/raid1/www/Hosts/bankrupt/TCR_Public/100924.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 24, 2010, Vol. 14, No. 265
Headlines
1031 TAX: Court Approves $12-Mil. Wave II Lockton Settlement
155 EAST TROPICANA: Falcone Buys $130MM 1st Lien Debt
A&S SUPPLY: Case Summary & 20 Largest Unsecured Creditors
ABIOLA ALALADE: Case Summary & 20 Largest Unsecured Creditors
ABITIBIBOWATER INC: Reorganization Plan Sanctioned by Quebec Court
ABITIBIBOWATER INC: BCFC Wants to Share Report to Canadian Court
ABITIBIBOWATER INC: Wins OK for Consulting Service Providers
AFFINION GROUP: Moody's Assigns 'Caa1' Rating on $325 Mil. Notes
ALLIANT TECHSYSTEMS: Moody's Upgrades Corp. Family Rating to 'Ba2'
ALLIANZ GLOBAL: Chapter 15 Case Summary
ALLIANZ IARD: Chapter 15 Case Summary
AMERICAN MEDICAL: Moody's Affirms 'Ba3' Corporate Family Rating
AMERLINK LTD: N.C. App. Ct. Rejects Anticipatory Breach Claim
AMR CORP: Provides Eagle Eye Update, Sees $4.8BB Cash at End of Q3
ANADARKO PETROLEUM: Moody's Confirms 'Ba1' Senior Unsecured Rating
ANGELICA CORP: S&P Assigns Corporate Credit Rating at 'B'
AQUILEX HOLDINGS: S&P Puts 'B' Rating on CreditWatch Negative
ASCEND PERFORMANCE: S&P Assigns 'B' Corporate Credit Rating
ASIA8 INC: Posts $39,000 Net Loss in June 30 Quarter
AUDIO PRAXIS: Nightclub Closing Order Prompted Chapter 11 Filing
BANDER LAW: Attorney Sanctioned for Failure to Attend Hearing
BENDER SHIPBUILDING: Gulf Offshore Loses Bid to Pursue Guarantor
BEVERAGES & MORE!: S&P Gives Stable Outlook; Affirms 'B-' Rating
BIONEUTRAL GROUP: Posts $655,800 Net Loss in July 31 Quarter
BLOCKBUSTER INC: Files for Chapter 11 with Pre-Arranged Plan
BLOCKBUSTER INC: Receives Court Approval of "First Day Motions"
BLOCKBUSTER INC: Bankruptcy Won't Impact Canada Business
BLOCKBUSTER INC: Case Summary & 50 Largest Unsecured Creditors
BRADLEY HARDY: Case Summary & 20 Largest Unsecured Creditors
CALIFORNIA HOUSING: S&P Cuts Counterparty Credit Rating to 'CC'
CATAMOUNT ROAD: Case Summary & 3 Largest Unsecured Creditors
CCGI HOLDING: Moody's Assigns 'B3' Corporate Family Rating
CHARLES JEANNEL: Case Summary & 20 Largest Unsecured Creditors
CHARTER COMMUNICATIONS: S&P Assigns 'B' Rating on $1 Bil. Notes
CHEMTURA CORPORATION: Terminates Rights Offering
CLASSIC TRANSPORTATION: Case Summary & 5 Largest Unsec. Creditors
COAST CRANE: Case Summary & 20 Largest Unsecured Creditors
COMPUCOM SYSTEMS: S&P Puts 'B+' Rating on CreditWatch Negative
CONTECH CONSTRUCTION: Moody's Junks Corporate Family Rating
COYOTES HOCKEY: Debtors Skirt Trustee Appointment
COZUMEL CARIBE: Seeks to Delay Bid for U.S. Bankruptcy Relief
CREDIT ACCEPTANCE: S&P Raises Counterparty Credit Rating to 'BB'
CRESCENT RESOURCES: Trust Sues Duke Energy Over Loan
DAGAZ INTERNATIONAL: Files for Bankruptcy Under Chapter 7
DAVID FLYNN: Case Summary & 20 Largest Unsecured Creditors
DELUJO SPANISH: Case Summary & 18 Largest Unsecured Creditors
DENNY HECKER: Sued by Trustee for Cashing in on Insurance
DINEEQUITY INC: Moody's Assigns 'Ba2' Rating on $50 Mil. Notes
DINEEQUITY INC: S&P Assigns Corporate Credit Rating at 'B'
DUBAI WORLD: Gets Approval for $24.9 Billion Debt Plan
ELENA HOME CARE: Atty. Sanctioned for Failure to Attend Hearing
ELVIN LINARES: Case Summary & 20 Largest Unsecured Creditors
ECOSPHERE TECHNOLOGIES: Earns $4.7 Million in June 30 Quarter
EOS PREFERRED: Earns $1.0 Million in June 30 Quarter
EOS PREFERRED: Hires Grant Thornton as New Independent Auditors
FORT LOWELL: Case Summary & 6 Largest Unsecured Creditors
FREESCALE SEMICONDUCTOR: S&P Assigns 'CCC' Senior Unsec. Rating
FREESCALE SEMICONDUCTOR: Moody's Assigns 'Caa2' Rating on Notes
FUSION DESIGN: Voluntary Chapter 11 Case Summary
GANNETT CO: S&P Gives Positive Outlook, Affirms 'BB' Rating
GENERAL GROWTH: Hughes Heirs Deal to Be Presented at Plan Hearing
GENERAL GROWTH: Receives Nod for Corporate Structure Deals
GENERAL GROWTH: Wins Nod for ERISA Class Action Settlement
GENERAL MOTORS: Treasury Must Sell Shares at $133.78 to Break-Even
GENON ESCROW: Fitch Assigns Issuer Default Rating at 'B'
GENTEK HOLDING: S&P Assigns Corporate Credit Rating at 'B'
GLOBAL DIVERSIFIED: Earns $159,900 in July 31 Quarter
HACKLEMAN BROTHERS: Case Summary & 20 Largest Unsecured Creditors
HERITAGE CONSOLIDATED: Asks for Court's Nod to Obtain Financing
HERITAGE CONSOLIDATED: Files Joint Plan of Reorganization
HERITAGE CONSOLIDATED: Sec. 341(a) Meeting Scheduled for Oct. 21
HERITAGE CONSOLIDATED: Discloses Largest Unsecured Creditor
HERITAGE CONSOLIDATED: Taps Munsch Hardt as Bankruptcy Counsel
HFG 231: Section 341(a) Meeting Scheduled for Oct. 15
HFG 231: EF-43 Asks Court to Dismiss Bankruptcy Case
HHI HOLDINGS: S&P Affirms Corporate Credit Rating at 'B+'
INNKEEPERS USA: Court Sets October 29 Claims Bar Date
INNKEEPERS USA: Preferred Shareholders Want Official Committee
INNKEEPERS USA: Wells Fargo Wants to File Competing Plan
INOVA TECHNOLOGY: Earns $2.2 Million in July 31 Quarter
INT'L COMMERCIAL: Auditor Amper Combines Pratice with Eisner
JAMES MEIS: Voluntary Chapter 11 Case Summary
JEFFERSON COUNTY: Ala. Cir. Ct. Appoints John Young as Receiver
JMA LOGISTICS: Case Summary & 20 Largest Unsecured Creditors
KHAN, INC.: Case Summary & 7 Largest Unsecured Creditors
KM ALLIED: Case Summary & 3 Largest Unsecured Creditors
KNITNEY LINES: In Chapter 11 After Loss of Major Customer
LEHMAN BROTHERS: Fed Planned to Wind Down Brokerage
LEHMAN BROTHERS: Files Avoidance Suits to Recover $3 Billion
LEHMAN BROTHERS: Freddie Mac Objects to Aurora Bank Settlement
LEHMAN BROTHERS: Proposes Stay of Avoidance Actions
LOGAN'S ROADHOUSE: S&P Assigns 'B-' Rating on $355 Mil. Notes
LONGYEAR PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
MATEH EFRAIM: Helen-May's $1,500 Per Diem Admin. Claim Nixed
MAUI LAND: To Sell Kapalua Bay Course to TY Management for $24.1MM
MF GLOBAL: Fitch Maintains Preferred Stock Rating at 'BB+'
MOTOR COACH: KPS Capital Acquires Controlling Stake
MOUNT LEBANON: Case Summary & 20 Largest Unsecured Creditors
NANCY WILLIAMSON: Case Summary & 20 Largest Unsecured Creditors
NPS PHARMACEUTICAL: Closes Public Offering of 8-Mil. Shares
OBN HOLDINGS: Posts $4.9 Million Net Loss in March 31 Quarter
PACIFIC ENERGY: Reaches Deal with Alaska Over Oil Leases
PARADE HILL: Case Summary & 16 Largest Unsecured Creditors
PARKVIEW CARE: Genser Dubow Fees Cut for Duplicative Work
PENFIELD GROUP: Voluntary Chapter 11 Case Summary
PETROLEUM SERVICES: Case Summary & 18 Largest Unsecured Creditors
PHILADELPHIA NEWSPAPERS: Lenders, Perelman Enter $50 Million Bids
RANDAL JACKSON: Case Summary & 12 Largest Unsecured Creditors
RDS GROUP: Federal Judge Converts Case to Chapter 7 Liquidation
RESOLUTION DIGITAL: Voluntary Chapter 11 Case Summary
RHODE ISLAND: Case Summary & 11 Largest Unsecured Creditors
RITTEN HOUSE: Istar Tara to Place Building in Receivership
ROCK & REPUBLIC: Bluestar to Provide $60MM to Fund Ch. 11 Exit
ROCK US: Combined Hearing on Prepack Plan on November 9
RONALD TRIPODO: Case Summary & 20 Largest Unsecured Creditors
S&R LLC: Case Summary & 4 Largest Unsecured Creditors
SAM NGUYEN: Case Summary & 20 Largest Unsecured Creditors
SHOW DEPARTMENT: Voluntary Chapter 11 Case Summary
SIERRA F: Case Summary & 8 Largest Unsecured Creditors
SILVER SPOON: Case Summary & 20 Largest Unsecured Creditors
SINCLAIR BROADCAST: Unit to Issue $250MM of Sr. Unsec. Notes
SKY BRIDGE: Focus Management to Facilitate Real Estate Sale
SOUTHLAKE DENTAL: Voluntary Chapter 11 Case Summary
SPARTA COMMERCIAL: Posts $1.3 Million Net Loss in July 31 Quarter
SPRINGBOK SERVICES: Fifth Third Acquires Certain Assets
STEVE FICARRO'S: Case Summary & 20 Largest Unsecured Creditors
SUNESIS PHARMACEUTICALS: Board Approves Amended Payment Plan
SUREFIL LLC: Emerges from Chapter 11
TAILOR MADE: Voluntary Chapter 11 Case Summary
TRIBUNE CO: Judge Rules Chadbourne Can Represent Creditors
TRIBUNE CO: Names David Eldersveld as General Counsel
TRONOX INC: Ernst & Young Work to Include 2009 Tax Return Services
TRONOX INC: Kirkland & Ellis Charges $6.09 Mil. for Feb.-June Work
TRONOX INC: Proposes March 31 Extension of Removal Period
TUCSON ELECTRIC: Fitch Upgrades Issuer Default Rating to 'BB+'
UAL CORP: APA Backs Contintental-United Pilot Stand on Outsourcing
UAL CORP: Mikells Acquires, Disposes Of 7,750 Shares of Stock
UAL CORP: Reports August 2010 Traffic Results
ULTIMATE ESCAPE: Court Holds Off Approving Auction Rules
ULTIMATE ESCAPES: Sues Club Holdings for Poaching Members
ULTIMATE ESCAPES: Wants to Sell Substantially All of Assets
UNILAVA CORPORATION: Posts $277,600 Net Loss in June 30 Quarter
UNITRIN INC: Fitch Affirms 'BB+' Ratings on $560 Mil. Notes
VALEANT PHARMACEUTICALS: S&P Shifts Rating on $1.2BB Notes to BB-
VERTELLUS SPECIALTIES: S&P Assigns 'B' Corporate Credit Rating
VICTOR VALLEY: Potential Buyer, Union Object to Auction Rules
VICTOR VALLEY: Court Extends Filing of Schedules Until Oct. 7
VISTEON CORP: 2 Equity Holders Fail Bid to Stay Plan Confirmation
VISTEON CORP: Ernst & Young Gets $5.8 Mil. for December-May
VISTEON CORP: Retirees Want Committee Rejection Reconsidered
WASHINGTON MUTUAL: Examiner's Final Report to Be Filed Nov. 1
WASHINGTON MUTUAL: Wilmington Trust Claims Settlement Approved
WASHINGTON MUTUAL: Wins Approval of IRS Settlements
WASTEQUIP INC: S&P Raises Corporate Credit Rating to 'CCC'
WEST LOWELL: Case Summary & 2 Largest Unsecured Creditors
WESTERN STATES: Voluntary Chapter 11 Case Summary
WILLIAM LYON: S&P Downgrades Rating on Senior Notes to 'D'
WINDSOR PETROLEUM: S&P Affirms 'BB+' Rating on $239.1 Mil. Notes
WINDSTREAM CORPORATION: Fitch Puts 'BB+' Rating on $500 Mil. Notes
WINDSTREAM CORP: S&P Assigns 'B+' Rating on $500 Mil. Notes
ZALE CORP: Names Killion as CEO; Breeden Steps Down From Board
ZELIG HERSKOVITZ: Case Summary & 20 Largest Unsecured Creditors
* Bankruptcy Turnarounds Menaced by Investor Valuation Fights
* South Korean Pension Fund to Invest $300MM in U.S. Real Estate
* Lawmakers Criticize SIPC Method for Paying Ponzi Victims
* Wall Street Players Exposed By Lehman Collapse, Says Vernon
* BOOK REVIEW: Corporate Venturing - Creating New Businesses
Within the Firm
*********
1031 TAX: Court Approves $12-Mil. Wave II Lockton Settlement
------------------------------------------------------------
In In Re: Edward H. Okun Internal Revenue Service Sec. 1031 Tax
Deferred Exchange Litigation MDL No. 2028; Anita Hunter, et al. v.
Edward H. Okun, et al., C.A. No. 07-2795 (N.D. Calif.); Quirk
Infiniti, Inc. v. Wachovia Bank, N.A., C.A. No. 08-12060 (D.
Mass.), the Hon. James Ware of the United States District Court
for the Northern District of California signed on September 3 a
FINAL APPROVAL ORDER AND JUDGMENT OF DISMISSAL RE: WAVE II
SETTLEMENT WITH LOCKTON. The Plaintiffs sought (A) final approval
of the $12,000,000 "Wave II Lockton Settlement", between the
Plaintiffs, on behalf of themselves and all others similarly
situated, and, Gerard A. McHale, Jr., PA, Liquidation Trustee for
the 1031 Debtors Liquidation Trust pursuant to the plan of
reorganization confirmed in the chapter 11 bankruptcy cases for
the 1031 Tax Group, LLC, et al., on the one hand, and Defendant
San Francisco Series of Lockton Companies, LLC, on the other, and
(B) Judgment of Dismissal as to Lockton. The Wave II Lockton
Settlement was preliminarily approved on May 13, 2010. The Court-
approved Wave II Notice Documents were distributed to potential
Class Members as required before May 24, 2010. There were no opt-
outs from the Settlement Class and there were no objections to the
Wave II Lockton Settlement. Hollister & Brace, Foley, Bezek,
Behle & Curtis, and Zelle, McDonough and Cohen were re-appointed
as Class Counsel.
A copy of the Final Approval Order is available at:
http://www.leagle.com/unsecure/page.htm?shortname=infdco20100903a51
About 1031 Tax Group
Headquartered in Richmond, Virginia, The 1031 Tax Group LLC --
http://www.ixg1031.com/-- was a privately held consolidated group
of qualified intermediaries created to service real property
exchanges under Section 1031 of the Internal Revenue Code.
The Company and 15 of its affiliates filed for Chapter 11
protection on May 14, 2007 (Bankr. S.D.N.Y. Lead Case No.
07-11448). Gerard A. McHale, Jr., was appointed Chapter 11
trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq.,
at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the
Chapter 11 trustee. Kurtzman Carson Consultants LLC acts as
claims and notice agent. Thomas J. Weber, Esq., Melanie L.
Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig,
LLP, represent the Official Committee of Unsecured Creditors. As
of Sept. 30, 2007, the Debtors had total assets of $164,231,012,
total liabilities of $168,126,294, and a stockholders' deficit of
$3,895,282.
Former CEO Edward H. Okun is in federal prison at Northern Neck
Regional Jail in Warsaw, Virginia, after being convicted of mail
fraud and other charges. Mr. Okun allegedly engaged in several
misappropriations of funds of 1031 Tax Group and other entities.
The funds were used for Mr. Okun's lavish lifestyle including
acquiring properties and luxury asset.
155 EAST TROPICANA: Falcone Buys $130MM 1st Lien Debt
-----------------------------------------------------
Phil Falcone, who runs the $8 billion New York hedge fund
Harbinger Capital Management, bought Hooters Casino Hotel's
troubled $130 million senior loan, putting him in a prime
ownership position for when the casino seeks bankruptcy
protection, sources tell The New York Post.
Mr. Falcone, however, is prohibited by National Hockey League
rules from owning a casino. Mr. Falcone has a 40% stake in the
NHL's Minnesota Wild.
According to The Post, the casino, with gambling revenues eroding
since the recession (they are down 24% in the first quarter
compared to the previous year) has missed three straight semi-
annual debt payments of $5.7 million beginning in April 2009. In
the first quarter, the casino, which has 620 slot machines and 24
table games, managed a loss of $3.9 million on $11.3 million in
revenue.
One debt investor told The Post that Mr. Falcone's is considering
a plan that would include selling some of the debt position for
between 25 cents and 27 cents on the dollar.
About 155 East Tropicana
Las Vegas, Nev.-based 155 East Tropicana, LLC, was formed in
June 2004 to acquire the Hotel San Remo Casino and Resort, a
casino hotel located in Las Vegas, Nevada, from Eastern & Western
Hotel Corporation. The Hotel San Remo was renovated and re-
branded and is now known as Hooters Casino Hotel.
The Hooters Casino Hotel is a separate property from the
restaurant chain, but controlled by some of the same people.
The Company's balance sheet at March 31, 2010, showed
$122.7 million in total assets and $171.8 million in total
liabilities, for a stockholder's deficit of $49.0 million.
According to the TCR on April 22, 2010, Moody's Investors Service
has withdrawn the ratings of 155 East Tropicana LLC for business
reasons. These ratings withdrawn include the 'Ca' Corporate
family rating.
Ernst & Young LLP, in Las Vegas, Nev., has expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted in its report filed together with
the company's annual report on Form 10-K for the year ended
December 31, 2009, that the Company has incurred recurring
operating losses, has a working capital deficiency and has an
accumulated deficit. In addition, on April 7, 2009, the Company
received a notice of default in connection with the Company's
credit facility. "The Company has been unable to meet 2009
payment obligations under certain debt agreements and anticipates
they will be unable to meet 2010 payment obligations under certain
debt agreements, which, absent forbearance or waiver from the
creditors, will result in additional events of default."
A&S SUPPLY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: A&S Supply Co., Inc.
1416 Poplar St.
Flint, MI 48503
Bankruptcy Case No.: 10-35065
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
Eastern District of Michigan (Flint)
Judge: Daniel S. Opperman
Debtor's Counsel: Rozanne M. Giunta, Esq.
LAMBERT, LESER, ISACKSON, COOK & GIUNTA, P.C
916 Washington Ave., Suite 309
Bay City, MI 48708
Tel: (989) 893-3518
Fax: (989) 894-2232
E-mail: rmgiunta@lambertleser.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/mieb10-35065.pdf
The petition was signed by Cheryl A. Gifford, president.
ABIOLA ALALADE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Joint Debtors: Abiola Ajibola Alalade
Timothy Olufemi Alalade
12824 Stone Brook Drive
Fort Lauderdale, FL 33330
Bankruptcy Case No.: 10-38390
Chapter 11 Petition Date: September 21, 2010
Court: U.S. Bankruptcy Court
Southern District of Florida (Fort Lauderdale)
Judge: Raymond B. Ray
Debtors' Counsel: Claudette Marie Brevitt-Schoop, Esq.
20401 NW 2 Avenue, #220
Miami, FL 33169
Tel: (305) 653-6959
E-mail: marie@brevittschoop.com
Scheduled Assets: $1,660,679
Scheduled Debts: $3,152,542
A list of the Joint Debtors' 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/flsb10-38390.pdf
ABITIBIBOWATER INC: Reorganization Plan Sanctioned by Quebec Court
------------------------------------------------------------------
AbitibiBowater Inc. disclosed that the Quebec Superior Court today
rendered an order sanctioning the Company's plan of reorganization
under the Canadian Companies' Creditors Arrangement Act. As
previously announced, on September 14 and 21, 2010, respectively,
the Company received approvals for its plans of reorganization
from affected creditors under the CCAA in Canada and chapter 11 of
the U.S. Bankruptcy Code in the United States, except with respect
to Bowater Canada Finance Corporation (BCFC), a special purpose
company subsidiary with no operating assets, which has been
excluded from the Company's plans of reorganization.
"We are pleased to have received an order from the Quebec Superior
Court sanctioning our CCAA plan," stated David J. Paterson,
President and Chief Executive Officer. "The rendering of this
court order represents a major milestone in the successful
restructuring of our Company."
The confirmation hearing under the Chapter 11 process is scheduled
to start on September 24, 2010, in the U.S. Bankruptcy Court in
Delaware. Subject to the satisfaction of certain conditions
provided for in the plans of reorganization, AbitibiBowater
continues to expect emergence from creditor protection this fall.
The sanction order rendered by the Quebec Superior Court on the
CCAA reorganization plan will be available through
http://www.abitibibowater.com/restructuring/
About AbitibiBowater Inc.
AbitibiBowater (OTC: ABWTQ) produces newsprint, commercial
printing papers, market pulp and wood products. It is the eighth
largest publicly traded pulp and paper manufacturer in the world.
AbitibiBowater owns or operates 22 pulp and paper facilities and
26 wood products facilities located in the United States, Canada
and South Korea. The Company also recycles old newspapers and
magazines.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). The Company and its
Canadian affiliates commenced parallel restructuring proceedings
under the Companies' Creditors Arrangement Act before the Quebec
Superior Court Commercial Division the next day. Alex F. Morrison
at Ernst & Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Pauline K. Morgan,
Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt &
Taylor, in Wilmington, represent the Chapter 15 Debtors.
U.S. Bankruptcy Judge Kevin Carey handles the Chapter 11 cases of
AbitibiBowater Inc. and its U.S. affiliates and the Chapter 15
case of ACI, et al.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: BCFC Wants to Share Report to Canadian Court
----------------------------------------------------------------
Bowater Canada Finance Corporation asks the U.S. Bankruptcy Court
to authorize Lisa Donahue to furnish a report concerning certain
intercompany transactional claims alleged to be asserted by BCFC
against various affiliates entities and related parties to the
Superior Court, Commercial Division, for the Judicial District of
Montreal, Canada.
The Canadian Court presides over the Canadian Debtors' proceedings
under the Companies' Creditors Arrangement Act.
Moreover, BCFC wants to file the Transaction-based Claims Report
on a strictly confidential basis for review and consideration
solely by:
(i) the judges overseeing the CCAA proceedings;
(ii) the monitor appointed in the CCAA proceedings and the
monitors' professional;
(iii) counsel for the CCAA Debtors; and
(iv) the parties identified in the Bankruptcy Court's July 7,
2010 Retention Order for the retention of AP Services LLC
as special advisor for BCFC and Lisa Donahue as BCFC's
vice president for restructuring.
BCFC notes that its request is in line with the Debtors' Motion
for "advice and direction" from the Canadian Court. BCFC says
that in line with the Canadian Advice Motion, it may be important
for the Canadian Court to have the benefit of the findings
reflected in the Transaction-based Claims Report.
About AbitibiBowater Inc.
AbitibiBowater (OTC: ABWTQ) produces newsprint, commercial
printing papers, market pulp and wood products. It is the eighth
largest publicly traded pulp and paper manufacturer in the world.
AbitibiBowater owns or operates 22 pulp and paper facilities and
26 wood products facilities located in the United States, Canada
and South Korea. The Company also recycles old newspapers and
magazines.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). The Company and its
Canadian affiliates commenced parallel restructuring proceedings
under the Companies' Creditors Arrangement Act before the Quebec
Superior Court Commercial Division the next day. Alex F. Morrison
at Ernst & Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Pauline K. Morgan,
Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt &
Taylor, in Wilmington, represent the Chapter 15 Debtors.
U.S. Bankruptcy Judge Kevin Carey handles the Chapter 11 cases of
AbitibiBowater Inc. and its U.S. affiliates and the Chapter 15
case of ACI, et al.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: Wins OK for Consulting Service Providers
------------------------------------------------------------
AbitibiBowater Inc. and its units received the U.S. Bankruptcy
Court's authority to hire Deloitte Consulting LLP as their
consulting service providers nunc pro tunc to July 5, 2010, in
connection with their anticipated emergence from Chapter 11.
The Debtors have selected Deloitte Consulting in light of the
firm's vast experience in bankruptcy-related services and the
firm's familiarity with their operations and restructuring
strategy.
As consulting service providers, Deloitte Consulting is expected
to:
(a) organize formation and staffing of planning process which
will serve to increase the Debtors' effectiveness as they
emerge from Chapter 11;
(b) manage Program Management Office reporting and issue
tracking;
(c) identify issues and risks that may cause delays in Day 1
readiness and inform the Debtors and other relevant
stakeholders of risks that arise;
(d) advise on development of blueprints for functional areas
required to support the Reorganized Debtors;
(e) advise on preparation for Day 1 including readiness
testing and identifying interdependencies;
(f) advise on preparation for the smooth functioning of key
departments (Finance, Treasury, HR, Payroll, etc.) post-
emergence;
(g) advise on development and delivery of informative pre-Day
1, Day 1 and post-Day 1 communications to employees,
retirees, vendors, suppliers and other stakeholders;
(h) advise work-stream owners on Plan optimization and
contingency planning; and
(i) provide other related services as may be requested in
writing by the Debtors and agreed to by the firm.
The Debtors aver that they will take every effort to ensure that
the service Deloitte Consulting will provide will not duplicate or
overlap with services provided by other retained advisors or
Deloitte's affiliates.
The Firm intends to charge the Debtors for the contemplated
services based on these hourly rates:
Partner, Principal or Director $620
Senior Manager $520
Manager $445
Senior Consultant $330
Staff Consultant/Business Analyst $260
The Firm also intends to charge necessary expenses incurred in
connection with its retention.
Deloitte Consulting's engagement letter with the Debtors provides
that the Debtors will indemnify the firm under certain
circumstances.
Michael J. Puleo, a director at Deloitte Consulting, assures the
Court that his firm does not hold any interest adverse to the
Debtors with respect to matters for which the firm is to be
retained.
* * *
The indemnification provisions that form part of the Engagement
Letter were approved, subject to certain modifications. Among
other things, Deloitte Consulting will not be entitled to
indemnification, contribution or reimbursement other than those
described in the Engagement Letter. The Debtors will have no
obligation to indemnify Deloitte Consulting for any claim or
expense that is determined to have arisen from the firm's gross
negligence. The firm must file an application to the Court if it
believes it is entitled to payment by the Debtors on account of
the Debtors' indemnification, contribution and reimbursement
obligations under the Engagement Letter.
About AbitibiBowater Inc.
AbitibiBowater (OTC: ABWTQ) produces newsprint, commercial
printing papers, market pulp and wood products. It is the eighth
largest publicly traded pulp and paper manufacturer in the world.
AbitibiBowater owns or operates 22 pulp and paper facilities and
26 wood products facilities located in the United States, Canada
and South Korea. The Company also recycles old newspapers and
magazines.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). The Company and its
Canadian affiliates commenced parallel restructuring proceedings
under the Companies' Creditors Arrangement Act before the Quebec
Superior Court Commercial Division the next day. Alex F. Morrison
at Ernst & Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Pauline K. Morgan,
Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt &
Taylor, in Wilmington, represent the Chapter 15 Debtors.
U.S. Bankruptcy Judge Kevin Carey handles the Chapter 11 cases of
AbitibiBowater Inc. and its U.S. affiliates and the Chapter 15
case of ACI, et al.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AFFINION GROUP: Moody's Assigns 'Caa1' Rating on $325 Mil. Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a Caa1 rating to the
proposed $325 million senior unsecured notes due 2015 of Affinion
Group Holdings, Inc. Proceeds from the notes issuance are expected
to be used to refinance about $291 million in senior unsecured
term loans (pay-in-kind) and the remainder for general corporate
purposes and related transaction fees. These ratings have been
assigned subject to Moody's review of final documentation
following completion of the notes offering. Moody's has also
affirmed the B2 corporate family and probability of default rating
and, the SGL-1 speculative grade liquidity rating. The rating
outlook is stable.
This instrument rating and LGD assessment and been affected:
Affinion Group, Inc.
-- Affirmed $125 million 5 year senior secured revolver, Ba2
(LGD2, 20% from LGD2, 18%)
-- Affirmed $875 million 6 year senior secured term loan, Ba2
(to LGD2, 20% from LGD2, 18%)
-- Affirmed $454 million senior unsecured notes due 2013, to B3
(LGD4, 61% from LGD4, 60%)
-- Affirmed $356 million senior subordinated notes due 2015,
Caa1 (to LGD5, 81% from LGD5, 82%)
Affinion Group Holdings, Inc.
-- Rated $325M senior unsecured notes due 2015, Caa1 (LGD6,
93%)
-- Affirmed Corporate Family Rating, B2
-- Affirmed Probability of Default Rating, B2
-- Affirmed Speculative Grade Liquidity Rating, SGL-1
This rating will be withdrawn upon closing of the transaction and
subject to final review of terms:
-- $281 million senior unsecured term loan due 2012, Caa1 (LGD6,
93%)
Ratings Rationale
The B2 Corporate Family Rating reflects weak financial strength
metrics for the rating category, lower member counts in the North
American membership and supplemental insured product lines, and
the risk that a difficult economic environment could continue to
pressure consumer response rates to the company's product
offerings. The ratings are supported by the company's large
member base, direct marketing expertise, track record of steady
financial performance and growth opportunities in international
markets.
The stable outlook anticipates steady revenues and profitability
in 2010 and improving free cash flow. Moody's expect Affinion to
use a significant portion of post-refinancing cash balance for
either acquisitions or debt repayments during 2011.
The rating outlook could be changed to positive if a sustained
improvement in profitability or debt reduction results in debt to
EBITDA of less than 5 times and free cash flow to debt of about
8%.
The ratings could be pressured by a material decline in
profitability resulting from (i) the loss of a top affinity
partner, (ii) a sharp decline in the member base, or (iii) the
failure to achieve growth in average revenue per member. A debt-
financed dividend or recapitalization could also pressure the
ratings. The ratings could be downgraded if Debt to EBITDA and
free cash flow to debt are sustained at over 6.5 times and below
2%, respectively.
Affinion is a leading provider of marketing services and loyalty
programs to many of the largest financial service companies
globally. The company provides credit monitoring and identity-
theft resolution, accidental death and dismemberment insurance,
discount travel services, loyalty programs, various checking
account and credit card enhancement services. Apollo Management
V, L.P., owns 97% of Affinion's common stock
ALLIANT TECHSYSTEMS: Moody's Upgrades Corp. Family Rating to 'Ba2'
------------------------------------------------------------------
Moody's Investors Service upgraded Alliant Techsystems Inc.'s
Corporate Family and Probability of Default ratings to Ba2 from
Ba3 and assigned Baa3 ratings to the company's $1.0 billion of new
bank credit facilities. At the same time, ratings on ATK's senior
subordinated and convertible subordinated note issues were raised
to Ba3 from B1. The outlook is stable.
Ratings changed with updated Loss Given Default point estimates:
-- Corporate Family to Ba2 from Ba3
-- Probability of Default to Ba2 from Ba3
-- Senior Subordinated notes to Ba3 (LGD-4, 68%) from B1 (LGD-4,
65%)*
-- Convertible Subordinated note to Ba3 (LGD-4, 68%) from B1
(LGD-4, 65%)
-- Existing Secured bank credit facilities to Baa3 (LGD-2, 13%)
from Ba1 (LGD-2, 16%)
* LGD point estimates on ATK's $280 million of convertible
subordinated notes will remain LGD-4, 65% pending their planned
redemption. The Ba3 rating and point estimate on the instrument
will be withdrawn upon closing of the redemption.
Ratings assigned
-- $600 million secured revolving credit facility, Baa3 (LGD-2,
14%)
-- $400 million secured term loan, Baa3 (LGD-2, 14%)
Ratings Rationale
The change in ratings follows ATK's receipt of commitments from
its bank group to amend its current credit facilities which will
extend a $600 million revolving credit and a $400 million term
loan, both of which will have five year maturities. The new
credits replace an existing $500 million revolving credit and
roughly $258 million outstanding under a term loan which were
scheduled to mature in March 2012. The refinancing further
improves ATK's liquidity, extends its debt maturities, and
provides incremental resources to address a $300 million maturity
in September 2011. The new bank credit facilities follow earlier
improvements in ATK's capital structure flowing from its
$350 million note issuance in September which will fund a
redemption of a convertible subordinated note that included a
contingent put feature. Collectively, these developments along
with sustained profitability and ongoing free cash flow generation
were considered sufficient to lift the underlying Corporate Family
and Probability of default ratings to Ba2 from Ba3.
The Ba2 Corporate Family and Probability of Default ratings
recognize ATK's material scale, profitability and consistent cash
flow contributions from its four defense and aerospace related
segments. Revenues and earnings have benefited from high levels
of U.S. defense and NASA budgets over the last few years and are
expected to experience favorable trends over the intermediate term
albeit at lower organic growth rates. The ratings also reflect
modest financial leverage that has declined through growth in
EBITDA. Adjustments for under-funded pension liabilities have
kept adjusted debt totals relatively constant at $2.5 billion
despite significant contributions to its defined benefit pension
plans. Still, ATK's capital structure continues with significant
levels of subordinated debt. These layers of junior debt can be a
platform on which additional senior obligations could be layered.
ATK's operating performance has produced improvement in debt
protection measures. A continuing substantial backlog of funded
orders, a generally supportive environment in the company's
operations and management's financial strategy are expected to
ultimately de-lever the firm over time. Nonetheless, growth in
several of the segments may only off-set lower revenues and
earnings in Aerospace Systems that could develop as Space Shuttle
activity winds-down and political uncertainties associated with
business awards for NASA's Constellation program (the Space
Shuttle's replacement) are resolved. The company continues with
both an acquisition strategy and a share repurchase authorization,
but currently does not pay dividends.
The stable outlook considers favorable prospects for sustained
performance, beneficial aspects of a substantial backlog of
orders, ongoing free cash flow and a strong liquidity profile.
Upward rating pressure could develop should the firm's revenues
and backlog expand beyond current expectations and become evident
in quantitative measures of debt/EBITDA at or below 3 times,
EBITA/interest above 4 times and FCF/debt consistently above 10%.
Conversely, increases in funded debt levels that facilitated share
repurchases or large acquisitions resulting in debt/EBITDA at 4
times or above or if FCF/debt fell below 5% of total debt, could
establish downward pressure on the outlook or ratings.
Ratings on the company's $280 million of convertible subordinated
notes due 2024, which have been called and will be redeemed on
October 14, 2010, will be withdrawn upon formal conclusion of that
process. Similarly, existing ratings on the company's current
bank credit facilities will be withdrawn upon effectiveness of the
new facilities.
The last rating action was on September 8, 2010 at which time the
outlook was changed to positive and a rating was assigned to a
$300 million senior subordinated note issue.
Alliant Techsystems Inc, headquartered in Edina, MN, is a leading
supplier of propulsion, composite structures, munitions, precision
capabilities and civil and sporting ammunition. The company
operates four segments: Aerospace Systems, Armament Systems,
Missile Products, and Security & Sporting. Revenues in fiscal
2010 were approximately $4.8 billion.
ALLIANZ GLOBAL: Chapter 15 Case Summary
---------------------------------------
Chapter 15 Petitioner: David McGuigan
Chapter 15 Debtor: Allianz Global Corporate & Specialty (France)
fka Compagnie d'Assurances Maritimes
Aeriennes et Terrestres
aka Allianz Marine & Aviation (France)
787 Seventh Avenue
New York, NY 10019
Tel: (212) 839-5300
Chapter 15 Case No.: 10-14990
Type of Business: The Debtor is one of the leading providers of
Property and Casual insurance, large engineering
projects and risk management solutions.
Chapter 15 Petition Date: September 22, 2010
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: Lee Stein Attanasio, Esq.
SIDLEY AUSTIN LLP
787 Seventh Avenue
New York, NY 10019
Tel: (212) 839-5300
Fax: (212) 839-5599
E-mail: lattanasio@sidley.com
Estimated Assets: More than $100 million
Estimated Assets: $1,000,001 to $100,000,000
The Debtor did not file a list of creditors together with its
petition.
ALLIANZ IARD: Chapter 15 Case Summary
-------------------------------------
Chapter 15 Petitioner: David McGuigan
Chapter 15 Debtor: Allianz IARD
fka Assurances Generales de France I.A.R.T.)
787 Seventh Avenue
New York, NY 10019
Tel: (212) 839-5300
Chapter 15 Case No.: 10-14991
Type of Business: The Debtor, which is based in Paris, France,
offers non life insurance services.
Chapter 15 Petition Date: September 22, 2010
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: Lee Stein Attanasio, Esq.
SIDLEY AUSTIN LLP
787 Seventh Avenue
New York, NY 10019
Tel: (212) 839-5300
Fax: (212) 839-5599
E-mail: lattanasio@sidley.com
Estimated Assets: More than $100 million
Estimated Assets: $1,000,001 to $100,000,000
The Debtor did not file a list of creditors together with its
petition.
AMERICAN MEDICAL: Moody's Affirms 'Ba3' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service affirmed the Ba3 Corporate Family and
Probability of Default Ratings of American Medical Systems
Holdings, Inc. Concurrently, Moody's upgraded the first lien
senior secured revolver and term loan to Baa3 due to changes in
the capital structure, as AMS has repaid a significant portion of
its senior secured term loan. The rating on the 3.25% convertible
senior subordinated notes remains B1 and the Speculative Grade
Liquidity Rating remains SGL-1, reflecting Moody's expectations
for very strong liquidity over the near-term. The outlook for the
ratings is stable.
Ratings Changed/LGD estimates revised:
-- $65 million senior secured revolver due 2012 to Baa3 (LGD1,
7%) from Ba1 (LGD2, 18%);
-- $59 million (originally $365 million) senior secured term
loan B due 2012 to Baa3 (LGD1, 7%) from Ba1 (LGD2, 18%); and
-- $62 million (outstanding as of July 3, 2010) convertible
senior subordinated notes due 2036 to B1 (LGD4, 63%) from B1
(LGD5, 74%).
Ratings Rationale
The Corporate Family Rating of Ba3 is supported by AMS's moderate
leverage and strong interest coverage and cash flow to debt
metrics. Credit metrics have been bolstered over the past several
years by considerable debt repayment with free cash flow and
proceeds from business divestitures. The ratings are also
supported by the company's leading positions in most of its niche
markets and its track record of innovation in men's and women's
pelvic health. Moody's expect liquidity to remain very strong,
supported by nearly $70 million of cash and investments, strong
free cash flow, undrawn revolver availability and ample covenant
cushion.
The ratings are constrained by the company's limited size, both on
an absolute basis, and relatively to competitors. Further, while
AMS has a number of products within the men's and women's health
segments, the majority of products are used by surgical urologists
and surgical gynecologists, resulting in a relatively narrow
business niche. The ratings are also constrained by the highly
competitive nature, high rate of technological innovation and low
customer switching costs in some of AMS' markets. These dynamics
can lead to a relatively rapid shift in market share when new
products are brought to market. That said, AMS has maintained a
very significant share of the men's pelvic health market for many
years. Lastly, most of AMS' products are used to treat "quality
of life" ailments, and can be negatively affected by weak economic
cycles as the procedures can often be deferred or foregone by
patients.
Moody's see the ratings and outlook as being stable over the near-
term. If over time, the company were to expand its scale and
diversity through organic growth or a moderate acquisition
strategy, Moody's could upgrade the ratings. Loss of market share
in key product areas, a meaningful deterioration in free cash
flow, or the pursuit of a significant debt financed acquisition
could lead to pressure on the ratings.
American Medical Systems Inc., headquartered in Minnetonka,
Minnesota, develops and delivers medical solutions to target
patients and physicians (primarily urologists, gynecologists,
urogynecologists and colorectal surgeons) treating men's and
women's pelvic health conditions. The company's products for men
deal with erectile restoration, incontinence and urethral
strictures, and benign prostatic hyperplasia; products for women
target urinary and fecal incontinence and pelvic organ prolapse.
For the twelve months ended July 3, 2010, the company reported
sales of approximately $541 million.
AMERLINK LTD: N.C. App. Ct. Rejects Anticipatory Breach Claim
-------------------------------------------------------------
Joseph Kintz sued AmerLink Ltd. and Richard Spoor, its president
and chief operating officer, in December 2008 for breach of
contract, breach of express warranty, breach of implied warranty
of merchantability, and others. The parties had entered into a
settlement in June 2008 that required AmerLink's payment of
$1,300,000 in exchange for certain releases. The settlement
payments were to be made in five installments. AmerLink made the
first two payments in a timely manner. Seven months before the
third installment was due, Mr. Kintz's attorney asked AmerLink to
confirm that it would make the next payment. Mr. Kintz did not
receive a reply, prompting the filing of the lawsuit.
Mr. Spoor sought dismissal of the complaint, arguing that the
settlement agreement had resolved all claims and that the
complaint failed to state a claim upon which relief can be
granted.
AmerLink filed for Chapter 11 bankruptcy on February 11, 2009. At
a March 2, 2009 hearing, the trial court granted Mr. Spoon's
motion.
Mr. Kintz argues that the trial court erred by not honoring the
automatic bankruptcy stay. On September 7, 2010, the Court of
Appeals of North Carolina rejected Mr. Kintz's claims. Judge Rick
Elmore, writing for a three-man panel, held that it is not clear
from the record how such an argument is relevant to this matter,
nor does plaintiff elucidate the issue for the Court of Appeals,
and as such this assignment of error is overruled.
Plaintiff next argues that the trial court erred because it
dismissed the suit based on its belief that, once AmerLink had
been dismissed as a party to the suit, the suit itself could no
longer proceed. "This argument seems to be based on one comment
made by the trial court at the end of the motion hearing that
plaintiff understood to mean that, when AmerLink was dismissed as
a party to the case, the complaint was no longer valid against
defendant alone. However, as the trial court did not state, in
either the written order or in its ruling in court, that this was
the basis for its ruling, we decline to infer that such was the
case. This assignment of error is overruled," Judge Elmore wrote.
Plaintiff also argues that the trial court erred in dismissing his
complaint because the documents before the court were sufficient
to establish a prima facie case for actual or anticipatory breach
of the settlement agreement. "At best, plaintiff can claim a lack
of response to a demand for clarification. Plaintiff can point
this Court to no case law suggesting that such a lack of response
constitutes the type of "positive, distinct, unequivocal, and
absolute refusal to perform" required to constitute anticipatory
breach. As such, this assignment of error is overruled," Judge
Elmore ruled.
Chief Judge John C. Martin and Judge Wanda G. Bryant concurred.
A copy of the Court's Opinion is available at:
http://www.leagle.com/unsecure/page.htm?shortname=inncco20100907522
AMR CORP: Provides Eagle Eye Update, Sees $4.8BB Cash at End of Q3
------------------------------------------------------------------
AMR Corporation has posted its Eagle Eye communication to
investors. This Eagle Eye provides updated guidance for the third
quarter and the full year 2010.
Performance Update:
* Revenue: Third quarter mainline unit revenue is expected to
increase between 9.8% and 10.8% year over year,
and third quarter consolidated unit revenue is
expected to increase between 9.8% and 10.8%. In
total, Cargo and Other Revenue is anticipated to
increase between 6.6% and 7.6% relative to third
quarter 2009.
* Liquidity: AMR expects to end the third quarter with a cash
and short-term investment balance of approximately
$4.8 billion, including approximately $450 million
in restricted cash and short-term investments.
A full-text copy of the Guidance Update is available for free
at http://ResearchArchives.com/t/s?6b8a
About AMR Corporation
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company's balance sheet for June 30, 2010, showed
$25.8 billion in total assets, $9.3 billion in total current
liabilities, $9.1 billion in long-term debt, $526.0 million in
obligation under capital leases, $7.5 billion in pension and
postretirement benefits, $3.1 billion in other liabilities, and
a $3.9 billion stockholders' deficit.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings. It
has 'Caa1' corporate family and probability of default ratings
from Moody's. It has 'B-' corporate credit rating, on watch
negative, from Standard & Poor's.
ANADARKO PETROLEUM: Moody's Confirms 'Ba1' Senior Unsecured Rating
------------------------------------------------------------------
Moody's Investors Service confirmed Anadarko Petroleum Corporation
and its guaranteed subsidiaries' Ba1 senior unsecured rating, and
affirmed the SGL-2 Speculative Grade Liquidity rating. The
outlook is stable. This concludes the review for possible
downgrade of Anadarko's ratings that was initiated on June 18,
2010.
"While uncertainty remains as to the magnitude of the ultimate
exposure faced by the group following the oil spill caused by the
explosion on the Deepwater Horizon drilling rig, Moody's rating
confirmation and stable outlook includes a Moody's estimated
Anadarko payment of up to $8 billion dollars," said Francis J.
Messina, Vice President -- Senior Analyst.
The confirmation of Anadarko's ratings reflects improved
visibility on Anadarko's future financial profile as a result of
Anadarko's liquidity and financial flexibility. Moody's also
considered the financial disclosure provided at the time of BP's
release of its second quarter 2010 results, which included a BP
post-tax charge of $22 billion related to the Gulf of Mexico oil
spill.
Moody's acknowledges that uncertainty remains at this stage as to
the ultimate cost of the Gulf of Mexico oil spill to all parties.
Moody's rating confirmation and stable outlook reflects Moody's
expectation that Anadarko will be able to sustain financial
metrics that are commensurate with a Ba1 rating under a range of
likely outcomes for the ultimate total costs resulting from the
oil spill. And, Moody's believes that Anadarko should be able to
accommodate expenses and cash outlays representing its 25% percent
proportion of the total charges up to approximately $8 billion
within the Ba1 rating level. A detailed analysis of Anadarko's
exposure was published Monday, September 20th. For this analysis
Moody's has run various sensitivities including downside scenarios
reflecting: (i) a level of fines and penalties at the top end of
the range stipulated under the Clean Water Act; (ii) damages to
satisfy OPA 90 claims under the Gulf Coast Claims Facility; and,
(iii) litigation awards and settlements.
