/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100929.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 29, 2010, Vol. 14, No. 270 Headlines ABITIBIBOWATER INC: Canadian Court Sanctions CCAA Plan ABITIBIBOWATER INC: Proposes Distribution Claims Reserve ABITIBIBOWATER INC: Receives Creditors' Support for Ch. 11 Plan ABS INVESTMENTS: Case Summary & 9 Largest Unsecured Creditors AG ENERGY: Case Summary & 20 Largest Unsecured Creditors AIRTRAN HOLDINGS: Moodys Puts Caa1 Corporate on Review for Upgrade ALLEN COTTAM: Case Summary & 20 Largest Unsecured Creditors ALLIED DEFENSE: Posts $9.4 Million Net Loss in June 30 Quarter ALLIED DEFENSE: Transfers Trading of Common Shares to OTCQB AIRTRAN HOLDINGS: S&P Puts 'B-' Corporate Credit Rating ANNA NICOLE SMITH: High Court Agrees to Look at Case Again AMERICAN SAFETY: Energizer Offered $301-Mil. for Assets AMERICAN INT'L: Finalizing Plan to Repay U.S. Bailout Loans ATLANTIC CITY HILTON: Landry's to Buy Casino if Receiver Named BLOCKBUSTER INC: Wins Interim Approval for DIP Financing BLOCKBUSTER INC: Wins Interim Approval to Pay Studio Claims BLOCKBUSTER INC: Proposes to Pay Prepetition Employee Wages BLOCKBUSTER INC: Wants to Limit Trading to Protect NOLs BLOCKBUSTER INC: Wants to Pay Prepetition Carrier Charges BLOCKBUSTER INC: Organizational Meeting to Form Panel on Oct. 1 BLUE CHIP: Case Summary & 9 Largest Unsecured Creditors BNA SUBSIDIARIES: Case Summary & 20 Largest Unsecured Creditors BOSTON GENERATING: Can Use Prepetition Lenders' Cash Collateral CAPITOL HILL: Pillsbury Accord Doesn't Bar Malpractice Claims CAPRIUS INC: Amends Securities Purchase Deal With Vintage Capital CHEM RX: Signs Agreement to Sell All Assets to PharMerica CHEMTURA CORP: Plan Confirmation Going Forward CHEMTURA CORP: Settles Environmental Claims With EPA for $26MM CHEMTURA CORP: Settles With State Environmental Agencies CHINA SHENGHUO: Receives Notice from NYSE Amex LLC CLAIM JUMPER: U.S. Trustee Forms Creditors Committee CLEO INVESTMENTS: Voluntary Chapter 11 Case Summary C.M.B. III: Case Summary & 22 Largest Unsecured Creditors COLUMBIA MEGA: Case Summary & 6 Largest Unsecured Creditors COMMAND CENTER: Appoints Fred Wilson to Board of Directors CONSOLIDATED CAPITAL: Posts $153,000 Net Loss in June 30 Quarter CUPIC LLC: Case Summary & 4 Largest Unsecured Creditors DAMON PURSELL: Gets Interim Okay to Use MCK's Cash Collateral DERIVIUM CAPITAL: Judge Rules on Grayson Suit v. Wachovia DETROIT MEDICAL: Moody's Affirms 'Ba3' Rating on $486.4 Mil. Bonds DOLLAR THRIFTY: Stands By Hertz; to Proceed With Sept. 30 Meeting DOLLAR THRIFTY: PAR Capital to Vote "NO" on Hertz Deal DONALD BRANDT: Statutes of Limitations Tolled in Military Service DRYSHIPS INC: Earns $15.2 Million in June 30 Quarter EMPIRE RESORTS: Not Nasdaq Compliant with Director Resignation EMPIRE RESORTS: Settles With Noteholders and Indenture Trustee FAIRPOINT COMMS: Appoints J. Hogshire as Vice-Pres. & Controller FAIRPOINT COMMS: Seeks Approval of Wireless Settlement FAIRPOINT COMMS: Settles CoBank's Claims on Patronage Stock FLAHERTY MECHANICAL: Case Summary & 20 Largest Unsecured Creditors FRASER PAPERS: Terminates Deal to Sell New Hampshire Paper Mill FREDDIE MAC: Issues August 2010 Monthly Volume Summary FX REAL ESTATE: Inks Subscription Deal with Select Directors GARLOCK SEALING: Court Appoints J. Grier as Future Claims Rep. GARLOCK SEALING: Proposes Rust Consulting as Claims Handling Agent GARLOCK SEALING: Proposes to Establish Gen. Claims Bar Date GEMCRAFT HOMES: Federal Judge Approves Reorganization Plan GLIMCHER REALTY: S&P Affirms 'B+' Corporate Credit Rating GLOBAL BEVERAGES: Posts $562,600 Net Loss in March 31 Quarter GREAT ATLANTIC: Elects Thomas Casey to Board of Directors GREDE FOUNDRIES: Wis. Court Says Electricity is a UCC "Good" GREEN RIVER: Quality Carriers Can File Late Claims GROVE COMMONS: Case Summary & 9 Largest Unsecured Creditors GRS ELECTRONICS: Omega Can't Access Funds From Court Registry HALAL 4 U: Judge Glenn Converts Case to Chapter 7 HARRISBURG, PA: Votes to Retain Bankruptcy Lawyers HARRISBURG, PA: May Not Make Wednesday's Payroll to Workers HEARTLINE FOODS: Has Not Meet Burden for "Nunc Pro Tunc" Relief HOSPITAL DAMAS: Case Summary & 20 Largest Unsecured Creditors HYTHIAM INC: Posts $2.5 Million Net Loss in June 30 Quarter JESUP & LAMONT: Voluntary Chapter 11 Case Summary JOSE FRANCO: Taps Victor Gratacos Diaz as Bankruptcy Counsel LAS VEGAS MONORAIL: Judge Postpones Key Hearings in Case LEHMAN BROTHERS: Barclays Want Calculations From SIPA Trustee LEHMAN BROTHERS: Fidelity Opposes SunCal Settlement LEHMAN BROTHERS: Judge Peck Approves Settlement With Aurora Bank LEHMAN BROTHERS: Judge Peck Approves Woodlands Bank Settlement LEHMAN BROTHERS: Proposes Settlement With Societe Generale LEHMAN BROTHERS: To File New Restructuring Plan by 4th Quarter LIFECARE HOLDINGS: Moody's Affirms 'Caa1' Corporate Family Rating LOCAL INSIGHT: Elects Two to Board of Directors MAGNA ENTERTAINMENT: Del. Court. Rules on Simulcast Site Suit MAJESTIC STAR: Creditors Motion to Terminate Exclusivity Baseless MATTERHORN NURSEY: Sale Collapse Prompted Ch. 11 Filing MERUELO MADDUX: Equity Holders Submit Revised Reorganization Plan MOUNT VERNON: Files Schedules of Assets and Liabilities MOUNT VERNON: U.S. Trustee Forms 6-Member Creditors Committee NALCO CO: S&P Assigns 'BB+' Rating on $750 Mil. Senior Loans NAT'L UNION OF HEALTHCARE: Members to Vote to Keep Union Contract NEC HOLDINGS: Wants Plan Exclusivity Until January 6 NEDAK ETHANOL: Posts $3.2 Million Net Loss in June 30 Quarter NEPHROS INC: Posts $365,000 Net Loss in June 30 Quarter NEW LEAF: Completes $1.65 Million Bridge Notes & Warrants Offering NIGHTHAWK RADIOLOGY: Moody's Retains 'B2' Corporate Family Rating NOBLEPEAK VISION: Assigns All Its Assets to Joseph F. Finn NUTRACEA: To Seek Confirmation of Full Payment Plan on Oct. 19 OCEAN CASINO: SunCruz Settles Gambling-Cruise Workers' WARN Suit OMC INC: Plans to Restructure Debt to Union OTC HOLDINGS: Plan Contemplates Consolidation and Assets Transfer PACIFIC DEVELOPMENT: Committee Taps Parsons Behle as Counsel PACIFIC DEVELOPMENT: Wants 90-Day Extension of Plan Exclusivity PACIFIC ETHANOL: Signs Definitive Agreements to Raise $53.5MM POWER DEVELOPMENT: Chapter 11 Case Dismissed PERRY COUNTY: Bankr. Ct. Won't Rule on Remand Bid in Landfill Suit PFG ASPENWALK: Case Summary & 10 Largest Unsecured Creditors PRES-LAHAINA SQUARE: Has Until Nov. 1 to File Reorganization Plan PRES-LAHAINA SQUARE: Taps Winthrop Couchot as Insolvency Counsel REEF ENVIRONMENTAL: Files for Chapter 11 Protection in Alabama REGAL ONE: Earns $408,576 in June 30 Quarter REMINGTON RANCH: Unlicensed Contractor Has No Construction Lien ROCK & REPUBLIC: Lender Protests 'Secret' Nature Sale Talks ROTECH HEALTHCARE: Moody's Reviews 'Caa2' Corporate Family Rating ROTECH HEALTHCARE: S&P Puts 'CCC' Rating on CreditWatch Positive RUBICON US: Starwood-JPMorgan Units Complete Reorganization SANSWIRE CORP: Posts $4.1 Million Net Loss in June 30 Quarter SEA ISLAND: Oaktree-Led Auction Set for October 11 SHOPPES OF LAKESIDE: Gets Temporary OK to Use Cash Collateral SHOREBANK CORP: Pacific and International Units Still Operating SOUTHPOINT I: Podolsky Northstar Sells Building to KVH Industries STERLING FINANCIAL: FDIC Lifts Cease Order on Sterling Bank TAGISH LAKE: New Pacific Take-Over Bid to Expire September 27 TAYLOR BEAN: Ex-Chair's Fraud Case Stays In Va., Judge Says TEGAL CORPORATION: Board Approves Bonuses to Company CEO and CFO TEGAL CORPORATION: Posts $2.5 Million Net Loss in June 30 Quarter TERRANCE COSGROVE: Case Summary & 20 Largest Unsecured Creditors TIX CORPORATION: To Be Delist From NASDAQ TONY NGUYEN: Case Summary & 15 Largest Unsecured Creditors THOMPSON PUBLISHING: Organizational Meeting Set for Oct. 1 TRIBUNE COMPANY: Mediator Endorses Settlement TRUVO INTERMEDIATE: S&P Withdraws 'D' Corporate Credit Rating ULTIMATE ESCAPES: Organizational Meeting to Form Panel on Oct. 1 UNITED COMPONENTS: S&P Raises Corporate Credit Rating to 'B' URBAN BRANDS: Asks Court to Extend Schedules Filing Until 45 Days URBAN BRANDS: Gets OK to Hire BMC Group as Claims & Noticing Agent URBAN BRANDS: Proposes New Ashley-Led Auction for Assets URBAN BRANDS: Organizational Meeting to Form Panel on Oct. 1 US DATAWORKS: Silicon Valley Bank Forbearance Expires Sept. 30 VICTOR VALLEY: Gets Court's Interim Nod to Use Cash Collateral VICTOR VALLEY: Gets Interim Nod to Obtain DIP Financing WALKER-CALLAHAM: Case Summary & Largest Unsecured Creditor WASHINGTON COMMONS: Case Summary & 8 Largest Unsecured Creditors WEST CORP: Gets Green Flag to Amend Credit Agreements WEST CORP: Plans to Offer $500 Million Senior Unsec. Notes WHITE BIRCH: Senior Lenders Insist $175MM Bid Was Superior WORKSTREAM INC: May 31 Balance Sheet Upside-Down by $20.1 Million XENONICS HOLDINGS: Stock Delisted From NYSE Amex Z TRIM: Incurs $3.6 Million Net Loss in June 30 Quarter * Bank Failures This Year Now Total to 127 * FDIC Puts Off Resolution Authority Rule Vote * Akin Gump and Orrick Herrington in Preliminary Merger Talks * Cadwalader Wins M&A Advisor Turnaround Award of the Year * Kramer Levin Haas 'Top 10 & 100' Attorneys on Super Lawyers List * Upcoming Meetings, Conferences and Seminars ********* ABITIBIBOWATER INC: Canadian Court Sanctions CCAA Plan ------------------------------------------------------ The Honourable Mr. Justice Clement Gascon, J.S.C., of the Quebec Superior Court rendered an order sanctioning AbitibiBowater Inc. and its affiliates' plan of reorganization under the Canadian Companies' Creditors Arrangement Act on September 23, 2010. 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. The Chapter 11 Plan and the CCAA Plan provide for the full payment, on the Implementation Date and consummation of the U.S Plan, of all of the AbitibiBowater Debtors' secured debt obligations. The Plans contemplate the conversion of unsecured debt obligations to equity of the post-emergence reorganized Abitibi. Moreover, as an alternative to the debt-to-equity swap, the basic structure of the CCAA Plan includes the possibility of smaller unsecured creditors receiving a cash distribution of 50% of the face amount of their Proven Claim if that claim was less than $6,073, or if they opted to reduce their claim to that amount. "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." Before the Canadian Court entered the Sanction Order, certain parties raised objections to the CCAA Plan. The Objecting Parties include Aurelius Capital Management, LP, Contrarian Capital Management, L.L.C., the provinces of Ontario and British Columbia, and NPower Cogen Limited. Aurelius and Contrarian are holders of BCFC Notes. Mr. Justice Gascon held that: -- the contestations of Ontario, British Columbia and NPower Cogen Limited have been satisfactorily resolved by adding to the Sanction Order sought limited "carve-out" provisions; and -- the contestations of Aurelius and Contrarian that (1) BCFC did not have an opportunity to vote on the CCAA Plan, (2) the CCAA Plan release provisions are overly broad, and (3) the NAFTA Settlement Funds are not properly allocated are ill founded. Mr. Justice Gascon is satisfied that the CCAA Plan is fair and reasonable. The Plan represented a truly successful compromise and restructuring, fully in line with the objectives of the CCAA, whose implementation will preserve social and economic benefits to the Canadian economy, he opined. The Canadian Court acknowledged that risks are associated with delaying the sanction of the CCAA Plan. Among other things, AbitibiBowater Chief Restructuring Officer Bruce Robertson testified at the Sanction Hearing held on September 20 and 21 that the monthly cost of any delay in Abitibi's emergence form the CCAA process is approximately $30 million. The Canadian Court also took into consideration the recommendations of Ernst & Young, the appointed monitor of the AbitibiBowater CCAA Proceedings. In its 57th Monitor Report, E&Y advised creditors that their approval of the CCAA Plan would be a reasonable decision. In its 58th Monitor Report, E&Y reaffirmed its view that the CCAA Plan was fair and reasonable and recommended the sanction of the CCAA Plan. Accordingly, pursuant to the Sanction Order, the Canadian Court authorizes and directs AbitibiBowater and its Canadian affiliates to take all steps and actions necessary to implement and effectuate the CCAA Plan. The Stay Period in the CCAA Proceedings is extended through the Implementation Date of the CCAA Plan, Mr. Justice Gascon further ruled. E&Y, in its 59th Monitor Report, recommended approval of the CCAA Stay extension through the date of emergence from the CCAA Proceedings, which the Canadian Debtors are targeting to be October 14, 2010. The confirmation hearing under AbitibiBowater's 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. Brandon Schwartz, media manager at Epiq Systems Class Action & Claims Solution, certified that a copy of AbitibiBowater Inc.'s Notice of the Confirmation Hearing, Confirmation Objection Deadline and Disclosure Statement Approval has been published in the New York Times and Le Presse on August 27, 2010, and September 3, 2010 respectively. The Sanction Order rendered by the Quebec Superior Court on the CCAA reorganization plan is available for free at: http://ResearchArchives.com/t/s?6b99 Full-text copies of the Supplemental 57th to 59th Monitor Reports are available for free at: http://bankrupt.com/misc/ABH_CCAA57thMonitorRpt_Spplmental.pdf http://bankrupt.com/misc/ABh_CCAA58thMonitorRpt.pdf http://bankrupt.com/misc/ABH_CCAA59thMonitorRpt.pdf http://bankrupt.com/misc/ABH_CCAA59thMonitorRpt_Spplmental.pdf 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: Proposes Distribution Claims Reserve -------------------------------------------------------- AbitibiBowater Inc. and its units ask the U.S. Bankruptcy Court to authorize the establishment of a disputed claims reserve solely to be used to determine distributions to Allowed Class 6 Claims under their Chapter 11 Plan. Class 6 Claims consist of general unsecured claims. Holders of these type of Claims are entitled to (i) receive a pro rata distribution of the number of shares of New ABH Common Stock allocated to the Debtor against which that Class 6 Claim is Allowed, subject to dilution; and (ii) participate in the portion of the Rights Offering allocated to the Debtor against which that Class 6 claim is allowed based on the allocations of New ABH Common Stock allocated to that Debtor. The Plan provides that unless otherwise ordered by the Court, from and after the Effective Date, and until the time that all Disputed Claims have become Allowed Claims, compromised or settled, the Disbursing Agent will reserve and hold in escrow, for the benefit of each holder of a Disputed Claim, New ABH Common Stock in an amount equal to the Pro Rata Share of distributions which would have been made to the holder of a Disputed Claim if it were an Allowed Claim in an amount equal to, as applicable: (i) the Disputed Claim amount, unless the Claim is a Disputed Claim solely because of Section 502(d) of the Bankruptcy Code, in which case the disputed and undisputed amount of the Claim will be reserved; or (ii) if the amount of the Disputed Claim will be estimated by the Court for purposes of allowance, the amount determined by the Court representing the maximum amount in which the Claim may ultimately be deemed an Allowed Claim; or (iii) other amount as may be agreed upon by the holder of a Disputed Claim and the Debtors or Reorganized Debtors. The Debtors inform the Court that they have not yet completed an analysis of all of the claims filed in their cases, so they do not know the potential universe of Disputed Claims. The Debtors, however, have compiled a listing of all Class 6 Disputed Claims that were filed with no amount asserted as due -- each a "Zero Dollar Claim." A full-text copy of the List is available for free at: http://bankrupt.com/misc/ABH_ZeroDollarClaimsList.pdf With respect to each Claim, a "Reserved Amount" is identified which contains the maximum amount for which the Debtors believe they would be liable for distribution purposes under the Plan and, accordingly, for which they intend to reserve, on an aggregate basis only, on account of the Zero Dollar Claims in the Disputed Claims Reserve. In determining the Disputed Claims Reserve, the Debtors disclose that they applied the following protocol to each Zero Dollar Claim: * If the claim is covered by insurance, the amount of the deductible or self-insured retention applicable to that claim, * If the claim is not covered by insurance, the maximum amount of any demand (or demands) received by the Debtors on account of that claim, and * If the claim is not covered by insurance and the Debtors have not received any previous demand on account of the claim, an amount estimated by the Debtors and their advisors as the maximum potential exposure for that claim (if found to be meritorious). Absent approval of the Disputed Claims Reserve, holders of undisputed and liquidated Class 6 Claims will have their distributions unduly delayed because the Debtors will be unable to estimate the maximum New ABH Common Stock to be attributed to the Zero Dollar Claims, Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, asserts. Moreover, he avers, the proposed Disputed Claims Reserve does not prejudice holders of the Zero Dollar Claims, as it provides sufficient protection to cover the maximum amounts at which those claims could reasonably be expected to be allowed. The Debtors maintain that the Disputed Claims Reserve is reasonably tailored to strike an appropriate balance between mitigating the potential for delay in distribution for holders of liquidated and undisputed Claims and protecting the rights of the holders of the Zero Dollar Claims, pending allowance or disallowance of the Zero Dollar Claims. Any creditor that believes an error has occurred in the manner in which its claim has been listed on the Zero Dollar Claims List and accounted for in the Disputed Claims Reserve may respond to the Debtors' request. Responding creditors must file with the Court and submit to counsel to the Debtors a response to the Motion identifying: (i) the name of the affected creditor, (ii) the date of filing of that creditor's proof of claim and the claim number, and (iii) the amount requested to be reserved on account of that creditor in the Disputed Claims Reserve. 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: Receives Creditors' Support for Ch. 11 Plan --------------------------------------------------------------- AbitibiBowater Inc. has received the necessary creditor approval for its plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code, except with respect to Bowater Canada Finance Corporation, a special purpose company subsidiary with no operating assets, which has been excluded from the Chapter 11 plan. The Chapter 11 plan of reorganization received overwhelming support from creditors, both in dollar amount of claims and in number of claim holders who voted on the plan, the Company noted on September 21, 2010. Having obtained the requisite votes from creditors, except with respect to BCFC, the Company and its subsidiaries will exclude BCFC from the process and proceed with plan confirmation. The Company does not believe that the exclusion of BCFC will affect the timing of its confirmation hearing that is scheduled to start on September 24, 2010, in the U.S. Bankruptcy Court in Delaware. "We are pleased to have received approval by the vast majority of creditors under the U.S. Bankruptcy Code for our chapter 11 plan of reorganization," stated David J. Paterson, President and Chief Executive Officer. "We appreciate the support for our plans of reorganization as we work to create a more sustainable and competitive organization." As previously reported, on September 14, 2010, the Company received approval for its plan of reorganization from affected creditors under the Canadian Companies' Creditors Arrangement Act in Canada, except with respect to BCFC. A copy of the certificate Ernst & Young LLP, as the appointed CCAA Monitor in the Canadian proceedings, prepared on the voting respects with respect to the CCAA Applicants is available for free at: http://bankrupt.com/misc/ABH_CCAADebtorsVotingResults.pdf Subject to the satisfaction of certain conditions provided for in the plans of reorganization, AbitibiBowater continues to expect emergence from creditor protection this fall. Details of the voting results under the Chapter 11 plan of reorganization, including votes on a class-by-class basis, are reflected in a declaration filed to the Bankruptcy Court by Stephenie Kjontvedt, senior consultant of Epiq Bankruptcy Solutions, LLC, AbitibiBowater's claims and balloting agent. A full-text copy of the Kjontvedt Declaration, including exhibits on (1) the final votes tabulation, (2) results if certain votes from guaranty claims are not counted, and (3) a report of all ballots not included in the tabulation, is available for free at: http://bankrupt.com/misc/ABH_PlanVotingResultsDeclration.pdf Abitibi Says Plan Confirmable AbitibiBowater Inc. and its debtor affiliates assert that the Second Amended Joint Plan of Reorganization they proposed fully satisfies all applicable requirements of the Bankruptcy Code and thus, ask Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware to confirm the Plan. The Plan is the result of extensive, arm's-length negotiations among the Debtors and their key creditor constituencies, the Official Committee of Unsecured Creditors, a group of unsecured noteholders that agreed to backstop the Debtors' Rights Offering, and an ad hoc committee of unsecured noteholders, Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, avers. "As a result of these negotiations, all of the Debtors' key constituencies support the Plan," Mr. Greecher notes. "In light of the myriad complex issues presented by these Chapter 11 Cases, this level of support for the Plan is a significant achievement." Overwhelming support for the Plan is further evidenced by the fact that almost all Classes of the Debtors' unsecured creditors, voted resoundingly to approve the Plan, Mr. Greecher adds. "This sweeping support evidences the fact that the Plan meets each and every requirement set forth in Section 1129 of the Bankruptcy Code." The resulting Chapter 11 Plan, along with the CCAA Plan, proposes to pay prepetition and postpetition secured lenders in full, and equitizes approximately $7 billion in prepetition unsecured debt. Consistent with the overarching objectives of Chapter 11, the Plan will allow the Reorganized Debtors to emerge with a strong balance sheet and the financial flexibility to compete in the highly competitive forest products industry, Steven Zelin, senior managing director of Blackstone Advisory Partners, L.P., the Debtors' financial advisors, related in a declaration filed with the Court in support of the Plan confirmation. The Debtors add that they have undertaken several important steps in furtherance of confirmation and implementation of the Plan, including (1) the implementation of a rights offering, (2) the negotiation of an exit financing -- obtaining commitments for a $600 million revolver facility and executing a purchase agreement for the issuance of $850 million of senior secured notes due 2018; and (3) the negotiation of resolutions to a number of objections to confirmation of the Plan. The Debtors received 18 objections to the confirmation of the Plan from, among others, the U.S. Trustee, Wilmington Trust Company, shareholders, taxing authorities, contract counterparties, a labor union, and certain retirees. The Debtors aver that they have worked to resolve the confirmation objections and believe that they will have achieved a resolution of a majority of the objections before the Confirmation Hearing. The Debtors also prepared an omnibus reply to objections that have not yet been resolved or withdrawn, principally those filed by Wilmington Trust Company, as indenture trustee for the 7.95% Notes, and Aurelius Capital Management, L.P., and Contrarian Capital Management, LLC -- the BCFC Noteholder Parties. As noted in the Omnibus Reply, Bowater Canada Finance Corporation has withdrawn its plan of reorganization, is no longer a proponent of the Plan, and therefore many of the confirmation objections raised by the BCFC Noteholder Parties are now moot. A status chart that identifies each of the Objections with a short summary of the substance of the Objection and the status of the Debtors' attempt to resolve that Objection is available: http://bankrupt.com/misc/ABH_ResponseCharttolanObjections.pdf To the extent any Objections remain unresolved at the time of the Confirmation Hearing, the Debtors believe that they should be overruled. In particular, the Debtors argue that no recovery for shareholders is possible and thus, their objections should be overruled. The Debtors note that Blackstone has estimated their enterprise value to fall within $3.5 to $3.8 billion, while the estimate of allowed claims against them is approximately $8.9 billion. As a result, taken as a whole, the Company is hopelessly insolvent, Mr. Zelin of Blackstone avers. Creditors Committee, FairFax, & Monitor All Support Plan Confirmation The Creditors Committee filed a statement in Court, reiterating its support for the Debtors' Plan. The Creditors Committee averred that it has negotiated terms with the Debtors that provide the best possible recovery for unsecured creditors as a whole, while proving the Debtors with the greatest opportunity for a successful reorganization. The Committee maintained that the Plan was proposed in good faith and does not violate the absolute priority rule nor discriminate against or improperly classify any particular claims. Ernst & Young Inc., the monitor appointed in the Canadian Debtors' CCAA proceedings, also supports confirmation of the Chapter 11 Plan. It believes that any delay in the implementation of the Plan is contrary to the best interests of the creditors who have overwhelmingly supported the Plan. The Monitor further believes that the issues regarding BCFC can and should be dealt with expeditiously and in a manner that does not interfere with the implementation of the Plan with respect to the Debtors other than BCFC. Moreover, Fairfax Financial Holdings Limited, sole holder of 8.0% Convertible Notes due 2013 issued by AbitibiBowater in April 2008, and Law Debenture Trust Company of New York, as indenture trustee for the Convertible Notes, filed a separate joint memorandum in support of plan confirmation. Fairfax clarify that the Plan does not provide for its release and the release of Law Debenture in their capacities relating to the Convertible Notes. Instead, the Plan provides for the allowance of a Guarantee Claim in relation to Bowater Inc's guarantee of the Convertible Notes obligations. Fairfax and Law Debenture further assert that the Court should confirm the Plan as there simply is no credible basis to disregard the Debtors' business judgment that the Guarantee Claim against Bowater should be allowed as a component of the global settlement under the Plan. Fairfax and Law Debenture maintain that: -- the claims are valid and are properly allowed under the Plan -- the fraudulent conveyance claim is meritless because Bowater received substantial indirect benefits that constituted reasonably equivalent value and it was solvent when it made the guarantee for the Convertible Notes; and -- allowance of claim is also warranted as a Rule 9019 settlement because all evidence indicates Fairfax would succeed on the merits of a fraudulent conveyance action, litigation would be expensive and protracted and the creditors have overwhelmingly supporting the settlement. In relation to the Convertible Notes, William G. Harvey, the Debtors' senior vice president and chief financial officer, apprised the Bankruptcy Court of AbitibiBowater Inc.'s deliberations regarding its 2008 refinancing plan, including the sale of its 8.00% Convertible Notes to Fairfax and Bowater's decision to guaranty the Convertible Notes. Mr. Harvey maintained that Bowater reaped considerable benefit from the 8.00% Convertible Notes Guaranty, which preserved significant merger synergies. The 8.00% Convertible Notes Guaranty was instrumental in preserving the nearly $200 million in additional annual cost reductions captured subsequent to its issuance, he said. He also averred that Bowater was solvent and adequately capitalized at the time the 8.00% Convertible Notes Guaranty was issued. Mr. Harvey further noted that while Bowater manages the day-to-day operations for a Ponderay mill pursuant to a management agreement between Bowater and Ponderay Newsprint Company, Ponderay's partners are the one that make material management decisions, including approval of labor agreements. The Association of Western Pulp and Paper Workers, a collective bargaining agent for Ponderay employees, objected to confirmation of the Plan, asserting that the Plan cannot be confirmed because any potential labor strike in Ponderay impacts the feasibility of the Plan. 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). ABS INVESTMENTS: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: ABS Investments LLC 1500 79th Ave SE Olympia, WA 98501 Bankruptcy Case No.: 10-47889 Chapter 11 Petition Date: September 24, 2010 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Timothy W. Dore, Esq. RYAN SWANSON & CLEVELAND PLLC 1201 3rd Ave., Ste 3400 Seattle, WA 98101-3034 Tel: (206) 464-4224 E-mail: dore@ryanlaw.com Scheduled Assets: $1,215,303 Scheduled Debts: $2,210,161 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-47889.pdf The petition was signed by Tri M. Vo, manager. AG ENERGY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Ag Energy Resources, Inc. P.O. Box 190 Benton, IL 62812 Bankruptcy Case No.: 10-41440 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court Southern District of Illinois (Benton) Judge: Laura K. Grandy Debtor's Counsel: Keith D. Price, Esq. SANBERG PHOENIX AND GOUTARD 600 Washington Avenue, 15th floor St Louis, MO 63101 Tel: (314) 231-3332 Fax: (314) 241-7604 E-mail: kprice@spvg.com Scheduled Assets: $14,133,914 Scheduled Debts: $9,651,006 The petition was signed by Michael Kearney. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal revenue Service 944 Taxes $95,521 Cincinnati, OH 45999 Foxboro/Invensys Systems Trade Debt $90,396 14526 Collections Center Drive Chicago, IL 60693 Kirby risk Trade Debt $80,776 P.O. box 664117 Indianapolis, IN 46266-4117 Global Recovery -- $76,985 Tylex, Inc. -- $72,619 Jayma McGovern Trade Debt - $72,500 Professional Services Southeastern Electric Trade Debt $54,885 Internal Revenue Service 944 Taxes $42,238 CCS Oil Field Construction, LLC Trade Debt $32,140 Robert E. Bruce, C.P.A., Ltd. Trade Debt $31,350 West Cal Commodities Trade Debt $31,183 Gusmer Enterprises, Inc. Trade Debt $26,758 Zimmerman Farms Trade Debt $25,413 Tim Keller Trade Debt $21,703 Roberta Tabor-Kearney Trade Debt $20,134 Brubaker, Nathan Trade Debt $18,313 Summers Crane Trade Debt $17,610 Benton Water Dept Trade Debt $14,859 Ace USA Trade Debt $14,575 Carpenters District Council Trade Debt $12,731 AIRTRAN HOLDINGS: Moodys Puts Caa1 Corporate on Review for Upgrade ------------------------------------------------------------------ Moody's Investors Service affirmed all of its debt ratings of Southwest Airlines, Inc., including the Baa3 senior unsecured rating, following the announcement that Southwest has entered into a definitive agreement to acquire 100% of the outstanding common stock of AirTran Holdings, Inc., for cash and common stock aggregating $1.4 billion. The outlook on Southwest's ratings is stable. Concurrently, Moody's placed all of its debt ratings of AirTran, including the Caa1 corporate family rating, under review for possible upgrade. Moody's also affirmed the SGL-3 Speculative Grade Liquidity Rating of AirTran. Completion of the proposed acquisition is subject to the approval of AirTran's stockholders, certain regulatory clearances and customary closing conditions. The companies indicated that a closing would not occur until sometime in the first half of 2011. According to the announcement, AirTran shareholders will receive $3.75 of cash plus 0.321 shares of Southwest common stock for each share of their AirTran common stock. The cash component reflects the use of approximately $670 million of these two carriers' June 30, 2010, combined unrestricted cash of approximately $3.7 billion. The transaction price values Air Tran at $3.4 billion including the assumption of its debt and aircraft operating leases. "The affirmation of Southwest's ratings reflects Moody's view that the acquisition of AirTran should enhance Southwest's competitive position in the consolidating U.S. passenger airline sector," said Moody's Airline Analyst, Jonathan Root. "Bringing AirTran's operating base centered at Atlanta's Hartsfield Airport, route network and fleet into the Southwest fold will significantly and more immediately expand Southwest's route network, with a lower investment, than if it sought to enter the Atlanta market and organically grow to the same scale and geographic scope of AirTran's current operations," continued Root. Moody's believes that with this acquisition Southwest can continue the improving trajectory of its credit metrics; albeit at a slower pace than if it stuck with its historical organic growth model. The announced transaction does reflect a change in Southwest's growth strategy which has not included large acquisitions in the recent past. It will introduce new risks including the successful melding of the labor groups, fleets, operating systems and cultures. Moody's believes that these risks are manageable, in part because of the long time frame for completing the integration of the operations. The scheduled wage increases of the existing AirTran labor contracts will incrementally pressure the consolidated labor cost line. Achieving the planned revenue synergies will be important to mitigate labor cost pressure on Southwest's future unit costs. Strong liquidity further supports the affirmation of Southwest's ratings. While the cash component of the purchase price represents a sizeable use of liquidity, Moody's expects unrestricted cash to revenue to remain above 20%, within the range maintained by other rated carriers. Moody's also anticipates Southwest to expand free cash flow generation above the $854 million achieved in the LTM period ended June 30, 2010. Full availability under revolving credit facilities and, according to Southwest, over $7.0 billion of unencumbered aircraft further support the company's ongoing liquidity profile. The Baa3 senior unsecured rating reflects the benefits of Southwest's significant brand equity, existing extensive route network and competitive cost structure. These characteristics have helped Southwest gain market share since the depths of the 2009 recession. Moody's continues to believe that Southwest's business model should enable it to sustain its leading competitive position through periods of industry adversity. The combination of the industry's so far disciplined management of capacity and improving demand has supported growth of passengers and yields in the first half of 2010 for all U.S. carriers. Southwest's yields grew at about twice the rate achieved by its low-cost carrier peers during this period and were second best among all rated U.S. carriers when including the legacy carriers. The strong traffic and yields have led to the positive inflection in credit metrics Moody's anticipated would come when, in July 2009, it maintained investment grade ratings on Southwest, notwithstanding the expectation that credit metrics in the near term would be weak for the Baa3 rating category. The Baa3 rating also incorporates Moody's estimates of further strengthening of credit metrics into 2011, because of Southwest's continuing focus on yield and cost management. The outcome of Moody's review of AirTran's debt ratings will consider the legal obligor structure post-closing of the acquisition. For the 2009-1 EETC, which is collateralized by Boeing B717's, the potential exists for Moody's to conclude the review of its ratings on this instrument at rating levels lower than those of Southwest's EETC and ETC obligations because of the small operator base and the relative unattractiveness of this aircraft type when compared to the Boeing B737 family of aircraft. The inability to sustain market share and yields at levels that allow Southwest to maintain credit metrics close to the medians of the Baa3-rating category for cross-industry issuers during the intervening period leading up to the closing of the merger could lead to a change in the outlook to negative or the initiation of a review for downgrade of the ratings. Debt to EBITDA that is sustained above 4.0 times, EBIT to Interest of below 3.0 times or an EBITDA margin that is sustained below 17% could adversely affect the outlook or ratings. The ratings could also be pressured if unrestricted cash was to approach $2.0 billion. For an upgrade of the ratings, Moody's would look for Debt to EBITDA to approach 3.0 times, EBIT to Interest to exceed 4.0 times and an EBITDA margin above 19%. Because the companies do not expect the acquisition to conclude for a number of months, Moody's expects the ratings of AirTran to remain under review for an extended period. Moody's will monitor developments with respect to each company's stand-alone credit profile and the progression of the closing date milestones, such as shareholder approvals, HSR reviews, and legal entity structuring and seek to complete the review as timely as possible. On Review for Possible Upgrade: Issuer: AirTran Airways, Inc. -- Senior Secured Enhanced Equipment Trust, Placed on Review for Possible Upgrade, currently a range of Caa2 to B1 Issuer: AirTran Holdings, Inc -- Probability of Default Rating, Placed on Review for Possible Upgrade, currently Caa1 -- Corporate Family Rating, Placed on Review for Possible Upgrade, currently Caa1 -- Multiple Seniority Shelf, Placed on Review for Possible Upgrade, currently (P)Ca -- Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review for Possible Upgrade, currently Caa3 Outlook Actions: Issuer: AirTran Airways, Inc. -- Outlook, Changed To Rating Under Review From Positive Issuer: AirTran Holdings, Inc -- Outlook, Changed To Rating Under Review From Positive Southwest Airlines Co. is a major passenger airline that provides scheduled air transportation in the United States. According to Southwest, based on data available from the U.S. Department of Transportation, as of March 31, 2010, the Company was the largest air carrier in the United States, as measured by the number of originating passengers boarded. AirTran Holdings, Inc., based in Orlando, Florida, conducts its operations through its wholly-owned subsidiary AirTran Airways, Inc., which is one of the largest low cost scheduled airlines in the United States. ALLEN COTTAM: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Allen Kent Cottam aka A. Kent Cottam Kent Cottam Laura Cottam 636 E Lost Ridge Drive Washington, UT 84780 Bankruptcy Case No.: 10-33139 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court District of Utah (Salt Lake City) Judge: William T. Thurman Debtors' Counsel: Penrod W. Keith, Esq. DURHAM JONES & PINEGAR 111 East Broadway, Suite 900 P.O. Box 4050 Salt Lake City, UT 84110-4050 Tel: (801) 415-3000 Fax: (801) 415-3500 E-mail: pkeith@djplaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Josie Livings, et al. Lawsuit $3,900,000 8 East Broadway, Suite 200 Salt Lake city, UT 84111 Zions First National Bank, N.A. Lawsuit $1,222,418 40 E Saint George Boulevard, Suite 100 Saint George, UT 84770 Monty Moshier & Kelly Moshier Lawsuit $785,710 40 N 300 E, Suite 101 Saint George, UT 84770 Insco Dico aka Developers Surety and Indemnity Company Bond $695,800 1540 W. Warm Springs Road, Suite 100 Henderson, NV 89014 Sun First Bank -- $432,822 146 E. St George Boulevard Saint George, UT 84770 FCC Financial Equipment Loan $336,417 P.O. Box 56347 Jacksonville, FL 32241-6347 Ash Creek Sewer District Impact Fees $102,816 against Willowind Creative Excavating Lawsuit $86,000 Geneva Pipe Charge Account $69,672 Chase Cardmember Services Credit Card $39,000 Certified Insurance Charge Account $27,423 Bank of America Credit Card $21,201 Hinton Burdick Hall & Spliker Charge Account $9,890 Fillmore Spencer, LLC Attorney Fees $8,389 Baja Broadband, Inc. Small Claim $6,291 Judgment ABC Auto Parts Charge Account $3,985 The Phone Book, Inc. Charge Account $1,815 Cat Financial Equipment Loan $1,006 American Express Credit Card $610 Unifirst Corporation Charge Account $386 ALLIED DEFENSE: Posts $9.4 Million Net Loss in June 30 Quarter -------------------------------------------------------------- The Allied Defense Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $9.4 million on $18.7 million of revenue for the three months ended June 30, 2010, compared with net income of $1.2 million on $47.4 million of revenue for the comparable period last year. At June 30, 2010, the Company had $6.8 million of cash on hand. For the six months ended June 30, 2010, the Company used $8.7 million of cash in its continuing operating activities. This usage stems mainly from a $14.3 million net loss from continuing operations, offset by an increase in net operating assets of $4.3 million and a positive $1.3 million of non-cash adjustments. The Company's balance sheet at June 30, 2010, showed $98.1 million in total assets, $87.9 million in total liabilities, and stockholders' equity of $10.2 million. DOJ Subpoena On January 19, 2010, the Company received a subpoena from the U.S. Department of Justice requesting that the Company produce documents relating to its dealings with foreign governments. The subpoena stated that it was issued in connection with an ongoing criminal investigation. On the same day, the Company also became aware through a press release issued by the DOJ that an employee of Mecar USA had been indicted by the DOJ for allegedly engaging in schemes to bribe foreign government officials to obtain and retain business. The unsealed indictment of this employee and the DOJ's press release indicate that the alleged criminal conduct was on behalf of a Decatur, Georgia company which is unrelated to the Company or Mecar USA. In light of the employee's breach of his employment agreement, Mecar USA terminated his employment on January 20, 2010. According to the DOJ's press release, the former employee was arrested on January 19, 2010, along with 21 other individuals, after a large-scale undercover operation that targeted foreign bribery in the military and law enforcement products industry. The indictments of the 22 individuals allege that the defendants conspired to violate the Foreign Corrupt Practices Act ("FCPA"), conspired to engage in money laundering and engaged in substantive violations of the FCPA. Going Concern Doubt As reported in the Troubled Company Reporter on April 16, 2010, BDO Seidman LLP, in Bethesda, Md., 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 recurring losses from operations. Also, the Company has been unable to obtain long-term and short-term financing necessary to support its operations. The Company discloses in its latest 10-Q that its continuing loss from operations, the lack of financing, the DOJ subpoena and the loss of a key Mecar USA executive raise doubt about the Company's ability to continue as a going concern in the event that the transactions contemplated by the Sale Agreement do not close. