, B, C, D, E, J, and K), the Maplewood and Garden Acres, Salt Lake City apartment complexes (Parcels F and G), a residential building lot (Parcel H) situated at St. George, Utah, the McWillises' Salt Lake City residence (Parcel I), and a cabin (Parcel L) situated at Christmas Meadows, Utah. Under the Debtors' Plan, from the proceeds of sale of any parcel of the real property, the Reorganized Debtors will pay, to the extent that funds are available, in the following order (a) reasonable costs of sale; (b) all allowed secured claims secured by that property; (c) any unsatisfied administrative claims; (d) arrearages on other allowed secured claims, pro rata; (e) with all remaining funds to be paid pro rata to the Class 15 unsecured claims. A full-text copy of the Debtors' amended Plan is available for free at http://bankrupt.com/misc/JerryAMcWillis_AmendedDS.pdf Bank of America, N.A.'s Competing Plan The Court approved Bank of America, N.A.'s competing Liquidating Plan of Reorganization for the Debtors subject to these modifications: a. updated values on certain properties owned by the Debtors; b. the proposed treatment of unencumbered property belonging to the Debtors, and the potential liquidation of the property by the Debtors or a Court-approved trustee, pursuant to the terms of any confirmed plan; and c. the attachment of, and reference to, the budget for the "Jerry & Janet McWillis Essential Living Expenses." A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/JerryMcWillis_BofADS.pdf The solicitation of BofA's Plan was stayed to allow the Debtors to file an amended Plan. About Jerry A. McWillis Jerry A. McWillis and Janet Kaye McWillis, of Salt Lake City, dba J.A.M. Family Limited Partnership, filed for Chapter 11 relief on October 9, 2008 (Bankr. D. Utah Case No. 08-26934). Salt Lake City-based J.A.M. Family Limited Parnership filed for Chapter 11 relief on October 27, 2008 (Bankr. D. Utah Case No. 08-27426). On February 4, 2009, the Court approved the consolidation of the cases under Case No. 08-26934 (Jerry McWillis and Janet Kaye McWillis). Anna W. Drake, Esq., at Anna W. Drake, P.C., represents the Debtors as counsel. When Jerry McWillis and Janet Kaye McWillis filed for protection from their creditors, they listed total assets and total debts of between $10 million and $50 million each. When J.A.M. Family Limited Partnership filed for protection from its creditors, it listed total assets and total debts of between $1 million to $10 million. JETBLUE AIRWAYS: Earns $30 Million for Second Quarter 2010 ---------------------------------------------------------- JetBlue Airways Corporation reported its results for the second quarter 2010: * Operating income for the quarter was $94 million, resulting in a 10.1% operating margin, compared to operating income of $76 million and a 9.4% operating margin in the second quarter of 2009. * Pre-tax income for the quarter was $51 million. This compares to pre-tax income of $36 million in the second quarter of 2009. * Net income for the second quarter was $30 million, or $0.10 per diluted share. This compares to JetBlue's second quarter 2009 net income of $20 million, or $0.07 per diluted share. "We are pleased to report a return to profitability in the second quarter with our highest-ever quarterly operating income," said Dave Barger, JetBlue's CEO. "During the quarter, we reported record revenues, reflecting an improved demand environment and the efforts of our outstanding crewmembers, who continue to be recognized with awards for exceptional customer service. Our second quarter results demonstrate the progress we are making to strengthen our network in Boston and New York, maximize revenues, control costs and maintain a long-term sustainable growth rate." Operational Performance JetBlue reported record second quarter revenues of $939 million. Revenue passenger miles for the second quarter increased 8.9% to 7.1 billion on a 5.5% increase in capacity, resulting in a second quarter load factor of 82.0%, an increase of 2.5 points year over year. Yield per passenger mile in the second quarter was 11.93 cents, up 8.2% compared to the second quarter of 2009. Passenger revenue per available seat mile for the second quarter 2010 increased 11.7% year over year to 9.78 cents and operating revenue per available seat mile increased 10.4% year-over-year to 10.81 cents. Operating expenses for the quarter increased 15.5%, or $114 million, over the prior year period. JetBlue's operating expense per available seat mile for the second quarter increased 9.5% year-over-year to 9.72 cents. Excluding fuel, CASM increased 8.2% to 6.51 cents. Fuel Expense and Hedging JetBlue continued to hedge fuel to help manage price volatility. Specifically, JetBlue hedged approximately 45% of its fuel consumption during the second quarter, resulting in a realized fuel price of $2.30 per gallon, a 12.3% increase over second quarter 2009 realized fuel price of $2.05. JetBlue recorded $2 million in losses on fuel hedges that settled during the second quarter. JetBlue has hedged approximately 47% of its third quarter projected fuel requirements and 46% of its fourth quarter projected fuel requirements with a combination of crude call options, jet fuel swaps and heating oil collars. JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $2.27 in the third quarter and $2.28 for the full year 2010. Balance Sheet Update JetBlue ended the second quarter with approximately $1.0 billion in unrestricted cash and short term investments, essentially unchanged from the end of the first quarter. "Our operating cash flow allowed us to make prudent investments in the business while maintaining a strong liquidity balance," said Ed Barnes, JetBlue's CFO. In July, UBS repurchased $49 million in par value of JetBlue's auction rate securities. JetBlue used the proceeds from this sale to repay a $40 million loan from UBS, which was secured by the repurchased auction rate securities. As a result of this sale, JetBlue no longer holds any auction rate securities. Third Quarter and Full Year Outlook "We are encouraged by the strengthening revenue environment as we continue to develop additional revenue streams with Sabre, our new customer service and reservations system," said Barnes. "With some of our biggest challenges behind us -- including the closure of JFK Airport's principal runway and the implementation of Sabre -- we are optimistic about the rest of the year." For the third quarter of 2010, PRASM is expected to increase between 12 and 15 percent year over year. RASM is expected to increase between 11 and 14 percent year over year. CASM is expected to increase between three and five percent over the year- ago period. Excluding fuel, CASM in the third quarter is expected to increase between two and four percent year over year. PRASM for the full year is expected to increase between nine and 12 percent year over year. RASM is expected to increase between eight and 11 percent year over year. CASM for the full year is expected to increase between six and eight percent over full year 2009. Excluding fuel, CASM in 2010 is expected to increase between four and six percent year over year. Capacity is expected to increase between six and eight percent in the third quarter and for the full year. A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?6710 A full-text copy of the Company's investor's guidance is available for free at http://ResearchArchives.com/t/s?6711 About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.55 billion in total assets, $1.16 billion in total current liabilities, $2.92 billion long-term debt and capital lease obligations, $529 million construction obligation, $397 million deferred taxes and others resulting to a $1.53 billion stockholders' equity, as of Dec. 31, 2009. * * * According to the Troubled Company Reporter on Jan. 28, 2010, Moody's Investors Service raised its ratings of JetBlue Airways, Corp.; corporate family and probability of default ratings each to Caa1 from Caa2. Moody's also raised by one notch, its debt ratings on the 3.75% Senior Unsecured Convertible Notes due 2035 to Caa3 from Ca, the respective Class G tranches of the Enhanced Equipment Trust Certificates Series 2004-2 to B1 from B2, and the Spare Parts EETC to Ba1 from Ba2, the Class B tranche of the Spare Parts EETC to B2 from B3 and the senior unsecured industrial revenue bonds to Caa3 from Ca. Moody's also affirmed the SGL-3 Speculative Grade Liquidity rating and changed the outlook to positive from stable. The TCR reported on March 9, 2010, that Fitch Ratings affirmed the Issuer Default Rating for JetBlue Airways at 'B-' and the senior unsecured rating, which applies to approximately $470 million of convertible notes, at 'CC' with a Recovery Rating of 'RR6'. The airline's Rating Outlook has been revised to Stable from Negative. JEVIC TRANSPORTATION: Interline Trust Fund Dispute Going to Trial ----------------------------------------------------------------- WestLaw reports that material issues of fact precluded summary judgment for a carrier on its claim that funds held by the debtor- trucking company were not property of the debtor's bankruptcy estate. The carrier asserted that, instead, pursuant to the interline trust fund doctrine, the funds were being held in trust for the benefit of the carrier, which had contracted with the debtor to receive goods from specified interchange points and transport them to customers. In re Jevic Holding Corp., --- B.R. ----, 2010 WL 2787863 (Bankr. D. Del.). Based in Delanco, New Jersey, Jevic Transportation Inc. -- http://www.jevic.com/-- provided trucking services. Two affiliates -- Jevic Holding Corp. and Creek Road Properties -- have no assets or operations. The three debtors sought chapter 11 protection (Bankr. D. Del. Case No. 08-11008) on May 20, 2008. Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers, in Wilmington, Del., represent the Debtors. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors. Robert J. Feinstein, Esq., Bruce Grohsgal, Esq., and Maria A. Bove, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Before filing for bankruptcy, the Debtors initiated an orderly wind-down process. As a part of the wind-down process, the Debtors ceased substantially all of their business and terminated approximately 90% of their employees. The Debtors continue to manage the wind-down process in an attempt to deliver all freight in their system and to retrieve their assets. When the Debtors sought protection from their creditors, they estimated assets and debts between $50 million and $100 million. As reported in the Troubled Company Reporter, at April 30, 2010, the Company had total assets of $608,228 and total liabilities of $12,206,497. JILLPLEX LLC: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jillplex, LLC 4548 Commercial Avenue Madison, WI 53714 Bankruptcy Case No.: 10-15440 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court Western District of Wisconsin (Madison) Judge: Robert D. Martin Debtor's Counsel: Richard S. Burris, Esq. Burris Law Offices P.O. Box 1452 Madison, WI 53701 Tel: (414) 469-8784 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 6 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wswb10-15440.pdf The petition was signed by Richard S. Burris, president. KENNETH STARR: Seeks Release on $2 Million Bail ----------------------------------------------- Dow Jones Newswires' Chad Bray reports that Kenneth Starr, the New York financial adviser accused of defrauding his celebrity clients and other investors out of about $59 million, is seeking to be released on $2 million bail. According to Mr. Bray, Flora Edwards, Esq., Mr. Starr's new lawyer, proposed in court papers Monday that he be released on a $2 million bond secured by $2 million in collateral. He would remain under house arrest and be subject to electronic monitoring under the proposal. The report says Ms. Edwards noted federal prosecutors initially agreed to bail for convicted Ponzi-scheme operator Bernard Madoff. Mr. Madoff admitted in March 2009 to running a decades-long Ponzi scheme that defrauded investors out of billions of dollars and is serving 150 years in prison. "In light of the fact that defendant Starr is willing to submit to house arrest and electronic monitoring and surrender of his passport, and unlike Madoff, has virtually no access to liquid capital, the proposed bail conditions are more than sufficient to assure his appearance notwithstanding the seriousness of the offense," Ms. Edwards said. According to the report, prosecutors from the U.S. Attorney's office in Manhattan, however, said Mr. Starr has an incentive to flee in part because he faces life in prison under federal sentencing guidelines and has access to millions of dollars in assets from his relatives. "The defendant's access to funds, and the willingness of others to commit funds to him, makes the threat of flight here even more real," the report quotes Assistant U.S. Attorney Michael Bosworth as saying. A federal judge in Manhattan is expected to hear bail arguments on Tuesday. Mr. Starr, 66, has been jailed since his arrest on May 27 on fraud and other charges. He has pleaded not guilty to those charges. Mr. Starr isn't the Kenneth Starr who was special prosecutor in the Whitewater investigation during the Clinton administration. LEHMAN BROTHERS: BNY Mellon Opposes Substantive Consolidation ------------------------------------------------------------- Bank of New York Mellon Trust Company N.A., as trustee representing creditors of Lehman Brothers Commodity Services, filed court papers opposing the idea of substantively consolidating the company and its affiliated debtors including Lehman Brothers Holdings Inc. BNY Mellon said the argument for substantive consolidation is "meritless." "These arguments appear to be made on behalf of a few individual LBHI bondholders that are merely grabbing for a higher recovery for LBHI creditors at the expense of subsidiary creditors," BNY Mellon said. BNY Mellon is arguing against an objection filed earlier by another group of creditors, led by the California Public Employees' Retirement System, which favors substantive consolidation. The CalPERS-led group argued that LBHI's creditors stand to fare better if the company and its affiliated debtors are substantively consolidated for purposes of the distribution. In substantive consolidation, guarantee claims are not recognized, all assets of the companies are thrown into one pot and their unsecured creditors receive same treatment. According to BNY Mellon, LBCS cannot be consolidated with its affiliated debtors because its books and records and those of other Lehman units "are not hopelessly intertwined." It added that LBCS was also solvent as of May 31, 2008, based on the report by the bankruptcy examiner who was appointed to investigate LBHI's bankruptcy. BNY Mellon, however, said that the Calpers group's objection has merit in one respect, which is its call for more information. "Without additional information, it appears that the plan gives too much value to LBHI creditors at the expense of LBCS creditors," BNY Mellon pointed out. BNY Mellon urged the Court to have LBHI and its affiliated debtors set up a data room so that they can provide "meaningful data" to creditors. BNY Mellon is trustee for holders of $700 million in bonds that were issued by Main Street Natural Gas Inc. as part of a deal that called for LBCS to supply natural gas to various municipalities in return for payment from Main Street. The bank also holds a guarantee claim against LBHI. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Has Paid $873,090,000 to Advisors So Far --------------------------------------------------------- Lehman Brothers Holdings Inc. disclosed these cash receipts and disbursements of the company, its affiliated debtors and other controlled entities for the month ended June 30, 2010: Beginning Cash & Investments (06/01/10) $18,395,000,000 Total Sources of Cash 1,914,000,000 Total Uses of Cash (1,389,000,000) FX Fluctuation (2,000,000) --------------- Ending Cash & Investments (06/30/10) $18,922,000,000 LBHI reported $2.366 billion in cash and investments as of June 1, 2010, and $2.075 billion as of June 30, 2010. The monthly operating report also showed that from September 15, 2008 to June 30, 2010, a total of $873,090,000 was paid to professionals including ordinary course professionals employed by the Debtors, the Official Committee of Unsecured Creditors, the Chapter 11 examiner and the Fee Examiner. Of the amount, $311,628,000 was paid to Alvarez & Marsal LLC, the Debtors' turnaround manager, while $200,587,000 was paid to Weil Gotshal & Manges LLP, the Debtors' lead bankruptcy counsel. A full-text copy of the June 2010 Operating Report is available for free at http://bankrupt.com/misc/LehmanMORJune2010.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Insists on McIssac Testimony Against Barclays -------------------------------------------------------------- Lehman Brothers Inc.'s trustee asks the U.S. Bankruptcy Court for the Southern District of New York to deny the motion of Barclays Capital Inc. to exclude the testimonies of Daniel McIsaac from the records. Mr. McIsaac serves as one of the witnesses of James Giddens, LBI's trustee, who was called to testify about the exchange traded derivatives and associated margin assets that were sold to Barclays as well as about LBI's obligations under the Securities Investor Protection Act and SEC rules. Barclays earlier questioned the reliability of Mr. McIsaac's statements, saying he is not an expert on exchange traded derivatives and SIPA. Neil Oxford, Esq., at Hughes Hubbard & Reed LLP, in New York, says Barclays resorted "to attacking a few isolated statements" from the witness' testimonies because the bank was not able to challenge his analysis and assessment. "These attacks are legally insufficient to justify the exclusion of Mr. McIsaac's opinions because they do not challenge [his] principles and methodology," Mr. Oxford says in a 20-page statement filed with the Court. According to Mr. Oxford, the witness conducted a "systematic and granular analysis" of the risk that Barclays assumed in acquiring LBI's exchange traded derivatives and derivatives clearing business. He points out that this systematic methodology helped the witness to take account of differences in the risk profiles of the various types of exchange traded derivatives and reach the conclusion that Barclays assumed very little risk. "Barclays does not challenge Mr. McIsaac's risk assessment and fails to offer a sufficient basis for excluding [his] testimony on this issue," he says. Mr. Oxford also says that Barclays did not point out any defect in the witness' methodology or opinions that would render inadmissible his testimonies about LBI's obligations under the SIPA and SEC rules. In a related development, Lehman Brothers Holdings Inc. has urged the Court to deny Barclays' motion to exclude from the records the testimonies made by John Garvey and six other witnesses. The witnesses supported the contention of the trustee, Lehman Brothers Holdings Inc. and the Official Committee of Unsecured Creditors that the "repo collateral" that was transferred to Barclays under the 2008 sale was worth about $50 billion rather than the $45.5 billion valuation that Barclays ascribed to those assets on its public financial statements. LBHI's attorney, Robert Gaffey, Esq., at Jones Day, in New York, says the testimonies of the witnesses are relevant to the valuation issues and will be helpful to the Court in making decisions. He added that the testimonies refute the statements of Barclays' expert witness, Paul Pfleiderer. Mr. Pfleiderer earlier said that Barclays did not receive a $5 billion discount on the portfolio of securities it acquired in connection with the sale of the broker-dealer business and that there was no negotiation for the discount from the inception of the deal. He also said that Barclays undertook substantial risks when it made the deal and that the bank adequately accounted for its gain upon acquisition of the business. According to Mr. Gaffey, the testimonies of Mr. Pfleiderer must also be excluded from the records. "[Mr.] Pfleiderer's opinion concerning whether Barclays received a $5 billion discount when acquiring the repo collateral is inadmissible. It is based on a methodology that, at bottom, cannot be replicated or tested," Mr. Gaffey says, adding that the expert witness also lacks the expertise to independently value the repo collateral. The witnesses executed the testimonies as part of LBHI's attempt to claw back billions of dollars in excess assets that were allegedly improperly transferred to Barclays under the deal. LBHI earlier urged the Court to reverse its decision approving the sale, accusing Barclays of receiving possibly $12 billion in excess assets that were never disclosed when it bought the broker-dealer business. The move came following the results of LBHI's investigation into the sale, showing that the deal that closed differed materially from the one approved by the Court. The investigation showed that the deal was actually structured to give Barclays "immediate and enormous windfall profit." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod of Deal With Silver Lake, et al. ---------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors received court approval of a settlement agreement that would authorize LBHI to sell its stake in Silver Lake Credit Fund LP. Under the deal, SL Credit's general partner, Silver Lake Financial Associates LP or a third party buyer will pay LBHI 92.5% of its capital account. In return, SL Financial will drop its claim against LBHI. SL Financial's claim stemmed from LBHI's guarantee obligations to SL Credit, which resulted from the obligations of the company's foreign affiliate, Lehman Brothers International (Europe), to SL Credit. LBHI's capital account is being maintained by SL Financial for the company's capital contribution as limited partner of SL Credit. The account is valued at $127,529,417 as of April 30, 2010. Lori Fife, Esq., at Weil Gotshal & Manges LLP, in New York, says the settlement allows LBHI to get near full recovery of its capital account while avoiding the costs and delay that may result from challenging the terms of its partnership agreement with SL Credit through a judicial proceeding. The settlement is formalized in a 22-page agreement, a copy of which is available at: http://bankrupt.com/misc/LBHI_AgreementSilverLake.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Has Nod to Transfer Servicing Rights to Aurora --------------------------------------------------------------- Lehman Brothers Holdings Inc. obtained court approval to transfer to Aurora Bank FSB the company's servicing rights to a portfolio of loans sponsored by Fannie Mae. The proposed transfer is part of a settlement made earlier by LBHI and Aurora Bank to support the latter's business plan to conduct mortgage loan origination, purchase and sale. The settlement was reached after Aurora Bank's primary regulator issued a directive imposing restrictions on the bank's sources of funding and origination of new loans because of its diminishing capital level. LBHI services about 40,000 residential mortgage loans with an outstanding principal amount of about $8.8 billion. The Official Committee of Unsecured Creditors has expressed support for the transfer, saying the servicing rights "are worth more in the bank's (Aurora Bank FSB) hands than in LBHI's hands." "The transfer will benefit LBHI, as the bank's sole equity holder, regardless of whether the settlement is ultimately consummated," said the Creditors Committee's attorney, Mr. Dennis Dunne, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York, Fannie Mae earlier filed a statement with the Court to clarify that it had not yet consented to the transfer of the servicing rights and had not reached an agreement with LBHI, Aurora Bank and Aurora Loan Services LLC on the terms of the transfer. The statement was eventually withdrawn after LBHI filed a revised proposed order clarifying that no provision in the order will "prejudice, impair or be construed as a waiver" of any claims asserted by Fannie Mae against LBHI or its affiliated debtors. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins OK to Sell New Silk Stake to Berkeley ----------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors received approval from the U.S. Bankruptcy Court for the Southern District of New York of an agreement authorizing the sale of LBHI's stake in a private-equity fund to Berkeley Investment Ltd. Under the deal, LBHI will sell its limited partnership interest in New Silk Route PE Asia Fund LP in return for payment of $441,226 from Berkeley, which will also assume the company's outstanding and future obligations to contribute capital to the equity fund. Meanwhile, the fund's general partner, New Silk Route PE Associates L.P., will drop its claim against LBHI, which stemmed from the company's failure to contribute capital to NSRP Asia. LBHI decided to sell its stake because of its failure to provide capital to NSRP Asia, which made a series of capital calls to its investors since October 2008. Under an April 27, 2007, partnership agreement between NSRP Associates and LBHI, NSRP Asia is entitled to sell LBHI's stake on its behalf if the company defaults on a capital call. As of September 15, 2008, the unpaid portion of LBHI's commitment was $97 million. "If LBHI does not enter into the agreement, it will likely not recover any amount on account of its interest and, indeed, will face a significant claim," says LBHI's attorney, Lori Fife, Esq., at Weil Gotshal & Manges LLP, in New York. The deal is formalized in a 22-page agreement, a copy of which is available at http://bankrupt.com/misc/LBHI_AgreementNewSilk.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVI STRAUSS: Names Fernando Aguirre as Chief Executive Officer --------------------------------------------------------------- Levi Strauss & Co. announced the election of Fernando Aguirre, chairman, president and chief executive officer of Chiquita Brands International, Inc., to its board of directors effective October. "Throughout his career, Fernando has successfully led large, global consumer brands," said LS&Co. Chairman Richard Kauffman. "He understands how to translate consumer insights into strategies that drive growth across cultures. [Mr. Aguirre's] experience as a successful brand-builder and global leader will bring tremendous insights to our board deliberations." Mr. Aguirre joined Chiquita Brands International, Inc., in 2004. Since taking over as Chiquita's CEO, he has led the company's strategic business transformation, leveraging the strong equity of the company's brands around the world, expanding into new markets and products and acquiring other top food companies to secure Chiquita's position as an international leader in fresh foods. Before joining Chiquita, Aguirre spent 23 years at Procter & Gamble Company in a number of senior leadership roles where he managed multimillion-dollar global consumer businesses and help set the company's global strategic direction as a member of its Global Leadership Council. He earned his B.S. in Business Administration at Southern Illinois University. "I am excited to join the Levi Strauss & Co. board of directors and help contribute to the legacy of this iconic company," said Aguirre. "My experience leveraging powerful, trusted brands around the world is a good fit with Levi Strauss & Co.'s strategic growth plans. I hope to bring meaningful experience and insights to the work of the Levi Strauss & Co. board." About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. As of February 28, 2010, the Company's balance sheet showed total assets of $2.9 billion and total liabilities of $3.1 billion, resulting in a stockholders' deficit of $265,455,000. * * * The Troubled Company Reporter reported on April 26, 2010, that Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on San Francisco, Calif.-based Levi Strauss & Co. The outlook is stable. The TCR also reported that Moody's Investors Service assigned a B2 rating to Levi Strauss & Co proposed senior unsecured notes. All other ratings including its B1 Corporate Family Rating were affirmed. The rating outlook remains stable. The TCR reported on April 7, 2010, that Fitch Ratings affirmed Levi Strauss & Co.'s ratings: Issuer Default Rating at 'BB-'; $750 million Bank Credit Facility at 'BB+'; Senior unsecured notes at 'BB-'; Senior unsecured term loan 'BB-'. LINEAR TECHNOLOGY: Directors Acquire 3,000 Shares on July 22 ------------------------------------------------------------ Several directors at Linear Technology Corp. disclosed in separate Form 4 filings with the Securities and Exchange Commission that on July 22 they acquired 3,000 shares of the Company's common stock: -- Arthur C. Agnos, -- John J. Gordon, -- David S. Lee, -- Richard M. Moley, and -- Thomas S. Volpe Mr. Agnos has raised his stake to 6,000 shares. He directly holds those shares. Mr. Gordon has raised his stake to 7,594 shares. He directly holds those shares. Mr. Lee has raised his stake to 9,000 shares. He directly holds those shares. Mr. Moley has raised his stake to 9,000 shares. He directly holds those shares. Mr. Volpe has raised his stake to 73,000 shares. He directly holds those shares. Milpitas, California-based Linear Technology Corporation (NASDAQ- LLTC) -- http://www.linear.com/-- manufactures high performance linear integrated circuits, including high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, uModuleO products, and many other analog functions. The Company's balance sheet showed $1.61 billion in total assets and $1.66 billion in total liabilities, for a stockholder's deficit of $50.7 million. LINEAR TECHNOLOGY: Posts $124.5MM Net Income for June 27 Quarter ---------------------------------------------------------------- Linear Technology Corporation reported financial results for the quarter ended June 27, 2010. Record quarterly revenues of $366.2 million for the fourth quarter of fiscal year 2010 increased $54.8 million or 18% compared to the previous quarter's revenue of $311.3 million and increased $158.1 million or 76% over $208.0 million reported in the fourth quarter of fiscal year 2009. Fourth quarter net income of $124.5 million included a non-cash charge of $10.5 million, on the early retirement of a portion of the Company's senior convertible notes. Consequently, net income increased $23.9 million or 24% over the third quarter of fiscal year 2010 and increased $73.1 million or 142% over the fourth quarter of fiscal year 2009 which had a lower tax rate of 21.5% compared to 26.0% this quarter. Diluted earning per share of $0.54 in the fourth quarter increased $0.10 per share or 23% over the third quarter of fiscal year 2010 and increased $0.31 per share or 135% over the fourth quarter of fiscal year 2009. Net income was calculated in accordance with U.S. Generally Accepted Accounting Principles and included $7.1 million of non-cash interest expense and $10.5 million of non-cash loss on the early retirement of a portion of the Company's senior convertible notes. Revenue for the year ended June 27, 2010 was $1.17 billion, an increase of 21% or $201.5 million over revenue of $968.5 million for the previous fiscal year. Net income of $361.3 million for fiscal year 2010 increased $72.1 million or 25% over $289.2 million reported in the previous fiscal year. Diluted EPS for the year ended June 27, 2010 was $1.58, an increase of 23% or $0.30 per share over the prior fiscal year. During the fourth quarter the Company's cash, cash equivalents and marketable securities decreased by $64.0 million to $958.1 million, net of spending $154.2 million to retire $154.9 million principle amount of the 3.0% Convertible Senior Notes due May 2014. A cash dividend of $0.23 per share will be paid on August 25, 2010, to stockholders of record on August 13, 2010. According to Lothar Maier, CEO, "One year ago as we entered fiscal 2010 we were starting to recover from a global recession and there were concerns about the sustainability of the recovery. However, our recovery from the steep decline we experienced in fiscal 2009 was surprisingly rapid as we delivered four very strong quarters of sequential growth, reaching record revenues in our fiscal third quarter and again handily beating that mark in the fourth quarter. Our growth was broad-based across all regions and end-markets, most notably in the automotive, industrial and computer end- markets. Our team did a tremendous job of adeptly changing course from a depressed market to one of strong growth. We continued to closely manage expenses and our rate of profitability improved, culminating in operating margin of 53.1% of sales achieved during the fourth quarter of fiscal year 2010. We are exiting fiscal 2010 with a high degree of confidence as we believe we are in an excellent position to grow our business. We had another good bookings quarter with a firmly positive book to bill ratio and orders continue to be strong at the start of the current quarter. While some bookings strength may be due to expanding lead times industry-wide, we continue to believe that the primary catalysts for our current growth are an increase in our customer base, the commencement of new programs at existing customers and an increase in end customer demand for existing programs. Though our first fiscal quarter is traditionally a slower growth quarter for the Company, we currently believe we can grow revenues in the 4% to 7% range sequentially for the first quarter of fiscal 2011." A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?66fa Milpitas, California-based Linear Technology Corporation (NASDAQ- LLTC) -- http://www.linear.com/-- manufactures high performance linear integrated circuits, including high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, uModuleO products, and many other analog functions. Linear Technology reported $1.512 billion in total assets and $1.627 billion in total liabilities resulting to a $114 million in stockholders' deficit as of December 27, 2009. LITTLE TOKYO: Asks for Court Okay to Use Cash Collateral -------------------------------------------------------- Little Tokyo Partners, L.P., has sought authorization from the U.S. Bankruptcy Court for the Central District of California to use the cash collateral through October 15, 2010. The entities with an interest in Cash Collateral are: (1) First-Citizens Bank & Trust Company (the Bank), as successor in interest to First Regional Bank. The Bank is a beneficiary under: (i) that certain Promissory Note (Note 1), dated as of August 10, 2007, in the principal amount of $10,400,000, which it asserts is secured by a first priority lien on Weller Court (Weller Court), a mall located in the "Little Tokyo" area of Downtown Los Angeles. As of the Petition Date, the outstanding principal amount due and owing under Note 1 was $10,400,000; (ii) that certain Promissory Note (the Note 2), dated as of November 25, 2009, in the principal amount of $33,600,000, which it asserts is secured by a first priority lien on the Kyoto Grand Hotel and Gardens (the Hotel), also located in Little Tokyo. As of the Petition Date, the outstanding principal amount due and owing under Note 2 was $33,580,415.83; and (2) Excell Investment Group, LLC. On July 14, 2010, Excell funded a $300,000 loan to the Debtor, pursuant to a secured loan transaction, in order to fund the Chapter 11 retainer payable to the Debtor's insolvency counsel. The Excell loan is secured by a second priority deed of trust on the Hotel and Weller Court, which is subordinate to the Bank's first priority deed of trust on the Hotel and Weller Court. Neeta Menon, Esq., at Stutman, Treister & Glatt Professional Corporation, the attorney for the Debtor, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/LITTLE_TOKYO_budget.pdf In exchange for using the cash collateral, the Bank's and Excell's lien interests will be adequately protected by: (1) the maintenance and preservation of the going concern value of their respective collateral, as described and discussed in section III- B-1 below; and (2) replacement liens in any proceeds generated from the postpetition use of the Properties. Little Tokyo Partners, L.P. -- fka New Otani Hotel; aka Kyoto Grand Hotel & Gardens; aka Little Tokyo Partners - Weller Court; aka Weller Court; aka Littlte Tokyo Partners - Kyoto Grand Hotel & Gardens -- a Delaware limited partnership, is a startup company that owns the Hotel and Weller Court in the "Little Tokyo"3 area of Downtown Los Angeles. Built in 1977, the Hotel is the centerpiece building and the only large, full-service hotel in Little Tokyo. The 21-story hotel was purchased by the Debtor in 2007 and features 434 guest rooms, meeting rooms and a hotel restaurant. The Company filed for Chapter 11 bankruptcy protection on July 15, 2010 (Bankr. C.D. Calif. Case No. 10-39113). Neeta Menon, Esq., who has an office in Los Angeles, California, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. LITTLE TOKYO: Section 341(a) Meeting Scheduled for August 26 ------------------------------------------------------------ The U.S. Trustee for Region 16 will convene a meeting of Little Tokyo Partners, L.P.'s creditors on August 26, 2010, at 11:00 a.m. The meeting will be held at 725 S Figueroa Street, Room 2610, Los Angeles, CA 90017. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Little Tokyo Partners, L.P. -- fka New Otani Hotel; aka Kyoto Grand Hotel & Gardens; aka Little Tokyo Partners - Weller Court; aka Weller Court; aka Littlte Tokyo Partners - Kyoto Grand Hotel & Gardens -- a Delaware limited partnership, is a startup company that owns the Hotel and Weller Court in the "Little Tokyo"3 area of Downtown Los Angeles. Built in 1977, the Hotel is the centerpiece building and the only large, full-service hotel in Little Tokyo. The 21-story hotel was purchased by the Debtor in 2007 and features 434 guest rooms, meeting rooms and a hotel restaurant. The Company filed for Chapter 11 bankruptcy protection on July 15, 2010 (Bankr. C.D. Calif. Case No. 10-39113). Neeta Menon, Esq., who has an office in Los Angeles, California, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. LODGENET INTERACTIVE: Black Horse Sells 1-Mil. Shares ----------------------------------------------------- Black Horse Capital Management LLC sold 300,000 shares of LodgeNet Interactive Corporation common stock in various transactions on July 7, 2010. Certain of the shares are held directly by Black Horse Capital LP; Black Horse Capital (QP) LP; Black Horse Capital Master Fund Ltd.; and Black Horse Offshore Fund. Between July 1 and July 6, Black Horse sold 782,000 common shares. Black Horse Capital Management LLC is the managing general partner of the Black Horse Capital Fund and Black Horse QP, and is the investment manager of Black Horse Offshore Fund, and may be deemed to indirectly beneficially own the shares owned by such funds. Dale Chappell is the managing member of Black Horse Management and is deemed to indirectly beneficially own the shares of stock beneficially owned by Black Horse Management. Black Horse Capital Fund additionally owns 2,477 shares of the Company's 10% Series B Cumulative Perpetual Convertible Preferred Stock. Black Horse QP Fund additionally owns 1,079 shares of Preferred Stock. Black Horse Offshore Fund additionally owns 1,390 shares of Preferred Stock. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company's balance sheet at March 31, 2010, revealed $485.0 million in total assets and $542.2 million in total liabilities, for a total stockholders' deficit of $57.2 million. * * * As reported by the Troubled Company Reporter on June 21, 2010, Standard & Poor's Ratings Services affirmed its ratings on Sioux Falls, S.D.-based LodgeNet Interactive, including the 'B-' corporate credit rating. At the same time, S&P revised the rating outlook to positive from stable. According to the TCR on September 30, 2009, Moody's Investors Service upgraded LodgeNet Interactive's speculative grade liquidity rating to SGL-3 (indicating adequate liquidity) from SGL-4 (indicating poor liquidity) while revising the outlook for all ratings to stable from negative. Concurrently, Moody's also affirmed LodgeNet's B3 corporate family rating and Caa1 probability of default rating. LODGENET INTERACTIVE: PAR Investment Reports Equity Stake --------------------------------------------------------- PAR Investment Partners LP disclosed in a regulatory filing on Friday that it directly holds 1,205,800 shares of common stock of LodgeNet Interactive Corp. PAR also disclosed that it holds 1,984,127 shares of Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock is convertible as of June 29, 2009, at the option of the holder. PAR also holds Total Return Swaps in the Company. A full-text copy of PAR's disclosure is available at no charge at http://ResearchArchives.com/t/s?6706 About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company's balance sheet at March 31, 2010, revealed $485.0 million in total assets and $542.2 million in total liabilities, for a total stockholders' deficit of $57.2 million. * * * As reported by the Troubled Company Reporter on June 21, 2010, Standard & Poor's Ratings Services affirmed its ratings on Sioux Falls, S.D.-based LodgeNet Interactive, including the 'B-' corporate credit rating. At the same time, S&P revised the rating outlook to positive from stable. According to the TCR on September 30, 2009, Moody's Investors Service upgraded LodgeNet Interactive's speculative grade liquidity rating to SGL-3 (indicating adequate liquidity) from SGL-4 (indicating poor liquidity) while revising the outlook for all ratings to stable from negative. Concurrently, Moody's also affirmed LodgeNet's B3 corporate family rating and Caa1 probability of default rating. LODGENET INTERACTIVE: Stockholders Elect 3 Directors ---------------------------------------------------- LodgeNet Interactive Corporation held its 2010 Annual Meeting of Stockholders. LodgeNet's Board proposed and the stockholders approved: i) the election of three persons to the Board of Directors of LodgeNet to serve for three-year terms expiring in 2013 and until such directors' successors are elected and qualified; and ii) the ratification of the appointment of PricewaterhouseCoopers LLP as LodgeNet's independent registered public accounting firm for the fiscal year ending December 31, 2010. The three directors were elected based upon the following votes: For Withheld Broker Non-Votes --- -------- ---------------- J. Scott Kirby 11,772,563 607,055 4,802,625 Scott C. Petersen 11,831,578 548,040 4,802,625 Scott H. Shlecter 11,772,925 606,693 4,802,625 The appointment of PricewaterhouseCoopers LLP as LodgeNet's independent registered public accounting firm for the fiscal year ending December 31, 2010, was ratified. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company's balance sheet at March 31, 2010, revealed $485.0 million in total assets and $542.2 million in total liabilities, for a total stockholders' deficit of $57.2 million. * * * According to the Troubled Company Reporter on September 30, 2009, Moody's Investors Service upgraded LodgeNet Interactive Corporation's speculative grade liquidity rating to SGL-3 (indicating adequate liquidity) from SGL-4 (indicating poor liquidity) while revising the outlook for all ratings to stable from negative. Concurrently, Moody's also affirmed LodgeNet's B3 corporate family rating and Caa1 probability of default rating. MALANDRIN LLC: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Malandrin, LLC c/o John T. Hamilton, Esq. Gess Mattingly & Atchison, PSC Lexington, KY 40507 Bankruptcy Case No.: 10-52316 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Judge: Tracey N. Wise Debtor's Counsel: John Thomas Hamilton, Esq. 201 W Short St Lexington, KY 40507-1231 Tel: (859) 252-9000 E-mail: jhamilton@gmalaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kyeb10-52316.pdf The petition was signed by Audrey L. Haisfield, managing member. METALS USA: Posts $2.5 Million Net Income for June 30 Quarter ------------------------------------------------------------- Metals USA Holdings Corp. reported its results for the three months ended June 30, 2010. Sales revenues for the second quarter of 2010 were $335.0 million compared to sales revenues of $287.9 million for the first quarter of 2010 and $267.8 million for the second quarter of 2009. Metal shipments for the second quarter of 2010 were 270,000 tons, sequentially improved from first quarter 2010 shipments of 249,000 tons and also better than 228,000 tons for second quarter 2009. Operating income for the second quarter of 2010 was $17.4 million, compared to $12.7 million for the first quarter of 2010 and an operating loss of $19.1 million recorded for the three months ended June 30, 2009. Net income for the three months ended June 30, 2010, was $2.5 million, or $0.07 per share. The Company incurred a non- recurring loss on the extinguishment of debt related to the redemption of the Company's Senior Floating Toggle Notes due 2012 of $3.5 million in the second quarter of 2010 as well as a non- recurring charge of $3.3 million related to termination of the Company's advisory agreement with Apollo upon the completion of the Company's initial public offering. The impact of these non- recurring charges was to decrease second quarter 2010 net income by $4.2 million or $0.12 per share. The company's balance sheet for June 30, 2010, showed $705.9 million in total assets and $525.1 million in total liabilities, for a $180.8 million total stockholders' equity. Adjusted EBITDA, a non-GAAP financial measure used by the Company and its lenders to evaluate the performance of the business, was $25.7 million for the second quarter of 2010, which exceeds first quarter 2010 Adjusted EBITDA of $18.2 million as well as second quarter 2009 Adjusted EBITDA of negative $13.5 million. Interest expense for the second quarter of 2010 was $9.5 million, which included $1.4 million of interest on the Toggle Notes. The Company recognized depreciation and amortization expenses of $4.4 million in the three months ended June 30, 2010. Lourenco Goncalves, the Company's Chairman, President and C.E.O., stated: "The second quarter was a decisive one for Metals USA. We executed our Initial Public Offering, significantly improved our balance sheet by paying off the Toggle Notes, and purchased a great addition to our Company with J. Rubin." Mr. Goncalves added: "Our inventory, strong balance sheet and correct attitude toward the business environment will continue to allow Metals USA to capitalize on new growth opportunities." On April 9, 2010, the Company completed its IPO of 11,426,315 shares of common stock at a price of $21.00 per share. The Company's stock began trading that day on the New York Stock Exchange under the ticker symbol MUSA. On April 14, 2010, the Company announced the redemption of all of the Toggle Notes with the IPO proceeds. The redemption was completed on May 14, 2010. On June 28, 2010, the Company acquired J. Rubin & Co. J. Rubin operates four locations servicing the Illinois, Wisconsin and Minnesota markets. J. Rubin's broad product range consists of carbon steel bars, carbon plate and