A positive outcome to key legal actions and investigations
together with the maintenance of operating performance and a
conservative financial policy at Anadarko could lead to a rating
upgrade.
Conversely, Anadarko's rating could be lowered should the ultimate
Gulf of Mexico oil spill related costs exceed Moody's range of
assumptions and/or the company's cash flow generation falls short
of current expectations.
The SGL-2 rating reflects Anadarko's good liquidity over the next
twelve months to meet its obligations. At June 30, 2010, cash
totaled $3.4 billion. Since then the company received
$450 million from Western Gas Partners for a dropdown, a
$5 billion five-year secured credit facility, and issued
$2 billion of seven year notes. Concurrently, the company has no
material debt maturities through 2015. Additionally, debt
covenants provide good headroom throughout the year. Three
financial covenants are required under the secured credit
facility: current ratio greater than 1.0x; leverage ratio less
than 4.5x, stepping down to 4.0x after 12/31/2011; and, a
collateral coverage ratio of greater than 1.75x.
Under Moody's Loss Given Default methodology Moody's has assigned
a Ba1 Probability of Default rating to the company. Based upon
the level of the secured debt in the capital structure in relation
to the size of the unsecured debt, the senior unsecured notes are
at the CFR level.
The last rating action on Anadarko was August 9, 2010, at which
time Moody's affirmed the company's CFR and SGL, and assigned a
Ba1 rating to new unsecured debt.
Anadarko Petroleum Corporation, a large independent exploration
and production company, is headquartered in The Woodlands, Texas.
ANGELICA CORP: S&P Assigns Corporate Credit Rating at 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B' corporate credit rating to Alpharetta, Ga.-based
Angelica Corp. The outlook is stable.
At the same time, S&P assigned its preliminary 'B+' issue rating
to the company's $185 million senior secured credit facility,
which consists of a five-year $35 million revolving credit
facility, a five-year $50 million term loan A, and a six-year
$100 million term loan B. The preliminary recovery rating is '2',
indicating S&P's expectation for substantial (70% to 90%) recovery
in the event of a payment default. The ratings are based on
preliminary terms and closing conditions, and subject to final
review upon receipt of final documentation.
Net proceeds of the term loans will be used to repay an
$85 million mezzanine loan, to repay existing revolver borrowings,
to pay a $35 million dividend to the equity sponsor, and to cover
transactions fees and expenses. S&P estimate Angelica will have
about $150 million in debt outstanding when the transaction is
finalized.
"In S&P's opinion, the ratings on Angelica Corp. reflect the
company's aggressive financial risk profile," said Standard &
Poor's credit analyst Brian Milligan. "The debt financed dividend
and high leverage is an indication of an aggressive financial
policy in S&P's view." Pro forma for the refinancing, S&P
calculate total debt to EBITDA of 4.9x, per Standard & Poor's
standard leverage adjustment methodology, one turn higher than
current leverage. S&P views Angelica's business risk profile as
vulnerable due to the company's narrow product focus and the
industry's low barriers to entry.
The company has a narrow product focus. Angelica provides
outsourced linen management services to the U.S. health care
industry. The majority of the company's business is with
hospitals; however, an effort to increase its share with clinics
and long-term care facilities is underway. Still, services to the
non-hospital segment constitutes 13% of the company's business.
The stable outlook reflects S&P's expectation for consistent sales
and margin performance, positive cash flow generation, and a
financial policy which leads to steady credit measure improvement.
In addition, the outlook reflects S&P's expectation for the
company to achieve modest market share gains in a weakened
economic environment. S&P believes the company will have adequate
covenant cushion and liquidity over the next year. S&P could
lower the rating if the company loses a significant number of
contracts, which results in profitability declines, thin
liquidity, and covenant cushion falling below 10%. Although
unlikely over the next 12 months, S&P could raise the rating if
improved economic conditions lead to increased revenue growth and
margin expansion, resulting in significantly stronger credit
measures, including total debt to EBITDA below 4.0x. EBITDA would
need to increase about 15% from current levels for this to occur.
This also presumes a financial policy committed to sustaining
significantly stronger credit measures.
AQUILEX HOLDINGS: S&P Puts 'B' Rating on CreditWatch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its 'B'
corporate credit rating and all other ratings on Atlanta, Ga.-
based Aquilex Holdings LLC on CreditWatch with negative
implications. The rating action follows the company's weaker-
than-expected operating performance and resulting erosion of
financial covenant headroom during the first half of 2010.
The provider of specialty welding, repair, maintenance, and
industrial cleaning services had total debt of $399 million on
June 30, 2010.
"The CreditWatch placement on Aquilex reflects the company's
diminished profitability and liquidity during the first half of
2010, because its customers, particularly those in its specialty
welding, repair, and overhaul segment, have delayed the timing of
maintenance turnaround projects to a degree greater than
previously expected," said Standard & Poor's credit analyst James
Siahaan.
Although the company's services are necessary to prevent the
deterioration of equipment and to maintain efficient operations,
its chemicals and utilities customers have continued to defer
maintenance projects on their plant and equipment in order to
temporarily reduce costs and conserve cash during this extended
period of economic uncertainty. The company's profitability has
eroded, as quarterly adjusted operating margins before
depreciation and amortization declined to 14% on June 30, 2010,
from 18% a year ago. S&P estimates that the level of headroom
under Aquilex's total debt to EBITDA financial covenant has
deteriorated to roughly 2.5% on June 30, 2010, from about 14% on
March 31, 2010.
Aquilex is highly leveraged. Its total adjusted debt to EBITDA
ratio had increased to 6.1x on June 30, 2010, from 4.6x as of
Dec. 31, 2009. Given the limited headroom under the financial
covenants, S&P considers the company's liquidity less than
adequate, though S&P note that Aquilex did have roughly $8 million
of cash and equivalents on June 30, 2010, with approximately
$37 million available under a $50 million revolving credit
facility. If Aquilex is unable to forestall a breach under its
financial covenants soon, then it could be reliant upon equity
sponsor Ontario Teachers' Pension Plan Board to provide additional
equity. The terms of the company's credit facility permit the
company to exercise an equity cure, subject to certain
constraints.
S&P expects to resolve the CreditWatch within a few weeks. S&P
will evaluate Aquilex's operating performance to determine whether
the company can generate enough business in the latter part of the
year to avoid breaching its financial covenants, what steps the
company may implement to address the covenants, and to evaluate
the potential for a downgrade based on the weaker than expected
financial performance.
ASCEND PERFORMANCE: S&P Assigns 'B' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned a preliminary 'B'
corporate credit rating to nylon 6,6 producer Ascend Performance
Materials LLC. The outlook is stable.
At the same time, S&P assigned a preliminary 'B' senior secured
debt rating (the same as the corporate credit rating) and a
preliminary recovery rating of '3' to the company's proposed
$800 million term loan B. These ratings reflect S&P's expectation
of a meaningful (50% to 70%) recovery in the event of a payment
default.
The ratings on Ascend reflect a weak business risk profile and a
highly leveraged financial risk profile.
S&P's assessment of Ascend's financial profile incorporates the
company's very aggressive financial policy, reflected in a high
dividend payout. Total dividends paid out in 2010 could approach
$1.1 billion. This estimate includes dividends already paid out,
a proposed dividend of $922 million to be funded by the current
transaction, and proposed future dividends contingent on certain
events. S&P's ratings factor in uncertainty on financial policy
because of Ascend's very limited track record as a stand-alone
company. The ratings also take into account a potential decline
in liquidity following the close of the proposed financing
transactions, given the company's intention to extract additional
dividends to be funded out of operating cash flows or availability
under the company's asset-based revolving credit facility. While
S&P recognizes the improving trend in operating performance, and
believe this trend is likely to be sustained for the near term,
S&P views the nylon 6,6 industry as highly cyclical and believe
the proposed liquidity provides less than adequate downside
protection.
Ascend produces nylon 6,6 and sells related chemicals that are not
used in Ascend's own nylon 6,6 production. Nylon 6,6 has
specialized applications in several industries but is used mainly
in the production of automobiles and construction materials due to
its superior thermal properties and abrasion resistance, relative
to other materials.
The stable outlook reflects near-term prospects for improvement in
operating performance. S&P also expect that management policies
will support stable credit metrics and maintenance of liquidity
levels to support the current ratings. However, S&P could lower
the ratings if liquidity or covenant compliance deteriorated
meaningfully below levels that S&P would expect at the close of
the transaction, which could occur as a result of additional
dividend payments or an unexpected downturn in business
conditions. For example, S&P could lower ratings following an
unexpected decline in revenues during 2011 and a drop in operating
margins to about 12% or below so that the ratio of FFO to total
debt weakened to single-digit levels with no prospects for
improvement. On the other hand S&P would consider a modest
upgrade if earnings improve during the next year so that the ratio
of FFO to total debt remains above 12% on a consistent basis, and
liquidity improves. In this situation S&P would assess financial
policy and management's support for a sustained improvement to
leverage credit metrics.
ASIA8 INC: Posts $39,000 Net Loss in June 30 Quarter
----------------------------------------------------
Asia8, Inc., filed its quarterly report on Form 10-Q, reporting a
net loss of $39,023 for the three months ended June 30, 2010,
compared with net income of $214,572 for the same period last
year. The Company had no revenue or gross profits for the three
months months ended June 30, 2010, and 2009.
Loss from equity investment (in WWA Group) was $22,282 during the
three months ended June 30, 2010, as compared to income from
equity investment of $255,882 during the same period of 2009. The
Company says it expects to transition back to net income over the
next twelve months as it expects income from its equity investment
and revenue from the sale of Wing House mobile shelters.
At June 30, 2010, the Company had a working capital deficit of
$170,203. This compares to a working capital deficit of $136,518
at December 31, 2009.
The Company's balance sheet as of June 30, 2010, showed
$1.8 million in total assets, $175,376 in total liabilities, and
stockholders' equity of $1.6 million.
As reported in the Troubled Company Reporter on April 7, 2010,
Kostandinos Jerry Georgatos, in Hayward, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted of the Company's recurring losses from operations
and net capital deficiency.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b7f
Tempe, Ariz.-based Asia8, Inc.'s current focus is to (i) work
together with its 32% owned subsidiary, WWA Group, Inc. and WWA
Group's subsidiaries to increase the value of the Company's
investment and (ii) leverage that relationship to develop the
distribution of Wing House mobile shelter systems.
During June of 2000, the Company paid $970,000 to acquire 49% of
World Wide Auctioneers, Inc., a Nevada registered corporation,
holding 100% of British Virgin Island registered company World
Wide Auctioneers, Ltd. In August of 2003, World Wide Auctioneers,
Inc., sold 100% of its subsidiary World Wide Auctioneers, Ltd., to
a Nevada registered company WWA Group, Inc., in a stock for stock
transaction whereby WWA stock was issued to owners of World Wide
Auctioneers, Inc., in exchange for ownership of World Wide
Auctioneers, Ltd. The exchange caused the Company to acquire a
minority equity investment in WWA Group.
AUDIO PRAXIS: Nightclub Closing Order Prompted Chapter 11 Filing
----------------------------------------------------------------
Luci Scott at The Arizona Republic reports that Audio Praxis
sought bankruptcy protection a day after Maricopa County Superior
Court Judge J. Richard Gama issued a preliminary injunction
closing its Phase 54 nightclub. Outback Steakhouse, Carrabba's
Italian Grill and Charleston's had sought the injunction, saying
Phase 54 violated the covenants, conditions and restrictions of
Chandler Gateway West.
Audio Praxis Ent. Inc./Phase, also known as Phase Four
Studios/Phase filed a Chapter 11 petition on August 26, 2010
(Bankr. D. Ariz. Case No. 10-27232). The petition was filed pro
se. The Debtor estimated assets of less than $50,000, and
liabilities between $100,000 and $500,000 in the Chapter 11
petition.
BANDER LAW: Attorney Sanctioned for Failure to Attend Hearing
-------------------------------------------------------------
In In re D'Angelo Camacho Carpo and Myrna Ayran Bautista-Carpo,
dba Elena Home Care, (Bankr. N.D. Calif. 09-32520), Judge Dennis
Montali on February 4, 2010, entered an order directing Timothy
Umbreit, Esq., to appear in person at a hearing on March 5, 2010,
to show cause why the Bander Law Firm should not be compelled to
disgorge all fees and retainers paid to it by the Debtors, and why
Mr. Umbreit, as the Debtors' principal bankruptcy counsel, should
not be personally sanctioned for failure to comply with the
court's prior directive to appear in person at a January 28 status
conference. Mr. Umbreit did not appear at the March 5 hearing on
the Order to Show Cause and he did not file a written response to
the OSC seven days prior to the hearing.
The court entered an order on March 22, 2010, imposing $5,000 in
sanctions against Mr. Umbreit personally. The Sanctions Order
directed Mr. Umbreit to pay that amount to Debtors, in care of
their new counsel, by April 5, 2010. Mr. Umbreit has not made the
payment.
Mr. Umbreit filed a motion for reconsideration and for relief from
the Sanctions Order. He did not seek a stay of the Sanctions
Order. The court held a hearing on the motion for reconsideration
on April 30, 2010.
The Debtors paid $20,000 or more to Mr. Umbreit's firm, but
neither Mr. Umbreit nor any other attorney from his firm ever met
Debtors in person.
In a decision dated September 7, Judge Montali maintained that Mr.
Umbreit's conduct vis-a-vis the court orders and failure to file
status conference statements was conscious and willful. Judge
Montali also held that Mr. Umbreit's his conduct in the
representation of Debtors was unprofessional and well below any
reasonable standard of care. Judge Montali denied Mr. Umbreit's
motion for reconsideration.
The Bander Law Firm filed a chapter 7 petition (Bankr. C.D. Calif.
Case No. 10-15066) on February 12, 2010. Mr. Umbreit has not
filed bankruptcy.
A copy of the Court's memorandum decision is available at:
http://www.leagle.com/unsecure/page.htm?shortname=inscco20100907631
BENDER SHIPBUILDING: Gulf Offshore Loses Bid to Pursue Guarantor
----------------------------------------------------------------
In Gulf Offshore Logistics, LLC, v. Thomas B. Bender, Jr., Civil
Action No. 09-0688 (S.D. Ala.)., the plaintiff entered an
agreement with Bender Shipbuilding & Repair, Inc., pursuant to
which the plaintiff paid to Bender $1 million to hold the delivery
date and production capacity for construction of a $43 million
vessel, pending further negotiation towards a contract for
construction of the vessel. The Letter Agreement provided that,
should the plaintiff for specified reasons not proceed to contract
with Bender, the $1 million would be returned to the plaintiff.
In connection with this agreement, the defendant executed a
personal guaranty. The plaintiff did not proceed to contract with
Bender. Bender returned $400,000 to the plaintiff, but the
principal sum of $600,000 remains unpaid. The plaintiff seeks to
recover the balance, plus interest, costs and attorney's fees,
from the defendant based on the Guaranty.
On June 9, 2009, several creditors of Bender filed an involuntary
bankruptcy petition under Chapter 7. On July 1, 2009, the case
was converted to a Chapter 11 reorganization proceeding, which
remains pending. The plaintiff argues that, once Bender was
placed in bankruptcy, it had no further obligation to pursue
Bender before pursuing the defendant.
Chief District Judge William H. Steele held that the plaintiff has
not met its burden and denied its request for summary judgment.
A copy of the court's order is available at:
http://www.leagle.com/unsecure/page.htm?shortname=infdco20100903a12
Bender Shipbuilding & Repair Co. welds the hull of an offshore oil
supply boats the Mobile, Alabama. Attorneys at Lugenbuhl,
Wheaton, Peck, Rankin & Hubbard, serve as counsel for the Debtor.
In January 2010, Signal International of Mobile, Alabama, emerged
as the winning bidder with its $31.3 million offer for Bender's
assets.
BEVERAGES & MORE!: S&P Gives Stable Outlook; Affirms 'B-' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
Concord, Calif.-based Beverages & More! Inc. to stable from
positive. At the same time, S&P affirmed the 'B-' corporate
credit rating on the company.
In addition, S&P assigned its 'B-' issue-level rating to the
company's new $125 million senior secured notes due 2014. The
recovery rating is '4', indicating S&P's expectation of average
(30%-50%) recovery in the event of default. The company intends
to use proceeds to refinance the existing $100 million senior
secured notes due 2012, to repay a portion of existing 13% pay-in-
kind notes, to reduce revolver borrowings, and to pay transaction-
related fees and expenses. The new issuance will extend the
company's senior secured notes maturity from 2012 to 2014.
"The rating action reflects BevMo's decelerating performance gains
amid weak economic conditions, coupled with a lack of recent
credit measure improvement," said Standard & Poor's credit analyst
Brian Milligan. With the modest debt increase from the
refinancing transaction and slowing performance improvement, S&P
does not expect a meaningful enhancement to the company's credit
protection profile over the near term.
BIONEUTRAL GROUP: Posts $655,800 Net Loss in July 31 Quarter
------------------------------------------------------------
BioNeutral Group, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $655,847 on $15,500 of revenue for the
three months ended July 31, 2010, compared with a net loss of
$1.74 million on $2,825 of revenue for the three months ended
July 31, 2009.
The Company has an accumulated deficit of $49.12 million and
working capital deficiency of $1.69 million as of July 31, 2010.
The Company's balance sheet at July 31, 2010, showed
$11.74 million in total assets, $3.47 million in total
liabilities, and stockholders' equity of $8.27 million.
Bartolomei Pucciarelli, LLC, in Lawrenceville, N.J., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its results for the fiscal year ended
October 31, 2009. The independent auditors noted that the Company
had a working capital deficiency of approximately $425,000 as of
October 31, 2009, a net loss of approximately $15.6 million for
the year ended October 31, 2009, and an accumulated deficit of
approximately $46.3 million as of October 31, 2009.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b83
About BioNeutral Group
Newark, N.J.-based BioNeutral Group, Inc. (OTC BB: BONU)
-- http://www.bioneutralgroup.com/-- is a technology-based life
science company which has developed a technology platform that
neutralizes harmful environmental contaminants, toxins and
dangerous micro-organisms including bacteria, viruses, mold, fungi
and spores.
BLOCKBUSTER INC: Files for Chapter 11 with Pre-Arranged Plan
------------------------------------------------------------
Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11
bankruptcy proceedings with a pre-arranged reorganization plan
in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No.
10-14997).
Blockbuster said in a statement that it has reached agreement with
a group of bondholders holding 80.1% principal amount of the
Company's 11.75% senior secured notes on the material terms of a
plan to recapitalize its balance sheet and put the Company in a
stronger financial position as it continues to pursue its
strategic plan and transform its business model. The
recapitalization plan would substantially reduce the Company's
indebtedness -- from nearly $1 billion currently to an estimated
$100 million or less when implemented.
Jim Keyes, chairman and chief executive officer, commented, in the
September 23 statement, "After a careful and thorough analysis, we
determined that the process announced today provides the optimal
path for recapitalizing our balance sheet and positioning
Blockbuster for the future as we continue to transform our
business model to meet the evolving preferences of our customers.
The recapitalized Blockbuster will move forward better able to
leverage its strong strategic position, including a well-
established brand name, an exceptional library of more than
125,000 titles, and our position as the only operator that
provides access across multiple delivery channels -- stores,
kiosks, by-mail and digital. This variety of delivery channels
provides unrivaled convenience, service, and value for our
customers."
Financing from Existing Noteholders
The Company has secured a commitment of $125 million in new
"debtor-in-possession" financing from certain existing senior
secured noteholders to help meet its obligations to customers,
suppliers and employees in the ordinary course during the
recapitalization process.
About $45 million of revolving loans will be made available upon
interim approval of the DIP financing.
The DIP financing also provides for a roll-up of up to $250
million of the $675 million in existing senior secured notes.
The DIP financing will mature April 30, 2011.
Mr. Keyes said, "We are pleased to enter this process with the
support of the Senior Noteholders. Their willingness to provide
the DIP financing and to support a plan to eliminate a substantial
amount of the Company's debt in exchange for new equity is an
important vote of confidence in Blockbuster."
Bankruptcy Exit by April 2011
Prepetition, Blockbuster issued $675 million aggregate principal
amount of 11.75% senior secured notes due October 1, 2014. It
also issued $300 million aggregate principal amount of 9.0% senior
unsecured subordinated notes due September 1, 2012. In addition,
Blockbuster estimates it has approximately $57 million in
outstanding accounts payable, exclusive of lease obligations and
the majority of studio-related obligations.
Under the terms of the plan of reorganization contemplated by the
Plan Support Agreement, the Company's 11.75% senior secured notes
will be exchanged for the equity of a reorganized Blockbuster.
The only debt expected to remain on the Company's balance sheet
upon its emergence from Chapter 11 under the proposed plan will be
the amounts drawn under Blockbuster's $125 million DIP financing,
which will convert to an exit loan facility upon consummation of
the plan, and a new exit revolving credit facility of up to $50
million. Under the proposed plan, there would be no recovery by
the holders of the Company's outstanding subordinated debt,
preferred stock or common stock.
Carl Icahn bought about one-third of Blockbuster's bonds as of
Sept. 17, Bloomberg News reported, citing people with knowledge of
the matter. According to Bloomberg, Mr. Icahn, 74, a former
director of the company, led a proxy fight in 2005 to put himself
and two nominees on the board. Last March, he cut his stake in
the company to 3.5 percent by selling stock. He left the board in
January.
The Plan Support Agreement requires Blockbuster to meet these
milestones:
-- By no later than 35 calendar days after the Commencement
Date, the Bankruptcy Court will have entered an order
granting payments to critical vendors;
-- By no later than 60 days after the Commencement Date,
the Debtors will have filed with the Bankruptcy Court the
Plan and Disclosure Statement, each containing terms and
conditions consistent with the terms and conditions
provided herein and in form and substance acceptable to the
Debtors and a Supermajority of the Consenting Noteholders;
-- By no later than January 15, 2011, the Bankruptcy Court
will have approved the Disclosure Statement with respect to
the Plan;
-- By no later than March 15, 2011, the Bankruptcy Court shall
have entered the Confirmation Order, in form and substance
acceptable to the Debtors and a Supermajority of the
Consenting Noteholders; and
-- By no later than April 14, 2011, the Effective Date will
have occurred.
A copy of the Plan Support Agreement is available for free at:
http://bankrupt.com/misc/Blockbuster_PlanSupportPact.pdf
U.S. Portfolio to be Evaluated
As part of the recapitalization process, the Company will evaluate
its U.S. store portfolio with a view towards enhancing the overall
profitability of its store operations. Currently, all 3,000 of
the Company's stores in the U.S. will remain open.
Blockbuster is likely to close more than 500 stores and will seek
ways to reduce lease costs on hundreds of others, Ronald Grover at
Bloomberg News reported, citing a person with knowledge of the
plans. The actual number of stores is still being worked out
following the Chapter 11 filing, said the person, who declined to
be identified because the deliberations are private and subject to
court approval.
Over the past two years, Blockbuster has closed 1,061 domestic
company-operated stores to reduce operating expenses.
Bankruptcy Professionals
Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the Debtors. Rothschild
Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent.
The Steering Group of Senior Secured Noteholders is represented
by:
James P. Seery, Esq.
Paul S. Caruso, Esq.
SIDLEY AUSTIN LLP
787 Seventh Avenue
New York, NY 10019
U.S. Bank National Association as trustee and collateral agent for
the Senior Secured Notes is represented by:
David McCarty, Esq.
Kyle Mathews, Esq.
SHEPPARD MULLIN RICHTER & HAMPTON LLP
333 South Hope Street, 43rd Floor
Los Angeles, CA 90071-1448
BDO Consulting is the financial advisor for the Indenture Trustee.
Wilmington Trust FSB as the DIP Agent is represented by:
Peter Neckles, Esq.
Alexandra Margolis, Esq.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
4 Times Square
New York, NY 10036-6522
Road to Bankruptcy
"Blockbuster's financial challenges result from trends in general
macroeconomic conditions; increased industry competition and
fragmentation; balancing the sectoral decline of Blockbuster's
largest distribution channel with the ascension of emerging
channels, such as vending and digital, unsustainable levels of
debt, and certain other factors," Jeffery J. Stegenga, the CRO,
said in a First Day affidavit filed with the Bankruptcy Court.
Prior to the bankruptcy filing, Blockbuster received from
bondholders a series of moratoriums on payment of principal and
interest, the latest of which was set to expire September 30,
2010.
In February 2009, Blockbuster hired law firm Weil Gotshal and
investment bank Rothschild Inc., to explore strategies for cutting
the Company's $1 billion debt load.
The Debtors' advisors initiated discussions with Houlihan, Lokey,
Howard & Zukin Inc. and Sidley Austin LLP, financial and legal
advisors, respectively, to an ad hoc group of holders of the
Senior Secured Notes -- Sponsoring Noteholders -- and Moelis & Co.
and Paul, Weiss, Rifkind, Wharton & Garrison LLP, financial and
legal advisors, respectively, to an ad hoc group of holders of the
Senior Subordinated Notes.
Since May 2010, Blockbuster and its advisors have worked
extensively with the Sponsoring Noteholders, their advisors, and
other stakeholders to advance and document a standalone
recapitalization transaction structure, the DIP Facility, and the
terms of supply agreements going forward. The negotiations led to
Blockbuster's entry into the Plan Support Agreement.
Business as Usual
Blockbuster said that despite the bankruptcy filing, U.S.
operations, including its stores, DVD vending kiosks, by-mail and
digital businesses, are open and serving customers in the normal
course. Blockbuster is fulfilling all orders as usual, including
continuing to provide access to new releases the first day they
become available. Blockbuster intends to continue honoring its
Rewards program, valid coupons, gift cards and other customer
programs.
Blockbuster franchise locations in both the U.S. and abroad are
independently owned, operated and funded, and are also continuing
normal business operations. In addition, BLOCKBUSTER Express
vending kiosks, owned and operated through a relationship with
NCR, continue their operations in retail locations around the U.S.
The Company's international operations in Canada, Denmark, Italy,
Mexico, and the United Kingdom are also conducting business as
usual. However, Blockbuster will no longer provide funding to
support its operations in Argentina, which have experienced
continued shortfalls in operating cash flow.
Blockbuster's non-U.S. operations and its domestic and
international franchisees, all of which are legally separate
entities, were not included in the filings and are not parties to
the Chapter 11 proceedings.
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles. Blockbuster said it
had assets of $1,017,035,832 and debts of $1,464,939,759 as of
August 1, 2010.
BLOCKBUSTER INC: Receives Court Approval of "First Day Motions"
---------------------------------------------------------------
Blockbuster Inc. disclosed that the U.S. Bankruptcy Court for the
Southern District of New York has granted approval of "First Day
Motions" requested by the Company to help enable it to conduct
business in the ordinary course as it moves to recapitalize its
balance sheet and substantially reduce debt.
All of Blockbuster's U.S. operations, including its stores, DVD
vending kiosks, by-mail and digital businesses, are open and
serving customers in the normal course. Blockbuster is fulfilling
all orders as usual, including continuing to provide access to new
releases the first day they become available.
On September 23, 2010, as part of its voluntary filing for
reorganization under Chapter 11 of the U.S. Bankruptcy Code, the
Company submitted First Day Motions designed to support its
domestic customers, vendors and employees. At a hearing later
that day, the Court granted permission for the Company, among
other things, to:
Continue honoring its Rewards program, valid coupons, gift cards
and other customer programs;
Pay its employees in the usual manner and to continue their
primary benefits without disruption;
Continue to maintain its cash management systems;
Pay certain pre-petition claims of movie studios.
The Court also authorized Blockbuster to access up to $20 million
of the new $125 million Debtor-in-Possession (DIP) financing
provided by the Senior Noteholders on an interim basis to help
meet its obligations to customers, suppliers and employees during
the recapitalization process. The Company will seek final
approval of the entire DIP financing at a future court hearing.
Blockbuster intends to pay suppliers under normal terms in the
ordinary course for all post-petition goods and services.
Jim Keyes, chairman and chief executive officer, said, "The
authorization granted by the court is an important first step in
our recapitalization process. With the continued support of the
Senior Noteholders, the movie studios and other key parties, we
intend to complete the recapitalization expeditiously and emerge
with our debt substantially reduced. With a strengthened balance
sheet, Blockbuster will be in a better position to continue the
transformation of our business model and demonstrate to our
customers the convenience and value of our multi-channel platform
and our 28-day rental advantage."
Judge Burton Lifland has continued the "First Day" hearing to
September 27, at 10:00 a.m. (Eastern Time)
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles. Blockbuster said it
had assets of $1,017,035,832 and debts of $1,464,939,759 as of
August 1, 2010.
BLOCKBUSTER INC: Bankruptcy Won't Impact Canada Business
--------------------------------------------------------
Blockbuster Inc. disclosed that it is undertaking financial
recapitalization through the Chapter 11 legal process in the U.S.
in order to be in a stronger fiscal position for the future.
Blockbuster Canada is not part of this legal process in the U.S.
and is not impacted by it. All of Blockbuster Canada's
operations are conducting business as usual.
"Blockbuster Canada operates independently of the U.S. and is
financially stable. We have the assets and cash flow to execute
our business plan," says Barry Guest, Vice President and General
Manager. "Blockbuster Canada continues to be committed to serving
our customers and keeping the business healthy for our nearly
5,000 employees in our 440 locations across the country."
Blockbuster Canada was not included in the Chapter 11 filing and
is not a party in the legal proceedings. All of Blockbuster
Canada's operations are open and serving customers in the normal
course. Vendors in Canada should not expect any changes in how
Blockbuster Canada does business with them. Invoices will be paid
in the normal and ordinary course, and we expect no interruptions
in the delivery of goods and services from our vendors.
"As a long time business partner, we will continue to support
Blockbuster Canada to ensure that their customers can rent or buy
the movies they are looking for," says Steven Dorman, President,
Universal Studios Home Entertainment Canada. "Going into the
busiest period of the year, it will be business as usual for
Blockbuster and Universal Studios Canada."
Canadian consumers can continue to count on Blockbuster Canada for
the best selection in movies including the best access to new
releases, TV and games as well as our convenience with more than
440 locations across Canada and great customer experience.
About Blockbuster Canada
Blockbuster Canada is an indirect subsidiary of Blockbuster Inc.,
with more than 440 stores across Canada.
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles. Blockbuster said it
had assets of $1,017,035,832 and debts of $1,464,939,759 as of
August 1, 2010.
BLOCKBUSTER INC: Case Summary & 50 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Blockbuster Inc.
1201 Elm Street
Dallas, Texas 75270
Bankruptcy Case No.: 10-14997
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Blockbuster Digital Technologies Inc. 10-14996
Blockbuster Canada Inc. 10-14998
Blockbuster Distribution, Inc. 10-14999
Blockbuster Gift Card Inc. 10-15000
Blockbuster Global Services Inc. 10-15001
Blockbuster International Spain Inc. 10-15002
Blockbuster Investments LLC 10-15003
Blockbuster Procurement LP 10-15004
Blockbuster Video Italy, Inc. 10-15005
Movielink, LLC 10-15006
Trading Zone Inc. 10-15007
Bý LLC 10-15008
Type of Business: Blockbuster Inc. is a global provider of rental
and retail movie and game entertainment. It
has a library of more than 125,000 movie and
game titles.
Web site: http://www.blockbuster.com/
Chapter 11 Petition Date: September 20, 2010
Bankruptcy Court: U.S. Bankruptcy Court
Southern District of New York
Debtors' Counsel: Stephen Karotkin, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8000
Fax : (212) 310-8007
E-mail: stephen.karotkin@weil.com
Martin A. Sosland, Esq.
WEIL, GOTSHAL & MANGES LLP
200 Crescent Court, Suite 300
Dallas, TX 75201
Tel: (214) 746-7700
Fax: (214) 746-7700
E-mail: martin.sosland@weil.com
Debtors'
Restructuring
Advisor: ALVAREZ & MARSHAL NORTH AMERICA, LLC
Debtors'
Claims Agent: KURTZMAN CARSON CONSULTANTS LLC
Financial Condition at August 1, 2010:
Total Assets: $1,017,035,832
Total Debts : $1,464,939,759
The petition was signed by Roderick J. McDonald, vice president,
general counsel and secretary.
Blockbuster Inc.'s List of 50 Largest Unsecured Creditors:
Entity/Person Nature of Claim Claim Amount
------------- --------------- ------------
The Bank of New York Mellon Bond Debt $315,121,589
as Indenture Trustee
600 N. Pearl Street
Dallas, TX 75201
Twentieth Century Fox Trade Payable- $21,603,028
Home Entertainment Studio
2121 Avenue of the Stars
11th FL
Los Angeles, CA 90067
Warner Home Video Inc. Trade Payable- $18,967,976
4000 Warner Blvd. Studio
Bldg 168
Burbank, CA 91522
Sony Pictures Home Trade Payable- $13,301,107
Entertainment Studio
The Walt Disney Company Trade Payable- $8,577,973
Studio
Universal Studios Home Trade Payable- $8,286,890
Entertainment Studio
Lions Gate Trade Payable- $7,908,719
Studio
Cognizant Technology Trade Payable- $3,071,262
Solutions Studio
Summit Entertainment Trade Payable- $3,003,223
Studio
Starz Media Anchor Bay Trade Payable- $2,794,868
Entertainment Studio
AT&T Trade Payable $2,732,933
Integrated Process Trade Payable $1,987,339
Technologies
E1 Entertainment US LP Trade Payable- $1,849,466
Studio
Developers Diversified Trade Payable- $1,245,523
Realty Corp. Rent, Lease
Termination
Developers Diversified Trade Payable- $1,245,523
Realty Corp. Rent, Lease
Termination
Compucom Systems Inc. Trade Payable $1,180,613
Hughes Electronics Corp Trade Payable $1,049,332
Magnolia Pictures LLC Trade Payable $832,413
Sitel Operating Corp Trade Payable $768,190
Coca-Cola Enterprises Trade Payable $703,412
Phase 4 Film (USA), LLC Trade Payable- $698,483
Studio
Stewart Tenants Corp. Lease Termination $518,148
Agreement
IFC (Rainbow Media Trade Payable- $464,509
Enterprises) Studio
Technimark Inc. Trade Payable $453,404
IBM Corporation Trade Payable $434,021
Viacom Trade Payable $405,543
Redprairie Corp Trade Payable $394,770
Bell, Mary Trade Payable $363,456
Regency Centers LP Trade Payable- $345,396
Rent
Acxiom Corporation Trade Payable $326,016
Merkle Inc. Trade Payable $318,154
Taleo Corporation Trade Payable $312,631
Partnership Marketing, Inc. Trade Payable $302,139
Viva Pictures LLC Trade Payable $300,087
BIC Management Corp. Lease Termination $300,000
Agreement
Circle.com Trade Payable $300,000
First Look (Millennium Trade Payable- $297,940
Media Services) Studio
Image Entertainment Inc Trade Payable- $264,193
Studio
FRITO-LAY INC Trade Payable- $263,797
Studio
Broadridge Investor Trade Payable $254,450
Communication
Solutions Inc
Moelis & Company LLC Trade Payable $254,050
NCR Corporation Trade Payable $216,793
Krumholz, Stephen Severance $199,765
Lee, Bill Severance $190,388
Autronic Plactics Inc. Trade Payable $178,106
Gencorp Technologies Inc. Trade Payable $176,040
Akamai Technologies Inc. Trade Payable $171,955
Starrett City Associates Trade Payable $170,554
Frank N Magid Associates Trade Payable $166,539
Inc
Maya Entertainment Group Trade Payable- $164,578
Inc Studio
Genius Products Trade Payable- $162,203
Studio
BRADLEY HARDY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Joint Debtors: Bradley Keith Hardy
aka Brad Hardy
aka Brad K. Hardy
K. Michelle Hardy
aka Kathleen M. Hardy
aka Michelle Hardy
11445 E. Via Linda #2-461
Scottsdale, AZ 85259
Bankruptcy Case No.: 10-29752
Chapter 11 Petition Date: September 17, 2010
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: George B. Nielsen Jr.
Debtor's Counsel: D. Lamar Hawkins, Esq.
AIKEN SCHENK HAWKINS & RICCIARDI PC
4742 North 24th Street, Suite 100
Phoenix, AZ 85016
Tel: (602) 248-8203
Fax: (602) 248-8840
E-mail: dlh@ashrlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Joint Debtors' list of 20 largest
unsecured creditors is available for free
at http://bankrupt.com/misc/azb10-29752.pdf
CALIFORNIA HOUSING: S&P Cuts Counterparty Credit Rating to 'CC'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
counterparty credit and financial strength ratings on California
Housing Loan Insurance Fund to 'CC' from 'CCC-'. Standard &
Poor's subsequently withdrew the ratings on CaHLIF at the
company's request.
On Jan. 21, 2010, Standard & Poor's Ratings Services lowered its
counterparty credit and financial strength ratings on CaHLIF to
'CCC-' from 'BBB', reflecting the rapid increase in delinquencies
and losses incurred. "Since then, losses have continued to the
extent that as of the end of the first quarter of 2010, surplus
has become significantly negative, with new notices of default
continuing to be reported," said Standard & Poor's credit analyst
Ron Joas. Standard & Poor's believes that the delinquencies
reported and losses incurred will ultimately transition into
claims paid with greater rapidity through the remainder of 2010
and into 2011, to the extent that CaHLIF is likely to default on
its claim obligations within the next six to nine months.
Other than a small line of credit from the California Housing
Finance Agency, Standard & Poor's believes CaHLIF has limited
sources of additional capital, particularly because it would have
to obtain legislative approval to receive new capital or redirect
capital from other funds. In addition, the State of California's
current budgetary restrictions appear to make it unlikely that the
state will recapitalize CaHLIF in the near term. As a result, S&P
has ascribed no support to CaHLIF from its relationship with
CalHFA.
The outlook on CaHLIF is negative, reflecting Standard & Poor's
belief that CaHLIF has limited sources of additional capital and
will default on its claims obligations within the next six to nine
months.
CATAMOUNT ROAD: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Catamount Road, LLC
75 Beacon Hill Rd
New Canaan, CT 06840-4919
Bankruptcy Case No.: 10-52233
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
District of Connecticut (Bridgeport)
Debtor's Counsel: George C. Tzepos, Esq.
LAW OFFICES OF GEORGE C. TZEPOS
444 Middlebury Road
Middlebury, CT 06762
Tel: (203) 598-0520
Fax: (203) 598-0522
E-mail: zepseven@sbcglobal.net
Scheduled Assets: $700,020
Scheduled Debts: $1,371,097
A list of the Company's three largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/ctb10-52233.pdf
The petition was signed by Ruth L. Jones.
Debtor-affiliates that filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Ruth L. Jones 09-51596 08/14/09
RLJ Sales & Service Maintenance, LLC 09-52076 10/15/09
JRL, LLC 09-52077 10/15/09
CCGI HOLDING: Moody's Assigns 'B3' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service has assigned a first-time B3 Corporate
Family Rating and a B3 Probability of Default Rating to CCGI
Holding Corporation. The rating agency also assigned a B3 (LGD4-
50%) rating to the proposed $250 million senior secured term loan
and the $25 million revolving credit facility that will be jointly
held by Covad Communications Group, Inc. and MegaPath, Inc., both
wholly-owned subsidiaries of CCGI. CCGI will guaranty the senior
secured facilities. The $250 million term loan under the credit
facilities and approximately $13 million of existing cash will be
used to refinance existing debt of the combined company that
represents the merger of Covad, MegaPath and Speakeasy Broadband
Services LLP.
Moody's has taken these rating actions:
Assignments:
Issuer: CCGI Holding Corporation
* Corporate Family Rating, Assigned B3
* Probability of Default Rating, Assigned B3
Issuer: Covad Communications Group, Inc., and MegaPath, Inc.
* $25Mln Senior Secured Revolving Credit Facility, Assigned B3
(LGD4-50%)
* $250Mln Senior Secured Term Loan, Assigned B3 (LGD4-50%)
Ratings Rationale
CCGI's B3 corporate family rating partly reflects Moody's concerns
about the Company's fundamental business model and the increased
execution risk associated with the simultaneous integration of
three companies. In addition, high competition in CCGI's markets
and the company's reliance on accessing incumbent telcos' networks
are also major considerations in CCGI's rating assignment. The
ratings are supported by the company's good liquidity and expected
free cash flow generation. Moody's expects the company's Moody's
adjusted EBITDA margin for 2010 to be about 16% (incorporating
pro-forma merged operations and year of one cost savings from the
merger transaction).
Moody's expects CCGI's pro-forma adjusted Debt/EBITDA leverage to
be under 4.0x at closing (Moody's adjusted, post-synergies),
potentially improving over the next several years driven by EBITDA
growth and debt reduction due to mandatory excess cash sweep in
the credit facility. This de-leveraging is, however, dependent on
the successful integration of the three companies and the success
of the revamped sales force to grow revenues.
Over the long term, Moody's believes that CCGI will face
increasing financial risk due to its challenging business model.
Moody's views this model, centered on serving small- to medium-
sized business customers, enterprise business customers and
wholesale markets over a primarily leased network from the local
telecom incumbents, to generate significantly lower margins when
compared to services offered over owned facilities.
Moody's expects CCGI's EBITDA margins in 2011 will be in the mid-
teen range, largely reflecting realization of the annualized cost
savings initiated in 2010 and some modest improvements in
operating margins. CCGI expects to generate about $44 million in
run-rate cost savings from the merger by mid-2011, primarily
through network and G&A consolidation. At the same time, the
company continues to face the intense competitive dynamics of its
industry as it fends off better capitalized and much-larger
incumbent telcos and cablecos, while attempting to increase sales
in a weak economy requiring tighter credit policies. Moody's
remains cautious as to the ability of the company to realize the
full benefit of these savings in light of the complexity of the
transaction and the tough operating environment.
Moody's expects CCGI will have "good" liquidity over the next
twelve months. Pro forma for the proposed loan offering, Moody's
projects the company will have over $35 million in cash or
equivalents and an undrawn $25 million revolving credit facility.
CCGI's projected free cash flow should be more than sufficient to
meet its modest capex obligations. In the event of business
weakness, capex would likely be lower as the majority of projected
spending is success based and the network's footprint is
essentially complete.
Outlook
The stable outlook reflects Moody's view that CCGI will retain a
disciplined capital structure and that merger synergies will drive
adjusted debt/EBITDA leverage below 4.0x range by the end of 2011.
What Could Change the Rating -- Up
Upward rating pressure could build if the company maintains
adjusted leverage in the low 3.0x range, which would likely result
from the company succeeding in growing its revenues through
greater product expansion and maintaining solid cost controls at
the combined entity. Maintenance of a good liquidity profile and
strong free cash flow-to-debt are also assumed to be prerequisites
to prospective positive rating action(s).
What Could Change the Rating -- Down
Downward rating pressure could develop if adjusted leverage
remains above 4.0x on a sustained basis, or if free cash flow-to-
debt falls below 5%, which could result from revenue declines or
the inability to successfully merge the three entities in the
transaction. Ratings could also come under downward pressure if
heightened competition and/or churn further threaten the combined
company's sales growth.
This is the first time that Moody's has rated CCGI.
CHARLES JEANNEL: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Charles Jeannel
10722 Washington Blvd., Suite 300
Culver City, CA 90232
Bankruptcy Case No.: 10-50232
Chapter 11 Petition Date: September 21, 2010
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Richard M. Neiter
Debtor's Counsel: Philip D. Dapeer, Esq.
PHILIP DAPEER, A LAW CORPORATION
2625 Townsgate Road, Suite 330
Westlake Village, CA 91361
Tel: (323) 954-9144
Fax: (323) 954-0457
E-mail: PhilipDapeer@aol.com
Scheduled Assets: $5,336,620
Scheduled Debts: $4,855,925
A list of the Debtor's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb10-50232.pdf
CHARTER COMMUNICATIONS: S&P Assigns 'B' Rating on $1 Bil. Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B' issue-
level rating and '6' recovery rating to $1 billion of unsecured
notes due 2017 to be offered by subsidiaries of St. Louis-based
Charter Communications Inc. The '6' recovery rating indicates
S&P's expectation of negligible (0%-10%) recovery of principal in
the event of a payment default. At the same time, S&P affirmed
the 'BB-' corporate credit rating on Charter, but raised certain
issue-level ratings. The outlook is stable.
The $1 billion senior notes will be co-issued by Charter
subsidiaries CCO Holdings LLC and CCO Holding Capital Corp. The
notes will be sold under Rule 144A with registration rights.
S&P raised the issue-level rating on the second-lien debt (issued
by Charter Communications Operating LLC and Charter Communications
Capital Corp.) to 'BB+' from 'BB' and revised the recovery rating
to '1' from '2'. At the same time, S&P raised the issue-level
rating on the third-lien debt (issued by CCO Holdings LLC) to
'BB+' from 'B', reflecting the revision of the recovery rating on
that debt to '1' from '6'. The '1' recovery rating indicates
prospects for very high (90%-100%) recovery of principal in the
event of a payment default.
"The issue-level rating upgrades on Charter's second- and third-
lien debt do not reflect a change in S&P's view of the company's
overall credit quality," said Standard & Poor's credit analyst
Richard Siderman, "rather, they reflect the relative improvement
in recovery prospects for those particular debt issues due to the
reduction in priority obligations." S&P expects Charter to use
proceeds from the new note issuance to repay a portion of the
fist-lien bank debt.
CHEMTURA CORPORATION: Terminates Rights Offering
------------------------------------------------
Chemtura Corporation has terminated its previously announced
rights offering to eligible holders to purchase up to 7,385,524
shares of new common stock.
As previously disclosed, on March 18, 2009, Chemtura and 26 of its
U.S. subsidiaries filed voluntary petitions for reorganization,
and on August 8, 2010, Chemtura Canada Co./Cie filed a voluntary
petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York. On August 5, 2010, the Debtors filed with
the Bankruptcy Court the solicitation version of their joint plan
of reorganization and accompanying disclosure statement. The
Bankruptcy Court approved the Disclosure Statement on August 5,
2010. On September 2, 2010, Chemtura filed a supplement to the
Plan with the Bankruptcy Court, as contemplated by the Plan.
Each class of creditors entitled to vote on the Plan has voted to
support the Plan, while the holders of Class 13a interests,
primarily consisting of the equity holders of the Debtors, voted
to reject the Plan. The previously proposed rights offering to
eligible holders to purchase up to 7,385,524 shares of new common
stock was conditioned upon the holders of Class 13a interests
voting to support the Plan, and therefore, such rights offering
has been terminated by the Company, and the shares of common stock
registered with the Securities and Exchange Commission pursuant to
a Registration Statement on Form S-1 will be deregistered by a
post-effective amendment.