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bb8 About The Allied Defense Group, Inc. Vienna, Va.-based The Allied Defense Group, Inc. (OTCQB: ADGI) -- http://www.allieddefensegroup.com/- is a multinational defense business focused on the manufacture and sale of ammunition and ammunition related products for use by the U.S. and foreign governments. Allied's business is conducted by its two wholly owned subsidiaries: Mecar S.A. ("Mecar") and Mecar USA, Inc. ("Mecar USA"). Mecar is located in Nivelles, Belgium and Mecar USA is located in Marshall, Texas. Corporate is located in Vienna, Virginia. On September 1, 2010, the Company announced that it completed the sale of substantially all of its assets to Chemring Group PLC. Chemring paid approximately $59.6 million in cash and assumed certain specified liabilities in exchange for all of the capital stock of Mecar sprl (formerly Mecar SA), a wholly owned subsidiary of ADG, and substantially all of the assets of Mecar USA, Inc., another wholly owned subsidiary of ADG. ADG has no significant operating assets as a result of the asset sale. ADG will reconvene the adjourned special meeting of its stockholders at 10:00 a.m. on September 30, 2010, in order to vote on a proposal to dissolve ADG. ALLIED DEFENSE: Transfers Trading of Common Shares to OTCQB ----------------------------------------------------------- The Allied Defense Group, Inc., has announced that trading of shares of the Company's common stock has been transferred from the NYSE Amex to the OTCQB(TM) Marketplace. ADG's symbol will now be ADGI. Investors can view real time stock quotes for ADGI at http://www.otcmarkets.com/ On September 13, 2010, The Allied Defense Group, Inc., received a staff determination letter from NYSE Amex LLC indicating that the Company no longer complies with the requirements for continued listing set forth in NYSE Amex LLC Company Guide Section 1003(c)(i) as a result of the sale of substantially all of the Company's assets as previously reported by the Company on a Form 8-K filed on September 2, 2010, and that shares of the Company's common stock are, therefore, subject to being delisted from the Exchange. About The Allied Defense Group, Inc. Vienna, Va.-based The Allied Defense Group, Inc. (OTCQB: ADGI) -- http://www.allieddefensegroup.com/-- is a multinational defense business focused on the manufacture and sale of ammunition and ammunition related products for use by the U.S. and foreign governments. Allied's business is conducted by its two wholly owned subsidiaries: Mecar S.A. ("Mecar") and Mecar USA, Inc. ("Mecar USA"). Mecar is located in Nivelles, Belgium and Mecar USA is located in Marshall, Texas. Corporate is located in Vienna, Virginia. On September 1, 2010, the Company announced that it completed the sale of substantially all of its assets to Chemring Group PLC. Chemring paid approximately $59.6 million in cash and assumed certain specified liabilities in exchange for all of the capital stock of Mecar sprl (formerly Mecar S.A.) and substantially all of the assets of Mecar USA. ADG has no significant operating assets as a result of the asset sale. ADG will reconvene the adjourned special meeting of its stockholders at 10:00 a.m. on September 30, 2010, in order to vote on a proposal to dissolve ADG. The Company's balance sheet at June 30, 2010, showed $98.1 million in total assets, $87.9 million in total liabilities, and stockholders' equity of $10.2 million. * * * As reported in the Troubled Company Reporter on April 16, 2010, BDO Seidman LLP, in Bethesda, Md., 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 recurring losses from operations. Also, the Company has been unable to obtain long-term and short-term financing necessary to support its operations. AIRTRAN HOLDINGS: S&P Puts 'B-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on AirTran Holdings Inc. on CreditWatch with positive implications. On Sept. 27, 2010, AirTran announced that it reached an agreement to sell itself to higher-rated Southwest Airlines for $1.3 billion in cash and Southwest stock. Southwest values the transaction at $3.2 billion including assumed AirTran debt and aircraft leases. Southwest forecasts annual revenue and cost synergies exceeding $400 million once the airlines' operations are combined by 2013. Southwest also sees one-time transaction costs of $300 million- $500 million. "In its view, the combination would weaken Southwest's financial profile, which S&P characterize as intermediate -- the strongest among rated U.S. airlines," said Standard & Poor's credit analyst Philip Baggaley. "Southwest's operating and financial performance has improved in 2010, with EBITDA interest coverage increasing to 4.6x for the 12 months ended June 30, 2010, from 3.6x a year earlier and funds from operations to debt increasing to 20% from 12%. While these are still below appropriate levels for the rating category, S&P expects the improving operating trend to result in increasing levels over the next several quarters. AirTran has substantial operating lease commitments (around $2 billion), since, unlike Southwest, it does not own many of its aircraft. These commitments would be assumed by Southwest, significantly increasing its lease-adjusted debt obligations." The principal benefit of the merger is, S&P believes, increased revenue potential from a broader route network, including the opportunity for Southwest to expand into Atlanta -- AirTran's main hub -- and Mexico and the Caribbean; Southwest currently has no international service. S&P believes the main risk is likely to be higher labor costs. Southwest's pay is among the highest in the U.S. airline industry for the models of aircraft it flies (various B737 models), while AirTran has some of the lowest labor costs. Usually, when two airlines merge, compensation of the lower-paid employees tends to rise to the level of the higher-paid ones. "If the acquisition is completed as proposed, S&P anticipate raising its ratings on AirTran to the same level as those on Southwest," Mr. Baggaley added. ANNA NICOLE SMITH: High Court Agrees to Look at Case Again ---------------------------------------------------------- The United States Supreme Court agreed this week to take a second look at disputes arising in and related to Playboy Playmate and Guess? Jeans model Anna Nicole Smith aka Vickie Lynn Marshall's 1996 bankruptcy case and her entitlement to payment of a $449 million judgment she obtained in bankruptcy court against her late step-son, E. Pierce Marshall, in 1999 following the death of her late husband, J. Howard Marshall. The High Court granted a petition for a writ of certiorari filed by Howard K. Stern, serving as Executor for the Estate of Vickie Lynn Marshall, filed in Aug. 2010. The High Court proceeding is docketed as Stern v. Marshall, No. 10-179 (U.S.). Elaine T. Marshall, serving as the Executrix for the Estate of E. Pierce Marshall, urged the Court to let the decision by the U.S. Court of Appeals for the Ninth Circuit (Nos. 02-56002 and 02-56067) stand, but the Justices agreed to take the case because there is no confusion or conflict among the circuit courts over the arcane questions the Petitioner asks the Court to answer. The Bankruptcy Estate is represented by: Kent L. Richland, Esq. Greines Martin Stein & Richland LLP 5900 Wilshire Blvd., 12th Floor Los Angeles, CA 90036 Telephone: (310) 859-7811 E-mail: Krichland@gmsr.com The Marshall Family is represented by: G. Eric Brunstad, Jr., Esq. Dechert LLP 90 State House Square Hartford, CT 06103 Telephone: (860) 524-3999 E-mail: eric.brunstad@dechert.com AMERICAN SAFETY: Energizer Offered $301-Mil. for Assets ------------------------------------------------------- Steven Church at Bloomberg News reports that Energizer Holdings Inc., maker of Schick shavers, offered $301 million in cash to buy competitor American Safety Razor Co., a financial adviser said September 28 in court. The offer was disclosed during testimony in U.S. Bankruptcy Court in Wilmington, Delaware, where American Safety is seeking permission to reject Energizer's bid in favor of a lower, debt- for-equity offer from lenders. American Safety financial adviser Andrew Torgove, managing director of Lazard Middle Market LLC, said the Energizer bid raises too many antitrust issues. Energizer refused to make a "hell-or-high-water" guarantee that it would buy the company even in the face of opposition from government antitrust regulators, Mr. Torgove told U.S. Bankruptcy Judge Mary F. Walrath. About American Safety American Safety Razor Company, LLC, doing business as Personna American Safety Razor, manufactures private-label shaving razors and blades. ASR also makes and distributes blades and bladed hand tools for a variety of industrial uses and specialty industrial and medical blades. The Company has roots going back to 1875. American Safety, along with affiliates, sought Chapter 11 relief (Bankr. D. Del. Case No. 10-12351) on July 28, 2010. Mark J. Thompson, Esq., and Morris J. Massel, Esq., at Simpson Thacher & Bartlett LLP, serve as bankruptcy attorneys. Howard A. Cohen, Esq., at Drinker Biddle & Reath LLP, is co-counsel. In addition, Lazard Middle Market LLC is the investment banker and Kurtzman Carson Consultants LLC is the claims and notice agent. American Safety estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. AMERICAN INT'L: Finalizing Plan to Repay U.S. Bailout Loans ----------------------------------------------------------- The Wall Street Journal's Serena Ng, Joann S. Lublin, and Deborah Solomon report that people familiar with the matter said American International Group Inc. and its various overseers are finalizing a plan to accelerate repayment of the company's taxpayer debt and allow the U.S. government to exit from majority ownership. Sources told the Journal the exit plan would involve the Treasury converting some $49 billion in AIG preferred shares it currently holds into AIG common shares that can be distributed or sold to private investors over time. The conversion, which could take place at about $35 an AIG share, is likely to occur in the first half of 2011 and is expected to happen after AIG repays its secured debt to the New York Fed, the people added. The move would likely raise government ownership in AIG to more than 90% before it is reduced gradually. A person familiar with the matter told the Journal the exact price at which the Treasury converts its preferred shares to common shares would determine how much of AIG the government would own as a result. Another source also told the Journal part of the exit plan could also involve the Treasury receiving some proceeds from equity securities in New York-based insurer MetLife Inc., which is buying one of AIG's overseas life-insurance units. Of the $15.5 billion MetLife is paying, $6.8 billion is in cash that would go straight to the New York Fed, while the rest is in the form of MetLife common and preferred stock that would be sold over time to repay taxpayers, the source said. The Journal's sources said the exit plan has many moving parts, and needs the approval of AIG's board of directors, the Treasury Department, the Federal Reserve and three trustees who oversee the government's current 79.8% ownership interest in AIG. The sources said all the constituents are trying to come to an agreement on the terms of the plan as soon as Wednesday, when AIG's board is scheduled to meet in New York with officials from the Treasury and Federal Reserve Bank of New York. According to the Journal, as of Sept. 22, AIG owed the New York Fed $19.7 billion under a secured credit facility that is scheduled to expire in September 2013. The regional Fed bank is separately owed $26 billion that it is positioned to recoup from sales of AIG's two largest overseas life-insurance businesses. The Journal says there is no assurance AIG and its overseers can reach an agreement on the exit plan by this week. The complexity of the plan and continued debates among representatives of the various constituents on terms of the plan could prolong the talks, people familiar with the matter told the Journal. About AIG American International Group, Inc. -- http://www.aig.com/-- is an international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage- backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG has been working to protect and enhance the value of its key businesses, execute an orderly asset disposition plan, and position itself for the future. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. ATLANTIC CITY HILTON: Landry's to Buy Casino if Receiver Named -------------------------------------------------------------- Howard Stutz at Casino City Times repors that Landry's Restaurants is reportedly trying to acquire the Atlantic City Hilton Casino Resort, which may be taken over by a bank that holds its mortgage. The report, citing the Press of Atlantic City, Landry's Restaurants might grab the resort if it is forced into receivership. According to the report, U.S. Bank National Association, the trustee for the Hilton's mortgage holder, J.P. Morgan Chase Commercial Mortgage Securities Corp, is trying to force the Boardwalk property and two sister casinos in Mississippi into receivership. The casinos' owners defaulted on a $960 million loan, the report notes. The report says the newspaper called the Hilton one of the worst- performing casinos, losing $6.3 million in this year's second quarter. In a statement, Landry's said it would change the property's name back to the Golden Nugget if the company acquires the resort, the report adds. Based in Houston, Texas, Landry's Restaurants, Inc. (NYSE: LNY) owns and operates full-service, casual dining restaurants, primarily under the names of Rainforest Cafe, Saltgrass Steak House, Landry's Seafood House, Charley's Crab, The Chart House, and the Signature Group of restaurants. The Company also owns and operates select hospitality businesses, including the Golden Nugget Hotel & Casinos in Las Vegas and Laughlin, Nevada. The Atlantic City Hilton Casino Resort was developed with the unwavering commitment: to create the complete embodiment of luxury, elegance and grace. The Atlantic City Hilton Casino is located at the top of the famous Atlantic City Boardwalk, overlooking the beautiful Atlantic Ocean. BLOCKBUSTER INC: Wins Interim Approval for DIP Financing -------------------------------------------------------- Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York issued an interim order authorizing Blockbuster Inc. and its units to make initial borrowings under their DIP Credit Agreement with Wilmington Trust FSB and a syndicate of lenders up to a maximum principal amount of $45,000,000 of the parties' Revolving DIP Loan. The Court held that all proceeds of the Financing will be used solely for the purposes permitted under the DIP Credit Agreement and the Interim Order, in accordance with the Approved Budget, a full-text copy of which may be accessed for free at: http://bankrupt.com/misc/BBI_Forecast_09272010.pdf The Court has scheduled a final hearing on the DIP request for October 19, 2010, at 10:00 a.m., prevailing Eastern time. Parties have until October 12, at 4:00 p.m., to file objections. The Court also issued an interim order authorizing the Debtors to use Cash Collateral, defined as: (i) all of the Debtors' funds -- including any funds on deposit or maintained in any account by any of the Debtors, whether or not subject to a control agreement, and any funds that are proceeds, products, rents, issues or profits of the Collateral -- including the contents of all of the deposit accounts and securities accounts of the Debtors; and (ii) all of the proceeds, products, rents, issues or profits of Collateral and all other cash collateral of the DIP Lenders, the Roll-Up Noteholders and the Adequate Protection Parties. The Debtors are enjoined and prohibited from using the Cash Collateral in a manner not expressly authorized by the Interim Order, the DIP Credit Agreement and the Approved Budget. The Court will convene a hearing on October 19, 2010, at 10:00 a.m., prevailing Eastern Time, to consider final approval of the Cash Collateral request. Parties have until October 12, at 4:00 p.m., to file objections to the Debtors' use of Cash Collateral. The $125-Mil. of DIP Financing The Debtors seek approval from the U.S. Bankruptcy Court for the Southern District of New York to dip their hands into a $125,000,000 loan pursuant to the terms and conditions of a Senior Secured, Super-Priority Debtor-in-Possession Revolving Credit Agreement with Wilmington Trust FSB. In the interim, the Debtors seek authorization to borrow from the DIP Lenders up to a maximum outstanding principal amount of $45,000,000 of the Revolving DIP Loan. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, informs the Court that the proposed DIP Loans are the result of the Debtors' negotiations with their Senior Secured Noteholders. Mr. Karotkin notes that many of the Sponsoring Noteholders have agreed to provide the proposed DIP Loans so as to enable the Chapter 11 cases to be appropriately administered and to effect a restructuring that will maximize value and assure Blockbuster's long-term viability. Specifically, certain of the Sponsoring Noteholders entered into a letter agreement, dated September 22, 2010, under which each of the Backstop Lenders has offered its individual commitment to provide a portion of the Revolving DIP Loan. The Debtors will grant to each DIP Lender the right to have an amount of its Senior Secured Notes converted to Roll-Up Notes in accordance with a certain ratio up to an aggregate maximum amount of $250 million for all Senior Secured Noteholders. The Roll-Up Notes will be given administrative priority claims status and superpriority priming liens. The granting of the Roll-Up Notes was a material part of the negotiation process and a critical element necessary to obtain the postpetition financing, Mr. Karotkin explains. The DIP Lenders will also receive perfected liens and security interests pursuant to Sections 361, 362, 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code on the Credit Parties' existing and after-acquired property and assets. The liens will prime the liens currently securing the Senior Secured Obligations, but will be subject to all other valid and enforceable senior liens of record, and to the Carve-Out Expenses. The availability of the DIP Loans addresses the Debtors' working capital and liquidity needs, will enable the Debtors to maintain a good business relationship with the motion picture studios, vendors, suppliers and customers of the Debtors, will allow the Debtors to make payroll and necessary capital expenditures, and accordingly should be approved, Mr. Karotkin tells the Court. Salient Terms Borrower Blockbuster Inc. Guarantors Blockbuster Canada Inc.; Blockbuster Digital Technologies Inc.; Blockbuster Distribution, Inc.; Blockbuster Gift Card, Inc.; Blockbuster Global Services Inc.; Blockbuster International Spain Inc.; Blockbuster Investments LLC; Blockbuster Procurement LP; Blockbuster Video Italy, Inc.; Movielink, LLC; Trading Zone Inc.; and B2 LLC DIP Lenders Backstop Lenders and other participating Senior Secured Noteholders DIP Agent Wilmington Trust FSB Closing Date September 22, 2010 Borrowing Limits Interim: $45 million Total: $125 million Roll-Up Up to $250 million of existing Senior Secured Notes. Interest Rate Contract Rate: Either (i) 7.50% plus the Index Rate, payable monthly in arrears, or, at the election of the Borrower, (ii) 8.50% plus the LIBOR rate, subject to a 2.0% LIBOR floor, for interest periods of one, two or three months, payable at the end of the relevant interest period, but in any event at least quarterly. Default Rate: Additional 2.0% per annum Fees and Reimbursement of Expenses Unused Line Fee: 1% per annum Commitment Fee: 1.5% payable to all DIP Lenders on the date of the entry of the Final Order. Backstop Commitment Fee: 2.0%, payable to Backstop Lenders, payable 50bps upon acceptance of Backstop Commitment Letter and 1.5% on the date of entry of the Interim Order. DIP Agent Fees: $75,000 administration fee plus $3,500 acceptance fee, payable on the Closing Date to the DIP Agent. Reimbursement of Fees/Costs: DIP Agent, Senior Indenture Trustee and their counsel and advisors. According to Mr. Karotkin, the proceeds of the Revolving DIP Loan and the proceeds from the DIP Collateral will be used solely to: (1) finance the Debtors' operation and make certain payments, including payments to critical vendors and ordinary course payments, (2) pay the fees and expenses of professionals retained by the Debtors and any statutory committees appointed in the Chapter 11 cases, (3) pay amounts owing to the DIP Lenders under the DIP Loan Documents, including loan fees and costs of designated professionals, (4) pay amounts owing to the Roll-Up Noteholders under the DIP Orders, and (5) finance the payment of the Adequate Protection Obligations. Use of the DIP Loan will terminate on the earliest to occur of: (i) the date 30 days after entry of the Interim Order if a Final Order has not been entered that is acceptable to the Requisite DIP Lenders; (ii) April 30, 2011; (iii) the date of any acceleration of the DIP Loans in accordance with the terms of the DIP Loan Documents; (iv) the date of any occurrence of an Event of Default under the DIP Loan Documents, including, without limitation, the provisions relating to the Chapter 11 Cases in Section 8.1(k) of the DIP Credit Agreement, unless the Event of Default is waived within three Business Days from the date of the occurrence in a manner consistent with the terms of the DIP Credit Agreement; (v) the breach of any obligations under the DIP Orders; (vi) the first Business Day on which the Interim Order expires by its terms or is terminated as to any Debtor, unless the Final Order has been entered and is in effect; (vii) the date upon which any provision of the DIP Orders will for any reason cease to be valid and binding, or any of the Debtors will so assert in any pleading filed in any court; (viii) the effective date of a plan of reorganization or a plan of liquidation in any of the Chapter 11 Cases; and (ix) the occurrence of a "Termination Event" as defined in the Plan Support Agreement. Under the DIP Credit Agreement, events of default are defined as: * Failure to (i) make payments of principal, interest or fees and (ii) reimburse expenses within 5 business days; * noncompliance with covenants (certain breaches have five or 15 business day grace periods); * breaches of representations and warranties; * payment default in respect of indebtedness in excess of $250,000 or any other breach that results in the acceleration of obligations in excess of $250,000; * seizure or levy upon assets in excess of $100,000 of fair market value (with a 30 day grace period); * failure to satisfy or stay execution of judgments in excess of $250,000 (with a 30 day grace period); * impairment of Loan Documents or security; * Change of Control; * dismissal of the Chapter 11 Case or conversion to a Chapter 7 case; * appointment of a Chapter 11 trustee; * filing of, and entry of a confirmation order with respect to a reorganization plan not consented by the Requisite Lenders; * failure to meet Specified Milestones, which include (1) entry of the Final Order within 30 days after the Petition Date, (2) the entry of critical vendor orders with respect to certain studios will have occurred containing terms approved by the Requisite Lenders within 35 days after the Petition Date, (3) the filing of a Conforming Plan of reorganization within 60 days after the Petition Date, (4) the Court will have approved the disclosure statement by January 15, 2011, (5) the Court will have confirmed the Conforming Plan by March 15, 2011, with a scheduled effective date for the Conforming Plan of no later than 30 days after the confirmation date; * failure of the Conforming Plan to become effective within 30 days after the confirmation; * additional events and certain occurrences in the Chapter 11 Cases (including, without limitation, the entry of certain types of motions, failure to maintain a Chief Restructuring Officer for five days); * failure to provide an updated Business Plan that is acceptable to the Requisite Lenders by November 30, 2010; * non-approval by the Requisite Lenders of the Proposed Budget; and * default or breach that would permit to terminate, or resulted in termination of, certain material contracts. A full-text copy of the DIP Credit agreement may be accessed for free at http://bankrupt.com/misc/BBI_DIP_09242010.pdf 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. 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). 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. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. 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. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Wins Interim Approval to Pay Studio Claims ----------------------------------------------------------- The core of Blockbuster's business is the delivery of movies and games to its customers for rent or purchase through three different channels of distribution: (i) retail, (ii) by-mail, and (iii) digital. To ensure it has adequate Product to meet customer demand, Blockbuster enters into various agreements with certain movie and game suppliers for the purchase of physical and digital copies of Product. Given the unique nature of the Product as proprietary, copyrighted material, the Studios are, in most cases, the only parties that can supply Blockbuster with the requisite Product. Because Blockbuster is one of the largest retailers of movies and games, Blockbuster's business and the Studios' businesses are highly interdependent, relates Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York. Consequently, he points out, absent strong business relationships with the Studios, Blockbuster would be unable to procure Product to rent and sell to its customers, and, as a result, would have no Product with which to stock its retail and warehouse shelves or virtual library. Hence, the Debtors seek: (1) authority to pay the undisputed outstanding prepetition obligations owed to: * the Secured Studios, consisting of Warner Home Video, Twentieth Century Fox Home Entertainment LLC and Sony Pictures Home Entertainment Inc., in accordance with that certain lien agreement dated March 31, 2010, between non-debtor affiliate Blockbuster Canada Co. and the Secured Studios; and * those certain unsecured studios with which Blockbuster may, in its sole discretion, enter into, on a postpetition basis, an accommodation agreement; and (2) administrative expense priority status for all undisputed obligations arising on account of the Studios' claims on a postpetition basis. Given the nature of the relief requested, and in light of Rule 6003 of the Federal Rules of Bankruptcy Procedure, the Debtors propose (i) entry of an interim order to govern the initial 21 days of the Chapter 11 cases, and (ii) subject to a final hearing, entry of a final order. Blockbuster estimates that, as of the Petition Date, it owes approximately $68.5 million to the Secured Studios and $49.6 million to the Unsecured Studios. Blockbuster further estimates that, within the Interim Period, approximately $28 million must be paid to the Secured Studios and approximately $12.4 million must be paid to the Unsecured Studios. To successfully reorganize, Blockbuster must be permitted to pay certain of the Studio Claims because that payment is necessary to the preservation of Blockbuster's business and, therefore, is a valid exercise of the Court's authority under Sections 105(a) and 363(b) of the Bankruptcy Code, Mr. Karotkin contends. He adds that a substantial number of the Studios may be parties to executory contracts and their claims under those contracts will be subject to cure payments if Blockbuster elects to assume the contracts under Section 365(a) of the Bankruptcy Code. * * * Judge Burton R. Lifland granted the request on an interim basis. The Court held that with respect to the Secured Studios, the Debtors are authorized to: (A) pay (1) in the ordinary course during the postpetition period, all undisputed outstanding prepetition obligations due and owing to each of the Secured Studios on account of the Secured Studio's undisputed prepetition claims that become due during the period prior to the Final Hearing on the request, and (2) the Secured Studios' Legal Fees; and (B) waive any and all claims and causes of action against the Secured Studios, where each Secured Studio agrees to; (C) extend trade credit and supply Product to the Debtors on terms and conditions no less favorable than those set forth in the applicable Trade Agreement in effect immediately prior to the Petition Date, including but not limited to, 90-day payment terms, through the earlier of: (p) the expiration of the applicable Trade Agreement; (q) the effective date of a plan of reorganization in the Debtors' chapter 11 cases; (r) dismissal, or conversion to Chapter 7, of one of the Debtors' Chapter 11 cases; or (s) a liquidation of one or more of the Debtors or a sale of substantially all of the assets of one or more of the Debtors; and (D) waive its right to assert an Event of Default solely on account of the commencement of the Chapter 11 cases. During the Interim Period, the Debtors are not authorized to waive, nor will be deemed to have waived, any Avoidance Action against the Secured Studios except Avoidance Actions based on Section 549 of the Bankruptcy Code. With respect to those Participating Unsecured Studios that enter into an Accommodation Agreement with the Debtors, the Debtors are authorized, but not directed, to: (A) pay, in the ordinary course during the postpetition period, all undisputed outstanding prepetition obligations due and owing to the Participating Unsecured Studio on account of the Participating Unsecured Studio's undisputed prepetition claims; (B) waive any and all claims and causes of action against the Participating Unsecured Studio; and (C) pay the professional fees of the Participating Unsecured Studio where, in exchange for the treatment, the Participating Unsecured Studio (1) agrees to extend trade credit and supply Product to the Debtors on terms as may be mutually agreed upon by the parties and set forth in the applicable Accommodation Agreement; and (2) acknowledges that its acceptance of the payment on account of its Studio Claims is deemed acceptance of the terms of the Orders. If any Participating Unsecured Studio does not provide the Debtors with trade terms at least as favorable as those set forth in the applicable Accommodation Agreement during the pendency of the Chapter 11 cases, any payments received postpetition may be deemed to be unauthorized and subject to recovery by the Debtors pursuant to Section 549 of the Bankruptcy Code. During the Interim Period, (a) the Debtors are not authorized to waive, nor will be deemed to have waived, any Avoidance Action against the Participating Unsecured Studio, and (b) the Debtors will not pay in excess of $150,000 in the aggregate in respect of professionals' fees incurred by Participating Unsecured Studios. A final hearing on the request will be held on October 19, 2010. 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. 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). 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. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. 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. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Proposes to Pay Prepetition Employee Wages ----------------------------------------------------------- Blockbuster Inc. and its units seek the U.S. Bankruptcy Court for the Southern District of New York's authority to (i) pay, in their sole discretion, all obligations incurred under or related to certain employee obligations and all fees and costs incident to those obligations, and (ii) maintain and continue to honor and pay all amounts with respect to their practices, programs, and policies for their employees as they were in effect as of the Petition Date. The Debtors also ask the Court to direct applicable banks and financial institutions, at the Debtors' instruction, to honor and process all checks or electronic fund transfers to the extent that those checks or transfers relate to any of the Employee Obligations. As of the Petition Date, the Debtors operated approximately 3,000 domestic retail stores, 39 distribution centers, and two corporate offices located throughout the United States of America, and approximately 1,600 stores in markets outside the United States. In connection with its operations, the Debtors currently employ approximately 25,500 employees, of whom 7,500 are full-time employees and 18,000 are part-time employees. Approximately 22,500 Employees are paid on an hourly basis and 3,000 Employees are paid a fixed salary. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, says that the Debtors' retail store Employees are the public "face" of their business. He elaborates that those Employees are responsible for ensuring that customers receive the product and service they have come to expect from the Blockbuster brand. Indeed, a positive in-store experience is a vital part of ensuring customer loyalty, especially in the face of competition from Blockbuster's non-retail competitors, he continues. Mr. Karotkin also asserts that Blockbuster's business crucially depends on its Employees, who assist with product distribution to its stores and online customers, development and maintenance of the Blockbuster Web site and digital delivery services, and corporate management of its operations. Accordingly, he points out, the Employees' skills and their knowledge and understanding of Blockbuster's operations, customer and supplier relationships, and infrastructure are essential to maintaining Blockbuster's business franchise and the success of its Chapter 11 reorganization efforts. To minimize the personal hardship that the Employees would suffer if the Employee Obligations are not paid when due and to maintain the stability of the Debtors' work force, the Debtors seek the Court's permission to honor these benefits and obligations to their Employees: A. payroll and related obligations, which include: -- compensation obligations; -- amounts withheld on behalf of third parties; -- supplemental workforce obligations; -- independent contractor obligations; and -- reimbursement obligations; B. incentive, retention, and severance programs, which include: -- incentive programs, including: * annual performance bonus; * field bonus plan; * long term incentive plan; * real estate incentive plan; and * other cash awards; -- retention plan; and -- severance plan; C. employee benefit plans, which include: -- health and welfare plans, including: * medical benefits; * dental plan coverage; * vision plan coverage; * employee assistance program; * life and ad&d insurance; * short- and long-term disability benefits; * accident insurance; * voluntary insurance benefits; and * Aetna Affordable Health Choices Insurance Plan; -- paid time off plans and leaves of absence, including: * paid time off; and * parental leave and adoption benefits; -- employee savings and retirement plans, including: * 401(k) plan; and * deferred compensation plan; -- other benefit programs, including: * commuter benefits; * automobile program; * relocation program; and * flexible benefit plan. * * * Judge Burton R. Lifland authorized, on an interim basis, the Debtors to pay, in their sole discretion, all Employee Obligations and all costs and expenses incident to those obligations. The Court will convene a final hearing on the request on a date yet to be disclosed. 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. 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). 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. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. 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. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Wants to Limit Trading to Protect NOLs ------------------------------------------------------- Blockbuster Inc. and its debtor-affiliates ask the Court establish (i) procedures to protect the potential value of their net operating tax loss carryforward amounts, net unrealized built-in losses in their assets, and certain other tax and business credits; and (ii) restrictions on certain transfers of interests in their estates. The Debtors estimate that, as of September 23, 2010, they have: (a) NOLs of at least $580,000,000; (b) consolidated Built-in Losses in excess of $50,000,000; and (c) other excess carryforwards in excess of $900,000. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that the Tax Attributes are valuable assets of the Debtors' estates because the Internal Revenue Code of 1986, as amended, generally permits corporations to carry over their losses and tax credits to offset future income, thereby reducing tax liability. Depending on future operating results and potential asset dispositions, and absent any intervening limitations, prior to the effective date of a Chapter 11 plan of reorganization, the Tax Attributes may reduce the Debtors' future U.S. federal income tax liability including any gain from a taxable transfer of assets pursuant to the Chapter 11 plan of reorganization, he points out. The Debtors' proposed procedures are designed to: (i) notify holders of each class of stock of Blockbuster Inc. of the injunction prohibiting acquiring ownership of stock above a certain threshold, and (ii) impose restrictions and notification procedures to ensure the Debtors receive the full benefits of the automatic stay, Mr. Karotkin explains. * * * At the Debtors' behest, the Court issued an interim order establishing procedures and restrictions that will apply to trading in, and conversions of, Blockbuster Stock: a. Any person or Entity that beneficially owns, at any time on or after Sept. 23, 2010, Blockbuster Stock in an amount sufficient to qualify that person or Entity as a Substantial Equityholder will file with the Court, and serve upon the Debtors and attorneys for the Debtors, a Notice of Substantial Stock Ownership. A "Substantial Equityholder" is any person or Entity that beneficially owns (a) 3,420 or more shares of Preferred Stock -- representing approximately 4.75% of the number of shares of such stock issued and outstanding, (b) 6,928,414 or more shares of Class A common stock -- representing approximately 4.75% of the number of shares of such stock issued and outstanding, or (c) 3,420,000 or more shares of Class B common stock -- representing approximately 4.75% of the number of shares of such stock issued and outstanding. b. At least 20 business days prior to the proposed date of any transfer of equity securities that would result in an increase/decrease in the amount of Blockbuster Stock beneficially owned by any person or Entity that currently is or subsequently becomes a Substantial Equityholder or that would result in a person or Entity becoming a/ceasing to be a Substantial Equityholder, that person, Entity, or Substantial Equityholder will file with the Court, and serve upon the Debtors and the attorneys for the Debtors, a Notice of Intent to (i) Purchase, Acquire, or Otherwise Accumulate Blockbuster Stock or (ii) Dispose of Blockbuster Stock. c. During the pendency of the Debtors' Chapter 11 cases, no person or Entity that beneficially owns or acquires Series A convertible preferred stock in Blockbuster Inc. will be permitted to convert shares of stock to Class A common stock or any other form of equity or ownership interest in the Debtors. d. The Debtors will have 15 business days after the filing of an Equity Trading Notice to file with the Court and serve on a Proposed Equity Transferee or a Proposed Equity Transferor, as the case may be, an objection to any proposed transfer of equity securities on the grounds that the transfer may adversely affect their ability to utilize the Tax Attributes as a result of an ownership change under Sections 382 or 383 of the Tax Code. * If the Debtors file an Equity Objection by the Equity Objection Deadline, then the Proposed Equity Transaction will not be effective unless approved by a final and non-appealable order of the Court. * If the Debtors do not file an Equity Objection by the Equity Objection Deadline, or if the Debtors provide written authorization to the Proposed Equity Transferee or the Proposed Equity Transferor, as the case may be, approving the Proposed Equity Transaction, prior to the Equity Objection Deadline, then the Proposed Equity Transaction may proceed solely as specifically described in the Equity Trading Notice. * Any further Proposed Equity Transaction must be the subject of additional notices and the prescribed waiting period. e. Effective as of Sept. 23, 2010, and until further order of the Court to the contrary, any acquisition, disposition, other transfer, or conversion of equity securities of the Debtors in violation of the procedures will be null and void ab initio as an act in violation of the automatic stay under Sections 105(a) and 362 of the Bankruptcy Code. Any objection to the Debtors' request must be filed by Oct. 12, 2010, at 4:00 p.m., prevailing Eastern Time. If timely Objections are received, a hearing will be held on Oct. 19, at 10:00 a.m., to consider, on a final basis, the relief requested. If no Objections are timely filed, the Debtors will submit to the Court a final order granting their request. 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. 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). 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. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. 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. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Wants to Pay Prepetition Carrier Charges --------------------------------------------------------- Through their vast transportation network, Blockbuster Inc. and its units distribute more than 110 million units and two million cases of their products per year to approximately 3,000 retail destinations. To ensure that the Debtors' stores and customers receive timely deliveries of video titles, video games, and other merchandise, the Debtors have developed an intricate distribution system that relies on certain parcel and postal carriers. Approximately 95% of all merchandise found in Blockbuster's stores is distributed through the distribution center located in McKinney, Texas. The Debtors use the McKinney Distribution Center to receive bulk deliveries of Retail Goods from their suppliers, including movie studios and video game manufacturers. The remaining 5% of the Debtors' inventory, including concessions and magazines, is shipped directly to stores and routed through small parcel carriers. The store based distribution is best characterized as a "hub and spoke" operation, with the McKinney Distribution Center serving at the center of the Debtors' distribution system, relates Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York. Once the Retail Goods are delivered from Vendors to the McKinney Distribution Center, the Debtors then repackage those bulk deliveries for distribution to the 14 Common Carrier hubs throughout the country. After the Retail Goods are delivered to the Common Carrier hubs, they are then transported to Blockbuster's stores. Blockbuster also relies on the Common Carriers to transport Retail Goods between stores. By this motion, the Debtors seek the Court's authority to pay the prepetition claims of the Common Carriers that the Debtors determine to be necessary to obtain the release of certain goods held by the Common Carriers. The Debtors also seek the Court's permission, but not direction, to pay certain lien claims, including mechanics' liens and materialmen's liens, on a case-by- case basis and at the Debtors' sole discretion, that either have resulted or reasonably could result in a lien being asserted against the Debtors' property. The Debtors pay approximately $68 million annually to the Common Carriers. The Debtors expect that, as of the Petition Date, the Common Carrier Charges will not exceed $3 million, of which approximately $1.8 million is due in the first 21 days of the cases. However, this balance can fluctuate on a daily basis depending on the timing of large deliveries and invoices. Absent payment of the Common Carrier Charges, the Common Carriers will likely refuse to continue to transport goods and make timely delivery or seize the goods in their possession as collateral securing their lien, Mr. Karotkin contends. He asserts that the Debtors' pricing policies, marketing strategies, and business operations rely on their ability to receive and rent or sell the Retail Goods in a timely fashion. "In many instances, particularly in the case of 'new release' video and game titles, the timing of deliveries is absolutely critical," Mr. Karotkin argues. "As such, the Debtors have developed a transportation network that is so precise that the Retail Goods are delivered from the Common Carrier hubs to the stores on set dates," he adds. The substantial majority of the Debtors' rental revenues are derived from the rental of new release movies and games, Mr. Karotkin further contends. "If the Debtors fail to have new release titles available on the applicable Street Date, the Debtors will suffer a loss of credibility with their customers," he insists. Accordingly, the Debtors ask the Court to grant their request because the Common Carriers are a critical component of the Debtors' business so that their supply and delivery system will continue to function without interruption. * * * The Court authorized the Debtors, on an interim basis, to make payments in respect of all valid, undisputed Common Carrier Charges and Miscellaneous Lien Claims, whether relating to the period prior to or after the Petition Date, as the Debtors determine to be necessary or appropriate to obtain the release of Retail Goods or liens against real or personal property of the Debtors. The Debtors are also authorized to pay up to $300,000 of the Miscellaneous Lien Claims during the interim period. A final hearing on the request will be held on October 19, 2010. 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. 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). 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. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. 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. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Organizational Meeting to Form Panel on Oct. 1 ---------------------------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, will hold an organizational meeting on October 1, 2010, at 11:00 a.m. in the bankruptcy case of Blockbuster, Inc., et al. The meeting will be held at United States Trustee Meeting Room, 80 Broad Street, Fourth Floor, New York, NY 10004. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. 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. 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). 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. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. 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. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLUE CHIP: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Blue Chip Riding Club, Inc. 572 East Branch Road Patterson, NY 12563 Bankruptcy Case No.: 10-37854 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Thomas Genova, Esq. GENOVA & MALIN, ATTORNEYS Hampton Business Center 1136 Route 9 Wappingers Falls, NY 12590-4332 Tel: (845) 298-1600 Fax: (845) 298-1265 E-mail: genmallaw@optonline.net Scheduled Assets: $2,606,265 Scheduled Debts: $2,709,018 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nysb10-37854.pdf The petition was signed by Virginia Smith, president. BNA SUBSIDIARIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: BNA Subsidiaries, LLC aka G-2 Reports Institute of Management & Administration, Inc. IOMA Kennedy Consulting Kennedy Consulting Research & Advisory Kennedy Consulting Search Group Kennedy Information Advisors Kennedy Information, Inc. Kennedy Investor Relations Kennedy IR Research & Advisory KI Holdings, Inc. Pike & Fischer Washington G-2 Reports 1 Phoenix Mill Lane, Floor 3 Petersborough, NH 03458 Bankruptcy Case No.: 10-13087 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Linehan Shannon Debtor's Counsel: Marion M. Quirk, Esq. Norman L. Pernick, Esq. COLE, SCHOTZ, MEISEL, FORMAN & LEONARD 500 Delaware Avenue, Suite 1410 Wilmington, DE 19801 Tel: (302) 652-3131 Fax: (302) 652-3117 E-mail: bankruptcy@coleschotz.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/deb10-13087.pdf The petition was signed by Bradford Smith, chief operating officer. BOSTON GENERATING: Can Use Prepetition Lenders' Cash Collateral --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York, in a final order, authorized Boston Generating, LLC, and its debtor-affiliates to use the cash collateral of their prepetition lenders. The Debtors' cash collateral access will terminate on June 18, 2011 (unless extended by consent of the Consenting First Lien Lenders), or on the occurrence of an event of default. As reported in the Troubled Company Reporter on August 26, 2010, the Debtors owe at least $1,279,450,000 to the first lien lenders, led by Credit Suisse AG as administrative agent. The Debtors also owe at least $350,000,000 to second lien lenders, led by Wilmington Trust FSB, as administrative agent. The Debtors would use the cash collateral to, among other things, permit the orderly continuation of the operation of their businesses, to maintain business relationships with vendors, suppliers and customers, to make payroll, to make capital expenditures and to satisfy other working capital and operation needs. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the prepetition lenders replacement liens and superpriority administrative claims status. About Boston Generating New York-based Boston Generating, LLC, owns nearly 3,000 megawatts of mostly modern natural gas-fired power plants in the Boston area. Privately held Boston Generating is an indirect subsidiary of US Power Generating Co., and considers itself as the third- largest fleet of plants in New England. Boston Generating filed for Chapter 11 protection on August 18, 2010 (Bankr. S.D.N.Y. Case No. 10-14419). Boston Generating estimated its assets and debts at more than $1 billion as of the Petition Date. EBG Holdings LLC; Fore River Development, LLC; Mystic, LLC; Mystic Development, LLC; BG New England Power Services, Inc.; and BG Boston Services, LLC, filed separate Chapter 11 petitions. D. J. Baker, Esq., at Latham & Watkins LLP, serves as bankruptcy counsel for the Debtors. JP Morgan Securities is the Debtors' investment banker. Perella Weinberg Partners, LP, is the Debtors' financial advisor. Brown Rudnick LLP is the Debtors' regulatory counsel. FTI Consulting, Inc., is the Debtors' restructuring consultant. Anderson Kill & Olick, P.C., is the Debtors' conflicts counsel. The Garden City Group, Inc., is the Debtors' claims agent. CAPITOL HILL: Pillsbury Accord Doesn't Bar Malpractice Claims ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Columbia denied a motion for summary judgment filed by a former counsel of Capitol Hill Group in Pillsbury Winthrop Shaw Pittman LLP v. Capitol Hill Group. Pillsbury filed the case to recover attorney's fees it incurred in defending against a malpractice lawsuit that Capitol Hill Group brought against the firm in 2007 with respect to services the firm provided to the company. In a memorandum decision, Judge S. Martin Teel Jr. said an agreement by Capitol Hill not to oppose Shaw Pittman's applications for attorney's fees billed prior to December 15, 2003, required only that the company won't contest the firm's fee applications for services provided through November 30, 2003. The judge said the agreement did not purport to address any malpractice claims that Capitol Hill Group might later pursue against the firm even if relating to the services that were the subject of those fee applications. A copy of Judge Martin Teel's decision is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100914515 Capitol Hill Group commenced its bankruptcy case (Bankr. D. D.C. Case No. 02-00359) by filing a voluntary petition under chapter 11 of the Bankruptcy Code on February 21, 2002, with Shaw Pittman acting as its counsel. CAPRIUS INC: Amends Securities Purchase Deal With Vintage Capital ----------------------------------------------------------------- Caprius Inc. and its subsidiaries entered on Sept. 8, 2010, into Amendment No. 1 to the Securities Purchase and Sale Agreement, dated as of September 16, 2009 with Vintage Capital Group, LLC, whereby the maximum availability thereunder was increased up to $4 million, provided that the Company pay to Vintage all funds collected on their accounts receivables. Vintage had advanced $3 million in cash to the Company, exclusive of amounts related to capitalized obligations. Upon entry into the Amendment, Vintage advanced an additional $519,837 to the Company. The Company will use the proceeds of the funding under the Amendment for working capital for production and further marketing of the SteriMed Systems as well as the settlement of certain outstanding obligations. The Company also agreed to modification of covenants covering establishing a new manufacturing source and SteriMed equipment sale targets. In the Amendment, the Company acknowledged that specified events of default had occurred under the Vintage loan facility and certain of them were continuing, and that Vintage has no obligation to make additional loans or extend further credit to the Company as a result of the existence of specified events of default. While certain defaults cannot be remedied, the Amendment provides a mechanism for certain events of defaults to be cured by the Company's subsequent performance under the post closing covenants of the Amendment. Effective September 15, 2010, Jonathan Joels ceased to be the Company's Chief Financial Officer, Treasurer and Secretary and Raymond Jackshies assumed the officer positions formerly held by Mr. Joels. Since January 2004, Mr. Jackshies, age 39, has served as our Controller. The Company entered into an Employment Agreement with Mr. Jackshies in which he serves in an "at will" capacity, at an annual base compensation of $110,000, provisions for performance based bonuses, and customary covenants of confidentiality. There is no family relationship between Mr. Jackshies and any other of its officers or directors. A full-text copy of the Securities and Purchase Agreement is available for free at http://ResearchArchives.com/t/s?6bb9 About Caprius, Inc. Paramus, N.Y.-based Caprius, Inc., is engaged in the infectious medical waste disposal business, through its wholly-owned subsidiary M.C.M. Environmental Technologies, Inc., which developed, markets and sells the SteriMed and SteriMed Junior compact systems that simultaneously shred and chemically disinfect regulated medical waste, utilizing its proprietary, EPA registered, bio-degradable chemical known as Ster-Cid. * * * Marcum LLP, in New York City, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial results for fiscal 2009. The independent auditors noted of the Company's working capital deficiency and substantial recurring losses from operations. CHEM RX: Signs Agreement to Sell All Assets to PharMerica --------------------------------------------------------- Chem Rx Corporation has reached a "stalking horse" asset purchase agreement to sell substantially all of the assets of the company to PharMerica Corporation. Partnering with Chem Rx will allow PharMerica to expand into New York and New Jersey, where it currently does not have a presence. Chem Rx will continue to maintain normal business operations throughout this process and thereafter. Per the terms of the agreement, Chem Rx's founder Jerry Silva and management team, including Steve Silva, Gary Jacobs, Evan Selzer, Paula Agoglia, Jody Silva-Falk, Shelly Evans, Michael Segal and Leora Tilocca will continue to be responsible for the day-to-day operations of Chem Rx. The company will also continue to operate under the Chem Rx name. The sale, conducted pursuant to Section 363 of the U.S. Bankruptcy Code, will significantly eliminate the company's debt. "We are excited about joining forces with PharMerica, which shares our commitment to providing clients with the drugs and supplies they need accurately and on time," said Jerry Silva, Chem Rx Chief Executive Officer. "This agreement will not only allow Chem Rx to continue serving our loyal customers in the same way we have for so many years, but also enable us to leverage the best technology available to ensure that we are at the forefront of long-term pharmacy care in the future. We believe that PharMerica is the best partner to take the company forward and we look forward to working with PharMerica throughout this process." Like Chem Rx, PharMerica is dedicated to providing quality customer service and innovative pharmacy solutions to institutional customers and patients in long-term care settings. A leader in U.S. industrial pharmaceutical services, PharMerica operates 90 institutional pharmacies in 41 states that serve more than 300,000 licensed beds for patients of long-term care facilities. PharMerica has approximately 6,000 employees nationwide. There will be no disruption of service or deliveries to Chem Rx's clients as a result of the filing and subsequent auction proceedings. Clients will continue to receive drugs, medical equipment and surgical supplies according to the same ordering processes and delivery schedules. As standard procedure in the process, Chem Rx will file the stalking horse asset purchase agreement with the United States Bankruptcy Court for the District of Delaware along with a motion seeking the establishment of bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers. The sale to PharMerica will include substantially all of Chem Rx's current assets, operations and employees. About Chem RX Corporation Long Beach, N.Y.-based Chem RX Corporation, aka Paramount Acquisition Corp. -- http://www.chemrx.net/-- is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. Chem Rx's client base includes skilled nursing facilities and a wide range of other long-term care facilities. Chem Rx annually provides more than six million prescriptions to more than 69,000 residents of more than 400 institutional facilities. The Company and five affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, represents the Company in its restructuring. Cypress Holdings, LLC, is the Company's financial advisor. RSR Consulting, LLC, is the Company's chief restructuring officer. Brunswick Group LLP is the Company's public relations consultant. Grant Thornton LLP is the Company's independent auditor. Lazard Middle Market LLC is the Company's investment banker. Eichen & Dimeglio PC is the Company's tax advisor. Kurtzman Carson Consultants is the Company's claims and notice agent. The Company disclosed $169,690,868 in assets and $178,281,128 in debts as of February 28, 2010. CHEMTURA CORP: Plan Confirmation Going Forward ---------------------------------------------- Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York commenced the hearing for considering confirmation of the Joint Chapter 11 Plan of Reorganization of Chemtura Corporation and its debtor affiliates on September 16, 2010. The Confirmation Hearing was continued through September 22, 2010. Among the hotly contested issues to be taken up the Confirmation Hearings is the Company's valuation. Chemtura shareholders insist that the Company's enterprise value is between $2.3 to $2.6 billion as opposed to the Company's own estimate of $2.05 billion. Bloomberg News reports that at the first day of the confirmation hearings, Chemtura Chief Financial Officer Stephen Forsyth that the Company's business is cyclical, making cash flow and earnings difficult to predict. "It's hard to conceive there won't be another downturn after 2014," the news source quoted Mr. Forsyth as saying. Plan Gets Overwhelming Creditor Support Robert Q. Klamser, a director at Kurtzman Carson Consultants LLC, submitted an amended declaration on his firm's tabulation of ballots accepting and rejecting the Debtors' Chapter 11 Plan of Reorganization with respect to claims in Classes 1, 4a, 4b, 5, 10, and 11. Pursuant to Mr. Klamser's amended declaration, the summary of the voting results with respect the Non-Securities Voting Classes is: ___________________________________________________________ | | | | | | Accepting | Rejecting | | Class |________________________|______________________| | | No. of | Amount | No. of | Amount | | | Holders | Held | Holders | Held | |___________|_________|______________|_________|____________| | | | | | | | | 3 | $26,617,022 | 0 | $0 | | 1 | | | | | | | (100%) | (100%) | (0%) | (0%) | |___________|_________|______________|_________|____________| | | | | | | | | 138 | $52,777,334 | 14 | $4,398,617 | | 4a | | | | | | | (91%) | (92%) | (9%) | (8%) | |___________|_________|______________|_________|____________| | | | | | | | | 109 | $15,098,122 | 8 | $171,007 | | 4b | | | | | | | (93%) | (99%) | (6%) | (1%) | |___________|_________|______________|_________|____________| | | | | | | | | 8 | $126,867,300 | 0 | $0 | | 5 | | | | | | | (100%) | (100%) | (0%) | (0%) | |___________|_________|______________|_________|____________| | | | | | | | | 364 | $52,210,818 | 1 | $1,750,000 | | 10 | | | | | | | (99%) | (97%) | (0.3%) | (3%) | |___________|_________|______________|_________|____________| | | | | | | | | 6 | $1,694,983 | 0 | $0 | | 11 | | | | | | | (100%) | (100%) | (0%) | (0%) | |___________|_________|______________|_________|____________| Kurtzman Carson solicited and tabulated ballots from the voting "non-securities" creditors of the Debtors under the Plan that hold: -- Class 1 Prepetition Secured Lender Claims, -- Class 4a General Unsecured Claims Vs. Chemtura Corp., -- Class 4b General Unsecured Claims Vs. Subsidiary Debtors, -- Class 5 Prepetition Unsecured Lender Claims, -- Class 10 Diacetyl Claims, and -- Class 11 Environmental Claims. Epiq Bankruptcy Solutions LLC solicited and tabulated ballots from the voting "securities" creditors of the Debtors under the Plan that hold: -- Class 6 2016 Notes Claims, -- Class 7 2009 Notes Claims, -- Class 8 2026 Notes Claims, and -- Class 13a Interests in Chemtura Corporation. Technical Amendments to Plan To provide clarity to all parties-in-interest, the Debtors delivered to the Court two further revised versions of their Joint Plan that reflect technical amendments. The first set of Plan technical amendments was filed on Sept. 14, 2010, and the second set of technical amendments was filed on Sept. 20, 2010. Among the technical amendments is the addition of a provision pertaining to environmental settlement agreements. Under the latest version of the Plan, the terms of environmental settlement agreements will govern if there is any conflict between the Plan, the Plan confirmation order and any environmental settlement agreement. For avoidance of doubt, the Plan also provides that: -- As of the Effective Date, all Proofs of Claim on account of Prepetition Secured Lender Claims, Prepetition Unsecured Lender Claims and Notes Claims will be deemed expunged; -- The Debtors will continue to provide certain retiree welfare benefits under certain of its retiree welfare benefit plans to the extent required under a separate agreement entered into with the United Steelworkers, to be approved by the Court in connection with Confirmation of the Plan, which requires the Debtors to modify and maintain the benefits under the plans; and -- Regardless of whether any Insurance Policy is or is not an Executory Contract, on and after the Effective Date, the Insurance Policies will remain valid and enforceable in accordance with their terms. With regard to the Diacetyl Reserve, it will be comprised of segregated reserves for any negotiated settlements that are the subject of motions pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure and Section 1123 of the Bankruptcy Code and pending approval as of the effective date of the Plan and any Disputed Diacetyl Claims accounted for in the Court's order determining the Diacetyl Claim Value. The segregated reserves may be established by the categories of the Diacetyl Claims set in a Court order determining the Diacetyl Claim Value and need not be established on an individual Claim basis. The Plan technical amendments also describe how periodic distributions may be made from the Disputed Claims Reserve. Blacklined versions of Revised Plans with technical amendments are available for free at: http://bankrupt.com/misc/ChemPlan&ROP(9-15).pdf http://bankrupt.com/misc/ChemPlan&ROP(9-21).pdf Chemtura & Committees File Responses to Plan Confirmation Objections Chemtura Corporation and its debtor affiliates tell Judge Gerber of the U.S. Bankruptcy Court for the Southern District of New York that they have worked to address the vast majority of general objections lodged against the confirmation of their Joint Chapter 11 Plan of Reorganization by making additions or changes to the Plan or proposing language to include in an order approving confirmation. More than 30 formal general objections and about four informal objections or inquiries were asserted against or with respect to the Plan. The General Objections pertain to insurer concerns, taxing authorities' concerns on tax claims, contract issues, the disputed claims reserve and retiree benefits, among other things. The Debtors also received objections from the Official Committee of Equity Security Holders, Investcorp Interlachen Multi-Strategy Master Fund Limited, Fiduciary Counselors Inc. and John Amon -- collectively the "Equity Objections." Majority of the Equity Objections are based on challenges to the Debtors' proferred valuation. The Debtors relate that they have negotiated with the Objecting Parties or otherwise have taken steps to resolve certain Objections and believe that many of these Objections are resolved. With respect to those Objections that remain unresolved, the Debtors maintain that the remaining General Objections and the Equity Objections should be overruled and the Plan should be confirmed. In particular, the Debtors submitted to the Court a chart of their specific replies to each confirmation objection, a copy of which is available for free at: http://bankrupt.com/misc/ChemRplyChrtConfObj9-21.pdf For its part, the Ad Hoc Committee of Bondholders maintain that the Debtors have given the Equity Committee every opportunity to maximize value for the Company for the benefit of its constituents -- even providing broad access to the Debtors' advisors and management to allow the Equity Committee to find equity investors willing to fund a plan of reorganization that will cash out all creditors, provide a reasonable level of funded debt, and provide substantial recoveries to the Debtors' equity holders. However, there seems to be no indication that anyone is willing to invest in the current market on the Equity Committee's terms, Richard L. Wynne, Esq., at Jones Day, in New York, points out. With the Debtors' Plan now overwhelmingly approved by all creditors, the Equity Committee is left with one option and that is to prevent the Court's approval of the Plan in the hope that something better will come along later, Mr. Wynne points out on behalf of the Bondholders Committee. To that end, the Equity Committee has set out to convince the Court to reject the Debtors' $2.05 billion valuation in favor of its inflated $2.3 to $2.6 billion valuation. "For all of its efforts, even the Equity Committee acknowledges that its inflated valuation is unlikely to pass muster in the current market," Mr. Wynne argues. The Official Committee of Unsecured Creditors filed its response to certain plan confirmation objections under seal. In related filings, the Debtors, the Creditors Committee and the Bondholders Committee sought and obtained Court authority to file their responses to the objection of the Equity Committee, Fiduciary Counselors and Investcorp under seal. The Parties noted that their replies contain and cite information that has been designated as confidential pursuant to the previously entered Protective Orders. In a related development, the Bondholder Committee sought a Court order unsealing (1) the Equity Committee' Plan Objection, (2) the Bondholder Committee' Reply Brief to the Equity Committee' Objection, and (3) certain documents and deposition transcripts to the extent they contain information that is not confidential. PBGC Answers Investcorp's Objection The Pension Benefit Guaranty Corporation asserts that Investcorp's plan objection fails because (i) it misunderstands PBGC's authority to institute termination proceedings, and (ii) it ignores the record in the Chapter 11 cases that unequivocally demonstrates the PBGC Settlement is fair, reasonable, and within the best interests of the Debtors' estates. The PBGC Settlement refers to the Debtors' agreement to provide further protection to the Chemtura Retirement Plan by paying a $50 million contribution to the Retirement Plan and PBGC's agreement not to terminate the Pension Plans. Certain Parties Withdraw Objections The State of Michigan Department of Treasury, the Texas Comptroller of Public Accounts, and VIP Builders LLP have withdrawn their objections to the confirmation of the Plan. VIP Builders particularly notes that it has withdrawn its objection based on revisions the Debtors made to certain Plan Supplements. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Settles Environmental Claims With EPA for $26MM -------------------------------------------------------------- The United States Government, on behalf of the U.S. Environmental Protection Agency and the National Oceanic and Atmospheric Administration, asks Judge Robert Gerber to approve the settlement it entered into with the Debtors, which resolves certain obligations the Debtors incurred while operating their businesses in various states. The settlement terms satisfactorily compensate the public and reasonably balance myriad competing factors, including the strength of the United States' case against the Debtors, the Debtors' bankruptcy, the Debtors' objections to the United States' proofs of claims, and the need to recover funds for cleanup and minimize the expense and potential delay of protracted litigation, Preet Bharara, United States Attorney for the Southern District of New York, tells the Court. She avers that the Settlement is reasonable. Stoney Creek Objects Stoney Creek Technologies LLC filed an objection to the EPA Settlement but subsequently withdrew it. In its objection, Stoney Creek argued that the Settlement Agreement does not expressly state whether the EPA intends to pursue Stoney Creek for any amounts of the Allowed Claim of the EPA against the Debtor related to the Stoney Creek Site. Before withdrawing its objection, Stoney Creek noted that it may consider withdrawing its objection if the EPA can definitively advise it that the EPA does not intend to pursue Stoney Creek for any money damages relating to remediation of the Stoney Creek site. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Settles With State Environmental Agencies -------------------------------------------------------- Chemtura Corp. and its units negotiated and reached separate agreements with certain state environmental agencies to resolve certain environmental obligations. Under the Settlements, the parties mutually release the Debtors from civil claims or causes of action. The State Environmental Agencies and the salient terms of their Environmental Settlements with the Debtors are: A. The Division of Waste Management of the North Carolina Department of Environmental and Natural Resources * NCDWM's claims will be deemed satisfied and one claim will be entitled to vote for $3,750,000; and * The NCDWM's Allowed Environmental Claim will be paid in cash. B. Georgia Department of Natural Resources * Georgia's Claim No. 9236 will be deemed an allowed Environmental Claim against Chemtura Corp. for $23; * Claim No. 9410 will be deemed automatically withdrawn upon confirmation of the Plan and occurrence of the Plan Effective Date without any further order of the Court or action by the Parties. However, all environmental obligations with respect to Claim No. 9410, except those obligations that constitute Environmental Claims on account of costs expended or paid by Georgia before the Petition Date or penalties for violations of environmental laws or regulations that occurred before the Petition Date, will remain in place after the Plan Effective Date; and * Other than the two allowed claims, Georgia agrees that it could assert no other claims and no other claims have arisen with respect to the prepetition conduct of the Debtors' business or their ownership, operation or use of facilities or properties in the State. C. The State of Louisiana Department of Environmental Quality * Louisiana will have an allowed Environmental Claim against Chemtura for $164,381, which includes $155,619 in civil penalties and $8,761 in environmental regulatory fees and oversight costs; * Payment is to be made within 10 days after the Plan Effective Date. If payment is not received within that time, the Parties' Settlement Agreement may be voidable at the option of the Department; * Louisiana agrees that it could assert no other claims and no other claims have arisen with respect to the prepetition conduct of the Debtors' business or their ownership, operation or use of facilities or properties in the State. D. Texas Commission on Environmental Quality * With respect to Claim No. 1979 against Chemtura related to the Archem Site, TCEQ will have an allowed Environmental Claim for $220,517; * With respect to Claim No. 1981 against Great Lakes related to the Archem Site, TCEQ will have an allowed Environmental Claim for $25,000; * With respect to Claim No. 1977 against Great Lakes related to the Malone Site, TCEQ will have an allowed Environmental Claim against Great Lakes for $16,275; * With respect to Claim No. 1976 against Chemtura related to the Malone Site, TCEQ will have an allowed Environmental Claim for $1,225; and * With respect to Claim No. 11237 against Chemtura related to the Continental Carbon Site, TCEQ agrees to withdraw its claims. E. New York State Department of Environmental Conservation Chemtura will enter into and comply with (a) the 688 Court Street Site Consent Order, which amends and supersedes a May 2002 Order, and (b) the 633 Court Street Order as they may be amended or superseded pursuant to New York Environmental Law. The obligations will not be impaired in any way by the Debtors' Chapter 11 Cases or the Plan of Reorganization. With respect to 688 Court Street Site: * Chemtura's obligations with respect to the 688 Court Street Site will be capped at $150,000 and $3.596 million for the 633 Court Street Site; * Chemtura agrees to undertake investigation and remediation activities for the Court Street Sites, including offsite areas where contamination has migrated from the Court Street Sites. Chemtura's obligations with respect to the Court Street Sites will be deemed satisfied upon the completion of approved investigation and remediation work and issuance of a "No Further Action" letter from the NYSDEC; * Except with respect to the suspended civil penalty assessment to be governed by the 688 Court Street Consent Order, the NYSDEC agrees not to seek to recover civil penalties for any violation of the May 2002 Order or the New York Environmental Laws occurring prior to the effective date of the settlement; and * NYSDEC will receive no payments or distributions under the Plan in the Debtors' Chapter 11 Cases with respect to any of Chemtura's liabilities and obligations for the 688 Court Street Site under the New York Environmental Laws or the May 2002 Order, provided, however, that the Parties' settlement will not affect penalties for any future violation of the 633 or 688 Court Street Consent Orders. With respect to 633 Court Street Site: * Chemtura agrees to undertake investigation and remediation activities at the 633 Court Street Site subject to a $3.596 million aggregate cap on Chemtura's expenditures; * All of Chemtura's obligations with respect to the 633 Court Street Site will be deemed satisfied upon the earlier of (a) completion of remediation work and issuance of a No Further Action letter from the NYSDEC; upon reaching either (a) or (b) above, the NYSDEC covenants not to file a civil action, not to take any administrative action, and not to seek any penalties against the Debtors with respect to the 633 Court Street Site; * The 633 Court Street Consent Order will govern the investigation and remediation activities at the 633 Court Street Site consistent with the NYSDEC's rules, regulations and guidance memoranda governing the activities; * Chemtura will have control over the investigation and remediation activities at the 633 Court Street Site subject to the NYSDEC's oversight and approval as set forth in the 633 Court Street Consent Order and will continue the activities; * The NYSDEC retains the right (1) to review all invoices for work performed with respect to 633 Court Street, and (2) to conduct an audit of the costs associated with Chemtura's investigation and remediation activities; * NYSDEC's oversight costs at the 633 Court Street Site will be capped at $100,000. Costs incurred by Chemtura in the performance of investigation and remediation activities at the 633 Court Street Site, together with any amount of money attributed to the NYSDEC's oversight costs, will be included in and count toward satisfaction of Chemtura's $3.596 million liability cap after the Settlement Effective Date; * The NYSDEC will not seek any penalties or other costs associated with any violations of New York Environmental Laws occurring prior to the Settlement Effective Date with respect to the 633 Court Street Site; and * NYSDEC will receive no payments or distributions under the Plan in the Chapter 11 Cases with respect to any of Chemtura's liabilities and obligations under the New York Environmental Laws for the 633 Court Street Site, provided, however, that the Settlement Agreement will not affect penalties for any future violation of the 633 or 688 Court Street Consent Orders. F. Commonwealth of Pennsylvania, Pennsylvania Department of Environmental Protection and American Refining Group, Inc. * On or before the Plan Effective Date, Chemtura will deposit $10,000,000 into the Environmental Reserve, and upon the earlier of (a) 30 days after the Effective Date of the Settlement Agreement and (b) the first distribution date occurring after the Effective Date, Chemtura will cause the amount to be released from the Environmental Reserve by wire transfer into a segregated fund; * In consideration of the payment of $10,000,000 into the Fund, PADEP will issue a covenant not to sue the Debtors with regard to any Pennsylvania Cleanup Laws, CERCLA, RCRA or other applicable law with respect to the Bradford Site, and ARG will covenant not to sue Chemtura; * Chemtura's conveyance of a wastewater treatment facility to ARG will be free and clear of liens; * The Environmental Declaratory Action will be dismissed as it pertains to PADEP; and * PADEP and ARG agree not to file a civil action or to take any administrative or other action against the Debtors pursuant to any Pennsylvania Environmental Law, CERCLA, or any other applicable federal law or regulation with regard to the Bradford Site. 