laser-cut flat-rolled products. The Company had $75.0 million drawn under its asset-based credit facility at June 30, 2010, with excess availability of $199.3 million which exceeds the $122.9 million available at December 31, 2009. Availability under the ABL Facility expanded commensurate with the increase in working capital. Net debt decreased by $186.2 million during the quarter to $289.1 million on June 30, 2010, due primarily to the redemption of all outstanding Toggle Notes. Net cash used in operating activities for the six month period ending June 30, 2010, was $42.4 million. During the second quarter 2010, the Company's working capital increased due to an improving economy and seasonally stronger demand combined with modestly increasing prices. Capital expenditures were $0.9 million for the quarter. A full-text copy of the company's earnings release is available for free at http://ResearchArchives.com/t/s?66f5 About Metals USA Based in Houston, Texas, Metals USA Holdings Corp. -- http://www.metalsusa.com/-- provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, non-ferrous metals, and building products markets. * * * The Troubled Company Reporter on April 13, 2010, reported that Standard & Poor's Ratings Services raised its ratings on Houston- based Metals USA Holdings and its wholly owned subsidiary, Metals USA Inc., to 'B-' from 'CCC+'. In addition, the ratings remain on CreditWatch with positive implications. S&P originally placed the ratings on CreditWatch with positive implications on April 7, 2010, based on S&P's assessment that the company's near-term operating performance is improving. The TCR on April 14, 2010, reported that Moody's Investors Service upgraded its ratings for Metals USA Holdings Corp. and assigned a stable rating outlook to the North American metal distributor. MUSA Holdings' corporate family rating was raised to B2 from B3 and the rating on the 11.125% notes issued by its subsidiary Metals USA Inc. was raised to B3 from Caa1. At the same time, MUSA Holdings' speculative grade liquidity rating was affirmed at SGL-3. MIRAMAX FILMS: Disney Wants Buyer to Advance $40MM by Wednesday --------------------------------------------------------------- According to The New York Times' Michael Cieply and Brooks Barnes, people briefed on the sale of Miramax Films said The Walt Disney Company wants an investment group that includes the construction executive Ronald N. Tutor to make a nonrefundable $40 million payment toward the purchase of Miramax by Wednesday to move forward with a deal. Should the deadline pass with no action, Disney could take Miramax off the market or throw open the bidding again to other suitors. The NY Times says word of the deadline is the latest wrinkle in a months-long effort to reach a deal for Miramax. The NY Times notes that potential buyers, including the co-founders of Miramax, Bob and Harvey Weinstein, have either made no offer after checking out a deal or have proposed terms that were far less than Disney wanted. The NY Times relates that several people who were briefed on the sale -- and spoke on condition of anonymity because of the confidentiality requirements -- said the deposit was to be accompanied by a plan to finance the purchase for about $650 million plus as much as $25 million in closing costs, though signed commitments from lenders are not required by the Wednesday deadline. The NY Times reports that the bid remains complicated by questions about the distribution of film franchises like the "Spy Kids" and "Scary Movie" series, in which the Weinsteins, who ran Miramax before leaving in 2005, continue to hold rights. Mr. Tutor, who is the chief executive of the Tutor Perini Corporation, told the NY Times on Monday he was blocked from discussing the proposed purchase by a confidentiality agreement that expires on Thursday. Asked about the deposit, Mr. Tutor said: "You'll know by Wednesday." Mr. Tutor's group includes the private equity firm Colony Capital, which has been guided in the transaction by Richard D. Nanula, a former chief financial officer of Disney who joined Colony two years ago. According to the NY Times, Mr. Tutor's group was granted an exclusive bargaining window for Miramax after talks with a group led by the Weinsteins and their principal backer, the investor Ron Burkle, collapsed amid dickering over a bid that was lowered to $565 million from about $600 million during a similar exclusive bargaining period. The NY Times relates that the Burkle-Weinstein group on Monday appeared poised to re-enter the bidding if the Tutor effort failed, according to people who were briefed on that bid, although Disney may chose not to restart talks with the group. The NY Times adds that, as of late last week, according to people who were briefed on the sale, the Tutor group was still scrambling to lock up financing. The NY Times says Mr. Tutor suggested that any move to pay a deposit would settle such questions. "Nobody's going to put up that kind of money if there's any doubt," he said. About Miramax Miramax Films -- http://www.miramax.com/-- is the art- house/independent film division of The Walt Disney Company, and acts as both producer and distributor for its own films or foreign films. Disney acquired Miramax in 1993 from the Weinstein brothers, who continued to oversee the outfit until 2005, when they left to found the Weinstein Company. Brothers Bob and Harvey Weinstein founded Miramax in 1979 and named it for their parents, Max and Miriam Weinstein. The Weinsteins sold the film outfit to Disney in 1993 and left in 2005 to start their current film studio. Citing The New York Times and The Wall Street Journal, the Troubled Company Reporter on February 2, 2010, reported that Walt Disney has been seeking buyers for its Miramax film unit. Brooks Barnes at The New York Times, citing a mergers and acquisitions expert with knowledge of the process, said Disney has attracted seven to 10 interested bidders. According to New York Times' source, the initial discussions indicate a price of more than $700 million for the Miramax name and its 700-film library. The Wall Street Journal's Ethan Smith said Disney has been gradually dismantling Miramax's filmmaking capacity for some time, laying off staff and executives. In January, Disney closed Miramax's offices and dismissed the majority of its remaining personnel. NEWLOOK INDUSTRIES: Expects to Submit Annual Report by July 31 -------------------------------------------------------------- Newlook Industries Corp. provided an update on the delay in filing its financial statements for the year ended December 31, 2009, along with associated management discussion and analysis and CEO/CFO certifications. The Company anticipates issuing its Annual Filings by July 31, 2010. Newlook's auditors, Deloitte & Touche LLP, are presently engaged in completing the audit of the annual financial statements. Significant progress has been made and completion of the audit is imminent. Shortly after the issuance of the Annual Filings, Newlook plans to file the financial statements for the quarter ended March 31, 2010, along with the associated MD&A and CEO/CFO certification. The TSX Venture Exchange suspended trading in the Company's securities on July 2, 2010 as a result of a Cease Trade Order ("CTO") issued by the Ontario Securities Commission. The CTO is expected to be in place until shortly after the receipt by the OSC of all Annual and Interim Filings that Newlook is required to make. Reinstatement to trading can occur only when the CTO is revoked and the TSXV has concluded its reinstatement review to ensure the Company has satisfactorily complied with all TSXV requirements. Newlook shall continue to keep the market continuously informed of any developments during the period of default. About Newlook Industries Headquartered in King City, Ontario, Newlook Industries Corp. -- http://www.sedar.com-- is a publicly traded company listed on the TSX Venture Exchange. NPS PHARMACEUTICALS: Completes Patient Randomization in Phase 3 --------------------------------------------------------------- NPS Pharmaceuticals completed the patient randomization in its Phase 3 registration study of GATTEX (teduglutide). The double- blind, placebo-controlled safety and efficacy study, which is known as STEPS, is being conducted in patients with parenteral nutrition dependent short bowel syndrome and is now fully randomized with 86 patients. "The timely completion of randomization in this Phase 3 study marks a significant milestone in our development program for GATTEX in short bowel syndrome," said Francois Nader, MD, president and chief executive officer of NPS Pharmaceuticals. "Short bowel syndrome can be highly debilitating and negatively impact quality-of-life. We believe GATTEX could represent an important advancement in patient care as a potential first-in- class therapy for reducing parenteral nutrition dependence by rehabilitating the intestine and enhancing nutrient absorption. We look forward to delivering our objective of reporting top line results early next year and filing a New Drug Application with the U.S. Food and Drug Administration as soon as possible thereafter." SBS is a rare disorder characterized by the poor absorption of nutrients that typically occurs in people who have had more than 50% of their small intestine removed. A proportion of SBS patients require the use of chronic PN or intravenous feeding to supplement and stabilize their nutritional needs. Given GATTEX's mechanism of action, which is specific to promoting gastrointestinal rehabilitation, NPS believes it has the potential to treat PN-dependent SBS and other gastrointestinal conditions associated with intestinal failure. About NPS Pharmaceuticals Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The Company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. The Company's balance sheet at December 31, 2009, showed $159.5 million in total assets and $382.3 million in total liabilities for a $222.7 million stockholders' deficit. According to the Company, it has not been profitable since its inception in 1986. As of December 31, 2009, the company had an accumulated deficit of approximately $922.7 million. At present, revenue from product sales has been in the form of royalty payments from Amgen on sales of Sensipar, royalty payments from Nycomed on sales of Preotact, royalty payments from Kyowa Kirin on sales of REGPARA, milestone revenue from the company's collaborative agreements with Nycomed, product sales to Nycomed and beginning in 2009, royalty payments on sales of Nucynta by Ortho-McNeil. OrbiMed Advisors LLC and OrbiMed Capital LLC hold shares on behalf of Eaton Vance Worldwide Health Sciences (2,385,000 shares), Eaton Vance Emerald Worldwide Health Sciences (39,000 shares), Eaton Vance Variable Trust (45,000 shares), and Finsbury Worldwide Pharmaceutical Trust (1,850,000 shares). MODOC COUNTY: California Considers Loan for Troubled County ----------------------------------------------------------- California finance officials will consider whether to loan as much as $12.5 million to Modoc County as the rural, financially distressed municipality prepares for the possibility of a chapter 9 filing, American Bankruptcy Institute reports. OAK SONG: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Oak Song, LLC 5150 Fair Oaks Boulevard, #101-239 Carmichael, CA 95608 Bankruptcy Case No.: 10-39123 Chapter 11 Petition Date: July 20, 2010 Court: U.S. Bankruptcy Court Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: Kenrick Young, Esq. 52 Seraspi Court Sacramento, CA 95834 Tel: (916) 929-6865 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The list of unsecured creditors filed together with its petition does not contain any entry. The petition was signed by Jennifer Bae, managing member. ON SEMICONDUCTOR: S&P Puts 'BB-' Rating on CreditWatch Positive --------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings, including the 'BB-' corporate credit rating, on Phoenix-based ON Semiconductor and its subsidiary on CreditWatch with positive implications. The action follows the company's July 16, 2010 announcement that it has agreed to acquire Gunma, Japan-based SANYO Semiconductor from SANYO Electric Co. for approximately $129 million in cash and $238 million in stock, for a total consideration of $366 million. "The CreditWatch placement primarily reflects the company's successful evolution of its business profile toward a primarily proprietary analog semiconductor provider model with less emphasis on typically lower margin standard products," said Standard & Poor's credit analyst Joseph Spence. The pending acquisition of SANYO Semiconductor enhances this product mix transition and expands ON's access to the Japanese semiconductor market, which represents about 18% of global semiconductor sales. Standard & Poor's will meet with management to assess ON's business and consolidation strategy, execution timeline, and expected operating performance before resolving the Credit Watch. PACIFIC AVENUE: Has 90 Days to File Plan to Save Company -------------------------------------------------------- Tony Burbeck at NewsChannel 36 notes that a federal bankruptcy court gave 90 days to EpiCentre to come up with a plan to save the company or risk losing ownership. In addition, the court allowed the company to continue using accounts and make salary payments. About Pacific Avenue Pacific Avenue LLC and an affiliate filed Chapter 11 Petitions July 22 (Bankr. W.D. N.C. Case No. 10-32093). Afshin Ghazi commenced bankruptcy proceedings after Regions Bank commenced a foreclosure proceeding against his companies. Pacific Avenue said it expects to come up with a viable plan and reorganized debt, structured for long term success, according to wsoctv.com. Pacific Avenue LLC and Pacific Avenue II LLC are the companies established by Afshin Ghazi to develop the EpiCentre entertainment and retail center in Charlotte, North Carolina. PACIFIC ENERGY: Files Liquidating Plan and Disclosure Statement --------------------------------------------------------------- Bankruptcy Law360 reports that with its California and Alaska properties sold off, Pacific Energy Resources Ltd. and affiliates are moving to complete its liquidation with the submission of a proposed Chapter 11 plan and disclosure statement. Law360 says the company filed its disclosure statement and proposed liquidation plan Wednesday with the support of its official committee of unsecured creditors. About Pacific Energy Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engaged in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). The petition listed between $100 million and $500 million each in assets and debts. Attorneys at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtors. The Debtors also tapped Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. PAJAAMCO FAMILY: Can Sell O&E Condominiums to Pay Rio Bank ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas authorized PAJAAMCO Family Limited Partnership to sell O&E Commercial Condominiums. The Debtor will sell unit 3, Building O and E, O&E Commercial Condominiums, is a condominium project in Hidalgo County, Texas for $201, 093, plus additional amounts of interest and reasonable expenses of collection including attorney's fees that accrue to time of closing. The Debtor will use the proceeds to pay the Rio Bank loan in full. About PAJAAMCO Family Limited McAllen, Texas-based PAJAAMCO Family Limited Partnership, fdba Pajamco Family Limited Partnership, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Texas Case No. 10-70010). John Kurt Stephen, Esq., at Cardena Whitis and Stephen, assists the Company in its restructuring effort. The Company has assets of $26,760,745, and total debts of $15,664,200. PEPPERWELL OAKS: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Pepperwell Oaks Developers, L.L.C. 6400 Desiree Drive Norman, OK 73071 Bankruptcy Case No.: 10-14389 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Niles L. Jackson Debtor's Counsel: O. Clifton Gooding, Esq. The Gooding Law Firm 1200 City Place Building 204 N Robinson Avenue Oklahoma City, OK 73102 Tel: (405) 948-1978 Fax: (405) 948-0864 E-mail: cgooding@goodingfirm.com Scheduled Assets: $2,250,294 Scheduled Debts: $3,062,356 A list of the Company's 6 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/okwb10-14389.pdf The petition was signed by Jerl Methvin, member manager. PICCADILLY INN: Files Voluntary Petition for Chapter 11 ------------------------------------------------------- Regis Hotel I, LLC, disclosed that on behalf of Piccadilly Inn Hotels that three Piccadilly Inn locations, have filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code. The properties affected are Piccadilly Inn Airport, Piccadilly Inn Shaw, and Piccadilly Inn Express locations in California. Restructuring under Chapter 11 allows Piccadilly Inn to continue normal operations led by current management, while restructuring its financial indebtedness. Hotel operations at all three locations will continue as normal with no anticipated impact on guests, suppliers, and employees. "The current economy has greatly reduced both tourist travel and business travel causing the hotel industry to be crushed. We're fortunate enough that the Piccadilly Inn hotels are well established properties with a strong reputation in the area. Most importantly, there will be no interruption in service to our clients and guests and we will continue seamless day to day operation of all four Piccadilly Inn locations," commented Steven Moore, Vice President of Regis Hotel I, LLC. About Piccadilly Inn Hotels For over 30 years, the Piccadilly Inn Hotels have been considered Fresno's very own neighborhood hotels. Known for gracious and unmatched service, all Piccadilly hotels feature deluxe accommodations at affordable rates conveniently located throughout the greater Fresno area. PMP II: to Convey Asset for a 25% Membership Interest in HKMP LLC ----------------------------------------------------------------- PMP II, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Texas a proposed Plan of Reorganization and explanatory Disclosure Statement. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. The Debtor's principal asset is an approximately 69 acre parcel of vacant land known as Paradise Memorial Park or Hawaii Kai Memorial Park located at Hawaii Kai Drive, Honolulu, Hawaii. According to the Disclosure Statement, the Plan provides for a reorganization of all liabilities owed by the Debtor. The Debtor will convey the property to HKMP, LLC, in exchange for a 25%, non- dilutable membership interest in HKMP, LLC, the venture created to develop the Property into a cemetery. As a member of HKMP, LLC, the Reorganized Debtor will be entitled to cash distributions as the Property is developed and revenue is generated from the sale of burial plots, niches, crypts and other services. Under the Plan, the Class 3 Claim of the Hawaiians will be converted to an equity interest in HKMP, LLC. The Hawaiians claim will be converted to a 75% equity interest in HKMP, LLC, which interest will be allocated pursuant to the Limited Liability Company Operating Agreement of HKMP, LLC. The remaining 25% equity interest in HKMP, LLC will belong to the Reorganized Debtor and be non-dilutable. The Debtor will contribute, transfer and convey all right, title and interest in the property to HKMP, LLC in exchange for a 25% membership interest in HKMP, LLC. Class 4 Allowed General Unsecured Claims will receive 100% of their Allowed Claims out of the cash distributions payable to the Reorganized Debtor until creditors holding Allowed General Unsecured Claims are paid in full. Class 5 Equity Interest Holders will assign all right, interest and title in the Reorganized Debtor to Bagelpipe. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/PMPII_DS.pdf The Debtor is represented by: Gerrit M. Pronske. Esq. E-mail: gpronske@pronskepatel.com Rakhee V. Patel, Esq. E-mail: rpatel@pronskepatel.com Melanie P. Goolsby, Esq. E-mail: mgoolsby@pronskepatel.com Pronske & Patel, P.C. 2200 Ross Avenue, Suite 5350 Dallas, TX 75201 Tel: (214) 658-6500 Fax: (214) 658-6509 About PMP II, LLC Chicago, Illinois-based PMP II, LLC, dba Paradise Memorial Park, filed for Chapter 11 bankruptcy protection on January 7, 2010 (Bankr. N.D. Texas Case No. 10-30252). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. POWER EFFICIENCY: Three Resign from Board of Directors ------------------------------------------------------ Dick Morgan, Gary Rado and George Boyadjieff resigned from the board of directors of Power Efficiency Corporation effective as of the close of business July 16, 2010. Messrs. Morgan, Rado, and Boyadjieff were members of the Company's audit committee. Morgan et al. were members of Company's compensation committee. Messrs. Morgan, Rado and Boyadjieff's resignations are purely personal in nature and not as a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. On July 16, 2010, at a duly held meeting of the board of directors of the Company, the board elected each of Mark Lehman and Herman Sarkowsky to serve on the board of directors of the Company until the next annual meeting of the Company's stockholders or such time as his successor is elected. Mr. Lehman was a Partner at JANA Partners LLC from 2002 to June 2010. Prior to joining JANA Partners, Mr. Lehmann was an analyst at Appaloosa Management L.P. from 1999 to 2002. Prior to that, Mr. Lehman had been an associate at NationsBanc Montgomery Securities, the Founder and President of Legacy Investment Research, and an Equity Research Associate at S.A.C. Capital Advisors, Morgan Stanley & Co. and Lehman Brothers. Mr. Lehman graduated with an M.B.A. from the Wharton School at the University of Pennsylvania in 1999 and with a B.S. from the Stern School of Business, New York University in 1993. Herman Sarkowsky is President of Sarkowsky Investment Corporation, a private investment firm for more than the past five years and serves on the Board of Directors of WebMD (NASDAQ), an online provider of medical information, and University of Washington Medical Center for more than the past five years. Mr. Sarkowsky has been in the home building and construction business since l950. He developed the Key Tower in Seattle, was a partner in the Frederick and Nelson department store chain, and founded the United Homes Corporation in the 1960s. Mr. Sarkowsky has served as a member of the Washington State Racing Association and was a co-founder of two major sports franchises in the Pacific Northwest, the Portland Trail Blazers of the NBA and the Seattle Seahawks of the NFL. Mr. Sarkowsky graduated in 1949 from the University of Washington with a B.A. in Business. About Power Efficiency 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 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. 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. PRIUM MEEKER: Section 341(a) Meeting Scheduled for August 18 ------------------------------------------------------------ The U.S. Trustee for Region 18 will convene a meeting of Prium Meeker Mall LLC's creditors on August 18, 2010, at 1:30 p.m. The meeting will be held at Courtroom J, Union Station, 1717 Pacific Avenue, Tacoma, WA 98402. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Tacoma, Washington-based Prium Meeker Mall LLC filed for Chapter 11 bankruptcy protection on July 14, 2010 (Bankr. W.D. Wash. Case No. 10-45713). Timothy W. Dore, Esq., at Ryan Swanson & Cleveland PLLC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. These affiliates filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Chelsea Heights LLC 10-44959 06/18/10 Prium Tumwater Buildings LLC 10-44962 06/18/10 Prium Kent Retail LLC QSGI INC: Inks Settlement Agreement with John Riconda ----------------------------------------------------- On July 2, 2010, QSGI, Inc., et al., and John Riconda filed a joint motion for approval of their agreement to settle asserted claims by both parties against each other with the United States Bankruptcy Court, Southern District of Florida, West Palm Beach Division, relating to the ownership of the stock of Contemporary Computer Services, Inc. ("CCSI"). Debtors and Mr. Riconda are parties to certain pre-petition agreements pursuant to which Mr. Riconda sold shares of stock he held in CCSI, a New York corporation, to QSGI Inc.'s wholly owned subsidiary, QSGI-CCSI, Inc., a Delaware corporation. Pursuant to the pre-petition agreements, the stock was held in escrow and, served as security for payment on certain promissory notes given to Mr. Riconda by the Debtors. The stock is currently being held in escrow with Meltzer, Lippe, Goldstein & Breitstone, LLP, as escrow agent, pending further order of a court of competent jurisdiction. Mr. Riconda submitted a proof of claim, as a secured lender, in the amount of $10,909,000 and QSG1-CCSI, Inc., listed Mr. Riconda on its "Schedule" D of secured creditors in the Bankruptcy Proceeding as the sole secured creditor, with a claim of approximately $10 million, secured by the stock of CCSI. On March 26, 2010, Mr. Riconda filed a Motion to Compel Abandonment, which sought the entry of an order, inter alia, compelling the Debtors to abandon the stock to him. The Debtors asserted substantive and procedural defenses to the Abandonment Motion in their response. On or about June 24, 2010, the parties entered into a settlement agreement. Pursuant to the agreement, QSGI shall abandon 100% of the capital stock of CCSI, Inc., to Mr. Riconda and Mr. Riconda releases his rights with respect to QSGI, except as specifically set forth in the agreement. Following court approval of the settlement agreement Mr. Riconda shall have no further secured rights in QSGI and shall retain an unsecured claim against QSGI in the amount of $10,159,000. A full-text copy of the Settlement Agreement and Mutual Release is available for free at http://researcharchives.com/t/s?66fe About QSGI, Inc. Palm Beach, Florida-based QSGI, Inc., and its affiliates provide technology services and maintenance geared towards both uses of enterprise class hardware as well as the uses of business - competing hardware. The Debtors filed for Chapter 11 on July 2, 2009 (Bankr. S.D. Fla. Lead Case No. 09-23658). Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara, Landau P.A., represents the Debtors in their restructuring efforts. The Debtors listed between $10 million and $50 million each in assets and debts. RIALTO HEIGHTS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Rialto Heights LLC 189 Quincy Avenue Long Beach, CA 90803 Bankruptcy Case No.: 10-39796 Chapter 11 Petition Date: July 20, 2010 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Vincent P. Zurzolo Debtor's Counsel: Michael Leight, Esq. 6700 E Pacific Coast Highway #237 Long Beach, CA 90803 Tel: (562) 430-1009 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The list of unsecured creditors filed together with its petition does not contain any entry. The petition was signed by Larry Boren, managing member. RICCO INC: Bankruptcy Counsel Withdrawn from Reorganization Case ---------------------------------------------------------------- The Hon. Patrick M. Flatley of the U.S. Bankruptcy Court for the Northern District of West Virginia has withdrawn John F. Wiley and Todd Johnson as counsel for Ricco, Inc. Messrs. Wiley and Johnson related that they have accomplished the tasks which the Debtor hired them for. The Debtors hired them as bankruptcy counsels solely to prepare their documents and to represent the Debtors in their Chapter 11 cases, including the filing of liquidating plans. Elk Garden, West Virginia-based Ricco, Inc. -- aka Amico Partners, Ambizioso Partners, Lupo Tana Partners, and Tre Manichinos Partners -- filed for Chapter 11 bankruptcy protection on January 7, 2010 (Bankr. N.D. W.V. Case No. 10-00023). Todd Johnson, Esq., at Johnson Law, PLLC, assists the Company in its restructuring effort. The Company has assets of $15,162,600, and total debts of $4,093,674. RIVERHEAD PARK: Files Amended Plan of Reorganization ---------------------------------------------------- Riverhead Park Corp. filed with the U.S. Bankruptcy Court for the Eastern District of New York amended Plan of Reorganization. As reported in the Troubled Company Reporter on Jun 29, 2010, according to the Disclosure Statement, the Plan provides that the funds for payment under the Plan will come from the sale of the real property with the closing to take place after 14 days subsequent to the order of confirmation becoming final and non- appealable. If the sale proceeds, if any, be insufficient to fund the plan in its entirety, other funds will come from any recovery due the Debtor arising from the litigation in federal court against the Town of Riverhead and the other defendants. Treatment of Claims Class 2 - 54 LLC and Parlex Investors LLC, the mortgagee: The Debtor will pay the lien and advanced sale costs from the sale proceeds or transfer of title if the mortgagee is the purchaser at the sale. Class 3 - Suffolk County Treasurer: The claim of $92,187 will be paid in full at the time of the transfer of title to the property. Class 4 - General unsecured claim of Edward Bagley may be paid less than 100%. Class 5 - Unsecured Claim of the Town of Riverhead: If the Debtor is successful, no money will be due the Town. Class 6 - Shareholders' interests will retain their respective interests upon confirmation pending completion of the litigation with the Town of Riverhead. They will only receive payment for the interests in the event all creditors receive a 100% distribution. A full-text copy of the amended Plan is available for free at http://bankrupt.com/misc/RIVERHEADPARK_AmendedDS.pdf About Riverhead Park Corp. Riverhead, New York-based Riverhead Park Corp. operates a real estate business. The Company filed for Chapter 11 on Oct. 27, 2009 (Bankr. E.D.N.Y. Case No. 09-78152). Harold M. Somer, PC assists the Debtor in its restructuring effort. According to the Debtor's schedules, it has assets of $10,020,000, and total debts of $5,995,696. RJ YORK: Automatic Stay Lifted on Property; Case Dismissed ---------------------------------------------------------- The Hon. Kathy A. Surratt-States of the U.S. Bankruptcy Court for the Eastern District of Missouri dismissed the Chapter 11 case of RJ York SSG, LLC. As reported in the Troubled Company Reporter on June 7, 2010, Nancy J. Gargula, the U.S. Trustee for Region 13, sought for the dismissal of the Debtor's case explaining that there is no reasonable likelihood of reorganization because on April 30, 2010, an order was entered terminating the automatic stay on the property effective July 1. The Debtor owns a certain real estate located at 24-45 North Central Avenue and 111 North Central Avenue in Clayton, Missouri. The Debtor is directed to pay all outstanding U.S. Trustee's fees and any Court costs that are due and owing. About RJ York SSG, LLC St. Louis, Missouri-based RJ York SSG, LLC, is a property developer. The Company filed for Chapter 11 bankruptcy protection on February 2, 2010 (Bankr. E.D. Mo. Case No. 10-40876). David L. Going, Esq., and Susan K. Ehlers, Esq., at Armstrong, Teasdale et al., assist 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. RMA REAL ESTATE: Involuntary Case Dismissed ------------------------------------------- The Hon. Stephen S. Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia dismissed the involuntary Chapter 11 case of RMA Real Estate Holdings, L.L.C. The Court ruled that the members are not eligible to file an involuntary petition against the Company. Roger Amendola, Brett Anthony Amendola, and Janet Amendola, filed for an involuntary Chapter 11 for RMA Real Estate Holdings, L.L.C., on June 22, 2010 (Bankr. E.D. Va. Case No. 10-15244.) John P. Forest, II, Esq. at StahlZelloe, P.C., represented the petitioning creditors. ROTHSTEIN ROSENFELDT: Banyon Fund & George Levin Settle ------------------------------------------------------- Julie Kay at Daily Business Review reports that Fort Lauderdale, Fla., millionaire George Levin, whose Banyon Investors Fund was the primary feeder fund that funneled about $830 million into Scott Rothstein's Ponzi scheme, has agreed to surrender the bulk of his assets under a bankruptcy settlement. John Genovese, Esq., at Genovese Joblove & Battista in Miami, representing the trustee for the defunct Rothstein Rosenfeldt Adler law firm, announced the settlement in court Friday. The deal is subject to approval by U.S. Bankruptcy Judge Raymond Ray. According to the report, pursuant to the deal, the former hedge fund manager has agreed to give up most of his 29 properties and business interests. Mr. Levin, 70, and his wife, Gayla Sue, will keep their primary home, a Fort Lauderdale waterfront home valued at $4.2 million, and $750,000 in jewelry and personal effects. The report says the value of the 29 assets was not disclosed, but Mr. Levin has stated in financial papers he is worth $100 million to $200 million. Since most of the holdings are real estate, Mr. Genovese said, "We have no idea what they are worth at this time." In addition, the assets were not detailed in court. But Mr. Genovese said they are properties and business interests throughout the state. The report relates the Rothstein bankruptcy estate will receive the first $5 million from asset sales and 85% of anything above that. The Levins would keep 15%. The settlement could include a $70 million Banyon insurance policy. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA, has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non-existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROTHSTEIN ROSENFELDT: Ex-Partner Adler Concern Over Dual Claims --------------------------------------------------------------- Julie Kay at Daily Business Review reports that an attorney for former Rothstein Rosenfeldt Adler partner Russell Adler on Friday expressed concern about dealing with dual claims to his share of a half-a-million-dollar New York co-op in both Scott Rothstein's criminal forfeiture and the firm's bankruptcy case. Bankruptcy lawyers also are seeking $655,000 in law firm loans to Mr. Adler and $580,000 in alleged overpayments. According to the report, Mr. Adler's attorney, Jason Slatkin, Esq., at Slatkin & Reynolds in Fort Lauderdale, said his client is not opposed to settling the case with the bankruptcy trustee but first wants assurances that the government won't make him pay a second time. "I don't think my client should have to defend himself twice," he said. He got no relief from U.S. Bankruptcy Judge Raymond Ray, the report says. "You know, you may have to pay twice," the report quotes the judge as saying. "This is a very unusual case." The report also states Mr. Adler's list of 15 to 20 witnesses if the case goes to trial includes Florida Gov. Charlie Crist and California Gov. Arnold Schwarzenegger. Prosecutors charge Mr. Rothstein's role as a high-profile political fundraiser helped attract investors to his fraud. "It goes to good faith," Mr. Slatkin said later in an interview, according to the report. "If these very prominent powerful people were unaware of the Ponzi and accepted political contributions, then it shows that Russell Adler could have been, too." About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA, has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non-existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROTHSTEIN ROSENFELDT: Judge to Hire Own Expert in Qtask Case ------------------------------------------------------------ Julie Kay at Daily Business Review reports that in the matter of cloud computing firm Qtask, a Web-based task manager used by defunct firm Rothstein Rosenfeldt Adler to keep track of clients and cases, Bankruptcy Judge Raymond Ray said he plans to appoint his own expert to determine whether the Burbank, Calif.-based company is in contempt of court for failing to turn over attorney passwords and other information. RRA was a Qtask client, and Scott Rothstein was an investor. The report notes lawyers for bankruptcy trustee Herbert Stettin have been trying to get RRA attorney passwords to explore their offsite records to determine if any attorneys knew of the fraud. According to the report, Qtask has argued the information would violate privacy rules and violate attorney-client privilege. Judge Ray held Qtask in contempt June 9 and set a fine of $5,000 a day. The report relates Chuck Lichtman, Esq., at Berger Singerman in Fort Lauderdale, another attorney for the bankruptcy trustee, said Qtask turned over a batch of documents the night before Friday's hearing. "There's nothing like a contempt order to get someone's attention," Mr. Lichtman said, the report relates. He said he was looking for information on 40 to 50 former RRA attorneys and would need about two weeks to digest the information. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA, has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non-existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. SAC II: Files Amended Schedules of Assets and Liabilities --------------------------------------------------------- SAC II filed with the U.S. Bankruptcy Court for the District of Nevada amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $40,955,000 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $38,542,896 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $902,222 ----------- ----------- TOTAL $40,955,000 $39,445,118 Reno, Nevada-based SAC II filed for Chapter 11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No. 10-51440). Sallie B. Armstrong, Esq., who has an office in Reno, Nevada, assists the Debtor in its restructuring effort. The Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. Affiliates, Specialty Trust, Inc., and Specialty Acquisition Corp., filed for separate Chapter 11 petitions. SAC II: Files List of Largest Unsecured Creditors ------------------------------------------------- SAC II filed with the U.S. Bankruptcy Court for the District of Nevada a list of its largest unsecured creditors, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ballard & Spahr LLP Legal Fees $13,107 1 East Washington St., Suite 2300 Phoenix, AZ 85004 Souhwest Ground-water Consulting $5,454 Consultants Services 3033 N. 44Th St., Suite 120 Phoenix, AZ 85018 Scythe & Spade of AZ LLC Farm Mgt. Fee $5,000 12 S. San Marcos Pl Chandler, AZ 85225 NAI Horizon Valuation Appraisal Fee $4,753 Services Group Samuels, Green & Steel LLP Legal Fees $3,600 About SAC II Reno, Nevada-based SAC II filed for Chapter 11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No. 10-51440). Sallie B. Armstrong, Esq., who has an office in Reno, Nevada, assists the Debtor in its restructuring effort. The Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. Affiliates, Specialty Trust, Inc., and Specialty Acquisition Corp., filed separate Chapter 11 petitions. SAINT VINCENTS: Has OK to Auction Off Home Healthcare Program ------------------------------------------------------------- Dow Jones Daily Bankruptcy Review reports that St. Vincent's Hospital received permission to place both branches of its home health-care program on the auction block, with a $15 million offer and a $17 million offer leading the way for bidding on the two groups of assets. St. Vincents Catholic Medical Centers returned to bankruptcy court by filing another Chapter 11 petition April 14, 2010, in New York (Bankr. S.D.N.Y. Case No. 10-11963). The new petition listed assets of $348 million against debt totaling $1.09 billion. Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtor in its Chapter 11 effort. Although the hospitals emerged from the prior reorganization in July 2007 with a Chapter 11 plan said to have a "a realistic chance" of paying all creditors in full, the bankruptcy left the medical center with more than $1 billion in debt. The new filing occurred after a $64 million operating loss in 2009 and the last potential buyer terminated discussions for taking over the flagship hospital. Saint Vincents Catholic Medical Centers -- http://www.svcmc.org/ -- is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Saint Vincent Catholic Medical Centers of New York and six of its affiliates first filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). SEA LAUNCH: Boeing, Aker Object to Reorganization Plan ------------------------------------------------------ Bankruptcy Law360 reports that Sea Launch LLC is facing objections to its proposed reorganization plan from the Boeing Co. and Aker Maritime Finance AS, which say the plan improperly treats them differently from other unsecured creditors. Boeing, which owns a 40 percent equity stake in Sea Launch, and Aker, which owns a 20 percent stake, filed separate objections to the plan Wednesday, according to Law360. About Sea Launch Sea Launch Company, L.L.C., is a satellite-launch services provider that offers commercial space launch capabilities from the Baikonur Space Center in Kazakhstan. Its owners include Boeing Co., RSC Energia, and Aker ASA. Sea Launch filed for Chapter 11 on June 22, 2009 (Bankr. D. Del. Case No. 09-12153). Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtor's counsel. At the time of the filing, the Company said its assets range from US$100 million to US$500 million and debts are at least US$1 billion. SNOWFLAKE WHITE: Files for Bankruptcy to Stop Salt River -------------------------------------------------------- Patrick O'Grady at Business Journal of Phoenix says Snowflake White Mountain Power LLC filed for bankruptcy under Chapter 11 to stop Salt River Project from terminating its contract to acquire 12 megawatts of power from the company's biomass power plant in Arizona. Creditors filed an involuntary Chapter 11 petition against the Company at the same time for the same reason. Based in Arizona, Snowflake White Mountain Power LLC operates a biomass power plant. SOL DE IBIZA: Sale Woes Prompt Chapter 11 Bankruptcy Filing ----------------------------------------------------------- Adrianne Pasquarelli at Crain's New York Business reports that Sol de Ibiza filed for bankruptcy protection due to its failure to pay rent of about $18,000 and low revenues. The Company listed assets of $121,480 and liabilities of $554,100. Sol de Ibiza operates a women's apparel shop in SoHo. SPECIALTY ACQUISITION: Files New Schedules of Assets and Debts -------------------------------------------------------------- Specialty Acquisition Corp. filed with the U.S. Bankruptcy Court for the District of Nevada amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $3,780,000 B. Personal Property $106,113 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $34,904,071 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $14,164,102 ----------- ----------- TOTAL $3,886,113 $49,068,173 Reno, Nevada-based Specialty Acquisition Corp. filed for Chapter 11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No. 10-51437). Sallie B. Armstrong, Esq., at Downey Brand, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10,000,001 to $50,000,000. Affiliates, Specialty Trust, Inc., and SAC II, filed for separate Chapter 11 petitions. SPECIALTY TRUST: Can Sell Las Vegas Property to SDMI Centennial --------------------------------------------------------------- The Hon. Gregg W. Zive of the U.S. Bankruptcy Court for the District of Nevada authorized Specialty Trust, Inc., and its debtor-affiliates, to sell certain real property located at N. Durango Drive and Deer Springs Way in Las Vegas, Nevada, to SDMI Centennial Hills, LLC. The Debtors related that they do not have sufficient available sources of working capital or funding to carry on the operation of their business without selling the property. Reno, Nevada-based Specialty Trust, Inc., filed for Chapter 11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No. 10-51432). Sallie B. Armstrong, Esq., at Downey Brand, assists the Debtor in its restructuring effort. The Debtor listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. Affiliates, Specialty Acquisition Corp., and SAC II filed for separate Chapter 11 petitions. STANDFAST INDUSTRIES: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Standfast Industries, Inc. 28024 Center Oaks Court Wixom, MI 48393-3343 Bankruptcy Case No.: 10-63085 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtor's Counsel: Michael E. Baum, Esq. 40950 Woodward Ave., Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: mbaum@schaferandweiner.com Scheduled Assets: $1,124,493 Scheduled Debts: $2,977,808 A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mieb10-63085.pdf The petition was signed by Laurette C. Walsh, president. STATION CASINOS: Further Revises Chapter 11 Plan ------------------------------------------------ Station Casinos, Inc., and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Nevada on July 22, 2010, a further revised version of their Joint Chapter 11 Plan of Reorganization and accompanying Disclosure Statement. The Revised Plan and Disclosure Statement reflect the changes based upon the requirements of the Court and the agreements among counsel at the July 15, 2010 Disclosure Statement hearing. Pursuant to the Revised Plan, Classes FHI.2, FHI.3, FHI.4, FHI.5, FHI.6, FP.2, FP.3, FP.4, FP.5, FP.6, VC.2, VC.3, VC.4, VC.5, VC.6, P.3, P.4, P.5, MP.1, MP.2, MP.3, MS.1, MS.2, MS.3, M7.1, M7.2, M7.3, M6.1, M6.2, M6.3, M5.1, M5.3, M5.4, M4.2, M4.3, M4.4, M3.2, M3.3, M2.2, M2.3, M2.4, M1.2, M1.3, M1.4, S.4, S.5, S.6, S.8, S.9, NA.2, NA.3, RL.2, RL.3, RC.3, RC.4, TS.3 and TS.4 are impaired and will receive no distribution under the Plan on account of their claims and are therefore presumed to have rejected the Plan pursuant to Section 1126(g) of the Bankruptcy Code. Moreover, each holder of an Allowed S.2 Claim will be deemed a party to the New Opco Credit Agreement and the New OpCo PIK Credit Agreement. "New Opco Credit Agreement" is a credit agreement to be entered into by New Opco and the other parties in connection with New Opco's acquisition of the New Opco Acquired Assets which provides for (i) a new revolving credit facility in the aggregate principal amount of $25 million and (ii) a term loan facility deemed issued on the Effective Date in the aggregate principal amount of $430 million. "New Opco PIK Credit Agreement" means that certain credit agreement to be entered into by a subsidiary of New Opco and the Prepetition Opco Secured Lenders in connection with New Opco's acquisition of the New Opco Acquired Assets, which provides for a term loan facility deemed issued on the Effective Date in the original aggregate principal amount of $25 million. The Revised Plan deleted the provisions regarding Surrender of Cancelled Instruments or Securities and Lost, Stolen, Mutilated or Destroyed Securities. Pursuant to the Revised Plan, these documents are excluded in the Plan Supplement: * IP License Agreement * Landco Asset Transfer Agreement * New Land Loan Agreement * New Propco Non-Compete Agreement * New Propco Purchase Agreement * New Propco Transfer Agreement The Revised Disclosure Statement provides these additional disclosures: -- In connection with negotiations regarding the sale process and potential bids for the New Opco Acquired Assets, Texas Gambling Hall & Hotel, Inc., the Mortgage Lenders and Texas Station, LLC entered into a binding settlement to avoid the process of determining the net