The treatment of holders of Class 13a interests when the Plan
becomes effective, if confirmed, is described in the Plan and
Disclosure Statement.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC. As of
December 31, 2008, the Debtors had total assets of $3.06 billion
and total debts of $1.02 billion. Bankruptcy Creditors' Service,
Inc., publishes Chemtura Bankruptcy News. The newsletter tracks
the Chapter 11 proceedings undertaken by Chemtura Corp. and its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CLASSIC TRANSPORTATION: Case Summary & 5 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Classic Transportation Leasing, LLC
7380 S. Eastern Avenue, Suite 150
Las Vegas, NV 89123
Tel: (909) 387-0800
Bankruptcy Case No.: 10-27755
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Bruce A. Markell
Debtor's Counsel: Kaaran E. Thomas, Esq.
MCDONALD CARANO WILSON LLP
100 W Liberty St., 10th Floor
Reno, NV 89505
Tel: (775) 788 2000
E-mail: kthomas@mcdonaldcarano.com
Scheduled Assets: $2,000,000
Scheduled Debts: $7,922,828
A list of the Company's five largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/nvb10-27755.pdf
The petition was signed by Larry R. Polhill, manager.
COAST CRANE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Coast Crane Company
8250 Fifth Avenue S
Seattle, WA 98108
Bankruptcy Case No.: 10-21229
Chapter 11 Petition Date: September 22, 2010
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Brian L. Lewis, Esq.
David C. Neu, Esq.
Michael J. Gearin, Esq.
K&L GATES LLP
925 4th Avenue, Suite 2900
Seattle, WA 98104-1158
Tel: (206) 623-7580
E-mail: brian.lewis@klgates.com
david.neu@klgates.com
michael.gearin@klgates.com
Debtors' Chief
Restructuring
Officer: Employ T. Scott Aliva
CRG PARTNERS GROUP LLC
Estimated Assets: $50,000,001 to $100,000,000
Estimated Debts: $100,000,001 to $500,000,000
The petition was signed by Tom Neary, chief operating and
financial officer.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bragg Crane Services Trade Debt $180,846
457 Parr Boulevard
Richmond, CA 94801
JLG Industries Inc Trade Debt $95,752
14943 Collections Center Drive
Chicago, IL 60693
Finnco Services LLC Trade Debt $62,422
314 Lytle Lane
Lytle Creek, CA 92358
Manitex Inc Trade Debt $57,172
Combined Carriers Co In Trade Debt $57,100
Petrocard Systems Inc Trade Debt $33,956
West Coast Wire Rope & Trade Debt $32,704
Wheco Corporation Trade Debt $30,679
Western States Equipment Trade Debt $28,900
Cen-Cal Machinery Co In Trade Debt $27,915
D Hill Trucking Inc Trade Debt $22,965
United Parcel Service Trade Debt $21,260
Minnpar LLC Trade Debt $19,431
Enterprise Rent-A-Car Trade Debt $18,828
Nelson Trucking Company Trade Debt $18,202
Carlile Transportation Trade Debt $18,081
Basil Equipment Inc Trade Debt $17,062
Nixon-Egli Equipment Co Trade Debt $15,670
Tadano America Corp Trade Debt $15,479
Crane Warning Systems A Trade Debt $15,388
COMPUCOM SYSTEMS: S&P Puts 'B+' Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B+'
corporate credit rating on Dallas-based CompuCom Systems Inc.,
along with all related issue-level ratings on the company's debt,
on CreditWatch with negative implications.
With annual revenues of about $1.8 billion, CompuCom reported
modest revenue growth in the first half of 2010, benefiting from
new contract signings.
"Annual EBITDA levels have been relatively stable, as ongoing
cost-reduction efforts offset weak economic conditions and
customer pricing pressures," said Standard & Poor's credit analyst
Martha Toll-Reed.
Adjusted debt to EBITDA levels (including accounts receivable
financing and operating leases) have been in excess of 5x since
the company's 2008 acquisition of the North American operations of
Getronics N.V. Discretionary cash flow was moderately negative in
2009 due to integration costs, but turned positive in 2010 as
integration efforts are nearing completion.
S&P will meet with management before resolving the CreditWatch.
S&P could lower the ratings to 'B' if, in its view, the company is
unlikely to sustain adequate covenant headroom over the near-to-
intermediate term.
CONTECH CONSTRUCTION: Moody's Junks Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service downgraded Contech Construction
Products, Inc.'s Corporate Family Rating and Probability of
Default Rating to Caa1 from B2, and its Senior Secured Bank Debt
to B3 from B1. Contech's ratings remain under review for further
downgrade.
These ratings/assessments were affected by this action:
-- Corporate Family Rating downgraded to Caa1 from B2;
-- Probability of Default Rating downgraded to Caa1 from B2;
and,
-- Senior Secured Bank Credit Facility downgraded to B3 (LGD3,
32%) from B1 (LGD3, 34%).
Ratings Rationale
The rating downgrade results from the company's weak operating
performance and an uncertain liquidity profile, characterized in
part by tight covenant compliance. Contech's construction end
markets continue to face significant pressures. Moody's expects
that homebuilding will remain at anemic levels through 2011, and
that non-residential construction will continue to contract.
Although the federal government is spending on infrastructure
programs, states and municipalities are grappling with diminished
tax revenues and resultant deficits, reducing spending on
infrastructure maintenance and repair.
Moody's review will focus on: (1) assessing Contech's ability to
improve its liquidity profile through covenant relief or
rebalancing its capital structure, (2) its earnings and cash flow
outlook, and (3) its longer term solvency.
Contech Construction Products, Inc., headquartered in West
Chester, OH, manufactures and markets corrugated steel and plastic
pipe and fabricated products for use in highway, residential, and
commercial construction.
COYOTES HOCKEY: Debtors Skirt Trustee Appointment
-------------------------------------------------
Bankruptcy Law360 reports that National Hockey League team the
Phoenix Coyotes successfully dodged a move to assign it a trustee
on Wednesday, according to one of the attorneys for the team's
debtors-in-possession. The U.S. Bankruptcy Court for the District
of Arizona quashed its own sua sponte motion to impose a trustee
or convert the case to a Chapter 7 liquidation, according to
Law360.
As reported in the TCR on Sept. 21, 2010, the city of Glendale,
Arizona, is trying to sell the Phoenix Coyotes to a buyer who will
keep the team in Phoenix. According to reports, Matthew Hulsizer,
the chief executive officer of Chicago investment firm Peak6
Investments LP, has deposited $25 million into escrow for the
purchase of Phoenix Coyotes. The city of Glendale has until Dec.
31, 2010, to complete the sale in Arizona otherwise the NHL will
market the Coyotes to group outside the Phoenix market.
NHL acquired the team for $140 million in October 2009 during
Chapter 11 bankruptcy proceedings. NHL said it wants to sell the
team for $170 million.
About Coyotes Hockey
Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes
Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of
the Phoenix Coyotes National Hockey League team -- filed for
Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on
May 5, 2009. The Debtors are represented by Thomas J. Salerno,
Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate
their assets and liabilities are between $100 million and
$500 million.
In the third quarter of 2009, Judge Redfield T. Baum approved the
sale of the Phoenix Coyotes to the National Hockey League, which
had bought the team to quash a plan by bidder Jim Balsillie's to
move the team to Ontario, Canada. Coyotes was sent to Chapter 11
to effectuate a sale by owner Jerry Moyes to Mr. Balsillie.
The NHL is in the process of selling the team.
COZUMEL CARIBE: Seeks to Delay Bid for U.S. Bankruptcy Relief
-------------------------------------------------------------
Cozumel Caribe SA is seeking to delay its bid to have its
bankruptcy case recognized in the U.S., in the wake of an
objection that called the move "premature," Dow Jones' DBR Small
Cap reports.
According to the report, the Company was set to move forward with
its request for Chapter 15 protection at a hearing on
September 22, 2010. However, the report relates, in a letter
addressed to Judge Martin Glenn of the U.S. Bankruptcy Court in
Manhattan earlier this week, Cozumel Caribe attorney Jeffrey R.
Gleit sought to push back the company's request until a Mexican
court rules on the company's insolvency proceedings there.
Cozumel Caribe launched its Chapter 15 proceedings in Manhattan on
July 20, a few months after initiating its Mexican insolvency
proceedings, the report says. However, the report relates, both
cases have yet to receive the blessing of the court.
About Cozumel Caribe
Cozumel Caribe SA de CV, a Mexican provider of tourism services at
a beachfront hotel in Cozumel, filed for Chapter 15 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 10-13913) on July 20, 2010.
Cozumel Caribe reported more than US$100 million in debts and
assets of more than US$10 million in its bankruptcy petition.
CREDIT ACCEPTANCE: S&P Raises Counterparty Credit Rating to 'BB'
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its ratings
on Credit Acceptance Corp., including raising the long-term
counterparty credit and senior secured debt ratings to 'BB' from
'BB-'. The outlook is stable.
S&P's ratings on Credit Acceptance Corp. are driven by the firm's
very strong earnings and leverage. "The company's performance has
been excellent in difficult economic circumstances and S&P
believes management's differentiation strategy provides a buffer
against competitive threats," said Standard & Poor's credit
analyst Jeff Zaun. The firm's monoline business profile,
dependence on wholesale funding, and concentrated ownership
partially offset its strengths.
With $1.3 billion in assets and $582 million of equity on June 30,
2010, Credit Acceptance is smaller than its peers, particularly
those with a nationwide franchise. Management sticks to a highly
focused and disciplined strategy, and maintains an operational
structure that has enabled the firm to be consistently profitable
at lending to deep subprime customers. There are no off-balance-
sheet assets and there is no goodwill. The firm's ratio of debt
to adjusted total equity, which S&P estimates at 1.85x following
the share repurchase that the firm completed in July 2010, is
strong for the rating. Its earnings have also remained robust
through the severe recession and weak recovery, with return on
average assets improving to an annualized rate of 13.3% through
the first six months of 2010 from 12.5% in 2009 and 6.0% in 2008.
These strong earnings have historically provided sufficient
cushion against modest changes in asset quality.
Credit Acceptance's concentration in deep subprime lending and its
dependence on wholesale funding partly offset these strengths.
The founder and Chairman of the Board, Donald A. Foss, owns 58% of
the company. This presents key man, succession, and governance
risks because of Mr. Foss's large influence on the Board.
The stable outlook balances Credit Acceptance's very strong
performance after the economic downturn in 2007 against its
monoline business model and dependence on wholesale funding
markets. Very strong leverage and very good earnings in the midst
of a deep recession have pushed the rating to a level that is high
for a wholesale-funded monoline lender.
Present earnings levels provide a significant cushion so that
lower profits would not result in a downgrade. S&P could
downgrade Credit Acceptance if material growth in the firm's
purchase program (which is less differentiated from traditional
subprime lending programs) is coupled with significantly
deteriorating asset quality, earnings, or leverage metrics. S&P
does not expect earnings to remain at their current, very high
levels. S&P could upgrade the firm if its leverage and earnings
remain superior to other commercial finance companies' for an
extended period.
CRESCENT RESOURCES: Trust Sues Duke Energy Over Loan
----------------------------------------------------
Dawn McCarty at Bloomberg News reports that a trust representing
creditors of Crescent Resources LLC sued Duke Energy Corp. to
recover $1.19 billion plus other damages tied to a 2006 loan deal.
The litigation trust said that Duke required Crescent, its
subsidiary at the time, to borrow $1.23 billion and immediately
transfer $1.19 billion back to Duke. The case is Crescent
Resources Litigation Trust v. Duke Energy Corp., case no.
10-01111 (Bankr. W.D. Tex.).
About Crescent Resources
Crescent Resources, LLC -- http://www.crescent-resources.com/--
is a land management and real estate development company with
interests in 10 states in the southeastern and southwestern United
States. Crescent Resources is a joint venture between Duke Energy
and Morgan Stanley Real Estate Fund. Established in 1969,
Crescent creates mixed-use developments, country club communities,
single-family neighborhoods, apartment and condominium
communities, Class A office space, business and industrial parks
and shopping centers.
Crescent Resources, LLC, and its debtor-affiliates filed for
Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 09-11507) on
June 10, 2009. Judge Craig A. Gargotta presided over the case.
Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., served
as the Debtors' bankruptcy counsel.
Crescent Resources' plan of reorganization was confirmed by the
Court on May 24, 2010. It successfully completed its financial
restructuring and emerged from Chapter 11 on June 9, 2010.
DAGAZ INTERNATIONAL: Files for Bankruptcy Under Chapter 7
---------------------------------------------------------
Adrianne Pasquarelli at Crain's New York Business reports that
home decorator Dagaz International Inc. filed for bankruptcy under
Chapter 7 with assets of about $18,000, and liabilities of more
than $632,000.
Company owner Michael Tavano listed a headquarters on East 33rd
Street, in New York, but he also operates a large showroom space
in the Design Center at 200 Lexington Ave. Mr. Tavano signed a
10-year lease for suites 1210, 1212 and 1214 at the Design Center
in September of last year, according to the report.
The Company owes $120,000 in back rent to Design Center and
$87,000 to Business Resources and Investment Service Center. The
Company also owes money to several smaller local vendors, such as
Long Island City, Queens-based fabric supplier Stroheim & Roman,
Brooklyn-based Blitz Cushion, and drapery service Studio M, which
is also based in Long Island City.
James Shenwick of Shenwick & Associates represents the Company.
DAVID FLYNN: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Joint Debtors: David Lloyd Flynn
Carla Flynn
2126 East Valley Road
Montecito, CA 93108
Bankruptcy Case No.: 10-14821
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
Central District Of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: Joseph M. Sholder, Esq.
GRIFFITH & THORNBURGH, LLP
8 E Figuerora St., Suite 300
Santa Barbara, CA 93101
Tel: (805) 965-5131
Fax: (805) 965-6751
E-mail: sholder@g-tlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Joint Debtors' 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb10-14821.pdf
DELUJO SPANISH: Case Summary & 18 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Delujo Spanish Village APS LLC
13711 Weddington Street
Sherman Oaks, CA 91401
Bankruptcy Case No.: 10-21875
Chapter 11 Petition Date: September 21, 2010
Court: U.S. Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: Philip D. Dapeer, Esq.
PHILIP DAPEER, A LAW CORPORATION
2625 Townsgate Road, Suite 330
Westlake Village, CA 91361
Tel: (323) 954-9144
Fax: (323) 954-0457
E-mail: PhilipDapeer@aol.com
Estimated Assets: $6,353,780
Estimated Debts: $2,870,943
A list of the Company's 18 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb10-21875.pdf
The petition was signed by Bolgai Diaz, vice president of the
general partner of the Limited Partnership Membe.
DENNY HECKER: Sued by Trustee for Cashing in on Insurance
---------------------------------------------------------
Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review,
reports that bankruptcy trustee Randall L. Seaver is suing Denny
Hecker, accusing him of cashing in on insurance policies that
should be available for his creditors.
According to DBR, Mr. Seaver says Mr. Hecker converted more than
$120,000 of insurance policy checks into cash, Western Union money
orders and "a preloaded Mastercard." While Mr. Hecker has
responded to Mr. Seaver's request to account for where the funds
went, Mr. Seaver says more than $20,000 still hasn't been
accounted for.
According to DBR, Mr. Seaver is asking the U.S. Bankruptcy Court
in Duluth, Minn., to force Mr. Hecker to immediately turn over the
funds he said Mr. Hecker wrongly tapped this summer. Mr. Seaver
also wants to enjoin Mr. Hecker and girlfriend Christi Rowan from
doing just about anything -- "using, disposing, transferring,
encumbering, secreting or destroying" -- with the assets that
belong to Mr. Hecker's bankruptcy estate, including those assets
that may be "concealed" by Mr. Hecker.
When asked for comment, Mr. Hecker's bankruptcy and criminal
defense attorney, Barbara May, Esq., told the St. Paul Pioneer
Press that "you really can't order a debtor to turn over something
that he doesn't have."
About Denny Hecker
Dennis E. Hecker owned and operated dozens of auto dealerships,
car rental franchises, and other businesses until 2009. He filed a
voluntary chapter 7 petition (Bankr. D. Minn. Case No. 09-50779)
on June 4, 2009, after his auto empire collapsed into bankruptcy.
Chrysler Financial filed a dischargeability action (Bankr. D.
Minn. Adv. Pro. No. 09-5019) on July 8, 2009. Chrysler Financial
alleged that $83 million of $350 million owed is nondischargeable
under 11 U.S.C. Sec. 523(a) because Mr. Hecker allegedly obtained
it through the use of false pretenses, false representations,
fraud, defalcation, and embezzlement. The Honorable Robert J.
Kressel granted Chrysler Financial's motion for sanctions and
ordered $83 million of the judgment against Mr. Hecker, together
with accrued interest, not dischargeable in the Chapter 7
bankruptcy case.
Mr. Hecker has pleaded guilty to two fraud charges: concealing
assets from the bankruptcy court and lying to get multimillion-
dollar loans for his dealerships and leasing operation.
DINEEQUITY INC: Moody's Assigns 'Ba2' Rating on $50 Mil. Notes
--------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to DineEquity
Inc's proposed $50 million guaranteed senior secured revolving
credit facility and $900 million guaranteed senior secured term
loan B, as well as a B3 rating to its $825 million senior
unsecured notes. Moody's also assigned DineEquity a B2 Corporate
Family Rating and Probability of Default Rating. The outlook is
stable. Proceeds from the proposed note offering will be used to
re-finance existing debt. Ratings are subject to final
documentation.
Ratings Rationale
DineEquity's ratings reflect its very high leverage and relatively
thin interest coverage, which position DineEquity weakly in the B2
category. Ratings also reflect Moody's expectation that
historically high unemployment and intense promotional activity by
its competitors will continue to pressure operating performance.
However, the ratings also reflect the company's reasonable scale,
multiple concepts which add diversity, franchise based business
model that is less capital intensive and has lower earnings
volatility, diversified day part which boosts returns on invested
capital, and good liquidity. The ratings also factor in Moody's
expectation that debt protection metrics will improve as the
company focuses on debt reduction.
The stable outlook reflects Moody's view that DineEquity's debt
protection measures will improve over the next twelve to eighteen
months despite persistently weak consumer spending as the company
focuses on debt reduction. The outlook also reflects Moody's
expectation that the company will maintain good liquidity.
New ratings assigned:
-- Corporate Family Rating at B2
-- Probability of Default Rating at B2
-- $50 million guaranteed senior secured revolver due 2015 at
Ba2 (LGD 2, 21%)
-- $900 million guaranteed senior secured term loan B due 2016
at Ba2 (LGD 2, 21%)
-- $825 million guaranteed senior unsecured notes due 2018 at B3
(LGD 5, 76%)
Factors that could result in a downgrade would include an
inability to strengthen debt protection metrics from current
levels over the next twelve to eighteen months while maintaining
good liquidity. Specifically, a downgrade could occur if
DineEquity is unable to reduce its Debt to EBITDA over the next
twelve to eighteen months to below 6.5 times or if EBITA to
interest approached 1.0 time. A deterioration in liquidity could
also result in a downgrade.
Given the company's weak debt protection metrics a higher rating
over the intermediate term is unlikely. However, factors that
could result in an upgrade would include stronger debt protection
metrics driven by solid operating performance and debt reduction.
Overall, an upgrade could occur if debt to EBITDA fell below 5.0
times and EBITA to interest approached 2.0 times. A higher rating
would also require good liquidity.
DineEquity, owns, operates, and franchises, approximately 3,477
casual dining restaurants under the brand names International
House of Pancakes and Applebee's Neighborhood Grill & Bar. Annual
revenues are approximately $1.4 billion.
DINEEQUITY INC: S&P Assigns Corporate Credit Rating at 'B'
----------------------------------------------------------
Standard & Poor's Rating Services said it assigned its 'B'
corporate credit rating to Glendale, Calif.-based DineEquity Inc.
S&P also assigned its 'BB-' issue rating (two notches above the
corporate credit rating) to the company's proposed $950 million
senior secured credit facilities (a $50 million revolving credit
facility due 2015 and $900 million term loan due 2017). The '1'
recovery rating indicates S&P's expectation of very high (90%-
100%) recovery in the event of a default.
S&P also assigned its 'CCC+' issue-level rating to the proposed
$825 million unsecured notes due 2018 (two notches below the
corporate credit rating). The recovery rating of '6' indicates
S&P's expectation of negligible (0%-10%) recovery in the event of
a default.
DineEquity intends to used the proceeds from the $900 million term
loan and $825 million unsecured notes to fund the tender offer,
consent solicitation, and redemption for about $1.6 billion of
securitized debt currently outstanding under its subsidiaries
Applebee's Neighborhood Grill & Bar and IHOP Restaurants.
"The rating on DineEquity reflects S&P's analysis that sales will
remain under pressure in 2010 as consumer spending stays weak in
the fragile economic recovery," said Standard & Poor's credit
analyst Ana Lai. It also reflects S&P's expectation that
DineEquity will use the bulk of its free cash flow and proceeds
from the franchising of additional restaurants, if any, toward
debt reduction. However, S&P believes leverage will remain
elevated because of the substantial amount of debt.
DUBAI WORLD: Gets Approval for $24.9 Billion Debt Plan
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Dubai World received approval from creditors to alter
the terms on $24.9 billion of debt, more than nine months after
the state-owned holding company's proposal to delay repaying loans
sent emerging market stocks tumbling.
According to the report, the Company and its main creditor banks
agreed in May to restructure $14.4 billion of loans and $8.9
billion of government liabilities to resolve a crisis that roiled
global markets last year. The company said banks would be paid
$4.4 billion in five years and another $10 billion over eight
years at below-market interest rates supported by assets sales.
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.
ELENA HOME CARE: Atty. Sanctioned for Failure to Attend Hearing
---------------------------------------------------------------
In In re D'Angelo Camacho Carpo and Myrna Ayran Bautista-Carpo,
dba Elena Home Care, (Bankr. N.D. Calif. 09-32520), Judge Dennis
Montali on February 4, 2010, entered an order directing Timothy
Umbreit, Esq., to appear in person at a hearing on March 5, 2010,
to show cause why the Bander Law Firm should not be compelled to
disgorge all fees and retainers paid to it by the Debtors, and why
Mr. Umbreit, as the Debtors' principal bankruptcy counsel, should
not be personally sanctioned for failure to comply with the
court's prior directive to appear in person at a January 28 status
conference. Mr. Umbreit did not appear at the March 5 hearing on
the Order to Show Cause and he did not file a written response to
the OSC seven days prior to the hearing.
The court entered an order on March 22, 2010, imposing $5,000 in
sanctions against Mr. Umbreit personally. The Sanctions Order
directed Mr. Umbreit to pay that amount to Debtors, in care of
their new counsel, by April 5, 2010. Mr. Umbreit has not made the
payment.
Mr. Umbreit filed a motion for reconsideration and for relief from
the Sanctions Order. He did not seek a stay of the Sanctions
Order. The court held a hearing on the motion for reconsideration
on April 30, 2010.
The Debtors paid $20,000 or more to Mr. Umbreit's firm, but
neither Mr. Umbreit nor any other attorney from his firm ever met
Debtors in person.
In a decision dated September 7, Judge Montali maintained that Mr.
Umbreit's conduct vis-a-vis the court orders and failure to file
status conference statements was conscious and willful. Judge
Montali also held that Mr. Umbreit's his conduct in the
representation of Debtors was unprofessional and well below any
reasonable standard of care. Judge Montali denied Mr. Umbreit's
motion for reconsideration.
The Bander Law Firm filed a chapter 7 petition (Bankr. C.D. Calif.
Case No. 10-15066) on February 12, 2010. Mr. Umbreit has not
filed bankruptcy.
A copy of the Court's memorandum decision is available at:
http://www.leagle.com/unsecure/page.htm?shortname=inscco20100907631
ELVIN LINARES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Joint Debtors: Elvin Efrain Linares
Denise Antonia Linares
1131 W 39th street
Los Angeles, CA 90037
Bankruptcy Case No.: 10-49958
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
Central District Of California (Los Angeles)
Judge: Sheri Bluebond
Debtor's Counsel: Anthony Egbase, Esq.
LAW OFFICES OF ANTHONY O EGBASE & ASSOC
350 S Figueroa St., Ste 189
Los Angeles, CA 90071
Tel: (213) 620-7070
E-mail: info@anthonyegbaselaw.com
Scheduled Assets: $839,740
Scheduled Debts: $1,676,017
A list of the Joint Debtors' 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb10-49958.pdf
Debtor-affiliates that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Jose Luis Nolasco and 09-22568 09/24/09
Maria Julia Nolasco
ECOSPHERE TECHNOLOGIES: Earns $4.7 Million in June 30 Quarter
-------------------------------------------------------------
Ecosphere Technologies, Inc., filed its quarterly report on Form
10-Q, reporting net income applicable to Ecosphere Technologies,
Inc. common stock of $4.7 million on $2.1 million of revenue for
the three months ended June 30, 2010, compared with a net loss
applicable to Ecosphere Technologies, Inc. common stock of
$18.5 million on $154,041 of revenue for the same period of 2009.
At June 30, 2010, the Company had a working capital deficiency of
$4.9 million, a stockholders' deficit of $1.8 million and had
outstanding convertible preferred stock that is redeemable under
limited circumstances for roughly $3.8 million (including accrued
dividends). The Company has not attained a level of revenues
sufficient to support recurring expenses, and the Company does not
presently have the resources to settle previously incurred
obligations.
The Company's balance sheet at June 30, 2010, showed
$9.9 million in total assets, $7.9 million in total liabilities,
$3.8 million in redeemable convertible cumulative preferred stock,
and a stockholders' deficit of $1.8 million.
As reported in the Troubled Company Reporter on April 6, 2010,
Salberg & Company, P.A., in Boca Raton, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted of the Company's net loss for 2009, and working
capital, stockholders' and accumulated deficits at December 31,
2009.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b7d
About Ecosphere Technologies
Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH)
-- http://www.ecospheretech.com/-- is a diversified water
engineering and environmental services company. Ecosphere
Technologies provides environmental services and technologies for
use in large-scale and sustainable applications across industries,
nations and ecosystems.
EOS PREFERRED: Earns $1.0 Million in June 30 Quarter
----------------------------------------------------
EOS Preferred Corporation filed its quarterly report on Form 10-Q,
reporting net income of $1.0 million on net revenue of
$1.3 million for the three months ended June 30, 2010, compared
with a net loss of $476,000 on ($148,000) of net revenue for the
same period of 2009.
The increase in net income was primarily due to an increase in the
gain on loans held for sale of $1.8 million. In the second
quarter of 2010 there was a gain on loans held for sale of
$756,000 as compared to a loss of $1.0 million in the second
quarter of 2009.
All of the mortgage assets in the Company's loan portfolio at
June 30, 2010, were acquired from Capital Crossing Bank or Aurora
Bank and it is anticipated that substantially all additional
mortgage assets, if any are acquired in the future, will be
acquired from Aurora Bank. As of June 30, 2010, the Company's
loan portfolio had a carrying value of $27.3 million and an unpaid
principal balance of $39.7 million. There were no loans purchased
or sold during the three months ended June 30, 2010.
The Company's balance sheet at June 30, 2010, showed $85.0 million
in total assets, $147,000 in total liabilities, and stockholders'
equity of $84.9 million.
As reported in the Troubled Company Reporter on April 6, 2010,
Ernst & Young LLP, in New York, expressed substantial doubt about
Capital Crossing Preferred Corporation's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted that on September 15, 2008, Lehman Brothers
Holdings Inc., indirect parent company to Aurora Bank FSB, and
ultimate parent company of Capital Crossing Preferred Corporation,
filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy
Code. The independent auditors also noted that Aurora Bank, the
sole owner of the common stock of the Company, is subject to a
Cease and Desist Order, dated January 26, 2009, and a Prompt
Corrective Action Directive, dated February 4, 2009, issued by the
Office of Thrift Supervision, requiring Aurora Bank, among other
matters, to submit a capital restoration plan and a liquidity
management plan, and imposing restrictions on certain activities
of Aurora Bank and Capital Crossing Preferred Corporation.
"The bankruptcy of Lehman Brothers and the ability of the OTS to
regulate and restrict the business and operations of Capital
Crossing Preferred Corporation, in light of the Cease and Desist
Order and the Prompt Corrective Action Directive, raise
substantial doubt about Capital Crossing Preferred Corporation's
ability to continue as a going concern."
The Company discloses in its latest 10-Q that at June 30, 2010,
according to a public filing with the OTS, Aurora Bank's capital
ratios were above the thresholds required to achieve the "well-
capitalized" designation. However, due to the continuation of the
provisions of the Order and the PCA Directive, Aurora Bank was
deemed to be "adequately capitalized". The classification of
Aurora Bank's capitalization level is subject to review and
acceptance by the OTS. The Order and the PCA Directive were still
effective as of the date of issuance of this interim report. The
OTS may direct in writing at any time the automatic exchange of
the Series B and Series D preferred stock for preferred shares of
Aurora Bank.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b7e
About EOS Preferred
Based in New York, EOS Preferred Corporation (formerly Capital
Crossing Preferred Corporation) is a Massachusetts corporation
with the principal business objective to hold mortgage assets that
will generate net income for distribution to stockholders. The
Company was organized on March 20, 1998, to acquire and hold real
estate assets and Aurora Bank FSB, an indirect wholly-owned
subsidiary of Lehman Brothers Holdings Inc., owns all of the
Company's common stock. Effective June 21, 2010, the Company
changed its corporate name to EOS Preferred Corporation.
The Company operates in a manner intended to allow its to be taxed
as a real estate investment trust, or a "REIT," under the Internal
Revenue Code of 1986, as amended. As a REIT, EOS will not be
required to pay federal or state income tax if it distributes its
earnings to its shareholders and continues to meet a number of
other requirements.
EOS PREFERRED: Hires Grant Thornton as New Independent Auditors
---------------------------------------------------------------
On September 17, 2010, the Audit Committee of the Board of
Directors of EOS Preferred Corporation engaged Grant Thornton LLP
as its new independent registered public accounting firm.
During the two fiscal years ended December 31, 2009, and 2008, and
the subsequent interim period through September 17, 2010, the
Company did not consult with GT regarding any of the matters or
events disclosed in any of its 10-K, 10-Q or 8-K filings.
GT replaces Ernst & Young LLP as the Company's independent
registered public accounting firm.
About EOS Preferred
Based in New York, EOS Preferred Corporation (formerly Capital
Crossing Preferred Corporation) is a Massachusetts corporation
with the principal business objective to hold mortgage assets that
will generate net income for distribution to stockholders. The
Company was organized on March 20, 1998, to acquire and hold real
estate assets and Aurora Bank FSB, an indirect wholly-owned
subsidiary of Lehman Brothers Holdings Inc., owns all of the
Company's common stock. Effective June 21, 2010, the Company
changed its corporate name to EOS Preferred Corporation.
The Company operates in a manner intended to allow it to be taxed
as a real estate investment trust, or a "REIT," under the Internal
Revenue Code of 1986, as amended. As a REIT, EOS will not be
required to pay federal or state income tax if it distributes its
earnings to its shareholders and continues to meet a number of
other requirements.
The Company's balance sheet at June 30, 2010, showed $85.0 million
in total assets, $147,000 in total liabilities, and stockholders'
equity of $84.9 million.
* * *
As reported in the Troubled Company Reporter on April 6, 2010,
Ernst & Young LLP, in New York, expressed substantial doubt about
Capital Crossing Preferred Corporation's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted that on September 15, 2008, Lehman Brothers
Holdings Inc., indirect parent company to Aurora Bank FSB, and
ultimate parent company of Capital Crossing Preferred Corporation,
filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy
Code. The independent auditors also noted that Aurora Bank, the
sole owner of the common stock of the Company, is subject to a
Cease and Desist Order, dated January 26, 2009, and a Prompt
Corrective Action Directive, dated February 4, 2009, issued by the
Office of Thrift Supervision, requiring Aurora Bank, among other
matters, to submit a capital restoration plan and a liquidity
management plan, and imposing restrictions on certain activities
of Aurora Bank and Capital Crossing Preferred Corporation.
"The bankruptcy of Lehman Brothers and the ability of the OTS to
regulate and restrict the business and operations of Capital
Crossing Preferred Corporation, in light of the Cease and Desist
Order and the Prompt Corrective Action Directive, raise
substantial doubt about Capital Crossing Preferred Corporation's
ability to continue as a going concern."
The Company discloses in its latest 10-Q that at June 30, 2010,
according to a public filing with the OTS, Aurora Bank's capital
ratios were above the thresholds required to achieve the "well-
capitalized" designation. However, due to the continuation of the
provisions of the Order and the PCA Directive, Aurora Bank was
deemed to be "adequately capitalized." The classification of
Aurora Bank's capitalization level is subject to review and
acceptance by the OTS. The Order and the PCA Directive were still
effective as of the date of issuance of this interim report. The
OTS may direct in writing at any time the automatic exchange of
the Series B and Series D preferred stock for preferred shares of
Aurora Bank.
FORT LOWELL: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Fort Lowell Retail, LLC
dba Copper Plaza
2850 E. Skyline Drive
5262 E. Hawthorne
Tucson, AZ 85718
Bankruptcy Case No.: 10-29820
Chapter 11 Petition Date: September 17, 2010
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Judge: James M. Marlar
Debtor's Counsel: Alan R. Solot, Esq.
TILTON & SOLOT
459 N Granada Ave.
Tucson, AZ 85701
Tel: (520) 622-4622
Fax: (520) 882-9861
E-mail: arsolot@tiltonandsolot.com
Scheduled Assets: $680,315
Scheduled Debts: $2,540,638
A list of the Company's six largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/azb10-29820.pdf
The petition was signed by Michael J. Hanson, president of NCH
Corporation, Debtor's managing member.
FREESCALE SEMICONDUCTOR: S&P Assigns 'CCC' Senior Unsec. Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'CCC'
senior unsecured rating and '6' recovery rating to Austin, Texas-
based Freescale Semiconductor Inc.'s senior unsecured notes due
2020. The '6' recovery rating indicated expectations for
negligible (0%-10%) recovery of principal in the event of payment
default. The company intends to use proceeds of the new notes to
retire existing senior unsecured notes.
"The rating on Freescale," said Standard & Poor's credit analyst
Lucy Patricola, "reflects S&P's expectation that the company will
continue on its current path to generate over $800 million of
EBITDA for 2010. S&P expects leverage to remain high but free
cash flow to be slightly positive, preserving existing cash
balances of $1 billion."
The proposed transaction does not affect S&P's 'B-' corporate
credit rating or its '6' recovery rating on senior unsecured
issues.
Ratings List
Freescale Semiconductor Inc.
Corporate Credit Rating B-/Stable/--
Ratings Assigned
Freescale Semiconductor Inc.
Senior Unsecured Notes due 2020 CCC
Recovery Rating 6
FREESCALE SEMICONDUCTOR: Moody's Assigns 'Caa2' Rating on Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to Freescale
Semiconductor, Inc.'s proposed $500 million issuance of senior
unsecured notes due 2020. The rating outlook is stable. Net
proceeds are expected to be used to repay a portion of the
$2.0 billion of aggregate senior unsecured debt maturing 2014
($1.269 billion senior unsecured notes; $179 million senior
unsecured floating rate notes; and $537 million senior unsecured
toggle notes). The assigned ratings are subject to review of
final documentation and no material change in the terms and
conditions of the transaction as advised to Moody's. Moody's
expect to withdraw ratings on any of the 2014 tranches that are
retired in their entirety.
This is a summary of the rating actions and Moody's current
ratings for Freescale:
* $500 Million Senior Unsecured Notes due 2020 -- Caa2 (LGD-5,
80%)
* Corporate Family Rating (New) -- Caa1
* Probability of Default Rating - Caa1
* $ 587 Million (originally $750 Million) Senior Secured Revolving
Credit Facility due 2012 - B2 (LGD-3, 30%)
* $2.251 Billion (originally $2.265 Billion) Senior Secured
Extended Maturity Term Loan due 2016 - B2 (LGD-3, 30%)
* $ 750 Million 10.125% Senior Secured Notes due 2018 -- B2 (LGD-
3, 30%)
* $1.380 Billion 9.25% Senior Secured Notes due 2018 -- B2 (LGD-3,
30%)
* $1.269 Billion (originally $2.35 Billion) 8.875% Senior
Unsecured Notes due 2014 - Caa2 (LGD-5, 80%)
* $ 179 Million (originally $500 Million) Senior Unsecured
Floating Rate Notes due 2014 - Caa2 (LGD-5, 80%)
* $ 537 Million (originally $1.5 Billion) 9.125%/9.875% Senior
Unsecured Toggle Notes due 2014 - Caa2 (LGD-5, 80%)
* $ 764 Million (originally $1.6 Billion) 10.125% Senior
Subordinated Unsecured Notes due 2016 - Caa3 (LGD-6, 94%)
* Speculative Grade Liquidity Rating - SGL- 3
Ratings Rationale
Though interest expense will increase, Moody's views
constructively this latest refinancing and extension of
Freescale's approximate $7.7 billion of LBO debt. The current
transaction somewhat alleviates the concentration of debt maturing
in 2014, given Freescale's limited ability to de-lever from
internal sources. Following this refinancing, Freescale will have
roughly $1.5 billion of debt due in 2014, its second closest
maturity following the company's revolver ($532 million
outstanding) due in 2012. Moody's view this transaction as a
continuation of Freescale's effort to proactively improve its
capital structure and create a more evenly distributed debt
maturity profile. The maturity extension also buys the company
additional time to transform new product categories into
meaningful contributors of profitable growth.
In February, Freescale amended its credit agreement to extend the
maturity date to 2016 on $2.265 billion of term loan B facility
debt and issued $750 million of 10.125% senior secured notes due
2018. Approximately $112 million was used to pay down a portion
of the revolver and $634 million was used to pay down the non-
extended portion of the term loan B facility due 2013. In April,
the company issued $1.38 billion of 9.25% senior secured notes due
2018, which was used to retire the remaining $472 million of the
secured term loan B facility and the remaining $917 million of the
secured incremental term loan due 2014.
Freescale's Caa1 CFR continues to be constrained by the company's
substantial leverage and thin interest coverage, as well as
Moody's expectation of very modest free cash flow generation
relative to its large debt load. The CFR also reflects a
significantly reduced earnings contribution from the company's
cellular segment, offset by modest earnings from Freescale's
recent entr‚e into higher growth sub-segments within consumer and
industrial markets. Since Freescale is exposed to the inherently
cyclical and volatile semiconductor industry, Moody's remain
concerned that Freescale's highly leveraged capital structure may
prove unsustainable if cash flows were to deteriorate for an
extended period.
The rating is supported by Moody's view that Freescale maintains
strong market leadership positions and a rich product portfolio
characterized by technological breadth; its somewhat favorable
revenue diversification across products, geographies and
customers; its refocused R&D program to drive future revenue
growth in extended market segments; and its "asset-light" model
that enables it to reduce expenses and capex in response to weak
market conditions.
The stable rating outlook reflects Moody's expectation that
following the severe downturn in profits and cash flow caused by
the recession, the company's operating performance will continue
to improve as a result of the recovery in the global demand
environment and Freescale's progress in eliminating $700 million
of annualized costs (full $800 million cost savings expected
during 2010). The stable outlook incorporates Moody's belief that
semiconductor end market demand will demonstrate growth in 2010/11
and Freescale's revenue growth will be in line with its
addressable markets.
The rating could experience upward pressure if Freescale
demonstrates a sustained return to improved profitability and
positive FCF generation, plus de-leveraging to at least 7.0x
through sustainable expanded EBITDA or debt reduction without
impairing its liquidity profile.
The rating could experience downward pressure to the extent demand
for Freescale's core embedded processors were to weaken and
earnings were to fall short of expectations or liquidity
experiences contraction, as evidenced by cash balances falling
below $1 billion for an extended period.
Freescale's liquidity is adequate as reflected in its SGL-3
speculative grade liquidity rating. The liquidity assessment is
principally driven by the company's $1.1 billion of cash balances
given that, over the next four quarters, Moody's expect Freescale
to generate very modest FCF relative to its large debt load.
Despite the absence of financial maintenance covenants, financial
flexibility remains diminished, in Moody's opinion, since the
company has drawn $532 million under its revolver, which has a
committed capacity of $587 million.
The last rating action was on April 7, 2010, when Moody's assigned
a B2 rating to the company's $1.38 billion 9.25% senior secured
notes due 2018.
Headquartered in Austin, TX, Freescale Semiconductor, Inc.,
designs and manufactures embedded semiconductors for the
transportation, networking and wireless markets. The company was
separated from Motorola via IPO in July 2004 and taken private in
a leveraged buyout in December 2006. Revenues for the twelve
months ended July 2, 2010, were $3.97 billion.
FUSION DESIGN: Voluntary Chapter 11 Case Summary
------------------------------------------------
Joint Debtors: Fusion Design and Catering, Inc.
Alexander N. Kim
Laura J. Foster
69 Vista High Drive
Carbondale, CO 81623
Bankruptcy Case No.: 10-33960
Chapter 11 Petition Date: September 21, 2010
Court: U.S. Bankruptcy Court
District of Colorado (Denver)
Judge: Sidney B. Brooks
Debtors' Counsel: John D. LaSalle, Esq.
715 West Main Street, Suite 201
Aspen, CO 81611
Tel: (970) 925-6633
E-mail: lasalle@sopris.net
Scheduled Assets: $2,250,200
Scheduled Debts: $2,465,923
The list of unsecured creditors filed together with its petition
does not contain any entry.
The petition was signed by Laura J. Foster, president.
GANNETT CO: S&P Gives Positive Outlook, Affirms 'BB' Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on McLean, Virginia-based Gannett Co. Inc. to positive
from stable. All existing ratings on the company, including the
'BB' corporate credit rating, were affirmed.
In addition, S&P assigned Gannett Co. Inc.'s $250 million senior
notes due 2015 and $250 million senior notes due 2018 S&P's issue-
level rating of 'BB' (at the same level as the 'BB' corporate
credit rating on the company). S&P also assigned the notes a
recovery rating of '3', indicating its expectation of meaningful
(50% to 70%) recovery for noteholders in the event of a payment
default.
The company plans to use proceeds from the notes to reduce
revolving credit and term loan balances. The notes are guaranteed
by all of Gannett's subsidiaries that guarantee obligations under
the company's credit facilities and, as such, they rank pari passu
with the facilities and other guaranteed notes issued by Gannett.
Gannett had total debt outstanding of $2.6 billion as of June 30,
2010.
"The outlook revision to positive reflects declining debt
leverage, resulting from aggressive debt repayment in 2009 and in
the first half of 2010 (exceeding $1 billion during the period),"
said Standard & Poor's credit analyst Hal F. Diamond. S&P
believes that Gannett's moderating declines in publishing ad
revenue and its cost-saving initiatives will likely enable the
company to continue to generate meaningful discretionary cash flow
for the remainder of 2010 and 2011. This will provide Gannett the
ability to continue to reduce debt leverage (adjusted for
operating leases and pension obligations) to roughly 2.5x at year-
end 2010 and 2.3x at year-end 2011, absent significant
acquisitions or stepped-up shareholder returns.
GENERAL GROWTH: Hughes Heirs Deal to Be Presented at Plan Hearing
-----------------------------------------------------------------
General Growth Properties, Inc., and its 125 debtor affiliates
submitted to Judge Allan L. Gropper of the U.S. Bankruptcy Court
for the Southern District of New York a supplemental disclosure to
the Disclosure Statement and the Third Amended Joint Plan of
Reorganization on September 20, 2010.
The Supplemental Disclosure incorporates a $230 million settlement
executed by GGP and Platt W. Davis III, David G. Elkins and David
R. Lummis, as representatives of holders and beneficiaries under
the Contingent Stock Agreement executed by The Rouse Company, a
company acquired by the Debtors in 2004.
"We are very pleased to reach a mutually beneficial settlement
agreement with the heirs of Howard Hughes regarding the Summerlin
property," Thomas H. Nolan Jr., president and chief operating
officer of GGP, said in a public statement.
"With this agreement, GGP settles one of the last remaining
material issues impacting the capital structure of the new GGP and
'Spinco' as we continue our steady march toward emergence from
bankruptcy. It has always been our preference to reach an
agreement with the Hughes heirs, with whom we have had a very
successful venture for many years. The Summerlin master planned
community is one of the premier communities in the nation and has
a long track record of strong and consistent financial
performance. It is indicative of the type and quality of assets
that will comprise 'Spinco,' the GGP spin-off company that will
consist of our portfolio of master planned communities and other
real estate assets with long-term value creation potential," Mr.
Nolan added.
Terms of Settlement Agreement
The Holders are former stockholders of The Hughes Corp. or their
successors. In the 1950s and 1960s, Howard Hughes acquired large
swaths of real estate in the Las Vegas area. Mr. Hughes died in
1976 leaving behind a web of operating companies in different
industries, about 49,000 acres of real estate, and a well-
renowned dispute over his estate. By the mid-1990s, the
administrators of Howard Hughes' estate had divested many assets,
leaving THC with about 24,000 acres of land in Nevada and
California, including about 22,500 acres that would become the
Summerlin MPC.
In 1996, THC sold itself to The Rouse Company, but the parties
were unable to agree on the value of the undeveloped real estate.
The parties agreed to the CSA which is a deferred payment
arrangement agreement designed to allow the Hughes Heirs to
realize about one-half the value of the undeveloped land as the
community was developed over time and land was sold to builders.
The CSA contemplates a final payment to the Hughes Heirs based
upon a valuation, as of December 31, 2009, of the remaining
unsold and developable CSA assets including the Summerlin MPC.
In August 2004, GGP acquired Rouse and assumed the obligations of
The Rouse Company under the CSA.
To resolve all disputes regarding the treatment of all obligations
to holders under the CSA, the parties entered into the Settlement
Agreement on September 17, 2010. The salient terms of the
Settlement Agreement are:
(A) In full and final satisfaction of all rights, claims or
interests held by the Holders under the CSA or their Claim
Nos. 7054, 7635, 7673, 7692, 7892, 5266 and 6524, the
Debtors will provide the Holders with a total of
$230 million in value to be paid in accordance with the Plan.
(B) All of the Debtors' obligations to the CSA Representatives
and to the Holders under the CSA and other related
agreements will be satisfied in full by payment in full of
the Settlement Amount. Subject to payment in full of the
Settlement Amount, the Debtors will be unconditionally
released and forever discharged as of the effective date of
the Plan from any and all claims, interests, lawsuits,
judgments, demands, debts, rights, causes of action,
obligations, and liabilities whatsoever, including all
claims, debts, interests, rights or obligations under the
CSA and the Related Agreements that were or could have been
asserted against the Debtors in the Claims. Upon
distribution of the Settlement Payment, the Claims will be
deemed satisfied in full and will be expunged from the
claims register.