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) CHINA SHENGHUO: Receives Notice from NYSE Amex LLC -------------------------------------------------- China Shenghuo Pharmaceutical Holdings, Inc. on September 22, 2010, received a deficiency letter from the NYSE Amex LLC stating that the Company was not in compliance with Section 1003(a)(i) of the AMEX's continued listing standards as a result of the Company having stockholders' equity of less than $2,000,000, and losses from continuing operations and net losses in two out of its three most recent fiscal years. The company was given an opportunity to submit a plan of compliance to the AMEX by October 22, 2010 to demonstrate the Company's ability to regain compliance with Section 1003(a)(i) by March 22, 2012. Pursuant to the Deficiency Letter, if the AMEX determines that the Company has made a reasonable demonstration in the Plan of an ability to regain compliance with the continued listing standards by March 22, 2012, the AMEX will accept the Plan. If the AMEX does not accept the Plan, or the Company does not make adequate progress and complete the actions outlined in the Plan by March 22, 2012, the AMEX will initiate delisting proceedings against the Company. The Company's unaudited net loss attributable to stockholders for the six months ended June 30, 2010, was narrowed to $28,837 as compared to an unaudited net loss attributable to stockholders of $6.7 million for the six months ended June 30, 2009. The Company expects to be profitable for the nine months ending September 30, 2010 and for the full fiscal year ending December 31, 2010. The Plan that the Company will present to the AMEX will show that the Company projects that within the 18-month plan period its stockholders' equity will increase to the $2 million level as a result of its internally generated return to profitability. Should the Company issue equity, whether in a private or public offering during that period, it would accelerate meeting this target. However, there can be no assurance that the AMEX will find the Plan to be submitted to be acceptable or, even if accepted, that the Company will in fact generate sufficient net profit to achieve the requisite stockholders' equity threshold. Therefore, the Company can provide no assurances that it will regain compliance with the AMEX's continued listing standards, and its failure to do so could result in the delisting of the Company's common stock from the AMEX. Until the Company achieves compliance with the AMEX's requirements, the Company's stock trading symbol will be appended with the ".BC" extension. About China Shenghuo Founded in 1995, China Shenghuo -- http://www.shenghuo.com.cn/-- is a specialty pharmaceutical company that focuses on the research, development, manufacture and marketing of Sanchi-based medicinal and pharmaceutical, nutritional supplement and cosmetic products. Through its subsidiary, Kunming Shenghuo Pharmaceutical (Group) Co., Ltd., it owns thirty SFDA (State Food and Drug Administration) approved medicines, including the flagship product Xuesaitong Soft Capsules, which is currently listed in the Insurance Catalogue. At present, China Shenghuo incorporates a sales network of agencies and representatives throughout China, which markets Sanchi-based traditional Chinese medicine to hospitals and drug stores as prescription and OTC drugs primarily for the treatment of cardiovascular, cerebrovascular and peptic ulcer disease. The Company also exports medicinal products to Asian countries such as Indonesia, Singapore, Japan, Malaysia and Thailand and to European countries such as the United Kingdom, Tajikistan, Russia and Kyrgyzstan. CLAIM JUMPER: U.S. Trustee Forms Creditors Committee ---------------------------------------------------- The United States Trustee for Region 3 appointed an Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy cases of Claim Jumper Restaurants, LLC and its affiliate, Claim Jumper Management, LLC., netDockets Blog reports. According to the report, the members of the Creditors' Committee are: -- Rogers Poultry Company -- Hannay Investment Properties, Inc. -- U.S. Foodservice -- Anderson Seafoods, Inc. -- Turnberry Centra Sub LLC netDockets Blog also reports that the Creditors Committee has selected the law firms of Cooley LLP and Klehr Harrison Harvey Branzburg LLP as counsel. About Claim Jumper Irvine, California-based Claim Jumper Restaurants, LLC -- http://www.claimjumper.com/-- operates a chain of casual dining restaurants. It was founded in 1977. It has locations in Arizona, California, Colorado, Illinois, Nevada, Oregon, Washington, and Wisconsin. Claim Jumper filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. D. Del. Case No. 10-12819). The Debtor estimated its assets at $50 million to $100 million and debts at $100 million to $500 million as of the Petition Date. The Debtor's affiliate, Claim Jumper Management, LLC, filed a separate Chapter 11 petition (Bankr. D. Del. Case No. 10-12820). Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' local counsel. Milbank, Tweed, Hadley & Mccloy LLP is the Debtors' general bankruptcy counsel. Piper Jaffray & Co. is the Debtors' financial advisors and investment bankers. Kurtzman Carson Consultants LLC is the Debtors' notice, claims and solicitation agent. CLEO INVESTMENTS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Cleo Investments LLC 1405 S. Central Avenue Kent, WA 98032 Bankruptcy Case No.: 10-21311 Chapter 11 Petition Date: September 23, 2010 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Yousef Arefi-afshar, Esq. CAIRNCROSS & HEMPELMANN PS 524 2nd Ave., Suite 500 Seattle, WA 98104-2323 Tel: (206) 587-0700 E-mail: yarefi-afshar@cairncross.com Scheduled Assets: $3,227,437 Scheduled Debts: $1,483,537 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Craig A. Bowes, member. C.M.B. III: Case Summary & 22 Largest Unsecured Creditors --------------------------------------------------------- Debtor: C.M.B. III, L.L.C. 2920 E. Camelback Road, Suite 200 Phoenix, AZ 85016 Bankruptcy Case No.: 10-30496 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Richard M. Lorenzen, Esq. PERKINS COIE BROWN & BAIN P.A. 2901 North Central Avenue, Suite 2000 Phoenix, AZ 85012-2788 Tel: (602) 351-8405 Fax: (602) 648-7077 E-mail: rlorenzen@perkinscoie.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Jerry Tokoph, Jr., president of Dimension Financial & Realty Investments, Inc., its manager. Debtor's List of 22 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Maricopa County Treasurer Taxes $395,000 301 W. Jefferson Street, Room 100 Phoenix, AZ 85003 City of Phoenix Water Utilities $6,000 305 W. Washington Street Phoenix, AZ 85003 Beaubien Lawn Maintenance Trade $6,000 P.O. Box 727 Vernon, AZ 85940 Ray Van Cleave Consulting Inc Professional $5,500 Services Mariscal Weeks Mcintyre & Friedlander PA Professional $5,000 Services Metro North Corporate Park Association Association Dues $3,500 Thomas Reuters Real Estate Tax $3,000 Appeals Travelers Crest Insurance Group LLC Insurance $3,000 Law Office of David Cisiewski Professional $2,000 Services Waste Management Utilities $1,500 Western Water Technologies, Inc Trade $1,250 ATD Building Services Trade $1,200 Metro Fire Equipment, Inc Trade $1,200 Verizon Wireless Trade $1,000 American Refrigeration Supplies, Inc Trade $1,000 Consolidated Electrical Distributors, Inc Trade $1,000 Qwest Trade $900 Copper State Bolt & Nut Company Trade $800 Macc Development Building Maintenance unknown and Construction Cashen Realty Advisors Real Estate unknown Commissions Genworth Financial Bank Loan unknown Arizona Public Service Utilities unknown COLUMBIA MEGA: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Columbia Mega Storage, LLC 620 Mitchell Ave. Woodland, WA 98674 Bankruptcy Case No.: 10-47850 Chapter 11 Petition Date: September 23, 2010 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch Debtor's Counsel: Richard S. Ross, Esq. LAW OFFICE OF RICHARD S ROSS 1610 Columbia St Vancouver, WA 98660 Tel: (360) 699-1400 E-mail: ecf@resolvedebt.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 six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-47850.pdf The petition was signed by Ruth Koda, managing member. COMMAND CENTER: Appoints Fred Wilson to Board of Directors ---------------------------------------------------------- Command Center, Inc., has announced the appointment of Jeff T. Wilson to the Company's board of directors. Based upon his qualifications and experience in financial and accounting management, the board of directors has also designated Mr. Wilson as chairman of the audit committee, as well as a member of both the compensation committee and the nominating and governance committee. With the appointment of Mr. Wilson, the Command Center board has been expanded to five members. Since April 2006, Mr. Wilson has served as the Chief Financial Officer of Microvision, Inc., a publicly-traded technology company based in Redmond, Washington. Prior to this appointment, he had served as Microvision's Controller and Principal Accounting Officer since August 1999. "We are pleased to have the input and participation from someone as well-versed and experienced in the public sector as Jeff Wilson," said Command's Chairman and CEO, Glenn Welstad. "Jeff brings a wide array of skills to our company. He is well-qualified to serve as chairman of our audit committee and will help ensure that the proper financial controls are in place to accommodate the company's rapid growth." About Command Center Headquartered in Post Falls, Idaho, Command Center, Inc. -- http://www.commandonline.com/-- provides on-demand employment solutions to businesses in the United States, primarily in the areas of light industrial, disaster relief, hospitality and event services. The Company's balance sheet as of June 25, 2010, showed $10.9 million in total assets, $10.3 million in total liabilities, and a stockholders' equity of $579,214. * * * As reported in the Troubled Company Reporter on April 12, 2010, DeCoria, Maichel & Teague P.S., in Spokane, Wash., 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 negative working capital and an accumulated deficit. CONSOLIDATED CAPITAL: Posts $153,000 Net Loss in June 30 Quarter ---------------------------------------------------------------- Consolidated Capital Properties III filed its quarterly report on Form 10-Q, reporting a net loss of $153,000 on $336,000 of revenue for the three months ended June 30, 2010, compared to a net loss of $139,000 on $359,000 of revenue for the corresponding period of 2009. Since the Partnership's term will expire on December 31, 2010, and the term cannot be extended, the General Partner began marketing its investment property, Village Green Apartments, for sale in 2010. On May 24, 2010, the Partnership entered into a sale contract with a third party relating to the sale of Village Green Apartments. On May 26, 2010, the purchaser terminated the sales contract. On July 16, 2010, the contract was amended and reinstated at a sales price of $7.45 million with the purchaser assuming the mortgage notes payable of the Partnership. The sale of the property is projected to close during the third quarter of 2010. The Partnership has determined that certain held for sale criteria have not been met at June 30, 2010, and therefore continues to report the assets and liabilities of its investment property as held for investment and its operations as continuing operations. At June 30, 2010, the Partnership had cash and cash equivalents of $31,000, compared to $52,000 at December 31, 2009. The Partnership's balance sheet as of June 30, 2010, showed $1.98 million in total assets, $8.16 million in total liabilities, and a partners' deficit of $6.18 million. As reported in the Troubled Company Reporter on April 12, 2010, Ernst & Young LLP, in Greenville, S.C., expressed substantial doubt about the Partnership's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Partnership Agreement provides for the Partnership to terminate December 31, 2010. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bc4 About Consolidated Capital Greenville, S.C.-based Consolidated Capital Properties III owns a 99% limited partnership interest in Concap Village Green Associates, Ltd., a Texas limited partnership, which owns Village Green Apartments, a 164-unit apartment complex located in Altamonte Springs, Florida. CUPIC LLC: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Cupic LLC 528 3rd Avenue W, Suite 101 Seattle, WA 98119 Bankruptcy Case No.: 10-21283 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Kevin T. Helenius, Esq. 40 Lake Bellevue, Suite 100 Bellevue, WA 98005 Tel: (425) 450-7011 E-mail: efiling@kth-law.com Scheduled Assets: $8,410,294 Scheduled Debts: $4,644,392 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-21283.pdf The petition was signed by Stephen P. Cupic, president. DAMON PURSELL: Gets Interim Okay to Use MCK's Cash Collateral ------------------------------------------------------------- Damon Pursell Construction Company sought and obtained interim authorization from the U.S. Bankruptcy Court for the Western District of Missouri to use the cash collateral of MCK Partnership, L.L.C., until January 14, 2011. MCK asserts and the Debtor acknowledges that the Debtor was indebted to MCK in the amount of $2,458,302.24, constituting all principal and accrued interest then owing to MCK from the Debtor. Thomas G. Stoll, Esq., at Dunn & Davison, LLC, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. In exchange for using the cash collateral, the Debtor will grant MCK a valid and duly-perfected first priority security interest in and lien on and against the cash collateral and the property constituting the Collateral and any proceeds therefrom, wherever located, and whether presently owned or hereafter acquired. To provide additional adequate protection to MCK, the Debtor will pay MCK $20,000 on the 15th day of each month, beginning on October 15, 2010, and continuing until the interim use of cash collateral terminates. The Debtor will at all times satisfy these conditions: a. The Debtor will maintain a loan-to-value ratio (unpaid balance of the indebtedness divided by the value of the collateral) of no greater than 80%; b. The Debtor will maintain inventory at its quarry with a cost value of at least $1,800,000; and c. The Debtor's accounts receivable aged less than 90 days will be at least $800,000. All cash in the Debtor's possession, under its control, or received by it hereafter, including the cash collateral, will be deposited immediately in the Debtor's debtor-in-possession bank account, which will be opened soon after the commencement date. The Debtor agrees to provide the account number and institution name to MCK upon opening the cash collateral account. Except for the cash collateral account, Debtor will maintain no other bank accounts, without the written consent of MCK or an order of the Court obtained with notice to MCK and an opportunity for a hearing. MCK is represented by J. Brian Hill -- jbhill@sbmlsh.com -- at Sexton, Bender, Maher, Hill & Steinman, P.C. The Court has set a final hearing for October 5, 2010, at 1:30 p.m. on the Debtor's request to use cash collateral. Kansas City, Missouri-based Damon Pursell Construction Company filed for Chapter 11 bankruptcy protection on September 15, 2010 (Bankr. W.D. Mo. Case No. 10-44965). Thomas G. Stoll, Esq., at Dunn & Davison, LLC, assists the Debtor in its restructuring effort. According to its schedules, the Debtor disclosed $18,458,000 in total assets and $11,981,801 in total liabilities as of the Petition Date. DERIVIUM CAPITAL: Judge Rules on Grayson Suit v. Wachovia --------------------------------------------------------- In Grayson Consulting, Inc., v. Wachovia Securities, LLC, f/k/a First Union Securities, Inc., and First Clearing, LLC, Adv. Pro. No. 07-80119 (Bankr. D. S.C.), the Defendants assert that they are entitled to summary judgment on the Plaintiff's fraudulent transfer claims under 11 U.S.C. Secs. 548 and 544, as to the three categories of transfers at issue: 1) transfers of securities made by Stock Loan Borrowers to the At-Issue Accounts, 2) transfers of cash by debtor Derivium Capital LLC or the Stock Loan Entities into their respective brokerage accounts at Wachovia, and 3) transfers of commissions, margin interest, wire transfer fees, prepayment fees, and other fees charged to Debtor or the Stock Loan Entities by the Defendants for brokerage services. In their Alter Ego Motion, the Defendants further assert that they are entitled to summary judgment as to the Plaintiff's Alter Ego theory. Specifically, the Defendants argue that the Plaintiff's claims for cash transferred into the At-Issue Accounts and for commissions, margin interest, and wire and pre-payment fees paid from those accounts also fail to the extent that those transfers were made by the Stock Loan Entities because the Plaintiff cannot meet its burden of establishing that these entities are alter-egos of the Debtor. In an order dated September 14, 2010, Judge John Waites said "genuine issues of material fact exist" regarding whether Derivium Capital and its owners exercised total domination and control of Bancroft Ventures Limited, WITCO Services (UK) Ltd. and Optech Limited such that these entities manifested no separate interest of their own and functioned solely to achieve the goals of Derivium Capital. Judge Waites granted the Defendants' Renewed Motion as to these issues: 1. Plaintiff's fraudulent transfer claims pursuant to 11 U.S.C. Secs. 544 and 548 with respect to transfers of stock from the Stock Loan Borrowers into the At-Issue Accounts; 2. Plaintiff's fraudulent transfer claims pursuant to 11 U.S.C. Sec. 544 with respect to transfers of margin interest payments; and 3. Plaintiff's fraudulent transfer claims pursuant to 11 U.S.C. Sec. 548 with respect to the cash transfers that Debtor and Bancroft directly deposited into their brokerage accounts with Defendants in the year prior to the Debtor's bankruptcy filing. The Court denied the Defendants' Renewed Motion: 1. To the extent that Defendants seek to bar Plaintiff's claims to transfers by Optech and WITCO based on waiver or prior court order; and 2. As to Plaintiff's fraudulent transfer claims pursuant to 11 U.S.C. Sec. 544 with respect to transfers of commissions, wire transfer fees, and prepayment fees. The Defendants' Alter Ego Motion is also denied. Grayson Consulting subsequently purchased the Chapter 7 Trustee's rights in the Wachovia action for $25,000 and an agreement to pay the estate a percentage of any net recovery in this matter. Grayson Consulting was substituted for the Trustee as Plaintiff and filed an Amended Complaint on December 21, 2007. A copy of the September 14 order is available for free at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100914526 Headquartered in Tuxedo, New York, Derivium Capital LLC marketed and administered loans. The Company filed for chapter 11 protection on Sept. 1, 2005 (Bankr. S.D.N.Y. Case No. 05-37491). Steven Soulios, Esq., at Ruta & Soulios, LLP, represented the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $60,000,000 in assets and $79,890,199 in debts. As reported by the Troubled Company Reporter, the Hon. Cecelia G. Morris converted the chapter 11 case of Derivium into a liquidation proceeding under chapter 7 of the Bankruptcy Code. Deirdre A. Martini, then U.S. Trustee for Region 2, had asked the Bankruptcy Court to convert or dismiss the Debtor's bankruptcy case on allegations that the Debtor had not acted in good faith during its bankruptcy proceedings. On November 7, 2005, Kevin Campbell was appointed as the Chapter 7 trustee for Debtor. DETROIT MEDICAL: Moody's Affirms 'Ba3' Rating on $486.4 Mil. Bonds ------------------------------------------------------------------ Moody's Investors Service has affirmed the Ba3 long-term bond rating assigned to Detroit Medical Center's $486.4 million of outstanding fixed rate bonds issued by the Michigan State Hospital Finance Authority. The outlook is revised to negative from stable. The outlook revision is attributable to Moody's concerns with the difficult operating environment that is contributing to an inability to improve liquidity with anticipated sizable cash contributions needed in the near term to fund the large underfunded defined benefit pension liability and to support needed capital investment. With the decline in the Michigan economy that has led to declines in the population, especially in the metro-Detroit area, along with increased competitive pressure on the fringes of the service area from newly opened hospitals in the last two years, Moody's believe increased pressure will be placed on volume metrics and revenue growth. Legal Security: The bonds are unsecured, joint and several obligations of the Obligated Group. The Obligated Group currently consists of nine Members: Children's Hospital of Michigan; Detroit Receiving Hospital and University Health Center; Harper Hospital; Huron Valley Hospital, Inc.; Hutzel Hospital; Rehabilitation Institute, Inc.; Sinai Hospital of Greater Detroit; and The Detroit Medical Center. The Detroit Medical Center is the holding company for the above mentioned hospitals. Interest Rate Derivatives: None Strengths * Large nine-facility (seven hospitals and two institutions) tertiary teaching system with diverse system of outpatient centers across metropolitan Detroit and over 2,700 affiliated physicians, providing for a strong market share in metropolitan Detroit and regional-to-state-wide draw for certain services * Affiliation with Wayne State University, the 2nd largest medical school in the U.S., with 1,000 residents at DMC, contributing to clinical expertise; new five year contract established in February 2010 * Track record of demonstrated support by governmental units, although state and municipal entities are currently facing economic and budgetary challenges * Moderate debt load that enables adequate Moody's-adjusted maximum annual debt service coverage of 2.61 times in fiscal year 2009 and 3.30 times on unaudited annualized six months FY 2010 * $40 million line of credit, of which just over $40 million is regularly available under the terms of the agreement's borrowing base calculation; the line of credit was not being utilized at June 30, 2010 Challenges * DMC considered the safety net provider in the region as Medicaid, under-insured, and uninsured populations represent 39% of gross revenues * Location of majority of facilities on downtown Detroit campus, with weak demographic profile for the City (City of Detroit general obligation unlimited tax bonds rated Ba2) and economic challenges for the State * Very low liquidity with 32 days cash on hand at fiscal yearend 2009 and 25 days as of June 30, 2010, yet consistent with levels since FYE 2006, driving very weak cash-to-debt ratio of 27% at June 30, 2010 * While six month FY 2010 annualized operating and operating cash flow margins of 2.6% and 7.6%, respectively, are good for a below investment grade healthcare system, operating performance continues to be enhanced by special funding sources and prior year cost report settlements * Anticipated increasing demands on liquidity to fund underfunded defined benefit pension plan and capital investment due to curtailed capital spending for multiple years Recent Developments/Results DMC continues to manage through a difficult operating environment, but Moody's have concerns on a go forward basis as the organization faces increased demands on an already weak liquidity balance to fund its pension obligations, operates in a service area with high unemployment and declining inpatient utilization that is contributing to low revenue growth, and addresses low capital spending over the past several years. In FY 2009, DMC experienced its third consecutive year of declining admissions, dropping 3.0% after declining 1.2% in FY 2008 and 1.8% in FY 2007. Despite the decline in admissions, consecutive years of increasing acuity (as shown by the increasing Medicare case mix index to 1.69 times in FY 2009 from 1.56 times in FY 2006) along with growth in emergency room visits and outpatient volumes have driven increases in total operating revenues. Nonetheless, operating income declined markedly in FY 2009 to $8.8 million (0.4% margin) from $45.1 million (2.3% margin) in FY 2008. Partly contributing to the decline was a $51 million swing in pension expense, to a $31 million expense from a $20 million credit with a frozen defined benefit plan. Regardless of the decline in performance, Moody's-adjusted MADS coverage remained adequate at 2.66 times with a low debt load of 26% debt-to-revenue. For the first six months of FY 2010, management is reporting unaudited results of $27.8 million operating profit and an improvement in MADS coverage to an annualized 3.3 times. Liquidity growth remains a struggle, with absolute unrestricted cash and investments increasing by $54.5 million in FY 2009 but assisted by an advanced payment of about $45 million from the state for FY 2010 supplemental payments (disproportionate share) and graduate medical education, and a $17 million increase in its draw against the available line of credit. Even with the additional cash, cash on hand reached only 32 days at FYE 2009. Through the first six months of FY 2010 liquidity declined $38.4 million and 7 days to 25 days at June 30, 2010, with the draw on the line of credit declining to zero from $20.8 million. DMC will continue to be challenged with growing liquidity as it begins to contribute to its highly underfunded ($184 million at FYE 2009) frozen defined benefit pension plan. Funding of unfunded liabilities are determined annually based upon the legally required payment that is based upon the discounted asset and liability values as of the prior year end. Furthermore, capital spending has been somewhat modest for the organization, spending below depreciation in each of the past five years (averaging $61 million per year, compared to average depreciation expense of $78 million per year). Despite the low debt load, the low liquidity results in very low cash-to-debt coverage of 27%. On June 11, 2010, DMC signed a definitive purchase agreement with Vanguard Health Systems whereby Vanguard would purchase the assets and assume all of the liabilities (other than its outstanding bonds and similar debt and certain other liabilities) of DMC. Under the agreement, Vanguard would pay the DMC an estimated $417 million. In addition, Vanguard will assume DMC's frozen defined benefit pension plan. Furthermore, Vanguard has committed to invest $500 million for specific capital projects and another $350 million for routine capital over the first five years. DMC and Vanguard are awaiting approval by the State of Michigan Attorney. DMC is looking to complete closure on the transaction by November 1, 2010. It is management's intention to call and defease outstanding bonds at the closure of the transaction. The current Ba3 rating does not take into consideration this pending transaction. Outlook The revision in the outlook to negative is attributable to Moody's concerns with the difficult operating environment that is contributing to an inability to improve liquidity with anticipated sizable cash contributions needed in the near term to fund the large underfunded pension liability and to support needed capital investment. With the decline in the Michigan economy, especially in the metro-Detroit area, along with increased competitive pressure on the fringes of the service area from newly opened hospitals in the last two years, Moody's believe increased pressure will be placed on volume metrics and reimbursement structures, driving further pressure on operating performance. What could change the rating -- Up Material growth in liquidity measures; improvement in operating cash flow driven by internal operational improvement and not growth in supplemental payments What could change the rating -- Down Loss of supplemental funding (net tax revenues or intergovernmental transfers) without a commensurate increase in cash flow from operations or other sources; decline in liquidity; sizable increase in direct or indirect debt Key Indicators Assumptions & Adjustments: -- Based on financial statements for The Detroit Medical Center and Subsidiaries -- First number reflects audit year ended December 31, 2008 -- Second number reflects audited year ended December 31, 2009 -- Excludes from operating revenues $2.4 million of investment income in FY 2009 -- Excludes from operations impairment charge of $1.3 million in FY 2009 -- Investment returns normalized at 6% unless otherwise noted * Inpatient admissions: 77,697; 75,340 * Total operating revenues: $1.99 billion; $2.09 billion * Moody's-adjusted net revenue available for debt service: $174.2 million; $143.9 million * Total debt outstanding: $537.9 million; $532.7 million * Maximum annual debt service (MADS): $55.1 million; $55.1 million (includes capital leases and notes) * MADS Coverage with reported investment income: 2.76 times; 2.34 times * Moody's-adjusted MADS Coverage with normalized investment income: 3.16 times; 2.61 times * Debt-to-cash flow: 3.85 times; 4.76 times * Days cash on hand: 23 days; 32 days * Cash-to-debt: 22%; 33% * Operating margin: 2.3%; 0.4% * Operating cash flow margin: 7.9%; 5.9% Rated Debt (amount outstanding as of June 30, 2010) Series 1993A ($105.2 million outstanding), rated Ba3 Series 1993B ($95.0 million), rated Ba3 Series 1995 ($30.3 million outstanding; issued by Sinai Hospital of Greater Detroit), rated Ba3 Series 1997A ($147.1 million outstanding), insured by Ambac, Ba3 unenhanced rating Series 1998A ($108.7 million outstanding, principal payments begin in 2012), rated Ba3 The last rating action with respect to Detroit Medical Center was on December 19, 2008, when a municipal finance scale rating of Ba3 was affirmed with a stable outlook. That rating was subsequently recalibrated to Ba3 on May 7, 2010. DOLLAR THRIFTY: Stands By Hertz; to Proceed With Sept. 30 Meeting ----------------------------------------------------------------- Dollar Thrifty Automotive Group, Inc. on Monday said its Board of Directors, in consultation with its financial and legal advisors, has reviewed and considered carefully Avis Budget Group's revised proposal. Dollar said while the proposal offers its shareholders the potential opportunity to receive greater consideration for their shares than the amount payable under the current terms of Dollar's agreed merger with Hertz, Avis Budget has not demonstrated to Dollar's satisfaction that its proposed transaction can be completed in a timely manner and that it would adequately protect Dollar shareholders in the event that Avis Budget is unable to obtain the required regulatory approvals. "Accordingly, our Board continues to recommend that Dollar Thrifty shareholders vote to approve the Hertz merger at the special shareholder meeting to be held on September 30, 2010." Hertz and Dollar Thrifty executed a definitive merger agreement on April 25, 2010, which agreement was amended on September 10, 2010, under which Hertz will acquire Dollar Thrifty for $43.60 per share in cash, inclusive of a special cash dividend to be paid immediately prior to the transaction closing, and 0.6366 shares of Hertz common stock. The transaction is subject to customary closing conditions, regulatory approvals, approval by Dollar Thrifty shareholders and payment of the special dividend. A special meeting of Dollar Thrifty shareholders to vote on the Hertz merger agreement has been scheduled for September 30, 2010. Shareholders of record as of August 13, 2010 are entitled to vote at that meeting. As reported by the Troubled Company Reporter, Hertz on Friday said its merger agreement to acquire Dollar Thrifty at a purchase price equivalent to $50.25 -- at the Sept 23 closing share price for Hertz of $10.45 -- is Hertz's best and final offer. Hertz also expressed confidence that Dollar Thrifty shareholders would approve the merger transaction at the September 30 meeting, thereby clearing the way for a closing later this year. Hertz's cash-and-stock bid carries a $44.6 million breakup fee. Avis' latest bid is worth about $1.5 billion, though it lacks a breakup fee, something Dollar Thrifty has suggested it wants. The TCR also reported that on Monday, prior to Dollar's statements, Avis said it is prepared to make two concrete proposals: * If the shareholder vote on a Hertz-Dollar Thrifty deal is delayed until December 30, Avis Budget will commit -- even without an agreement with Dollar -- to continue to diligently pursue antitrust clearance for its transaction through the end of the year. The best way to assure that the highest value is provided to Dollar Thrifty shareholders is to hold the shareholder vote on December 30 and let the FTC complete its review and render its findings. If Hertz is confident that its antitrust posture is so much better than Avis', Avis said it does not see why Hertz would have any objection to delaying the shareholder vote. * Alternatively, if Dollar is unable or unwilling to delay the shareholder vote, in the event the Hertz-Dollar Thrifty deal is not approved at the September 30 meeting, Avis will commit to commence an exchange offer at its recent offer price no later than 10 business days after the shareholder meeting. Such offer will be subject only to the terms and conditions in the merger agreement previously provided to Dollar -- as adjusted for an exchange offer structure and to address a technical modification of a credit agreement -- and the Dollar disclosure schedules previously delivered to Avis, and Avis will keep such offer open until the end of the year while Avis continues to pursue antitrust clearance. Dollar Thrifty shareholders who have questions about the merger or the special meeting, or who wish to obtain copies of the proxy statement/prospectus, proxy cards or other documents relating to the special meeting, may contact GeorgesonInc., Dollar Thrifty's proxy solicitor, at 1-8667678986 (toll free) or 212-8066859 (international). Dollar Thrifty is being advised by J.P.Morgan and Goldman, Sachs & Co. and the law firm of Cleary Gottlieb Steen & Hamilton LLP. Citigroup and Morgan Stanley & Co. Incorporated are acting as financial advisors to Avis Budget Group, and Kirkland & Ellis LLP and Arnold & Porter LLP are acting as legal counsel. About Dollar Thrifty Dollar Thrifty Automotive Group, Inc., is headquartered in Tulsa, Oklahoma. Driven by the mission "Value Every Time," the Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value- conscious travelers in over 70 countries. Dollar and Thrifty have over 600 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,400 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. The Company's balance sheet at June 30, 2010, showed $2.5 billion in total assets and $2.0 billion in total liabilities, for $467.8 million in total stockholders' equity. * * * As reported by the Troubled Company Reporter on August 2, 2010, Standard & Poor's Ratings Services said its ratings on Dollar Thrifty (DTAG; B-/Watch Pos/--) remain on CreditWatch with positive implications. This follows Avis' (B+/Stable/--) July 28, 2010 bid to acquire DTAG. S&P initially placed the ratings on DTAG on CreditWatch with positive implications on April 26, 2010, when the company announced that it had signed a definitive agreement to be acquired by another competitor, Hertz Global Holdings Inc. (B/Watch Pos/--). S&P said the acquisition would result in an increase in market share for either Avis Budget or Hertz in the U.S. There currently are three major on-airport car rental companies: Hertz, Avis (parent of the Avis and Budget brands), and Enterprise Rent-A-Car Co. (parent of the Enterprise, Alamo, and National brands), each with about a 30% market share. DTAG accounts for most of the balance. As reported by the TCR on August 10, 2010, Dominion Bond Rating Service commented that Dollar Thrifty's ratings, including its Issuer Rating of B (high) are unaffected following the Company's announcement of second quarter 2010 earnings results. All ratings remain Under Review Positive, where they were placed on April 28, 2010. DBRS acknowledged DTAG's continued progress in refinancing maturing debt and improved access to the capital markets. During the quarter, DTAG established two new funding facilities totaling $500 million and repaid $200 million of maturing notes. DTAG's next medium term note maturity is $600 million, which will begin to amortize in December 2010. Given the Company's solid liquidity and improved access to the capital markets, DBRS sees these maturities as manageable. In November 2009, S&P raised its corporate credit rating of Dollar Thrifty to 'B-' from 'CCC', in light of the Company's improved operating and financial performance that began in mid-2009. Moody's Investors Service also upgraded Dollar Thrifty's Probability of Default Rating to 'B3' from 'Caa2' and Corporate Family Rating to 'B3' from 'Caa3'. DOLLAR THRIFTY: PAR Capital to Vote "NO" on Hertz Deal ------------------------------------------------------ The Wall Street Journal's Rolfe Winkler and Gina Chon report that Paul Reeder, president of Boston hedge fund PAR Capital Management Inc., said he intends to vote against Dollar Thrifty Automotive Group Inc.'s merger deal with rival Hertz Global Holdings Inc. According to the Journal, Mr. Reeder said Hertz's cash-and-stock offer -- currently valued at about $50.88 a share of Dollar Thrifty -- undervalues his holdings. The stock fell 1%, or 50 cents, to $50.29 in 4 p.m. composite trading Tuesday on the New York Stock Exchange. PAR Capital holds 2.2 million shares, or about 7.7% of shares outstanding, according to a recent SEC filing. "We intend to vote 'no' because the value of the Hertz offer on the table doesn't fully compensate us for the value of Dollar Thrifty as a going concern," Mr. Reeder told the Journal in an interview. "Nor does it compensate us for synergies that will accrue to the winning bidder." The Journal says Mr. Reeder's views could be part of a serious challenge to Hertz, whose deal goes for a vote before Dollar Thrifty shareholders on Sept. 30. The offer must receive a majority of votes cast to win approval. About Dollar Thrifty Dollar Thrifty Automotive Group, Inc., is headquartered in Tulsa, Oklahoma. Driven by the mission "Value Every Time," the Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value- conscious travelers in over 70 countries. Dollar and Thrifty have over 600 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,400 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. The Company's balance sheet at June 30, 2010, showed $2.5 billion in total assets and $2.0 billion in total liabilities, for $467.8 million in total stockholders' equity. * * * As reported by the Troubled Company Reporter on August 2, 2010, Standard & Poor's Ratings Services said its ratings on Dollar Thrifty (DTAG; B-/Watch Pos/--) remain on CreditWatch with positive implications. This follows Avis' (B+/Stable/--) July 28, 2010 bid to acquire DTAG. S&P initially placed the ratings on DTAG on CreditWatch with positive implications on April 26, 2010, when the company announced that it had signed a definitive agreement to be acquired by another competitor, Hertz Global Holdings Inc. (B/Watch Pos/--). S&P said the acquisition would result in an increase in market share for either Avis Budget or Hertz in the U.S. There currently are three major on-airport car rental companies: Hertz, Avis (parent of the Avis and Budget brands), and Enterprise Rent-A-Car Co. (parent of the Enterprise, Alamo, and National brands), each with about a 30% market share. DTAG accounts for most of the balance. As reported by the TCR on August 10, 2010, Dominion Bond Rating Service commented that Dollar Thrifty's ratings, including its Issuer Rating of B (high) are unaffected following the Company's announcement of second quarter 2010 earnings results. All ratings remain Under Review Positive, where they were placed on April 28, 2010. DBRS acknowledged DTAG's continued progress in refinancing maturing debt and improved access to the capital markets. During the quarter, DTAG established two new funding facilities totaling $500 million and repaid $200 million of maturing notes. DTAG's next medium term note maturity is $600 million, which will begin to amortize in December 2010. Given the Company's solid liquidity and improved access to the capital markets, DBRS sees these maturities as manageable. In November 2009, S&P raised its corporate credit rating of Dollar Thrifty to 'B-' from 'CCC', in light of the Company's improved operating and financial performance that began in mid-2009. Moody's Investors Service also upgraded Dollar Thrifty's Probability of Default Rating to 'B3' from 'Caa2' and Corporate Family Rating to 'B3' from 'Caa3'. DONALD BRANDT: Statutes of Limitations Tolled in Military Service ----------------------------------------------------------- In Donald Brandt, v. Joe Weyant, Joe Weyant Attorney At Law, PLLC, Tracy Ann Puckett, Dennis Stanford, Lowry Shrader, Julianne Broden, Keller Williams Realty, Lance Miller, The Kenedy Law Firm, PLLC, Carrie Gasaway and Sharon Massey, both individually and a/b/a Gasaway & Massey, and Farmers & Merchants Bank, Adv. Proc. No. 09-0305 (Bankr. M.D. Tenn.), plaintiff claims he was victimized by an unscrupulous real estate agent and others with respect to investments, borrowings and the use of his bank accounts while he was unavailable because of military duty. The defendants have cross-claimed among themselves and some have counter-claimed that Mr. Brandt is responsible for some or all of the financial misfortune he experienced. Relying on Tennessee statutes of limitations -- that range from 1 year to 3 years -- for each cause of action asserted by Mr. Brandt, the defendants argue that the limitation periods ran before the adversary proceeding was filed on August 12, 2009. In response, Mr. Brandt claims that all state statutes of limitations were tolled by Sec. 526(a) of The Servicemembers' Civil Relief Act of 2003. Mr. Brandt asserts that the tolling provision is mandatory and that as a career servicemember, in active service at all relevant times, he receives the protection of the statute and these actions were timely filed. On September 20, 2010, the Hon. Keith M. Lundin concluded that Section 526(a) of the SCRA is mandatory, pointing out that "[o]nce a servicemember's military service is established, statutes of limitations are tolled 'during the period of a servicemember's military service . . . for the bringing of any action or proceeding in a court . . . by or against the servicemember[.]" A copy of the opinion is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100920363 Based in Daleville, Alabama, Donald Ernest Brandt, dba Brandt Enterprises, Wilbur Group, and Brandt and Father, filed for chapter 11 bankruptcy protection (Bankr. M.D. Tenn. Case No. 09-08066) on July 20, 2009. Judge Keith M. Lundin presides over the case. Steven L. Lefkovitz, Esq., in Nashville, Tennessee, serves as bankruptcy counsel. The Debtor listed total assets of $2,038,659 and total debts of $2,432,341 in his petition. DRYSHIPS INC: Earns $15.2 Million in June 30 Quarter ---------------------------------------------------- DryShips Inc. reported net income attributable to DryShips of $15.2 million on $418.4 million of revenue for the three months ended June 30, 2010, compared with a net loss attributable to DryShips of $67.4 million on $401.1 million of revenue for the same period of 2009. For the Drybulk Carrier segment, during the six-month period ended June 30, 2009, an amount of $226.7 million was recognized as a loss on contract termination fees and forfeiture of vessel deposits. There were no such losses during the six-month period ended June 30, 2010. The Company is currently in negotiations with its lenders to obtain waivers, waiver extensions or to restructure its debt. Management expects that the lenders will not demand payment of the loans before their maturity, provided that the Company pays loan installments and accumulated or accrued interest as they fall due under the existing credit facilities. Management plans to settle the loan interest and scheduled loan repayments with cash generated from operations. As of June 30, 2010, the Company's theoretical exposure (current portion of long-term debt less cash and cash equivalents less restricted cash) amounted to $761.4 million. The Company's cash and cash equivalents decreased by $299.2 million to $394 million as of June 30, 2010, compared to $693.2 million as of December 31, 2009. The Company's working capital deficit increased to $832.7 million as of June 30, 2010, as compared to a working capital deficit of $715.4 million as of December 31, 2009. The increase in the Company's working capital deficit is primarily due to the yard installments payments made for the drillships under construction and the net repayment of approximately $145.1 million of debt under the Company's long-term credit. The Company's balance sheet as of June 30, 2010, showed $5.983 billion in total assets, $3.101 billion in total liabilities, and stockholders equity of $2.882 billion. As reported in the Troubled Company Reporter on April 12, 2010, Hadjipavlou Sofianos & Cambais S.A., in Athens, Greece, 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 inability to comply with financial covenants under its original loan agreements as of December 31, 2009, and 2008, and negative working capital position. A full-text copy of the Company's unaudited interim condensed consolidated financial statements and related information as of and for the period ended June 30, 2010, is available for free at: http://researcharchives.com/t/s?6bc3 About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- is an owner and operator of drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of September 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". EMPIRE RESORTS: Not Nasdaq Compliant with Director Resignation -------------------------------------------------------------- Empire Resorts Inc. delivered on Sept. 21, 2010, a notice to The NASDAQ Stock Market that, effective September 8, 2010, the Company no longer complies with NASDAQ's independent director requirements due to the resignation of G. Michael Brown from the Company's Board of Directors. As previously disclosed, Mr. Brown resigned from the Board of Directors of the Company due to health reasons, effective September 8, 2010, and the resulting vacancy on the Board of Directors was filled by Joseph D'Amato, the Company's Chief Executive Officer and Chief Financial Officer. Mr. D'Amato was appointed pursuant to the recommendation of Kien Huat Realty III Limited in accordance with the terms of that certain Investment Agreement, dated as of August 19, 2009, by and between Kien Huat and the Company. Mr. Brown was an "Independent Director," as defined in NASDAQ Listing Rule 5605(a)(2). Mr. D'Amato, however, is not an Independent Director due to his positions as an officer of the Company. As a result, a majority of the Company's Board of Directors is no longer comprised of Independent Directors as required by Listing Rule 5605(b)(1). On September 22, 2010, NASDAQ delivered a notice to the Company acknowledging the Company's non-compliance with the NASDAQ independent director requirements described above and advising that, in accordance with Listing Rule 5605(b)(1), NASDAQ has provided the Company with a cure period in which to regain compliance therewith. As set forth in NASDAQ's September 22, 2010 notice, the Company must regain compliance with Listing Rule 5605(b)(1) by: (a) the earlier of the Company's next annual stockholders' meeting or September 8, 2011; or (b) if the next annual stockholders' meeting is held before March 7, 2011, then the Company must evidence compliance no later than March 7, 2011. The Company intends to regain compliance with Listing Rule 5605(b)(1) at its next annual meeting of stockholders, which the Company intends to hold before January 1, 2011. About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- currently owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. The Company's balance sheet at June 30, 2010, showed $85.95 million in total assets, $73.60 million in total liabilities, and $12.35 million in stockholders' equity. Auditor Friedman LLP, in New York, after auditing the Company's 2009 results, said Empire Resorts' ability to continue as a going concern depends on the Company's ability to fulfill its obligations with respect to its $65 million of 5-1/2% senior convertible notes. Friedman also noted of the Company's continuing net losses and negative cash flows from operating activities. EMPIRE RESORTS: Settles With Noteholders and Indenture Trustee -------------------------------------------------------------- Empire Resorts Inc. has entered into a settlement agreement with the holders of over 93% of the outstanding principal amount of the Company's 5 1/2% Senior Convertible Notes Due 2014 and the Trustee under the indenture governing the Notes, pursuant to which the parties have agreed to settle the proceeding commenced by the Company in August 2009 in the Supreme Court of New York, Sullivan County relating to the exercise of the put right contained in the indenture governing the Notes. Empire Resort Chairman of the Board Emanuel R. Pearlman commented, "The Board has worked diligently over the past months to forge the best possible outcome for our company and its various stakeholders. We are pleased to have reached this agreement with our Noteholders which resolves pending litigation and significantly deleverages the company." Under the terms of the settlement agreement, the Company has agreed to repay $22.5 million in aggregate principal amount of Notes and offer to exchange up to 100% of the aggregate principal amount of the Notes that remain outstanding after giving effect to the such repayments for $32.5 million in aggregate principal amount of 12% Senior Convertible Notes due 2014 to be issued by the Company and a pro rata share of one million shares of the Company's common stock. The Company also has the option to seek alternative financing to repurchase all Notes on or before November 22, 2010 for an amount equal to the sum of all outstanding principal and interest owed on the Notes plus $975,000. The Company will redeem any Notes held by a beneficial owner that does not accept the Company's offer, if made, to exchange the remaining Notes for the Restated Notes and common stock, subject to the terms of the settlement agreement. In addition to the foregoing, the Company repaid an aggregate of $10 million of principal amount of the Notes in July and August 2010 in connection with settlement discussions with the Trustee and the holders of the Notes. Upon the closing of the settlement agreement, the parties to the pending litigation will release all claims known, unknown or suspected that each may have against the other at such time and execute and file a Stipulation of Discontinuance providing for the dismissal of the pending litigation with prejudice and without costs to any party. The Restated Notes, if issued, will bear interest on the principal amount thereof at the rate of 12% per annum, 8% of which will be payable in cash and 4% of which will be payable in cash or, at the Company's option, in additional Restated Notes. The Restated Notes will be convertible, at the option of the holder, into shares of Common Stock based upon a conversion rate of 1,132 shares per $1,000 in principal amount, subject to certain anti- dilution adjustment from time to time. The Restated Indenture governing the Restated Notes will set forth other important terms of the Restated Notes, including, without limitation, provisions relating to the holders' put option, mandatory and option redemptions, interest make-whole provisions, and restrictive covenants. The closing of the settlement agreement is subject to, among other things, the approval by the Company's stockholders of the transactions contemplated by the settlement agreement and of a corresponding increase in the Company's authorized capital stock and upon the acceptance of the company's exchange offer by holders of at least 90% of the then outstanding aggregate principal amount of Notes. Empire Resorts CEO Joseph D'Amato concluded, "This settlement is an important milestone for Empire Resorts. We are pleased to have crafted an agreement that resolves the uncertainty of litigation and also provides us with the flexibility to seek alternative financing arrangements to satisfy our obligations under the Notes until November 22, 2010. We are optimistic that resolving the pending litigation as provided under the settlement agreement will allow Empire Resorts to focus on our ongoing efforts to enhance shareholder value." About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- currently owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. The Company's balance sheet at June 30, 2010, showed $85.95 million in total assets, $73.60 million in total liabilities, and $12.35 million in stockholders' equity. Auditor Friedman LLP, in New York, after auditing the Company's 2009 results, said Empire Resorts' ability to continue as a going concern depends on the Company's ability to fulfill its obligations with respect to its $65 million of 5-1/2% senior convertible notes. Friedman also noted of the Company's continuing net losses and negative cash flows from operating activities. FAIRPOINT COMMS: Appoints J. Hogshire as Vice-Pres. & Controller ---------------------------------------------------------------- FairPoint Communications, Inc., has named John Hogshire, a seasoned finance professional with extensive telecommunications experience, vice president and controller. Mr. Hogshire has spent nearly 27 years working in finance, 23 of which have been with telecommunications companies. He most recently served as director of accounting for Aviat Networks (formerly Harris Stratex Networks) prior to which he was vice president and controller for Madison River Communications, a position he held for nearly nine years. Mr. Hogshire began his telecommunications career with Sprint, where he took on roles of increasing responsibility over a 10-year period. "John's extensive finance and telecommunications expertise will be instrumental in helping FairPoint to closely manage financial reporting and meet SOX, regulatory and tax compliance," says Ajay Sabherwal, executive vice president and chief financial officer of FairPoint. Mr. Hogshire holds a bachelor's degree from North Carolina Wesleyan College with a concentration in accounting. He is a certified public accountant and a member of the American Institute of Certified Public Accountants and the North Carolina Association of Certified Public Accountants. He will be based in Charlotte, N.C. * * * Mr. Hogshire said he does not own any securities of FairPoint, according to an initial statement of beneficial ownership on Form 3 filed with the Securities and Exchange Commission on Sept. 17, 2010. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry-leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. FairPoint and its affiliates filed for Chapter 11 protection on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, FairPoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Andrews Kurth is counsel to the Official Committee of Unsecured Creditors. Altman Vilandrie is the operational consultant to the Creditors' Committee. Verrill Dana is the Creditors' Committee's special regulatory counsel. Jeffries serves as the Creditors' Committee's financial advisor. (FairPoint Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FAIRPOINT COMMS: Seeks Approval of Wireless Settlement ------------------------------------------------------ Debtors Northern New England Telephone Operations LLC d/b/a FairPoint Communications-NNE and Telephone Operating Company of Vermont LLC d/b/a FairPoint Communications seek the Court's permission to enter into a settlement agreement with RCC Atlantic, Inc., d/b/a Verizon Wireless, for the resolution of disputes relating to "E-911 service." The Debtors operate telecommunications networks as a local exchange carrier in Maine, New Hampshire and Vermont. Verizon operates telecommunications networks as a commercial radio service provider in those states. The Parties have exchanged telecommunications traffic between their networks and have entered into interconnection agreements or ICAs setting out the terms and pricing of their provision of services to one another. "Enhanced 911 service" is a telecommunications capability that automatically associates a physical address with the calling party's telephone number and routes emergence "9-1-1" calls to the appropriate answering center based on the physical location of the caller. The Debtors have asserted certain claims against Verizon alleging Verizon's non-payment of certain E-911 facility charges for "Type 2C facilities/tracking" services provided in Maine, New Hampshire and Vermont by former Verizon Communications Inc. subsidiaries that were merged into the Debtors. The E-911 Service was provided to RCC Atlantic, Inc. which was merged into Verizon. Verizon has disputed the Debtors' charges for E-911 Service, alleging that that service was not covered by the pertinent ICAs which provided only for "9-1-1" services that were not "enhanced." To fully and finally resolve all disputes relating to E-911 Service provided by the Debtors through and including Dec. 31, 2009, the Parties entered into a settlement which provides for these salient terms: (a) Contemporaneous with the execution of the Settlement Agreement, the Parties will execute amendments to the ICAs for Maine, New Hampshire, and Vermont to add language covering E-911 Service, which will be retroactive to January 1,2010. The ICA Amendments will govern the Parties' rights and obligations with respect to subsequent E-911 service; (b) The Debtors will issue invoices in the total amount of $984,603.06 to Verizon. Verizon will pay the invoices for the Settlement Payment within 30 days of receipt of those Invoices; (c) Upon the Debtors' receipt of the Settlement Payment, the Debtors will unconditionally waive, release, and discharge Verizon and its affiliates of and from any and all claims, demands, costs, liabilities, causes of action and damages, arising out of relating to the E-911 2009 and prior charges only; (d) Nothing contained in the Settlement Agreement will be deemed to release, waive or discharge RCC or any of its affiliates from any claim, demand, cost, liability, cause of action or damage; (e) Upon FairPoint's receipt of the Settlement Payment, Verizon will unconditionally waive, release, and discharge the Debtors of and from any and all claims, demands, costs, liabilities, causes of action, and damages, arising out of or relating to the E-911 2009 and Prior Charges only; and (f) In the event any of the ICA Amendments is not approved by the applicable regulatory authority, the Settlement Agreement will be null and void. Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart & Sullivan, LLP, in New York, notes that the Settlement provides the Debtors with a $984,603 settlement payment, which will ultimately inure to the benefit of creditors directly or indirectly. Absent the Settlement, the Parties face the prospect of protracted litigation, with its attendant delay, distraction, and expense, he stresses. The Debtors estimate that assuming they were to pursue litigation with Verizon, they could potentially recover $1.4 million if they were to prevail on every issue. The Settlement Payment represents 70% of this gross amount, Mr. Kirpalani tells the Court. The amendments to the ICA under the Settlement will also minimize the likelihood for any similar billing or other disputes in the future, the resolution of which could be costly to the Debtors, Mr. Kirpalani adds. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry-leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. FairPoint and its affiliates filed for Chapter 11 protection on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, FairPoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Andrews Kurth is counsel to the Official Committee of Unsecured Creditors. Altman Vilandrie is the operational consultant to the Creditors' Committee. Verrill Dana is the Creditors' Committee's special regulatory counsel. Jeffries serves as the Creditors' Committee's financial advisor. (FairPoint Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FAIRPOINT COMMS: Settles CoBank's Claims on Patronage Stock ----------------------------------------------------------- FairPoint Communications, Inc., and CoBank, ACB, entered into a court-approved stipulation regarding a 2009 distribution of patronage stock in CoBank. As of December 31, 2009, FairPoint owned $3,330,639 shares of patronage stock in CoBank. In March 2010, CoBank issued a certain statement of qualified patronage distribution announcing FairPoint is entitled to distributions aggregating $548,870 on account of the CoBank Stock. CoBank however contends that it holds a first lien on the CoBank Stock pursuant to Section 2131(c) of the Farm Credit Act. CoBank has also asserted that its statutory lien gives it a claim on the 2009 Distribution. Consequently, CoBank withheld payment of the 2009 FairPoint disputes CoBank's right to withhold payment of the 2009 Distribution and enforce the statutory lien. To resolve those issues, the parties agree that CoBank will pay FairPoint $384,209 by wire transfer of immediately available funds. CoBank will be entitled to retain $164,661 from the 2009 Distribution, in full and complete satisfaction of any claim that CoBank may have, to exercise CoBank's Statutory Lien against the CoBank Stock, or proceeds from the CoBank Stock, on account of any prepetition transaction between the Parties related to CoBank Stock. However, in the event FairPoint's Chapter 11 case is dismissed or converted, or in the event that the Chapter 11 Plan Reorganization is not confirmed, the CoBank Prepetition Statutory Lien Claims will not be deemed satisfied except with respect to the 2009 Distribution. FairPoint also agrees that the automatic stay may be lifted solely to allow CoBank to exercise its Statutory Lien against the Retained Proceeds. The Parties otherwise reserve all rights, remedies and defenses under applicable law vis-a-vis the Statutory Lien. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry-leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. FairPoint and its affiliates filed for Chapter 11 protection on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, FairPoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Andrews Kurth is counsel to the Official Committee of Unsecured Creditors. Altman Vilandrie is the operational consultant to the Creditors' Committee. Verrill Dana is the Creditors' Committee's special regulatory counsel. Jeffries serves as the Creditors' Committee's financial advisor. (FairPoint Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FLAHERTY MECHANICAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Flaherty Mechanical Contractors, LLC 548 Baldwin Street Bridgeville, PA 15017 Bankruptcy Case No.: 10-26801 Chapter 11 Petition Date: September 24, 2010 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Donald R. Calaiaro, Esq. CALAIARO & CORBETT, P.C. Grant Building, Suite 1105 310 Grant Street Pittsburgh, PA 15219-2230 Tel: (412) 232-0930 Fax: (412) 232-3858 E-mail: dcalaiaro@calaiarocorbett.com Estimated Assets: $100,001 to $500,000 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/pawb10-26801.pdf The petition was signed by Denis Flaherty, owner/executive vice president. FRASER PAPERS: Terminates Deal to Sell New Hampshire Paper Mill --------------------------------------------------------------- Fraser Papers Inc. has terminated the agreement to sell its paper mill in Gorham, New Hampshire. The company disclosed that the purchaser could not secure sufficient financing to complete the transaction. The Company has begun contacting other parties to determine their interest in acquiring the mill. Fraser Papers also announced that it will close the mill indefinitely while the Company continues its efforts to sell the mill. The Company plans to shut down the Gorham mill indefinitely on or about October 13, 2010, depending upon whether acceptable orders can be obtained. The Company noted that the shutdown is due to current market conditions and is in no way reflective of the outstanding dedication and commitment of the employees at the mill who have worked tirelessly to ensure Fraser Papers' paper products are of the highest quality. In conjunction with the anticipated shutdown of the of the Gorham mill, Fraser Papers has provided notice to the employees of the Gorham mill under the Worker Adjustment and Retraining Notification ("WARN") Act. Fraser Papers remains under creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act ("CCAA") in Canada and Chapter 15 of the United States Bankruptcy Code in the United States. About Fraser Papers Fraser Papers -- http://www.fraserpapers.com/-- is an integrated specialty paper company that produces a broad range of specialty packaging and printing papers. The Company has operations in New Brunswick, Maine, New Hampshire and Quebec. On June 18, 2009, citing continued operating losses, weak markets for pulp and lumber, impending debt repayments and significant pension funding obligations, the Company and its subsidiaries filed for protection under the Companies Creditors Arrangement Act (Ont. Super. Ct. J. Ct. File No. CV-09-8241-00CL) in Toronto and Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-12123). Fraser is represented by Michael Barrack, Esq., Robert I. Thornton, Esq., and D.J. Miller, Esq., at ThorntonGroutFinnigan LLP, in Toronto, and Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Del. Fraser has said it is developing a restructuring plan to present to its creditors by Oct. 16, 2009, with the objective of emerging with a sustainable and profitable specialty papers business. In July 2010, Fraser Papers disclosed that the Ontario Superior Court of Justice has granted a further extension of the initial Order under which Fraser Papers, together with its subsidiaries, was granted creditor protection under the Companies' Creditors Arrangement Act. This extension is through October 29, 2010 and was supported by PricewaterhouseCoopers Inc., the Court appointed Monitor of the Company's CCAA process. FREDDIE MAC: Issues August 2010 Monthly Volume Summary ------------------------------------------------------ Freddie Mac formally known as the Federal Home Loan Mortgage Corporation issued on September 24, 2010, its August 2010 Monthly Volume Summary. A full-text copy of The Monthly Volume Summary is available for free at http://ResearchArchives.com/t/s?6bbf Highlights include: -- The total mortgage portfolio decreased at an annualized rate of 5.2% in August. -- Single-family refinance-loan purchase and guarantee volume was $21.2 billion in August, reflecting 73% of total mortgage portfolio purchases and issuances. -- Total number of loan modifications were 9,976 in August 2010 and 114,568 for the eight months ended August 31, 2010. -- The aggregate unpaid principal balance (UPB) of Freddie's mortgage-related investments portfolio decreased by approximately $10.3 billion. -- Total guaranteed PCs and Structured Securities issued decreased at an annualized rate of 5.4% in August. -- Single-family delinquency rate decreased to 3.83% in August. Multifamily delinquency rate increased to 0.32% in August. -- The measure of our exposure to changes in portfolio market value (PMVS-L) averaged $57 million in August. Duration gap averaged 0 months. About Freddie Mac Based in McLean, Virginia, Freddie Mac (NYSE: FRE) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. Freddie Mac is under conservatorship and is dependent upon the continued support of Treasury and FHFA to continue operating its business. The Company received $6.1 billion and $30.8 billion in June 2009 and March 2009, respectively, pursuant to draw requests that FHFA submitted to Treasury on the Company's behalf to address the deficits in the Company's net worth as of March 31, 2009, and December 31, 2008, respectively. As a result of funding of the draw requests, the aggregate liquidation preference on the senior preferred stock owned by Treasury increased from $14.8 billion as of December 31, 2008, to $51.7 billion on December 31, 2009. FX REAL ESTATE: Inks Subscription Deal with Select Directors ------------------------------------------------------------ FX Real Estate and Entertainment Inc. entered on Sept. 21, 2010, into subscription agreements with certain of its directors, executive officers and greater than 10% stockholders and other accredited investors, pursuant to which the Purchasers purchased from the Company an aggregate of 500 units at a purchase price of $1,000 per Unit. Each Unit consists of (x) one share of the Company's Series B Convertible Preferred Stock, $0.01 par value per share, and (y) a warrant to purchase up to 14,306.15 shares of the Company's common stock at an exercise price of $0.2097 per share. The Warrants are exercisable for a period of 5 years. The Company generated aggregate proceeds of $500,000 from the sale of the Units pursuant to the Subscription Agreements. The Company intends to use the proceeds to fund working capital requirements and for general corporate purposes. As previously reported in the Company's Current Report on Aug. 18, 2010, the Company created 2,500 shares of Series B Convertible Stock by filing a Certificate of Designation with the Secretary of State of the State of Delaware thereby amending its Amended and Restated Certificate of Incorporation, as amended. The Company has issued and sold thus far an aggregate of 650 shares of the Series B Convertible Preferred Stock as part of the Units and the sale of other units reported in the August 2010 and has 1,850 authorized shares of Series B Convertible Preferred Stock that remain available for future issuance under the Series B Certificate of Designation. The designation, powers, preferences and rights of the shares of Series B Convertible Preferred Stock and the qualifications, limitations and restrictions thereof are contained in the Series B Certificate of Designation and are summarized in the August 2010. About FX Real Estate FX Real Estate and Entertainment Inc. owns 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas Property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. On June 23, 2009, as a result of the default under the first mortgage loan, the first lien lenders had a receiver appointed to take control of the property. The Company is headquartered in New York City. The Company's balance sheet as of June 30, 2010, showed $141.8 million in total assets, $515.1 million in total liabilities, and a stockholders' deficit of $373.3 million. * * * As reported in the Troubled Company Reporter on April 15, 2010, LL Bradford, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company is in default under the mortgage loan, has limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. The Company disclosed in its Form 10-Q for the quarter ended June 30, 2010, that it has no current cash flow and cash on hand as of August 13, 2010, is not sufficient to fund its short-term liquidity requirements, including its ordinary course obligations as they come due. On April 21, 2010, the Company's remaining Las Vegas subsidiary, namely FX Luxury Las Vegas I, LLC, filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Nevada (Case No. 10-17015). GARLOCK SEALING: Court Appoints J. Grier as Future Claims Rep. -------------------------------------------------------------- Judge George R. Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina appointed Joseph W. Grier, III, as the legal representative for holders of future asbestos claims, effective as of September 16, 2010. The Future Asbestos Claimants' Representative will protect the rights of persons who may, subsequent to confirmation of the Debtors' plans of reorganization, hold Future Asbestos Claims, defined as claims based on, arising out of, or related to asbestos-related injury, disease, or death that has not manifested, become evident, or been diagnosed as of the date an order is entered confirming a plan of reorganization in the Debtors' Chapter 11 cases, Judge Hodges averred. The FCR will not be liable for any damages, or have any obligation other than as prescribed by order of the Court; provided, however, that the FCR may be liable for damages caused by willful misconduct or gross negligence, Judge Hodges clarified. The FCR will also not be liable to any person as a result of any action or omission taken or made in good faith, Judge Hodges noted. The FCR is a party-in-interest in the Debtors' Chapter 11 cases, and will have standing under Section 1109(b) of the Bankruptcy Code to be heard on any issue in these Chapter 11 cases in the Bankruptcy Court, the U.S. District Court for the Western District of North Carolina or any other court. The FCR will also have the powers and duties of a committee set forth in Section 1103 of the Bankruptcy Code as are appropriate for a FCR. The FCR and his counsel will be entitled to receive all notices and pleadings that is served pursuant to any and all orders entered in the Debtors' bankruptcy cases, Judge Hodges added. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Proposes Rust Consulting as Claims Handling Agent ------------------------------------------------------------------ Garlock Sealing Technologies LLC and its units seek the U.S. Bankruptcy Court's permission to employ Rust Consulting, Inc., as their claims handling agent. The proposed services of Rust Consulting include: (a) Rust Consulting will maintain the Claims Register for all proofs of claim filed in the Debtors' Chapter 11 Cases, in accord with these requirements: (i) The Claims Register will be available for review by the public, Rust Consulting will assign each proof of claim a unique number, will list each individual creditor and provide for the index of claims alphabetically and numerically; (ii) Rust Consulting will establish a publicly accessible Web site through which the Claims Register may be viewed and through which Asbestos Proofs of Claim and Non-Asbestos Proofs of Claim may be filed; (iii) Each Proof of Claim will be stored in portable document format or .pdf; and (iv) In accord with other Orders of the Court, portions of each Asbestos Proof of Claim will be available to the public through the Claims Register, but non- public portions of Asbestos Proofs of Claim, including full social security numbers of persons and certain medical information, will be stored securely in a location not accessible to the public. (b) Rust Consulting will receive and docket Asbestos Proofs of Claim and Non-Asbestos Proofs of Claim. (c) Rust Consulting will date-stamp all proofs of claim on the date of receipt. Proofs of claim received by the Court will be datestamped on the date of receipt by the Clerk, and forwarded to Rust Consulting for acknowledgement and docketing. (d) For claims filed through the Claims Web site or proofs of claim where a creditor identified electronic mail as the means for further notice, Rust Consulting will transmit an electronic acknowledgement of the receipt of a proof of claim. For other proofs of claim, if a claimant provides a self-addressed, stamped envelope with the submission of a proof of claim, Rust Consulting will provide an acknowledgement of the receipt of the proof of claim. (e) Rust Consulting will perform proper data quality assurance to verify that each portable document format image is complete, and information listed on each claim is accurately reflected in the Claims Register. (f) Rust Consulting will duplicate any proofs of claim filed directly with the Court in CM/ECF and cause them to be placed on the Claims Register. (g) Rust Consulting will record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy procedure and provide notice of those transfers pursuant to Rule 3001(e). (h) Rust Consulting will provide the Clerk of Court an electronic copy of the Claims Register every 90 days after entry of an Order appointing Rust Consulting through the bar dates set by the Court and every 180 days thereafter until these Chapter 11 cases are closed. (i) Rust Consulting will staff a call center open during Regular business hours to answer questions posed by claimants concerning claims for a period as set forth in other orders of the Court. (j) Upon the closing of the Debtors' Chapter 11 cases, Rust Consulting will submit to the Clerk for entry in CM/ECF all proofs of claim filed in portable document format, with separate image files provided for the publicly available portion of each proof of claim and the non- publicly available portion of each proof of claim. Rust Consulting will cause any physical copy of proofs of claim to be shredded or stored, but will not lodge them in the Court. (k) Rust Consulting will comply with applicable federal and state laws, rules, orders and regulations, and the further conditions and requirements as the Clerk of Court may prescribe. The proposed activities of Rust Consulting on behalf of the Debtors will include, but are not limited to: (a) To the extent required, assisting in providing direct notice and mailing of Bar Date Packages and other materials to parties-in-interest; (b) Analysis and capture of data included in the Proof of Claim Form, scanning Proofs of Claims, and entering data contained in Proofs of Claim and other materials received from Debtors; (c) Data storage; and (d) Other than those activities that may arise during the implementation of procedures and processes outlined in the Asbestos Bar Date Motion or that may be reasonably required in connection with the relief sought. The Debtors will pay Rust Consulting's professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Senior management/consultants $185 to $290 Senior project administrator $170 to $185 Project manager $110 to $150 Technical consultant $110 to $190 Call center manager $150 Call center supervisor $85 Customer service representative $45 to $55 Processor $47 to $130 The Debtors will also reimburse Rust Consulting for expenses incurred. Rust Consulting estimates the total project cost as $415,105. Elizabeth Graham King, senior vice president of Rust Consulting -- bgrahamking@rustconsulting.com -- maintains that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Debtors ask the Court to shorten notice period for the application so as a hearing may be held on September 30, 2010. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Proposes to Establish Gen. Claims Bar Date ----------------------------------------------------------- Garlock Sealing Technologies LLC and its debtor affiliates ask Judge George R. Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina to: (i) establish a general bar date by which all creditors asserting any non-asbestos claim must file proofs of claim in the Debtors' Chapter 11 cases; (ii) establish a bar date by which a proof of claim relating to the Debtors' rejection of any executory contract or unexpired lease must be filed; (iii) establish a bar date by which creditors holding Non- Asbestos Claims, which have been amended by the Debtors in their Schedules of Assets and Liabilities, must be filed; (iv) approve a tailored proof of claim form to be distributed to potential Non-Asbestos Claimants; (v) approve the forms of notice to be used to inform potential Non-Asbestos Claimants of the Bar Dates; (vi) approve mailing procedures with respect to notice of the Bar Dates; and (vii) approve supplemental procedures regarding the Bar Dates. Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure provides that "[t]he court will fix . . . the time within which proofs of claim or interest may be filed." General Bar Date The Debtors ask the Court to fix the day that is 90 days from the entry of an order approving their Bar Date Motion as the General Bar Date for Non-Asbestos Claims, excluding claims by governmental units. Governmental units will have a bar date of December 3, 2010, according to the Debtors. The Debtors propose these procedures for filing proofs of non- asbestos claim: (1) Any entity that asserts a Non-Asbestos Claim that arose before the Petition Date must file an original, written proof of a Prepetition Non-Asbestos Claim, which is substantially in the form of the Official Form No. 10, so as to be actually received or, as appropriate, electronically filed on or before the General Bar Date. (2) Proofs of claim that were filed with the Court before the appointment of a claims processing agent will be deemed timely received by the Claims Processing Agent. The General Bar Date would apply to all Entities holding Prepetition Non-Asbestos Claims, including, but not limited to: (a) creditors whose Prepetition Non-Asbestos Claims arise out of the rejection of executory contracts or unexpired leases by the Debtor before entry of the Bar Date Order; (b) governmental units holding Prepetition Non-Asbestos Claims for unpaid taxes, whether arising from prepetition tax years or periods or prepetition transactions to which a Debtor was a party; and (c) entities whose Prepetition Non-Asbestos Claims arise out of the obligations of those Entities under a contract for the provision of liability insurance to a Debtor. These parties need not file proofs of claim on or before the General Bar Date: (A) any Entity that has already properly filed a proof of claim against one or more of the Debtors against whom that Entity asserts a claim; (B) any Entity (i) whose Prepetition Non-Asbestos Claim is not listed as disputed, contingent, or unliquidated in the Schedules; and (ii) that agrees with the nature, classification, and amount of those Prepetition Non- Asbestos Claim set forth in the Schedules; (C) any Entity whose Prepetition Non-Asbestos Claim has been allowed by, or paid pursuant to, an order of the Court; and (D) any of the Debtors that hold Prepetition Non-Asbestos Claims against one or more of the other Debtors. However, any Entity (i) whose Prepetition Non-Asbestos Claim is not listed as disputed, contingent, or unliquidated but desires to participate in the Chapter 11 cases or share in any distribution in any of the Chapter 11 cases; and (ii) that believes its Prepetition Non-Asbestos Claim should be allowed in a classification or amount other than that set forth in the Schedules, must file a proof of claim on or before the General Bar Date. Rejection Bar Date The Debtors propose that the Rejection Bar Date will be: (1) the later of the General Bar Date; and (2) 30 days after the effective date of rejection of a contract or lease as provided by an order of the Court or pursuant to a notice under procedures approved by the Court. Entities wishing to assert a Rejection Damages Claim are required to file an original, written request for payment of any Rejection Damages Claim, substantially in the form of the Proof of Claim Form, so as to be received on or before the Rejection Bar Date. Amended Schedule Bar Date The Debtors ask the Court to fix the Amended Schedule Bar Date as the later of the General Bar Date and 23 days after the date that notice of the amendment is served on the affected Non-Asbestos Claimants. The Debtors propose to retain the right to: (a) dispute or assert offsets or defenses against any filed Prepetition Non-Asbestos Claim or any Prepetition Non- Asbestos Claim listed or reflected in the Schedules as to nature, amount, liability, classification, or otherwise; (b) subsequently designate any Prepetition Non-Asbestos Claim as disputed, contingent or unliquidated; (c) add a claim to the Schedules; and (d) object to any Prepetition Non-asbestos Claim; provided, however, that, if the Debtors amend the Schedules to, among other things, reduce the undisputed, noncontingent, and liquidated amount, then the affected claimant will have until the Amended Schedule Bar Date to file a proof of claim or to amend any filed proof of claim in respect of the amended scheduled Prepetition Non-Asbestos Claim or added claim. The Debtors also propose that any Entity that is required to file a proof of claim for a Prepetition Non-asbestos Claim but fails to do so in a timely manner will be forever barred, estopped, and enjoined from: * asserting any Prepetition Non-Asbestos Claim against any of the Debtors that (i) is in an amount that exceeds the amount, if any, that is set forth in the Schedules as undisputed, noncontingent, and liquidated, or (ii) is of a different nature or classification; or * voting upon any plan or plans of reorganization in the Chapter 11 cases in respect of that Unsecured Claim. Bar Date Notices The Debtors propose to provide actual notice of the Bar Dates by mailing (a) a notice of the Bar Dates; and (b) the Proof of Claim Form to these parties, including, but not limited to: (a) Bankruptcy Administrator; (b) Counsel for the Official Committee of the Asbestos Personal Injury Claimants and the Official Committee of Unsecured Creditors; (c) all holders of Prepetition Non-Asbestos Claims listed on the Schedules at the addresses stated therein; (d) all counterparties to executory contracts and unexpired leases; (e) all current employees of the Debtors; (f) a representative of the local International Association of Machinists and Aerospace Workers; (g) the U.S. Department of the Treasury by service upon the District Director of the Internal Revenue Service and all taxing authorities for locations in which the Debtors do business; (h) the U.S. Securities and Exchange Commission; (i) the office of the U.S. Attorney for the Western District of North Carolina; (j) the Pension Benefit Guaranty Corporation; and (k) all Entities requesting notice pursuant to Rule 2002 as of the entry of the Bar Date Order. Based on the number of entities to provide notice to, the Debtors believe that they will be able to complete the mailing of the Bar Date Notice Package within approximately three business days after the date of entry of the Bar Date Order, John R. Miller, Esq., at Rayburn Cooper & Durham, P.A., in Charlotte, North Carolina, relates. Given that the General Bar Date is 90 days after the entry of the order on the Bar Dates Motion, all potential claimants should have about 90 days' notice of those Bar Dates, Mr. Miller asserts. That notice period exceeds the 20-day notice period required under Rule 2002(a)(7) of the Federal Rules of Bankruptcy Procedure and will provide creditors ample time within which to prepare and file proofs of claim, he assures the Court. The Debtors also propose to make supplemental mailings of the Bar Date Notice Package up to 23 days in advance of the applicable Bar Dates, with any of those supplemental mailings being deemed timely, in the event: (1) Bar Date Notice Packages are returned by the post office with forwarding addresses, necessitating a remailing to the new addresses; (2) certain parties acting on behalf of parties-in-interest decline to pass along Bar Date Notice Packages to those parties and instead return their names and addresses to the Debtors for direct mailing; and (3) additional potential claimants become known to the Debtors. To minimize the time and expense associated with having to seek subsequent orders from the Court, the Debtors seek the Court's permission to establish special bar dates with respect to the Special Bar Date Parties as to which a mailing or remailing of the Bar Date Notice Package is necessary and cannot be accomplished before the 23-day period. With respect the Special Bar Date Parties, the Debtors propose to establish special bar dates at least 23 days after the date on which they mail the notice of each special bar date. The 23-day notice of each special bar date is appropriate because any special bar dates will be established later in the Debtors' Chapter 11 cases and must be structured so as not to delay the progress of these cases, Mr. Miller points out. The Debtors intend to advise the Court of the establishment of each special bar date by filing a notice, together with a list that identifies the Special Bar Date Parties that are subject to it and a copy of the bar date notice applicable to the special bar date. That notice will also be served upon the Bankruptcy Administrator, the Counsel for the Asbestos Claimants Committee and the Creditors' Committee and all Entities seeking notice pursuant to Rule 2002. In other matters, the Debtors propose that all entities asserting claims against more than one Debtor be required to file a separate proof of claim with respect to each Debtor. The Entities will be required to identify on each proof of claim the particular Debtor against which their claim is asserted. The Court will consider the Debtors' request on October 14, 2010. Objections are due October 1. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GEMCRAFT HOMES: Federal Judge Approves Reorganization Plan ---------------------------------------------------------- Alan J. Heavens at The Philadelphia Inquirer reports that a U.S. bankruptcy judge in Baltimore approved Gemcraft Homes' plan of reorganization, allowing the home builder to exit Chapter 11 after less than a year. The Company was able to secure $70 million in financing to continue operations. According to Marcus Rauhut, staff writer at Public Opinion, Gemcraft Homes negotiated deals with Regions Bank, M&T Bank, and other institutions to secure more than $70 million in new financing to continue its building and development operations. The two banks collectively supplied $30 million in debtor-in- possession financing during the reorganization process. Normal day-to-day business operations of the company were allowed to continue and there was no effect upon Gemcraft customers. About Gemcraft Homes Gemcraft Homes, Inc., is a corporation formed under the laws of the State of Maryland with its principal place of business located in Harford County, Maryland. Gemcraft was founded in 1993 with a single sales trailer in Abingdon, Maryland, from which six residential homes were sold. Since that time, Gemcraft has grown to become one of the largest independent homebuilders in the Mid- Atlantic region, and one of the fastest growing builders in the entire country. Gemcraft is a production builder which targets first-time homebuyers and first-time "move up" buyers. It also targets retired, and soon to retire, buyers for its retirement communities. The Company filed for Chapter 11 bankruptcy protection on November 9, 2009 (Bankr. D. Md. Case No. 09-31696.) The Company's affiliates -- DLM, LLC, et al. -- filed separate Chapter 11 bankruptcy petitions. In its schedules, Gemcraft Homes' disclosed total assets of $40,668,980, and total liabilities of $73,468,237. GLIMCHER REALTY: S&P Affirms 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Glimcher Realty Trust, including its 'B+' corporate credit rating and 'CCC+' preferred stock rating. The outlook is negative. The rating actions affect roughly $280 billion of rated preferred stock. "S&P's rating on Glimcher reflects the company's aggressive financial risk profile, with high leverage, low fixed-charge coverage, and a fully encumbered asset base," said Standard & Poor's credit analyst George Skoufis. "S&P views Glimcher's business risk profile as weak, reflecting the company's smaller and less competitively positioned portfolio relative to peers." However, Glimcher's portfolio remains well-occupied, and recent results point to modest improvements in operating trends. S&P has also factored in its expectation that the Scottsdale Quarter development project will begin to contribute to cash flow over the next several quarters and that the company's debt maturities are very manageable through 2011. S&P's outlook remains negative, reflecting its belief that the feeble economic recovery will continue to weigh on consumer confidence and retail demand, which may pressure occupancy and rents in Glimcher's retail portfolio over the near term. S&P also considered the potential risk that cash flow contribution from the Scottsdale Quarter development could be delayed or lower than expected. S&P will monitor Glimcher's cash flow over the next few quarters with the expectation that FCC will be on a trajectory to reach 1.4x or higher by the end of 2011. S&P would consider lowering the ratings if S&P believes FCC and total coverage will fall below 1.4x and 1.0x, respectively, or if any bank covenants come under pressure. Aggressive acquisitions would also factor into a downgrade if they pressure coverage measures and strain liquidity. S&P does not foresee improvement in the ratings over the near term. However, S&P would consider an upgrade if retail fundamentals stabilize, leverage levels moderate, operating cash flow comfortably covers the common dividend and maintenance cap ex, and S&P believes the company can achieve FCC exceeding 1.7x. GLOBAL BEVERAGES: Posts $562,600 Net Loss in March 31 Quarter ------------------------------------------------------------- Global Beverages, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $562,609 on $4.25 million of revenue for the three months ended March 31, 2010, compared with net income of $56,556 on $814,488 of revenue for the three months ended March 31, 2009. The increase in revenues was primarily related to the inclusion of revenues generated by the business units acquired in the Asia Distribution Solutions transaction, and revenue generated from sale of grapes in the Australian operations. The Company had an operating loss of $364,002 in the three months ended March 31, 2010, compared to operating income of $186,099 in the three months ended March 31, 2009. At March 31, 2010, the Company had a working capital deficiency of $700,250 and an accumulated deficit of $15.26 million. The Company's balance sheet as of March 31, 2010, showed $42.01 million in total assets, $17.42 million in total liabilities, and stockholders' equity of $24.59 million. As reported in the Troubled Company Reporter on April 12, 2010, Acquavella, Chiarelli, Shuster, Berkower & Co., LLP, in New York, 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 incurred operating losses and has negative cash flows from operations for fiscal 2009. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bc2 About Global Beverages Based in Wybong Upper Valley, New South Wales, Australia, Global Beverages, Inc., is engaged in the operation of vineyards and wine production in Australia and distribution of wine products in Australia, People's Republic of China, United States, Canada and throughout Europe. GREAT ATLANTIC: Elects Thomas Casey to Board of Directors --------------------------------------------------------- The Great Atlantic & Pacific Tea Company Inc. elected Thomas Casey to the Company's Board of Directors. Mr. Casey holds the open Board position that has been vacated by Mr. Brace, the Company's Chief Administrative Officer. Mr. Casey has more than 24 years experience in financial management and strategic planning. During his career, Mr. Casey has served as a strategic financial advisor to some of the world's largest companies in the retail entertainment, food and drug, convenience store, food wholesale and foodservice industries. During his tenure at Deutsche Bank Securities, Inc. Mr. Casey was responsible for the banks' retail industry relationships in North America. He has also held financial and investment banking positions with Citigroup, Merrill Lynch, Blockbuster and Dillon Read & Co. Mr. Casey has a Bachelor of Science degree from the U.S. Naval Academy and has served as an officer in the U.S. Navy. He also received his MBA from Harvard Business School. "I would like to welcome Tom to the Board. We are excited to have his extensive financial knowledge and experience to help us lead our comprehensive turnaround. I am looking forward to working with Tom and the Board of Directors to create value for our shareholders," concluded Christian Haub, Executive Chairman, The Great Atlantic & Pacific Tea Company. About A&P Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP), founded in 1859, is one of the nation's first supermarket chains. The Company operates 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a- Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. The Company's balance sheet at June 19, 2010, showed $2.6 billion in total assets, $897.0 million in total current liabilities, $2.3 billion in total non-current liabilities, $135.0 million series A redeemable preferred stock, and $659.0 million in stockholders' deficit. Great Atlantic carries 'Caa3' probability of default and corporate family ratings from Moody's Investors Service and a 'CCC' corporate credit rating from Standard & Poor's. At the end of July 2010, when Moody's downgraded the SGL rating to SGL-4 (reflecting weak liquidity), Moody's said, "A&P does have sufficient liquidity to meet immediate operating needs, but liquidity is strained over the next four quarters as a result of the company's debt maturity in June 2011." S&P, in July 2010, when it lowered the corporate rating to 'CCC' from 'CCC+', said it "expects weak trends to continue and the company to be significantly cash flow negative." GREDE FOUNDRIES: Wis. Court Says Electricity is a UCC "Good" ------------------------------------------------------------ WestLaw reports that electricity that utilities supplied to a Chapter 11 debtor within 20 days prior to the petition date was in the nature of a "good," for whose value the utilities could assert an administrative priority claim. While the movement was so fast as to almost instantaneous, electricity was plainly moveable, and was in fact moving from the utilities' power lines to the debtor's facility, at the time that it was metered and became identifiable to the supply agreements between the parties, thereby satisfying the Uniform Commercial Code definition for a "good." There was nothing in the administrative priority provision of the Bankruptcy Code or in the Uniform Commercial Code requiring that this movement occur at any particular speed. In re Grede Foundries, Inc., --- B.R. ----, 2010 WL 2196280 (Bankr. W.D. Wis.) About Grede Foundries Based in Reedsburg, Wisconsin, Grede Foundries, Inc. -- http://www.grede.com/-- produces ductile iron, grey iron and specialty metal parts. The Company serves the automotive, heavy truck, off-highway, diesel engine and industrial markets and is one of the largest cast-iron foundry companies in the United States. The Company sought Chapter 11 protection (Bankr. W.D. Wisc. Case No. 09-14337) on June 30, 2009. Daryl L. Diesing, Esq., Jerard J. Jensen, Esq., and Daniel J. McGarry, Esq., at Whyte Hirschboeck Dudek S.C., represent the Debtor. The Debtor selected Conway Del Genio Gries & Co. as its restructuring advisor; Leverson & Metz S.C. as special counsel; and Kurtzman Carson Consultants LLC as claims agent. The Debtor reported total assets of $143,983,000 and total debts of $148,243,000 at the petition date. Wayzata Investment Partners LLC purchased the business of Grede Foundries for $106.5 million in Feb. 2010 and merged it with Citation Corp. GREEN RIVER: Quality Carriers Can File Late Claims -------------------------------------------------- In In re: Green River Biodiesel, Inc., (Bankr. N.D. Ala. Case No. 08-72626, September 24, 2010), the Hon. C. Michael Stilson grants a request by Quality Carriers, Inc.'s Motion for Leave to File Late-Filed Claims, over the Debtor's objection. Judge Stilson held that the notices sent to QCI at the Chicago lock-box address did not comport with due process; therefore, QCI did not receive adequate notice of the May 11, 2009 bar date. In addition, QCI did not have knowledge of the May 11, 2009 bar date prior to its expiration. Having neither adequate notice nor knowledge of the May 11, 2009 bar date, QCI is not bound by the May 11, 2009 bar date. A copy of the Court's memorandum opinion is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100924570 QCI is a bulk transportation company. Green River Biodiesel, Inc., was engaged in the business of manufacturing biodiesel fuel at its plant located in Moundville, Alabama. On November 21, 2008, an involuntary Chapter 7 bankruptcy case was filed by four of Green River's creditors. On March 3, 2009, Green River consented to the conversion of the involuntary Chapter 7 case to a case under Chapter 11 of the Bankruptcy Code, and an order for relief was entered March 5, 2009. GROVE COMMONS: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Grove Commons Limited Partnership 106 East North Street New Castle, PA 16101 Bankruptcy Case No.: 10-26791 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Scott E. Schuster, Esq. BERNSTEIN LAW FIRM 2200 Gulf Tower 707 Grant Street Pittsburgh, PA 15219 Tel: (412) 456-8119 Fax: (412) 456-8273 E-mail: sschuster@bernsteinlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/pawb10-26791.pdf The petition was signed by Thomas J. George, vice president. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Washington Commons Limited Partnership 10-26792 09/23/10 GRS ELECTRONICS: Omega Can't Access Funds From Court Registry ------------------------------------------------------------- In In re: GRS Electronics, Inc. (Bankr. D. N.J. Case No. 94-11024), the Hon. Judith H. Wizmur denies a request by Omega Consulting, as assignee of Blair Acquisition Corporation, to withdraw funds from the Court Registry on behalf of Omega Consulting. Omega Consulting claimed to be the assignee of Blair, f/k/a Advent Electronics, Inc., successor by merger to GRS Acquisition Corporation, "the successor-in-interest to Debtor, GRS Electronics." The debtor, GRS Electronics, sold its assets to GRS Acquisition in July 1994 while in bankruptcy. The sale was exclusive of accounts receivable to be collected by the Debtor, certain causes of action retained by the Debtor, and the debtor's real estate. Thereafter, the Debtor proposed a Chapter 11 plan which would be funded through the collection of accounts receivable and the collection of rents from the real estate that the debtor continued to own, as well as through contributions from its principal, Walter A. Beringer, Jr. The First Amended Disclosure Statement was approved in January 1995 and the plan was confirmed in April 1995. The Debtor's case was administratively closed in April 1997. Judge Wizmur holds that the sale of the Debtor's assets to GRS Acquisition occurred prior to the formulation and confirmation of the Debtor's plan. Following confirmation, the Debtor continued to operate as a real estate holding company for an additional five years, funding the Chapter 11 plan through its accounts receivable collections and its rent receivables, ultimately selling its real estate to an unrelated third party. She points out that the funds in question were generated through the Debtor's postpetition existence as a real estate holding company, and were deposited in the Court Registry for the benefit of specified creditors who had no connection to GRS Acquisition. A copy of the Court's letter opinion is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100924576 GRS Electronics, Inc., d/b/a General Radio Supply, Inc., operated as a wholesale distributor of electrical and electronic parts and components for over 50 years before experiencing financial difficulties in the late 1980's. GRS Electronics filed for Chapter 11 bankruptcy protection on March 10, 1994. HALAL 4 U: Judge Glenn Converts Case to Chapter 7 ------------------------------------------------- The Hon. Martin Glenn grants the United States Trustee's motion to convert Halal 4 U LLC's case from a chapter 11 case to a case under chapter 7. While there is no conclusive proof that the Debtor has filed its petition in bad faith, the circumstances surrounding the Debtor's filing and accompanying disclosures are suspicious. There are no records of the Debtor's cash inflows and outflows prior to the filing -- and those post-filing are not very informative -- the Debtor has filed two amended schedules listing additional properties not initially disclosed, and the Debtor has not satisfactorily demonstrated what interests it has in the listed properties and how it acquired such interests. Furthermore, it is unclear the extent to which the Debtor has satisfied its tax and insurance obligations on the listed properties, and the extent to which the Debtor has made the requisite mortgage payments. Additionally, one or more of the properties as to which the Debtor claims an interest were "acquired" or "transferred" from individuals facing imminent foreclosure or their own bankruptcy filings raising questions whether the Debtor's alleged interests were the result of fraudulent conveyances. The Debtor submitted an untimely objection on September 21, 2010. A copy of the Court's memorandum order is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100924578 This is the U.S. Trustee's second bid for conversion or dismissal of the case. On January 21, 2009, the U.S. Trustee moved the court to dismiss the case or convert it to a case under chapter 7 based on the Debtor's failure to retain counsel. The issue was resolved, however, when the Debtor obtained legal representation. Halal 4 U LLC filed a chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 08-15216) on December 30, 2008. HARRISBURG, PA: Votes to Retain Bankruptcy Lawyers -------------------------------------------------- Dunstan McNichol at Bloomberg News reports that the City Council of Harrisburg, Pennsylvania, voted 5-2 on September 28 to seek professional advice on bankruptcy or state oversight. Harrisburg needed state aid to avoid default on $3.3 million of bond payments this month. According to Bloomberg, the city has missed about $8 million in debt-service payments this year on bonds issued in connection with a trash-to-energy incinerator. The city owes another $40 million by the end of the year, and was sued by its home county, Dauphin, and Hamilton, Bermuda-based bond insurer Assured Guaranty Municipal Corp. over its failure to honor the commitments. Bloomberg relates that Mayor Linda Thompson spoke to the council in public for 40 minutes at the start of the meeting, and urged them to reject bankruptcy. "The whole world is watching Harrisburg," she said. "Our bondholders are looking to make us the poster child of the world to municipalities in financial difficulties. And they don't plan on losing." Should Harrisburg seek bankruptcy protection, it would be the second Pennsylvania community to do so. Westphal Township filed for Chapter 9 bankruptcy in November 2009 in the face of a legal settlement that exceeded the municipal budget. The case was resolved a short time later. Bloomberg News earlier reported that Harrisburg Councilman Brad Koplinski made a second attempt to have lawmakers consider hiring a lawyer for advice on bankruptcy. Mr. Koplinski had his attempt to move a similar motion at a City Council meeting on Sept. 14 rejected as out of order because it was unadvertised new business. "We're looking to have it officially placed on the agenda" for a meeting on the 28th, Mr. Koplinski said in a telephone interview from Harrisburg. About Harrisburg, PA The city of Harrisburg is coping with debt related to a failed revamp of an incinerator. The outstanding principal on the Incinerator debt is $288 million. Total principal and interest on this debt would amount to approximately $458 million. Debt service payments on the total incinerator debt are $20 million per year. Of this total, Dauphin County, Pennsylvania, is responsible for roughly $10 million and Harrisburg is responsible for the other $10 million. The city is guarantor on 100% of the $288 million Incinerator debt. As reported by the Troubled Company Reporter on August 19, 2010, Harrisburg hired Scott Balice Strategies to help plot a financial recovery plan. As reported by the TCR on September 7, 2010, Dow Jones' DBR Small Cap said elected officials in Harrisburg met to discuss hiring a bankruptcy adviser and handing over control of their troubled municipal authority to a receiver as the city's fiscal problems mount. As reported by the TCR on September 1, Harrisburg will skip $3.29 million in debt-service payments on general obligation debt from 1997 due Sept. 15. Ambac Assurance Corp., which insures the GO bonds, will meet payments to investors. The TCR said on September 14, 2010, that Dauphin County, Pennsylvania, bond trustees and bond insurer Assured Guaranty Municipal Corp. on September 13 filed complaints to seek the appointment of a receiver for the Harrisburg Authority's Resource Recovery Facility and to obtain an order of mandamus to compel the city of Harrisburg to meet its obligations on the defaulted Harrisburg Authority Resource Recovery Facility Revenue bonds. HARRISBURG, PA: May Not Make Wednesday's Payroll to Workers ----------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that city workers in Harrisburg, Pa., may not get their paychecks Wednesday, another sign of the political squabbling that has sunk the capital city into a fiscal crisis. About Harrisburg, PA The city of Harrisburg is coping with debt related to a failed revamp of an incinerator. The outstanding principal on the Incinerator debt is $288 million. Total principal and interest on this debt would amount to approximately $458 million. Debt service payments on the total incinerator debt are $20 million per year. Of this total, Dauphin County, Pennsylvania, is responsible for roughly $10 million and Harrisburg is responsible for the other $10 million. The city is guarantor on 100% of the $288 million Incinerator debt. As reported by the Troubled Company Reporter on August 19, 2010, Harrisburg hired Scott Balice Strategies to help plot a financial recovery plan. As reported by the TCR on September 7, 2010, Dow Jones' DBR Small Cap said elected officials in Harrisburg met to discuss hiring a bankruptcy adviser and handing over control of their troubled municipal authority to a receiver as the city's fiscal problems mount. As reported by the TCR on September 1, Harrisburg will skip $3.29 million in debt-service payments on general obligation debt from 1997 due Sept. 15. Ambac Assurance Corp., which insures the GO bonds, will meet payments to investors. The TCR said on September 14, 2010, that Dauphin County, Pennsylvania, bond trustees and bond insurer Assured Guaranty Municipal Corp. on September 13 filed complaints to seek the appointment of a receiver for the Harrisburg Authority's Resource Recovery Facility and to obtain an order of mandamus to compel the city of Harrisburg to meet its obligations on the defaulted Harrisburg Authority Resource Recovery Facility Revenue bonds. HEARTLINE FOODS: Has Not Meet Burden for "Nunc Pro Tunc" Relief --------------------------------------------------------------- The Hon. Alan H. S. Shiff denies Heartline Foods, Inc.'s Application for Final Decree nunc pro tunc to June 20, 2005, which would have eliminated its obligation to pay quarterly fees to the United States Trustee and file monthly operating reports. Judge Shiff rules that to establish that nunc pro tunc relief is warranted, the requesting party must show that (1) if the application for relief had been made timely, the bankruptcy court would have granted the relief requested, and (2) the delay in seeking relief resulted from extraordinary circumstances. Judge Shiff says the debtor's only explanation for its failure to timely prosecute its Application for Final Decree is that "[i]t appears to have been an unusual oversight". Without more, the debtor has failed to meet its burden of showing that its delay in closing the case resulted from extraordinary circumstances. The debtor has until October 24 to comply with the Consent Order entered into with the U.S. Trustee. If the debtor fails to do so, the case will be converted to a case under Chapter 7 pursuant to the terms of the Consent Order. A copy of the Court's memorandum and order is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100924572 Heartline Foods, Inc., filed a chapter 11 petition (Bankr. D. Conn. Case No. 02-51288) on October 16, 2002. On April 13, 2005, the debtor's First Amended Chapter 11 Plan was confirmed. HOSPITAL DAMAS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Hospital Damas, Inc. 2213 Ponce By Pass Ponce, PR 00717-1318 Bankruptcy Case No.: 10-08844 Chapter 11 Petition Date: September 24, 2010 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Charles Alfred Cuprill, Esq. CHARLES A. CURPILL, PSC LAW OFFICE 356 Calle Fortaleza, Second Floor San Juan, PR 00901 Tel: (787) 977-0515 E-mail: cacuprill@aol.com Scheduled Assets: $24,017,166 Scheduled Debts: $21,267,263 The petition was signed by Julio Colon, CFO. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco Popular de Bank Loan $3,314,000 Puerto Rico P.O. Box 362708 San Juan, PR 00936-2708 Cardinal Health P.R., Inc. pharmacy $1,598,551 P.O. Box 71438 management San Juan, PR 00936 Lizbeth Vargas Colon suit for $1,100,000 c/o LCDO. David Efron medical P.O. Box 29314 malpractice San Juan, PR 00929-0314 Boston Scientific del medical $931,018 Caribe supplies Torre Chardon Bldg 350 Chardon Ave. Ste 1001 San Juan, PR 00918 A.E.E. Electric Power $708,887 P.O. Box 7366 Services Ponce, PR 00732-9917 Isla Lab Products, Corp. Supplies & Leased $579,032 P.O. Box 361810 equipment San Juan, PR 00936-1810 P.R. Hospital Supply, Medical supplies $518,339 Inc. P.O. Box 158 Carolina, PR 00986-0158 Borschow Hospital Med. Pharmacy supplies $434,175 Sup. P.O. Box 366211 San Juan, PR 00936-6211 Juan Orta Rodriguez Suit for medical $425,000 c/o LCDO. Luis R. Rivera malpractice Edif. Capital Center Suite San Juan, PR 00918 Baxter Sales Corp. Medical supplies $409,984 Rexco Industrical Park State Road #24 Buchanan Guaynabo, PR 00968 J&J Medical Caribbean Medical supplies $286,542 P.O. Box 70304 San Juan, PR 00936-8304 Infomedika, Inc. Financing billing $253,781 P.O. Box 11095 system Caparra Heights Station San Juan, PR 00922 Covidien Medical supplies $203,040 (Tyco Healthcare) GPO Box 71416 San Juan, PR 00936 Ciracet, Corp. Medical services $151,134 Abbott Laboratories Medical supplies $141,080 P.R. Inc. Imperial Credit Insurance policy $139,218 Corporation Spectranetics Medical supplies $137,942 Instituto Emergencias Security deposit $137,500 Medicas Laboratory Corp. of Laboratory services $136,293 America Rimaco, Inc. Medical supplies $134,938 HYTHIAM INC: Posts $2.5 Million Net Loss in June 30 Quarter ----------------------------------------------------------- Hythiam, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.5 million on $111,000 of revenue for the three months ended June 30, 2010, compared with a net loss of $4.9 million on $371,000 of revenue for the same period of 2009. As of June 30, the Company had a working capital deficit of $3.5 million compared to a surplus of $79,000 as of December 31, 2009. During the six months ended June 30, 2010, cash used in operating activities amounted $4.3 million. The Company expects to continue to incur negative cash flows and net losses for the next twelve months. The Company's balance sheet as of June 30, 2010, showed $7.5 million in total assets, $8.1 million in total liabilities, and a stockholders' deficit of $588,000. As reported in the Troubled Company Reporter on April 19, 2010, BDO Seidman, LLP, in Los Angeles, 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 recurring losses from operations and negative cash flows from operating activities. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bc5 About Hythiam, Inc. Based in Los Angeles, Hythiam, Inc., is a healthcare services management company, providing through its Catasys(R) subsidiary specialized behavioral health management services for substance abuse to health plans. JESUP & LAMONT: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Jesup & Lamont Securities Corporation 415 Madison Avenue, Suite 1436 New York, NY 10017 Bankruptcy Case No.: 10-15037 Chapter 11 Petition Date: September 24, 2010 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Arthur J. Gonzalez Debtor's Counsel: Ronald J. Friedman, Esq. SILVERMANACAMPORA LLP 100 Jericho Quadrangle, Suite 300 Jericho, NY 11753 Tel: (516) 479-6300 Fax: (516) 479-6301 E-mail: filings@spallp.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 William C. Holub, chief financial officer. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Jesup & Lamont, Inc. 10-14133 07/30/10 JOSE FRANCO: Taps Victor Gratacos Diaz as Bankruptcy Counsel ------------------------------------------------------------ The Hon. Brian K. Tester of the U.S. Bankruptcy Court for the District of Puerto Rico authorized Jose Manuel Colon Franco to employ Victor Gratacos Diaz, Esq., as counsel. Mr. Diaz will represent the Debtor in the Chapter 11 proceedings. To the best of the Debtor's knowledge, Mr. Diaz is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Jose Franco Caguas, Puerto-Rico-based Jose Manuel Colon Franco, aka Cheo Colon Franco, fdba Garaje Colon Hijo; and Ramona Arroyo Ramos, aka Monin Arroyo, filed for Chapter 11 bankruptcy protection on June 14, 2010 (Bankr. D.P.R. Case No. 10-05189). The Company estimated its assets and debts at $10 million to $50 million. LAS VEGAS MONORAIL: Judge Postpones Key Hearings in Case -------------------------------------------------------- Dow Jones' DBR Small Cap reports that Judge Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada has agreed to postpone key hearings for Las Vegas Monorail Co.'s reorganization efforts. According to the report, Judge Markell signed an order that moves to November 9 the hearing on Wells Fargo Bank's request to end Las Vegas Monorail's exclusive control of its reorganization efforts. The hearing was originally scheduled for September 22. The report notes that Judge Markell also moved the hearing to consider the adequacy of the disclosure statement in explaining the reorganization plan to November 17. The hearing was originally set for October 5. The judge, the report relates, moved the hearing dates based on an agreement Las Vegas Monorail reached with Wells Fargo Bank, the indenture trustee for first-tier bondholders. Other parties to the agreement are the majority of first-tier, the report adds. About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company disclosed $395,959,764 in assets and $769,515,450 in liabilities as of the Petition Date. In May 2010, Ambac Assurance Corp. lost its bid to stay the bankruptcy case while a district court considers whether the bankruptcy court wrongly rejected Ambac's argument that Monorail was a municipality and thus ineligible to be a Chapter 11 debtor. LEHMAN BROTHERS: Barclays Want Calculations From SIPA Trustee ------------------------------------------------------------- Barclays Capital, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to compel the Trustee in the Securities Investor Protection Act proceedings of Lehman Brothers Inc. to produce on an expedited basis the data and analyses prepared by his financial advisors at Deloitte necessary for Barclays to perform a 15c3-3 reserve calculation for LBI and to examine any and all possible adjustments to that calculation, not merely those identified by the Trustee's 15c3-3 expert Daniel McIsaac. According to Barclays' counsel, Hamish P.M. Hume, Esq., at Boies, Schiller & Flexner LLP, in New York, the parties have met and conferred with respect to this issue and have failed to resolve it. Mr. Hume relates that Barclays is entitled to receive "to the extent permitted by applicable law, and as soon as practicable after the Closing, $769 million of securities, as held by or on behalf of LBI on the date hereof pursuant to Rule 15c3-3 of the Securities and Exchange Act of 1934, as amended, or securities of substantially the same nature and value." This entitlement, he said, is not dependent on whether or not there was an excess equal to or greater than $769 million in LBI's 15c3-3 reserve account as of any date, because (i) the SIPA Trustee was authorized to transact in LBI's property and committed to delivering these securities without regard to whether there was an excess, and (ii) even if the Court finds that the non- existence of an excess would preclude the Trustee from delivering $769 million of securities "as held by or on behalf of LBI . . . pursuant to Rule 15c3-3," it would not preclude him from delivering "securities of substantially the same nature and value," as he agreed to do. 