present value of the rental stream, with all of the attendant potential disputes, and to fix the cost of purchasing the Texas Station real estate upon a change of control resulting from the Sale Process: (i) if the Acquisition is consummated and the Stalking Horse Bidder is the Successful Bidder, the Texas Put will be extinguished and no longer exercisable; (ii) if a person other than the Stalking Horse Bidder is selected as the Successful Bidder for the Opco assets, the price for the settlement of the Texas Put will be $75 million and will be required to be paid at closing of purchase pursuant to that bid; and (iii) if the Plan is not confirmed, a person other than the Stalking Horse Bidder is not selected as the successful bidder under the Plan and the Asset Transfers occur, the price for the settlement of the Texas Put will be $75 million and will not be required to be paid until the first anniversary of the consummation of the transfer of the New Propco Purchased Assets. -- The Debtors do not believe that GV Ranch Station, Inc.' equity interests in the joint venture that owns Green Valley Ranch have any value. -- The Debtors do not believe that SCI's indirect equity interests in the joint venture that owns Aliante Station have any value. -- As of the Petition Date, outstanding amounts under the Prepetition Opco Credit Agreement aggregated approximately $880-890 million. -- The Committee asserts that the Debtors did not subject the Excluded Assets to a formal valuation or market test and that the fair market value of the Excluded Assets is unknown. -- The superpriority claims of the Prepetition Opco Secured Lenders likely are far in excess of $100 million. -- The Debtors estimate that the amount of Allowed Administrative Claims that will be outstanding as of the Effective Date, excluding DIP Facility Claims and Superpriority Claims under the Opco Cash Collateral Order, will be approximately $55-65 million if the Debtors are able to reach a settlement with the Official Committee of Unsecured Creditors prior to confirmation and approximately $65-75 million if no settlement is reached. These estimates do not include any Administrative Claims, including adequate protection or professional fee claims, that have been or will be paid in the ordinary course or otherwise pursuant to applicable Court-approved procedures prior to the Effective Date. -- The Committee believes that Article VII.L of the Plan can be interpreted to provide for an impermissible release of subordination rights or claims that creditors may have, and the Committee intends to object to the inclusion of Article VII.L in the Plan. The Debtors disagree with the Committee's interpretation and believe that the intent of Article VII.L is simply to confirm that the provisions in the Plan regarding the treatment of the various Classes of Creditors is designed to take into account and enforce any and all valid subordination rights that may exist. A full-text redlined copy of the Revised Plan is available for free at http://bankrupt.com/misc/SCI_RevPlan722.pdf A full-text redlined copy of the Revised Disclosure Statement is available for free at http://bankrupt.com/misc/SCI_RevDS722.pdf About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. The Company owns and operates Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Rancho and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Wildfire Boulder, Gold Rush Casino and Lake Mead Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Aliante Station Casino and Hotel, Barley's Casino & Brewing Company, The Greens and Wildfire Lanes in Henderson, Nevada and a 6.7% interest in the joint venture that owns the Palms Casino Resort in Las Vegas, Nevada. In addition, the Company manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Wins Nod to Enter Into Insurance Pact With FIFC ---------------------------------------------------------------- Debtor Station Casinos, Inc., sought and obtained the U.S. Bankruptcy Court for the District of Nevada's authority to enter into an Insurance Premium Finance Agreement and Disclosure Statement with First Insurance Funding Corp. in order to finance its insurance coverage and provide FIFC with adequate protection. In connection with the day-to-day operations of its business, the Debtor is either required by law or compelled by sound business judgment to maintain various forms of insurance, including property casualty insurance and workers compensation. The insurance policies obtained by the Debtor to provide that coverage require the Debtor to prepay the full premium for the applicable coverage period. Because all of the Policies cover policy periods of 12 months, the requirement to prepay the full premiums would impose a significant financial burden on the Debtor, says Robert C. Shenfeld, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California. To lesson this burden, the Debtor proposes to finance the premiums for the Policies pursuant to the Insurance Premium Finance Agreement and to grant FIFC adequate protection for the Debtor's repayment obligations by providing a post-petition security interest in return premiums, dividend payments, and certain loss payments related to the Policies, together with the right to cancel policies as set forth in the Insurance Premium Finance Agreement. Pursuant to the Insurance Premium Finance Agreement, FIFC will pay the premiums due under the Policies and the Debtor thereby will become obligated to repay FIFC for the amount financed under the Insurance Premium Finance Agreement in installments over the term of the Insurance Premium Finance Agreement. The Debtor believes the Insurance Premium Finance Agreement represents a fair and reasonable commercial transaction with competitive terms. Under the Insurance Premium Finance Agreement, the total amount financed is $4,242,459. By virtue of the Insurance Premium Finance Agreement, the Debtor will become obligated to pay to FIFC the sum of $794,000 as a down payment and $391,592 per month in 9 monthly installments. The finance charge is $75,874 and the annual percentage rate is 5.250%. Pursuant to the terms of the Insurance Premium Finance Agreement, the Debtor is appointing FIFC as its attorney-in-fact with the irrevocable power to cancel the Policies and collect the unearned premium in the event SCI is in default of its obligations under the Insurance Premium Finance Agreement. "Without insurance, the Debtor would be forced to cease operations," Mr. Shenfeld asserts. The Debtor and FIFC have reached an agreement that the appropriate adequate protection for FIFC would be an order of the Court: (a) authorizing and directing SCI to timely make all payments due under the Insurance Premium Finance Agreement and authorizing FIFC to receive and apply those payments to the indebtedness owed by SCI to FIFC as provided in the Insurance Premium Finance Agreement; and (b) directing that if the Debtor does not make any of the payments due under the Insurance Premium Finance Agreement as they become due, the automatic stay will automatically lift to enable FIFC and third parties, including insurance companies providing the coverage under the Policies, to take all steps necessary and appropriate to cancel the Policies, collect the collateral and apply that collateral to the indebtedness owed to FIFC by the Debtor. In exercising those rights, FIFC or third parties will comply with the notice and other relevant provisions of the Insurance Premium Finance Agreement. According to Mr. Shenfeld, the only assets in which FIFC will have a security interest under the Insurance Premium Finance Agreement will be those sums payable under or in relation to the Policies, and the security interest granted to FIFC will only secure the Debtor's remaining payment obligations to FIFC under the Insurance Premium Finance Agreement. In support of the motion, Thomas M. Friel, executive vice president, chief accounting officer, and treasurer of Station Casinos, Inc., avers that the coverage provided under the Policies subject to the Insurance Premium Finance Agreement is essential for preserving the value of the Debtor's estates. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. The Company owns and operates Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Rancho and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Wildfire Boulder, Gold Rush Casino and Lake Mead Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Aliante Station Casino and Hotel, Barley's Casino & Brewing Company, The Greens and Wildfire Lanes in Henderson, Nevada and a 6.7% interest in the joint venture that owns the Palms Casino Resort in Las Vegas, Nevada. In addition, the Company manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Wins OK to Settle FTB Disputes for $2.8 Million ---------------------------------------------------------------- Debtor Station Casinos, Inc., received the U.S. Bankruptcy Court for the District of Nevada's authority to enter into an Insurance Premium Finance Agreement and Disclosure Statement with First Insurance Funding Corp. in order to finance its insurance coverage and provide FIFC with adequate protection. In connection with the day-to-day operations of its business, the Debtor is either required by law or compelled by sound business judgment to maintain various forms of insurance, including property casualty insurance and workers compensation. The insurance policies obtained by the Debtor to provide that coverage require the Debtor to prepay the full premium for the applicable coverage period. Because all of the Policies cover policy periods of 12 months, the requirement to prepay the full premiums would impose a significant financial burden on the Debtor, says Robert C. Shenfeld, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California. To lesson this burden, the Debtor proposes to finance the premiums for the Policies pursuant to the Insurance Premium Finance Agreement and to grant FIFC adequate protection for the Debtor's repayment obligations by providing a post-petition security interest in return premiums, dividend payments, and certain loss payments related to the Policies, together with the right to cancel policies as set forth in the Insurance Premium Finance Agreement. Pursuant to the Insurance Premium Finance Agreement, FIFC will pay the premiums due under the Policies and the Debtor thereby will become obligated to repay FIFC for the amount financed under the Insurance Premium Finance Agreement in installments over the term of the Insurance Premium Finance Agreement. The Debtor believes the Insurance Premium Finance Agreement represents a fair and reasonable commercial transaction with competitive terms. Under the Insurance Premium Finance Agreement, the total amount financed is $4,242,459. By virtue of the Insurance Premium Finance Agreement, the Debtor will become obligated to pay to FIFC the sum of $794,000 as a down payment and $391,592 per month in 9 monthly installments. The finance charge is $75,874 and the annual percentage rate is 5.250%. Pursuant to the terms of the Insurance Premium Finance Agreement, the Debtor is appointing FIFC as its attorney-in-fact with the irrevocable power to cancel the Policies and collect the unearned premium in the event SCI is in default of its obligations under the Insurance Premium Finance Agreement. "Without insurance, the Debtor would be forced to cease operations," Mr. Shenfeld asserts. The Debtor and FIFC have reached an agreement that the appropriate adequate protection for FIFC would be an order of the Court: (a) authorizing and directing SCI to timely make all payments due under the Insurance Premium Finance Agreement and authorizing FIFC to receive and apply those payments to the indebtedness owed by SCI to FIFC as provided in the Insurance Premium Finance Agreement; and (b) directing that if the Debtor does not make any of the payments due under the Insurance Premium Finance Agreement as they become due, the automatic stay will automatically lift to enable FIFC and third parties, including insurance companies providing the coverage under the Policies, to take all steps necessary and appropriate to cancel the Policies, collect the collateral and apply that collateral to the indebtedness owed to FIFC by the Debtor. In exercising those rights, FIFC or third parties will comply with the notice and other relevant provisions of the Insurance Premium Finance Agreement. According to Mr. Shenfeld, the only assets in which FIFC will have a security interest under the Insurance Premium Finance Agreement will be those sums payable under or in relation to the Policies, and the security interest granted to FIFC will only secure the Debtor's remaining payment obligations to FIFC under the Insurance Premium Finance Agreement. In support of the motion, Thomas M. Friel, executive vice president, chief accounting officer, and treasurer of Station Casinos, Inc., avers that the coverage provided under the Policies subject to the Insurance Premium Finance Agreement is essential for preserving the value of the Debtor's estates. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. The Company owns and operates Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Rancho and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Wildfire Boulder, Gold Rush Casino and Lake Mead Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Aliante Station Casino and Hotel, Barley's Casino & Brewing Company, The Greens and Wildfire Lanes in Henderson, Nevada and a 6.7% interest in the joint venture that owns the Palms Casino Resort in Las Vegas, Nevada. In addition, the Company manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STONE*WALL FARM: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Stone*Wall Farm Stallions I, LLC c/o John T. Hamilton, Esq. Gess Mattingly & Atchison, PSC Lexington, KY 40507 Bankruptcy Case No.: 10-52318 Chapter 11 Petition Date: July 20, 2010 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Judge: Tracey N. Wise Debtor's Counsel: John Thomas Hamilton, Esq. 201 W Short St Lexington, KY 40507-1231 Tel: (859) 252-9000 E-mail: jhamilton@gmalaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Stone*Wall Farm Stallions VII, LLC 10-52319 7/20/10 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 Stone*Wall Farm Stallions Racing Division I, LLC 10-52317 7/20/10 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Audrey L. Haisfield, managing member. A list of Stone*Wall Farm Stallions I's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kyeb10-52318.pdf A list of Stone*Wall Farm Stallions VII's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kyeb10-52319.pdf A list of Stone*Wall Farm Stallions Racing Division I's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kyeb10-52317.pdf SUNESIS PHARMA: Committee Approves Cash Bonuses to Executives ------------------------------------------------------------- The Compensation Committee of the Board of Directors of Sunesis Pharmaceuticals Inc. approved the payment of cash bonuses to certain of the company's employees, including the company's named executive officers, pursuant to its 2009 Bonus Program, as amended. The committee said, "under the Bonus Program, each participant was eligible to receive a cash bonus in an amount up to a specified target percentage of such participant's annual base salary based on the level of achievement of certain corporate and individual objectives, subject to the company's cash balance equaling or exceeding a specified amount on or before July 31, 2010 as a result of proceeds from one or more transactions deemed to be aligned with the value-creating objectives of the Bonus Program, or the Cash Bonus Threshold. The bonus payment amounts approved by the Committee were based on its determination of the degree to which such corporate and individual objectives were achieved and that we had met the Cash Bonus Threshold." The committee said, "A portion of the bonuses awarded to our named executive officers will consist of fully vested shares of our common stock granted under our 2005 Equity Incentive Award Plan, or the 2005 Plan, in order to minimize the associated cash expense of the payouts." The bonus payment amounts for each of the company's named executive officers and the portion thereof to be paid in cash and shares of its common stock are as follows: Named Executive Officer Total Bonus ----------------------- ----------- Daniel N. Swisher, Jr. $81,000 Eric Bjerkholt $61,200 Steven B. Ketchum, Ph.D. $75,600 The cash bonus payments will be made on July 30, 2010, and the stock awards will be granted effective July 30, 2010. The number of shares of the company's common stock awarded to each of its named executive officers under the 2005 Plan will be determined based on the last closing price of the company's common stock as quoted on the NASDAQ Capital Market on July 29, 2010, rounded down to the nearest whole share. About Sunesis Pharmaceuticals South San Francisco, Calif.-based Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS) -- http://www.sunesis.com/-- is a biopharmaceutical company focused on the development and commercialization of new oncology therapeutics for the treatment of hematologic and solid tumor cancers. The Company's balance sheet as of March 31, 2010, showed $15,329,511 in assets, $3,541,245 of liabilities, and $11,788,266 of stockholders' equity. * * * As reported in the Troubled Company Reporter on April 6, 2010, Ernst & Young, LLP, in Palo Alto, Calif., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for 2009. The independent auditors noted that of the Company's recurring losses from operations. TEXAS RANGERS: Cuban Deal May Be Like Phoenix Coyotes Scenario -------------------------------------------------------------- According to Eric Morath at Dow Jones Daily Bankruptcy Review, Tom Salerno, Esq., a partner at Squire, Sanders & Dempsey LLP, said Mark Cuban's potential bid to buy the Texas Rangers baseball team out of bankruptcy could challenge profession sports leagues' iron- clad hold on who can join their elite group of owners, and could create the same type of headaches for Major League Baseball that BlackBerry mogul Jim Balsillie caused for the National Hockey League when he sought to acquire the Phoenix Coyotes through a Chapter 11 process. Mr. Salerno represented the Phoenix Coyotes in bankruptcy court. According to Mr. Salerno, "If Mark Cuban makes the highest bid for team and Major League Baseball says `no' . . . it will be fascinating to see if this judge uses his powers under bankruptcy law to override that decision." If Mr. Cuban's bid is economically superior, Mr. Salerno said it would be difficult for a judge to throw out that offer solely based on league preference. In the Coyotes' case, a bankruptcy judge blocked Mr. Balsillie from buying the team after the NHL said he was unfit to be an owner. Ultimately, the league bought the Coyotes despite the higher offer from Mr. Balsillie, Research In Motion's co-chief executive. The NHL opposed Mr. Balsillie's plans to move the team to Canada. The Troubled Company Reporter, citing a report by Mr. Morath, said July 23 that Greenberg Traurig LLP attorney Clifton Jessup, Esq., introduced himself in court Thursday as a representative for a Mark Cuban company that is potentially interested in buying the Texas Rangers. Mark Cuban owns the Dallas Mavericks basketball team in the National Basketball Association. According to Dow Jones, some say baseball similarly wants no part of Mr. Cuban, a sometimes reality television star who's had high- profile run-ins with National Basketball Association referees and executives. Mr. Cuban was previously rebuffed in his attempt to buy the Chicago Cubs. Dow Jones adds that Mr. Salerno said it will be more difficult for MLB to stop Mr. Cuban than it was for the NHL to derail Mr. Balsillie's sale. Mr. Salerno pointed out that Mr. Cuban's popularity in Dallas and intent to keep the team playing in the area makes his potential offer more difficult for other owners to oppose. Moreover, the judge overseeing the Rangers' case, D. Michael Lynn, has already made it clear that MLB does not have complete authority over the team. Dow Jones notes a MLB spokesman declined to comment last week on the prospect of Mr. Cuban becoming an owner. League commissioner Bud Selig earlier this month said he wanted to see the current lead bidders for the Rangers, a group the includes Hall of Fame pitcher Nolan Ryan, buy the team. Judge Lynn has said he will not delay the Aug. 4 auction for Texas Rangers. About Texas Rangers Texas Rangers Baseball Partners owns and operates the Texas Rangers Major League Baseball Club, a professional baseball club in the Dallas/Fort Worth Metroplex. TRBP is a Texas general partnership, in which subsidiaries of HSG Sports Group LLC own a 100% stake. Controlled by Thomas O. Hicks, HSG also indirectly wholly-owns Dallas Stars, L.P., which owns and operates the Dallas Stars National Hockey League franchise. The Texas Rangers have had five owners since the club moved to Arlington in 1972. Mr. Hicks became the fifth owner in the history of the Texas Rangers on June 16, 1998. In its petition, Texas Rangers Baseball Partners said it had both assets and debt of less than $500 million. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtor. Forshey & Prostok LLP serves as conflicts counsel. Parella Weinberg Partners LP serves as financial advisor. Lenders to the Texas Rangers sought to force the baseball team's equity owners -- Rangers Equity Holdings, L.P. and Rangers Equity Holdings GP, LLC -- into bankruptcy court protection (Bankr. N.D. Tex. Case No. 10-43624 and 10-43625). The lenders, a group that includes investment funds Monarch Alternative Capital and Kingsland Capital Management, filed an involuntary bankruptcy petition on May 28 against the two companies. The two companies were not included in the May 24 Chapter 11 filing of TRBP. TRILOGY INTERNATIONAL: Moody's Assigns 'Caa1' Rating on Notes ------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to the proposed $370 million senior secured notes of Trilogy International Partners LLC and revised the company's ratings outlook to stable from negative. Trilogy intends to use the proceeds primarily to refinance its existing $250 million term loan and to fund growth opportunities for its New Zealand subsidiary. The outlook change incorporates the anticipated improvement in liquidity position pro forma for the announced transaction, coupled with Moody's expectation that losses in Trilogy's New Zealand and Dominican Republic operations will abate over time. Also, the proposed indenture tightens the company's ability to distribute cash to its New Zealand subsidiary and brings New Zealand into the restricted group, improving the position for debt holders relative to the existing structure. The proposed transaction would increase the cash balance to almost $200 million and extend the maturity of the majority of Trilogy's debt to 2016 from 2012. Leverage would increase to 4.7 times debt-to-EBITDA from 3.5 times (LTM through March 31, 2010; all metrics incorporating Moody's standard adjustment for the capitalization of operating leases), but Moody's expects leverage to moderate over the intermediate term as losses in the New Zealand subsidiary diminish. Trilogy's growth strategy requires substantial liquidity and has contributed to negative free cash flow over the past several years, which is likely to continue over the intermediate term, and the B3 corporate family rating incorporates this financial risk. The rating also reflects political and business risk related to its presence in emerging economies (Bolivia, Haiti and the Dominican Republic) and the intense competition it faces. To help manage these risks, Moody's expects the company to maintain good liquidity, and Moody's belief that the company has the ability to manage its expansion strategy also supports the rating. Furthermore, relatively low overall levels of telecommunications penetration and the inferior quality of wireline present favorable growth prospects in Trilogy's emerging markets. High prices, low usage, and limited options for consumers in the recently entered New Zealand market also afford good growth opportunities, but as a developed market, New Zealand represents a departure from the company's historic emerging markets focus and as such poses some risk. Trilogy generates a reasonable portion of its cash flow in U.S. dollars, which partially mitigates foreign exchange risks arising from the need to service U.S. dollar denominated debt obligations with local cash flows, and local currency borrowings in Bolivia provide a natural hedge for that region. These factors also support the rating. The stable outlook reflects expectations that management will exercise the fiscal discipline necessary to maintain a good liquidity profile and will remain focused on its core operations. Moody's also affirmed the B3 corporate family rating, and a summary of the action follows. Trilogy International Partners LLC -- Senior Secured Bonds, Assigned Caa1, LGD4, 62% -- Affirmed B3 Corporate Family Rating -- Affirmed B3 Probability of Default Rating -- Outlook, Changed To Stable From Negative The ratings are subject to the execution of the proposed transaction and Moody's review of final documentation. Moody's rates the proposed senior secured notes one notch lower than the B3 CFR due to liabilities ranked ahead of it in Moody's Loss Given Default analysis, including secured loans at the company's Bolivian operating subsidiary and trade payables at all operating subsidiaries. The potential for incremental secured debt at the New Zealand operating subsidiary, which could further subordinate TIP lenders, also supports the one notch differential. The most recent rating action for Trilogy International Partners LLC was on May 13, 2010, when Moody's confirmed the B3 corporate family rating. Based in Bellevue, WA, Trilogy International Partners LLC provides wireless communication services to over 3 million subscribers in Bolivia, Haiti, the Dominican Republic, and New Zealand. UAL CORP: Continental & UAL Reach Transition Pact with Pilots ------------------------------------------------------------- United Air Lines, Inc., and Continental Airlines Inc. have reached an agreement in principle on a transition and process agreement with the pilots of both companies, according to a joint public statement dated July 20, 2010. The agreement provides a framework for pilot operations of the two groups until the carriers' operating certificates are combined. "This is an important step forward that reflects the hard work and collaborative dialogue required to reach this transition agreement that is in the best interest of our new company and our pilots," said Glenn Tilton, United chairman and chief executive officer, who will serve as non-executive chairman of the merged company. "We are pleased to have reached this important agreement at such an early stage of the integration planning process, as it is a key first step in building a long-term, productive relationship between the combined company and our pilots," said Jeff Smisek, Continental's chairman, president and chief executive officer who will serve as chief executive officer of the combined carrier. "We will continue to focus on working together with all of our work groups to reach agreements that are fair to our employees and fair to the company." The companies expect to close the merger in the fourth quarter of 2010. United & Continental Conduct First Merger Meeting The Integration Steering Committee of United and Continental held their first meeting on July 14, 2010, at Continental's headquarters in Houston, Texas, Jenalia Moreno of The Houston Chronicle reports. As previously reported, the Integration Steering Committee is led by Messrs. Tilton and Smisek. Members of the Integration Steering Committee are: (i) Kathryn Mikells, senior vice president and chief financial officer, and Pete McDonald, senior vice president and chief administrative officer from United; and (ii) Zane Rowe, executive vice president and chief financial officer, and Jim Compton, executive vice president and chief marketing officer from Continental Ms. Moreno notes that Mr. McDonald and Lori Gobillot, Continental's staff vice president and assistant general counsel, will lead an "integration management office" that will oversee the daily integration planning and make recommendations to the Integration Planning Committee. Ms. Moreno adds that the office will create five groups, each led by a Continental and United employee. According to the report, the Integration Steering Committee will meet every two weeks, alternating between Houston and Chicago, and will operate until the merger closes. Merger Will Enhance United's Network with Small Airports, UAL Says Small airports and the communities United serves are critically important to the carrier's network just as United's presence is to them, UAL said in a Form 425 filed with the Securities and Exchange Commission dated July 15, 2010. UAL explained that while small communities feed traffic to United's hubs, those communities reap economic benefits from the presence of an airline that connects them to communities large and small around the globe. "That relationship would continue to benefit both parties after our planned merger with Continental is completed," said Kevin Knight, senior vice president - planning for United, at a presentation to the Airports Council International-North America's Small Airports Conference in Minneapolis, Minnesota on July 9, 2010. By combining United's network with Continental's, United would be even better positioned to offer improved service to smaller communities and better positioned to succeed, Mr. Knight emphasized. "Following our merger, the communities we serve will benefit from an enhanced network that offers our customers new services opportunities," Mr. Knight added. Under the merger, customers will have access to 116 new domestic destinations; 40 destinations will be new to United customers, and 76 destinations will be new to Continental customers. The merger will also create more than 1,000 new domestic connecting city pairs served by the combined carrier, providing additional convenience to customers, Mr. Knight noted. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Provides Financial Projections for 3rd Quarter -------------------------------------------------------- UAL Corp, the holding company of United Air Lines, Inc., filed with the U.S. Securities and Exchange Commission on July 20, 2010, an investor update related to its financial and operational outlook for the third quarter and full year of 2010. Capacity Kathryn A. Mikells, senior vice president and chief financial officer of UAL, says third quarter 2010 consolidated available seat miles (ASMs) are estimated to be up 1.6% to 2.6% year-over- year. Full year 2010 consolidated ASMs are estimated to be flat to up 1.0%, she notes. UAL's current capacity guidance represents a half a point increase from UAL's previous full year guidance. Ms. Mikells explains that about half of this increase is due to the capacity related to United's enhanced code share agreement with Aer Lingus to provide service from Washington Dulles to Madrid, which was not anticipated to be included in the carrier's consolidated results in the previous guidance. She adds that the remaining increase is due to the elimination of scheduled paint visits in anticipation of changing United's livery as a result of the carrier's proposed merger with Continental Airlines Inc. later this year. Non-Fuel Expense UAL estimates third quarter 2010 mainline non-fuel unit cost per ASM (CASM), excluding profit sharing and certain accounting charges, to be up 3.8% to 4.8% year-over-year, and consolidated CASM, excluding profit sharing and certain accounting charges, to be up 3.3% to 4.3% year-over-year. For the full-year 2010, UAL expects mainline and consolidated CASM, excluding fuel, profit sharing and certain accounting charges to be up 2.0% to 3.0% year- over-year. Fuel Expense UAL anticipates mainline fuel price, including the impact of cash settled hedges, to be $2.40 per gallon for the third quarter and $2.34 for the full year based on a July 16, 2010, forward curve. Non-Operating Income/Expense Non-operating expense is estimated to be $170 million to $180 million for the third quarter and $655 million to $665 million for the full year, Ms. Mikells discloses. Income Taxes Because of its net operating loss carry-forwards, UAL expects to pay minimal cash taxes for the future and is not recording incremental tax benefits at this time, Ms. Mikells tells the SEC. UAL expects an effective tax rate of 0% for the third quarter and full year 2010, she adds. Capital Spending and Scheduled Debt and Capital Lease Payments Of the planned roughly $350 million in non-aircraft capital expenditures for 2010, about $125 million has been spent as of the end of the second quarter, Ms. Mikells relates. UAL expects scheduled debt and capital lease payments of about $220 million in the third quarter and $410 million for the remainder of the year. Fuel Hedge Positions For the third quarter, UAL has hedged 80% of its estimated consolidated fuel consumption at an average price of $79 per barrel. For the remainder of 2010, UAL has hedged 74% of its estimated consolidated fuel consumption at an average price of $80 per barrel. UAL's estimated settled hedge impacts at various crude oil prices, based on the hedge portfolio as of July 14, 2010 are: Cash Settled Crude Oil Price Hedge Impact 1Q10 2Q10 3Q10 4Q10 FY10 --------------- ------------ ---- ---- ---- ---- ---- $100 per Barrel Mainline Fuel $2.19 $2.30 $2.82 $2.82 $2.54 Price Excluding Hedge ($/gal) Impact to Fuel $0.03 $0.04 ($0.25)($0.32)($0.13) Expense ($/gal) $90 per Barrel Mainline Fuel $2.19 $2.30 $2.58 $2.59 $2.42 Price Excluding Hedge ($/gal) Impact to Fuel $0.03 $0.04 ($0.06)($0.12)($0.03) Expense ($/gal) $80 per Barrel Mainline Fuel $2.19 $2.30 $2.34 $2.35 $2.30 Price Excluding Hedge ($/gal) Impact to Fuel $0.03 $0.04 $0.10 $0.07 $0.06 Expense ($/gal) $76.01 per Mainline Fuel $2.19 $2.30 $2.25 $2.25 $2.25 Barrel Price Excluding Hedge ($/gal) Impact to Fuel $0.03 $0.04 $0.15 $0.12 $0.09 Expense ($/gal) $70 per Barrel Mainline Fuel $2.19 $2.30 $2.11 $2.11 $2.18 Price Excluding Hedge ($/gal) Impact to Fuel $0.03 $0.04 $0.21 $0.19 $0.12 Expense ($/gal) $60 per Barrel Mainline Fuel $2.19 $2.30 $1.87 $1.87 $2.06 Price Excluding Hedge ($/gal) Impact to Fuel $0.03 $0.04 $0.31 $0.29 $0.17 Expense ($/gal) $50 per Barrel Mainline Fuel $2.19 $2.30 $1.63 $1.63 $1.93 Price Excluding Hedge ($/gal) Impact to Fuel $0.03 $0.04 $0.41 $0.39 $0.22 Expense ($/gal) A full-text copy of the Investor Update is available for free at: http://ResearchArchives.com/t/s?66e0 About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Reports First Quarterly Profit Since 2007 --------------------------------------------------- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Air Lines, Inc., reported results for the second quarter ended June 30, 2010. The company: * Reported its first quarterly profit since 2007 with a second quarter net profit of $430 million, or $1.95 per diluted share, excluding non-cash, net mark-to-market hedge gains and certain accounting charges, an improvement of $751 million from second quarter 2009. The company reported a GAAP net profit of $273 million, or $1.29 per diluted share. * Reported a 26.9% year-over-year increase in consolidated passenger revenue per available seat mile (PRASM) for the second quarter with double digit growth rates across all regions. * Reported a 1.9% year-over-year increase in consolidated unit cost per available seat mile (CASM) for the quarter, excluding fuel, certain accounting charges and profit sharing, with an increase in consolidated capacity of 1.1% year-over-year. * Generated strong operating cash flow of $874 million and free cash flow of $801 million in the second quarter, and closed the quarter with a total cash balance of $5.2 billion, including unrestricted cash of $4.9 billion. * Accrued $63 million for profit sharing based on year-to- date pre-tax profitability, and paid $315 in incentive compensation to each eligible front-line employee based on strong operational and customer satisfaction performance in the second quarter. * Ranked No. 1 in on-time arrivals among the five largest U.S. global carriers for the first six months of 2010 based on preliminary information . * Announced merger agreement with Continental Airlines on May 3, 2010, which will create the world s leading airline serving over 350 destinations worldwide. Integration planning is under way and we expect to close the transaction by year-end. * Flew inaugural flight to Africa, commencing daily service between Washington Dulles and Accra, Ghana. "We are pleased to report a significant net profit improvement in the quarter along with excellent operational results across the company," said Glenn Tilton, UAL Corporation chairman, president and CEO. "The United team continues to execute across our critical operating, service and financial metrics and this strong performance builds momentum that we take into our planned merger with Continental Airlines later this year." Revenue Trends Continue Solid Year-Over-Year Improvements For the second quarter, consolidated PRASM increased 26.9% year- over-year. Consolidated yield improved 23.6% and consolidated load factor increased 2.3 percentage points year-over-year. 2Q2010 Passenger Passenger Revenue Revenue % PRASM % vs. ASM % vs. Geographic Area (millions) vs. 2Q 2009 2Q 2009 2Q 2009 --------------- ---------- ----------- ---------- --------- Domestic $2,063 15.4% 19.1% (3.0%) Pacific 789 52.4% 52.0% 0.4% Atlantic 742 31.7% 33.1% (1.0%) Latin America 118 63.4% 55.9% 4.7% ---------- ----------- ---------- --------- International $1,649 43.0% 42.9% 0.1% Mainline $3,712 26.2% 28.3% (1.6%) Regional Affiliates $1,021 36.3% 13.1% 20.5% ---------- ----------- ---------- --------- Consolidated $4,733 28.3% 26.9% 1.1% Cargo revenue increased 57% year-over-year for the quarter as continued improvements in demand drove strength in both volume and yields across all regions, particularly trans-Pacific markets. Maintained Strong Unit Cost Control Total consolidated expense, including fuel and excluding non- cash net mark-to-market hedge gains and certain accounting charges, increased $455 million, or 11.1% year-over-year for the second quarter. Consolidated expense, excluding fuel, profit sharing programs and certain accounting charges, was up $91 million or 3.1%. Total GAAP consolidated expense, including these items, was up $816 million for the quarter. Consolidated CASM, excluding fuel, profit sharing programs and certain accounting charges, increased by 1.9% year-over-year in the second quarter against a consolidated capacity increase of 1.1%. Mainline CASM, excluding fuel, profit sharing programs and certain accounting charges, increased by 1.7% in the second quarter, against a 1.6% decline in mainline capacity. Mainline and Consolidated CASM, including these items, were up 21.1% and 19.6%, compared to the year-ago quarter. Hedged 80% of Consolidated Fuel Consumption for Third Quarter 2010 The company recorded $17 million in cash losses on fuel hedges that settled in the second quarter including hedge ineffectiveness. In addition, the company also recorded non-cash, net mark-to-market losses on its fuel hedges of $37 million. Hedge impacts for the quarter shows: Fuel Hedge Impacts Included in 2Q 2010 Fuel Fuel Hedge Impacts Expense ------------------ -------------- Non-Cash Net Mark-to-Market Net Gain/(Loss) ($37) Cash Net Gain/(Loss) on Settled Contracts (17) -------------- Total Recorded Net Gain/(Loss) ($54) ============== The company's hedge book consists of roughly 50% call options and 50% swaps, providing protection against rising fuel prices while allowing significant downside participation if fuel prices fall. For the third quarter 2010, the company has capped 80% of its estimated consolidated fuel consumption at a crude-equivalent average price of $79 per barrel. For the remainder of 2010, the company has capped 74% of its estimated consolidated fuel consumption at a crude-equivalent average price of $80 per barrel. The company will benefit from roughly 63% downside participation for the last half of 2010 if fuel prices fall. Strong Liquidity Position Further Bolstered By Operating Cash Flow The company ended the quarter with a total cash balance of $5.2 billion, including an unrestricted cash balance of more than $4.9 billion and restricted cash balance of $250 million. In the second quarter, the company generated $874 million of positive operating cash flow and $801 million of positive free cash flow, defined as operating cash flow less capital expenditures. In the second quarter, the company had scheduled debt and net capital lease payments of $135 million, and non- aircraft capital expenditures of $73 million. "We are clearly on the right path toward our goal of achieving sustained and sufficient profitability across the economic cycle," said Kathryn Mikells, UAL Corporation executive vice president and chief financial officer. "While there is much more work needed, our current results, including improvements in unit revenue, cost controls, cash flow and profit margin, demonstrate substantial progress against our objective." No. 1 On-Time Airline Among 5 Largest U.S. Global Carriers for First Six Months of 2010 Based on preliminary industry results, United remains in first place among the five largest U.S. global network carriers in on- time arrival performance for the first six months of 2010, and was ranked second place in the second quarter. Each participating front-line employee earned a $315 bonus payout in the second quarter as a result of exceeding internal customer satisfaction and on-time performance goals. Business Highlights * On May 3, 2010, United and Continental Airlines announced a planned merger transaction that will create the world's leading airline and will expand access to an unparalleled global network serving 350 destinations around the world. The integration planning process is underway; teams from both companies are developing comprehensive plans for the combined company. * United launched its inaugural flight to the continent of Africa on June 20 with daily non-stop service from Washington Dulles to Accra, Ghana. * United completed the first flight by a U.S. commercial airline using natural gas synthetic jet fuel, demonstrating United's commitment to the advancement of alternative fuels in commercial aviation using fuel that is safe and approved for use in commercial aircraft. United also became the first airline to conduct two trans- Atlantic flights using state-of-the-art flight planning to demonstrate the potential for fuel savings and carbon dioxide reductions. * Glenn Tilton, UAL Corp. chairman, president and CEO joined The Future of Aviation Advisory Committee convened by U.S. Department of Transportation Secretary Ray LaHood. 2010 Outlook The company expects both mainline and consolidated CASM, excluding fuel, profit sharing and certain accounting charges for the full year 2010 to be up 2.0% to 3.0% year-over-year. The company expects consolidated CASM, excluding fuel, profit sharing and certain accounting charges for the third quarter 2010 to be up 3.3% to 4.3% year-over-year. The company expects scheduled debt and capital lease payments of approximately $220 million and non-aircraft capital expenditures of approximately $120 million for the third quarter of 2010. Complete details on United's outlook can be found in the Investor Update, available at www.united.com/ir UAL filed with the U.S. Securities and Exchange Commission its Form 10Q dated July 20, 2010, disclosing UAL's financial results for the quarter ended June 30, 2010. A full-text copy of UAL Corp.'s 2nd Quarter 2010 Results is available for free at: http://ResearchArchives.com/t/s?66c8 UAL also filed with the SEC on Form 425 dated July 21, 2010, a transcript of its earnings conference call held on July 20, 2010. A full-text copy of the transcript is available for free at: http://ResearchArchives.com/t/s?66e2 UAL Corporation and Subsidiary Companies Statement of Consolidated Financial Position As of June 30, 2010 (in millions) Current Assets: Cash and cash equivalents $4,906 Restricted cash 53 Receivables, net allowance for doubtful accounts 971 Aircraft fuel 280 Aircraft lease deposits maturing within one year 275 Deferred income taxes 51 Prepaid expenses and other 447 ----------- Total current assets 6,983 ----------- Operating property and equipment: Owned Flight equipment 8,354 Advances on flight equipment 51 Other property and equipment 1,767 ----------- 10,172 Less -- accumulated depreciation and amortization (2,293) ----------- Total owned 7,879 ----------- Capital leases Flight equipment 2,095 Other property and equipment 51 ----------- 2,146 Less -- accumulated amortization (422) ----------- Total capital leases 1,724 ----------- Total operating property and equipment 9,714 ----------- Other assets: Intangibles, net 2,416 Restricted cash 197 Investments 97 Aircraft lease deposits 10 Others 828 ----------- Total other assets 3,548 ----------- TOTAL ASSETS $20,134 =========== Liabilities and Stockholders' Equity Current liabilities: Advance ticket sales $2,300 Mileage Plus deferred revenue 1,745 Long-term debt maturing within one year 1,415 Accounts payable 926 Accrued salaries, wages and benefits 817 Current obligations under capital leases 464 Other 906 ----------- Total current liabilities 8,573 Long-term debt 6,281 ----------- Long-term obligations under capital leases 1,014 ----------- other liabilities and deferred credits: Mileage Plus deferred revenue 2,356 Postretirement benefit liability 1,940 Advanced purchase of miles 1,115 Deferred income taxes 537 Other 1,074 ----------- Total other liabilities and deferred credits 7,022 ----------- Stockholders' deficit: Preferred stock - Common stock 2 Additional capital invested 3,146 Retained deficit (5,765) Stock held in treasury (30) Accumulated other comprehensive income (109) ----------- (2,756) ----------- TOTAL LIABILITIES $20,134 =========== UAL Corporation and Subsidiary Companies Unaudited Statement of Consolidated Operations Three Months Ended June 30, 2010 (in millions) Operating revenues: Passenger - United Airlines $3,712 Passenger - Regional Affiliates 1,021 Cargo 190 Other operating revenues 238 ----------- Total Operating Expenses 5,161 Operating expenses: Aircraft fuel 1,198 Salaries and related costs 1,020 Regional affiliates 911 Purchased services 256 Aircraft maintenance materials and outside repairs 245 Landing fees and other rent 241 Depreciation and amortization 215 Distribution expenses 154 Impairments and special items 106 Aircraft rent 81 Cost of third party-sales 61 Other operating expenses 239 ----------- Total Operating Expenses 4,727 Earnings (loss) from operations 434 Other income (expense): Interest expense (171) Interest income 2 Interest capitalized 3 Miscellaneous, net 3 ----------- (163) Income before income taxes and equity in earnings of affiliates 271 Income tax expense (benefit) (2) ----------- Income before equity in earnings of affiliates 273 Equity in earnings of affiliates, net of tax - ----------- NET INCOME $273 =========== UAL Corporation and Subsidiary Companies Statement of Consolidated Cash Flows Three Months Ended June 30, 2010 (in millions) Cash flows provided (used) by operating activities: $874 Cash flows provided (used) by investing activities: Additions to property, equipment and deferred software (73) Advanced deposits on aircraft - (Increase) Decrease in restricted cash 33 Proceeds from asset sale-leasebacks - Proceeds from the sale of property and equipment 21 Other, net - ----------- (19) ----------- Cash flows provided (used) by financing activities: Proceeds from issuance of long-term debt 686 Repayment of long-term debt (70) Principal payments under capital leases (66) Increase in deferred financing costs (19) Proceeds from the issuance of common stock - Decrease in lease deposits 1 Other, net 3 ----------- 535 ----------- Increase (decrease) in cash and cash equivalents during the period 1,390 Cash and cash equivalents at beginning of the period 3,516 ----------- Cash and cash equivalents at end of the period $4,906 =========== * * * UAL posted profit that exceeded analysts' estimates on fuller planes and higher fares, Mary Jane Credeur of Bloomberg News relates. Ms. Credeur elaborates that UAL's second quarter profit excluding some costs was $430 million, or $1.95 a share, topping the $1.75 average of 12 analysts' prediction compiled by Bloomberg. That, Ms. Credeur continues, compares with a loss of $321 million, or $2.21, a year earlier according to UAL in a statement. Ms. Credeur says revenue jumped 28% to $5.16 billion as United took advantage of increasing business and leisure travel by raising fares. Ms. Credeur explains that United and other carriers have not added back planes that were parked during the recession, giving them more control over pricing as demand improves. Ms. Credeur adds that United's capacity revenue for each seat flown a mile jumped 27%, showing that the carrier is regarding control over fares. "The United team continues to execute," Glenn Tilton, UAL's chief executive, said in a FT interview. Jeremy Lemer of Financial Times points out that United surpassed expectations as it took advantage of a sharp rebound in passenger and cargo traffic to pack its aircraft and charge passengers more for tickets. In another interview with Bloomberg Television, Kathryn Mikells, UAL's chief financial officer, said, "To improve profitability, we need pricing power, and you get that by managing capacity." Ms. Mikells added in the Bloomberg interview that United's capacity will be little changed this year and that competitors have been very disciplined as well. In addition, United President John Tague noted at a conference call that the carrier sees a potential $1 billion in revenue from fees for checking luggage and other services, Ms. Credeur reports. Mr. Tague disclosed that United earns $400 million from bag fees, Bloomberg notes. As of July 20, 2010, trading of UAL's shares rose $1.02, or 4.8% to $22.40 at 4 p.m. New York time on the Nasdaq Stock Market, Ms. Credeur states. Mr. Lemer says over the year to date, United shares have risen more than 60%, boosted by operating results that have outperformed its peers. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. ULICO STANDARD: A.M. Best Withdraws B- Financial Strength Rating ---------------------------------------------------------------- A.M. Best Co. has withdrawn the financial strength rating (FSR) of B- (Fair) and issuer credit rating (ICR) of "bb-" and assigned an NR-3 (Rating Procedure Inapplicable) to the FSR and an "nr" to the ICR of Ulico Standard of America Casualty Company (USA Casualty) (San Francisco, CA). These rating actions stem from the commutation of the last remaining assumption reinsurance treaties with affiliate, ULLICO Casualty Company (ULLICO Casualty), effective July 1, 2009. USA Casualty is currently a clean shell company as it holds no loss reserves and has no active business writings. Concurrently, A.M. Best has affirmed the FSR of B+ (Good) and ICR of "bbb-" of ULLICO Casualty. The outlook for both ratings is positive. UNO RESTAURANT: Emerges from Chapter 11 --------------------------------------- Uno Restaurant Holdings Corporation has emerged from chapter 11 pursuant to its plan of reorganization, confirmed by the United States Bankruptcy Court for the Southern District of New York on July 6, 2010. "Today's successful emergence from Chapter 11 completes the restructuring process in just six months and allows us to turn our full attention to the growth and development of the Uno brands, which consist of our flagship casual dining restaurant, Uno Chicago Grill(R), our fast casual concept, Uno Due Go(R), our quick service format, Uno Express(R), and our packaged foods business, Uno Foods. We have emerged from this process with a strong balance sheet and enhanced liquidity, which will enable us to invest in our business. The event marks a new beginning for Uno," said Frank Guidara, President and Chief Executive Officer of the Company. Guidara added, "During the past six months, while we have been busy implementing our financial restructuring, we have also worked hard to prepare for an exciting future. In addition to a new and innovative menu launched earlier this month in Uno Chicago Grill, we have introduced two new product lines in our packaged foods business consisting of a line of frozen entrees and our line of Tastefuls(R), a hand-held, microwavable mini-calzone. In the next few weeks, we will be completing the renovation and re-opening of our Warwick, Rhode Island restaurant which will showcase the new Uno prototype of the future. In August and September, we will be opening new Uno Due Go units on the campuses of two major colleges and universities. This is in addition to the two highly successful Uno Due Go units already in operation at the Dallas Forth Worth airport. In addition, over the next few months, we will be opening several new Uno Express locations in high-traffic, high-profile venues." Mr. Guidara continued, "We could not have accomplished so much without the steadfast support of our amazing employees, franchisees, vendors, lenders and other stakeholders. I appreciate everything they have done and continue to do on our behalf. Their commitment to our success is what fuels everything we do." Rob Webster, senior managing director and co-founder of Twin Haven Capital Partners, the new majority shareholder of the Company said, "We have been associated with Uno for several years and believe that Uno is a great company that was hampered by an over- leveraged balance sheet. We are excited about the potential of its great brands now that we have an appropriate capital structure for the Company. I am looking forward to working with Frank and the rest of the management team, along with our shareholder partners, which include Coliseum Capital and Newport Global Advisors, to help Uno achieve its goals." Pursuant to the Plan, 100 percent of the Company's $142 million, 10 percent Senior Secured Notes, due in February 2011, has been converted into substantially all of the equity of the Company, thereby eliminating $14.2 million in annual interest payments and reducing total debt from $176.3 million to approximately $40 million. In connection with the emergence from Chapter 11, the Company arranged for $55 million of permanent, long-term exit financing comprised of a $30 million revolving credit facility, due in July 2015, provided by long-standing-lender Wells Fargo Capital Finance, part of Wells Fargo & Company, and $25 million of new notes, due February 2016, provided by a majority of the new equity holders. The Exit Facility allowed the Company to repay all outstanding amounts under its former Debtor in Possession Credit Facility, implement the provisions of the Plan, pay transaction costs and provide significant liquidity going forward to fund working capital needs and the Company's growth and investment plans. About Uno Restaurant Holdings Corporation Boston, Massachusetts-based Uno Restaurant Holdings Corporation -- http://www.unos.com/-- has 179 company-owned and franchised full-service Uno Chicago Grill restaurants located in 28 states, the District of Columbia, Puerto Rico, South Korea, the United Arab Emirates, Honduras, Kuwait, and Saudi Arabia. The company also operates a fast casual concept called Uno Due Go(R), a quick serve concept called Uno Express, and a consumer foods division which supplies airlines, movie theaters, hotels, airports, travel plazas, schools and supermarkets with both frozen and refrigerated private-label foods and branded Uno products. The Company and 152 affiliates filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-10209). The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. Weil, Gotshal & Manges LLP assist the Debtors in their restructuring effort. CRG Partners Group LLC is the restructuring advisor. Kurtzman Carson Consultants LLC serves as noticing and claims agent. US CONCRETE: Put Option Parties Commit to Purchase $50MM of Notes ----------------------------------------------------------------- On July 20, 2010, U.S. Concrete, Inc., entered into a Purchase Letter among the Company and Monarch Alternative Capital, L.P., Whitebox Advisors, LLC and York Capital Management Global Advisors, LLC (collectively, the "Put Option Parties") pursuant to which the Put Option Parties have granted the Company a put option. If the Company exercises the Put Option, the Put Option Parties will be obligated to purchase an aggregate of $50 million of convertible secured notes, subject to the satisfaction or waiver of the conditions set forth in the Purchase Letter. The Debtors will be reorganized pursuant to a joint plan of reorganization, dated as of June 2, 2010. The terms of the Convertible Notes will be on terms set forth in the Purchase Letter. The Purchase Letter contemplates that the other holders of the Company's 8.375% Senior Subordinated Notes due 2014 (the "Existing Notes") to the extent they are Qualified Institutional Buyers (as defined in Rule 144A under the Securities Act of 1933) or institutional accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), will be offered the opportunity to purchase Convertible Notes in an amount up to their pro rata holdings of the Existing Notes. The offer of Convertible Notes to holders of the Existing Notes and the purchase of Convertible Notes by the Put Option Parties and holders of the Existing Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent an applicable exemption from registration requirements. The amount of Convertible Notes purchased by the holders of the Existing Notes will reduce the aggregate commitment of the Put Option Parties pursuant to the Put Option. Each Put Option Party's commitment is subject to, among other things, (1) entry of an order by the Bankruptcy Court approving the Purchase Letter and authorizing the Debtors to execute, perform and incur their obligations under the Purchase Letter, (2) there not having occurred a dismissal or conversion of any Case into a chapter 7 liquidation or the appointment of a Chapter 11 trustee in any Case, (3)(a) no provision of the Plan (as filed with the Bankruptcy Court) having been amended, supplemented or otherwise modified in any respect in a manner materially adverse to the Put Option Parties without their consent and (b) not later than August 18, 2010, entry of an order confirming the Plan by the Bankruptcy Court in the Cases, (4) the Confirmation Order having become a final order, in full force and effect, (5) concurrently with the issuance of the Convertible Notes, all obligations under the Debtors' existing debtor-in possession financing (the "DIP Facility") (other than contingent obligations not then due and payable) having been repaid in full, all commitments under the DIP Facility having been terminated and all liens and security interests related to the DIP Facility have been terminated or released, (6)(a) there not occurring or becoming known to the Put Option Parties any events, developments, conditions or circumstances that, individually or in the aggregate, have had or could reasonably be expected to have a material adverse effect on the business, operations, property, condition (financial or otherwise) or prospects of the Company and its subsidiaries and (b) no material assets of the Debtors having been sold or agreed to be sold outside of the ordinary course of business, (7) the Company and the Put Option Parties having entered into definitive documentation relating to the Convertible Notes on the terms and conditions set forth in the Purchase Letter and otherwise customary for this type of transaction, and on the effective date of the Plan (a) there not having been an event of default under such documentation and (b) such documentation being in full force and effect, (8) the payment of the fees and reimbursement of out- of-pocket costs and expenses as set in the Purchase Letter, the Plan and the letter agreement between the Company and Paul, Weiss, Rifkind, Wharton & Garrison LLP ("Paul Weiss") regarding payment by the Company of fees and expenses to Paul Weiss as counsel to a group formed by certain holders of the Existing Notes, (9) the Effective Date and closing of the offering and issuance of the Convertible Notes (the "Transaction") having occurred not later than September 27, 2010, (10) the Offering Memorandum Supplement and related documentation with respect to the Transaction being complete and correct in all material respects and not misleading, (11) the Company's filings with the Securities and Exchange Commission between January 1, 2010, and the date of the Purchase Letter being complete and correct in all material respects and not misleading, as of the respective filing date, (12) substantially concurrently with the issuance of the Convertible Notes the Debtors and their lenders having entered into the definitive documentation for the first lien revolving facility referred to in the Purchase Letter and any related documentation, and all conditions to the borrowing under such facility being satisfied or waived, and on the Effective Date (a) there not having been an event of default under such facility and (b) such facility being in full force and effect, (13) the Put Option Parties having received such legal opinions, documents and other instruments as are customary for transactions of this type and (14) all governmental, shareholder or third party consents, if any, necessary for the consummation of the Transaction having been obtained. Proceeds of the Convertible Notes will be used to repay in full the DIP Facility and for working capital and general corporate purposes of the Company and its subsidiaries. The Purchase Letter will terminate on September 27, 2010. The Plan provides for the conversion of approximately $272 million of principal amount of 8.375% Senior Subordinated Notes due 2014 into equity in the reorganized company. Trade creditors are currently being paid in full in the ordinary course and are expected to be unaffected by the restructuring. A full-text copy of the Purchase Letter dated July 20, 2010, among U.S. Concrete, Inc., Monarch Alternative Capital, L.P., Whitebox Advisors, LLC and York Capital Management Global Advisors, LLC is available for free at http://researcharchives.com/t/s?6700 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. USG CORP: Posts $74 Million Net Loss for June 30 Quarter -------------------------------------------------------- USG Corporation reported second quarter 2010 net sales of $769 million, an operating loss of $25 million and a net loss of $74 million, or $0.74 per diluted share based on 99.5 million average diluted shares outstanding. The corporation's operating loss in the first quarter of 2010 was $82 million and its net loss for that quarter was $110 million. The company's balance sheet for June 30, 2010, showed $3.9 billion in total assets, $507.0 million in total current liabilities, $1.9 billion deferred income taxes, $20 million other liabilities, and $707.0 million commitments and contingencies, for a $740.0 million total stockholders' equity. "The significant reduction in the company's operating loss in the second quarter demonstrates the effectiveness of our many initiatives to improve margins and reduce overall costs," said William C. Foote, Chairman and CEO. "Market conditions during the quarter were similar to the prior quarter and modestly better than the environment experienced last year, but demand remains exceptionally weak. When the economy recovers and demand improves, we expect to achieve substantial operating leverage in our businesses." Adjusted for restructuring, impairment and other charges and income from a litigation settlement in the fourth quarter of 2009, the company's adjusted operating loss was $18 million in the second quarter of 2010, which compares to losses of $70 million in the first quarter of 2010 and $77 million in the fourth quarter of 2009. The adjusted operating losses exclude $7 million of restructuring and impairment charges in the second quarter 2010, $12 million of restructuring and impairment charges in the first quarter of 2010, and $31 million of restructuring and impairment charges and $97 million of income from the litigation settlement in the fourth quarter of 2009. A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?6709 About USG Corp. USG Corporation, headquartered in Chicago, Illinois, is a leading producer and distributor of building materials in the Unites States, Canada and Mexico. The company manufactures and markets gypsum wallboard and operates a specialty distribution business that sells to professional contractors. It also manufactures ceiling tiles and ceiling grids used primarily in commercial applications. Revenues for the last 12 months through March 31, 2010, totaled approximately $3.1 billion. * * * As reported by the Troubled Company Reporter on June 28, 2010, Moody's Investors Service downgraded USG Corporation's Corporate Family Rating and Probability of Default Rating to Caa1 from B3. In a related rating action Moody's downgraded the guaranteed senior unsecured notes due 2014 to B2 from B1 and the other senior unsecured debt to Caa2 from Caa1. The Speculative Grade Liquidity rating remains SIGIL-3. The outlook is stable. The downgrades result from weaker than previously anticipated operating performance. Moody's believes that potential demand increases for wallboard from North American new home construction and repair and remodeling will not be adequate to generate sufficient volumes and operating profits to cover USG's interest expense over the intermediate term. Furthermore, the non- residential construction end market, which accounts for about 30% of USG's revenues, is expected to contract well into 2011. VANTAGE DRILLING: S&P Assigns 'B-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B-' corporate credit rating to Vantage Drilling Co. At the same time, S&P assigned a preliminary 'B-' issue-level rating (the same as the corporate credit rating) to subsidiary Offshore Group Investment Ltd.'s planned $960 million senior secured note issuance due 2015. In addition, the debt issues were assigned a preliminary '3' recovery rating, indicating the expectation of meaningful (50% to 70%) recovery in the event of default. "The ratings on Vantage Drilling Co. reflect S&P's concerns about timely delivery and operational execution risk regarding the Platinum Explorer drillship, the company's aggressive debt leverage, its limited liquidity relative to fixed spending requirements, and its reliance on an asset that is currently under construction for a majority of cash flows," said Standard & Poor's credit analyst Marc Bromberg. S&P has also taken into consideration the company's limited operating history, narrow scale and scope, and concerns about near-term expiring contracts in a very difficult drilling price environment. In S&P's view, these concerns are partially offset by Vantage's relatively young and technically sophisticated fleet and favorable five-year $1.1 billion contract backlog for its Platinum Explorer drillship, assuming completion and operational schedules are met. Houston-based Vantage Drilling provides contract drilling services primarily to international oil and natural gas companies. Its fleet includes four owned and operated jackups along with the Platinum Explorer drillship that is under construction. The company expects that construction on the drillship will be completed by November and that it will be operational for its operator Oil and Natural Gas Corp. Ltd. by Dec. 31, 2010. Vantage also has a construction and operating management business that S&P forecasts could contribute 5% of the company's gross margin in 2010. Vantage is issuing $960 million in senior secured notes, $60 million of convertible notes to majority shareholder F3 Capital, and $50 million in common equity to acquire the remaining 55% stake in Mandarin Drilling Corp., which owes shipbuilder Daewoo Shipbuilding & Marine Engineering approximately $575 million (Mandarin owns the construction contract for the Platinum Explorer). Vantage will also use about $75 million of proceeds for equipment and oversight associated with the Platinum Explorer and most of the remaining proceeds to pay down approximately $152 million in existing credit facilities associated with the Emerald and Sapphire jackups and a $135 million principal payment for the 13.5% P2021 notes associated with the Topaz jackup. The negative outlook reflects S&P's view of the construction and mobilization risk associated with delivery of the Platinum Explorer. In the event the delivery of Platinum is delayed, the company will forfeit its rights to Platinum and could face a liquidity squeeze due to its funding requirement of a $70 million bond payment. Also, if the drillship is not successfully operating by March 11, 2011, and ONGC cancels its contract, Vantage is subject to renegotiation risk of the Platinum rig, which could result in lower ratings and leave the company's already weak liquidity position inadequate to meet its debt service requirements, in S&P's view. If the contract with ONGC begins as scheduled, S&P could revise the outlook to stable. VIKING SYSTEMS: Directors Acquire Stock Options ----------------------------------------------- William C. Bopp, director at Viking Systems, Inc., disclosed that he acquired options to acquire 37,500 shares of the company's common stock at $0.242 a share. The Stock options fully vest on the one year anniversary of grant date. The options were granted by the Company as compensation for services as an outside director. Mr. Bopp also has warrants to acquire 11,765,792 company shares at $0.18 a share. The warrants may be exercised between January 4, 2008, and January 3, 2013. Director William T. Tumber meanwhile disclosed acquiring options to buy 75,000 shares. The Stock options fully vest on the one year anniversary of grant date. The options were granted by the Company as compensation for services as an outside director. About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. At March 31, 2010, the Company had total assets of $3 million against total liabilities, all current, of $2.1 million, resulting in stockholders' equity of $847,854. The report from Viking Systems, Inc.'s independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, dated February 22, 2010, includes a going concern explanatory paragraph which states that factors relating to the Company's net losses and working capital concerns raise substantial doubt the Company's ability to continue as a going concern. Viking Systems said it will need to generate significant additional revenue to achieve profitability and it may require additional financing during 2010. "The going concern explanatory paragraph in the independent auditor's report emphasizes the uncertainty related to our business as well as the level of risk associated with an investment in our common stock," Viking Systems said. VIKING SYSTEMS: To Report Strategic Plan & Market Opportunities --------------------------------------------------------------- Viking Systems, Inc., has prepared a corporate presentation summarizing its business, market opportunities and related strategic plans. The full presentation is available for free at http://ResearchArchives.com/t/s?66f7 About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. At March 31, 2010, the Company had total assets of $3 million against total liabilities, all current, of $2.1 million, resulting in stockholders' equity of $847,854. The report from Viking Systems, Inc.'s independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, dated February 22, 2010, includes a going concern explanatory paragraph which states that factors relating to the Company's net losses and working capital concerns raise substantial doubt the Company's ability to continue as a going concern. Viking Systems said it will need to generate significant additional revenue to achieve profitability and it may require additional financing during 2010. "The going concern explanatory paragraph in the independent auditor's report emphasizes the uncertainty related to our business as well as the level of risk associated with an investment in our common stock," Viking Systems said. VISTEON CORP: Union Wants to Reinstate Retiree's Insurance ---------------------------------------------------------- BankruptcyData.com reports that the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, Communications Workers of America, AFL-CIO, CLC (IUE-CWA) filed with the U.S. Bankruptcy Court a motion to compel Visteon to immediately reinstate retiree health and life insurance for IUE CWA-represented retirees. BData says the motion asserts, "IUE-CWA respectfully submits that, at this juncture, an order to immediately reinstate the terminated retiree health and life insurance benefits should be issued. The appeal has already been won, and this Court has already found that the IUE-CWA retirees will be irreparably injured if they are deprived of these benefits." The Court scheduled an August 17, 2010 hearing to consider the motion. Separately, the IUE, CWA filed an objection with the Court to the Company's Revised Fourth Amended Joint Plan of Reorganization. The objection states, "The POR purports to release the Debtors from any liability for OPEB. (Docket No. 3471 at 34). However, such a release would violate the Opinion and Judgment which require the Debtors to restore retiree benefits during the bankruptcy Case. (Judgment at 2). Section 1129(a) provides that a plan may be confirmed only if all its requirements are met, including that 'the plan complies with the applicable provisions of this title.' 