(C) The CSA and the Related Agreements will be terminated as to
the Debtors as of the Effective Date of the Plan, subject to
the payment in full of the Settlement Amount; provided,
however, that the CSA, the Related Agreements, and the
Consenting Holder Agreements will be preserved and continue
in full force and effect as between the Holders and the CSA
Representatives.
(D) The Plan will provide that the Debtors will pay $10 million
of the Settlement Amount in cash, in immediately available
funds, after the Effective Date. The Plan will provide that
the Debtors will have the right and option to pay the
remaining $220 million of the Settlement Amount in any
combination of cash or freely tradable New GGP Common Stock.
If paid in stock, the conversion price will be based upon a
10-day weighted average share price formula. Distributions
to holders of Allowed Hughes Heirs Obligations are subject
to reduction on account of the withholding of any Diversion
Amounts, which will be payable as directed by the CSA
Representatives.
(E) The Plan will provide that the Holders under the CSA and the
CSA Representatives will be deemed to have given the
releases as set forth in the Plan notwithstanding any
election to the contrary on Plan voting ballots. The
Debtors will amend the Plan accordingly to include the CSA
Representatives in the parties receiving releases, and the
Plan will include releases given by the members of Class
4.17 Hughes Heirs Obligations to the CSA Representatives.
(F) Upon approval of the Hughes Heirs Supplemental Disclosure
and resolicitation, the CSA Representatives will withdraw
the Motion to Determine Claim; provided, however, that the
Claim Determination Motion may be reinstated in the event
the Settlement Agreement is terminated.
A full-text copy of the Settlement Agreement is available for
free at http://bankrupt.com/misc/ggp_HughesSettlement.pdf
GGP's lead bankruptcy counsel, Marcia L. Goldstein, Esq., at Weil,
Gotshal & Manges LLP, in New York, further noted that the
Settlement Agreement obviates the need to continue appraisal work
regarding the valuation of the Summerlin and resolves numerous
smaller valuation disputes between the parties. Indeed, Kris
Hudson of The Wall Street Journal stated that pursuant to the CSA,
GGP and the Hughes Heirs had received their own appraisals for the
land's value but had not divulged them to each other, according to
people familiar with the matter. Mr. Hudson added that a third
appraisal is yet to be completed.
The Settlement Agreement is subject to approval by the Court as
part of confirmation of the Plan scheduled for October 21, 2010.
In other modifications, the Supplemental Disclosure also appends
proposed amendments in the Plan to accommodate the terms of the
Settlement Agreement, a full-text copy of which is available for
free at http://bankrupt.com/misc/ggp_PlanPropRevisions.pdf
A full-text copy of the Supplemental Disclosure is available for
free at http://bankrupt.com/misc/ggp_SupplementalDisclosure.pdf
Re-solicitation of Votes
of Hughes Holders
In light of the Debtors' filing of the Supplemental Disclosure to
the Disclosure Statement and Third Amended Joint Plan of
Reorganization, the Plan Debtors seek the Court's permission to:
(i) send the Supplemental Disclosure to all of the holders of
Class 4.17 Hughes Heirs Obligations; and
(ii) re-solicit votes of the Holders using proposed procedures.
Although the Court determined in August 2010, that the Disclosure
Statement contained adequate information regarding treatment of
the Hughes Heirs Obligations under the Plan, the Supplemental
Disclosure is appropriate because a subsequent development -- the
Settlement Agreement -- provides further clarity on this issue,
Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New
York, stresses.
While the CSA Representatives have authority from the vast
majority of the Holders to vote on their behalf, they do not have
consent from two holders that hold about 0.5% of the interests
under the CSA, Ms. Goldstein says. The Supplemental Disclosure
will thus explain that the CSA Representatives, who represent
about 99.5% of the Holders, now support the Settlement Agreement
and the Plan, she points out.
Re-solicitation is also appropriate because certain of the
Holders already may have voted without the benefit of information
regarding the Settlement Agreement, Ms. Goldstein tells the
Court. Thus, to ensure that all the Holders of the Hughes Heirs
Obligations vote based on the same information, the Plan Debtors
ask the Court to declare the previously distributed ballots are
void and that votes cast on the voided ballots will not be
counted.
Specifically, the Plan Debtors will resolicit votes for Class
4.17, and that re-solicitation packages will include a new re-
solicitation ballot and the Supplemental Disclosure. The Plan
Debtors also propose that the deadline for the Holders to vote on
the Plan will be extended to October 14, 2010.
The Plan Debtors believe that re-solicitation can be accomplished
on an expedited timeline and will not delay confirmation. The
Debtors propose this timeline for re-solicitation:
September 23, 2010 -- Hearing on the Debtors'
Supplemental Disclosure
Motion
September 24 to October 14, 2010 -- Re-solicitation of the
Hughes Heirs
October 7, 2010 -- Deadline for objection to
Plan
October 14, 2010 -- Confirmation Hearing
No class member will be prejudiced by this process because the
voting deadline will be extended to October 14, 2010, and any
Holder wishing to reaffirm a previous vote, or change his or her
vote, can do so simply by mailing a second ballot, Ms. Goldstein
assures the Court.
At the Plan Debtors' behest, the Court shortened notice period
with respect to the Supplemental Disclosure Motion and set the
Supplemental Disclosure Motion for hearing on September 23, 2010,
which is also the objection deadline. Ms. Goldstein emphasized
that the Settlement Agreement states that it is subject to
termination if the Court does not approve the re-solicitation on
or before September 30.
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 protection 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, serve as bankruptcy counsel. Kirkland &
Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been
engaged as claims agent. The Company also hired AlixPartners LLP
as financial advisor and Miller Buckfire Co. LLC, as investment
bankers. The Debtors disclosed $29,557,330,000 in assets and
$27,293,734,000 in debts as of December 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL GROWTH: Receives Nod for Corporate Structure Deals
----------------------------------------------------------
General Growth Properties, Inc., and its units received the
Court's authority for General Growth Properties Inc., in its sole
discretion, to take or cause to be taken any corporate actions
permitted by applicable law and the respective Debtor or non-
Debtor affiliate's organizational documents, and determined by
General Growth to be necessary or appropriate to implement the
transactions.
To streamline administration of its financial accounting and tax
reporting, General Growth plans to merge, dissolve, convert or
consolidate certain Debtor and non-Debtor affiliates. These
transactions, known as "Corporate Structure Transactions," will
either eliminate minority interests or are a step towards the
ultimate goal of eliminating minority interests held by
approximately six Debtor and fifteen non-Debtor entities, Stephen
A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New York,
tells the Court.
The aggregate value of all property interests to be transferred,
consisting primarily of less than 1% ownership interests in other
entities, pursuant to the proposed Corporate Structure
Transactions is estimated at approximately $3.1 million. Mr.
Youngman says General Growth, as a matter of ordinary course,
undertook these types of transactions before the Petition Date.
While General Growth's proposed Plan of Reorganization
contemplates that it may undertake similar corporate restructuring
transactions in connection with or after the effective date of the
Plan, General Growth is seeking authority now, in an abundance of
caution, so that it may, with respect to these Restructured
Entities, proceed with the Corporate Structure Transactions now,
prior to confirmation of the Plan, Mr. Youngman tells the Court.
These Corporate Structure Transactions are the same type of
transactions undertaken outside of Chapter 11 in the ordinary
course prior to the Petition Date, he says.
General Growth, Mr. Youngman relates, intends to take or cause to
be taken certain corporate actions, including, without limitation:
(i) causing any or all of the Restructured Entities to be
merged into or contributed to certain Debtors or non
Debtor affiliates, dissolved or otherwise consolidated
or converted;
(ii) transferring Assets between or among certain Debtors
and non-Debtor affiliates;
(iii) changing the legal name of any one or more of the
Restructured Entities; and
(iv) engaging in other transactions or taking other and
further actions permitted by applicable law and the
respective Debtor's or non-Debtor affiliate's
organizational documents and determined by General
Growth to be necessary or appropriate to implement the
aforementioned transactions.
Diagrams demonstrating the proposed Corporate Structure
Transactions on a property-by-property basis are available for
free at http://bankrupt.com/misc/ggpcorpchart.pdf
For each property affected by the proposed Corporate Structure
Transactions, the diagrams provide: (i) a description of the
corporate steps necessary to implement the Corporate Structure
Transaction; (ii) a structure chart showing the current corporate
structure, combined with an illustration of the changes necessary
to effectuate the proposed Corporate Structure Transaction; and
(iii) a structure chart showing the projected corporate structure
upon consummation of the Corporate Structure Transaction.
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 protection 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, serve as bankruptcy counsel. Kirkland &
Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been
engaged as claims agent. The Company also hired AlixPartners LLP
as financial advisor and Miller Buckfire Co. LLC, as investment
bankers. The Debtors disclosed $29,557,330,000 in assets and
$27,293,734,000 in debts as of December 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL GROWTH: Wins Nod for ERISA Class Action Settlement
----------------------------------------------------------
Judge Alan Gropper permitted General Growth Properties Inc. and
its units to enter into the settlement agreement resolving a class
action relating to the General Growth 401(k) Savings Plan.
Judge Gropper also modified the automatic stay solely to allow
St. Paul Mercury Insurance Company to make payment of the
$5,750,000 provided for in the Settlement Agreement on behalf of
the defendants out of the remaining policy limits of the subject
Fiduciary Liability Policy.
Judge Gropper clarifies that nothing in the order will constitute
a determination that the proceeds of the Fiduciary Liability
Policy are property of the Debtors' estates and the rights of all
parties-in-interest to assert that the proceeds of the Policy
are, or are not, property of the Debtors' estates are hereby
reserved.
Counsel for ERISA Plaintiffs' Statement
Counsel for Plaintiffs in the lawsuit In Re General Growth
Properties, Inc. ERISA Litigation, Master File No. 08-cv-6680 in
the United States District Court for the Northern District of
Illinois, Eastern Division, announce the proposed settlement of
this class action. The Settlement Class is defined as: All
participants or beneficiaries in the General Growth 401(k) Savings
Plan (the "Plan") at any time between April 30, 2007, and
April 16, 2009, inclusive (the "Class Period"), whose Plan
account(s) held investments in General Growth Properties, Inc.
("GGP") common stock and/or the General Growth Properties, Inc.
Common Stock Fund for their benefit during the Class Period, other
than the Defendants and their immediate family members (the
"Settlement Class").
The Plaintiffs in this litigation allege that Defendants breached
their fiduciary duty to the Plan and its participants by allowing
them to purchase or hold GGP common stock in the Plan during the
Class Period. The parties have reached an agreement to settle the
litigation. While the parties have decided to settle the case,
Defendants adamantly deny any wrongdoing. On August 19, 2010, the
United States District Court for the Northern District of
Illinois, Eastern Division, certified this case as a class action
for settlement purposes and directed that this Notice be
publicized to inform potential Settlement Class members of the
pending litigation. A fairness hearing has been scheduled for
December 9, 2010, at the United States District Court for the
Northern District of Illinois, Everett McKinley Dirksen United
States Courthouse, 219 South Dearborn Street, Chicago, Illinois
60604, before the Honorable James B. Zagel.
If you are a member of the Settlement Class and have not received
a Notice of Proposed Settlement of Class Action describing the
litigation, the proposed settlement, and your rights as a Class
member, you may obtain a copy of the Notice by visiting
http://www.berdonclaims.com/by calling 800-766-3330, or by
identifying yourself as a Settlement Class member and writing
to: GGP ERISA Litigation, c/o Berdon Claims Administration LLC,
P.O. Box 9014, Jericho, NY 11753-8914.
Inquiries should NOT be directed to the Court or the Clerk of the
Court.
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 protection 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, serve as bankruptcy counsel. Kirkland &
Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been
engaged as claims agent. The Company also hired AlixPartners LLP
as financial advisor and Miller Buckfire Co. LLC, as investment
bankers. The Debtors disclosed $29,557,330,000 in assets and
$27,293,734,000 in debts as of December 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Treasury Must Sell Shares at $133.78 to Break-Even
------------------------------------------------------------------
Sharon Terlep, writing for The Wall Street Journal, reports that
the Obama administration official overseeing the Troubled Asset
Relief Program said the U.S. government needs to sell all its
stock in General Motors Co. at an average price of $133.78 a share
to fully recoup the $49.5 billion it spent to rescue the auto
maker. Ms. Terlep notes that price is $39.15 greater than the
highest level shares in the old GM ever reached, during the boom
in pickup trucks and sport-utility vehicles in 2000.
Ms. Terlep reports that Neil Barofsky -- special inspector general
for the $700 billion that was used to bail out GM and Chrysler
Group LLC as well as other distressed companies last year -- also
said he will initiate a review of GM's July acquisition of
subprime lender AmeriCredit Corp.
According to Ms. Terlep, Mr. Barofsky's comments came in response
to an August letter from Republican Sen. Charles Grassley of Iowa,
who asked for an analysis of GM's planned stock offering this fall
and the government's chances of getting back the money it put into
the company. Mr. Grassley also requested details on GM's decision
to buy AmeriCredit for $3.5 billion in a move to bolster auto
lending.
According to Ms. Terlep, Mr. Barofsky's letter said the review of
the AmeriCredit purchase, which would be part of an audit of the
initial public offering, would seek to understand any role the
Treasury played in "reviewing, approving or otherwise
participating" in the decision.
A portion of the U.S. stake will be offered to investors in
November. Additional shares are likely to be sold in later
offerings. It could take the U.S. years to sell its entire stake.
Ms. Terlep reports that people familiar with the thinking of GM
and the Treasury said the price at which the government sells its
stock in the November IPO will likely fall below $133.78. The
sources told the Journal the government could have a chance to
break even if GM and the U.S. economy rebound and the stock
fetches higher prices in follow-on offerings.
According to the Journal, Mr. Barofsky said in a letter that was
dated Aug. 30 but surfaced Wednesday that the break-even share
price doesn't factor in IPO costs that include $7.5 million to
advisory firm Lazard Ltd or underwriters' payments of 0.75% of the
proceeds.
The Journal also reports that Stephen Spivey Frost & Sullivan's
Automotive & Transportation practice, said the depressed U.S. auto
market and tenuous financial markets make hitting the price target
unlikely in the near term, but even reaching that goal over time
will be a stretch.
The Journal further notes GM would need to achieve a market value
of about $70 billion for the U.S. to recoup its investment. Ford
Motor Co., which sells fewer cars than GM globally but has been
reporting strong profits, has a market capitalization of about $43
billion. Toyota Motor Corp. is valued at about $113 billion.
GM didn't respond to a request for comment, Ms. Terlep says.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company -- http://www.gm.com/-- is one of the world's largest
automakers. GM employs 205,000 people in every major region of
the world and does business in some 157 countries. GM and its
strategic partners produce cars and trucks in 31 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang,
Opel, Vauxhall and Wuling. GM's largest national market is China,
followed by the United States, Brazil, Germany, the United
Kingdom, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. is 60.8% owned by the U.S. Government. It was
formed to acquire the operations of General Motors Corporation
through a sale under 11 U.S.C. Sec. 363 following Old GM's
bankruptcy filing. The deal was closed on July 10, 2009, and Old
GM changed its name to Motors Liquidation Co. Old GM remains
subject to a pending Chapter 11 reorganization case before the
U.S. Bankruptcy Court for the Southern District of New York.
At June 30, 2010, GM had $131.899 billion in total assets,
$101.00 billion in total liabilities, $6.998 billion in preferred
stock, and $23.901 billion in stockholders' equity.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP serve as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long serve as counsel regarding
supplier contract matters. FTI Consulting, Inc., serves as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Committee. Legal Analysis Systems, Inc., serves as asbestos
valuation analyst.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENON ESCROW: Fitch Assigns Issuer Default Rating at 'B'
--------------------------------------------------------
Fitch Ratings has assigned an initial 'B' Issuer Default Rating to
GenOn Escrow Corp.
Fitch has also assigned ratings to GenOn Escrow's proposed
offering:
-- $550 million 9.875% senior unsecured notes due 2020 'BB-
/RR1';
-- $675 million 9.5% senior unsecured notes due 2018 'BB-/RR1'.
The Rating Outlook is Stable.
The notes, as well as the term and revolving credit facilities
described below, are being issued as part of a financing plan
associated with the planned merger between RRI Energy (RRI; IDR:
'B') and Mirant Corp. (IDR: 'B+') to create GenOn Energy Inc. Upon
issuance of the senior unsecured notes by GenOn Escrow the funds
will be deposited into a segregated escrow account pending
completion of this merger. If the merger is not completed on or
before Dec. 31, 2010, or the merger is terminated, GenOn Escrow
will be required to redeem the notes at 100% of the issue price
plus accrued and unpaid interest.
Fitch is also assigning ratings to the proposed $700 million
seven-year senior secured term loan facility, and $788 million
five-year senior secured revolving credit facility at 'BB/RR1'.
The term loan and credit facility are part of a credit agreement
entered into by RRI Energy, which is to be renamed as GenOn
following merger close. Upon the closing of the new credit
facility and the term loan, which is expected concurrently with
the closing date of the merger, the obligations under the new
credit facility and the term loan will be guaranteed by certain of
RRI's and MIR's existing assets.
On April 11, 2010, RRI and MIR announced that they have entered
into a definitive agreement to create GenOn in a deal structured
as an all-stock, tax-free merger. Under the terms of the merger
agreement MIR shareholders will receive a fixed ratio of 2.835
shares of RRI stock for each share of MIR common stock they own.
Following the close of transaction MIR will own approximately 54%
of the equity of the combined company and RRI Energy stockholders
will own approximately 46%. As a combined entity, GenOn will have
approximately 24,700 megawatts of electric generating capacity and
a pro forma market capitalization of $3.1 billion. As per the
financing conditions associated with the merger, GenOn Escrow is
issuing this new debt plus the new RRI Energy term loan and credit
facility to replace these:
-- $279 million in RRI secured bonds due 2014 (rated 'BB/RR1');
-- $371 million in Pennsylvania Economic Development Financing
Authority (PEDFA) Reliant Energy Seward, LLC Project secured
notes due 2036 (rated 'BB/RR1');
-- $500 million senior secured revolver due 2012 (rated
'BB/RR1');
-- $250 million letter of credit facility due 2014 (rated
'BB/RR1');
-- $307 million in Mirant North America senior secured
term loan due 2013 ('BB/RR1');
-- $850 million in MNA 7.375% senior notes due 2013 (rated 'BB-
/RR1');
-- $755 million MNA revolving credit facility due 2012.
Following merger close, Fitch expects GenOn's capital structure to
consist of Reliant Energy Mid Atlantic and Mirant Mid Atlantic
lease obligations; RRI's remaining unsecured notes $575 million
due 2014 and $725 million due in 2015, which are expected to be
pari passu to GenOn's new offering; the secured term loan due 2017
and credit facility due 2015; and $850 million in Mirant Americas
Generation notes due 2021 and 2031. Given the proposed capital
structure leverage at GenOn is expected to remain relatively high
over the next two years in part due to the muted earnings driven
by the current low power price environment, which Fitch expects to
continue. Fitch's expectations for 2011 Debt to EBITDA is roughly
6.9 times, including lease obligations, moving only slightly lower
in 2012 to 6.5x. However, maturities should be manageable with no
significant maturities until 2014 and more than adequate liquidity
at GenOn. Both entities will bring to the merger high cash
liquidity which the combined organization will have available to
deal with debt maturities and future commodity market price
fluctuation. The combined cash balance of the companies as of
Dec. 31, 2009, was $2.9 billion. Fitch's expectation is for year-
end 2011 liquidity to be slightly higher than $1.5 billion
excluding any revolver availability.
The primary credit benefit of the merger transaction is the likely
achievement of operating efficiency and cost savings projected by
the management of both companies (estimated at $150 million per
annum to be fully realized by 2012, following a restructuring
charge of roughly $125 million spread over the next two years),
savings which are currently unachievable by MIR and RRI on a
standalone basis. Additional credit benefits include a greater
focus of cash flow stability and the impact of increased
collateral at the security level due to the increased asset
portfolio. Management strategy is expected to be slightly more
conservative in the face of the current weak pricing environment.
Following the merger, Fitch expects a greater focus on hedging and
capacity contracts in an effort to ensure a predictable cash flow
stream more in line with Mirant's past practices, which have
focused on hedging on a rolling four- to five-year basis on both
its power and fuel.
Meanwhile, doubling the size of the generation portfolio by
merging the two companies will result in a more efficient scale of
operations, without materially altering the profile of the
generating fleet. In determining recovery values, Fitch typically
uses an asset valuation methodology wherein Fitch considers the
dispatch for each asset within the generating fleet, projected
market clearing prices in the relevant region and estimates of
price volatility under distressed pricing scenarios to determine
asset cash flow and value and ultimately a stressed enterprise
value. Using this approach, Fitch believes that both the secured
term loan and credit facility, as well as, the unsecured notes of
GenOn would have significant recovery in a default scenario While
power prices and demand remain weak and reserve margins high,
Fitch believes the longer-term asset value of GenOn's 24,700 MW
generation portfolio remains strong relative to its proposed
indebtedness given that roughly 30% of the portfolio is baseload
generation, which though coal fired is not easily or quickly
replaced or replicated. This value is reflected in the strong
'RR1' Recovery Ratings. Fitch's recovery analysis is intended to
provide a point of view on the relative recovery prospects for the
various debt issues; the actual enterprise valuation in an actual
default would likely vary significantly from projected levels
based on commodity prices, capital structure, reasons for default,
and capital market conditions at the time of default.
Mirroring the credit concerns facing the entire merchant
generating space, GenOn will continue to face ongoing challenges
with weak wholesale power prices, environmental rules and
compliance costs, and managing commodity price volatility. As
with the other merchant generators, Fitch believes GenOn will be
faced with a weak operating environment, which will limit upside
performance in the near to medium term. GenOn's performance
longer-term is going to be strongly correlated to economic
recovery and a meaningful return of power demand growth. Fitch
believes that GenOn's hedging program will moderate earnings and
cash flow volatility, but power-price forward curves indicate
continued margin pressure for coal-fired generators such as GenOn.
Should natural gas prices remain near current levels of $4 per
billion cubic feet, power prices will likely remain low,
pressuring GenOn's operating margins and credit metrics.
Additionally there remains a high degree of uncertainty
surrounding Federal carbon legislation and the form and cost of
EPA regulation of greenhouse gas emission, coal ash disposal,
waste management, etc., which could have significant financial
impact given GenOn's generation portfolio's composition, which is
more heavily weighted toward coal-fired generation.
GenOn Escrow's Stable Outlook is reflective of Fitch's
expectations of cash flow and earnings stability due to GenOn's
expressed commitment towards hedging the majority of its expected
generation and fuel exposure. Fitch would likely take a negative
rating action should any of these occur: power prices and demand
continue to languish or move lower; GenOn's capital structure
change significantly from expectations; or punitive regulation or
legislation impact GenOn's generation portfolio. Positive ratings
actions are unlikely based on current expectations.
GENTEK HOLDING: S&P Assigns Corporate Credit Rating at 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
corporate credit rating to GenTek Holding LLC after reviewing the
company's proposed dividend recapitalization. The outlook is
stable.
Based on preliminary terms and conditions, S&P assigned a 'B'
issue-level rating (same as the 'B' corporate credit rating) and a
'3' recovery rating to GenTek's proposed $425 million term loan B
and $30 million revolving credit facility. This indicates S&P's
expectation for meaningful (50%-70%) recovery in the event of a
payment default.
"Although the proposed debt-financed dividend recapitalization
weakens leverage and cash flow protection metrics, S&P expects the
financial profile to remain at a level appropriate for the current
rating," said Standard & Poor's credit analyst Henry Fukuchi.
The proposed transaction will be funded by a new $425 million term
loan B and approximately $32 million in cash. Total proceeds of
approximately $457 million will be used to distribute $152 million
to existing shareholders, refinance $289 million in existing term
loans, and to pay transaction fees. Incremental debt of
approximately $136 million will increase total adjusted debt to
EBITDA pro forma for the transaction as of June 30, 2010, to 3.6x
from 2.7x and decrease funds from operations to total adjusted
debt to 19.2% from 23.4%. Although S&P expects reasonable cash
flow generation and business prospects to remain stable in the
near term, S&P views this transaction as a continued indication of
a very aggressive financial policy.
GLOBAL DIVERSIFIED: Earns $159,900 in July 31 Quarter
-----------------------------------------------------
Global Diversified Industries, Inc., filed its quarterly report on
Form 10-Q, reporting net income of $159,866 on $2.2 million of
revenue for the three months ended July 31, 2010, compared to net
income of $1.1 million on $12,441 of revenue for the same period
of 2009.
Included in other income (expense) for the three months ended
July 31, 2010, is a $349,387 gain resulting from a change in the
fair value of derivatives, as compared to a $2.3 million gain for
the three months ended July 31, 2009.
The Company's balance sheet at July 31, 2010, showed $13.6 million
in total assets, $9.4 million in total liabilities, $11.0 million
in convertible redeemable preferred stock, and a stockholders'
deficit of $6.8 million.
M&K CPAS, PLLC, in Houston, expressed substantial doubt about the
Company's ability to continue as a going concern, following its
results for the fiscal year ended April 30, 2010. The independent
auditors noted that the Company has suffered recurring losses and
has generated negative cash flows from operations.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b81
About Global Diversified
Chowchilla, Calif.-based Global Diversified Industries, Inc., is a
holding company for two wholly owned subsidiaries, Lutrex
Enterprises, Inc., an entity which holds equipment and inventory
for the Company, and Global Modular, Inc., an entity which
provides sales, marketing, manufacturing and construction site
work of modular type structures.
HACKLEMAN BROTHERS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Hackleman Brothers Construction, LLC
101-A Industrial Blvd.
Nash, TX 75569
Bankruptcy Case No.: 10-50207
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
Eastern District of Texas (Texarkana)
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
E-mail: eric@ealpc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/txeb10-50207.pdf
The petition was signed by Joe Hackleman, general partner.
HERITAGE CONSOLIDATED: Asks for Court's Nod to Obtain Financing
---------------------------------------------------------------
Heritage Consolidated, LLC, and Heritage Standard Corporation ask
for authority from the U.S. Bankruptcy Court for the Northern
District of Texas to obtain postpetition secured financing from
lenders led by CIT Capital USA Inc. and CIT Capital Securities
LLC, as DIP agent and arranger.
The DIP lenders have committed to provide up to $4.6 million,
which will consist of: (i) an initial tranche in the principal
amount of $2.6 million to fund operating expenses; and an
additional tranche in the principal amount of $2 million to fund
capital expenses covering sidetrack operations relating to the Pat
Howell Well.
A copy of the DIP financing terms is available for free at:
http://ResearchArchives.com/t/s?6b8b
Joe E. Marwill, Esq., at Munsch Hardt Kopf & Harr, P.C., explains
that the Debtors need the money to pay postpetition operating
expenses. A copy of the operating budget is available for free
at http://ResearchArchives.com/t/s?6b8c
Borrowings will be repaid in full and the Commitment will
terminate 120 days after Consolidated's petition date, or 35 days
after the entry of the first interim order approving the DIP
Credit Facility if the final order approving the DIP Credit
Facility on a final basis has not been entered prior to the
expiration of the 35-day period.
The obligations under the DIP Credit Facility will be secured
by first priority security interests and liens to be granted by
HSC in, to, and on all of its assets and first priority security
interests and liens to be granted by Consolidated in, to, and on
all of its assets.
With respect to the Tranche A of the DIP Loan, prior to the
Effective Date, the non-default interest rate will be the DIP
Agent's Rate (the same as the Prime Rate under the Credit
Agreements, which will be the interest rate publicly announced
by JPMorgan Chase Bank, N.A., from time to time as its general
reference rate of interest, which prime rate will change upon
any change in such announced or published general reference
interest rate and which prime rate may not be the lowest interest
rate charged by the Administrative Agent or the Lenders, provided
that in no event will the rate be less than 3.0%) plus 8.0%.
After the Effective Date, the non-default rate will be 10%.
With respect to Tranche B of the DIP Loans, the non-default rate
will be 10%. With respect to the DIP Loans, (i) there will be no
LIBOR Rate or other optional pricing option; (ii) interest on all
loans will be payable monthly in arrears and on the Maturity Date
and will be computed for the actual number of days elapsed on the
basis of a year of 360 days; (iii) interest will be payable on or
before the last business day of each month commencing on
September 30, 2010; and (iv) in no event will the Interest Rate
exceed the highest lawful rate.
Upon the occurrence and during the continuance of any default,
interest on all outstanding loans under the DIP Credit Agreement
will be payable on demand at 4.0% above the then-applicable rate.
The DIP lien is subject to a carveout for U.S. Trustee and Clerk
of Court fees; up to $75,000 in fees payable to professional
employed in the Debtors' case; and fees of the committee in
pursuing actions challenging the DIP Lenders' lien.
The Debtors are required to pay: (i) DIP facility fees, which are
2.5% of the amount of Tranche A payable at the closing of the
DIP Facility; and (ii) exit fees, about 2.5% of the amount of
Tranche A payable at final pay-down of the outstanding obligations
under the DIP facility.
The DIP financing terms mandate that if interim court order isn't
entered prior to September 13, 2010, the obligation of the DIP
Lender will terminate. However, the hearing on the DIP financing
request has been reset to October 4, 2010, at 9:00 a.m.
Objection
Aquila Drilling Co., L.P. has objected to the financing, saying
that the financing proposal has a single purpose -- to facilitate
and achieve a swift acquisition of the Debtors' properties by an
indirect affiliate of CIT without affording the estate or its
creditors a fair and open marketing process of those properties
and to ensure that their potential value is preserved solely for
CIT. According to Aquila, the financing proposed isn't the best
deal on the table. Aquila said, "Aquila has extended to the
Debtors an offer to provide them a financing facility in an equal
amount under far more favorable terms and conditions than extended
by CIT. Under Aquila's terms there is no rush to divest the
Debtors' of their assets; rather, the purpose and intention is to
afford the Debtors an opportunity to (i) provide necessary repairs
and maintenance to the oil and gas wells to bring efficiency to
them in order to cause the highest and best production possible,
and (ii) by achieving the best production possible, realize the
highest and best value for those properties through a proper sale
process involving a proper and complete marketing effort by a
credible, capable and experienced marketing firm."
Aquila is represented by:
a. Mark A. Weisbart -- weisbartm@earthlink.net -- at the Law
Offices of Mark A. Weisbart; and
b. James S. Brouner -- brounerj@earthlink.net -- at the Law
Offices of Mark A. Weisbart.
About Heritage Consolidated
Heritage Consolidated LLC filed a Chapter 11 petition (Bankr. N.D.
Tex. Case No. 10-36484) on September 14, 2010, in Dallas, Texas.
Its affiliate, Heritage Standard Corporation, also filed for
Chapter 11 (Bankr. N.D. Tex. Case No. 10-36485). The Debtors each
estimated assets and debts of $10 million to $50 million in their
Chapter 11 petitions. Kevin D. McCullough, Esq., in Dallas,
Texas, serves as counsel to the Debtors.
HERITAGE CONSOLIDATED: Files Joint Plan of Reorganization
---------------------------------------------------------
Heritage Consolidated LLC, et al., have filed a Joint Plan of
Reorganization and disclosure statement with the U.S. Bankruptcy
Court for the Northern District of Texas.
The Plan is designed to accomplish five primary objectives:
(a) implement the terms of the sale and transfer of certain assets
of the Debtors' Estates, including, among others, the assumption
of certain Claims and liabilities by the purchaser of the Debtors'
assets; (b) the commencement of Sidetrack Drilling Operations on
the Pat Howell #1 Well by the Buyer or its designee as operator;
(c) use of production proceeds from the Debtors' and the Buyer's
assets to satisfy Claims in accordance with a waterfall mechanism
for distribution set forth in the Plan; (d) subordination of
certain Claim asserted against the Debtors; and (e) the making of
distributions to holders of Allowed Claims consistent with the
priorities mandated by the U.S. Bankruptcy Code.
Copies of the Plan and disclosure statement are available for free
at:
http://bankrupt.com/misc/HERITAGE_CONSOLIDATED_plan.pdf
http://bankrupt.com/misc/HERITAGE_CONSOLIDATED_ds.pdf
Treatment of Claims
Claims Against And Equity Interests In Consolidated
Classification Treatment
-------------- ---------
1 - Allowed Ad Valorem A holder will (a) receive Distributions
Tax Claims from Reorganized Consolidated out of its
Senior Claim Distribution Reserve in the
amount of the holder's Allowed Ad
Valorem Tax Claims plus interest at the
Plan Interest Rate from the Petition
Date until the claim has been satisfied
in full as and at the time provided
under Article VIII of the Plan; or
(b) receive other less favorable
treatment that may be agreed upon in
writing by such holder, the Lender and
the Plan Administrator.
2 - Allowed Priority A holder will (a) receive Distributions
Claims from Reorganized Consolidated out of its
Senior Claim Distribution Reserve
in the amount of the holder's Allowed
Priority Claim plus interest at the Plan
Interest Rate from the Petition Date
until the claim has been satisfied in
full; or (b) receive other less
favorable treatment that may be agreed
upon in writing by the holder, the
Lender and the Plan Administrator.
3 - Allowed Lender The Lender Secured Claims will be
Secured Claim Allowed in the aggregate amount of
$18,035,100 of principal as of the date
of the Plan. Included in the Allowed
Lender Secured Claim will be the Lender
Bridge Secured Claim, which will be
$400,000 of principal as of the date of
the Plan, subject to upward adjustment
based on, among other things, any and
all interest, attorney's fees, and other
fees and expenses to which the holder of
the Lender Bridge Secured Claim may be
entitled under that certain Promissory
Note dated July 30, 2010, by Standard
and Consolidated, as maker, and CIT
Capital, as holder, or any related
Lender Credit Documents. One-half of
the Allowed Lender Bridge Secured Claim
will be applied to reduce the
Distribution to be made to the holder of
the Allowed Standard Secured Claim. The
unpaid portion of the Allowed Lender
Bridge Secured Claim will be satisfied
by the Newco Entities.
4 - Allowed Standard The Standard Secured Claim will be
Secured Claim Allowed in the aggregate amount of up to
$16,100,000. Standard, as holder of the
Allowed Standard Secured Claim against
Consolidated's Estate, will (a) be paid,
by Non-Section 6 Newco the amount of
$3.56 million in one cash payment on the
Effective Date; and (b) receive the
treatment set forth in Article VI of the
Plan. Standard will retain its liens
until the claim is satisfied. Standard
will waive any and all deficiencies with
respect to any claim under the Non-
Section 6 JOAs and the Pat Howell JOA.
The Allowed Standard Secured Claim will
be reduced to the extent that the
Allowed Standard Secured Claim exceeds
the aggregate amount of Allowed Claims
in Standard Classes 6 and 7, and the
reduction will be offset against any
distributions made to holders of Allowed
Standard Secured Claim.
5- Allowed Other Secured A holder will (a) receive distributions
Claims from Reorganized Consolidated out of its
Senior Claim Distribution Reserve
in the amount of the holder's Allowed
Other Secured claim plus interest at the
Plan Interest Rate from the Petition
Date until the claim has been satisfied
in full; (b) receive title to the
holder's collateral; (c) be paid by
Reorganized Consolidated under the terms
of the agreement under which the Other
Secured Claim arose provided that
Reorganized Consolidated will cure any
arrearages under the agreement on the
later of (I) the Effective Date and
(II) 15 business days following the date
that the claim is allowed by non-
appealable court order; or (d) receive
other less favorable treatment that may
be agreed upon in writing by the
holders, the Lender and the Plan
Administrator.
6- Reserved Reserved.
7- Allowed General A holder will (a) receive its Pro Rata
Unsecured Claims share of distributions of available cash
from Reorganized Consolidated out of its
Senior Claim Distribution Reserve in the
amount of the holder's Allowed General
Unsecured Claim plus interest at the
Plan Interest Rate from the Petition
Date until the claim has been satisfied
in full; or (b) receive other less
favorable treatment that may be agreed
upon in writing by the holder and the
Plan Administrator.
8-Allowed Subordinated A holder will (a) receive its Pro Rata
Claims share of distribution of available cash
from Reorganized Consolidated out of
their Senior Claim Distribution Reserve
in the amount of the holder's Allowed
Subordinate Claim until the claim has
been satisfied in full; or (b) receive
other less favorable treatment that may
be agreed upon in writing by the holder
and the Plan Administrator.
9- Allowed Equity Each then-issued and outstanding Equity
Interests Interest in Consolidated will be
cancelled and extinguished, and a New
Consolidated Membership Interest will be
issued to the holder in place of the
cancelled and extinguished Equity
Interest in Consolidated.
Objection to Plan
Pathfinder Energy Services, LLC, and Smith International, Inc.,
have objected to the Debtors' Plan and Disclosure Statement,
saying that the Plan fails to disclose material information. "The
Disclosure Statement and the Plan fail to provide for any payment
to unsecured creditors. Yet the Plan provides for a sale of
substantially all of the Debtors' assets to the Buyers for no
consideration except to the Debtors' equity holders and secured
lender, CIT Capital," Pathfinder and Smith said.
Pathfinder and Smith are represented by Locke Lord Bissell &
Liddell LLP.
About Heritage Consolidated
Heritage Consolidated LLC filed a Chapter 11 petition (Bankr. N.D.
Tex. Case No. 10-36484) on September 14, 2010, in Dallas, Texas.
Its affiliate, Heritage Standard Corporation, also filed for
Chapter 11 (Bankr. N.D. Tex. Case No. 10-36485). The Debtors each
estimated assets and debts of $10 million to $50 million in their
Chapter 11 petitions. Kevin D. McCullough, Esq., in Dallas,
Texas, serves as counsel to the Debtors.
HERITAGE CONSOLIDATED: Sec. 341(a) Meeting Scheduled for Oct. 21
----------------------------------------------------------------
The U.S. Trustee for Region 6 will convene a meeting of Heritage
Consolidated, LLC's creditors on October 21, 2010, at 1:30 p.m.
The meeting will be held at the Office of the U.S. Trustee, 1100
Commerce Street, Room 976, Dallas, TX 75242.
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.
Heritage Consolidated LLC filed a Chapter 11 petition (Bankr. N.D.
Tex. Case No. 10-36484) on September 14, 2010, in Dallas, Texas.
Its affiliate, Heritage Standard Corporation, also filed for
Chapter 11 (Bankr. N.D. Tex. Case No. 10-36485). The Debtors each
estimated assets and debts of $10 million to $50 million in their
Chapter 11 petitions. Kevin D. McCullough, Esq., in Dallas,
Texas, serves as counsel to the Debtors.
HERITAGE CONSOLIDATED: Discloses Largest Unsecured Creditor
-----------------------------------------------------------
Heritage Consolidated LLC has filed with the U.S. Bankruptcy Court
for the Northern District of Texas a list of its largest unsecured
creditor, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Aquila Drilling Company LP
2525 Kell Boulevard
Suite 405
Wichita Falls, TX 76308 Trade $4,926,430
Heritage Consolidated LLC filed a Chapter 11 petition (Bankr. N.D.
Tex. Case No. 10-36484) on September 14, 2010, in Dallas, Texas.
Its affiliate, Heritage Standard Corporation, also filed for
Chapter 11 (Bankr. N.D. Tex. Case No. 10-36485). The Debtors each
listed assets and debts of $10 million to $50 million. Kevin D.
McCullough, Esq., in Dallas, Texas, serves as counsel to the
Debtors.
HERITAGE CONSOLIDATED: Taps Munsch Hardt as Bankruptcy Counsel
--------------------------------------------------------------
Heritage Consolidated, LLC, asks for authorization from the U.S.
Bankruptcy Court for the Northern District of Texas to employ
Munsch Hardt Kopf & Harr, P.C., as bankruptcy counsel.
Munsch Hardt will, among other things:
(a) advise Consolidated of its responsibilities to its
unsecured creditors and direct necessary communications
with them, including attendance at meetings and
negotiations with representatives of creditors, their
counsel, and other parties-in-interest;
(b) assist Consolidated in negotiations with secured
creditors, including, but not limited to, issues
regarding use of cash collateral, mechanics and
materialmen's liens, and payment of royalty owners;
(c) consult with the U.S. Trustee, any statutory committee
that may be formed, and all other creditors and parties-
in-interest concerning the administration of the
U.S. Bankruptcy Case; and
(d) assist Consolidated in analyzing and appropriately
treating the claims of creditors.
The hourly rates of Munsch Hardt's personnel are:
Joe E. Marshall, Shareholder $400
Kathleen M. Patrick, Associate $295
Lee J. Pannier, Associate $260
Patricia Moore, Paralegal $190
Joe E. Marshall, Esq., at Munsch Hardt, assures the Court that the
firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Heritage Consolidated LLC filed a Chapter 11 petition (Bankr. N.D.
Tex. Case No. 10-36484) on September 14, 2010, in Dallas, Texas.
Its affiliate, Heritage Standard Corporation, also filed for
Chapter 11 (Bankr. N.D. Tex. Case No. 10-36485). The Debtors each
listed assets and debts of $10 million to $50 million. Kevin D.
McCullough, Esq., in Dallas, Texas, serves as counsel to the
Debtors.
HFG 231: Section 341(a) Meeting Scheduled for Oct. 15
-----------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of HFG 231,
LLC's creditors on October 15, 2010, at 11:00 a.m. The meeting
will be held at Office of the United States Trustee, Long Island
Federal Courthouse, 560 Federal Plaza - Room 562, Central Islip,
New York.
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.
Woodmere, New York-based HFG 231, LLC, filed for Chapter 11
bankruptcy protection on September 14, 2010 (Bankr. E.D.N.Y. Case
No. 10-77208). Joseph S. Maniscalco, Esq., at Lamonica Herbst
Maniscalco, assists the Debtor in its restructuring effort. The
Debtor estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million.
HFG 231: EF-43 Asks Court to Dismiss Bankruptcy Case
----------------------------------------------------
EF-43 LLC has filed with the Eastern District of New York a motion
to dismiss HFG 231, LLC's Chapter 11 bankruptcy case.
The Debtor was party to a real property purchase agreement with
property owner EF-43. Under this agreement, the Debtor was
afforded a diligence period, at the expiry of which the Debtor
could either terminate the agreement and get its full deposit back
or supplement its deposit (with its deposit becoming
nonrefundable) and consummate the acquisition within 30 days.
EF-43 said, "Instead of exercising its termination right to get
its full deposit back (or supplementing its deposit and proceeding
with the acquisition), the Debtor filed for bankruptcy one day
before the expiration of the diligence period. The Debtor's
filing is obviously and admittedly an improper attempt by the
Debtor to use the automatic stay to gain more time in a last-ditch
effort to raise the necessary financing for the transaction."
According to EF-43, the Debtor didn't file for bankruptcy for any
legitimate reorganization purpose. "The Debtor is under no
financial distress. It is a shell company, with no business or
assets (other than its rights under the purchase agreement), with
no real creditors and with no employees. The Chapter 11 filing
does not protect the rights of creditors (because the Debtor does
not have any genuine creditors) but instead is solely intended to
preserve an investment opportunity for the Debtor's shareholders,"
EF-43 stated.
A hearing on EF-43's request for the dismissal of the Debtor's
bankruptcy case will be held on October 15, 2010, at 12:00 noon.
Objections on EF-43's request must be filed by October 8, 2010, at
4:00 p.m.
EF-43 is represented by Kaye Scholer LLP.
Woodmere, New York-based HFG 231, LLC, filed for Chapter 11
bankruptcy protection on September 14, 2010 (Bankr. E.D.N.Y. Case
No. 10-77208). Joseph S. Maniscalco, Esq., at Lamonica Herbst
Maniscalco, assists the Debtor in its restructuring effort. The
Debtor estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million.
HHI HOLDINGS: S&P Affirms Corporate Credit Rating at 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on HHI Holdings LLC and its 'B+' and '4' recovery
rating on the company's term loan B, which is being increased by
$30 million to about $228 million. The outlook is stable.
"The ratings on HHI reflect what S&P considers to be its weak
business risk profile and aggressive financial risk profile.
S&P's business risk assessment incorporates the multiple industry
risks facing automotive suppliers, including volatile demand, high
fixed costs, intense competition, and severe pricing pressures,"
said Standard & Poor's credit analyst Lawrence Orlowski.
S&P considers HHI's concentrated customer base to be another key
risk factor, since more than half of its backlog of future
revenues is tied directly or indirectly to General Motors Co.
(unrated). GM is in the early stages, in S&P's view, of an
uncertain recovery from its 2009 restructuring. Although GM's
production has recently increased amid a broader stabilization of
U.S. auto demand, S&P believes future production could remain
highly volatile. In addition, the long-term direction of GM's
market share is unknown, and S&P believes any additional
significant market share losses by GM would adversely affect HHI.
S&P's financial risk profile assessment includes HHI's pending
recapitalization. The capital structure will include an
additional $30 million of term loan debt to fund the proposed
dividend. The senior secured term loan will rise to about
$228 million and the unrated $100 million asset-based revolving
credit facility will have about $13 million drawn to help fund the
dividend. S&P estimates that debt to EBITDA, taking account of
the transaction and including S&P's adjustment to add the net
present value of operating leases to debt, will be about 3.4x at
the end of 2010. EBITDA during 2010 will include a full year of
the FormTech unit, which was acquired in August 2009. S&P expects
this ratio to remain below 3.5x, including its adjustments, over
the intermediate term for the current rating.
Despite the potential for moderating leverage over time, S&P
assumes HHI's financial policies will continue to be aggressive,
given the concentrated ownership and the possibility that the
company may pursue additional targeted acquisitions. Under the
terms of the term loan, HHI has leeway to make acquisitions as
long as leverage, as defined by the credit agreement, remains
below 2.75x (not including S&P's adjustments to debt).
S&P could lower the rating if free operating cash flow generation
turns negative for consecutive quarters, or if debt to EBITDA,
including S&P's adjustments, exceeds 5x. For example, S&P
estimates that debt to EBITDA could reach this threshold if HHI's
gross margins, excluding depreciation and amortization, fall by
500 basis points compared with 2009's level. A steep slide in
GM's U.S. market share to 15% from the 20% level in 2009 could
also result in a sufficient decline in EBITDA and cash flow to
warrant a lower rating. "S&P considers an upgrade highly unlikely
during the next year based on S&P's current weak business risk
assessment and HHI's concentrated ownership," Mr. Orlowski added.