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: Fidelity Opposes SunCal Settlement --------------------------------------------------- Fidelity National Title Insurance Company is seeking to block court approval of a settlement proposed by Lehman Commercial Paper Inc. LCPI earlier filed a motion for approval of a term sheet, which establishes the framework for a settlement among the company, the Official Committee of Unsecured Creditors and the SunCal entities' trustee. The term sheet addresses the disposition of certain real estate development projects and the liens on those projects. Fidelity purportedly has an interest in the term sheet as an issuer of insurance policies with respect to LCPI's liens on those projects. Joshua Cohen, Esq., at Day Pitney LLP, in New Haven, Connecticut, says the proposed settlement under the term sheet "improperly seeks to allocate funds" in the Development Account Fund in a manner that is contrary to the terms of the insurance policies. Mr. Cohen also says the settlement purports to transfer to the trustee LCPI's obligation under the insurance policies to cooperate with Fidelity in its defense of certain foreclosure actions and in coverage investigation. Mr. Cohen has also expressed concern that the settlement may affect the rights and obligations of Fidelity and LCPI under the insurance policies. In a statement filed with the Court, Gramercy Warehouse Funding I LLC has also criticized the motion as "internally inconsistent, saying it could be interpreted in a way that directly alters the firm's rights. Gramercy works as agent for the second lien lenders under a 2006 credit agreement with LBREP/L-SunCal Master I LLC, LCPI and Lehman Brothers Inc. The firm has also suggested the appointment of a special examiner, subject to the Court's jurisdiction and control, to evaluate the claims of the trustee and to issue a report about the settlement. LBREP Lakeside SC Master I, LLC, asks the Court to deny the settlement as fundamentally unfair, inequitable and inappropriate. LBREP notes that while this is the second attempt by the Debtors and the SunCal Entities to have the settlement approved, they still do not address any of the concerns related to giving LCPI and its first lien lenders a direct stake in the outcome of a claim based on their actions in the related transactions. Christopher W. Keegan filed a declaration in support of LBREP's objection. 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: Judge Peck Approves Settlement With Aurora Bank ---------------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York has approved a settlement agreement between Lehman Brothers Holdings Inc. and Aurora Bank FSB. In an order dated September 23, 2010, the Court authorized the transfer of $577 million in cash and $409.3 million worth of assets to Aurora Bank or to Aurora Loan Services LLC. The Court also authorized LBHI to transfer a portfolio of its servicing rights of about 33,000 residential mortgage loans free and clear of liens and claims. The court order prohibits persons or entities from pursuing their interests in the assets to be transferred. It does not restrict, however, the right of a government-sponsored entity to approve the transfer of mortgage servicing rights associated with its sponsored loans, and to agree to the transfer of those rights without assumption of LBHI's seller obligations by Aurora Bank and Aurora Loan. The court order does not also affect, limit or prejudice the rights, powers and privileges of the Federal Housing Finance Agency, in its capacity as the Conservator of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. under the Housing and Economic Recovery Act of 2008. Any claim, right or obligation that LBHI and its affiliated debtors may have against each other in connection with the settlement are "fully preserved" and will not be prejudiced by the issuance of the order. Any allocation of costs and benefits among the Lehman units in connection with the settlement will be subject to adjustment. The September 23 order does not prejudice the right of the Debtors or any concerned party to seek "a different allocation as between the Debtors at a later point," including the right to challenge any determination of ownership or valuation of the Debtors' assets that are the subject of the settlement. In connection with the settlement, LBHI was also given the go- signal to enter into the capital maintenance agreement and the new tax allocation agreement with Aurora Bank. The company was also authorized to extend the terms of an amended repurchase agreement and financing facility for the duration of its ownership of Aurora Bank and Aurora Loan. The Official Committee of Unsecured Creditors extended its support for approval of the settlement, saying LBHI would be able to recover its investment in Aurora Bank as the deal through the infusion of additional financing and the settlement of claims between the bank and the Lehman units. Douglas Lambert, managing director with Alvarez and Marsal and Chief Executive Officer of Lamco LLC, also maintained that the Settlement is in the best interest of the Debtors as the Settlement will allow LBHI to begin to extract its equity interest and investment in the bank. Prior to the approval, a group of creditors expressed concern over another arrangement made by LBHI, Lehman Commercial Paper Inc. and Luxembourg Residential Properties Loan Finance S.a.r.l. for the funding of the capital transfer. Under the arrangement, LBHI agreed that LCPI and Luxembourg Residential will not be responsible for funding the portion of the capital transfer representing the fair value of their collateral that was posted to support LBHI's obligations under the MFA. Instead, LBHI will each fund 90% of such amount as well as fund the balance of the portion of the capital transfer. The group, which calls itself the Ad Hoc Group of Lehman Brothers Creditors, said that what is lacking in the arrangement is any disclosure regarding the process by which and the person by whom the fair value of the underlying loans will be determined on the closing date. The ad hoc group pointed out that any sale among the Lehman units has to be at arms-length and at a price authorized by the Court under Section 363 of the Bankruptcy Code since the assets involved are worth millions of dollars. 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: Judge Peck Approves Woodlands Bank Settlement -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a settlement deal between Lehman Brothers Holdings Inc. and Woodlands Commercial Bank. In an order dated September 23, 2010, the Court authorized the transfer of $75 million in cash to Woodlands, and the cancellation by LBHI of its participation rights to the first $200 million recovered from Woodlands' customer claim against Lehman Brothers Inc. Woodlands filed the customer claim for the undelivered municipal bond securities, which it purchased through LBI. The buy-out and LBI's alleged failure to segregate the securities, which were taken by its clearing bank JPMorgan purchase, reportedly caused the decline in Woodlands' capital level. The September 23 order also authorized LBHI to execute a capital maintenance agreement and a new tax allocation agreement with Woodlands in connection with the settlement deal. Any claim, right or obligation that LBHI and its affiliated debtors may have against each other in connection with the settlement are "fully preserved" and will not be prejudiced by the issuance of the order. Any allocation of costs and benefits among the Lehman units in connection with the settlement will be subject to adjustment, according to the September 23 order. The court order does not prejudice the right of the Debtors or any concerned party to seek "a different allocation as between the Debtors at a later point," including the right to challenge any determination of ownership or valuation of the Debtors' assets that are the subject of the settlement. The Official Committee of Unsecured Creditors has expressed support for the approval of the settlement, saying LBHI would be able to recover its investment as the deal allows the company to inject additional financing to maintain Woodland's capital level and settles all claims between the bank and the Lehman units. Douglas Lambert, managing director with Alvarez and Marsal and Chief Executive Officer of Lamco LLC, maintained in a declaration that the settlement is in the best interest of the Debtors and should be approved. He stated that although every aspect of the Settlements may not be the best possible result for LBHI, when viewed in their entirety and under the circumstances, including giving effect to the potential consequences to LBHI's estate if the Settlements are not approved, the Settlements are fair and reasonable. Prior to the approval, the Ad Hoc Group of Lehman Brothers Creditors raised concern over the decision of some Lehman units to allocate the costs of the settlement among themselves without the Court's supervision or authorization. The group pointed out that the shifting of hundreds of millions of dollars of assets and liabilities among the Debtors should be subjected to more scrutiny. 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 Settlement With Societe Generale ---------------------------------------------------------- Lehman Brothers Special Financing Inc. seeks court approval of a settlement with Societe Generale New York and Lehman Brothers Holdings Inc. to recover as much as $445 million. The settlement deal was hammered out in connection with the credit default swap agreements with Libra CDO Limited and MKP Vela CBO Ltd., special purpose entities that invested in mortgage-backed securities. If LBSF won court approval of the deal, it would receive as much as $445 million, which consists of an immediate payment of $370 million and $75 million guaranteed by Societe Generale. LBSF would also have the right to pursue the remaining assets in Libra and MKP Vela against the other parties to the swap agreements, allowing the company to recover an additional $72 million. LBSF could also ask the indenture trustee of Libra CDO to return about $128 million, which the company posted as collateral before Libra CDO's bankruptcy filing. Meanwhile, LBHI's guarantee of LBSF's obligations under the swap agreements would be extinguished. The settlement is formalized in a 48-page agreement, a full-text copy of which is available without charge at: http://bankrupt.com/misc/LBHI_SGSettlement.pdf LBSF executed the swap agreements to purchase credit protection, which is similar to insurance, from Libra CDO and MKP Vela. The company agreed to make premium payments to Libra CDO and MKP Vela in exchange for their payment if losses are incurred on mortgage- related securities. At the same time that the swap agreements were executed, Libra CDO and MKP Vela entered into derivative transactions with Societe Generale. The transactions require Societe General to advance funds to Libra CDO and MKP Vela so that they could pay LBSF under the swap agreements in case they do not have available funds. As part of the settlement, LBSF also seeks the Court's approval to assume, assign and sell its rights and interests in the swap agreements to Societe Generale upon satisfaction of certain conditions. One of the conditions includes the issuance by the Court of an order invalidating the early termination of the swap agreements. The swap agreements were terminated by the indenture trustee after LBSF filed for bankruptcy protection in September 2008, prompting the company and LBHI to file a lawsuit against the trustee, Libra CDO and Societe Generale to invalidate the early termination of their agreement. The Lehman units have not yet filed a complaint challenging the validity of the termination of their swap agreement with MKP Vela but they anticipate filing such a complaint as contemplated by the settlement deal, according to court papers. The Court will consider approval of the proposed settlement at the hearing scheduled for October 20, 2010. Deadline for filing objections is October 13, 2010. 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: To File New Restructuring Plan by 4th Quarter -------------------------------------------------------------- Lehman Brothers Holdings Inc. said it is optimistic that its Chapter 11 restructuring plan will be confirmed by the U.S. Bankruptcy Court for the Southern District of New York by the end of the first quarter in 2011. In a regulatory filing with the U.S. Securities and Exchange Commission, LBHI said the "size, complexity and diverse interests" made the original timing target for confirmation of the restructuring plan unachievable. The company also said in the securities filing that a revised plan and disclosure statement are likely to be filed by the fourth quarter of this year. LBHI and its affiliated debtors filed their restructuring plan with the U.S. Bankruptcy Court for the Southern District of New York on March 15, 2010. Under the proposed plan, general unsecured creditors of LBHI would likely recover 10.4 cents to 14.7 cents on the dollar for their claims while unsecured creditors of the company's commercial paper unit would likely recover between 29 cents and 44 cents on the dollar. Unsecured creditors of LBHI's special finance unit, meanwhile, would likely recover between 22 cents and 24 cents on the dollar. At the September 22 hearing, Chief Executive Bryan Marsal told Judge James Peck that the biggest obstacle to getting a plan approved has been dealing with foreign affiliates that are in their own insolvency proceedings, Bloomberg News reported. "I think our patience is paying off," Bloomberg News quoted Mr. Marsal as telling the bankruptcy judge who oversees LBHI's bankruptcy case. LBHI said in the securities filing that it has made progress in narrowing the amount of claims filed against the company and its affiliated debtors from nearly $1.2 trillion to $464 billion. The company also disclosed that "clearly erroneous errors" and duplicate claims have been disallowed and a more realistic range of unsecured claims is estimated at $250 to $350 billion. A full-text copy of the September 22 securities filing is available for free at http://ResearchArchives.com/t/s?6ba4 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) LIFECARE HOLDINGS: Moody's Affirms 'Caa1' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service lowered the speculative grade liquidity rating of LifeCare Holdings, Inc., to SGL-4 from SGL-3. Concurrently, LifeCare's corporate family and probability of default ratings were affirmed at Caa1. The first lien facilities' ratings were affirmed at B2 and the rating on the subordinated notes was affirmed at Caa3. The outlook remains negative. The downgrade of the SGL rating to SGL-4 (indicating weak liquidity position) from SGL-3 is prompted by the projected narrowing of the headroom under financial covenants and increased refinancing risk over the next twelve months. While the company's free cash flow generation is expected to be positive and cash balance (excluding the revolver draws) adequate, the SGL-4 rating takes into consideration the upcoming revolver maturity in August 2011 and the expected narrowing of the headroom under the company's financial covenants in the first quarter of 2011. The company's net debt leverage covenant is currently set at 7 times but will step-down to 6 times in 1Q11. With the current debt balances and EBITDA, the company would violate the 6 times covenant level. Moody's note that the covenant is net of cash above $5 million. LifeCare's $60 million revolving credit facility is due in August 2011; the company had $35 million of borrowings and $2.3 million of letters of credit outstanding under the revolver at the end of the second quarter 2010. The Caa1 corporate family rating continues to consider the company's high debt leverage on a gross debt basis of close to 8 times and weak interest coverage of slightly above 1 times at the end of June 2010. The negative outlook reflects increased refinancing risk and Moody's concerns about the company's ability to support its current capital structure over the longer-term as well as narrow headroom under the financial covenants over the next 12-18 months. The ratings would likely be downgraded if the company is unsuccessful in its refinancing progress in the near term. Moody's does not foresee upgrading the company's ratings in the near term given the refinancing risk, reimbursement pressures, and weak credit metrics. These rating actions were taken: -- Corporate family rating, affirmed at Caa1; -- Probability of default rating, affirmed at Caa1; -- $255 million ($243 million outstanding) first lien term loan, due August 11, 2012, affirmed at B2; LGD assessment changed to LGD3, 31% from LGD3, 30%; -- $60 million first lien revolving credit facility, due August 11, 2011, affirmed at B2; LGD assessment changed to LGD3, 31% from LGD3, 30%; -- $150 million ($119 million outstanding) 9 �% subordinated notes, due August 15, 2013, affirmed at Caa3; LGD assessment changed to LGD6, 90% from LGD5, 89%; -- Speculative grade liquidity rating, downgraded to SGL-4 from SGL-3. The last rating action on LifeCare was on April 24, 2009, when the limited default designation on the probability of default rating was removed and subordinated notes were upgraded to Caa3. Headquartered in Plano, Texas, LifeCare operates 19 long-term acute care hospitals in nine states. The company's facilities include eight "hospital within a hospital" facilities and eleven free-standing facilities. In addition, the company holds a 50% investment in a joint venture for a long-term care hospital. LifeCare reported revenues of $359 million for the twelve months ended June 30, 2010. LOCAL INSIGHT: Elects Two to Board of Directors ----------------------------------------------- Local Insight Regatta Holdings Inc. said on Sept. 20, 2010, pursuant to the Bylaws of the Company that (i) the size of the Board of Directors of the Company was increased from five to seven members and (ii) Allan R. Spies and Frederic F. Brace were elected to serve as members of the Board. Mr. Brace will receive a monthly cash retainer of $16,667 for his service on the Board. On the earlier to occur of: (i) April 1, 2011 and (ii) the completion of any restructuring of the Company's capital structure, Mr. Brace's compensation arrangement will be reviewed. Mr. Spies has served as a director and a member of the Audit Committee of Local Insight Media Holdings, Inc., the indirect parent of the Company, since September 2008. Mr. Spies will receive a monthly cash retainer of $13,333 for his service on the Board and the LIMH Board of Directors. In addition, Mr. Spies will receive a monthly cash retainer of $6,667 for his service on the LIMH Audit Committee. On the earlier to occur of: (i) April 1, 2011 and (ii) the completion of any restructuring of the capital structure of LIMH or any of its subsidiaries, Mr. Spies' compensation arrangement will be reviewed. In September 2008, Mr. Spies was granted options under the LIMH 2008 Stock Option Plan. Pursuant to the Option Plan, eligible employees and directors of and consultants to LIMH and its direct and indirect subsidiaries may be granted options to purchase shares of common stock of LIMH. The LIMH Compensation Committee is responsible for administering the Option Plan and has authority to approve the terms of all grants of equity compensation under the Option Plan. About Local Insight Regatta Headquartered in Englewood, Colorado, Local Insight Regatta Holdings, Inc. is a leading provider of local search advertising products and services, targeting small and medium-sized businesses, with a range of lead-generating solutions that enable consumers to find products and services they need. The company's integrated suite of local advertising solutions includes print Yellow Pages as well as a range of digital advertising products and services designed to establish, maintain and optimize an advertiser's online presence. For the 12 months ended June 30, 2010, the company reported revenues of approximately $554 million. The company is an indirect, wholly-owned subsidiary of Local Insight Media Holdings, Inc. whose primary owner is Welsh, Carson, Anderson & Stowe. * * * According to the Troubled Company Reporter on Aug. 25, 2010, Standard & Poor's Ratings Services lowered its ratings on Englewood, Colo.-based Local Insight Regatta Holdings Inc. to 'CCC-' from 'CCC+'. The rating outlook is negative. Moody's Investors Service downgraded Local Insight Regatta Holdings, Inc.'s Corporate Family Rating and its Probability of Default Rating, each to Ca from Caa1, and associated instrument ratings detailed below. The multi-notch downgrades reflect Moody's view that the company is likely to violate financial covenants for the September 30, 2010 reporting period and will need to restructure its balance sheet in the near term. Moody's estimate recovery prospects to be average for a Ca rating with subordinated debt taking most of the loss. As announced on September 8, 2010, management engaged a financial advisor to evaluate the capital structure of its parent holding company, Local Insight Media Holdings, Inc. These downgrades complete Moody's review initiated on September 9, 2010. MAGNA ENTERTAINMENT: Del. Court. Rules on Simulcast Site Suit ------------------------------------------------------- Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware approved in part and denied in part Magna Entertainment Corp.'s motion to dismiss an adversary proceeding filed by Redrock Administrative Services LLC, Racing and Gaming Services, LTD., Amwest Entertainment, LLC, Bettor Racing, Inc., d/b/a Royal River Racing, and the Elite Turf Club, N.V. -- the Simulcast Sites. The adversary proceeding seeks to recover $7,307,298 allegedly owed to the Simulcast Sites on account of Pari-mutuel funds or money room settlements that were not paid on races conducted prior to Magna Entertainment's filing for bankruptcy. The Court held that to the extent that the Simulcast Sites seek payment of fees and commissions due them under their contracts with the Debtors, they are merely creditors and have failed to state a claim for imposition of a trust, conversion, or bailment. However, to the extent the Simulcast Sites contend that they have paid the winning bettors who placed wagers at their locations, the Court concluded that the Simulcast Sites may be subrogated to the rights of the winning bettors and have stated a claim for imposition of a trust and bailment in the Pari-mutuel Funds. The adversary case is Redrock Administrative Services LLC, Racing and Gaming Services, Ltd., Amwest Entertainment, LLC, Bettor Racing, Inc. d/b/a Royal River Racing, and The Elite Turf Club, N.V., v. Magna Entertainment Corp., Pacific Racing Association, Inc., Mec Land Holdings (California), Inc., Gulfstream Park Racing Assoc., Inc., Los Angeles Turf Club, Inc., and The Santa Anita Companies, Inc., Adv. Proc. No. 09-51155 (Bankr. D. Del.). A copy of the opinion dated September 20, 2010, is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100920355 About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, served as the Debtors' bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., served as the Debtors' local counsel. Miller Buckfire & Co. LLC acted as the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC served as the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of December 31, 2008. On April 29, 2010, the Bankruptcy Court confirmed the Second Modified Third Amended Joint Plan of Magna Entertainment Corp., its affiliated Debtors, the official committee of unsecured creditors, MI Developments Inc., and MI Developments US Financing. The Debtors emerged from Bankruptcy on April 30, 2010. MAJESTIC STAR: Creditors Motion to Terminate Exclusivity Baseless ----------------------------------------------------------------- The Majestic Star Casino, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to deny the Official Committee of Unsecured Creditors' request to terminate their exclusivity periods. As reported in the Troubled Company Reporter on September 27, 2010, the Committee asked for the termination of the Debtors' exclusivity periods because it intends to file under seal the Committee Plan, which will be premised upon the prosecution of the claims and defenses inappropriately compromised in the Plan Settlements. The Debtors explained that: -- the Committee has not established requisite cause; -- creditor objections to proposed plan treatment do not justify denying or terminating exclusivity; -- denying an extension or terminating the exclusive periods and soliciting dual plans would significantly prejudice the Debtors; and -- the Committee's confirmation objections are premature, inaccurate, and are not grounds to deny or terminative exclusivity. The Debtors relate that the Disclosure Statement and Plan have the preliminary support of all of the key creditors. About Majestic Star The Majestic Star Casino, LLC -- aka Majestic Star Casino, aka Majestic Star -- is based in Las Vegas, Nevada. It is a wholly owned subsidiary of Majestic Holdco, LLC, which is a wholly owned subsidiary of Barden Development, Inc. The Company was formed on December 8, 1993, as an Indiana limited liability company to provide gaming and related entertainment to the public. The Company commenced gaming operations in the City of Gary at Buffington Harbor, located in Lake County, Indiana on June 7, 1996. The Company is a multi-jurisdictional gaming company with operations in three states -- Indiana, Mississippi and Colorado. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 09-14136) on November 23, 2009. The Company's affiliates -- The Majestic Star Casino II, Inc., The Majestic Star Casino Capital Corp., Majestic Star Casino Capital Corp. II, Barden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC, Majestic Holdco, LLC, and Majestic Star Holdco, Inc. -- also filed separate Chapter 11 petitions. Kirkland & Ellis LLP is the Debtors' bankruptcy counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP are the Debtors' Delaware counsel. Xroads Solutions Group, LLC, is the Debtors' financial advisor, while EPIQ Bankruptcy Solutions LLC are the Debtors' claims and notice agent. The Majestic Star Casino's balance sheet at June 30, 2009, showed total assets of $406.42 million and total liabilities of $749.55 million. When it filed for bankruptcy, the Company estimated up to $500 million in assets and up to $1 billion in debts. MATTERHORN NURSEY: Sale Collapse Prompted Ch. 11 Filing ------------------------------------------------------- Bill Cary at LoHud.com reports that Matterhorn Nursery is in Chapter 11 protection after the Town of Ramapo pulled out of a deal to purchase 15 acres of unused land. The Company's owners wanted to use the sale proceeds to provide cash flow as they made long-planned renovations to the nursery. The owners said the collapse of the deal with Ramapo came as a shock because it had been in the works for more than two years. Matterhorn Nursery operates a 38-acre New Hempstead nursery in Spring Valley, New York. Matterhorn Nursery, Inc., filed for Chapter 11 protection on Sept. 10, 2010 (Bankr. S.D.N.Y. Case No. 10-23887). Dana Patricia Brescia, Esq., at Alter, Goldman & Brescia, LLP, in New York, serves as counsel to the Debtor. The Debtor estimated assets and debts of $1 million to $10 million. MERUELO MADDUX: Equity Holders Submit Revised Reorganization Plan ----------------------------------------------------------------- Bankruptcy Law360 reports that two equity holders of Meruelo Maddux Properties Inc. have submitted a revised reorganization plan that will compete for creditors' votes with two other plans already on the table in the bankrupt real estate company's contentious Chapter 11 proceedings. Charlestown Capital Advisors LLC and Hartland Asset Management Corp. filed the reorganization plan on Friday in the U.S. Bankruptcy Court for the Central District of California, Law360 says. Three parties have filed competing plans for Meruelo Maddux: (1) The Company. -- The plan provides for the payment in full of all claims over time with interest. The secured claims will be paid interest only over the term of the Plan and the principal balance will be paid either through the sale of the property securing the claim or the refinance of the secured debt. PI shareholders will retain their shares in MMPI. General unsecured creditors will be paid within 30 days after the effective date with interest from the Petition Date at 5% per annum. Holders of unsecured claims will be paid in the full amount of their claims over 5 years from the effective date. See http://bankrupt.com/misc/MMP_MgtPlan_091510.pdf (2) Lenders Legendary Investors Group No. 1 LLC and East West Bank. -- The plan's foundation is an $80 million recapitalization via a $5 million cash infusion by Legendary, conversion of about $65 million of debt to equity and a $10 million rights offering to holders of Meruelo Maddux existing common stock. East West will receive 70% to 80% of the stock of the reorganized company. Holders of unsecured claims will receive a cash payment equal to 100% of the amount of their allowed claims on the effective date, plus simple interest at 5% per annum for the period from the petition date through the date each allowed claim is paid. Interest will be at the Federal Judgment Rate if the creditors vote to reject the plan. Holders of the existing stock will receive 20% of the stock in the reorganized company. See http://bankrupt.com/misc/MMP_LendersPlan_091010.pdf (3) Existing shareholders Charlestown Capital Advisors LLC and Hartland Asset Management Corp. -- Under the plan, MMPI will receive a $31 million cash investment from Charleston and Hartland-led investors and from a rights offering made available to existing MMPI shareholders. Non-insider general unsecured creditors will be paid in full with interest as soon as the plan becomes effective. Holders of secured claims will receive monthly interest payments at 5.25% for four years with full payment on the principal balance four years after the effective date. Reorganized MMPI will issue to existing holders of MMPI interests, if they elect to receive stock instead of cash, will receive up to 26% of the total stock of the reorganized company. Stockholders can also purchase up to 19% of the stock in an $8 million rights offering. The Creditors Committee is recommending that creditors turn down the management plan. The Committee supports the lenders' plan. The Committee noted that the lenders' plan will pay creditors in full with interest shortly after plan confirmation while the company plan would pay creditors in full over five years. The Company has said that East West is taking a predatory action by converting real estate debt into a controlling interest in a company. East West also appears to be proposing it use TARP money obtained by the federal government as a part of its effort to complete its hostile takeover of Meruelo Maddux. Charleston and Hartland are represented by: Christopher E. Prince, Esq. Matthew A. Lesnick, Esq. Andrew R. Cahill, Esq. LESNICK PRINCE LLP 185 Pier Avenue, Suite 103 Santa Monica, CA 90405 Tel: (213) 291-8984 Fax: (310) 396-0963 E-mail: cprince@lesnickprince.com matt@lesnickprince.com acahill@lesnickprince.com Legendary Investors is represented by: Jeremy V. Richards, Esq. Jeffrey W. Dulberg, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., 11th Floor Los Angeles, CA 90067-4100 Tel: (310) 277-6910 Fax: (310) 201-0760 E-mail: jrichards@pszjlaw.com jdulberg@pszjlaw.com - and - Surjit P. Soni, Esq. THE SONI LAW FIRM 35 N. Lake Ave., Suite 720 Pasadena, CA 91101 Tel: (626) 683-7600 Fax: (626) 683-1199 E-mail: surj@sonilaw.com East West Bank is represented by: Curtis C. Jung, Esq. Monica H. Lin, Esq. JUNG & YUEN, LLP 888 South Figueroa Street, Suite 720 Los Angeles, CA 90017 Tel: (213) 689-8880 Fax: (213) 689-8887 E-mail: curtis@jyllp.com - and - Elmer Dean Martin III, Esq. 22632 Golden Springs Dr., Suite 190 Diamond Bar, CA 91765 Tel: (909) 861-6700 Fax: (909) 860-3801 E-mail: elmer@bankruptcytax.net The Creditors Committee is represented by; Victor A. Sahn, Esq. Dean G. Rallis Jr., Esq. Asa S. Hami, Esq. Tamar Kouyoumjian, Esq. SULMEYERKUPETZ 333 South Hope Street, 35th Floor Los Angeles, CA 90071-1406 Tel: (213) 626-2311 Fax: (213) 629-4520 E-mail: vsahn@sulmeyerlaw.com drallis@sulmeyerlaw.com ahami@sulmeyerlaw.com tkouyoumjian@sulmeyerlaw.com About Meruelo Maddux Meruelo Maddux and its affiliates filed for Chapter 11 protection on March 26, 2009 (Bankr. C.D. Calif. Lead Case No. 09-13356). Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N. Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the Debtors in their restructuring effort. The Debtors' financial condition as of December 31, 2008, showed $681,769,000 in assets and $342,022,000 of debts. MOUNT VERNON: Files Schedules of Assets and Liabilities ------------------------------------------------------- Mount Vernon Money Center Corp., a debtor-affiliate of Mount Vernon Monetary Management, filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $173,798 B. Personal Property $26,830,876 C. Property Claimed as Exempt D. Creditors Holding Secured Claims - E. Creditors Holding Unsecured Priority Claims $6,516 F. Creditors Holding Unsecured Non-priority Claims $81,749,422 ----------- ----------- TOTAL $27,004,674 $81,755,938 The lead Debtor and two other debtor-affiliates also filed their respective schedules: Mount Vernon Monetary Management Corp. disclosed $2,394,555 in assets and $162,139 in liabilities. GT Public Services, Inc., disclosed "-" assets and "-" liabilities. MKey, LLC, disclosed "-" assets and "-" liabilities. About Mount Vernon Mount Vernon, New York-based Mount Vernon Monetary Management Corp. and its affiliates consist of 33 commonly owned entities engaged in the ownership and management of automated teller machines, check cashing, and armored car services, real estate entities and related businesses, many of which are operationally related. Mount Vernon Monetary Management and its affiliates filed for Chapter 11 bankruptcy protection on May 27, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-23053). Mount Vernon filed for Chapter 11 bankruptcy after their president Robert Egan and chief operating officer Bernard McGarry were arrested and charged with bank fraud. Allen D. Applbaum, a senior managing director with FTI Consulting, Inc., has been appointed by the court as Receiver and Sole Corporate Manager of the Debtors. Allen G. Kadish, Esq., at Greenberg Traurig, LLP, assists the Company in its restructuring effort. In an affidavit filed with the Bankruptcy Court on the Petition Date, Allen D. Applbaum said as of April 30, 2010, the Debtors had an aggregate total of $179.1 million in assets and $186 million in liabilities. MOUNT VERNON: U.S. Trustee Forms 6-Member Creditors Committee ------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, appointed six members to the official committee of unsecured creditors in the Chapter 11 cases of Mount Vernon Money Center Corp., et al. The Creditors Committee members are: 1. Bank of America, N.A. Attn: Lora C. Pepi, Esq. MA1-225-0201 225 Franklin Street Boston, MA 02110 Tel: (671) 346-0588 2. U.S. Bank National Association Attn: Laura L. Jones 2751 Shepard Road Mail Stop: EP-MN-BB1P St. Paul, MN 55116 Tel: (651) 205-3433 3. Webster Bank National Association Attn: Erin Dorman Webster Plaza 145 Bank Street/ME 105 Waterbury, CT 06702 Tel: (203) 294-8321 4. New York Community Bancorp., Inc. Attn: Kathy Kowler, Esq. One Jericho Plaza, 2nd Floor, Wing B Jericho, NY 11753 Tel: (516) 942-6944 5. Actors Federal Credit Union Attn: Jeff Rodman 165 W. 46th Street, 14th Floor New York, NY 10036 Tel: (212) 869-8926 extn. 317 6. NorthEast Alliance Federal Credit Union Attn: Donald H. Briggs 35 Bardonia Road Bardonia, NY 10954 Tel: (845) 735-6659 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Mount Vernon Mount Vernon, New York-based Mount Vernon Monetary Management Corp. and its affiliates consist of 33 commonly owned entities engaged in the ownership and management of automated teller machines, check cashing, and armored car services, real estate entities and related businesses, many of which are operationally related. Mount Vernon Monetary Management and its affiliates filed for Chapter 11 bankruptcy protection on May 27, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-23053). Mount Vernon filed for Chapter 11 bankruptcy after their president Robert Egan and chief operating officer Bernard McGarry were arrested and charged with bank fraud. Allen D. Applbaum, a senior managing director with FTI Consulting, Inc., has been appointed by the court as Receiver and Sole Corporate Manager of the Debtors. Allen G. Kadish, Esq., at Greenberg Traurig, LLP, assists the Company in its restructuring effort. In an affidavit filed with the Bankruptcy Court on the Petition Date, Allen D. Applbaum said as of April 30, 2010, the Debtors had an aggregate total of $179.1 million in assets and $186 million in liabilities. NALCO CO: S&P Assigns 'BB+' Rating on $750 Mil. Senior Loans ------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its 'BB+' senior secured debt rating and a recovery rating of '1' to Nalco Co.'s proposed $750 million senior secured term loans. They include a $650 million new term loan B-1 maturing in 2017 and a $100 million new term loan C-1 maturing in May 2016 (concurrent with existing term loan C maturity). The ratings indicate S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. Proceeds from the proposed term loans along with cash on hand will be used to refinance the existing term loan B due 2010 and term loan B due 2016. All other ratings on Nalco, including the 'BB-' corporate credit rating, are unchanged. The outlook is positive. Standard & Poor's has updated its recovery analysis on Nalco. The rating on Naperville, Ill.