29 U.S.C. 1129(a)(1). Here, the POR does not comply with 1114(e)(1), which provides that debtors 'shall timely pay and shall not modify any retiree benefits' unless the debtor has achieved a modification of benefits under the 1114 procedures. Visteon has terminated retiree benefits for IUE-CWA retirees as of May 1, 2010, without following the requirements of 1114." 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). VITERRA INC: Moody's Assigns 'Ba1' Rating on Senior Unsec. Notes ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Viterra, Inc.'s C$500 million shelf prospectus for senior unsecured notes. Viterra's Ba1 Corporate Family Rating and other ratings were affirmed. The rating on Viterra's May 2010 proposed note offering was withdrawn. Proceeds from any notes issuance from the new shelf are to be used for debt reduction and for general corporate purposes. The proposed notes are expected to rank pari passu with all of Viterra's existing and future senior unsecured indebtedness including its recent C$1.6 billion global unsecured guaranteed revolving credit facility executed in May 2010. Viterra's Speculative Grade Liquidity Rating of SGL-2 indicating a good liquidity profile over the next 12 months was also affirmed. The outlook is stable. The shelf and the executed C$1.6 billion global revolving credit facility follow the September 2009 acquisition of ABB Grain Ltd. of Australia. While the C$1.4 billion acquisition was comprised of a prudent mix of 50% equity and 50% cash, the lack of a global unsecured revolving credit facility had been a modest credit concern. Future draws under the shelf, if used to pay down short term debt, will likely improve the overall credit and maturity profile of Viterra. Specific benefits recently achieved include: an improved maturity schedule, decrease in interest rate, removal of security requirements on debt, covenant consistency, and central global liquidity facility. The unsecured structure of Viterra's new credit facilities is a clear credit positive, as unsecured revolvers/debt are typically commensurate with investment grade ratings, while secured debt is unusual at the investment grade level. The Ba1 ratings continue to reflect the growth aspirations of Viterra management and incorporate an expectation of the financial impact of future acquisition activity. Prior to a positive rating move Moody's would look for the agricultural market dynamics to remain healthy and stable, for continued success by management at integrating ABB and other recent and potential acquisitions, and for investment grade credit metrics to be achieved and sustained over a multi-year period. Importantly Moody's would like to see sustainable generation of investment grade credit metrics within Viterra's new business profile. The generation of free cash flow is a typical trait for investment grade issuers, thus a free cash flow to debt ratio of over 8% on a sustainable basis would be seen as a positive for the rating. The stable outlook incorporates the assumption that future acquisition activity of material size would continue to be prudently financed. The outlook also reflects the desire by Moody's to see Viterra to perform over a longer period of time with its relatively new consolidated group of assets given the acquisition related growth strategy that management has undertaken. Viterra's annual revenues have grown from C$1.5 billion at the end of 2006 to C$7.5 billion for the LTM period ending April 30, 2010, and ABB could add C$2 billion in revenues in 2010 to the C$6.6 billion 2009 Viterra stand-alone revenues. Total assets were estimated to approach C$6.1 billion at the end of April 2010 up from C$774 million at the end of July 2006 an increase of over 680% over the last 45 months. Affirmations Issuer: Viterra Inc. -- Probability of Default Rating - Ba1 -- Corporate Family Rating- Ba1 -- Senior Unsecured Regular Bond/Debentures rated Ba1, LGD4, 58% moved from LGD4, 56% Assignments: -- Senior Unsecured Shelf, Assigned (P)Ba1 Withdrawals: -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Ba1, LGD4, 56% Viterra's SGL-2 rating, reflecting a good liquidity profile, is indicative of the company's significant cash generating capabilities, balanced by the high seasonal demands on working capital for its grain handling and agriproducts businesses (over 75% of Viterra's agriproducts are delivered from April through June). Ongoing liquidity concerns for grain processors center on volatility of crop and farm input pricing. For example, a significant increase in the cost of commodity grains can increase the working capital burden for Viterra and other processors, and these price movements will increase the cash requirements in managing the business. Viterra's liquidity is supported by its sizeable cash and marketable securities of approximately C$480 million as of the second quarter filings ending April 30, 2010. Additionally, Moody's estimate that Viterra had about C$400 million drawn on the new C$1.6 billion global multi currency credit facility at closing; the facility is used for managing the seasonal swings in working capital. Sustaining capital spending for 2010 is estimated at C$440 million. Viterra does not pay a dividend on its common stock and the company further benefits from having no near term maturities of its long-term debt. Moody's most recent announcement concerning the ratings for Viterra was on May 10, 2010, when Moody's confirmed the CFR and assigned a Ba1 to the proposed senior notes offered by the issuer. Viterra Inc., formerly known as Saskatchewan Wheat Pool Inc., is headquartered in Regina, Saskatchewan, and is the largest grain handler in Canada. The Viterra entity was formed on May 29, 2007 after the acquisition of Agricore United by Saskatchewan Wheat Pool. Viterra operates through three business segments; Grain Handling and Marketing, Agri-Products, and Processing, but derives the majority of their income through the Grain Handling and Marketing and Agri-Products business segment. In September 2009 Viterra acquired ABB for A$1.6 billion (C$1.4 billion) with 50% equity and 50% cash, adding global diversity, improved access to Asia, and market share. Revenues were C$7.5 billion for the 12 month period ending third-quarter April 30, 2010. WILDWING DEV'T: Unable to Obtain Funding, Wants Case Dismissed -------------------------------------------------------------- Wildwing Development, LLC, asks the U.S. Bankruptcy Court for the District of Colorado to dismiss its Chapter 11 case. The Debtor explains that since the petition date, it has sought to negotiate and restructure its obligations and has attempted to obtain the necessary financing to emerge from Chapter 11. These efforts have yet to yield any substantive results. Additionally, Bank of Colorado moved for relief from stay. The deadline for the Debtor to respond to this motion is July 29, 2010, with a hearing set for August 5. If relief from stay is granted, or the Debtor is unable to obtain financing or some other arrangement that would permit the Debtor to restructure or refinance its bank obligations, cause will exist for dismissal of the case. The Debtor relates that, to date, it was unable to propose or effectuate a Plan and, under the circumstances, does not presently have a reasonable likelihood of rehabilitation. It also does not have the financial resources to make the requisite monthly payments to BOC. The Debtor is represented by: Horowitz & Burnett, P.C. Bart B. Burnett, Esq. E-mail: bburnett@hblegal.net Kevin S. Neiman, Esq. E-mail: kneiman@hblegal.net 1660 Lincoln Street, Suite 1900 Denver, CO 80264 Tel: (303) 996-8600 Fax: (303) 996-8636 About Wildwing Development LLC Centennial, Colorado-based Wildwing Development LLC, is a single asset real estate. The Company filed for Chapter 11 bankruptcy protection on April 13, 2010 (Bankr. D. Colo. Case No. 10-18467). Bart B. Burnett, Esq., who has an office in Denver, Colorado, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10,000,000 to $50,000,000. WILLIAM ROSE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: William Rose & Associates, Inc. dba WRA Engineering 24911 Avenue Stanford, #204 Valencia, CA 91355 Bankruptcy Case No.: 10-39755 Chapter 11 Petition Date: July 20, 2010 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Pro Se Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Cornel Alvarado, CEO. WYNN RESORTS: Moody's Affirms Corporate Family Rating at 'Ba3' -------------------------------------------------------------- Moody's Investors Service affirmed Wynn Resorts, Limited's Ba3 Corporate Family and Probability of Default ratings and revised the company's rating outlook to positive from stable. The Ba3 rating on Wynn Las Vegas, LLC's $1.3 billion 6 5/8% first mortgage notes due 2014 was affirmed. The affirmation of Wynn's ratings consider Moody's favorable view of the consolidated entity's overall growth prospects, the company's moderately high leverage, very good liquidity, and the quality, popularity, and favorable reputation of Wynn's casino properties -- a factor that continues to distinguish the company from most other gaming operators. It also reflects the strong performance of the company's Macau operations, and Moody's expectations that such performance will continue. Key rating concerns include the challenging operating environment and supply growth in Las Vegas that will continue to pressure Wynn's earnings. And although the strength of Wynn's Macau operations supports its rating, Moody's does have some concern over the company's significantly exposure to Macau, as well as China's regulatory environment. Although gaming has taken place in Macau for a number of decades and the government has reaffirmed its support for the healthy development of the sector, its post- liberalization history remains short, with no stable track record in the existing regulatory environment. Also factored into the rating is Moody's expectation that Wynn will continue to pursue the development of high risk/high reward large-scale integrated casino and entertainment resorts. This rating action also acknowledges Wynn's recent announcement that it had commenced a cash tender offer for its Wynn Las Vegas $1.32 billion 6 5/8% first mortgage notes due 2014 with the proceeds from the offering of $1.32 billion of new first mortgage notes due 2020 to be issued by Wynn Las Vegas (not-rated). In addition, it recognizes Wynn's plan to amend Wynn Las Vegas' credit facility (not-rated) concurrent with the first mortgage note refinancing. Although these transactions improve Wynn's financial flexibility, they are leverage neutral. The outlook revision to positive from stable reflects Moody's favorable view of Wynn's earnings prospects in Macau. Macau currently accounts for about 65% of Wynn's consolidated revenue and about 75% of consolidate property-level EBITDA. The region has performed exceptionally well and Moody's anticipates that this trend will continue providing the company with the ability to absorb the earnings pressure at Wynn Las Vegas. At the same time, Macau's strong performance affords Wynn the opportunity to reduce and sustain consolidated debt/EBITDA (without giving consideration to cash balances) at or below 4 times, a level Moody's believe could support a higher rating. Ratings affirmed: * Wynn Resorts, Limited Corporate Family Rating at Ba3 * Wynn Resorts, Limited Probability of Default Rating at Ba3 * Wynn Las Vegas LLC $1.3 billion 6 5/8% first mortgage notes due 2014 at Ba3 (LGD 4, 50%) Moody's last rating action on Wynn occurred on October 14, 2009, when the company's rating outlook was revised to stable from negative and Wynn Las Vegas, LLC's first mortgage notes due 2014 were lowered to Ba3 from Ba2. Wynn owns and operates casino hotel resort properties in Las Vegas, Nevada and Macau, China. The company currently generates about $3.2 billion in annual net revenue. XODTEC LED: Posts $614,400 Net Loss in Q1 Ended May 31 ------------------------------------------------------ Xodtec LED, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $614,439 on $243,785 of revenue for the three months ended May 31, 2010, compared with a net loss of $896,844 on $230,087 of revenue for the same period of 2009. The Company's balance sheet at May 31, 2010, showed $1,786,400 in assets and $2,522,583 of liabilities, for a stockholders' deficit of $736,183. As reported in the Troubled Company Reporter on July 23, 2010, Simon & Edward, LLP, in City of Industry, Calif., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended February 28, 2010. The independent auditors noted that the Company has incurred significant operating losses, has serious liquidity concerns and may require additional financing in the foreseeable future. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?670b Headquartered in Jhonghe City, Taiwan, Xodtec LED, Inc. is a Nevada corporation incorporated on November 29, 2006, under the name Sparking Events, Inc. On June 28, 2009, the Company's corporate name was changed to "Xodtec Group USA, Inc." and on May 17, 2010, the Company's corporate name was changed to "Xodtec LED, Inc." The Company, through its subsidiaries, is engaged in the design, marketing and selling of advanced lighting solutions which are designed to use less energy and have a longer life than traditional incandescent, halogen, fluorescent light sources. The Company's wholly-owned subsidiaries, Xodtec Technology Co., Ltd.; Targetek Technology Co., Ltd.; UP Technology Co., Ltd., are organized under the laws of the Republic of China (Taiwan). The Company also owns a 35% interest in Radiant Sun Development S.A., a company organized under the laws of the Independent State of Samoa. ZALE CORP: Bank Can End Deal If Credit Sales Fall Below Threshold ----------------------------------------------------------------- Zale Corporation said two of its subsidiaries are parties to a Merchant Services Agreement with Citibank (South Dakota), N.A., under which Citibank provides private label credit cards. If the volume of credit card sales pursuant to the Agreement does not meet agreed-upon levels, Citibank is entitled to terminate the Agreement on 180 days notice, although the Company may avoid that termination by compensating Citibank for the Minimum Volume Shortfall. Citibank has given the Company three termination notices under the Minimum Volume Shortfall provisions of the Agreement, the first of which covered the twelve month period ended February 2010 and the two most recent of which covered the months of March, April and May 2010. Pursuant to the first notice, the Company paid Citibank approximately $5.4 million on June 15, 2010, of which approximately $1.3 million was subsequently refunded based upon a recalculation of the amount due. Pursuant to the second notice, the Company paid Citibank approximately $1.1 million on July 16, 2010. On July 19, 2010, the Company received the most recent notice, pursuant to which it is required to pay approximately $335,000 prior to August 18, 2010, in order to avoid termination on January 15, 2011. In the absence of an earlier termination, whether due to a termination notice in connection with a Minimum Volume Shortfall or otherwise, the Agreement is scheduled to expire in March 2011. All terminations are subject to the parties' obligation to continue to perform under the Agreement for up to an additional 365 days in order to facilitate the transition to a new provider of private label credit cards. The Company and Citibank are continuing negotiations on a non- exclusive basis with respect to a new agreement. Dallas, Texas-based Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating roughly 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at www.zales.com, www.zalesoutlet.com and www.gordonsjewelers.com As reported by the Troubled Company Reporter on February 10, 2010, The Deal.com's Sara Behunek reported that analysts said bankruptcy looms for Zale if it fails to restructure its debt and put in place a solid merchandising strategy. * Florida Lawyer Gets 8 Years for $2.6 Million Fraud Scheme ----------------------------------------------------------- Bankruptcy Law360 reports that a well-known Florida attorney has received an eight-year prison sentence for using his role as receiver and liquidation trustee in several legal actions to steal more than $2.6 million for his own benefit. Lewis B. Freeman, formerly of Lewis B. Freeman & Partners Inc., will spend 100 months in a Florida prison and three additional years on probation, Law360 says. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Share- Total Working Holders' Assets Capital Equity Company Company ($MM) ($MM) ($MM) ------- ------- ------ ------- -------- AUTOZONE INC AZO US 5,452.8 (293.1) (462.0) LORILLARD INC LO US 2,902.0 718.0 (37.0) DUN & BRADSTREET DNB US 1,699.5 (454.1) (778.3) MEAD JOHNSON MJN US 1,996.7 319.9 (583.7) NAVISTAR INTL NAV US 8,940.0 1,251.0 (1,198.0) BOARDWALK REAL E BEI-U CN 2,332.1 - (57.6) TAUBMAN CENTERS TCO US 2,572.3 - (494.8) BOARDWALK REAL E BOWFF US 2,332.1 - (57.6) CHOICE HOTELS CHH US 360.6 (6.3) (115.0) COOPER-STANDARD COSH US 1,686.4 433.1 (304.3) SUN COMMUNITIES SUI US 1,173.3 - (118.3) WEIGHT WATCHERS WTW US 1,093.0 (408.5) (700.1) CABLEVISION SYS CVC US 7,364.2 54.8 (6,201.5) WR GRACE & CO GRA US 3,957.9 1,177.5 (234.4) TENNECO INC TEN US 3,034.0 203.0 (14.0) IPCS INC IPCS US 559.2 72.1 (33.0) PETROALGAE INC PALG US 4.7 (13.9) (48.0) UNISYS CORP UIS US 2,711.8 320.6 (1,221.7) UAL CORP UAUA US 20,134.0 (1,590.0) (2,756.0) MOODY'S CORP MCO US 2,003.3 (138.9) (534.0) VENOCO INC VQ US 799.5 10.6 (127.6) DISH NETWORK-A DISH US 8,689.0 305.1 (1,850.3) CHENIERE ENERGY CQP US 1,883.2 37.6 (491.7) EXPRESS INC EXPR US 718.1 38.4 (81.8) VECTOR GROUP LTD VGR US 743.1 231.5 (13.4) NATIONAL CINEMED NCMI US 620.4 106.9 (462.7) HEALTHSOUTH CORP HLS US 1,716.1 90.6 (474.5) PROTECTION ONE PONE US 562.9 (7.6) (61.8) ARVINMERITOR INC ARM US 2,769.0 345.0 (877.0) DISH NETWORK-A EOT GR 8,689.0 305.1 (1,850.3) THERAVANCE THRX US 232.4 180.2 (126.0) REGAL ENTERTAI-A RGC US 2,588.9 (168.9) (260.7) REVLON INC-A REV US 765.8 63.9 (1,027.2) MERU NETWORKS IN MERU US 88.8 0.5 (4.1) DOMINO'S PIZZA DPZ US 427.6 92.8 (1,290.0) JUST ENERGY INCO JE-U CN 1,353.1 (513.7) (503.2) UNITED RENTALS URI US 3,574.0 24.0 (50.0) FORD MOTOR CO F US 195,485.0 (7,269.0) (5,437.0) CARDTRONICS INC CATM US 449.3 (36.6) (2.3) INCYTE CORP INCY US 502.7 332.9 (114.4) TEAM HEALTH HOLD TMH US 797.4 52.1 (58.6) KNOLOGY INC KNOL US 641.7 30.9 (28.3) WORLD COLOR PRES WC CN 2,641.5 479.2 (1,735.9) LIBBEY INC LBY US 776.9 128.0 (18.3) GRAHAM PACKAGING GRM US 2,126.4 187.6 (629.0) 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) INTERMUNE INC ITMN US 190.9 102.8 (21.3) US AIRWAYS GROUP LCC US 8,131.0 (220.0) (168.0) COMMERCIAL VEHIC CVGI US 276.8 105.5 (10.7) AFC ENTERPRISES AFCE US 114.6 (2.0) (11.5) SALLY BEAUTY HOL SBH US 1,531.5 366.1 (553.1) FORD MOTOR CO F BB 195,485.0 (7,269.0) (5,437.0) AMER AXLE & MFG AXL US 1,967.6 (0.3) (545.4) RURAL/METRO CORP RURL US 286.2 38.7 (100.9) JAZZ PHARMACEUTI JAZZ US 106.7 (31.2) (69.0) BROADSOFT INC BSFT US 68.3 1.7 (6.4) CENTENNIAL COMM CYCL US 1,480.9 (52.1) (925.9) WABASH NATIONAL WNC US 249.0 (154.6) (62.4) RSC HOLDINGS INC RRR US 2,690.2 (120.0) (33.8) BLUEKNIGHT ENERG BKEP US 303.6 (15.3) (147.2) EPICEPT CORP EPCT SS 6.3 0.2 (12.7) HALOZYME THERAPE HALO US 65.2 48.9 (3.2) AMR CORP AMR US 25,885.0 (2,015.0) (3,930.0) ALIMERA SCIENCES ALIM US 16.3 3.5 (42.7) CC MEDIA-A CCMO US 17,400.0 1,279.2 (7,054.8) MANNKIND CORP MNKD US 243.3 8.5 (100.9) NPS PHARM INC NPSP US 140.4 95.2 (227.6) CENVEO INC CVO US 1,563.5 212.7 (180.6) PDL BIOPHARMA IN PDLI US 358.3 (83.5) (501.1) SANDRIDGE ENERGY SD US 2,971.7 (33.9) (171.3) IDENIX PHARM IDIX US 61.0 16.8 (20.7) PALM INC PALM US 1,007.2 141.7 (6.2) SINCLAIR BROAD-A SBGI US 1,576.6 48.1 (187.8) QWEST COMMUNICAT Q US 19,362.0 (585.0) (1,120.0) LIN TV CORP-CL A TVL US 783.5 28.7 (156.5) PLAYBOY ENTERP-A PLA/A US 196.6 (9.6) (23.0) GENCORP INC GY US 963.4 140.3 (241.2) PLAYBOY ENTERP-B PLA US 196.6 (9.6) (23.0) ACCO BRANDS CORP ABD US 1,062.7 240.1 (118.0) VIRGIN MOBILE-A VM US 307.4 (138.3) (244.2) EASTMAN KODAK EK US 7,178.0 1,588.0 (53.0) WARNER MUSIC GRO WMG US 3,752.0 (557.0) (116.0) CONSUMERS' WATER CWI-U CN 895.2 (5.3) (254.9) GLG PARTNERS-UTS GLG/U US 403.5 155.5 (285.9) GLG PARTNERS INC GLG US 403.5 155.5 (285.9) HOVNANIAN ENT-A HOV US 2,029.1 1,358.9 (137.0) HOVNANIAN ENT-B HOVVB US 2,029.1 1,358.9 (137.0) MAGMA DESIGN AUT LAVA US 122.1 14.4 (4.3) ARRAY BIOPHARMA ARRY US 131.5 21.5 (109.5) EXELIXIS INC EXEL US 284.2 (32.7) (199.3) ARIAD PHARM ARIA US 50.4 (8.2) (110.8) ********* 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 ***