INNKEEPERS USA: Court Sets October 29 Claims Bar Date
-----------------------------------------------------
Judge Shelley Chapman of the United States Bankruptcy Court for
the Southern District of New York granted the Debtors' request and
set these bar dates for filing claims in the bankruptcy cases:
(a) October 29, 2010, as the General Claims Bar Date; and
(b) January 18, 2011, as the Governmental Unit Claims Bar
Date.
The Court also approved the Debtors' procedures for filing proofs
of claims, and the form of the Bar Date Notice.
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 estimated assets and debts of more
than $1 billion as of the bankruptcy filing.
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: Preferred Shareholders Want Official Committee
--------------------------------------------------------------
The Ad Hoc Committee of Preferred Shareholders ask the Court to
direct the appointment of a statutory committee of preferred
shareholders pursuant to Section 1102(a)(2) of the Bankruptcy
Code.
Representing the Ad Hoc Committee, Martin J. Bienenstock, Esq., at
Dewey & LeBoeuf LLP, in New York, contends that the Preferred
Shareholders are not contractually or structurally subordinate to
all creditors of each of the Debtors. Rather, he asserts, the
Preferred Shareholders are entitled to the value of each Debtor
having value, notwithstanding that other Debtors may be unable to
pay in full all their respective creditors. Hence, he insists
that appointment of a statutory equity committee is necessary to
provide adequate representation of Preferred Shareholders in each
of the Debtors' Chapter 11 cases.
Mr. Bienenstock alleges that the record of the cases is a
testament to the need for a statutory committee to represent
preferred shareholders because the Debtors have used estate funds
to pay for the efforts of their executives, attorneys, and
financial advisors to wipe out Preferred Shareholders while
illegally favoring the common shareholder. He adds that the
Debtors simultaneously opposed use of any estate assets to
represent Preferred Shareholders by urging the United States
Trustee not to appoint a preferred shareholders' committee.
The Ad Hoc Committee's timely application for the appointment of a
statutory preferred shareholders' committee will not delay these
cases because extensive plan negotiations and discussions among
competing stakeholders regarding plan formulation will likely
unfold over the next critical months, Mr. Bienenstock further
argues. He points out the appointment of a statutory committee
will ensure Preferred Shareholders a seat at the negotiating table
to advance a consensual plan that meets all fiduciary obligations.
A hearing to consider the request will be held on September 30,
2010. Objections are due on September 24.
U.S. Trustee Objects
Tracy Hope Davis, the United States Trustee for Region 2, contends
that the request should not be heard because the Ad Hoc Committee
has not complied with Rule 2019(a) of the Federal Rules of
Bankruptcy Procedure.
Ms. Davis explains that according to the Ad Hoc Committee's Rule
2019(a) verified statement, they held preferred shares purchased
both before and after the Petition Date. However, she asserts,
the Committee members have not disclosed the exact dates upon
which they acquired their shares, including the dates and number
of shares purchased postpetition or the amounts paid, and any
sales or other disposition of those shares.
If the Court decides to hear the request, it should be denied
because the Ad Hoc Committee has not shown that the appointment of
an official equity committee is warranted, Ms. Davis asserts.
Specifically, she points out, the Ad Hoc Committee has failed to
meet its burden to establish that preferred shareholders are not
adequately represented or that there is a substantial likelihood
of a meaningful recovery to them.
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 estimated assets and debts of more
than $1 billion as of the bankruptcy filing.
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: Wells Fargo Wants to File Competing Plan
--------------------------------------------------------
Wells Fargo Bank, N.A., and U.S. Bank National Association, both
known as the Property Level Lenders, jointly ask Judge Shelley
Chapman of the United States Bankruptcy Court for the Southern
District of New York to terminate the exclusive periods of certain
of the Debtors to permit the Property Level Lenders to file a plan
or plans of reorganization with respect to the Property Level
Debtors.
The Property Level Debtors are Grand Prix RIMV; KPA RIMV, LLC;
Grand Prix RIGG; KPA RIGG LLC; KPA Washington DC, LLC; KPA Tysons
Corner RI, LLC; and KPA San Antonio, LLC.
Wells Fargo is the Trustee for the registered holders of Credit
Suisse First Boston Mortgage Securities Corp. Commercial Mortgage
Pass-Through Certificates, Series 2007-C1, while U.S. Bank is the
successor to LaSalle Bank N.A., formerly known as LaSalle National
Bank, the Trustee for the registered holders of ML-CFC Commercial
Mortgage Trust 2006-4, Commercial Mortgage Pass-Through
Certificates, Series 2006-4.
Lawrence P. Gottesman, Esq., at Bryan Cave LLP, in New York,
argues that it is imperative that the Chapter 11 cases be opened
up to permit competing transactions to ensure that recoveries are
maximized for all creditors of each of the separate bankruptcy
estates, none of which have or can be substantively consolidated.
Mr. Gottesman contends that the Debtors' prepetition Plan Support
Agreement with Lehman ALI, Inc., and the cramdown plan of
reorganization contemplated in the PSA were negotiated with only
one minority secured creditor and with an out-of-the-money equity
holder of the Debtors. He alleges that the Debtors (i) made
information and documents available only to Lehman ALI and
(ii) did not engage in any meaningful shopping of the proposed
transaction or negotiations with the vast majority of their
secured creditors or make any effort to ensure that one or more
bankruptcy estates and their creditors were not preferred over the
bankruptcy estates and creditors of other of the Debtors.
The Debtors' lack of due care and good faith and their abdication
of their fiduciary obligations owed to all of the Debtors and
their respective creditors demonstrates the need to terminate the
Debtors' exclusive periods to meaningfully open up the process,
Mr. Gottesman tells Judge Chapman. "The termination of
exclusivity is necessary, bluntly stated, to keep the Debtors
honest," he asserts, among other things.
The Property Level Lenders also join in (i) Midland Loan Services,
Inc.'s motion to terminate the Debtors' exclusivity, and (ii)
Midland's request that the Court set a schedule for confirmation
of the Lehman/AIC Plan, a plan incorporating the proposal by Five
Mile Capital Partners for an alternative plan of reorganization,
and any other competing plan.
C-III Asset Management LLC and CWCapital Asset Management LLC join
in both Wells Fargo's and Midland's motions to end the Debtors'
exclusivity rights.
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 estimated assets and debts of more
than $1 billion as of the bankruptcy filing.
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).
INOVA TECHNOLOGY: Earns $2.2 Million in July 31 Quarter
-------------------------------------------------------
Inova Technology Inc. filed its quarterly report on Form 10-Q,
reporting net income of $2.18 million on $7.87 million of revenue
for the three months ended July 31, 2010, compared with a net loss
$2.36 million on $4.93 million of revenue for the three months
ended July 31, 2009.
Net loss decreased from $2.36 million for the three months ending
July 31, 2009, to net income of $2.18 million for the same period
in 2010. This is due to a change from a derivative loss of
$1.65 million during the three months ended July 31, 2009, to a
derivative gain of $2.34 million for the three months ended
July 31, 2010.
The Company's balance sheet at July 31, 2010, showed
$11.86 million in total assets, $16.72 million in total
liabilities, and a stockholders' deficit of $4.86 million.
As reported in the Troubled Company Reporter on August 26, 2010,
MaloneBailey, LLP, in Houston, expressed substantial doubt about
the Company's ability to continue as a going concern, following
its results for the fiscal year ended April 30, 2010. The
independent auditors noted that Inova incurred losses from
operations for fiscal 2010 and 2009 and has a working capital
deficit as of April 30, 2010.
The Company discloses in its latest 10-Q that it is in default on
the majority of its notes payable as of July 31, 2010.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b80
About Inova Technology
Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA)
-- http://www.inovatechnology.com/-- through its subsidiaries,
provides information technology (IT) consulting services in the
United States. It also manufactures radio frequency
identification (RFID) equipment; and provides computer network
solutions. The company was formerly known as Edgetech Services
Inc. and changed its name to Inova Technology, Inc., in 2007.
INT'L COMMERCIAL: Auditor Amper Combines Pratice with Eisner
------------------------------------------------------------
International Commercial Television Inc. said it was notified that
Amper, Politziner and Mattia, LLP, an independent registered
public accounting firm, combined its practice with that of Eisner
LLP and the name of the combined practice operates under the name
EisnerAmper LLP. The Company's Board of Directors has engaged
EisnerAmper LLP to serve as the Company's new independent
registered public accounting firm.
Amper's reports on the Company's financial statements for the
two years ended December 31, 2009 and 2008, did not contain any
adverse opinion or disclaimer of opinion, nor were they qualified
or modified as to uncertainty, audit scope, or accounting
principles, except each report contained an explanatory paragraph
regarding the Company's ability to continue as a going concern.
About International Commercial
Bainbridge Island, Wash.-based International Commercial Television
Inc. was organized under the laws of the State of Nevada on
June 25, 1998. The Company sells various consumer products. The
products are primarily marketed and sold throughout the United
States and internationally via infomercials.
The Company's balance sheet at June 30, 2010, showed $955,380 in
total assets, $1.64 million in total liabilities, and a
shareholders' deficit of $683,204.
As reported in the Troubled Company Reporter on June 25, 2010,
Amper, Politziner & Mattia LLP, in Edison, N.J., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted of the Company's recurring losses from operations
and negative cash flows.
JAMES MEIS: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: James A. Meis
18502 U Road
P.O. Box 168
Cimarron, KS 67835
Bankruptcy Case No.: 10-13207
Chapter 11 Petition Date: September 21, 2010
Court: United States Bankruptcy Court
District of Kansas (Wichita)
Judge: Robert E. Nugent
Debtor's Counsel: Elizabeth A. Carson, Esq.
BRUCE BRUCE & LEHMAN LLC
3330 W. Douglas
P.O. Box 75037
Wichita, KS 67275
Tel: (316) 264-8000
E-mail: lcarson@ksadvocates.com
Estimated Assets: $0 to $50,000
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.
JEFFERSON COUNTY: Ala. Cir. Ct. Appoints John Young as Receiver
---------------------------------------------------------------
Dow Jones Newswires' Kelly Nolan reports that Alabama Circuit
Court Judge Albert Johnson named John S. Young Jr. LLC as receiver
for the Jefferson County, Ala., sewer system, a move that comes as
the county is working to avoid what would be the largest municipal
bankruptcy in U.S. history.
Dow Jones reports that according to a court order Wednesday, John
Young, president and chief technology officer of American Water
Works Service Co., will serve as chief executive of the newly
formed Delaware limited liability corporation that will oversee
the sewer system.
"The Court is of the opinion that bankruptcy is not a feasible
alternative. Jefferson County, in order to progress, must have
access to capital markets," Judge Johnson wrote, according to Dow
Jones.
Dow Jones relates that the court order puts an end to what has
been a two-year-long process for Bank of New York Mellon Corp.,
the trustee hired to collect bond payments and protect the
interests of bondholders. When it sued Jefferson County in 2008,
BNY Mellon asked for a receiver for the sewer system, alleging the
county had mismanaged it while accumulating more than $515 million
in payment defaults.
Dow Jones reports Jefferson County attorney Joseph Mays, partner
at Bradley Arant Boult Cummings, said: "We are studying Judge
Johnson's order and will be prepared to advise the County
Commission about possible responses to it."
Mr. Young, 56, is president of a unit of American Water Works Co.,
which says it is the largest investor-owned U.S. water and
wastewater utility company. He was identified last week by Dow
Jones Newswires as the leading candidate for the receiver
position.
Dow Jones relates Maureen Duffy, spokeswoman for American Water
Works Co., said that, while the matter didn't relate specifically
to the company, American Water was "extremely proud that one of
its long-term employees has been asked to help resolve a
community's wastewater challenges."
According to Dow Jones, Mr. Young will have the power to operate
and administer the sewer system, including the ability to raise
rates, as allowed by the bond indenture.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000. It ended its 2006 fiscal year with a
$42.6 million general fund balance, according to Standard &
Poor's.
Jefferson County is trying to restructure $3.2 billion in sewer
debt. A bankruptcy by Jefferson County stands to be the largest
municipal bankruptcy in U.S. history. It could beat the record of
$1.7 billion set by Orange County, California in 1994.
* * *
In August 2010, Standard & Poor's Ratings Services withdrew its
underlying rating on Jefferson County, Ala.'s series 2001B general
obligation warrants. S&P lowered the SPUR to 'D' from 'B' on
Sept. 24, 2008, due to the county's failure to make a principal
payment on the bank warrants due Sept. 15, 2008, in accordance
with the terms of the Standby Warrant Purchase Agreement.
The county and the banks entered into a forbearance agreement that
effectively delayed payments due under the SWPA.
JMA LOGISTICS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: JMA Logistics, Inc.
dba HK Transportation Services, Inc.
aka HK Trucking
1515 W. 178th Street
Gardena, CA 90248
Bankruptcy Case No.: 10-50004
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Peter Carroll
Debtor's Counsel: James R. Selth, Esq.
WEINTRAUB & SELTH, APC
12121 Wilshire Boulevard, Suite 1300
Los Angeles, CA 90025
Tel: (310) 207-1494
Fax: (310) 207-0660
E-mail: jim@wsrlaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb10-50004.pdf
The petition was signed by Jorge Roque, president.
KHAN, INC.: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Khan, Inc.
aka Dunkin Donuts, Tara Blvd Jonesboro
Dunkin Donuts, Buford Hwy. Atlanta
3007 Buford Highway NE
Atlanta, GA 30329
Bankruptcy Case No.: 10-87860
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: James Massey
Debtor's Counsel: Edward F. Danowitz, Jr., Esq.
DANOWITZ & ASSOCIATES, P.C.
300 Galleria Parkway, NW, Suite 960
Atlanta, GA 30339
Tel: (770) 933-0960
E-mail: edanowitz@danowitzlegal.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's seven largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/ganb10-87860.pdf
The petition was signed by Shahab A. Khan, CEO.
KM ALLIED: Case Summary & 3 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: KM Allied of Nampa, LLC
398 South 9th Street, Suite 260
Boise, ID 83702
Bankruptcy Case No.: 10-03056
Chapter 11 Petition Date: September 17, 2010
Court: United States Bankruptcy Court
District of Idaho (Boise)
Judge: Terry L. Myers
Debtor's Counsel: Randal J. French, Esq.
BAUER & FRENCH
P.O. Box 2730
Boise, ID 83701-2730
Tel: (208) 383-0090
Fax: (208) 383-0412
E-mail: rfrench@bauerandfrench.com
Scheduled Assets: $2,020,600
Scheduled Debts: $2,626,080
A list of the Company's three largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/idb10-03056.pdf
The petition was signed by John W. Mackey, manager.
KNITNEY LINES: In Chapter 11 After Loss of Major Customer
---------------------------------------------------------
TheTimes-Tribune reports that Knitney Lines Inc. said it filed for
Chapter 11 early this month due to the stalled economy, which
forced some customers out of business and impaired company
revenue. The Company lost one of its major customers, which filed
for bankruptcy, and it impacted their business, said a person with
knowledge of the filing.
Knitney Lines Inc. operates a transportation company in Scranton,
Pennsylvania.
Knitney Lines filed for Chapter 11 protection on Sept. 3, 2010
(Bankr. M.D. Pa. Case No. 10-07267). Mark J. Conway, Esq., in
Dunmore, Pennsylvania, serves as counsel to the Debtor. The
Debtor estimated assets and debts of $1 million to $10 million in
its Chapter 11 petition. A list of the Company's 20 largest
unsecured creditors filed together with the petition is available
for free at http://bankrupt.com/misc/pamb10-07267.pdf
LEHMAN BROTHERS: Fed Planned to Wind Down Brokerage
---------------------------------------------------
A lawyer testified that the U.S. Federal Reserve planned to wind
down the company's brokerage unit during the 2008 financial
crisis, Bloomberg News reported.
Shari Leventhal, Esq., a lawyer for the Federal Reserve Bank of
New York, testified in Lehman Brothers Holdings Inc.'s lawsuit
against Barclays that the Fed provided a $45 billion loan to the
brokerage unit for an "orderly wind-down" after LBHI filed for
bankruptcy protection, the report said.
Ms. Leventhal, who was involved in the Lehman-Barclays deal, said
the Fed supported the sale because it was concerned about the
stability of the financial markets. She said she continues to
believe that the Fed's support for the sale was well-founded,
according to the report.
The lawyer recounted that the initial plan of the Fed was to
facilitate a takeover of not just the brokerage business but all
of Lehman. However, the idea of winding down the brokerage took
precedence after it became clear that neither Barclays nor any
other bidder would buy LBHI, Bloomberg News reported.
Ms. Leventhal said the Fed was "happy" when Barclays came back as
a bidder for the brokerage for public policy reasons.
Ms. Leventhal further said that LBHI was not pressured by the Fed
to file for bankruptcy after bidders receded but she admitted
that the Fed officials called the company to make sure its board
of directors understood the urgency of the situation.
With respect to the $4 billion accounting gain that Barclays
reported on the deal, the lawyer said it was not relevant to the
Fed, Bloomberg related.
"We assumed they entered into the deal expecting to do well,"
Bloomberg News quoted Ms. Leventhal as saying. "They are a
business concern and we assumed they had done due diligence."
Ms. Leventhal disclosed that they required Barclays to take over
the Fed loan to Lehman before the deal closed and promised about
$49 billion of the company's collateral to back the loan. She
stressed that the Fed wanted Barclays, rather than the Fed and
taxpayers, to risk lending to Lehman, and provided loan to the
British bank temporarily to help it complete the deal.
LBHI's lawyer, Robert Gaffey, tried to show at the hearing that
the Fed had no knowledge of whether Barclays was acting in good
faith when it acquired the brokerage. He also tried to show the
Fed supported Barclays even though there could have been other
bidders, Bloomberg News reported.
Examiner Says Lehman Board Should Have
Asked More Questions
An examiner who investigated into what caused the collapse of
LBHI said disaster could have been avoided if its board of
directors had asked more questions about accounting transactions
used as "window dressing" on its quarterly financial statements,
according to a September 15 report by Reuters.
Anton Valukas said the "Repo 105" transactions were "open and
notorious" within the company but its directors never asked the
executives about "window dressing" and its off-balance sheet
liabilities, Reuters reported.
A repo transaction is an artificial sale and buy-back deal that
enabled LBHI to hide billions of debts from regulators.
Mr. Valukas said there is no evidence Lehman personnel lied to
the directors only that basic questions about off-balance-sheet
transactions and other things were not being asked by the
directors, according to the report.
Mr. Valukas was appointed early last year after LBHI's creditors
called for transparency on the company's business affairs. The
creditors complained over the lack of disclosure, particularly on
the flow of funds and property among LBHI and its affiliates days
before their bankruptcy filing.
Results of the investigation showed that LBHI used the repo
transactions and was able to hide $50 billion or GBP32 billion of
debts from regulators despite checks by its auditor.
* * *
Live testimony of certain witnesses in the related proceedings
will occur on September 20 and 21, at 9:30 a.m. (Prevailing
Eastern Time). The continued hearing will be held before Judge
Peck.
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: Files Avoidance Suits to Recover $3 Billion
------------------------------------------------------------
Lehman Brothers Holdings Inc. and its debtor affiliates,
including Lehman Brothers Special Financing Inc. and Lehman
Brothers Financial Products Inc., filed 54 lawsuits seeking to
recover funds they transferred to counterparties in more than 230
transactions entered into before they filed for bankruptcy on
September 15, 2008.
The lawsuits, according to Reuters, aim to recover more than
$3 billion.
By filing the Avoidance Actions, the Lehman Debtors, according to
papers filed with the Bankruptcy Court, seek to protect and
restore their property interest that has substantial economic
value to their estate. These interests particularly refer to the
Debtors' contractual right to senior payment priority in
derivatives transaction.
The Avoidance Actions stem from provisions that govern
transaction documents with respect to certain derivatives
transactions, the application of which was conditioned on the
commencement of either LBHI or LBSF's bankruptcy case. The
subject provisions operate to deprive them [the Debtors??] of
their property interest by (i) taking Senior Payment Priority
from them, (ii) replacing it with junior payment priority, and
(iii) transferring Senior Payment Priority to or for the benefit
of certain noteholders who otherwise would have only Junior
Payment Priority, which include certain circumstances that reduce
or eliminate the Debtors' right to payment altogether.
The Avoidance Actions were initiated against certain special-
purpose entities that issued series of notes pursuant to certain
transaction documents and banks that served as trustees in the
trust or indenture. LBHI served as credit support provider or
guarantor under the indentures.
Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that under the Agreements, the commencement of a
bankruptcy case by the Debtors constituted an Event of Default
and upon (i) the occurrence of an Event of Default under the
Agreements with respect to the Debtors, and (ii) triggering of
the Modification Provisions, Senior Payment Priority is
transferred from LBSF to or for the benefit of the Noteholders,
leaving LBSF with only Junior Payment Priority, or no payment,
for its claim.
In the Avoidance Actions, the Debtors specifically seek:
(a) a declaratory judgment that the Payment Priority Exchanges
improperly modified LBSF's Senior Payment Priority as a
result of a bankruptcy filing, and, thus, the Modification
Provisions constitute unenforceable ipso facto clauses
that violate Sections 365(e)(1) and 541(c)(1) and LBSF is
entitled to Senior Payment Priority; and
(b) a declaratory judgment that any action to enforce the
Payment Priority Exchanges as a result of a bankruptcy
filing violates the automatic stay under Section 362(a).
In the alternative, the Debtors seek a judgment that the Payment
Priority Exchanges were preferential transfers avoidable pursuant
to Section 547, constructive fraudulent transfers avoidable
pursuant to Section 548, and unauthorized postpetition transfers
avoidable pursuant to Section 549; and that pursuant to Sections
550 and 551, LBSF is entitled to recover and preserve Senior
Payment Priority for the benefit of its estate.
Among the defendants named in the lawsuits are Bank of America
Corp (BAC.N), Bank of New York Mellon Corp (BK.N), Deutsche Bank
AG (DBKGn.DE) and US Bancorp (USB.N), Citibank, and Wells Fargo.
The banks, as trustees, held the collateral backing the deals.
A schedule of the Avoidance Actions is available for free
at http://bankrupt.com/misc/lehmapsept15.pdf
Mr. Waisman relates that the Debtors and the Official Committee
of Unsecured Creditors have been diligently investigating
thousands of transactions to determine whether any payments or
transfers of the Debtors' interests in property constitute
preferential, fraudulent and unauthorized transfers that may be
avoided under the Bankruptcy Code. To prevent the loss of
avoidance causes of action prior to the expiration of the
applicable statute of limitations periods imposed by the
Bankruptcy Code, the Debtors commenced the avoidance actions.
"We plan to vigorously contest this matter," Citigroup
spokeswoman Danielle Romero-Apsilos told The Wall Street Journal.
Citibank acted as the trustee for notes issued by a CDO called
Pebble Creek. Lehman's lawyers have previously said in court
filings that the investment bank is owed $68 million related to
termination of the swap.
Derivatives, according to the Journal, represent a significant
source of cash for Lehman creditors still waiting to get paid 24
months after the investment bank filed for bankruptcy protection
in September 2008. At the time of its collapse, Lehman was a
party to or had guaranteed more than 10,000 derivative contracts
representing more than 1.7 million transactions, according to
court documents.
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: Freddie Mac Objects to Aurora Bank Settlement
--------------------------------------------------------------
Federal Home Loan Mortgage Corporation in Conservatorship --
Freddie Mac -- reserves its rights and objection regarding Lehman
Brothers Holdings' motion seeking approval of the settlement with
Aurora Bank.
Freddie Mac relates that it is the owner of many thousands of
mortgage loans that Lehman Brothers Holdings Inc. services for
Freddie Mac under the terms and conditions of a certain mortgage
selling and servicing contract between Freddie Mac and LBHI.
LBHI has contracted with Aurora Loan Services, LLC, to subservice
the loans. Freddie Mac has filed proofs of claim against LBHI,
arising from, among other things, loan servicing related
obligations. Freddie Mac's potential exposure to LBHI for
servicing related obligations, including repurchase obligations,
as of June 30, 2009, is estimated to be approximately
$868.6 million.
According to Freddie Mac's counsel, Sophia Ree, Esq., at Landman
Corsi Ballaine & Ford P.C., in New York, Freddie Mac retains the
absolute right to approve and transfer of servicing. Ms. Ree
says Freddie Mac individuals who would ultimately have to approve
any transfer have not been contacted with respect to the subject
matter of the motion.
Freddie Mac also objects to the portion of the settlement where
LBHI agrees to transfer and assign to ALS "all income
attributable to or derived from such excluded mortgage servicing
rights." Freddie Mac, Ms. Ree says, believes that that
assignment could effectively accomplish an end-run around Freddie
Mac's approval rights -- by making ALS the servicer of the
Freddie Mac loans for purposes of receiving 100% of the income
earned under the loan servicing.
Clayton Services Inc. seeks a court ruling to ensure repayment
from Aurora Bank FSB of whatever amount remitted by the firm to
LBHI under a master services agreement.
The move came after Clayton received a demand letter from LBHI,
requiring the firm to remit a certain sum to settle the payment
of as much as $793,887, purportedly related to the agreement.
Aurora Bank entered into the agreement in 2008 to tap the
services of Clayton. The bank was obligated under the deal to
pay for Clayton's services but it arranged for Lehman Brothers
Inc. or any affiliated debtor of LBHI, to make the actual
payments.
"Clayton believes that all such payments relate to the agreement,
and would, to the extent recovered by the Debtors, give rise to
an obligation on [Aurora Bank's] part to pay Clayton a sum equal
to any such recoveries ," says the firm's lawyer, Brian Harvey,
Esq., at Goodwin Procter LLP, in New York.
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: Proposes Stay of Avoidance Actions
---------------------------------------------------
Lehman Brothers Holdings Inc., in connection with their filing of
53 avoidance actions, ask Judge James Peck for an immediate stay
of those Actions and certain related relief potentially to avoid
the enormous costs and burdens to all parties and the Court
associated with prematurely pursuing active litigation in the
Avoidance Actions.
According to Shai Y. Waisman, Esq., at Weil, Gotshal & Manges
LLP, in New York, many of the Avoidance Actions involve highly
complex transactions and issues like those presented by the
action filed by Lehman Brothers Special Financing Inc. against
BNY Corp. in Adversary Proceeding No. 09-01242. Others involve
more routine transfers that nonetheless require further fact-
intensive analysis.
If the Avoidance Actions are not stayed, the Debtors will be
forced to divert their resources from conducting further due
diligence and actively pursuing consensual resolutions of these
matters to responding to discovery demands; engaging in motion
practice; and preparing for contested proceedings and trials, Mr.
Waisman asserts. "Not only will wide-scale litigation of the
Avoidance Actions drain the Debtors' resources, it would also
monopolize the Court's docket."
Mr. Waisman explains that the Avoidance Actions had to be
commenced to preserve significant causes of action and to fulfill
the Debtors' fiduciary duties to maximize value for creditors.
He says the Debtors and the Official Committee of Unsecured
Creditors recognize that litigation is not necessarily the most
efficient path to recover value for the Debtors' estates.
Temporarily staying these proceedings will allow the Debtors to
pursue consensual resolutions of claims -- whether by settlement
or dismissal as appropriate -- with minimized costs, Mr. Waisman
says.
The Debtors propose the implementation of these uniform
procedures to govern the stay of the Avoidance Actions:
A. Stay of Avoidance Actions. All Avoidance Actions will be
immediately stayed so that (1) all applicable deadlines
(other than those related to completion of service of
process) will be indefinitely suspended, (2) all discovery
and pre-trial conferences will not be required or
conducted, and (3) all motion practice and contested
hearings or trials will be prohibited. During the stay,
the Debtors may (1) amend the Avoidance Action complaints,
(2) employ the Derivative Alternative Dispute Resolution
Procedures or other procedures to attempt to consensually
resolve their disputes, (3) enter into settlements of the
Avoidance Actions, (4) complete service of the Avoidance
Action complaints, (5) seek discovery for the purpose of
assisting the Debtors in completing service of the
Avoidance Action complaints, and (6) dismiss an Avoidance
Action in accordance with Rule 7041 of the Federal Rules of
Bankruptcy Procedure. No Avoidance Action Defendant will
be required to respond to, or otherwise answer, the
Avoidance Action complaint while the Stay is in effect, and
all rights of the Debtors and the Avoidance Action
Defendants, including requests for dismissal of the
Avoidance Action on any basis, will be fully preserved.
B. Notice of Stay. Upon the entry of an order granting the
Stay Motion, the Debtors will file a "notice of stay" on
the docket of each Avoidance Action to make clear that
responses to the complaint are not required until the Stay
is lifted. For those Avoidance Actions that have not yet
been commenced, the Debtors file will and serve the "notice
of stay" once the Avoidance Action has been commenced.
C. Extension of Time to Complete Service of Complaints.
Pursuant to the discretion granted to the Court under Rule
4(m) of the Federal Rules of Civil Procedure, the Debtors
will have until 180 days from the filing of the complaints
to complete service in accordance with Bankruptcy Rule 7004
without prejudice to the Debtors' ability to request
further extensions.
D. Lifting of the Stay. The Stay over an Avoidance Action may
be lifted by (i) the Debtors upon the filing and service of
a notice on the applicable Avoidance Action Defendant(s)
indicating the Debtors' intention to prosecute the
Avoidance Action, or (ii) the Court for good cause shown
upon an application by an Avoidance Action Defendant and
after notice and a hearing with an opportunity to respond
by the Debtors and the Creditors' Committee. The date of
the Debtors' notice of intention to prosecute or the
Court's order modifying the Stay will govern the parties'
responsive pleading or answer deadlines in the Avoidance
Actions and reinstate all applicable Bankruptcy Rules,
including rules governing discovery and motion practice.
For example, Avoidance Action Defendants will be required
to respond to the complaint within 30 days of the Debtors'
notice of intention to prosecute an Avoidance Action.
The Debtors will not seek to enforce defaults or seek default
judgments against the Avoidance Action Defendants for failure to
respond to the complaint prior to the entry of an order with
respect to the Stay Motion, Mr. Waisman tells the Court.
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)
LOGAN'S ROADHOUSE: S&P Assigns 'B-' Rating on $355 Mil. Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B-'
issue-level rating, based Logan's Roadhouse Inc.'s proposed
$355 million second lien senior secured notes. The recovery
rating is '3'', indicating S&P's expectation for meaningful (50%-
70%) recovery of principal in the event of default.
The proposed $30 million first lien revolver is unrated. At the
same time, S&P affirmed all existing ratings, including its 'B-'
corporate credit rating on the company. S&P's rating outlook is
stable.
"The rating action follows Logan's merger agreement to be acquired
by Kelso & Co. for $585 million, including fees and expenses,"
said Standard & Poor's credit analyst Mariola Borysiak The
transaction is being financed with a $30 million unfunded revolver
and $355 million senior secured second lien notes. Kelso's and
Logan's managements will invest approximately $230 million.
Logan's pre-transaction capital structure included about
$102 million of preferred equity which S&P treated as debt in its
ratio calculation. As such, Logan's pro forma debt balances,
assuming that all existing debt is repaid and preferred equity
redeemed, will only be marginally higher resulting in slightly
weaker credit metric. Pro forma for the proposed transaction and
based on the preliminary results for the fiscal year ended Aug. 1,
2010, Logan's leverage will slightly increase to about 7.2x from
about 6.8x before the buyout. EBITDA interest coverage is
expected to be about 1.5x, down from 1.6x before the transaction.
LONGYEAR PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Longyear Properties, LLC
1420 Providence Highway
Norwood, MA 02062
Bankruptcy Case No.: 10-20326
Chapter 11 Petition Date: September 22, 2010
Court: District of Massachusetts (Boston)
Judge: Frank J. Bailey
Debtor's Counsel: Heather Zelevinsky, Esq.
Stewart F. Grossman, Esq.
LOONEY & GROSSMAN LLP
101 Arch Street
Boston, MA 02110
Tel: (617) 951-2800
Fax: (617) 951-2819
E-mail: hzelevinsky@lgllp.com
trustee@lgllp.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by John J. Sullivan, president of Seaver
Street, Inc., manager.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Columbia Construction Company Trade Debt $535,077
100 Riverpark Drive, PO Box 220
North Reading, MA 01864
Robinson & Cole LLP Trade Debt $129,716
280 Trumbull Street
Hartford, CT 06103
WB Cameron Trade Debt $88,584
2 Bennet Road
Wayland, MA 01778
R. J. Kenney Associates Inc. Trade Debt $59,493
National Lumber Trade Debt $56,822
Hammond Residential Real Estate Trade Debt $40,967
Monroe Plumbing & Heating Inc Trade Debt $40,524
Todd & Weld LLP Trade Debt $37,892
D'Agostino Associates Inc Trade Debt $35,243
Business Card-Bank of America Trade Debt $35,213
Sprink-Tech Company, Inc Trade Debt $33,379
P.J. Dionne Company Inc Trade Debt $26,345
Hancock Associates, Inc Trade Debt $23,741
Fire Suppression Systems LLC Trade Debt $22,820
Quinn Brothers of Essex Trade Debt $18,576
Sounder Systems Inc Trade Debt $18,502
Daniel Massouda Trade Debt $16,132
Robert McGinty Trade Debt $16,000
Waterproofing Company Inc Trade Debt $13,175
Nathaniel Brady Finishing Inc Trade Debt $13,000
MATEH EFRAIM: Helen-May's $1,500 Per Diem Admin. Claim Nixed
------------------------------------------------------------
The trustee for the Chapter 7 bankruptcy estate of Kollel Mateh
Efraim, LLC, a/k/a Mateh Ephraim LLC, a/k/a Kollel Mateh Efraim,
agreed to allow an administrative claim in favor of Helen-May
Holdings, LLC, at the rate of $1,500 per day for the approximate
three years that the debtor occupied Helen-May's property. The
settlement reserved to parties-in-interest the right to object to
the administrative claim. The debtor's former attorneys,
Backenroth Frankel & Krinsky, LLP, and Jack Lefkowitz and Abraham
Steinwurzel -- defendants in the adversary proceeding entitled
Geltzer v. Lefkowitz, Adv. Pro. No. 08-1265 -- objected to the
allowance of an administrative claim, asserting that Helen-May's
damages for use and occupancy should be limited to (i) a 2007
judgment for $245,779 against the Debtor for failure to make
adequate protection payments, plus (ii) the $140,000 down payment
on the Contract that Helen-May had retained.
On September 21, 2010, Judge Stuart M. Bernstein sided with the
Fiduciary Defendants and held that Helen-May's administrative
claim under the settlement and in connection with the Fiduciary
Litigation will be fixed at zero. Judge Bernstein said Helen-May
failed to carry is burden of proving the elements of its
administrative claim.
The Court's conclusion does not affect the prior judgment
resulting from the debtor's failure to make adequate protection
payments ordered by the Court.
The cases are Robert Geltzer, as Chapter 7 Trustee of the Estate
of Kollel Mateh Efraim, LLC, a/k/a Mateh Ephraim LLC, a/k/a Kollel
Mateh Efraim, v. Helen-May Holdings, LLC, and Irene Griffin, Adv.
Proc. No. 04-4545 (Bankr. S.D.N.Y.); and Robert Geltzer, as
Chapter 7 Trustee of the Estate of Kollel Mateh Efraim, LLC, a/k/a
Mateh Ephraim LLC, a/k/a Kollel Mateh Efraim, Plaintiff, v. Jack
Lefkowitz and Abraham Steinwurzel, Adv. Pro. No. 08-1265 (Bankr.
S.D.N.Y.). A copy of the Court's memorandum decision is available
at:
http://www.leagle.com/unsecure/page.htm?shortname=inbco20100921644
Helen-May Holdings is represented by:
David Carlebach, Esq.
LAW OFFICES OF DAVID CARLEBACH
40 Exchange Pl.
New York, New York
Messrs. Lefkowitz and Steinwurzel are represented by:
Eli Feit, Esq.
Stuart A. Blander, Esq.
HELLER, HOROWITZ & FEIT, PC
292 Madison Avenue, 20th Floor
New York, NY 10017
Telephone: Tel: (212) 685-7600 x3016
E-mail: efeit@hhandf.com
sablander@hhandf.com
The Chapter 7 Trustee is represented by:
Robert A. Wolf, Esq.
Daniel C. Mazanec, Esq.
SQUIRE, SANDERS & DEMPSEY LLP
30 Rockefeller Plaza
New York, NY 10112
Telephone: (212) 872-9800
Facsimile: (212) 872-9815
E-mail: rwolf@ssd.com
dmazanec@ssd.com
Pro Se Objector Backenroth Frankel may be reached at:
Scott Krinsky, Esq.
BACKENROTH FRANKEL & KRINSKY, LLP
489 Fifth Avenue
New York, NY 10017
Telephone: (212) 593-1100
Telecopy: (212) 644-0544
E-mail: skrinsky@bfklaw.com
Mateh Epraim LLC, dba Kollel Mateh Epraim LLC, is a real estate
developer. Mateh Epraim filed for Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 04-17525) on November 24,
2004. Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky,
LLP, served as bankruptcy counsel. The debtor listed $740,000 in
assets and $2,852,700 in debts in its petition. On October 25,
2007, the Court converted the chapter 11 case to case under
chapter 7, and Robert L. Geltzer, Esq. was appointed the Trustee.
MAUI LAND: To Sell Kapalua Bay Course to TY Management for $24.1MM
------------------------------------------------------------------
Maui Land & Pineapple Company, Inc. announced Wednesday that it
has entered into a definitive agreement for the sale of The
Kapalua Bay Course and Maintenance Facility to TY Management
Corporation, a Hawaii corporation, for $24.1 million. Under terms
of the sale, which is expected to close before the end of
September, the Company will enter into a lease to operate The Bay
Course until March 31, 2011.
"We are pleased to be able to continue our relationship with TY
Management to facilitate the sale of The Bay Course," stated
Warren H. Haruki, chairman and interim CEO of MLP. "With this
transaction, we are able to consolidate the ownership of both
Kapalua golf courses with an esteemed partner. We will continue
to operate The Bay Course in a manner that has led to Kapalua's
world-wide recognition as the number one golf resort in Hawaii.
We have an established relationship with TY Management
Corporation, which purchased The Plantation Course from MLP last
year, and look forward to a long term partnership at Kapalua for
many years."
The Bay Course is the forerunner of Kapalua Resort's two
championship golf courses. The 6,600-yard, par 72 Bay Course was
designed by Arnold Palmer and Francis Duane and opened in 1975.
About Maui Land & Pineapple Company
Maui Land & Pineapple Company, Inc.(NYSE: MLP) --
http://mauiland.com/-- is a landholding, real estate development
and asset management company headquartered in Maui, Hawaii. The
Company owns approximately 24,000 acres of land on Maui, including
its principal development, the Kapalua Resort, a 1,650 acre
master-planned, destination resort community.
The Company's balance sheet as of June 30, 2010, showed
$119.4 million in total assets, $202.7 million in total
liabilities, and stockholders' deficit of $83.3 million.
* * *
As reported in the Troubled Company Reporter on April 5, 2010,
Deloitte & Touche LLP, in Honolulu, Hawaii, expressed substantial
doubt about the Company's ability to continue as a going concern
following the Company's 2009 results. The independent auditors
noted of the Company's recurring losses and negative cash flows
from operations and deficiency in stockholders' equity at
December 31, 2009.
MF GLOBAL: Fitch Maintains Preferred Stock Rating at 'BB+'
----------------------------------------------------------
Fitch Ratings has maintained the ratings of MF Global Holdings
Ltd. on Rating Watch Negative where they were placed on March 23,
2010.
On May 20, 2010, MF's new management team announced a number of
near-term strategic initiatives to improve the company's financial
profile. Since then, MF has taken steps to improve its expense
base through staff reduction, a better alignment of compensation
and performance, and a rationalization of some of its businesses.
The cost restructuring efforts are expected to yield savings of
$60 million-$75 million a year. The company has also executed a
number of initiatives to enhance the quality and carry cost of its
capital structure. Specifically, MF completed an equity offering
that raised $174.4 million in net proceeds in June. Part of these
proceeds ($53.3 million) were used to complete an offer to
exchange common stock of the company plus cash for comparatively
high-cost convertible debt (9%) and non-cumulative preferred
shares (9.75%). The exchange offer is expected to reduce interest
and dividend expense by approximately $11.2 million after-tax per
year. Further, the company's funding and capital profile has
benefited from an amendment and extension of its revolving credit
facility at a relatively limited cost.
Profitability and revenue generation have been weaknesses over the
past several periods. To address these deficiencies, the company
is looking to diversify and grow its revenue base through
incremental principal trading activities as well as the
introduction of select new products and services. During the
first quarter of fiscal year 2011 (ended June 30, 2010), the
company was marginally profitable. Looking ahead, MF will
continue to be challenged in its efforts to establish and sustain
revenue growth and profitability. Going forward, Fitch looks to
management to provide a detailed plan to generate consistent
positive earnings. In evaluating management's plan, Fitch will
also consider the potential impact of the charted course on the
firm's overall risk profile.
The resolution of the Rating Watch could take a number of paths.
The articulation of an achievable path to sustained profitability
could result in a ratings affirmation, albeit with a Negative
Rating Outlook as the company executes its plan. Alternatively,
the ratings could be downgraded, potentially by multiple notches,
if in Fitch's view management's plan is not likely to be
achievable and/or entails a level of risk not commensurate with
the current ratings.
Fitch rates MF Global Holdings Ltd.:
-- Long-term Issuer Default Rating 'BBB';
-- Short-term IDR 'F2';
-- Senior debt 'BBB';
-- Preferred stock 'BB+';
-- Rating Watch Negative.
MF Global Holdings Ltd. is a leading futures and options broker
with subsidiaries in major financial hubs. Main subsidiaries are
registered futures commissions merchants and broker/dealers. MF
Global is heavily regulated as a member of commodities, futures,
and securities exchanges in the U.S., Europe and the Asia-Pacific
region.
MOTOR COACH: KPS Capital Acquires Controlling Stake
---------------------------------------------------
KPS Capital Partners, LP, on Monday completed a controlling
investment, through an affiliate, in MCII Holdings, Inc., the
parent company of Motor Coach Industries International, Inc. The
transaction is the result of a multi-stakeholder recapitalization
of MCII Holdings sponsored by KPS. Financial terms of the
transaction were not disclosed.
MCI is the largest manufacturer of intercity highway coaches in
North America. The Company is the only "Buy America" compliant
coach manufacturer in the industry and the premier motor coach
supplier to North America's largest transit agencies. In addition,
MCI is the leading supplier to private sector coach operators,
including charter and tour, line-haul and scheduled-service
operators. The MCI D-Series is the number one selling coach of all
time and the MCI J-Series is the best selling coach of the last
decade. The Company has the largest installed fleet of motor
coaches in North America. MCI is also the industry's leading
provider of aftermarket parts and service.
Jay Bernstein, a Partner of KPS, said, "MCI is universally
recognized as the premium coach brand and the leading participant
in the coach bus industry with a reputation for quality and
durability that is second to none. We are very excited to partner
with the Company's 1,500 employees in the U.S. and Canada to
manufacture products in North America for North American
customers, and to continue to provide MCI's customers with the
highest levels of quality and service. As a result of the KPS-
sponsored recapitalization, MCI is now conservatively capitalized
and has the financial resources to fund its continued growth and
investment in industry-leading innovation and technology."
KPS has considerable experience in the bus sector through its
former ownership of New Flyer Industries, Ltd., the leading
manufacturer of transit buses in North America. Under KPS's
ownership, New Flyer experienced significant growth in revenue and
profitability, and became the industry leader in quality, delivery
and customer service.
Miller Buckfire & Co., LLC served as financial advisor and Paul,
Weiss, Rifkind, Wharton and Garrison LLP served as legal counsel
to KPS with respect to the transaction.
About KPS Capital Partners
KPS Capital Partners, LP -- http://www.kpsfund.com/-- is the
manager of the KPS Special Situations Funds, a family of private
equity funds with over $2.6 billion of committed capital focused
on constructive investing in restructurings, turnarounds and other
special situations. KPS has created new companies to purchase
operating assets out of bankruptcy; established stand-alone
entities to operate divested assets; and recapitalized highly
leveraged public and private companies. The KPS investment
strategy targets companies with strong franchises that are
experiencing operating and financial problems. KPS invests its
capital concurrently with a turnaround plan predicated on cost
reduction, capital investment and capital availability. Typically,
the KPS turnaround plan is accompanied by a financial
restructuring of the company's liabilities.
About Motor Coach Industries
Motor Coach Industries, Inc. -- http://www.mcicoach.com/-- is the
largest manufacturer of intercity highway coaches for the tour,
charter, line-haul, schedule service, commuter transit and
conversion markets in the U.S. and Canada. The company operates
two manufacturing facilities in Winnipeg, Manitoba and Pembina,
North Dakota, as well as seven sales centers and eight service
centers in North America. MCI is also the industry's leading
supplier of aftermarket parts for most bus makes and models.
Headquartered in Schaumburg, Illinois, MCI has over 1,500
employees.
The Company and six of its affiliates filed separate petitions
for Chapter 11 relief (Bankr. D. Del. Lead Case No. 08-12136) on
Sept. 15, 2008, to implement a pre-negotiated restructuring plan
to be funded by Franklin Mutual Advisers, LLC and certain of its
affiliates. The company's Canadian operations weren't included in
the filing. At the time of filing, the Debtors estimated assets
between $500 million and $1 billion and liabilities between $100
million and $500 million.
The Bankruptcy Court confirmed the Debtors' Second Amended Plan of
Reorganization on January 28, 2009. Motor Coach completed its
financial restructuring and emerged from bankruptcy in only seven
months. The centerpiece of the Plan of Reorganization was a
$200 million investment by funds managed by Franklin Mutual
Advisers, which also converted their existing third lien secured
debt into common stock and are now the Company's majority
shareholders. The Debtors also obtained a $75 million senior
credit facility from GE Capital, and an additional $155 million
second lien loan from existing debtholders.
MOUNT LEBANON: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Mount Lebanon Personal Care Home
dba James S. Taylor Memorial Home
1015 Magazine Street
Louisville, KY 40203
Bankruptcy Case No.: 10-34999
Chapter 11 Petition Date: September 21, 2010
Court: United States Bankruptcy Court
Western District of Kentucky (Louisville)
Debtor's Counsel: Gordon A. Rowe, Jr., Esq.
LAW OFFICE OF GORDON ROWE
The Starks Bldg., Suite 1430
455 S. 4th Street
Louisville, KY 40202
Tel: (502) 584-1300
Fax: (502) 584-9555
E-mail: g3rowelaw@aol.com
Scheduled Assets: $5,916,135
Scheduled Debts: $7,030,949
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/kywb10-34999.pdf
The petition was signed by Stephanie Mathis, administrator.
NANCY WILLIAMSON: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Nancy P. Williamson
22424 N. 4th Street
Phoenix, AZ 85054
Bankruptcy Case No.: 10-29953
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: James M. Marlar
Debtor's Counsel: Brian N. Spector, Esq.
JENNINGS STROUSS & SALMON, PLC
One E. Washington St., #1900
Phoenix, AZ 85004-2554
Tel: (602) 262-5977
Fax: (602) 495-2654
E-mail: bspector@jsslaw.com
Scheduled Assets: $502,512
Scheduled Debts: $1,377,494
A list of the Debtor's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/azb10-29953.pdf
NPS PHARMACEUTICAL: Closes Public Offering of 8-Mil. Shares
-----------------------------------------------------------
NPS Pharmaceuticals Inc. reported the closing of a public offering
of 7,912,000 shares of its common stock, including 1,032,000
shares sold pursuant to the full exercise of an overallotment
option previously granted to the underwriters. Net proceeds were
approximately $44.4 million after deducting underwriting discounts
and estimated offering expenses. Jefferies & Company, Inc. acted
as the sole book-running manager and Canaccord Genuity Inc. acted
as co-lead manager for the offering.
About NPS Pharmaceuticals
Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq:
NPSP) -- http://www.npsp.com/-- is developing new treatment
options for patients with rare gastrointestinal and endocrine
disorders.
NPS noted in its Form 10-K for the year ended Dec. 31, 2009, it
has not been profitable since our inception in 1986. As of
December 31, 2009, it had an accumulated deficit of
$922.7 million. "Currently, we are not a self-sustaining business
and certain economic, operational and strategic factors may
require us to secure additional funds." The Company though
believes its existing capital resources at December 31, 2009,
along with the receipt of $38.4 million from the sale of its
REGPARA royalty stream, should be sufficient to fund its current
and planned operations through at least January 1, 2011.
The Company's balance sheet at June 30, 2010, showed
$193.77 million in total assets, $373.29 million in total
liabilities, and a stockholders' deficit of $179.51 million.
OBN HOLDINGS: Posts $4.9 Million Net Loss in March 31 Quarter
-------------------------------------------------------------
OBN Holdings, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $4.9 million on $2.8 million of revenue
for the three months ended March 31, 2010, compared to a net loss
of $827,871 on $4.5 million of revenue for the same period ended
March 31, 2009.
As of March 31, 2010, the Company's current liabilities of
$3.0 million exceeded current assets of $1.7 million by
$1.3 million. Approximately 30% of current liabilities represent
accrued payroll for executives who have opted to defer taking
salaries until additional funding is received.
The Company's balance sheet at March 31, 2010, showed
$2.2 million in total assets, $3.1 million in total liabilities,
and a stockholders' equity of $903,727.
As reported in the Troubled Company Reporter on September 3, 2010,
Tarvraran Askelson & Company LLP, in Laguna Niguel, Calif.,
expressed substantial doubt about the Company's ability to
continue as a going concern, following its results for the fiscal
year ended June 30, 2009. The independent auditors noted that the
Company has limited operating cash flows and does not have
sufficient working capital to fully fund its operations.
A full-text copy of the Form 10-Q for free at:
http://researcharchives.com/t/s?6b82
About OBN Holdings
Las Vegas, Nev.-based OBN Holdings, Inc., is a holding company
with operations in several industries, including the internet
broadcasting, television/film production, plastics recycling,
intelligent traffic systems the commodity import/export
industries. The Company is internationally diversified with
subsidiaries in China, Japan and the United States.
The Company was incorporated in Nevada on January 21, 2003, as the
holding company for three wholly owned entertainment operating
subsidiaries: Omni Broadcasting Network, Eclectic Entertainment
and Products On Demand Channel. In August 2003, the Company
acquired KSSY television, which is located in San Luis Obispo
County, California.
PACIFIC ENERGY: Reaches Deal with Alaska Over Oil Leases
--------------------------------------------------------
Bankruptcy Law360 reports that Pacific Energy Resources Ltd. has
asked a bankruptcy court to sign off on a stipulation in which it
would allow more than $40 million in claims from Alaska in order
to resolve a dispute over several oil and gas leases.
Law360 says the company filed a bid with the U.S. Bankruptcy Court
for the District of Delaware on Tuesday seeking approval of the
agreement.
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 Debtor estimated between $100 million and
$500 million in assets and debts in its Chapter 11 petition.
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.
PARADE HILL: Case Summary & 16 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Parade Hill Road, LLC
75 Beacon Hill Road
New Canaan, CT 06840-4919
Bankruptcy Case No.: 10-52234
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
District of Connecticut (Bridgeport)
Debtor's Counsel: George C. Tzepos, Esq.
LAW OFFICES OF GEORGE C. TZEPOS
444 Middlebury Road
Middlebury, CT 06762
Tel: (203) 598-0520
Fax: (203) 598-0522
E-mail: zepseven@sbcglobal.net
Scheduled Assets: $1,550,251
Scheduled Debts: $2,896,603
A list of the Company's 16 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/ctb10-52234.pdf
The petition was signed by Ruth L. Jones.
Debtor-affiliates that filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Ruth L. Jones 09-51596 08/14/09
RLJ Sales & Service Maintenance, LLC 09-52076 10/15/09
JRL, LLC 09-52077 10/15/09
PARKVIEW CARE: Genser Dubow Fees Cut for Duplicative Work
---------------------------------------------------------
Genser, Dubow, Genser & Cona, LLP, made a final application for
compensation for their work as special counsel on behalf of
Parkview Care and Rehabilitation Center, Inc. The Final
Application seeks $112,361.90 in fees and $4,112.61 in expenses.
The Final Application also seeks compensation of $2,118.62, which
represents fees that were held back from Genser's First Interim
Fee Application.
Both the Debtor and the Official Committee of Unsecured Creditors
objected. The Committee orally withdrew its objection at the
hearing. The United States Trustee informed the Court that it had
no objections to the Final Application.
The Court finds that a de minimis reduction in the amount of fees
is appropriate in light of some instances of duplicative work, and
as such the Court will not award the amount held back from the
First Interim Fee Application in the sum of $2,118.62.
The Court grants Genser's Application, and Genser will be
compensated fees in the amount of $112,361.90, representing the
total amount sought in its Final Application. Genser's requested
expenses in the amount of $4,112.61 are also approved.
A copy of the Court's decision is available at:
http://www.leagle.com/unsecure/page.htm?shortname=inbco20100907661
Genser, Dubow, Genser & Cona, LLP, is represented by:
Jack Genser, Esq.
Kenneth Kern, Esq.
GENSER, DUBOW, GENSER & CONA, LLP
Melville, New York
Telephone: 631-390-5000
718-834-0440
Facsimile: 631-390-5001
E-mail: Ken@genserlaw.com
David@genserlaw.com
Massapequa, New York-based Parkview Care and Rehabilitation Center
Inc., f/k/a Parkview Nursing Home Inc., filed for Chapter 11
bankruptcy protection (Bankr. E.D.N.Y. Case No. 8-08-71867) on
April 16, 2008. Judge Dorothy Eisenberg presides over the case.
Walter J. Greenhalgh, Esq., and Gia G. Incardone, Esq., at Duane
Morris LLP, in Newark, New Jersey, serve as the Debtor's
bankruptcy counsel. Michael S. Amato, Esq., at Ruskin Moscou
Faltisckek PC, in Uniondale, New York, serves as counsel to the
Official Committee of Unsecured Creditors. The Debtor estimated
$1 million to $10 million in both assets and debts in its
petition.
PENFIELD GROUP: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Penfield Group, Inc.
3500 Powerline Road
Oakland Park, FL 33309
Bankruptcy Case No.: 10-38213
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Southern District of Florida (Fort Lauderdale)
Judge: Raymond B. Ray
Debtor's Counsel: Chad T. Van Horn, Esq.
330 N. Andrews Avenue, #450
Ft Lauderdale, FL 33301
Tel: (954) 765-3166
E-mail: chad@brownvanhorn.com
Estimated Assets: $500,001 to $1,000,000
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 Wye Meng Cheong, vice president.
PETROLEUM SERVICES: Case Summary & 18 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Petroleum Services, Inc.
P.O. Box 9615
The Woodlands, TX 77387
Bankruptcy Case No.: 10-38261
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Letitia Z. Paul
Debtor's Counsel: Barbara Mincey Rogers, Esq.
ROGERS & ANDERSON, PLLC
1415 North Loop West, Ste 1020
Houston, TX 77008
Tel: (713) 868-4411
Fax: (713) 868-4413
E-mail: barbaramrogers@swbell.net
Scheduled Assets: $2,155,269
Scheduled Debts: $418,640
A list of the Company's 18 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/txsb10-38261.pdf
The petition was signed by Augustine O. Ajufo, president.
PHILADELPHIA NEWSPAPERS: Lenders, Perelman Enter $50 Million Bids
-----------------------------------------------------------------
Philadelphia Newspapers LLC snagged two bids of at least $50
million for its upcoming bankruptcy auction just before a noon
deadline Wednesday, fielding one proposal from Philadelphia
philanthropist Raymond Perelman and another from a group of senior
lenders that had backed out of a planned $139 million purchase of
the struggling media company Sept. 14, Bankruptcy Law360 reports.
Law360 says both bids are qualified under the rules set by the
U.S. Bankruptcy Court for the Eastern District of Pennsylvania,
according to Dilworth Paxson LLP's Lawrence McMichael.
About Philadelphia Newspapers
Philadelphia Newspapers -- http://www.philly.com/-- owns and
operates numerous print and online publications in the
Philadelphia market, including the Philadelphia Inquirer, the
Philadelphia Daily News, several community newspapers, the
region's number one local Web site, philly.com, and a number of
related online products. The Company's flagship publications are
the Inquirer, the third oldest newspaper in the country and the
winner of numerous Pulitzer Prizes and other journalistic
recognitions, and the Daily News.
Philadelphia Newspapers and its debtor-affiliates filed for
Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D.
Pa. Case No. 09-11204). Mark K. Thomas, Esq., and Paul V.
Possinger, Esq., at Proskauer Rose LLP in Chicago, Illinois; and
Lawrence G. McMichael, Esq., Christie Callahan Comerford, Esq.,
and Anne M. Aaronson, Esq., at Dilworth Paxson LLP, in
Philadelphia, Pennsylvania, serve as bankruptcy counsel. The
Debtors' financial advisor is Jefferies & Company Inc. The Garden
City Group, Inc., serves as claims and notice agent.
Ben Logan, Esq., at O'Melveny & Myers LLP in Los Angeles,
California; and Gary Schildhorn, Esq., at Eckert Seamans Cherin &
Mellott, LLC in Philadelphia, represent the Official Committee of
Unsecured Creditors. Fred S. Hodara, Esq., Abid Qureshi, Esq.,
and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP in
New York, represent the Steering Group of Prepetition Secured
Lenders.
Philadelphia Newspapers estimated assets and debts of $100 million
to $500 million in its bankruptcy petition.
RANDAL JACKSON: Case Summary & 12 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Randal G. Jackson
2106 Five Bridges Road
Snow Hill, MD 21863
Bankruptcy Case No.: 10-74958
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Western District of Arkansas (Harrison)
Debtor's Counsel: Geoffrey B. Treece, Esq.
QUATTLEBAUM, GROOMS, TULL & BURROW PLLC
111 Center Street, Suite 1900
Little Rock, AR 72201
Tel: (501) 379-1700
Fax: (501) 379-1701
E-mail: gtreece@qgtb.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Debtor's 12 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/arwb10-74958.pdf
RDS GROUP: Federal Judge Converts Case to Chapter 7 Liquidation
---------------------------------------------------------------
Tom Witosky at DesMoinesRegister.com reports that a federal
bankruptcy judge converted the Chapter 11 bankruptcy case of RDS
Group to Chapter 7 liquidation proceeding at the behest of the
Company's largest creditor Western Heritage Insurance Co.
Western Herigate, according to the report, asked that the Company
owner Randall Lee be found in contempt of court for failing to
comply with a court-ordered freezing of the account used to pay
Western Heritage its premiums. RDS Group claimed assets of
$531,384 and liabilities of $544,623, but Western Heritage
officials contend that Lee has "played hide the ball" concerning
the location of the money owed, he adds.
DesMoinesRegister reports, citing papers filed with the court,
that Western Heritage lawyers discovered that Mr. Lee apparently
loaned himself $1.4 million from RDS funds one week after he had
been enjoined from taking money out of an account used to pay
customer premiums to Western and other companies. Western
Heritage has claimed that it is owned $307,075 in premiums from
sales of insurance policies by RDS Group.
RDS Group, Inc., filed a Chapter 11 petition on August 31, 2010
(Bankr. S.D. Iowa Case No. 10-04405). Donald F. Neiman, Attorney;
Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave,
P.C., serves as counsel to the Debtor.
RESOLUTION DIGITAL: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Resolution Digital Studios, LLC
2201 W. Fulton
Chicago, IL 60612
Bankruptcy Case No.: 10-42066
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Pamela S. Hollis
Debtor's Counsel: Andrew J. Maxwell, Esq.
Vikram R. Barad, Esq.
MAXWELL LAW GROUP, LLC
105 West Adams Street, Suite 3200
Chicago, IL 60603
Tel: (312) 368-1138
Fax: (312) 368-1080
E-mail: maxwelllawchicago@yahoo.com
vbarad@maxwellandpotts.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Lee M. Facklis, manager.
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Show Department, Inc. 10-42055 9/20/10
Boreray, LLC -- --
RHODE ISLAND: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rhode Island State Pier Properties, LLC
c/o Patrick Conley, Esq.
1445 Wampanoag Trail, Ste 203
E. Providence, RI 02915
Bankruptcy Case No.: 10-13937
Chapter 11 Petition Date: September 21, 2010
Court: United States Bankruptcy Court
District of Rhode Island (Providence)
Judge: Arthur N. Votolato
Debtor's Counsel: John Boyajian, Esq.
BOYAJIAN HARRINGTON & RICHARDSON
182 Waterman Street
Providence, RI 02906
Tel: (401) 273-9600
E-mail: john@bhrlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 11 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/rib10-13937.pdf
The petition was signed by Patrick T. Conley.
RITTEN HOUSE: Istar Tara to Place Building in Receivership
----------------------------------------------------------
The senior lender for a luxury high-rise on Philadelphia's tony
Rittenhouse Square wants to foreclose on the $300 million project,
LDNews reports.
According to the report, New York-based Istar Tara L.L.C. filed a
suit last week in Common Pleas Court to place the 33-story 10
Rittenhouse Square building in receivership. The report relates
that another lender, Delaware Valley Real Estate Investment Fund,
filed suit against Istar Tara in July.
The report says that building management told The Philadelphia
Inquirer that 41 of the project's 135 condos are sold or under
contract with five more in negotiation. The units are priced from
$600,000 to $15 million, the report adds.
ROCK & REPUBLIC: Bluestar to Provide $60MM to Fund Ch. 11 Exit
--------------------------------------------------------------
ApparelNews.net, citing report from a New York Post, says that
Bluestar Alliance said it will pony up $60 million to help Rock &
Republic emerge from Chapter 11 bankruptcy protection. The deal
will allow Rock & Republic to pay off the $40 million it owes to
its creditors as well as go forward to expand the brand.
About Rock & Republic
New York-based Rock & Republic Enterprises, Inc., is a wholesale
and retail apparel company specializing in an avant-garde and
distinctive line of clothing. Originally started in 2002 by its
Chief Executive Officer, Michael Ball, primarily as an American
jeans company, the Debtors have expanded their lines to include
high fashion clothing for men, women and children as well as
shoes, cosmetics and accessories. The Company's merchandise can
be found at most high end retail stores such as Nordstrom, Neiman
Marcus, Bergdorf Goodman, Bloomingdales, Lord & Taylor, Harvey
Nichols and Saks Fifth Avenue, as well as in small upscale
boutiques.
The Company filed for Chapter 11 bankruptcy protection on April 1,
2010 (Bankr. S.D.N.Y. Case No. 10-11728). Alex Spizz, Esq., and
Arthur Goldstein, Esq., at Todtman, Nachamie, Spizz & Johns, P.C.,
assist the Company in its restructuring effort. Manderson,
Schaefer & McKinlay, LLP, is the Company's special corporate
counsel. The Company estimated $50 million to $100 million in
assets and $10 million to $50 million in liabilities.
The Company's affiliate, Triple R, Inc., filed a separate Chapter
11 petition on April 1, 2010 (Bankr. S.D.N.Y. Case No. 10-11729).
ROCK US: Combined Hearing on Prepack Plan on November 9
-------------------------------------------------------
Rock US Holdings Inc., et al., have filed a Joint Prepackaged Plan
of Reorganization and disclosure statement with the U.S.
Bankruptcy Court for the District of Delaware.
Copies of the Plan and the Disclosure Statement are available for
free at:
http://bankrupt.com/misc/ROCK_US_plan.pdf
http://bankrupt.com/misc/ROCK_US_plan2.pdf
http://bankrupt.com/misc/ROCK_US_ds.pdf
http://bankrupt.com/misc/ROCK_US_ds2.pdf
The Court will consider the adequacy of the Disclosure Statement
and confirmation of the Plan during a hearing set for November 9,
2010, at 9:30 a.m. prevailing Eastern Time. Objections to the
Disclosure Statement and the Plan must be filed with the Clerk of
the Court by October 18, 2010.
The Plan is intended to facilitate the sale of the Debtors'
properties. The process in place is intended to maximize the
recoveries available for the benefit of the estates, and the Bank
of Scotland plc is agreeing to fund the costs of operation of the
properties, the payment of ordinary course obligations of the
properties and special capital improvements, and the costs of
confirming the Plan, out of its cash collateral and asset sale
proceeds. Secured and priority liabilities are being funded as
part of the transactions contemplated by the Plan. Given the
Debtors' current debt obligations and lack of adequate liquidity
to fund all of its operating needs, the Debtors have no choice but
to pursue the sale process in the manner described.
The transactions proposed under the Plan will (i) pay all allowed
administrative claims, priority tax claims, other secured claims
and other priority claims in full; (ii) facilitate the sale or
other disposition of the properties and other assets of the
Debtors; (iii) provided a mechanism for relieving the properties
of the encumbrances caused by the ROFR, ROFO, and Landmark
Designation Process; and (iv) allow the orderly wind down of the
operations of the Debtors.
The transactions will convey clean title to the Fifth Avenue
Property to its purchaser and the Madison Avenue Property to its
purchaser in exchange for, as applicable, cash consideration and
the assumption of mortgage debt and other liabilities, or
cancellation of debt if the senior lenders determine to take title
to the properties. The Plan provides that, if the Madison Avenue
and the Fifth Avenue Purchase Agreements have terminated prior to
their respective closing dates, at the senior lenders' option, the
senior lenders may convey title to either or both of the
properties to the senior lenders in full satisfaction of their
Class 1 claims or designate one more entities, as applicable, as
purchasers of the properties.
Treatment of Claims
Under the Plan, the administrative claims will be paid in cash, in
full. Each holder of a Priority Tax Claim will receive cash, in
full satisfaction of their claims.
With respect to classified claims:
Classification Treatment
-------------- ---------
1 - Senior Lender Claims In full and final satisfaction,
allowed senior lender claims (i) the
Fifth Avenue Property will be conveyed
to the purchaser free and clear of
liens, claims, encumbrances or
interests; (ii) the Madison Avenue
Property will be conveyed to the
purchaser free and clear of liens,
claims, encumbrances or interests;
(iii) the senior agent, as disbursing
agent for the senior lenders will get
the net proceeds of the sale of the
Fifth Avenue Property; (iv) the senior
agent, as disbursing agent for the
senior lenders will get the net
proceeds of the sale of the Madison
Avenue Property; (v) the senior agent
will get an allowed unsecured
deficiency claim classified in Class 6
in the amount of at least $98,100,598;
(vi) any cash remaining in the
Debtors' cash balances after payment
of allowed administrative claims and
priority tax claims pursuant to the
Plan, other than amounts for wind-up
fees, costs and expenses included in
the approved cash collateral budget or
any subsequent budget agreed to by the
Debtors and the senior lenders, will
be disbursed to the senior agent;
(vii) proceeds, or rights to proceeds,
as applicable, of any insurance
policies maintained in connection with
the Fifth Avenue Property in relation
to a casualty thereto, will be
disbursed or assigned to the
purchaser; (viii) proceeds, or rights
to proceeds, as applicable, of any
insurance policies maintained in
connection with the Madison Avenue
Property in relation to a casualty
thereto, will be disbursed or assigned
to the purchaser; (ix) refunds of real
estate taxes paid with respect to the
Fifth Avenue Property will be
disbursed to the purchaser; and (x)
refunds of real estate taxes paid with
respect to the Madison Avenue Property
will be disbursed to the purchaser
Class 2 - Other Secured The legal, equitable and contractual
Claims rights of the holders won't be altered
by the Plan. Holders will receive, in
full and final satisfaction of the
claims, these treatments: (i)
reinstatement of the claim; (ii)
payment of the claim; (iii) delivery
of the collateral securing the claim;
or (iv) other treatment so as to
render the claim unimpaired.
Class 3 - Other Priority The legal, equitable and contractual
Claims rights of the holders won't be altered
by the Plan. Holders will receive, in
full and final satisfaction of the
claims, these treatments: (i) payment
in full in cash; (ii) payment either
(a) in the ordinary course of
business in accordance with applicable
law or the terms of any agreement that
governs the claims or (b) in
accordance with the course of practice
between the Debtors and the holders
with respect to the claim; or (iii)
other treatment as to render the claim
unimpaired.
Class 4 - Subordinated No property of the estates will be
Lender Claims distributed to or retained by the
holders.
Class 5 - Fifth Avenue No property of the estates will be
Note Claims distributed to or retained by the
holders.
Class 6 - General No property of the estates will be
Unsecured Claims distributed to or retained by the
holders.
Class 7 - Intercompany No property of the estates will be
Claims distributed to or retained by the
holders.
Class 8 - Interests No property of the estates will be
distributed to or retained by the
holders. Interests will be deemed
cancelled and extinguished on the
effective date.
About Rock US
Rock US Holdings Inc. filed for Chapter 11 bankruptcy protection
on September 15, 2010 (Bankr. D. Del. Case No. 10-12892).
Affiliates Rock US Investments LLC (Bankr. D. Del. Case No. 10-
12893), Rock New York (100-104) Fifth Avenue LLC (Bankr. D. Del.
Case No. 10-12894), and Rock New York (183 Madison Avenue) LLC
(Bankr. D. Del. Case No. 10-12895) filed separate Chapter 11
petitions.
Rock US Holdings estimated assets at up to $50,000 debts at
$100 million to $500 million as of the Petition Date. Rock US
Investments estimated its assets at up to $50,000 and debts at
$100 million to $500 million; Rock New York (100-104) estimated
its assets at $100 million to $500 million and debts at
$100 million to $500 million; and Rock New York (183 Madison)
estimated its assets at $100 million to $500 million and debts at
$100 million to $500 million as of the Petition Date.
Jamie Lynne Edmonson, Esq., Neil B. Glassman, Esq., at Bayard PA,
are the Debtors' general bankruptcy counsel.
Hogan Lovells US LLP is the Debtors' special corporate and
Litigation counsel.
Jones Day is the Debtors' special real estate counsel.
RONALD TRIPODO: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Joint Debtors: Ronald J. Tripodo
aka Ron Tripodo
Patsy T. Tripodo
1171 Bridge Mill Avenue
Canton, GA 30114
Bankruptcy Case No.: 10-87806
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: James Massey
Debtors' Counsel: Herbert C. Broadfoot, II, Esq.
RAGSDALE, BEALS, SEIGLER, ET AL.
2400 International Tower
229 Peachtree Street, N.E.
Atlanta, GA 30303
Tel: (404) 588-0500
Fax: (404) 523-6714
E-mail: broadfoot@rbspg.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A list of the Joint Debtors' 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/ganb10-87806.pdf
S&R LLC: Case Summary & 4 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: S&R, LLC
3409 Willow Treet Lane
Falls Church, VA 22044
Bankruptcy Case No.: 10-17929
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Nathan A. Fisher, Esq.
3977 Chain Bridge Road, #2
Fairfax, VA 22030
Tel: (703) 691-1642
Fax: (703) 691-0192
E-mail: Fbarsad@cs.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's four largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/vaeb10-17929.pdf
The petition was signed by Santo M. Mirabile, president.
SAM NGUYEN: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Joint Debtors: Sam Thanh Nguyen
aka Son Thanh Nguyen
Nina Nhi Phan
9409 Verlaine
Las Vegas, NV 89145
Bankruptcy Case No.: 10-27777
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtor's Counsel: Zachariah Larson, Esq.
LARSON & STEPHENS
810 S. Casino Center Blvd., Ste 104
Las Vegas, NV 89101
Tel: (702) 382-1170
Fax: (702) 382-1169
E-mail: ecf@lslawnv.com
Scheduled Assets: $5,428,682
Scheduled Debts: $13,033,260
A list of the Joint Debtors' 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/nvb10-27777.pdf
SHOW DEPARTMENT: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Show Department, Inc.
2201 W. Fulton
Chicago, IL 60612
Bankruptcy Case No.: 10-42055
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Pamela S. Hollis
Debtor's Counsel: Andrew J. Maxwell, Esq.
Vikram R. Barad, Esq.
MAXWELL LAW GROUP, LLC
105 West Adams Street Ste 3200
Chicago, IL 60603
Tel: (312) 368-1138
Fax: (312) 368-1080
E-mail: maxwelllawchicago@yahoo.com
vbarad@maxwellandpotts.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Lee M. Facklis, president.
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Resolution Digital Studios, LLC 10-42066 9/20/10
Boreray, LLC -- --
SIERRA F: Case Summary & 8 Largest Unsecured Creditors
------------------------------------------------------
Debtor: Sierra F, LLC
10722 Washington Boulevard, Suite 300
Culver City, CA 90232
Bankruptcy Case No.: 10-50227
Chapter 11 Petition Date: September 21, 2010
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles
Judge: Alan M. Ahart
Debtor's Counsel: Philip D. Dapeer, Esq.
PHILIP DAPEER, A LAW CORPORATION
2625 Townsgate Road, Suite 330
Westlake Village, CA 91361
Tel: (323) 954-9144
Fax: (323) 954-0457
E-mail: PhilipDapeer@aol.com
Scheduled Assets: $1,109,500
Scheduled Debts: $1,612,031
A list of the Company's eight largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb10-50227.pdf
The petition was signed by Charles Jeannel, member and manager.
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Charles Jeannel 10-50232 9/21/10
SILVER SPOON: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Silver Spoon Salad Company, Inc.
447 West Lowell Avenue
Haverhill, MA 01832
Bankruptcy Case No.: 10-44639
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
District of Massachusetts (Worcester)
Judge: Melvin S. Hoffman
Debtor's Counsel: Robert L. O'Brien, Esq.
P.O. Box 357
New Boston, NH 03070-0357
Tel: (603) 459-9965
Fax: (603) 250-0822
E-mail: robjd@mail2firm.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/mab10-44639.pdf
The petition was signed by Ronald Tomacchio, vice president.
SINCLAIR BROADCAST: Unit to Issue $250MM of Sr. Unsec. Notes
------------------------------------------------------------
Sinclair Broadcast Group Inc. said that its wholly-owned
subsidiary, Sinclair Television Group Inc., intends to offer,
subject to market conditions and other factors, approximately
$250.0 million aggregate principal amount of Senior Unsecured
Notes. The Notes are expected to mature in 2018 and to be
guaranteed by Sinclair and certain of Sinclair's subsidiaries.
This private placement of Notes would be conditioned on customary
closing conditions.
The net proceeds from the private placement of Notes are intended
to be used, together with available cash on hand and revolving
debt, to repurchase all or a portion of Sinclair Television's
8.0% Senior Subordinated Notes due 2012 and the Company's 6%
Convertible Subordinated Debentures due 2012. Any net proceeds
not used for the repurchases would be used for general corporate
purposes.
About Sinclair Broadcast
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
The Company's balance sheet at June 30, 2010, showed $1.53 billion
in total assets, $1.71 billion in total liabilities, and a
stockholders' deficit of $170.36 million.
* * *
Sinclair Broadcast has a 'B1' corporate family rating from
Moody's. It has a 'B+' corporate credit rating from Standard &
Poor's Ratings Services.
"The CFR continues to reflect still high financial risk,
nonetheless, and the inherent cyclicality of the broadcast
television business, among other factors," Moody's said in August
2010.
"The 'B+' rating reflects S&P's expectation that Sinclair will be
able to reduce its leverage further by the end of 2010 through
revenue and EBITDA growth and lower debt balances," explained
Standard & Poor's credit analyst Deborah Kinzer in August.
Moody's Investors Service raised its ratings for Sinclair
Broadcast Group, Inc., and subsidiary Sinclair Television Group,
Inc., including the Corporate Family Rating and Probability-of-
Default Rating, each to Ba3 from B1, and the ratings for
individual debt instruments, concluding its review for possible
upgrade as initiated on August 5, 2010. Moody's also assigned a
B2 (LGD 5, 87%) rating to the proposed $250 million issuance of
Senior Unsecured Notes due 2018 by STG. The Speculative Grade
Liquidity Rating remains unchanged at SGL-2. The rating outlook
is now stable.
SKY BRIDGE: Focus Management to Facilitate Real Estate Sale
-----------------------------------------------------------
Focus Management Group was appointed as Financial Advisor to Sky
Bridge Resorts Community, L.L.C., in May 2010 and is currently
facilitating the sale of SkyBridge's real estate assets under
Section 363 of the Bankruptcy Code.
Sky Bridge filed a Chapter 11 case in the United States Bankruptcy
Court in the District of Delaware on February 2, 2010. Its
principal asset consists of a 1,637-acre residential land
development project located ten miles southwest of Hot Springs,
AR.
Subject to final approval of the Bankruptcy Court and the Court's
calendar, Focus is assisting SkyBridge to solicit bids for some or
all of the Debtor's assets. An auction is currently scheduled to
be held on September 29, 2010, following which a hearing is
scheduled to approve the sale to the winning bidder on October 1,
2010.
The Sky Bridge property straddles Hot Spring and Garland Counties
and is positioned on a sudden and dramatic rise overlooking Lake
Hamilton's 363 miles of shoreline. The rise is comprised of three
parallel ridgelines, each three miles in length, offering views
with visibility of up to 25 miles. Development plans have called
for eight or more phases to include up to 1,500 single family and
condominium residential units, hospitality enterprise, assisted
living and commercial space. Phase I consists of 303 single-
family homes and 160 condominiums across 382 acres (the
condominium pad would alternatively support approximately 55
maximum-view single-family lots).
Leading the Focus engagement are Managing Directors John Bambach,
Jr. and Keith Hyatt. Mr. Bambach, a Certified Turnaround
Professional, has over 20 years of bankruptcy and turnaround
management in a diverse range of industries. Mr. Hyatt is a
seasoned real estate professional with wide-ranging experience in
the acquisition, development, marketing and management of real
estate assets.
Focus has established an online data room for principals of
qualified parties interested in reviewing this opportunity.
Interested parties should direct their inquiries to John Bambach
(Phone: (610) 574-1127; E-mail: j.bambach@focusmg.com) or Keith
Hyatt (Phone: (904) 669-4757; E-mail: k.hyatt@focusmg.com).
About Focus Management Group
Focus Management Group -- http://www.focusmg.com-- provides
nationwide professional services in turnaround management,
insolvency proceedings, business restructuring and operational
improvement with a senior-level team of 130 professionals.
Headquartered in Tampa, FL, with offices in Atlanta, Chicago,
Cleveland, Columbus, Dallas, Los Angeles and Philadelphia, the
firm provides a full portfolio of services to distressed companies
and their stakeholders, including secured lenders and equity
sponsors.
SOUTHLAKE DENTAL: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Southlake Dental Associates, PC
6630 Exchange Place
Morrow, GA 30260
Bankruptcy Case No.: 10-88022
Chapter 11 Petition Date: September 21, 2010
Court: U.S. Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: Richard E. Thomasson, Esq.
THOMASSON LAW FIRM, LLC
362 Cotton Avenue, Suite 100
Macon, GA 31201
Tel: (478) 743-7453
E-mail: ret@thomassonlawfirm.com
Scheduled Assets: $229,108
Scheduled Debts: $1,717,501
The Company did not file a list of creditors together with its
petition.
The petition was signed by Troy L. Gibbons, DDS, CEO.
SPARTA COMMERCIAL: Posts $1.3 Million Net Loss in July 31 Quarter
-----------------------------------------------------------------
Sparta Commercial Services, Inc.. filed its quarterly report on
Form 10-Q, reporting a net loss of $1.31 million on $132,147 of
revenue for the three months ended July 31, 2010, compared with a
net loss of $994,279 on $216,804 of revenue for the same period
ended July 31, 2009.
The Company has an accumulated deficit of $32.73 million as of
July 31, 2010.
The Company's balance sheet at July 31, 2010, showed $2.18 million
in total assets, $4.84 million in total liabilities, and a
stockholders' deficit of $2.66 million.
RBSM LLP, in New York, expressed substantial doubt about Sparta
Commercial Services, Inc.'s ability to continue as a going concern
following its results for the fiscal year ended April 30, 2010.
The independent auditors noted of the Company's recurring losses
from operations.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b84
About Sparta Commercial
Based in New York, Sparta Commercial Services, Inc.
-- http://www.spartacommercial.com/-- is a specialized consumer
finance company engaged primarily in the purchase of retail
installment sales contracts and the origination of leases to
assist consumers in acquiring new and used motorcycles (550cc and
higher), scooters, and 4-stroke ATVs.
SPRINGBOK SERVICES: Fifth Third Acquires Certain Assets
-------------------------------------------------------
Fifth Third Processing Solutions LLC has acquired certain assets
of Springbok Services Inc. The assets were acquired by Fifth
Third Processing Solutions in connection with Springbok's Chapter
11 bankruptcy proceeding and include Springbok's cutting edge
reloadable prepaid card processing platform.
The acquisition enables Fifth Third Processing Solutions to
immediately expand its processing capabilities to include Visa and
MasterCard branded gift cards, general purpose reloadable cards,
payroll cards and loyalty programs to further complement its
industry-leading debit card and credit card authorization,
settlement and back office processing services.
Fifth Third Processing Solutions is the 3rd largest transaction
acquirer in the industry as ranked by the Nilson Report,
processing 33 billion transactions and over $315 billion in sales
volume annually.
"We are fully committed to helping our clients differentiate
themselves from their competitors by delivering the technology
solutions they need to grow their businesses," commented Charles
Drucker, President and CEO of Fifth Third Processing Solutions.
"This acquisition is especially exciting because it further
complements our existing product offerings and enables us to offer
our clients a reloadable prepaid program that utilizes a
consolidated transaction infrastructure, which will help them to
holistically maximize efficiencies across their company. Our
3,000 financial institution clients will be able to process these
transactions using the same connection they have with us today,
which will give them speed-to-market advantages in under-
penetrated markets such as the unbanked segment. In addition, our
merchant clients will be able to offer a proven reloadable card
alternative to their customers, using the same single processing
platform they use today with us. We are proud to continue and
expand our resources to our valued clients!"
In conjunction with the acquisition, key employees responsible for
Springbok's processing platform development have joined Fifth
Third Processing Solutions.
About Springbok Services
Englewood, Colorado-based Springbok Services, Inc., fka The Best
Present Company, Inc.; and fdba Springbok Card Processing
Services, fka Springbok Card Processing Services, Inc., filed for
Chapter 11 bankruptcy protection on June 18, 2010 (Bankr. D. Colo.
Case No. 10-25285). Duncan E. Barber, Esq., who has an office in
Denver, Colorado, assists the Company in its restructuring effort.
The Company estimated its assets and debts at $10,000,001 to
$50,000,000.
STEVE FICARRO'S: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Steve Ficarro's Auto Body, LLC
21 Industry Court
Ewing, NJ 08638
Bankruptcy Case No.: 10-39170
Chapter 11 Petition Date: September 21, 2010
Court: United States Bankruptcy Court
District of New Jersey (Trenton)
Judge: Raymond T. Lyons Jr.
Debtor's Counsel: Carol L. Knowlton, Esq.
TEICH GROH
691 State Highway 33
Trenton, NJ 08619
Tel: (609) 890-1500
E-mail: cknowlton@teichgroh.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/njb10-39170.pdf
The petition was signed by Ronald Hartley, president.
SUNESIS PHARMACEUTICALS: Board Approves Amended Payment Plan
------------------------------------------------------------
The Board of Directors of Sunesis Pharmaceuticals Inc. approved on
Sept. 16, 2010, the amendment and restatement of its Change of
Control Payment Plan providing for an extension of its term
through June 30, 2011.
2010 Bonus Program
The Company said, "On Sept. 16, 2010, the Board approved its 2010
Bonus Program. The 2010 Bonus Program provides its executive
officers and other eligible employees the opportunity to earn cash
bonuses based on the level of achievement by us of certain
corporate objectives and by each participant of certain individual
performance objectives from June 30, 2010 through December 31,
2010. A participant must remain an employee through the payment
date under the 2010 Bonus Program to be eligible to earn a cash
bonus."
"The Board approved the Corporate Objectives and assigned a
weighting to each objective. The Compensation Committee of the
Board shall set the Individual Objectives of our chief executive
officer, as well as the Individual Objectives of the remaining
executive officers based on the recommendations of the chief
executive officer. The Individual Objectives of non-executive
participants shall be set by each participant's immediate
supervisor.
"Each eligible participant in the 2010 Bonus Program may receive a
cash bonus in an amount up to a specified percentage of such
participant's annual base salary earned in 2010. Under the 2010
Bonus Program, the Bonus Targets range from 25% to 50% of a
participant's 2010 base salary for Vice President level employees
and above. The bonus target percentage for each of our named
executive officers is as follows:
Named Executive Officer Bonus Target Percentage
----------------------- -----------------------
Daniel N. Swisher, Jr. 50.0%
President and Chief
Executive Officer
Eric H. Bjerkholt 37.5%
Senior Vice President,
Corporate Development and
Finance, Chief Financial
Officer and Corporate Secretary
Steven B. Ketchum, Ph.D. 37.5%
Senior Vice President, Research
and Development
The Compensation Committee will determine the degree to which the
Corporate Objectives have been met after receiving the analysis
and recommendations of management. Based on such determination,
the Compensation Committee will adjust these Bonus Targets
accordingly.
The Compensation Committee said, "It will also determine the level
of achievement of the Individual Objectives by our chief executive
officer based on its evaluation of the chief executive officer's
achievements and by the remaining executive officers based on the
recommendations of the chief executive officer.
®There is no set formula for determining the amount of bonus
earned under the 2010 Bonus Program based on the achievement of
the Corporate and Individual Objectives. Rather, the Compensation
Committee will exercise its discretion in determining the amount
of cash bonus actually earned. Payment under the 2010 Bonus
Program is expected to occur in the first quarter of 2011."
Discretionary Cash Bonus
On September 16, 2010, the Board awarded Dr. Steven Ketchum, the
company's Senior Vice President, Research and Development, a
discretionary cash bonus of $30,000.
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.
Sunesis' balance sheet at June 30, 2010, showed $49.84 million in
total assets, $5.53 million in total liabilities, $61,741 in non-
current portion of deferred rent, and $44.25 million in
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.
SUREFIL LLC: Emerges from Chapter 11
------------------------------------
Surefil LLC emerged from Chapter 11 protection with Federal Court
approval on September 15, 2010. The company was able to attract
ABACO Partners, LLC a Michigan based company lead by the former
Chief Executive Officer of Universal Forest Products, Bill Currie,
to purchase the company. Surefil's top management and all
employees will remain with the company.
"We are very pleased to have completed the acquisition of
Surefil," said Currie. "The company is emerging from Chapter 11
debt-free and is well positioned for growth." Mr. Currie is
currently Chairman of the Board at Universal Forest Products.
Other partners in ABACO include Mike Currie, president of Grand
Northern Products, Tom Seeber and Brady Bailiff of Blue Wing
Partners, and Bernd Durstberger.
Since its founding in 2005, Surefil grew rapidly and has become a
major player in the growing contract manufacturing business. The
company provides services to many well respected blue chip
companies in the personal care and drug market and numerous
entrepreneurial companies in the energy shot category.
"The willingness of a West Michigan business to reinvest in
Surefil was vital to creating and sustaining jobs in the area and
to the company's successful navigation through Chapter 11," said
Surefil President Bill Hunt. "The company was able to grow and
develop under the Chapter 11 protection by signing new contracts,
recruiting strong management talent and attracting dedicated
suppliers willing to bet on the company's success." Hunt also
credits Huntington Bank for supporting Surefil. "Huntington's
commitment, focus and willingness to support Surefil for well over
a year were critical to this success story," he added.
About Surefil LLC
Surefil is a Grand Rapids, Mich. based company dedicated to
providing custom filling solutions to the personal care, homecare,
oral, medical and beverage industries. Surefil provides
formulation support and manufacturing.
Surefil, LLC, filed for Chapter 11 protection on June 8, 2009
(Bankr. W.D. Mich. Case No.: 09-06914). Surefil Properties, LLC,
also filed for Chapter 11 (Case No. 09-06916). Harold E. Nelson,
Esq., at Nantz, Litowich, Smith & Girard, serves as bankruptcy
counsel. Surefil LLC estimated assets at up to $10 million and
debts at up to $50 million.
TAILOR MADE: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Tailor Made Enterprises LLC
317 NW Olive
Lees Summit, MO 64063
Bankruptcy Case No.: 10-45003
Chapter 11 Petition Date: September 17, 2010
Court: United States Bankruptcy Court
Western District of Missouri (Kansas City)
Judge: Dennis R. Dow
Debtor's Counsel: Joel Pelofsky, Esq.
BERMAN DELEVE KUCHAN & CHAPMAN, LC
2230 Commerce Tower, 911 Main Street
Kansas City, MO 64105
Tel: (816) 471-5900
Fax: (816) 842-9955
E-mail: jpelofsky@bdkc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Richard Mullin, member.
TRIBUNE CO: Judge Rules Chadbourne Can Represent Creditors
----------------------------------------------------------
Bankruptcy Law360 reports that Judge Kevin J. Carey of the U.S.
Bankruptcy Court for the District of Delaware ruled Wednesday that
Chadbourne & Parke LLP will be permitted to advise the official
committee of unsecured creditors in The Tribune Co.'s bankruptcy
in an upcoming mediation to resolve disputes over a 2008 leveraged
buyout of the media conglomerate.
Judge Carey denied a motion by Aurelius Capital Management, one of
the largest unsecured creditors in the case, according to Law360.
About Tribune Co
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. And Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors had $7,604,195,000 in total
assets and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Names David Eldersveld as General Counsel
-----------------------------------------------------
Tribune Company announced that David Eldersveld has been promoted
to general counsel and that former general counsel Don Liebentritt
has been named the company's chief restructuring officer. Mr.
Liebentritt will focus entirely on leading Tribune's restructuring
efforts. Both appointments are effective immediately.
"As we enter the next phase of our Chapter 11 process and begin
working with the mediator assigned to oversee negotiations with
our creditor constituencies, Don needs to devote all his attention
and energy entirely to our restructuring efforts," said Randy
Michaels, Tribune's chief executive officer. "He's intimately
familiar with the process and what needs to be done to achieve a
restructuring plan that can win the votes of our creditors and be
approved by the court."
Mr. Liebentritt has served as Tribune's general counsel since
2008. Mr. Eldersveld was named Tribune's senior vice
president/deputy general counsel and corporate secretary in 2008;
he joined the company in 2005 as senior counsel/mergers and
acquisitions.
"Dave has earned this promotion -- he's intelligent, articulate
and effective, and has been a great second-in-command," said
Michaels. "As Tribune has moved through the Chapter 11 process,
Dave has stepped up to provide great leadership in our legal
department -- his appointment will enable Don to stay focused on
our restructuring."
Mr. Eldersveld said, "Tribune has an extremely talented legal
staff. They are dedicated to defending the interests of this
company, the exceptional work of the journalists at its media
properties and the principal of a free press -- it is a privilege
to work with them."
About Tribune Co
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. And Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors had $7,604,195,000 in total
assets and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Ernst & Young Work to Include 2009 Tax Return Services
------------------------------------------------------------------
Tronox Inc. and its units sought and obtained authority from Judge
Allan L. Gropper of the U.S. Bankruptcy Court for the Southern
District of New York to expand the scope of Ernst & Young LLP's
employment to include 2009 Tax Return Services, nunc pro tunc to
June 22, 2010.
Tronox previously obtained approval to hire Ernst & Young as
auditor.
The additional services are pursuant to the terms and conditions
contained in the additional statement of work dated as of
June 22, 2010, submitted by Ernst & Young and approved by the
Court.
The 2009 Tax Return Services consist of Ernst & Young performing
review procedures with respect to Tronox Incorporated's U.S.
federal and state income tax returns for the taxable year ended
December 31, 2009.
Fees for the 2009 Tax Return Services under the 2009 Tax Return
SOW will be based on the hourly rates:
Executive Director/Principal/Partner $580 to $760
Manager/Senior Manager $455 to $575
Senior $275 to $380
Staff $125 to $245
In addition, the Debtors will reimburse Ernst & Young for any
direct expenses incurred in connection with the performance of
the 2009 Tax Return Services.
William Buergler, a partner at Ernst & Young, assured the Court
that his firm does not hold or represent any interest materially
adverse to the Debtors' estates in the matters for which it is to
be retained.
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Kirkland & Ellis Charges $6.09 Mil. for Feb.-June Work
------------------------------------------------------------------
Professionals retained in Tronox Inc.'s bankruptcy cases filed
interim applications for the allowance of fees and expenses
incurred for the period from February 1 through June 30, 2010:
A. Debtors
Professional Period Fees Expenses
------------ ------ ---- --------
Kirkland & Ellis LLP 02/01/2010- $6,095,872 $317,185
06/30/2010
Alvarez & Marsal North 02/01/2010- 1,243,492 17,500
America, LLC 06/30/2010
Togut, Segal & Segal LLP 02/01/2010- 757,304 3,349
06/30/2010
Ernst & Young LLP 02/01/2010- 377,701 126
06/30/2010
Rothschild, Inc. 02/01/2010- 1,000,000 45,195
06/30/2010
B. Official Committee of Unsecured Creditors
Professional Period Fees Expenses
------------ ------ ---- --------
Jefferies & Company, Inc. 02/01/2010- 600,000 25,478
06/30/2010
Members of the Official 02/01/2010- -- 6,584
Committee of Unsecured 06/30/2010
Creditors
Paul, Weiss, Rifkind, 02/01/2010- 673,472 12,144
Wharton & Garrison LLP 06/30/2010
C. Official Committee of Equity Security Holders
Professional Period Fees Expenses
------------ ------ ---- --------
Pillsbury Winthrop Shaw 02/01/2010- $958,660 $34,850
Pittman LLP 06/30/2010
The Debtors employed Kirkland & Ellis as counsel, Alvarez &
Marsal as crisis managers, Rothschild as financial advisor, Togut
Segal as conflicts counsel and Ernst & Young as auditors and tax
advisors.
The Official Committee of Unsecured Creditors retained Paul Weiss
as counsel and Jefferies & Company as financial advisor. The
Official Committee of Equity Security Holders retained Pillsbury
Winthrop as counsel.
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Proposes March 31 Extension of Removal Period
---------------------------------------------------------
Tronox Incorporated and its debtor-affiliates ask Judge Allan L.
Gropper of the U.S. Bankruptcy Court for the Southern District of
New York to further extend the time within which they may file
notices of removal with respect to any actions that are subject
to removal under Section 1452 of the Judiciary and Judicial
Procedure.
Specifically, the Debtors propose to extend its removal deadline
under Rule 9027 of the Federal Rules of Bankruptcy Procedure to
the earlier of:
(a) March 31, 2011,
(b) the effective date of a plan of reorganization,
(c) the day that is 30 days after the entry of an order
terminating the automatic stay provided by Section 362 of
the Bankruptcy Code with respect to the particular action
sought to be removed, or
(d) with respect to certain Postpetition Actions, the time
periods set forth in Rule 9027(a)(3).
The Debtors further request that the order be without prejudice
to (a) any position the Debtors may take regarding whether
Section 362 of the Bankruptcy Code applies to stay any actions;
and (b) the Debtors' right to seek future extensions of time to
remove any and all actions.
Patrick J. Nash, Jr., Esq., at Kirkland & Ellis LLP, in New York,
relates that the Debtors are party to approximately 240 actions
pending in various state and federal courts and is represented by
many different law firms in these actions. Moreover, additional
actions may be filed against the Debtors during the pendency of
their Chapter 11 cases, he says. While Section 362(a) of the
Bankruptcy Code automatically stays many, if not all, of the
Actions pending against the Debtors, the Debtors are not yet
prepared to decide which, if any, Actions it will seek to remove,
Mr. Nash tells the Court.
The Debtors believe that the proposed time extension will provide
them with the necessary additional time to consider, and make
decisions concerning, the removal of any Actions. Unless the
extension is granted, the Debtors believe they will not have
sufficient time to consider adequately whether removal of any of
the Actions is necessary.
The requested extension of the Removal Period will not prejudice
the rights of any party to the Actions, Mr. Nash avers. Inasmuch
as Section 362(a) of the Bankruptcy Code automatically stays
actions against the Debtors, the Actions will not be proceeding
in their respective courts with respect to the Debtors even
absent the relief requested in the Motion, Mr. Nash avers.
The Court will consider the Motion on September 30, 2010, at
11:00 a.m. (Eastern Time). Objections to the Motion are due on
September 27, 2010, at 4:00 p.m. (Eastern Time).
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TUCSON ELECTRIC: Fitch Upgrades Issuer Default Rating to 'BB+'
--------------------------------------------------------------
Fitch Ratings has upgraded Tucson Electric Power Company's long-
term Issuer Default Rating and individual security ratings as
indicated below.
-- Long-term IDR to 'BB+' from 'BB';
-- First mortgage bonds to 'BBB' from 'BBB-';
-- Secured bank facility to 'BBB' from 'BBB-' ;
-- Unsecured industrial revenue bonds to 'BBB-' from 'BB+';
-- Unsecured pollution control revenue bonds to 'BBB-' from
'BB+'.
Fitch has also affirmed TEP's short-term IDR at 'B'. The Rating
Outlook is Stable.
Approximately $1 billion of debt securities are affected by the
rating action. TEP is a wholly-owned subsidiary of UniSource
Energy.
Key rating drivers include:
-- Continued management focus on debt reduction and regulatory
process;
-- Renegotiation of revolving credit and letter of credit
facilities which are scheduled to mature in August 2011;
-- High debt leverage (including capital lease obligations);
-- More stable earnings and cash flows as the result of the
final outcome in TEP's 2007 general rate case;
-- Exposure to changes in environmental rules and regulations;
and,
-- Interest rate risk exposure on variable rate debt securities.
In the intermediate term, improvement in TEP's credit metrics
consistent with Fitch's expectations may result in positive future
rating actions.
The rating upgrade and Stable Outlook reflect sharp improvement in
TEP's credit metrics since 2008 primarily as the result of the
balanced final order in the utility's 2007 general rate case.
Issued by the Arizona Corporation Commission in November 2008,
the final order increased fuel and base rates approximately
$100 million on an annual run rate and authorized implementation
of a deferral and pass-through mechanism for 100% of TEP's fuel
and purchase power cost variation from amounts reflected in rates.
As a result, TEP's earnings and cash flows should be more
predictable at higher levels compared to pre-2007 GRC authorized
levels. Higher base rates were effective Dec. 1, 2008, and the
purchase power and fuel adjustment clause Jan. 1, 2009.
The ratings also recognize TEP's competitive electric rates and
significant debt reduction in recent years. Fitch expects TEP's
cash flow will be modestly positive through 2014 in part due to
capital expenditure reductions driven by sluggish economic
conditions in TEP's service territory economy. TEP sales growth
is likely to slow to approximately 1% from its historic 2% to 3%
annual rate during 2011 - 2014 reflecting sluggish economic
conditions and energy efficiency initiatives in Arizona. The
higher ratings also assume that TEP will be able to negotiate less
restrictive bank facility covenants in ongoing discussions to
replace its revolving credit and letters of credit facility.
TEP's LTM June 30, 2010 EBITDA and funds from operations plus
interest to interest expense were 4.4 times and 4.2x,
respectively, a significant improvement from 2008 levels of 2.4x
and 3.2x. Fitch projects that TEP's EBITDA and FFO coverage
ratios ranges to range between 4.2x-5.4x and 3.4x-4.7x,
respectively during 2010-2014. Leverage ratios are also expected
to show improvement over the same time period with FFO to debt
rising from an estimated 17% in 2010 to 20% in 2014. Debt to
total capitalization is expected to decline from 68% at year-end
2009 to 61% in 2014. Fitch includes capital lease obligations in
its debt leverage calculations.
In addition to strengthening credit metrics, TEP's credit quality
benefits from meaningful reductions to variable debt in 2009 and
2010 through a $50 million interest rate swap and the
restructuring of $130 million of debt from variable- to fixed-rate
mode, respectively. Although beneficial in a low interest rate
environment Fitch considers a large component of variable rate
debt as part of a utility's permanent capital structure to be a
credit concern. Fitch calculates that variable-rate debt as a
percentage of total debt has been reduced to approximately 20% at
the end of the second quarter 2010 from 30% at year-end 2009.
During 2008, average rates ranged from 0.55% to 8.09% and in 2009
0.25% to 0.79% for TEP's outstanding variable-rate debt. Debt
leverage restrictions in TEP's bank agreements, which limit debt
to EBITDA as calculated under the terms of the agreement to 4.0x,
and frozen non fuel rates are a concerns for TEP investors, in
Fitch's opinion.
In 2008 TEP amended and restated its secured credit facilities
modifying the maximum allowable leverage ratio contained therein
from:
-- 4.0x to 4.50x from July 1, 2008 through Sept. 30, 2008;
-- 4.75x from Oct. 1, 2008 through Dec. 31, 2008;
-- 4.50x from Jan. 1, 2009 through June 30, 2009; and
-- 4.0x after June 30, 2009.
The amendment became necessary due to the effect of high net power
supply costs in the first half of 2008 combined with the absence
of a PPFAC, frozen rates and other operating factors. As the
result of the implementation of the PPFAC and $50 million non fuel
base rate hike, Fitch expects TEP's post-GRC EBITDA to be more
stable at higher levels.
Debt maturities at TEP are manageable 2010-2014. TEP's
$491 million bank facility is set to mature August 2011, while its
$30 million term loan is slated for maturity in September 2011.
In addition, $350 million of $439 million of TEP's long-term
capital lease obligations amortize by the end of 2014. There are
no other scheduled debt maturities. As of June 30, 2010, TEP had
cash and cash equivalents totaling $19 million and $105 million of
borrowing capacity available under its $150 million secured
revolving credit facility.
TEP's $491 million secured bank facility includes a $150 million
revolving credit facility used to meet day-to-day working capital
requirements and a $341 million secured letter-of-credit facility
that supports outstanding tax-exempt bonds. In January 2010, TEP
terminated its $132 million secured letter of credit facility.
The credit facility backed TEP's $130 million of Pima County tax-
exempt industrial revenue bonds and was terminated and the IDBs
converted from secured variable to unsecured fixed rate mode with
a 5.75% coupon.
Fitch also factors the credit implications of TEP's status as a
subsidiary utility operating company within the UniSource Energy
corporate complex are also factored into the utility's credit
ratings. Fitch notes that the amount of dividends TEP is
permitted to upstream to UNS is limited under the Federal Power
Act. UNS owns the much smaller, UniSource Energy Services, Inc.,
an intermediate holding company which owns two Arizona-based
operating utility subsidiaries, UNS Gas, a wholly-owned natural
gas distribution company serving 146,000 customers and UNS
Electric, a wholly-owned electric distribution utility serving
90,000 customers. UNS also owns UniSource Energy Development
Company and Millennium Energy Holdings, Inc.
UED developed and owns a natural gas-fired combustion turbine in
Northern Arizona that supplies energy to UES' electric utility
subsidiary. Millennium has existing investment in unregulated
businesses that represent less than 1% of UNS' total assets as of
June 30, 2010. There are no cross-defaults or guarantees between
TEP and its corporate parent or affiliate companies. TEP is UNS'
core electric utility operation representing 79% of consolidated
UNS' 2009 operating revenue, 89% of EBITDA and 81% of total
assets. TEP serves more than 400,000 electric customers in
Tucson, Arizona.
UAL CORP: APA Backs Contintental-United Pilot Stand on Outsourcing
------------------------------------------------------------------
The Allied Pilots Association (APA), certified collective
bargaining agent for the 11,500 pilots of American Airlines (NYSE:
AMR), expressed strong support for a proposal put forth by the
pilots of Continental Airlines and United Airlines to end
outsourcing of flying to regional partners.
"We commend the pilots of Continental and United for their efforts
to end the practice of outsourcing flying to regional airline
partners by mainline carriers," said APA President Captain David
Bates. "It is our hope that executives at those two carriers will
see the wisdom behind this proposal and embrace it as part of a
successful merger."
Captain Jay Pierce, head of the Continental Airlines Master
Executive Council for the Air Line Pilots Association, was quoted
in recent news reports that he is confident a new pilots' deal can
be put together with Continental and United management by year-
end, in line with the airlines' merger schedule. According to the
same news reports, Pierce also said he believes management
throughout the industry has become stuck in a mindset where they
feel they have to subcontract more flying -- a mindset that he and
his colleagues are now challenging at the bargaining table.
"United and other airlines must stop outsourcing to the lowest
subcontractor bidder, and instead avail themselves of the
experienced pilots who find themselves out on the street," said
Captain Wendy Morse, United Airlines Master Executive Council
Chairman. "We cannot afford for airline management to place
dollars ahead of safety."
Captain Morse characterized outsourcing as "the ultimate bait and
switch" and emphasized that passengers "deserve to have United
Airlines pilots at the controls" when they buy a ticket from
United.
"The pilots of American Airlines are likewise well acquainted with
the widespread practice of outsourcing to regional carriers,"
Mr. Bates said. "A considerable amount of flying that American
Airlines pilots once did is now performed by commuter affiliates.
We are also keenly interested in reversing this trend and will be
watching developments at Continental and United closely.
"The APA leadership believes an excellent case can be made
for the consolidation of all flying under the banner of well-
established mainline airline brands and we intend to pursue the
same approach in our own negotiations with American Airlines
management," Mr. Bates said.
Founded in 1963, the Allied Pilots Association -- the largest
independent pilot union in the U.S. -- is headquartered in Fort
Worth, Texas. APA represents the 11,500 pilots of American
Airlines, including 1,988 pilots on furlough. The furloughs began
shortly after the September 11, 2001 attacks. Also, several
hundred American Airlines pilots are on full-time military leave
of absence serving in the armed forces. The union's Web site
address is www.alliedpilots.org. American Airlines is the
nation's second-largest passenger carrier and fifth-largest cargo
carrier.
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 'B3' corporate family and
probability of default ratings from Moody's, 'B-' long term
foreign issuer credit rating from Standard & Poor's, and 'CCC'
long term issuer default rating from Fitch.
At June 30, 2010, UAL had $20.134 billion in total assets against
total current liabilities of $8.573 billion, long-term debt of
$6.281 billion, long-term obligations under capital leases of
$1.01 billion, other liabilities and deferred credits of
$7.022 billion, and a stockholders' deficit of $2.756 billion.
UAL and Continental Airlines expect to close their merger by
Friday, Oct. 1, 2010. Upon the closing of the merger, the holding
company, UAL Corporation, will be renamed United Continental
Holdings, Inc.
About Continental Airlines
Continental Airlines 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. Continental has total assets of $13.60 billion against
total debts of $12.87 billion as of June 30, 2010.
In May 2010, Continental announced an agreement to merge with UAL
Corp. The merger has not yet been completed.
In August 2010, Moody's Investors Service affirmed its 'B2'
corporate family, with negative outlook, for Continental Airlines.
Moody's said the affirmation, among other things, signifies the
potential for it to maintain the B2 rating if the proposed merger
with UAL (B3 corporate family from Moody's, on review for upgrade)
is completed under terms that enable the combined entity to
achieve the potential revenue and cost synergies that have been
identified. However, the outlook remains negative because of the
industry's weak track record in successfully executing large
business combinations.
Continental caries a 'B' corporate rating, on watch negative, from
Standard & Poor's.
* * *
In September 2010, Fitch Ratings upgraded the debt ratings of UAL
Corp. and its principal operating subsidiary United Airlines,
Inc., prior to the expected closing of the merger between United
and Continental Airlines. Fitch has also assigned a rating of
'BB-/RR1' to certain senior secured issues, which are obligations
of United and guaranteed by UAL. The Rating Outlook for both UAL
and United is Positive.
United's ratings, which were placed on Rating Watch Positive in
May at the time the merger plan was announced, have been upgraded:
United:
-- Issuer Default Ratings (IDR) to 'B-' from 'CCC';
-- Secured bank credit facility to 'BB-/RR1' from 'B+/RR1';
-- Senior unsecured to 'CC/RR6' from 'C/RR6'.
In addition, Fitch upgraded UAL's ratings:
-- IDR to 'B-' from 'CCC';
-- Senior unsecured to 'CC/RR6' from 'C/RR6'.
UAL CORP: Mikells Acquires, Disposes Of 7,750 Shares of Stock
-------------------------------------------------------------
In separate regulatory filings with the Securities and Exchange
Commission dated September 3 and 8, 2010, Kathryn A. Mikells,
reported a change in her beneficial ownership of UAL Corp. common
stock.
According to the filings, Ms. Mikells acquired:
* 3,875 shares of UAL common stock at $4.86 per share on
Sept. 1, 2010, and then disposed of these shares on the
same day at $22 per share.
* 3,875 shares of UAL common stock at $4.86 per share on
Sept. 8, 2010, and then disposed of these shares on the
same day at $22.7 per share.
As a result of the transactions, Ms. Mikells now beneficially owns
22,500 shares of UAL common stock.
Ms. Mikells further disclosed that she disposed of her option or
right to buy 3,875 shares of UAL common stock at $4.86 per share
on Sept. 1 and 3, 2010. The option, which has an expiration date
of March 31, 2019, vests in three equal installments on April 1,
2010, 2011 and 2012. Following the transaction, Ms. Mikells
disclosed derived ownership 62,000 UAL shares.
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 'B3' corporate family and
probability of default ratings from Moody's, 'B-' long term
foreign issuer credit rating from Standard & Poor's, and 'CCC'
long term issuer default rating from Fitch.
At June 30, 2010, UAL had $20.134 billion in total assets against
total current liabilities of $8.573 billion, long-term debt of
$6.281 billion, long-term obligations under capital leases of
$1.01 billion, other liabilities and deferred credits of
$7.022 billion, and a stockholders' deficit of $2.756 billion.
UAL and Continental Airlines expect to close their merger by
Friday, Oct. 1, 2010. Upon the closing of the merger, the holding
company, UAL Corporation, will be renamed United Continental
Holdings, Inc.
UAL CORP: Reports August 2010 Traffic Results
---------------------------------------------
United Airlines reported its preliminary consolidated traffic
results for August 2010. Total consolidated revenue passenger
miles (RPMs) increased in August by 2.5% on an increase of 1.7% in
available seat miles (ASMs) compared with the same period in 2009.
This resulted in a reported August consolidated passenger load
factor of 86.7%, an increase of 0.6 points compared to 2009.
United reported a U.S. Department of Transportation on-time
arrival rate of 85.0% in August.
For August 2010, consolidated passenger revenue per available seat
mile (PRASM) is estimated to have increased 18.0% to 19.0% year-
over-year. Consolidated PRASM for August 2010 compared to August
2008 is estimated to have increased 0.0% to 1.0%.
Average August 2010 mainline fuel price, including gains or losses
on settled fuel hedges and excluding non-cash, mark-to-market fuel
hedge gains and losses, is estimated to be $2.38 per gallon.
Including non-cash, mark-to-market fuel hedge gains and losses,
the estimated fuel price is $2.41 per gallon for the month.
REVENUE PASSENGER MILES (000)
Aug-10 Aug-09 Change
North America 5,446,709 5,579,224 -2.40%
Pacific 2,140,708 2,022,008 5.90%
Atlantic 1,892,259 1,833,490 3.20%
Latin America 280,244 268,443 4.40%
Total International 4,313,211 4,123,941 4.60%
Total Mainline 9,759,920 9,703,165 0.60%
Regional Affiliates 1,539,918 1,322,498 16.40%
Total Consolidated 11,299,838 11,025,663 2.50%
AVAILABLE SEAT MILES (000)
North America 6,139,321 6,347,059 -3.30%
Pacific 2,424,593 2,390,979 1.40%
Atlantic 2,218,348 2,071,121 7.10%
Latin America 345,648 324,440 6.50%
Total International 4,988,589 4,786,540 4.20%
Total Mainline 11,127,910 11,133,599 -0.10%
Regional Affiliates 1,900,586 1,671,057 13.70%
Total Consolidated 13,028,496 12,804,656 1.70%
LOAD FACTOR
North America 88.70% 87.90% 0.8 pts
Pacific 88.30% 84.60% 3.7 pts
Atlantic 85.30% 88.50% -3.2 pts
Latin America 81.10% 82.70% -1.6 pts
Total International 86.50% 86.20% 0.3 pts
Total Mainline 87.70% 87.20% 0.5 pts
Regional Affiliates 81.00% 79.10% 1.9 pts
Total Consolidated 86.70% 86.10% 0.6 pts
REVENUE PASSENGERS BOARDED (000)
Mainline 5,057 5,330 -5.10%
Regional Affiliates 2,638 2,363 11.60%
Total Consolidated 7,695 7,693 0.00%
CARGO TON MILES (000)
Freight 136,073 116,234 17.10%
Mail 12,311 14,404 -14.50%
Total Mainline 148,384 130,638 13.60%
REVENUE PASSENGER MILES (000)
QTD August 20QTD August Change
North America 10,907,860 11,278,385 -3.30%
Pacific 4,250,828 4,037,345 5.30%
Atlantic 3,842,490 3,662,590 4.90%
Latin America 588,716 540,210 9.00%
Total International 8,682,034 8,240,145 5.40%
Total Mainline 19,589,894 19,518,530 0.40%
Regional Affiliates 3,099,330 2,659,049 16.60%
Total Consolidated 22,689,224 22,177,579 2.30%
AVAILABLE SEAT MILES (000)
North America 12,290,975 12,759,227 -3.70%
Pacific 4,853,415 4,797,559 1.20%
Atlantic 4,442,603 4,135,373 7.40%
Latin America 715,727 639,639 11.90%
Total International 10,011,745 9,572,571 4.60%
Total Mainline 22,302,720 22,331,798 -0.10%
Regional Affiliates 3,789,531 3,309,812 14.50%
Total Consolidated 26,092,251 25,641,610 1.80%
LOAD FACTOR
North America 88.70% 88.40% 0.3 pts
Pacific 87.60% 84.20% 3.4 pts
Atlantic 86.50% 88.60% -2.1 pts
Latin America 82.30% 84.50% -2.2 pts
Total International 86.70% 86.10% 0.6 pts
Total Mainline 87.80% 87.40% 0.4 pts
Regional Affiliates 81.80% 80.30% 1.5 pts
Total Consolidated 87.00% 86.50% 0.5 pts
REVENUE PASSENGERS BOARDED (000)
Mainline 10,122 10,754 -5.90%
Regional Affiliates 5,295 4,765 11.10%
Total Consolidated 15,417 15,519 -0.70%
CARGO TON MILES (000)
Freight 277,674 233,142 19.10%
Mail 25,957 29,524 -12.10%
Total Mainline 303,631 262,666 15.60%
GAAP To Non-GAAP Reconciliations
Pursuant to SEC Regulation G, the Company has included the
following reconciliation of reported non-GAAP financial measures
to comparable financial measures reported on a GAAP basis. Since
the Company did not apply cash flow hedge accounting prior to
April 1, 2010, the Company believes that the net fuel hedge
adjustments provide management and investors with a better
perspective of its performance and comparison to its peers because
the adjustments reflect the economic fuel cost during the periods
presented and many of our peers apply cash flow hedge accounting.
The non-cash mark-to-market gain/loss adjustment includes the
reversal of prior period non-cash mark-to-market gain/loss related
to August hedge settlements.
August 2010
Mainline fuel price per gallon excluding
non-cash, net mark-to-market gains and losses $2.38
Add: Non-cash, net mark-to-market (gains)
and losses per gallon (0.03)
Mainline fuel price per gallon $2.41c
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 'B3' corporate family and
probability of default ratings from Moody's, 'B-' long term
foreign issuer credit rating from Standard & Poor's, and 'CCC'
long term issuer default rating from Fitch.
At June 30, 2010, UAL had $20.134 billion in total assets against
total current liabilities of $8.573 billion, long-term debt of
$6.281 billion, long-term obligations under capital leases of
$1.01 billion, other liabilities and deferred credits of
$7.022 billion, and a stockholders' deficit of $2.756 billion.
UAL and Continental Airlines expect to close their merger by
Friday, Oct. 1, 2010. Upon the closing of the merger, the holding
company, UAL Corporation, will be renamed United Continental
Holdings, Inc.
ULTIMATE ESCAPE: Court Holds Off Approving Auction Rules
--------------------------------------------------------
Judge Brendan Shannon of the U.S. Bankruptcy Court in Wilmington,
Del. Shannon held off approving rules that would govern the
bankruptcy auction of Ultimate Escapes Holdings LLC, which has an
offer from its assets from secured lender CapitalSource Bank, Dow
Jones' DBR Small Cap reports.
The company was in court September 22, 2010, for its debut Chapter
11 hearing in front of Judge Shannon.
According to the report, Judge Shannon said the company's
unsecured creditors must be able to weigh in on how the auction
should be conducted, and the official committee has not yet been
formed. The judge, however, granted interim approval on $2.3
million worth of bankruptcy financing from CapitalSource and noted
that the money is earmarked for holding Ultimate Escapes together
briefly while it tries to find a buyer, the report relates.
CapitalSource, which has agreed to serve as the lead bidder at an
auction for Ultimate Escapes, has offered to make as much as $3.6
million available to the distressed company, the report notes.
About Ultimate Escapes
Ultimate Escapes, Inc. -- http://www.ultimateescapes.com/-- is a
luxury destination club that sells club memberships offering
members reservation rights to use its vacation properties, subject
to the rules of the club member's Club Membership Agreement. The
Company's properties are located in various resort locations
throughout the world.
Kissimmee, Florida-based Ultimate Escapes Holdings, LLC, filed for
Chapter 11 bankruptcy protection on September 20, 2010 (Bankr. D.
Del. Case No. 10-12915).
Affiliates Ultimate Resort, LLC; Ultimate Operations, LLC;
Ultimate Resort Holdings, LLC; Ultimate Escapes, Inc. (fka Secure
America Acquisition Corporation); P & J Partners, LLC; UE Holdco,
LLC; UE Member, LLC, et al., filed separate Chapter 11 petitions.
Scott D. Cousins, Esq., at Greenberg Traurig LLP, assists the
Debtors in their restructuring efforts. CRG Partners Group LLC is
the Debtors' chief restructuring officer. BMC Group Inc. is the
Company's claims and notice agent.
Ultimate Escapes estimated assets at $10 million to $50 million
and debts at $100 million to $500 million as of the Petition Date.
ULTIMATE ESCAPES: Sues Club Holdings for Poaching Members
---------------------------------------------------------
Dow Jones' DBR Small Cap reports that Ultimate Escapes Holdings
LLC filed a lawsuit against one of its competitors, alleging that
the rival used confidential information to poach its members.
About Ultimate Escapes
Ultimate Escapes, Inc. -- http://www.ultimateescapes.com/-- is a
luxury destination club that sells club memberships offering
members reservation rights to use its vacation properties, subject
to the rules of the club member's Club Membership Agreement. The
Company's properties are located in various resort locations
throughout the world.
Kissimmee, Florida-based Ultimate Escapes Holdings, LLC, filed for
Chapter 11 bankruptcy protection on September 20, 2010 (Bankr. D.
Del. Case No. 10-12915).
Affiliates Ultimate Resort, LLC; Ultimate Operations, LLC;
Ultimate Resort Holdings, LLC; Ultimate Escapes, Inc. (fka Secure
America Acquisition Corporation); P & J Partners, LLC; UE Holdco,
LLC; UE Member, LLC, et al., filed separate Chapter 11 petitions.
Scott D. Cousins, Esq., at Greenberg Traurig LLP, assists the
Debtors in their restructuring efforts. CRG Partners Group LLC is
the Debtors' chief restructuring officer. BMC Group Inc. is the
Company's claims and notice agent.
Ultimate Escapes estimated assets at $10 million to $50 million
and debts at $100 million to $500 million as of the Petition Date.
ULTIMATE ESCAPES: Wants to Sell Substantially All of Assets
-----------------------------------------------------------
Ultimate Escapes Holdings, LLC, et al., ask for authorization from
the U.S. Bankruptcy Court for the District of Delaware to sell
substantially all of the Debtors' assets free and clear of liens,
claims, interests and encumbrances.
The Debtors entered into an asset purchase agreement with
CapitalSource Finance LLC, as administrative, payment and
collateral agent, and CapitalSource Bahamas LLC, as a collateral
agent, for the benefit of CapitalSource Bank, as lender. Under
the APA, CapitalSource will acquire the assets for $74,709,715,
which will e paid by way of a dollar-for-dollar credit against the
prepetition obligations, or $97,276,905.84.
CapitalSource won't assume any liabilities of the Debtors.
A copy of the APA is available for free at:
http://bankrupt.com/misc/ULTIMATE_ESCAPES_apa.pdf
In the event that the Debtors receive better offers for the
assets, an auction will be held on October 18, 2010, at 10:00 a.m.
The Debtors propose that no later than October 15, 2010, at
4:00 p.m. prevailing Eastern time, the Debtors will notify the
qualified bidders of (i) the highest or otherwise best qualified
bid and (ii) the time and place of the auction.
The Debtors have filed with the Court its proposed bidding
procedures, a copy of which is available for free at:
http://bankrupt.com/misc/ULTIMATE_ESCAPES_saleprocedures.pdf
The Debtors propose that each interested bidder must make a cash
deposit in an amount equal to 10% of the proposed purchase price
offered by the qualified bidder in its bid. Bids must be at least
equal to the sum of (i) the Purchase Price, (ii) $25,000, (iii) an
additional amount equal to 1% of the foregoing items (i) and
(ii) to be paid to the Debtors' financial advisors, and (iv) the
expense reimbursement. Bids must be submitted by October 15,
2010, at 12:00 p.m. Eastern time.
Each qualified bidders' initial overbid will be at least $25,000
in excess of the baseline bid and each subsequent overbid must be
made in increments of at least $25,000 over the previous highest
or best bid and qualified bidders other than CapitalSource, as the
stalking horse purchaser, will also be required to add an
additional amount equal to 1% of the amount of the bid.
The Debtors propose that the sale hearing be held on October 20,
2010.
In the event that another interested party is chosen as successful
bidder, the Debtors will reimburse the
Stalking Horse Purchaser for reasonable and necessary expenses
incurred in connection with the formation, negotiation and
documentation of the APA, and in participation in the sale
process, up to a maximum amount of all sums advanced by
CapitalSource in its capacity as postpetition lender.
About Ultimate Escapes
Ultimate Escapes, Inc. -- http://www.ultimateescapes.com/-- is a
luxury destination club that sells club memberships offering
members reservation rights to use its vacation properties, subject
to the rules of the club member's Club Membership Agreement. The
Company's properties are located in various resort locations
throughout the world.
Kissimmee, Florida-based Ultimate Escapes Holdings, LLC, filed for
Chapter 11 bankruptcy protection on September 20, 2010 (Bankr. D.
Del. Case No. 10-12915).
Affiliates Ultimate Resort, LLC; Ultimate Operations, LLC;
Ultimate Resort Holdings, LLC; Ultimate Escapes, Inc. (fka Secure
America Acquisition Corporation); P & J Partners, LLC; UE Holdco,
LLC; UE Member, LLC, et al., filed separate Chapter 11 petitions.
Scott D. Cousins, Esq., at Greenberg Traurig LLP, assists the
Debtors in their restructuring efforts. CRG Partners Group LLC is
the Debtors' chief restructuring officer. BMC Group is the
Debtors' claims and noticing agent.
Ultimate Escapes estimated assets at $10 million to $50 million
and debts at $100 million to $500 million as of the Petition Date.
UNILAVA CORPORATION: Posts $277,600 Net Loss in June 30 Quarter
---------------------------------------------------------------
Unilava Corporation filed its quarterly report on Form 10-Q,
reporting a net loss of $277,630 on $1.4 million of revenue for
the three months ended June 30, 2010, compared with a net loss of
$522,638 on $1.9 million of revenue for the same period last year.
The Company has an accumulated deficit of $1.9 million at June 30,
2010. In addition, the Company has negative working capital of
$4.0 million at June 30, 2010.
The Company's balance sheet at June 30, 2010, showed $4.9 million
in total assets, $5.2 million in total liabilities, and a
stockholders' deficit of $313,979.
De Joya Griffith & Company, LLC, in Henderson, Nev., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted that the Company has suffered losses from
operations.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6b85
About Unilava Corporation
Unilava Corporation (OTC BB: UNLA)-- http://www.unilava.com/-- is
a diversified communications holding company incorporated under
the laws of the State of Wyoming in 2009. Unilava Corporation and
its subsidiary brands provide a variety of communications
services, products, and equipment that address the needs of
corporations, small businesses and consumers. The Company is
licensed to provide long distance services in 41 states throughout
the U.S. and local phone services across 11 states. Through its
carrier-grade microwave wireless broadband infrastructure and
broadband Internet access partners, the Company also offers mobile
and high-definition IP-hosted voice services to residential
customers and corporate clients. Additionally, Unilava Corp.
delivers a comprehensive and integrated suite of fee-based online
and mobile advertising and web services to a broad array of
business enterprises. Headquartered in San Francisco, the Company
has regional offices in Chicago, Seoul, Hong Kong, and Beijing.
UNITRIN INC: Fitch Affirms 'BB+' Ratings on $560 Mil. Notes
-----------------------------------------------------------
Fitch Ratings has affirmed all ratings of Unitrin, Inc., and its
operating subsidiaries. These ratings include the 'BBB-' Issuer
Default Rating for Unitrin, as well as its senior debt and Insurer
Financial Strength ratings. The Rating Outlook is Negative.
Fitch's rating rationale includes Unitrin's modest operating
performance, which has improved in 2009 and through the first half
of 2010, its competitive business lines and solid operating
company capital quality.
The Negative Outlook reflects uncertainty in the run-off of
Unitrin's consumer finance business and potential changes within
the company's liquidity and balance sheet profile related to its
approaching November 2010 debt maturity of $200 million.
On March 24, 2009, Unitrin announced a plan to exit the auto
finance business (Fireside Bank), suspended all new lending
activity and ceased opening new certificates of deposit. While
year-to-date 2010 operating performance and capitalization have
improved tremendously, Fitch believes there is still risk related
to the performance of Fireside Bank's loan portfolio, which is
expected to partially fund maturing CDs over the next several
years. Somewhat mitigating this risk in the near term is the
bank's $260 million cash and investment balance.
In addition to a $245 million bank revolver that is in place
through October 2012, Unitrin has approximately $135 million in
holding company cash and an additional $70 million of dividend
capacity from its insurance subsidiaries, all of which can be used
to pay off the $200 million of November 2010 maturing debt.
However, if Unitrin were to use these resources instead of
refinancing with new, longer term financing, Fitch believes it
would materially reduce the company's overall financial
flexibility and holding company capitalization in the near term as
Fireside Bank continues to wind down.
Unitrin's ratings also reflect Fitch's expectation that pricing
softness in the property/casualty insurance marketplace will
persist. Favorably, Unitrin's financial leverage and interest
coverage remain within Fitch's expectation at 21.4% and 8 times,
respectively, as of June 30, 2010.
On Dec. 31, 2009, Unitrin contributed 100% of its interest in
Reliable Life Insurance Co. and Union National Life Insurance Co.
to United Insurance Company of America for $20.8 million. Fitch
expects Unitrin's life operations to be a steady contributor of
capital with limited growth potential, given its home service
market focus.
Key rating drivers include maintaining capitalization and
underwriting results consistent with recent levels. In addition,
Fireside Bank is anticipated to be self-funding and not weaken the
balance sheet of the parent company. Any shortfalls in these
items could lead to a downgrade.
Fitch could consider a revision in Unitrin's Outlook to Stable if
its holding company profile improved such that maturing debt is
successfully refinanced, along with continued improvement in
Fireside Bank's liquidity profile.
The current notching between the insurance operating companies and
the holding company senior notes is one notch wider than most
insurance organizations due to Fitch's view that the run-off
finance business presents additional risks to the overall Unitrin
operation.
Fitch has affirmed these ratings, with a Negative Outlook:
Unitrin
-- IDR at 'BBB-';
-- $560 million senior notes at 'BB+'.
Trinity Universal Insurance Co.
United Insurance Co. of America
Union National Life Insurance Co.
Reliable Life Insurance Co.
-- IFS rating at 'A-'.
VALEANT PHARMACEUTICALS: S&P Shifts Rating on $1.2BB Notes to BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its preliminary
issue-level and preliminary recovery ratings on Valeant
Pharmaceuticals International's $1.2 billion of senior unsecured
notes. The $1.2 billion of senior unsecured notes were divided
into two tranches: a $700 million 7% tranche due 2020 and a
$500 million 6.75% tranche due 2017. S&P revised the preliminary
issue-level ratings to 'BB-' from 'B+' and revised the preliminary
recovery ratings to '4' from '5'. These changes follow changes in
the terms, specifically the increase of term loan A to $1 billion
from $750 million.
The 'BB-' corporate credit rating on Valeant remains unchanged.
Ratings List
Valeant Pharmaceuticals International
Corporate Credit Rating BB-/Stable/--
Upgraded; Recovery Rating Revised
Valeant Pharmaceuticals International
To From
-- ----
Senior Unsecured $1.2 Bil. Notes BB- (Prelim) B+ (Prelim)
Recovery Rating 4 (Prelim) 5 (Prelim)
VERTELLUS SPECIALTIES: S&P Assigns 'B' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned a 'B'
preliminary corporate credit rating to Indianapolis, Ind.-based
Vertellus Specialties Inc. The outlook is stable.
S&P assigned a 'BB-' preliminary issue-level rating and '1'
preliminary recovery rating to the proposed new $85 million asset-
based lending facility. The '1' recovery rating reflects S&P's
expectation for very high (90%-100%) recovery for ABL lenders in
the event of a payment default.
S&P also assigned a 'B' preliminary issue-level rating and '4'
preliminary recovery rating to the proposed $325 million senior
secured notes. The '4' recovery rating reflects S&P's expectation
for average (30%-50%) recovery for senior noteholders in the event
of a payment default.
The proposed $325 million in new senior secured notes and
$24.4 million to be drawn on the proposed new ABL facility at
close, will be used to refinance $214 million in existing first-
lien and $125 million in existing second-lien debt outstanding
(includes accrued interest and prepayment penalty fees).
"The ratings on Vertellus reflect a weak business risk profile
including a narrow scope of products, and a highly leveraged
financial profile," said Standard & Poor's credit analyst Henry
Fukuchi.
VICTOR VALLEY: Potential Buyer, Union Object to Auction Rules
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that a potential bidder an a
union object to the auction rules proposed by Victor Valley
Community Hospital. Victor Valley's auction rules unfairly favor
bidder Prime Healthcare Services Foundation Inc. and will deter
rival bidders from participating, according to one would-be buyer
of the California hospital as well as a major union.
About Victor Valley
Victor Valley Community Hospital -- http://www.vvch.org/--
operates a health care facility. It has a rural nonprofit
hospital operator in Southern California.
Victor Valley Community Hospital filed for Chapter 11 protection
on September 13, 2010 (Bankr. C.D. Calif. Case No. 10-39537
The Debtor estimated assets and debts of $10 million to $50
million in its Chapter 11 petition. Debt includes $4.5 million
owed to the bank lender. Unsecured creditors are owed $16.5
million. Mary D. Lane, Esq., Samuel R. Maizel, Esq., and Scotta E.
McFarland, Esq., at Pachulski Stang Ziehl & Jones LLP.
VICTOR VALLEY: Court Extends Filing of Schedules Until Oct. 7
-------------------------------------------------------------
The Hon. Catherine E. Bauer of the U.S. Bankruptcy Court for the
Central District of California extended, at the behest of Victor
Valley Community Hospital, the deadline for the filing of its
schedules of assets and liabilities and statement of
financial affairs until October 7, 2010.
The Debtor was initially required to file the schedules by
September 27, 2010. The Debtor said that it has a small
administrative office staff. Due to the demands on the Debtor
created by (i) filing this Case and the financial difficulties
giving rise thereto, (ii) the need to maintain continuity in the
Debtor's business, (iii) the need to prepare and file several
first day motions, and (iv) the immediate need to comply with the
filing requirements as set forth in the "Guidelines for
Fulfilling the Requirements of the United States Trustee," the
Debtor said that it wouldn't be able to complete the schedules
within the 14-day statutory period. The Debtor requested for an
additional 14 calendar days, up to and including October 11, 2010,
within which to file the schedules.
Victorville, California-based Victor Valley Community Hospital
filed for Chapter 11 bankruptcy protection on September 13, 2010
(Bankr. C.D. Calif. Case No. 10-39537). Mary D. Lane, Esq.,
Samuel R. Maizel, Esq., and Scotta E. McFarland, Esq., at
Pachulski Stang Ziehl & Jones LLP, assist the Debtor in its
restructuring effort. The Debtor estimated its assets and debts
at $10 million to $50 million as of the Petition Date.
VISTEON CORP: 2 Equity Holders Fail Bid to Stay Plan Confirmation
-----------------------------------------------------------------
Mark Taub and Andrew Shirley, holders of certain equity interests
in Visteon Corporation, took an appeal to the U.S. District Court
for the District of Delaware from Judge Christopher Sontchi's
order confirming the Fifth Amended Joint Plan of Reorganization of
Visteon Corp. and its debtor affiliates.
Appellants Seek Stay Pending Appeal,
Wilmington Insists on More Time to Review Request
In a related filing, the Appellants asked the Bankruptcy Court to
stay the implementation of the Confirmation Order pending the
resolution of their Appeal.
Counsel to the Appellants, Edward Neiger, Esq., at Neiger LLP, in
New York -- eneiger@neigerllp.com -- asserted that the Plan
cannot be confirmed because it provides for better treatment on
account of certain interests than it does other interests of the
same class. The Plan treats interests of members of class J who
are members of the Ad Hoc Committee of Equity Holders better than
the interests of Class J members who are not part of the Ad Hoc
Equity Committee, he pointed out.
Mr. Neiger further cited that under the guise of the Third
Amended Equity Commitment Agreement between the Debtors, certain
of the Debtors' unsecured noteholders, and the Ad Hoc Equity
Committee, the Plan provides:
(a) Ad Hoc Equity Committee members a right to purchase
144,456 shares in the Debtors' reorganized equity on
account of their interests; and
(b) that the Debtors will provide up to $4.25 million to the
Ad Hoc Equity Committee on account of its professionals'
fees.
In stark contrast, Mr. Neiger specified, the Debtors do not
provide any similar rights to Ordinary Shareholders on account of
those shareholders' interests under the Plan nor do they agree to
pay the Ordinary Shareholders' professionals' fees --
notwithstanding that the Ad Hoc Equity Committee members and the
Ordinary Shareholders are members of the same voting class of
Class J.
Mr. Neiger argued that this opportunity to participate in the
Rights Offering provides the members of the Ad Hoc Equity
Committee with disproportionate value on account of their
interests when compared to the measly (i) 2.0% of Distributable
Equity, and (ii) the Old Equity Warrants given to Ordinary
Shareholders on account of their interests. Indeed, he added,
the Rights Offering is so valuable that bondholders were paying
103% of claim value just for the right to purchase this same
equity -- an equity that already trades in the "when issued"
market at a more than 80% return to its Plan value.
"[T]he primary beneficiaries of this orchestrated Plan
confirmation process are members of the Debtors' management who
stand to reap a windfall from a management equity incentive plan
. . . that is being instituted as part of the Plan," Mr. Neiger
said.
The Appellants averred that they have a strong likelihood of
success on the merits of their Appeal but that absent a stay,
will be irreparably harmed. On the contrary, the Appellants
maintained, issuance of a stay will not substantially injure
other parties-in-interest.
The Appellants also asked the Bankruptcy Court to shorten the
notice and expedite the hearing with respect to their Stay
Motion. They insisted that if the Plan becomes effective and is
implemented, they would be left with recovery on account of their
interest that is much lesser than their true value.
For its part, Wilmington Trust FSB, as administrative agent under
the Debtors' senior secured term loan facility, on behalf of
itself and several lenders of the prepetition term loan,
contended that all parties should be given an appropriate amount
of time to review the issues presented in the Appellants' Stay
Motion and to prepare a response. "The stakes are obviously high
as the Stay Motion seeks to block a fully consensual
reorganization involving billions of dollars in creditor claims
and more than a billion dollars of fresh capital," Wilmington
Trust said. Wilmington Trust thus opposed the request for an
expedited hearing on the Stay Motion.
* * *
Judge Sontchi denied the Appellants' request for the imposition
of a stay on the Confirmation Order pending a consideration of
the Appeal. In connection with the Court's ruling, the expedited
hearing request is denied as moot.
Parties Want U.S. Trustee to Appeal Confirmation
In separate letters dated September 8 to 15, 2010, Heasley St. J.
Rook, Dexter Yuen, Kathleen Crowle and Joseph Guarneri, all
shareholders of the Debtors, asked Roberta A. DeAngelis, the U.S.
Trustee for the District of Delaware, to file an appeal of the
order confirming the Debtors' Fifth Amended Plan of
Reorganization.
The Shareholders contend that that the confirmation outcome is
not worthy of the judicial system and should be contested.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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.
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware entered an order on August 31, 2010,
confirming the Fifth Amended Plan of Reorganization of Visteon
Corporation and its debtor affiliates. Visteon expects to emerge
from Chapter 11 upon completion of necessary closing conditions,
which the Company expects to occur by October 1.
VISTEON CORP: Ernst & Young Gets $5.8 Mil. for December-May
-----------------------------------------------------------
Bankruptcy Judge Christopher Sontchi awarded 11 professionals
retained in Visteon Corp.'s cases their interim fees and expenses
for the period covering March to May 2010. The Court also awarded
Ernst & Young LLP its fees and expenses for the period from
November 2009 to February 2010.
The Approved Fees and Expenses aggregate approximately
$20,700,000.
The Professionals and their corresponding approved fees and
expenses are:
Professional Period Fees Expenses
------------ -------- ---------- --------
Ernst & Young LLP 12/01/09-
02/28/10 $3,302,857 $211,284
Ernst & Young LLP 03/01/10-
05/31/10 2,535,810 40,459
PricewaterhouseCoopers 03/01/10-
LLP 05/31/10 636,663 (25,529)
Dickinson Wright PLLC 03/01/10-
05/31/10 222,496 3,330
Alvarez & Marsal North 03/01/10-
America, LLC 05/31/10 4,041,676 276,364
Brown Rudnick LLP 03/01/10-
05/31/10 1,320,215 57,288
Ashby & Geddes, P.A. 03/01/10-
05/31/10 142,748 8,400
Chanin Capital Partners, 03/01/10-
LLC 05/31/10 450,000 7,179
FTI Consulting, Inc. 03/01/10-
05/31/10 601,033 232
Kirkland & Ellis LLP 03/01/10-
05/31/10 5,831,503 127,107
Pachulski Stang Ziehl 03/01/10-
& Jones LLP 05/31/10 177,574 35,416
Rothschild Inc. 03/01/10-
05/31/10 750,000 23,415
In separate filings, counsel to the Debtors certified that no
objections were filed as to the March to May 2010 interim fee
applications of Pachulski Stang Ziehl & Jones LLP and Deloitte
Tax LLP.
Shortly before Judge Sontchi entered his omnibus order on the
Bankruptcy Professionals' quarterly fee applications, the Fee
Review Committee of the Debtors' estates submitted to the Court a
statement on its review of the Professionals' Fourth Interim Fee
Applications. The Fee Review Committee noted under its statement
that:
-- It has agreed with Kirkland & Ellis LLP to a fee reduction
of $10,227 and an expense reduction of $3,260.
-- It has agreed with Ernst & Young LLP to an expense
reduction of $1,400. The large majority of requested
reductions were addressed through a voluntary expense
reduction taken by Ernst & Young LLP in its Third Interim
Fee Application.
-- It has agreed with Alvarez & Marsal, LLC to an expense
reduction of $10,598.
-- It has agreed with Brown Rudnick LLP to a fee reduction
of $7,980.
-- It has noted certain issues regarding Ashby & Geddes P.A.'s
time reporting and requested that the issued be remedied in
future fee applications.
The Fee Review Committee also stated that Deloitte Tax LLP has
not yet responded to its request.
The FRC noted no issues with these professionals' fee
applications:
* Pachulski Stang Ziehl & Jones LLP (Delaware counsel);
* Dickinson Wright PLLC (special counsel);
* Rothschild, Inc. (investment banker);
* PricewaterhouseCoopers LLP (independent auditors);
* FTI Consulting, Inc. (financial advisor); and
* Chanin Capital Partners, LLC (restructuring and financial
advisor).
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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.
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware entered an order on August 31, 2010,
confirming the Fifth Amended Plan of Reorganization of Visteon
Corporation and its debtor affiliates. Visteon expects to emerge
from Chapter 11 upon completion of necessary closing conditions,
which the Company expects to occur by October 1.
VISTEON CORP: Retirees Want Committee Rejection Reconsidered
------------------------------------------------------------
Robert Dudon, Michael Jarema, III, Miriam Rosario, William
Shillingford, Julio Soto, Dean Turner, Ronald Young and Thomas
Zurek ask Judge Christopher Sontchi to reconsider his order
denying their motion for the appointment of a retiree committee.
As previously reported, the Bankruptcy Court ordered the Debtors
to restore all previously terminated retiree benefits, including
those benefits for Salaried Retirees. It, however, denied the
Salaried Retirees' request for the appointment of a Retiree
Committee finding that the Debtors' assurance that they were
restoring all benefits eliminated the need of a retiree
committee.
The Debtors subsequently appealed the Bankruptcy Court's order
restoring retiree benefits for the Salaried Retirees and the
retirees represented by the International Union, United
Automobile, Aerospace and Agricultural Implement Workers of
America.
"Accordingly, at this point in time there can be no doubt that
the Debtors are seeking to modify or eliminate retiree benefits
for the Salaried Retirees," Richard A. Barkasy, Esq., at Schnader
Harrison Segal & Lewis LLP, in Wilmington, Delaware, counsel to
the Salaried Retirees, says.
Mr. Barkasy contends that without the appointment of a retiree
committee, the Salaried Retirees cannot file any pleadings before
the Bankruptcy Court or with respect to the Appeal on behalf of
the thousands of other affected non-union retirees.
Moreover, in the absence of a retiree committee to represent the
non-union retirees on appeal, the Debtors have no statutorily
recognized group of retirees to even negotiate with, Mr. Barkasy
maintains.
In a separate filing, the Salaried Retirees asked Judge Sontchi
to shorten the notice on their Reconsideration Motion so that it
can be heard on September 16, 2010. Judge Sontchi, however,
denied expedited hearing request and held that the Salaried
Retirees have not established sufficient cause to justify the
relief requested.
A hearing on the Reconsideration Motion will be held on
October 18, 2010. Objections from parties-in-interest are due no
later than October 1.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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.
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware entered an order on August 31, 2010,
confirming the Fifth Amended Plan of Reorganization of Visteon
Corporation and its debtor affiliates. Visteon expects to emerge
from Chapter 11 upon completion of necessary closing conditions,
which the Company expects to occur by October 1.
WASHINGTON MUTUAL: Examiner's Final Report to Be Filed Nov. 1
-------------------------------------------------------------
Bankruptcy Judge Mary Walrath entered a formal order extending the
deadline of Joshua R. Hochberg, the examiner appointed in
Washington Mutual Inc.'s cases, to submit his final report through
November 1, 2010.
As reported in the Troubled Company Reporter on Sept. 10, 2010,
Joshua R. Hochberg, the examiner appointed in the Chapter 11 cases
of Washington Mutual, Inc. and WMI Investment Corp. delivered a
preliminary report of his investigation to the U.S.
Bankruptcy Court for the District of Delaware.
The Preliminary Report summarized the progress made by teams
formed by the Examiner:
(A) JPMorgan Team -- The team is examining claims against, and
issues pertaining to, JPMorgan and certain third-party
claims. Among other things, the JPMorgan Team is
investigating whether JPMorgan (1) intentionally injured
WaMu in connection with the sale of WaMu to JPMorgan for
$1.9 billion; and (2) improperly interfered with the sale
of WaMu or Washington Mutual Bank to others. Based on
the JPMorgan Team's review of discovery materials, work
product, briefs filed with the courts and other
materials, the team has identified several areas of
inquiry.
(B) Asset and Avoidance Team -- The team is investigating the
disputed claims of ownership of certain "deposit
accounts," including the approximately $4 billion in
funds held in deposit accounts at Washington Mutual Bank
fsb. The team is also evaluating whether the Debtors may
assert avoidance claims for transfers made to Washington
Mutual Bank and possible avoidance claims the FDIC
Receiver may have against the Debtors.
(C) FDIC Team -- The team is evaluating potential claims that
the Debtors' estates may have against the FDIC and which
would be released upon Plan confirmation. The team is
considering the substantial procedural and legal defenses
asserted by the FDIC to all potential claims.
Moreover, among the allegations investigated is that of
the FDIC breaching its statutory or fiduciary duties as
receiver by selling WaMu Bank for less than possible.
(D) Tax Team -- The team is investigating and analyzing three
issues: (1) the likelihood that the Net Tax Refunds
identified in the Settlement will be received from the
various tax authorities and the anticipated timing of the
receipt of the refunds; (2) the competing claims to the
ownership of certain tax refunds as advanced in various
litigation and other forums; and (3) whether the Plan
maximizes the tax assets available to the Debtors. The
Examiner is devoting significant resources to those tax
issues.
(E) Trust Preferred Securities Team -- The team is examining
issues related to certain securities that were issued by
an indirect subsidiary of Washington Mutual Bank in 2006
and 2007, resulting in WaMu Bank raising several billions
in dollars in capital. The TPS team is locating or
obtaining additional documents relevant to the TPS
issues.
The Examiner said he needs the additional time to (i) obtain
additional documents, (ii) interview witnesses, and (iii) analyze
and evaluate all the information to complete the Final Report.
The Examiner added that witnesses are scheduled to be interviewed
through September 17, 2010, and more interviews are being
arranged.
A full-text copy of the WaMu Examiner Preliminary Report is
available for free at:
http://bankrupt.com/misc/WaMu_PrelimExaminerReport.pdf
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment estimated assets of
$500,000,000 to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the Chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WASHINGTON MUTUAL: Wilmington Trust Claims Settlement Approved
--------------------------------------------------------------
Washington Mutual Inc. obtained approval of a settlement of the
claims of Wilmington Trust Company aggregating $43 million.
No objections were filed to the Debtors' motion for approval of
the Settlement.
Wilmington Trust Company is the successor Indenture Trustee for
five of the seven series of junior subordinated debt securities,
in the aggregate original principal amount of $68,580,000,
assumed by Washington Mutual Bank in connection with its
acquisition of Commerce Capital Bancorp in 2006 and Hawthorne
Financial Corporation. The indentures relate to HFC Capital
Trust I, CCB Capital Trust IV, CCB Capital Trust V, CCB Capital
Trust VII, and CCB Capital Trust VIII.
Each series of the WMB/CCB Subordinated Notes was sold to a
separate special purpose Delaware statutory trust. Wilmington
Trust also serves as successor Guarantee Trustee for certain of
the WMB/CCB Subordinated Notes.
Wilmington Trust has been appointed by the U.S. Trustee to serve
as a member of the official unsecured creditors' committee for
holders of approximately $43 million of debt guaranteed by
Washington Mutual, Inc.
Representing the Debtors, Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, relates that
Wilmington Trust, as Indenture Trustee, on behalf of itself and
other holders of debt issued pursuant to the Indentures, asserted
claims for unliquidated guarantee claims as of the Petition Date.
The Claims are:
Claim Indenture Interest Maturity Claimed Claimed
No. Date Rate Date Principal Interest
----- --------- -------- -------- ----------- ---------
2113 03/28/01 10.18% 2031 $9,300,000 $286,651
2116 09/25/10 Floating Rate 2033 $7,732,000 $98,999
2118 12/19/03 Floating Rate 2034 $10,310,000 $104,833
2120 05/27/04 Floating Rate 2034 $7,732,000 $75,120
2122 06/22/04 Floating Rate 2034 $7,732,000 $80,064
In addition to the Guarantee Claims, the Indenture Trustee Proofs
of Claims asserted claims for the continuing accrual of interest
and various other unliquidated amounts allegedly due and owing
under the Indentures for both prepetition and postpetition
periods, according to Mr. Collins.
Certain of the debt issued pursuant to the indentures relating to
HFC Capital Trust I, CCB Capital Trust IV, CCB Capital Trust V,
CCB Capital Trust VII, and CCB Capital Trust VIII was issued at a
discount to its face value, or with "original issue discount."
Unamortized original issue discount is treated as unmatured
interest pursuant to Section 502(b)(2) of the Bankruptcy Code
and, therefore, disallowed as a claim against a Chapter 11
debtor, Mr. Collins says, citing In re Chateaugay Corp., 961 F.2d
378, 380 (2nd Cir. 1992).
As part of the Debtors' ongoing claims reconciliation process,
the Debtors reviewed and analyzed the Indenture Trustee Claims
and determined that the Guarantee Claims should be allowed in
amounts that are different from the amounts that were asserted in
the Indenture Trustee Claims.
As a result of discussions, the Debtors and the Indenture Trustee
have agreed that the Guarantee Claims will be reduced and allowed
in these amounts, totaling $43,443,878:
Claim Indenture Interest Maturity Allowed
No. Date Rate Date Amount
----- --------- -------- -------- -------------
2113 March 28, 2011 10.18% 2031 $9,854,022
2116 Sept. 25, 2003 Floating Rate 2033 $7,829,778
2118 Dec. 19, 2003 Floating Rate 2034 $10,413,245
2120 May 27, 2004 Floating Rate 2034 $7,805,982
2122 June 22, 2004 Floating Rate 2034 $7,810,851
The Allowed Guarantee Claim Amounts, however, will be further
reduced, on a dollar-for-dollar basis by the amount, if any, of
distributions received by the Indenture Trustee from or on
account of the Receivership of WMB under the Federal Deposit
Insurance Corporation, according to Mr. Collins.
The Debtors and Wilmington Trust reserve their rights with
respect to the Additional Unliquidated Claims in the Indenture
Trustee Claims.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment estimated assets of
$500,000,000 to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the Chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WASHINGTON MUTUAL: Wins Approval of IRS Settlements
---------------------------------------------------
Washington Mutual, Inc., won approval from the Bankruptcy Court of
settlements with the U.S. Internal Service.
WaMu is the common parent of an affiliated group of corporations,
including Washington Mutual Bank and its direct and indirect
subsidiaries that join in filing consolidated U.S. federal income
tax returns. As the common parent of the WaMu Group, WaMu has
authority to settle audits and disputes with the U.S. Internal
Revenue Service on its own behalf and on behalf of all members of
the consolidated return group, including WMB and its predecessor
companies, for certain tax years.
WaMu is also the successor to H.F. Ahmanson & Company, by virtue
of a merger of Ahmanson with and into WaMu on October 1, 1998.
Prior to the transaction, Ahmanson was the common parent of an
affiliated group of corporations that filed consolidated U.S.
federal income tax returns for tax periods prior to October 1,
1998. WaMu, as successor to Ahmanson, has represented the
Ahmanson Group in the IRS audits of the Ahmanson Group's tax
returns, including the resolution of certain refund claims at the
Office of Appeals of the IRS.
WaMu relates that since the Petition Date, it has worked with the
IRS to resolve -- subject to approval by the Bankruptcy Court and
by the U.S. Congress Joint Committee on Taxation -- all
outstanding issues with the IRS regarding the consolidated tax
liability of the WaMu Group for the 2001 through 2008 tax years,
except for certain adjustments for which the WaMu Group may be
entitled to claim a tax refund pending the outcome of certain
lawsuits initiated by WaMu on behalf of the Ahmanson Group.
WaMu adds that it has also reached a settlement with the IRS on a
tax refund claim of the Ahmanson Group with respect to the 1997
Tax Year.
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Debtors and IRS, among other entities, entered
into separate settlements to allow the WaMu Group to recover most
of the claimed federal tax refund amounts, and resolve many
contentious federal income tax issues on reasonable terms and
with finality and certainty, thus eliminating the significant
cost, delay and uncertainty of litigation, Mark D. Collins, Esq.,
at Richards, Layton & Finger, P.A., in Wilmington, Delaware,
reveals.
According to Mr. Collins, the IRS Settlements are essentially
reflected in these documents:
(i) An Appeals Settlement Agreement on IRS Form 870-AD, for
Tax Years 2001-2003 of the WaMu Group, or the "2001-2003
Appeals Settlement;"
(ii) An IRS Form 870, Waiver of Restrictions on Assessment and
Collection of Deficiency in Tax and Acceptance of
Overassessment, for Tax Years 2003-2008, on Form 870 and
the corresponding Revenue Agent's Report or IRS Form 4549,
also known as "RAR;"
(iii) A Closing Agreement with respect to foreign tax credits
and related issues for Tax Years 2005-2007, or the
"Closing Agreement;" and
(iv) An Appeals Settlement Agreement on IRS Form 870-AD) for
tax year 1997 of the Ahmanson Group, or the "Ahmanson
Appeals Settlement."
Terms of IRS Settlements
The 2001-2003 Appeals Settlement documents the resolution in
November 2009, of remaining tax issues in dispute for the 2001-
2003 Audit Cycle after discussions and negotiations among WaMu,
the Examination Division of the IRS, and the Office of Appeals of
the IRS. The 2001-03 Appeals Settlement, which has been reviewed
and accepted by the Joint Taxation Committee, is subject to
approval by the Bankruptcy Court.
Because the IRS Exam Division had accounted for all the disputed
adjustments that are subject of the 2001-2003 Appeals Settlement
by reducing the February 2008 refund, the Settlement will yield
an additional net tax refund for the WaMu Group, Mr. Collins
avers. In addition, several additional adjustments favorable to
the WaMu Group also were made as corollary changes in the 2001-
2003 Audit Cycle and included as part of the 2001-2003 Appeals
Settlement, he cites.
Specifically, the total net refund from the 2001-2003 Appeals
Settlement is approximately $447.2 million plus additional
overpayment interest to be determined when the tax amounts are
paid. WaMu estimates that overpayment interest due on the
refund, if accrued through December 31, 2010, would be
approximately $124 million.
The RAR Settlement documents the reached complete resolution and
settlement between WaMu and the IRS Exam Division of all
outstanding audit issues for the 2004-2008 Tax Years and WaMu's
filed refund claims for tax years 2003-2008 based on its election
to carry back the 2008 consolidated net operating loss or "the
2008 NOL Refund Claims."
The WaMu Group will be entitled to receive a net federal tax
refund of approximately $4.533 billion for the 2003-2008 tax
years under the RAR Settlement, Mr. Collins notes.
The $4.533 billion Refund Amount "represents a recovery of almost
all the federal taxes paid in tax years 2004-2007 plus
approximately fifty percent (50%) of taxes paid in 2003, and also
includes recovery of approximately $9.9 million, representing an
erroneously computed penalty for 2004," according to Mr. Collins.
The amount of overpayment interest due on this projected refund,
if accrued through December 31, 2010, is estimated to be
approximately $100.7 million, he points out.
The Ahmanson Appeals Settlement resolves the tax deficiency of
$12.2 million and a corresponding penalty of $4.9 million filed
by the IRS Exam Division against the Ahmanson Group. The
$4.9 million Penalty would have affected WaMu, as successor to
Ahmanson.
The Ahmanson Appeals Settlement was reviewed by the Joint
Taxation Committee and approved in April 2010. Under the terms
of the Settlement, the Ahmanson Group will be allowed a capital
loss of $6.3 million and a deduction of $27,000 for costs
associated with the transaction. This results in a tax refund of
approximately $2.2 million.
In addition, the penalties assessed on the Ahmanson Appeals
Transaction will be reduced from $4.9 million to $1.5 million
resulting in a refund of approximately $3.4 million in previously
paid penalties. In total, WaMu, as successor to Ahmanson, will
be entitled to an aggregate refund of approximately $5.6 million
plus a refund of previously paid underpayment interest and
applicable overpayment interest from the 2006 payment date.
WaMu estimates that the interest to be received on the refund
related to the Ahmanson Appeals Settlement, if accrued through
December 31, 2010, will be approximately $6.3 million.
Mr. Collins emphasizes that the IRS Settlement will significantly
reduce the extent of outstanding tax claims against WaMu's
estate, thus increasing the amount of the tax refund to be
received on account of the 2008 NOL Refund Claims. Moreover, he
avers, the proposed settlement will relieve WaMu from having to
commit substantial resources to protracted litigation.
Nothing contained in the Settlement Documents prejudices the
rights of JPMorgan Chase N.A. or the Federal Deposit Insurance
Corporation under the Global Settlement Agreement under the
Debtors' Chapter 11 Plan of Reorganization, as amended.
Accordingly, neither JPMorgan Chase nor the FDIC has raised any
objection or exception to the terms contained in the IRS
Settlement Documents.
The Official Committee of Unsecured Creditors Committee has had
an opportunity to review, and supports the terms of, all
Settlement Documents, Mr. Collins tells Judge Walrath.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment estimated assets of
$500,000,000 to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the Chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WASTEQUIP INC: S&P Raises Corporate Credit Rating to 'CCC'
----------------------------------------------------------
Standard & Poor's Ratings Services raised its CCR on Wastequip
Inc. to 'CCC' from 'SD'. At the same time, S&P lowered the issue-
level rating on the company's senior secured debt at 'CCC' from
'CCC+' (the same as the CCR). The recovery rating on this debt
remains unchanged at '3', indicating S&P's expectation of
meaningful (50%-70%) recovery in the event of a payment default.
The outlook is negative.
"The upgrade reflects S&P's assessment of Wastequip's weak
business risk profile and highly leveraged financial profile
following the company's recent exercise of its PIK-toggle option
under its mezzanine loan agreement," said Standard & Poor's credit
analyst Gregoire Buet. "The company's financial profile is highly
leveraged, with adjusted total debt to EBITDA currently in excess
of 15x, and S&P view its liquidity position as weak, marked by
volatile free cash flow generation, reduced revolver availability,
as well as by tight financial covenants. Through 2010, S&P
believes that the equity cure provision and PIK-toggle provision
could enable Wastequip to meet the financial covenant requirements
under its senior credit facilities. A subsequent election of the
PIK-toggle option under the mezzanine loan, if any, would not
cause a downgrade of the rating to selective default ('SD').
However, S&P believes that the company will need to significantly
improve its profitability and cash flow generation in a sustained
manner to be able to meet, over the longer term, its financial
obligations under its current capital structure. Considering
current and prospective leverage, S&P remain concerned about
refinancing risks with respects to the revolving credit facility
maturing in February 2012, when interest on its holding company's
subordinated debt also becomes payable in cash."
Wastequip's weak business risk profile primarily reflects its
limited diversity and participation in a relatively small niche
market. Due to the challenging conditions in the U.S. housing and
nonresidential construction market, demand from national and
regional waste haulers has declined, resulting in lower revenues
and weak earnings for suppliers such as Wastequip. The company's
operating margin has deteriorated meaningfully since its peak
level of about 14% in 2006, but has recently stabilized in the
upper-single-digit area due to its cost-cutting initiatives.
Wastequip is highly leveraged. As of Dec. 31, 2009, lease-
adjusted debt to EBITDA was more than 15x, and funds from
operations (FFO) to total debt was minimal. The calculations for
both ratios include the 13.5% senior unsecured PIK notes at the
holding company. Operating conditions have remained challenging
in the first half of 2010. While higher volumes, operating
efficiencies and lower margin pressure from raw material prices
could lead to profitability improvements in the second half of the
year, S&P believes credit measures and liquidity will remain under
pressure.
The outlook is negative. S&P could lower the ratings if
refinancing risks with respect to the February 2012 revolver
maturity remain a concern into 2011, or if sustained high leverage
makes a debt restructuring increasingly likely. "If the company
violates its covenants and the likelihood of obtaining a
satisfactory cure worsens, or if it fails to meet its financial
obligations, including its cash interest obligation, S&P would
also lower the ratings. On the other hand, S&P could consider
revising the outlook to stable or upgrade the ratings if Wastequip
appears likely to make significant improvement in financial
performance, for instance, if leverage trends back towards less
than 10x, the company maintains adequate headroom under its
covenants, and it appears to be on track to resolve its liquidity
challenges," Mr. Buet added.
WEST LOWELL: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: West Lowell Realty LLC
447 West Lowell Ave
Haverhill, MA 01832
Bankruptcy Case No.: 10-44641
Chapter 11 Petition Date: September 20, 2010
Court: United States Bankruptcy Court
District of Massachusetts (Worcester)
Judge: Melvin S. Hoffman
Debtor's Counsel: Robert L. O'Brien, Esq.
P.O. Box 357
New Boston, NH 03070-0357
Tel: (603) 459-9965
Fax: (603) 250-0822
E-mail: robjd@mail2firm.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's two largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/mab10-44641.pdf
The petition was signed by Ronald Tomacchio, managing member.
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Silver Spoon Salad Company Inc. 10-44639 09/19/10
WESTERN STATES: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Western States Land Reliance Trust
401 Main Street, Suite B
Sweet Home, OR 97386
Bankruptcy Case No.: 10-65642
Chapter 11 Petition Date: September 17, 2010
Court: United States Bankruptcy Court
District of Oregon
Judge: Frank R. Alley III
Debtor's Counsel: Michael D. Vergamini, Esq.
399 E 10th Ave #109
Eugene, OR 97401
Tel: (541) 302-1800
E-mail: mdvergamini@efn.org
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Dan Desler, managing trustee.
WILLIAM LYON: S&P Downgrades Rating on Senior Notes to 'D'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on William
Lyon Homes' 10.75% senior unsecured notes due 2013 to 'D' from
'CC' after the company repurchased $10.5 million of outstanding
principal for $9.0 million. S&P also revised its outlook to
negative from developing. S&P affirmed its 'CCC' corporate credit
rating, which continues to reflect a vulnerable business risk
profile, as well as risks associated with a highly leveraged
capital structure. Lastly, S&P affirmed its 'CC' ratings on the
company's senior notes due in 2012 and 2014.
"S&P considers the discounted repurchase to be tantamount to
default under its criteria for exchange offers and similar
restructurings," said credit analyst James Fielding. "In
accordance with S&P's criteria, S&P expects to raise its rating on
these notes to 'CC' within approximately 24 hours because the
company completed its repurchase, and S&P is not aware of
additional discounted repurchases at this time."
S&P's negative outlook acknowledges that the housing recovery
appears to have stalled following the expiration of federal tax
credits for homebuyers expired in June 2010. Single-family
housing starts and new home sales are now tracking the more
pessimistic scenario that S&P outlined in its industry economic
and ratings outlook in February 2010. In this environment, S&P
expects that it may be more difficult for William Lyon to hold
profit margins and increase sales velocity in existing
communities. S&P also believes that capital constraints may
impede the company's ability to substantially grow its community
count. These conditions are likely to preclude an upgrade over
the next 12 months. S&P would lower its rating if conditions
worsen and operating losses and/or impairments further erode
shareholder equity, such that William Lyon's cushion over its
tangible net worth covenant approaches $25 million. S&P would
also lower its ratings on the William Lyon's senior notes if the
company pursues additional distressed exchanges or restructurings.
WINDSOR PETROLEUM: S&P Affirms 'BB+' Rating on $239.1 Mil. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' rating on
Windsor Petroleum Transport Corp.'s $239.1 million secured term
notes due Jan. 15, 2021 ($236.3 million outstanding as of June 30,
2010). At the same time, S&P removed the rating from CreditWatch
with negative implications. The outlook is stable. S&P also
revised Windsor's recovery rating to '3' from '2', indicating its
expectation of a meaningful (50%-70%) recovery to lenders in the
event of a payment default.
The rating actions follow the extension of charters for the VLCCs
British Purpose and British Pride for one additional year through
July 2012. As a result, the British Purpose will trade on a
market rate with a minimum of $20,000 per day from mid-July 2010
until mid-July 2012. The British Pride will continue on a rate of
$24,895 per day until July 2011 followed by a market rate with a
minimum of $20,000 per day until the end of July 2012. The
extensions provide lenders with greater short-term cash flow
certainty. Windsor's next notification deadline is for the
British Progress in February 2011 for a termination 12 months
later in 2012. The minimum rate charters on three of the four
Windsor vessels partly mitigate S&P's short-term concern of
terminations and exposure to the volatile VLCC charter market.
WINDSTREAM CORPORATION: Fitch Puts 'BB+' Rating on $500 Mil. Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Windstream
Corporation's proposed $500 million of senior unsecured notes due
2020. Windstream's Issuer Default Rating is 'BB+'. The Rating
Outlook is Stable.
Proceeds from the offering, combined with cash on hand, are
expected to be used to fund the cash portion of the company's
proposed acquisition of Q-Comm Corporation as well as repay Q-
Comm's outstanding debt. To complete the transaction -- which has
a total value of approximately $782 million -- Windstream will pay
$278 million in cash, repay an estimated $267 million of Q-Comm's
net debt and issue approximately 20.6 million shares of stock
valued at $237 million (based on an Aug. 17, 2010 closing price).
The transaction is expected to be completed in the fourth quarter
of 2010.
Windstream's ratings incorporate expectations for the company to
generate strong operating and free cash flows and to have access
to ample liquidity. Moreover, the acquisition further diversifies
Windstream's revenues and, along with other recent acquisitions,
adds scale to the company, partly offsetting the effect of
competition for residential voice services on the company's
operations, which is Fitch's primary concern. Integration risk is
an additional concern, but in Fitch's view is relatively modest,
owing to the company's experience with acquiring and incorporating
small- and medium-sized acquisitions.
Fitch believes the initial effect of the acquisition on
Windstream's leverage will be modest, and once synergies are
realized (in 2011) from the proposed and recent transactions,
leverage will be within the current expectations for Windstream's
'BB+' IDR. By the end of 2010, Fitch expects Windstream's pro
forma leverage will approximate 3.5 times, slightly over the upper
end of the company's 3.2x to 3.4x historical range.
Q-Comm, including its wholly owned subsidiaries Kentucky Data
Link, Inc., and Norlight, Inc., provides regional fiber transport
and competitive local exchange services in 22 states highly
complementary to Windstream's existing operations. Prior to the
close of the transaction Q-Comm will divest certain assets so that
the remaining businesses will consist of Kentucky Data Link and
Norlight. The proposed acquisition generated approximately
$93 million in EBITDA over the last 12 months, and Windstream
expects to realize approximately $25 million in annual synergies.
On June 30, 2010, Windstream had $191.5 million available on its
revolver and $53.5 million of cash on its balance sheet, which
provided for liquidity below historical levels. However, pro
forma for a July 2010 $400 million senior unsecured debt offering,
the company's liquidity was restored to historical levels as
proceeds were used to free up the revolver. Pro forma for the
debt offering, availability on the revolver was approximately
$492 million (net of outstanding letters of credit). Over the
past several quarters, the company has extended the maturity of
$457 million of the $500 million revolving credit facility from
July 2011 to July 2013, with the remainder maturing in July 2011.
In October 2009, Windstream amended its senior secured term loan
facilities to extend their maturities. The maturity of
$168.9 million of the $283 million outstanding on term loan A was
extended from July 2011 to July 2013. The term loan B, which as
of June 30, 2010 had a $1.358 billion balance outstanding, now has
approximately $1.070 billion maturing in December 2015 rather than
in July 2013. In September 2010, Windstream's facilities were
amended to allow the company to receive certain broadband stimulus
grants, to increase the amount of permitted incremental senior
secured debt under the facilities to $1.6 billion from
$800 million and to permit the company to extend the term loan B
to the extent not previously extended.
Principal financial covenants in the credit facilities require a
minimum interest coverage ratio of 2.75x and a maximum leverage
ratio of 4.5x. There are limitations on capital spending, and the
dividend is limited to the sum of excess free cash flow and net
cash equity issuance proceeds subject to pro forma leverage of
4.5x or less.
Other than the portion of the revolver and term loan A facility
maturing in 2011, upcoming maturities are nominal through 2012.
Liquidity is also supported by free cash flow, which Fitch
estimates will be in upper end of a $200 million to $300 million
range for 2010. Capital spending, per the company's guidance, is
expected to range from $390 million to $410 million.
WINDSTREAM CORP: S&P Assigns 'B+' Rating on $500 Mil. Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its issue-
level and recovery ratings to Little Rock, Ark.-based incumbent
local exchange carrier Windstream Corp.'s proposed $500 million of
senior notes due 2020 to be issued under rule 144A with
registration rights. S&P rated the notes 'B+' with a recovery
rating of '5', which indicates S&P's expectation for modest (10%-
30%) recovery in the event of payment default.
At the same time, S&P affirmed all other ratings on Windstream,
including the 'BB-' corporate credit rating. The outlook is
stable.
The company said it will use proceeds, coupled with cash on hand,
to fund the acquisition of privately held Q-Comm Corp., a regional
fiber transport and competitive local exchange carrier consisting
of subsidiaries Kentucky Data Link Inc. and Norlight Inc. S&P
expects the transaction to close in the fourth quarter of 2010.
S&P expects total debt outstanding to be around $7.2 billion.
"On a pro forma basis, including this acquisition and several
recently closed transactions, Windstream's leverage is around 4x
debt to EBITDA," explained Standard & Poor's credit analyst Allyn
Arden. This calculation includes S&P's adjustments for operating
leases and unfunded pensions and OPEBs.
"S&P believes the company's credit metrics will remain within
levels S&P considers appropriate for the rating," added Mr. Arden.
While S&P views the businesses being acquired to be more exposed
to competitive pressures than Windstream's core incumbent local
exchange business, Q-Comm's revenue base is small relative to that
of Windstream.
ZALE CORP: Names Killion as CEO; Breeden Steps Down From Board
--------------------------------------------------------------
Zale Corporation on Thursday said its Board of Directors has named
Theo Killion Chief Executive Officer and a Member of the Board,
effective immediately. Mr. Killion has served as President and
Interim Chief Executive Officer since January 13, 2010.
"Theo has successfully led Zale through the critical initial
stages of our operational and financial turnaround, showing equal
skill in working with vendors, customers, shareholders and
employees," said John B. Lowe, Jr., Zale's Chairman. "We look
forward to Theo's contributions as Chief Executive Officer and as
a member of our Board as we execute on our turnaround strategy
designed to rebuild the Zale franchise."
Mr. Killion joined Zale Corporation in January 2008 as Executive
Vice President and was appointed President in August 2008.
Previously, he held senior management positions at Tommy Hilfiger,
Limited Brands, Macy's East and the Home Shopping Network.
The Company also announced these additional changes to its Board.
-- Kenneth B. Gilman, a retail industry veteran, has joined
the Company's Board as an independent director. Mr.
Gilman's experience includes 25 years at Limited Brands,
Inc., serving in numerous capacities, including Chief
Financial Officer and Chief Administrative Officer. He
was also Chief Executive Officer of Asbury Automotive
Group, one of the largest automobile retailers in the
United States. He is currently on the Board of Liz
Claiborne Inc. and Internet Brands Inc.
-- Richard C. Breeden and James M. Cotter have resigned from
the Board having served since January 2008. They have been
instrumental in helping reshape the Company to address the
very difficult macroeconomic environment confronting
retailers. Breeden Capital continues to be Zale's largest
shareholder.
"We are extremely appreciative of the active role Richard and Jim
have played on our Board," Mr. Lowe said. "We are equally
fortunate to be working with Ken Gilman as a new Board member at a
pivotal time for our Company," Mr. Lowe added. "Ken's experience
in the retail sector is broad and deep, and he will be a
tremendous asset as we move forward with the next stage of our
transformation."
Mr. Killion said, "I am delighted to continue my service to the
Company as Chief Executive Officer and as a member of the Board.
Zale is clearly on the right track, and I am eager to move ahead
with our many opportunities, working closely with a strong
management team and Board."
On September 14, 2010, Zale said John Legg has been named Senior
Vice President, Supply Chain. Mr. Legg will have responsibility
for warehousing, logistics and purchasing and will report to Matt
Appel, Executive Vice President and Chief Financial Officer.
Mr. Legg was most recently Managing Director for Management
Services International, LLC, a global consulting services company
he formed to assess, design and launch supply chain solutions in
support of restructuring, process improvement and inventory
management initiatives. Prior to that, he served as Senior Vice
President of Global Distribution and Logistics for Warnaco, Inc.
and Vice President of International Distribution and Logistics for
Liz Claiborne, Inc. Mr. Legg is a graduate of Northeastern
University.
* * *
The Wall Street Journal's Miguel Bustillo reports that neither Mr.
Breeden nor company officials could immediately be reached for
comment late Thursday.
Mr. Breeden served as chairman of the Securities and Exchange
Commission from 1989 to 1993.
According to Mr. Bustillo, Mr. Breeden jostled with fellow Zale
directors after they learned that he had been approached by
investors interested in the company and kept the information to
himself, people involved in the process told the Journal earlier
this year. Mr. Breeden maintained he had directed overtures to the
company. Some current and former Zale executives and board
members also told the Journal that the company had made mistakes
trying to please Mr. Breeden, including leasing an expensive
billboard at the stadium of the New York Yankees, a team Mr.
Breeden passionately supports.
Mr. Bustillo notes Zale stock has plummeted 72% in the past year,
following the forced resignation of the retailer's last chief
executive, Neal Goldberg, in January. The 1,900-store chain last
reported quarterly earnings in May, disclosing a 2.2% drop in
sales at stores open at least a year, a big improvement from a 20%
decline in 2009.
The Journal notes Zale hasn't said when it will report earnings
next. Its shares fell 3.1% Thursday to $1.99.
About Zale Corporation
Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) --
http://www.zalecorp.com/-- is a specialty retailer of diamonds
and other jewelry products in North America, operating
approximately 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,
www.gordonsjewelers.com and www.pagoda.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.
Zale reported a net loss of $12.09 million for the three months
ended April 30, 2010, from a net loss of $19.5 million for the
same period in 2009. Zale reported a net loss of $65.15 million
for nine months ended April 30, 2010, from a net loss of
$99.7 million in the same period in 2009.
ZELIG HERSKOVITZ: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Zelig Herskovitz
5630 Rhodes Avenue
Valley Village, CA 91607
Bankruptcy Case No.: 10-21788
Chapter 11 Petition Date: September 20, 2010
Court: U.S. Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: Roy C. Dickson, Esq.
2323 N. Tustin Avenue, Suite I
Santa Ana, CA 92705
Tel: (714) 541-8080
Fax: (714) 541-8090
E-mail: roycd@aol.com
Scheduled Assets: $1,425,850
Scheduled Debts: $2,231,141
A list of the Debtor's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb10-21788.pdf
* Bankruptcy Turnarounds Menaced by Investor Valuation Fights
-------------------------------------------------------------
Bankruptcy Judge Burton Lifland, speaking at ABI's Seventh Annual
Complex Financial Restructuring Program on Monday, said that
companies trying to rehabilitate themselves through bankruptcy are
threatened by valuation fights among late-arriving investors,
according to American Bankruptcy Institute.
* South Korean Pension Fund to Invest $300MM in U.S. Real Estate
----------------------------------------------------------------
The Wall Street Journal's Lingling Wei reports that South Korea's
National Pension Service, the world's fifth-largest pension fund,
has committed to invest $300 million in troubled real estate
through Cleveland-based Townsend Group, the latest sign that
foreign investors increasingly are venturing into the down-on-its-
luck U.S. property market.
Its primary focus will be on snapping up stakes in distressed
private-equity real-estate funds and recapitalizing them.
According to the Journal, the National Pension Service has more
than $250 billion in assets.
* Lawmakers Criticize SIPC Method for Paying Ponzi Victims
----------------------------------------------------------
Dow Jones Newswires' Jessica Holzer and Sarah Lynch report that
senior U.S. lawmaker Rep. Paul Kanjorski (D., Pa.) criticized the
method being used to pay claims to victims of the Madoff and other
Ponzi schemes as unfair and vowed to pursue changes at the
Securities Investor Protection Corp. Dow Jones reports Rep.
Kanjorski said the SIPC has damaged investor trust by denying
claims of victims based on brokerage statements reporting false
paper profits.
"Investor trust, for which SIPA was designed to preserve, has been
seriously eroded by SIPC's narrow interpretations of its statutory
mandate," said Mr. Kanjorski, who heads the House Financial
Services Subcommittee on Capital Markets, Thursday at a hearing,
according to Dow Jones. The Securities Investor Protection Act
established the SIPC in 1970 to return money to the customers of
failed brokerages.
"While SIPC's actions may follow the letter of the law, many would
argue that SIPC has ignored the spirit of the law," he continued.
According to Dow Jones, Mr. Kanjorski said he would pursue changes
to require the SIPC to fulfill claims of customers based on the
account statements they received from failed broker-dealers. He
also said he would explore whether the SIPC coverage should apply
to investment advisers as well as broker-dealers.
Dow Jones also reports that Rep. Scott Garrett (R., N.J.), the
panel's top Republican, said he was concerned about the plans of
Madoff trustee Irving Picard to clawback funds from people who
withdrew fraudulent profits from the Ponzi scheme over the years.
"SIPC leadership and the trustee have indicated that he will not
be going after so-called 'ordinary' people who are not leading a
lavish lifestyle and who had no knowledge of the fraud," Mr.
Garrett said. "But that's not what I'm hearing from my
constituents and others."
Dow Jones relates that in testimony Thursday, SIPC Chairman Orlan
Johnson defended the method being used by Mr. Picard, saying it
wouldn't be right to pay claims based on account statements
containing phony trading profits.
For the most part, brokerage accounts are protected by SIPC up to
$500,000.
In testimony, Dow Jones continues, Alabama Securities Commission
Director Joseph Borg urged an increase in coverage from $500,000
to $1 million. He also said the protection levels should be
indexed to inflation.
* Wall Street Players Exposed By Lehman Collapse, Says Vernon
-------------------------------------------------------------
Christopher Vernon said in a statement that on the two year
anniversary of its collapse and bankruptcy filing, many contend
that Lehman Brothers hid the full extent of its problems from the
outside world until the bankruptcy. While this may be true with
respect to main street investors, don't let Wall Street fool you
into thinking that its major players didn't see it coming.
Mr. Vernon said that one example of Wall Street's detailed
knowledge of Lehman's problems well in advance of its bankruptcy
involves the Union Bank of Switzerland, commonly known as UBS.
This is significant to us as retail investors because UBS, like
some other financial institutions on Wall Street, used this
knowledge to its own advantage rather than protect its own clients
or the investing public.
According to Mr. Vernon, although it would be impossible to detail
all of what UBS knew about Lehman in this short commentary, some
of what we have pieced together during our investigation is
detailed below. This intimate knowledge that UBS had of Lehman
was due to its relationship as a lender of short term and
collateralized loans to Lehman.
"In 2007, UBS discussed a possible merger with Lehman. During
that period, more than 75 percent of Lehman's overall equity --
more than $100 billion -- was concentrated in risky mortgage and
real estate assets. So large was the amount of Lehman's illiquid
assets during this period that Lehman employees referred to their
balance sheets as "dead assets schedules." During this period,
UBS also became aware that Lehman's credit default swap spread --
the cost to insure a loan to Lehman against default -- increased
dramatically.
"Throughout this same period, UBS was heavily recommending and
selling "structured notes" issued by Lehman to its own clients.
Although "structured notes" are very complicated products not
understood by many financial advisors, much less retail investors,
these products are for the most part unsecured and illiquid medium
term loans to Lehman.
"While urging its own client base to effectively loan money to
Lehman on an unsecured basis through illiquid structured notes,
UBS was using its own firm money to make fully collateralized
short term loans to Lehman, charging outrageously high interest
rates. These Repo 105 loans by UBS to Lehman are now the focus of
an SEC investigation of Lehman. UBS was able to charge such high
interest rates on these loans because it was aware of Lehman's
severe financial problems and resulting desperate need for the
Repo 105 loans.
"Through the spring of 2008, UBS continued to capitalize on
Lehman's problems by charging Lehman shocking rates of interest
for fully collateralized short term loans. Simultaneously, UBS
continued to profit from the recommendation and sale of Lehman
"structured notes" -- which were loans to Lehman by UBS clients
that were unsecured, longer term, and far less appealing in terms
of likely returns than the "Repo 105" loans that UBS was making
to Lehman.
"How outrageous was UBS's behavior? By way of example, while
still selling Lehman structured notes to its own clients,
UBS charged the now "desperate" Lehman an interest fee of
$186 million on a very short term and fully collateralized
multi-billion dollar loan. If this short term loan return
were annualized, it would equate to a return to UBS of more
than 150 percent annual interest on the loan. As one of
Lehman's own employees said in early 2008, "Everyone knows 105
is an off balance sheet mechanism so counterparties are looking
for ridiculous levels" to try to squeeze Lehman.
"Although the collateral and return disparities between the loan
deals that UBS made for its clients and the loan deals that UBS
made for itself are very troubling, it was the liquidity disparity
that became especially significant in the summer of 2008 leading
up to Lehman's bankruptcy. Specifically, UBS clients holding the
Lehman structured notes recommended by UBS were effectively unable
to sell or liquidate these notes until they matured. In contrast,
over the summer of 2008, UBS significantly reduced its weekly Repo
105 loans it had made to Lehman.
"For the foregoing reasons, the Lehman bankruptcy in September of
2008 had a far greater impact on UBS's clients than on UBS itself.
When Lehman declared bankruptcy, UBS investors who had invested in
Lehman structured notes were left standing at the back of the line
with the unsecured creditors in the Lehman bankruptcy and will
likely recover little of their original investment. In contrast,
after the Lehman bankruptcy announcement, UBS issued a press
release8 regarding its limited exposure due to its loans and other
transactions with Lehman. Based on our investigation, it appears
that while UBS was systematically shedding its own exposure to
Lehman debt, it was continuing to develop and pitch Lehman
structured notes with so-called principal protection to its own
client base.
"UBS's public statement earlier this year that the Lehman
Bankruptcy Report does not show that the "counterparties such as
UBS acted inappropriately" is dubious. The Lehman Bankruptcy
Report was designed to look into the activities of Lehman, not
other financial institutions on Wall Street, like UBS. In
reality, the Lehman Bankruptcy Report represents further evidence
that firms such as UBS took advantage of the Lehman situation for
their own benefit, while utterly failing their own clients."
Christopher Vernon, the author of the article, is a Naples
based attorney with the law firm Vernon Healy. He advocates for
the rights of investors throughout the United States and abroad -
- both in and out of the courtroom and arbitration hearing room.
Mr. Vernon currently holds an AV rating by Martindale-Hubbell, has
been repeatedly recognized by his peers in The Best Lawyers in
America, and has also been consistently recognized in the Florida
editions of the Super Lawyers publication. Mr. Vernon has spoken
at both national securities and national trial attorney
conventions and has also conducted continuing education in the
U.S. and abroad for CPAs, CFAs, CFPs, investment professionals,
board certified business litigation lawyers and board certified
trust and estate lawyers. Mr. Vernon has also provided training
for and been retained as an expert by government agencies on
securities matters.
* BOOK REVIEW: Corporate Venturing - Creating New Businesses
Within the Firm
------------------------------------------------------------
Author: Zenas Block and Ian C. MacMillan
Publisher: Beard Books, Washington, D.C. 2003
(reprint of 1993 book published by the President and Fellows of
Harvard College).
371 pages. $34.95 trade paper, ISBN 1-58798-211-0.
Creating new businesses within a firm is a way for a company to
try to tap into its potential while at the same time minimizing
risks. A new business within a firm is like an entrepreneurial
venture in that it would have greater flexibility to
opportunistically pursue profits apart from the normal corporate
structure and decision-making processes. Such a business is
different from a true entrepreneurial venture however in that the
business has corporate resources at its disposal. Such a company
business venture has to answer to the company management too.
Corporate venturing -- to use the authors' term -- offers
innovative and stimulating business opportunities. Though
venturing is in a somewhat symbotic relationship with the parent
firm, the venture would never threaten to ruin the parent firm as
a entrepreneur might be financially devastated by failure.
Block and MacMillan contrast an entrepreneurial enterprise with
their subject of corporate venturing, "When a new entrepreneurial
venture is created outside an existing organization, a wide
variety of environmental factors determine the fledgling
business's survival. Inside an organization . . . senior
management is the most critical environmental factor." This
circumstance is the basis for both the strengths and limitations
of a corporate venture. In their book, the authors discuss how
senior management working with the leadership of a corporate
venture can work in consideration of these strengths and
weaknesses to give the venture the best chances for success. If
the venture succeeds beyond the prospects and goals going into its
formation, it can always be integrated into the parent company as
a new division or subsidiary modeled after the regular parts of a
company with the open-ended commitment, regular hiring practices,
and reporting and coordination, etc., going with this. As covered
by the authors, done properly with the right commitment, sense of
realism and practicality, and preliminary research and ongoing
analysis, corporate venturing offers a firm new paths of growth
and a way to reach out to new markets, engage in fruitful business
research, and adapt to changing market and industry conditions.
The principle of corporate venturing is the familiar adage,
"nothing ventured, nothing gained." While it is improbable that a
corporate venture can save a dying firm, a characteristic of every
dying firm is a blindness about venturing. Just thinking about
corporate ventures alone can bring to a firm a vibrancy and
imagination needed for business longevity.
Ideas, insights, and vision are the essence of corporate
venturing. But these are not enough by themselves. Corporate
venturing is based as much on the right personnel, especially the
top leaders. The authors advise to select current employees of a
firm to lead a corporate venture whenever feasible because they
already have relationships with senior management who are the
ultimate overseers of a venture and they understand the corporate
culture. In one of their several references to the corporate
consultant and motivational speaker Peter Drucker, the authors
quote him as identifying only half jokingly the most promising
employees to lead the corporate venture as "the troublemakers".
These are the ones who will be given the "great freedom and a high
level of empowerment" required to make the venture workable and
who also are most suited to "adapt rapidly to new information."
Such employees for top management of a venture are not entirely on
their own. The other side of this, as Brock and MacMillan go
into, is for such venture management to earn and hold the trust
and confidence of the firm's top management and work within the
framework and follow the guidelines set for the venture.
Corporate venturing is an operation which is a hybrid of the
standard corporate interests and operations and an independent
business with entrepreneurial flexibility mainly from focus on one
product or service or at most a few interrelated ones, simplified
operations, and streamlined decision-making. From identifying
opportunities and getting starting through the business plan and
corporate politics, Brock and MacMillan guide the readers into all
of the areas of corporate venturing.
Zenas Block is a former adjunct professor with the Executive MBA
Program at the NYU Stern School of Business. Ian C. MacMillan is
associated with Wharton as a professor and a director of a center
for entrepreneurial studies.
*********
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
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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*** End of Transmission ***