-based Nalco, a subsidiary of Nalco Holding Co., reflects a strong business risk profile and an aggressive financial risk profile. The company's business profile benefits from Nalco's strong competitive position in water treatment and process chemicals and its respectable operating margins. In addition, it has demonstrated its ability to generate meaningful discretionary cash flows, which it has used in a balanced fashion to support growth, shareholder distributions, and debt reduction. Ratings List Nalco Co. Corporate credit rating BB-/Positive/-- New Rating Nalco Co. $650 million new term loan B-1 due 2017 BB+ Recovery rating 1 $100 million new term loan C-1 due May 2016 BB+ Recovery rating 1 NAT'L UNION OF HEALTHCARE: Members to Vote to Keep Union Contract ----------------------------------------------------------------- Another group of Service Employees International Union-United Healthcare Workers West (SEIU-UHW) members are preparing to vote to keep their union and contract intact as the National Labor Relations Board (NLRB) sets a mail ballot election to begin October 18. The National Union of Healthcare Workers (NUHW), a union started last year, triggered the election by filing a petition with the NLRB to decertify the union for almost 2,000 optical professionals, psychologists, social workers and other professional members of SEIU-UHW in Northern California. The election will give Kaiser professionals in Northern California the option of remaining in SEIU-UHW, with their guaranteed contract protections, no union whatsoever, or moving into NUHW. Leaving SEIU-UHW would mean workers lose their guaranteed raises, benefits, bonuses, and job security protections--and have to re- bargain a contract in the midst of the economic crisis. "We worked too hard for our contract gains to allow NUHW, or anyone else, to purposely destroy our union and knowingly invalidate our contract," said Paul Martinez, Customer Service, Kaiser Richmond Optical Lab. "We won't sit by and let that happen. Just like other Kaiser workers, we're getting out there to protect our contract and getting ready to vote to stay with SEIU- UHW." 43,000 other Kaiser employees at facilities statewide are already in the process of voting in a mail ballot election that began September 13. Ballots in that election are due back to the NLRB offices in Oakland on October 4 and will be counted beginning October 6. "With SEIU-UHW we have bargained annual raises, secure healthcare benefits, are part of the Coalition of Unions at Kaiser, and are supported by our union. With NUHW, we get empty promises. There is no contest. I am ready to cast my ballot for SEIU-UHW," said Alex Ivanovsky, LCSW, Kaiser Roseville Hospice. NUHW is led by former SEIU leaders who were removed from office in January 2009 for misusing members' dues money. NUHW leaders were found liable by a federal jury and ordered to repay SEIU-UHW members $1.57 million in damages. NUHW recently filed a motion to indefinitely delay payment, claiming they do not have the resources and would face bankruptcy if they are forced to comply with the award--but their motion was denied. NEC HOLDINGS: Wants Plan Exclusivity Until January 6 ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reported that National Envelope Corp., which completed the sale of its business to The Gores Group, LLC, early this month, is seeking a January 6 extension of the exclusive right to propose a Chapter 11 plan. A hearing is scheduled on October 6. The Debtor obtained approval to sell the business to affiliates of Gores Group for $208 million, including $149.9 million in cash. About NEC Holdings Uniondale, New York-based National Envelope Corporation -- http://www.nationalenvelope.com/-- is the largest manufacturer of envelopes in the world with 14 manufacturing facilities and two distribution centers and approximately 3,500 employees in the U.S. and Canada. NEC Holdings Corp., together with affiliates, including National Envelope Inc., filed for Chapter 11 on June 10, 2010 (Bankr. D. Del. Lead Case No. 10-11890). Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor LLP, serves as bankruptcy counsel. David S. Heller, Esq., at Josef S. Athanas, Esq., and Stephen R. Tetro II, Esq., at Latham & Watkins LLP, serve as co-counsel. The Garden City Group is the claims and notice agent. NEC Holdings estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. NEDAK ETHANOL: Posts $3.2 Million Net Loss in June 30 Quarter ------------------------------------------------------------- NEDAK Ethanol, LLC, filed its quarterly report on Form 10-Q, reporting a net loss of $3.2 million on $21.4 million of revenue for the three months ended June 30, 2010, compared with a net loss of $4.4 million on $12.0 million of revenue for the same period last year. As of June 30, 2010, the Company was in default of its Credit Agreement and its Tax Increment Financing. For this reason, the Company has reclassified amounts owing under these loans as current liabilities. Because of these events and market conditions, there is an increased level of uncertainty with respect to the Company's ability to obtain sufficient cash flows from operations or debt or equity financing sufficient to cover the liquidity needed for ongoing operations. The reclassification of long term debt to current liabilities resulted in negative working capital of $45.6 million as of June 30, 2010. The Company's balance sheet as of June 30, 2010, showed $89.7 million in assets, $55.6 million in total liabilities, and members' equity of $34.1 million. As reported in the Troubled Company Reporter on April 14, 2010, McGladrey & Pullen, LLP, in Sioux Falls, South Dakota, expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that there is uncertainty as to the Company's ability to secure additional funds needed to fund ongoing operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bb6 About NEDAK Ethanol Atkinson, Neb.-based NEDAK Ethanol, LLC -- http://www.nedakethanol.com/-- operates a 44 million gallon per year ethanol plant in Atkinson, Nebraska, and produces and sells fuel ethanol and distillers grains, a co-product of the ethanol production process. Sales of ethanol and distillers grains began in January 2009. NEPHROS INC: Posts $365,000 Net Loss in June 30 Quarter ------------------------------------------------------- Nephros, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $365,000 on $809,000 of revenue for the three months ended June 30, 2010, compared with a net loss of $413,000 on $527,000 of revenue for the same period of 2009. The Company says it needs to raise operating funds through either the licensing or sale of its technologies or public or private offerings of its securities. Unless capital is raised, the Company expects its funds will be depleted in the fourth quarter of 2010, and it might not be able to continue its operations. The Company's balance sheet as of June 30, 2010, showed $1.94 million in total assets, $867,000 in total liabilities, and stockholders' equity of $1.07 million. As reported in the Troubled Company Reporter on April 6, 2010, Rothstein, Kass & Company, P.C. 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 incurred negative cash flow from operations and net losses since inception. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bb5 Headquartered in River Edge, N.J., Nephros, Inc. (OTC: NEPH.OB - News) -- http://www.nephros.com/-- is a medical device company developing and marketing filtration products for therapeutic applications, infection control, and water purification. NEW LEAF: Completes $1.65 Million Bridge Notes & Warrants Offering ------------------------------------------------------------------ New Leaf Brands Inc. completed on Sept. 21 & 22, 2010, a unit offering of $1,652,273 of its bridge notes and warrants to accredited investors. The bridge notes were sold at an Original Issue Discount of 12%, and have a 90 day maturity. Each Unit sold consisted of $1,000 principal amount of 12% Notes and warrants to purchase 1,200 shares of common stock at $0.25 per share. The company sold 1,982,727 warrants to the accredited investors in conjunction with this offering. A full-text copy of the Promissory Note is available for free at http://ResearchArchives.com/t/s?6bbc A full-text copy of the Common Stock Purchase Warrant is available for free at http://ResearchArchives.com/t/s?6bbd A full-text copy of the Note And Warrant Purchase Agreement is available for free at http://ResearchArchives.com/t/s?6bbe About New Leaf Brands Scottsdale, Ariz.-based New Leaf Brands, Inc. develops, markets and distributes healthy and functional ready-to-drink teas under the New Leaf(R) brand. * * * According to the Troubled Company Reporter on April 8, 2010, Mayer Hoffman McCann P.C., in Phoenix, Ariz., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has a working capital deficiency, was not in compliance with certain financial covenants related to debt agreements, and has a significant amount of debt maturing in 2010. NIGHTHAWK RADIOLOGY: Moody's Retains 'B2' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service said that it expects repayment in full of the rated debt of NightHawk Radiology Holdings Inc. per the change of control provision in the company's credit agreement, assuming the completion of the definitive purchase agreement announced by Virtual Radiologic on September 27, 2010, to acquire NightHawk. Existing ratings of NightHawk, including the B2 corporate family rating and negative outlook are unaffected by the announcement. When the rated debt has been paid in full, Moody's will withdraw all of the ratings of NightHawk Radiology Holdings Inc. The last ratings action was on March 11, 2010, when Moody's lowered NightHawk's corporate family rating to B2. NightHawk Radiology Holdings Inc. is a provider of professional and business solutions to radiology groups and hospitals in the United States. For the trailing twelve months ended June 30, 2010, the company reported revenues of approximately $157 million. NOBLEPEAK VISION: Assigns All Its Assets to Joseph F. Finn ---------------------------------------------------------- Joseph F. Finn, Jr., C.P.A. disclosed that assets of NoblePeak Vision Corp. of Wakefield, Massachusetts have been assigned to him for the benefit of NoblePeak's creditors. NoblePeak holds numerous patents in germanium (Ge) on silicon processing. Its TriWave technology is the world's first Germanium-enhanced, CMOS image sensor technology, which delivers sensitivity and resolution across the visible, near infrared (NIR) and short wave infrared (SWIR) spectrum. The intellectual property, fixed assets and inventory will be sold by a sealed bid sale at 12:00 noon on November 5, 2010. Persons interested in bidding must sign a Confidentiality Disclosure Agreement obtained from Finn's Office: jffinnjr@finnwarnkegayton.com 781-237-8840. They will then receive a bid package. About Joseph F. Finn, Jr. Joseph F. Finn, Jr., C.P.A. is the owner of the firm Finn, Warnke & Gayton, Certified Public Accountants of Wellesley Hills, Massachusetts. He works primarily in the area of management consulting for distressed enterprises, bankruptcy accounting and related matters, such as assignee for the benefit of creditors and liquidating agent for a corporation. He has been involved in a number of loan workouts and bankruptcy cases for thirty-five (35) years. His most recent Assignments for the Benefit of Creditors in the biotech field include Spherics, Inc., ActivBiotics, Inc., Prospect Therapeutics, Inc. and Epix Pharmaceuticals, Inc NUTRACEA: To Seek Confirmation of Full Payment Plan on Oct. 19 -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reported that NutraCea has a confirmation hearing scheduled for Oct. 19 to approve the reorganization plan designed to pay unsecured creditors in full with interest. Distributions to unsecured creditors will be about $6.2 million. NutraCea, Mr. Rochelle relates, recently sold a non-core facility in Phoenix for $4.5 million to pay off remaining secured debt. About NutraCea Phoenix, Arizona-based NutraCea is a world leader in production and utilization of stabilized rice bran. NutraCea holds many patents for stabilized rice bran production technology and proprietary products derived from SRB. NutraCea's proprietary technology enables the creation of food and nutrition products to be unlocked from rice bran, normally a waste by-product of standard rice processing. Nutracea filed for Chapter 11 bankruptcy protection November 10, 2009 (Bankr. D. Ariz. Case No. 09-28817). S. Cary Forrester, Esq., at Forrester & Worth, PLLC, assists the Company in its restructuring effort. The Company estimated assets of $50 million to $100 million and debts of $10 million to $50 million in its Chapter 11 petition. OCEAN CASINO: SunCruz Settles Gambling-Cruise Workers' WARN Suit ---------------------------------------------------------------- Bankruptcy Law360 reports that Fortress Investment Group's SunCruz Casinos has agreed to pay more than $600,000 to settle claims with a class of employees who accused the company of failing to give proper notice that it would conduct a mass layoff prior to filing for bankruptcy in December 2009. Magistrate Judge David Baker of the U.S. District Court for the Middle District of Florida on Monday signed off on the preliminary agreement resolving the suit. Ocean Casino Cruises Inc., which is the parent company of SunCruz Casinos, filed for Chapter 7 bankruptcy Dec. 28, 2009, in the Southern District of Florida. The bankruptcy filing says the Company's assets are worth $1 million to $10 million, but it owes $50 million to $100 million. OMC INC: Plans to Restructure Debt to Union ------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reported that OMC Inc. filed for Chapter 11 protection after running up debt to the Sheet Metal Workers Union. The Bronx, New York-based company resorted to Chapter 11 when negotiations with the union on a stretch-out didn't bear fruit. OMC intends to use Chapter 11 to "restructure its outstanding liabilities to the union." OMC Inc. is a subcontractor that makes and installs sheet metal ductwork for heating and cooling systems. The Debtor estimated assets of $1 million to $10 million, and debts of $10 million to $50 million. Company President Michael Checchi, according to Bloomberg, said in a court filing that revenue declined to $13 million in 2009 from $25 million in 2007. Depressed cash flow resulted in a $4 million liability to the union and a $1 million debt to the union pension fund. OMC, Inc., filed for Chapter 11 protection on Sept. 15, 2010 (Bankr. S.D.N.Y. Case No. 10-14864). Jonathan S. Pasternak, Esq., at Rattet, Pasternak & Gordon Oliver, LLP, in New York, serves as counsel. OTC HOLDINGS: Plan Contemplates Consolidation and Assets Transfer ----------------------------------------------------------------- OTC Holdings Corporation, et al., submitted to the U.S. Bankruptcy Court for the District of Delaware a proposed Plan of Reorganization and an explanatory Disclosure Statement. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for the substantive consolidation of the estates of certain Debtors. On the effective date, Fun Express, Inc. and Oriental Trading Marketing, Inc. will deemed merged into OTC. In addition, on the effective date, Holdings will be deemed, but solely for administration of the Chapter 11 cases, merged into OTC Investors Corporation. Under the Plan, these entities will be formed: (i) a Delaware corporation (New OTC) that will own, directly or indirectly through one or more subsidiaries, substantially all of the assets of the Debtors as of the effective date upon the consummation of the asset transfer contemplated by the Plan; (ii) a Delaware corporation that will own all of the shares of common stock of New OTC upon the consummation of the asset transfer (New Midco); and (iii) a Delaware corporation that will own all of the shares of New Midco upon the consummation of the asset transfer (New Holdco). After the asset transfer, New OTC will be renamed as Oriental Trading Company, Inc. The Debtors, in consultation with the first lien steering committee will obtain the new term loans from new term third party lenders. In the event that the new term loans cannot be obtained on term reasonably acceptable to the Debtors and the first lien steering committee, then the new term loans will be issued to the first lien lenders. Treatment of Claims and Interests Classification Estimated Percentage Recovery -------------- ----------------------------- DIP Facility Claims 100% Class 2 Other Secured Claims 100% Class 3 First Lien Claims [__]% Class 4 Second Lien Claims [__]% Class 5 General Unsecured Claims On the effective date, each holder will receive its pro rata share of cash in an amount sufficient to provide each holder with a percentage recovery equal to the percentage recovery received by each holder of a Class 4 claim through the distribution of New Warants to each holder on account of its Class 4 claim. [__]% Intercompany claims 0% Class 7 First Lien Guarantee Claims [__]% Class 8 Second Lien Guarantee Claims [__]% Class 9 Holdings/Investors General On the effective date, each Unsecured Claims holder will receive its pro rata share of the Holdings cash. [__]% Class 10 Equity Interests 0% A full-text copy of the Plan and the Disclosure Statement is available for free at: http://bankrupt.com/misc/OTCHoldings_Plan.pdf http://bankrupt.com/misc/OTCHoldings_DS.pdf About OTC Holdings Omaha, Nebraska-based OTC Holdings Corporation filed for Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10- 12636). Affiliates OTC Investors Corporation (Bankr. D. Del. Case No. 10-12637), Oriental Trading Company, Inc. (Bankr. D. Del. Case No. 10-12638), Fun Express, Inc. (Bankr. D. Del. Case No. 10- 12639), and Oriental Trading Marketing, Inc. (Bankr. D. Del. Case No. 10-12640), filed separate Chapter 11 petitions on August 25, 2010. The Debtors disclosed $463 million in total assets and $757 million in total liabilities as of the Petition Date. Richard Hahn, Esq., My Chi To, Esq., Jae-Sun Chung, Esq., Huyue Angela Zhang, Esq., and Jessica Katz, Esq., at Debevoise & Plimpton LLP, assist the Debtors in their restructuring efforts. Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' local counsel. Jefferies & Company, Inc., is the Debtors' financial advisor. Protiviti, Inc., is the Debtors' restructuring consultant. Kurtzman Carson Consultants LLC is the Debtors' claims agent. PACIFIC DEVELOPMENT: Committee Taps Parsons Behle as Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Chapter 11 case of Pacific Development, L.C., asks the U.S. Bankruptcy Court for the District of Utah form permission to employ Parsons Behle & Latimer as its counsel. The firm will, among other things: -- represent the Committee in its investigation of, analysis of an consultations with the Debtor concerning the history, operation and liquidation of the Debtor's business and assets and the administration of the Debtor's case; -- represent the Committee and the interests of unsecured creditors in negotiations toward, and confirmation and consummation of, any reorganization plan; and -- represent the Committee and the interest of the unsecured creditors in all matters of the Court in the case. The hourly rates of the firm's personnel are: J. Thomas Beckett, Esq. $400 David P. Billings, Esq. $190 To the best of the Committee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: J. Thomas Beckett, Esq. David P. Billings, Esq. PARSONS BEHLE & LATIMER One Utah Center 201 South Main Street, Suite 1800 P.O. Box 45898 Salt Lake City, UT 84145-0898 Tel: (801) 532-1234 E-mail: tbeckett@parsonsbehle.com dbillings@parsonsbehle.com About Pacific Development, L.C. Provo, Utah-based Pacific Development, L.C., is the obligor on and owner of various real estate development loans for properties primarily located in Payson, Salem, Springville and Harrisburg, Utah. The Company filed for Chapter 11 protection on March 10, 2010 (Bankr. D. Utah Case No. 10-22754). Danny C. Kelly, Esq. at Stoel Rives LLP represents 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. PACIFIC DEVELOPMENT: Wants 90-Day Extension of Plan Exclusivity --------------------------------------------------------------- Pacific Development, L.C., asks the U.S. Bankruptcy Court for the District of Utah for a 90 day extension on both of its exclusive periods to file and solicit acceptances for the proposed plan of reorganization. The Debtor is represented by: Blake D. Miller, Esq. James W. Anderson, Esq. MILLER GUYMON, P.C. 165 Regent Street Salt Lake City, Utah 84111 Tel: (801) 363-5600 Fax: (801) 363-5601 E-mail: miller@millerguymon.com anderson@millerguymon.com Provo, Utah-based Pacific Development, L.C., is the obligor on and owner of various real estate development loans for properties primarily located in Payson, Salem, Springville and Harrisburg, Utah. The Company filed for Chapter 11 protection on March 10, 2010 (Bankr. D. Utah Case No. 10-22754). Danny C. Kelly, Esq. at Stoel Rives LLP represents 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. PACIFIC ETHANOL: Signs Definitive Agreements to Raise $53.5MM ------------------------------------------------------------- Pacific Ethanol, Inc. disclosed that several transactions intended to further improve the company's balance sheet and position the company for continued growth in the ethanol industry. On September 27, 2010, PEI entered into agreements to issue senior convertible notes (Notes) in the aggregate principal amount of $35.0 million to institutional investors, which agreements are expected to close on or prior to October 11, 2010. In addition, on September 27, 2010, PEI signed an agreement to sell its minority ownership interest in Front Range Energy, LLC for $18.5 million in cash that is expected to close coincident with the closing of the issuance of the Notes. Total gross proceeds from these two transactions are expected to be $53.5 million. On September 28, 2010, PEI entered into agreements to purchase for $23.3 million a 20% ownership interest in New PE Holdco LLC (New PEH), which is the owner of PEI's previously-owned four ethanol production facilities. As a result, PEI will hold the largest equity ownership position in New PEH. Further, PEI intends to retire $17.0 million in corporate debt, accrued interest and fees owed to Lyles United LLC and Lyles Mechanical Co. (Lyles). The balance of the proceeds is expected to pay transaction fees and to provide approximately $10.0 million of cash reserves to PEI's balance sheet. Neil Koehler, PEI's president and CEO, stated, "These transactions represent a significant step forward for PEI as we complete our restructuring and improve our balance sheet. We are reinvesting in the ownership of core assets at a time when plant valuations offer considerable upside potential, as evidenced by the price we received from the sale of our interest in Front Range. We believe these transactions best enable us to continue our mission and leadership as the leading West Coast marketer and producer of low carbon renewable fuels, and will drive our growth strategy. We are focused on an immediate plan to restart the Stockton, California, plant to meet the growing demand for ethanol and realize the high value of California produced ethanol. With our improved financial position, additional working capital, the integration of marketing, asset management, and plant ownership, together with efficient operations, we are well positioned for profitable growth." PEI has also filed a Current Report on Form 8-K today with the Securities and Exchange Commission that provides further details of the transactions described above and further summarized below. Senior Convertible Notes and Warrants PEI has signed definitive agreements, conditioned on the simultaneous closing of the other transactions described in this press release and other customary closing conditions, to issue Notes for cash in the aggregate principal amount of $35.0 million. The Notes will have a term of 15 months, bear interest at the rate of 8% per annum and will contain other terms that are consistent with the terms approved by PEI's stockholders at its annual meeting held on June 3, 2010. In connection with the issuance of the Notes, PEI will issue seven-year warrants to purchase an aggregate of up to 20.6 million shares of its common stock. PEI expects to close the offering of the Notes and warrants on or prior to October 11, 2010, subject to the satisfaction of various customary closing conditions. PEI expects that the net proceeds from the offering will be approximately $32.0 million, after deducting estimated fees and expenses of the offering. Lazard Capital Markets LLC acted as the exclusive placement agent for this transaction. Sale of Minority Ownership of Front Range PEI signed a definitive agreement with the majority owner for the sale of its 42% interest in Front Range Energy, LLC, a 48 million gallon per year ethanol production facility located in Windsor, Colorado, for $18.5 million in cash. The sale is anticipated to close on or prior to October 11, 2010, subject to customary closing conditions. Purchase of Ownership in Plants As part of PEI's plan of reorganization following its emergence from bankruptcy on June 29, 2010, the ownership of its wholly- owned subsidiary, Pacific Ethanol Holding Co. LLC (PEH), together with PEH's four wholly-owned ethanol production facilities with a combined annual capacity of 200 million gallons was transferred to a newly formed holding company, New PEH. As announced on June 29, 2010, PEI had an exclusive option to purchase up to a 25% equity interest in New PEH for up to $30 million in cash. PEI exercised its option and entered into a separate agreement to acquire ownership interests. PEI will pay $23.3 million in the aggregate for a 20% interest. As a result, PEI will hold the largest equity ownership interest in New PEH. Retirement of Corporate Debt With the proceeds of the sale of PEI's interest in Front Range Energy, LLC, PEI will retire all of its corporate debt obligations to Lyles, including accrued interest and fees, in the aggregate amount of approximately $17.0 million. PEI has been in default under these obligations since 2009. About Pacific Ethanol Pacific Ethanol Holding Co. LLC and four affiliates filed for Chapter 11 on May 17, 2009 (Bankr. D. Del. Case No. 09-11713). Judge Kevin Gross handles the case. Attorneys at Cooley Godward Kronish LLP represent the Debtors as counsel. Attorneys at Potter Anderson & Corroon LLP are co-counsel. Epiq Bankruptcy Solutions LLC is the claims agent. Pacific Ethanol Holding disclosed $50 million to $100 million in assets and $100 million to $500 million in debts in its petition. Pacific Ethanol Inc. and its marketing subsidiaries, Kinergy Marketing LLC, and Pacific Ag. Products, LLC, have not filed for Chapter 11 bankruptcy protection. The Company is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries' ethanol and feed production under existing Marketing Agreements. POWER DEVELOPMENT: Chapter 11 Case Dismissed -------------------------------------------- American Bankruptcy Institute reports that the bankruptcy case of Power Development LLC has been dismissed due to the debtor's failure to comply with court orders and the unlikelihood that it could successfully reorganize. Asheville, North Carolina-based Power Development, LLC, filed for Chapter 11 bankruptcy protection on June 11, 2010 (Bankr. W.D. N.C. Case No. 10-10684). D. Rodney Kight, Jr., Esq., at Kight Law Office, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million. PERRY COUNTY: Bankr. Ct. Won't Rule on Remand Bid in Landfill Suit ------------------------------------------------------------------ In Ethel L. Abrahams, et al., v. Phill-Con Services LLC and Phillips & Jordan Incorporated, Adv. Pro. No. 10-00075 (Bankr. S.D. Ala., September 24, 2010), the Hon. Margaret A. Mahoney grants the defendants' Motion to Defer Ruling on the plaintiffs' Motion for Remand and Abstention, and denies the plaintiffs' Motion to Strike. The adversary proceeding is "related to" the Chapter 11 cases of Perry Uniontown Ventures I, LLC, and Perry County Associates, LLC. The plaintiffs sued the defendants on June 21, 2010, in Perry County Circuit Court (Case No. 2010-cv-24), alleging negligence, wantonness, nuisance, and trespass arising from the construction and operation of the Arrowhead Landfill in Perry County, Alabama. On June 25, 2010, the plaintiffs filed a complaint in the United States District Court for the Southern District of Alabama (Case No. 10-cv-00326), alleging violations of federal law. The plaintiffs demanded jury trials. The defendants removed the state court action to the Debtors' Chapter 11 cases. Phill-Con filed a Motion to Refer the district court litigation to the Bankruptcy Court to consolidate the federal action with the removed state court action that is presently pending. Perry Uniontown Ventures I owns the Landfill, which is its primary asset. Perry County Associates owns Alabama Department of Environmental Management Solid Waste Disposal Permit No. 53-03, which authorizes the operation of the Landfill facility. The ADEM permit is PCA's only asset. Phill-Con operates the Landfill. P&J is a contractor for construction at the Landfill and operates the Landfill in conjunction with Phill-Con. The Plaintiffs filed a Motion to Withdraw Reference pursuant to 28 U.S.C. Sec. 157 in the event that the District Court decides to refer the federal action to the Bankruptcy Court. Phill-Con filed a Motion to Withdraw Reference in the adversary proceeding. The Motions to Withdraw Reference are currently pending before Judge Steele in the District Court. According to Judge Mahoney, any ruling by the Bankruptcy Court on abstention or remand might moot any ruling on the pending District Court Issues. "Judge Steele may decide that withdrawal of the reference in this adversary proceeding is appropriate. Therefore, it is premature for [the Bankruptcy] Court to make any determination as to remand and abstention. The District Court should have an opportunity to rule on the motions before it as its decision will determine the direction of remaining litigation in this case. For these reasons the Defendants' Motion to Defer Ruling Pending Action by the District Court is due to be GRANTED," Judge Mahoney says. On September 20, 2010, the Plaintiffs submitted a Motion to Strike Exhibits, objecting to exhibits attached to the Defendants' Motion for Remand or Abstention and Response to the Court's Show Cause Order. The Plaintiffs object to the admission of the exhibits on the ground that they support a "false assertion" by the Defendant that Plaintiffs "began a new focus' on P&J and Phill-Con with an intent 'to circumvent the Debtors' Bankruptcy Case.'" Judge Mahoney holds that it is appropriate to deny the Motion to Strike. The exhibits in question were attached to a response and include notices of intent to sue sent to various government bodies as well as requests to the Environment Protection Agency/ADEM, and two news articles. In the present case these attachments need not be removed from the litigation at hand, she says. A copy of the Court's order is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100924571 About Perry Uniontown & Perry County Assoc. Atlanta, Georgia-based Perry County Associates, LLC, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ala. Case No. 10-00277) on January 26, 2010. Jeffery J. Hartley, Esq., at Helmsing, Leach, Herlon, Newman & Rouse, assists the Company in its restructuring effort. PCA estimated $50 million to $100 million in assets and debts. Affiliate Perry Uniontown Ventures I, LLC, filed a separate Chapter 11 bankruptcy petition (Bankr. S.D. Ala. Case No. 10- 00276). PUV disclosed $15,009,538 in assets and $67,489,007 in liabilities in its schedules. PFG ASPENWALK: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: PFG AspenWalk, LLC 2005 Cargo Road Minneapolis, MN 55450 Bankruptcy Case No.: 10-47089 Chapter 11 Petition Date: September 23, 2010 Court: United States Bankruptcy Court District of Minnesota (Minneapolis) Judge: Robert J. Kressel Debtor's Counsel: Robert T. Kugler, Esq. LEONARD STREET & DEINARD P.A. 150 South Fifth Street, Suite 2300 Minneapolis, MN 55402 Tel: (612) 335-1645 E-mail: robert.kugler@leonard.com Scheduled Assets: $12,004,580 Scheduled Debts: $7,535,608 The petition was signed by Thomas Salmen, vice president of Finance. Debtor's List of 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America, N.A. Swap Agmt. $628,661 Attn: Richard L. Carter 2990 Lava Ridge CT, Suite 120 Roseville, CA 95661 Sopris Consulting Consulting $480,000 Group, LLC Contract Attn: Paul Lotzer August 2010 5400 Norwood Lane Plymouth, MN 55442 See Attachment to $16,025 Schedule E for Tenant Security Deposits/Prepaid Rent Holy Cross Energy $495 Stan Clauson $467 Associates, Inc. Waste Management- $444 Carbondale Integrity Plumbing and $388 Heating Aspen Custom Glass $265 City of Aspen $248 Terminix $240 PRES-LAHAINA SQUARE: Has Until Nov. 1 to File Reorganization Plan ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California directed Pres-Lahaina Square LLC and VLJ Aloha LLC to file a proposed plan of reorganization and an explanatory disclosure statement by November 1, 2010. Newport Beach, California-based Pres-Lahaina Square LLC filed for Chapter 11 bankruptcy protection on June 15, 2010 (Bankr. C.D. Calif. Case No. 10-18065). Marc J. Winthrop, Esq., who has an office in Newport Beach, California, assists the Debtors in their restructuring effort. The Company estimated its assets and debts at $10 million to $50 million. The Company's affiliate, VLJ Aloha LLC, filed a separate Chapter 11 petition on June 15, 2010 (Case No. 10-18067). PRES-LAHAINA SQUARE: Taps Winthrop Couchot as Insolvency Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Pres-Lahaina Square LLC and VLJ Aloha LLC to Winthrop Couchot Professional Corporation as general insolvency counsel. The firm is expected to represent the Debtors in the Chapter 11 proceedings. To the best of the Debtors' knowledge, the firm is a "disinterested person" as that tem is defined in Section 101(14) of the Bankruptcy Code. Newport Beach, California-based Pres-Lahaina Square LLC filed for Chapter 11 bankruptcy protection on June 15, 2010 (Bankr. C.D. Calif. Case No. 10-18065). Marc J. Winthrop, Esq., who has an office in Newport Beach, California, assists the Debtors in their restructuring effort. The Company estimated its assets and debts at $10 million to $50 million. The Company's affiliate, VLJ Aloha LLC, filed a separate Chapter 11 petition on June 15, 2010 (Case No. 10-18067). REEF ENVIRONMENTAL: Files for Chapter 11 Protection in Alabama -------------------------------------------------------------- Matt Quillen at The Daily Home reports that REEF Environmental officials filed for Chapter 11 bankruptcy in Montgomery, Alabama. According to Daily Homes, the REEF wastewater treatment plant, located in the Sylacauga area, has been an object of local controversy for at least 18 months. Odors believed to be coming from the plant caused residents to file lawsuits and notify local and state officials. The Alabama Department of Environmental Management fined REEF $72,000 in October 2009 for violating an air permit. The city of Sylacauga also filed a civil lawsuit against the company that is pending. REGAL ONE: Earns $408,576 in June 30 Quarter -------------------------------------------- Regal One Corporation filed on April 8, 2010, its quarterly report on Form 10-Q, reporting net increase in net assets of $408,576 for the three months ended June 30, 2010, compared with a net decrease in net assets of $14,695 for the comparable period of 2009. For the three and six months ended June 30, 2010, the Company had no operating revenues. For the six month period ended June 30, 2010, the Company primarily satisfied its working capital needs from cash on hand at the beginning of the period which decreased by $68,048. Working capital expenditures included: (i) a decrease in prepaid insurance in the amount of $12,279. For the three months ended June 30, 2010, operating expenses were $33,984 compared to $56,898 for the comparable period of 2009. The decrease for the three month period ending June 30, 2010, compared to the comparable period of 2009 was primarily due to decreased Professional Services expenses of $20,239 and a $2,675 decrease in General and Administrative expenses. The Company recorded a gain on recovery of legal fees of $63,484 for the three months months ended June 30, 2010. These funds were received in July. For the three months ending June 30, 2010, the Company's net investment income after taxes was $29,500 compared to a net investment loss of $56,898 for the comparable period in 2009. The change of $86,398 in the three month month period ending June 30, 2010 as compared to the comparable period ended June 30, 2009 was attributable to the factors discussed above. For the three months ended June 30, 2010, net assets increased by $408,576 primarily from the net change in unrealized gain on the value of portfolio securities of $158,500 combined with the unrealized gain of $205,200 in the valuation of the investment warrant. This compares to an unrealized gain on the value of portfolio securities of $6,833 and an unrealized gain of $6,300 in stock options for the comparable period in 2009. The Company's balance sheet as of June 30, 2010, showed $2.09 million in total assets, $13,153 in total liabilities, and stockholders' equity of $2.08 million. As reported in the Troubled Company Reporter on April 12, 2010, 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 does not generate operating revenue and must liquidate its investment portfolio to provide cash flow for its operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bc0 About Regal One Based in Las Angeles, Regal One Corporation is a financial services company which coaches and assists biomedical companies, through its network of professionals, in listing their securities on the over-the-counter market. REMINGTON RANCH: Unlicensed Contractor Has No Construction Lien --------------------------------------------------------------- The Hon. Elizabeth Perris concludes that the correct reading of The Oregon Revised Statues 701.131(2)(a) requires a contractor to be licensed by the Construction Contractors Board at the time it perfects a lien. If the contractor is not licensed at the time of perfection, the lien is a nullity. Accordingly, Judge Perris says Hooker Creek Companies, LLC, does not qualify for the safe harbor and thus it does not hold a construction lien on debtor's property. The adversary case is Remington Ranch, LLC, Plaintiff, and Columbia State Bank, Successor-in-Interest to Columbia River Bank, a Washington State Chartered Bank, Intervenor-Plaintiff, v. Hooker Creek Companies, LLC, an Oregon Limited Liability Company, Defendant, Adv. Proc. No. 10-3093 (Bankr. D. Ore., September 24, 2010). A copy of the memorandum opinion is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100924583 Powell Butte, Oregon-based Remington Ranch, LLC, is a property developer. The Company filed for Chapter 11 bankruptcy protection on January 21, 2010 (Bankr. D. Ore. Case No. 10-30406). In its schedules, the Debtor disclosed $29,298,544 in assets and $32,453,284 in liabilities. ROCK & REPUBLIC: Lender Protests 'Secret' Nature Sale Talks ----------------------------------------------------------- Rock & Republic Enterprises Inc.'s largest secured lender is criticizing the company for hinging all of its sale aspirations on one prospective purchaser, arguing the clothing designer's plan to carry out exclusive negotiations could threaten the lender's chances of getting repaid, Dow Jones' DBR Small Cap reports. 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). ROTECH HEALTHCARE: Moody's Reviews 'Caa2' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service placed Rotech Healthcare, Inc.'s Caa2 corporate family rating and Caa2 probability of default rating under review for possible upgrade and assigned a prospective B1 rating to the new $225 million in first lien notes. Moody's placed Rotech's Caa3 rated senior subordinated notes under review for possible upgrade as well. Moody's expects to upgrade Rotech's CFR and PDR to Caa1 and the senior subordinated notes rating to Caa2 following the close of the transaction and review of the final documentation. Ratings Rationale The review for upgrade will consider the improvement in Rotech's operating performance, most notably over the past two quarters although leverage remains high at 5.5 times debt-to-EBITDA (according to Moody's standard adjustments). Moreover, Moody's anticipates that Rotech will be able to de-lever modestly over time through EBITDA growth. The operating performance reflects a better cost structure and increasing revenue despite the significant reduction in Medicare reimbursement. Revenue growth is also supported by the acquisition of competitors that have exited the market and the potential for market share gains. In Moody's view, Rotech is likely to garner market share as a result of its scale (in a negative pricing environment) as well as its success in contract awards following the Round 1 Rebid for Medicare patients. Notwithstanding the improvement in operations, Moody's remains concerned about ongoing uncertainty around the reimbursement environment and the potential for further negative impact on oxygen and other home medical equipment providers. Moody's is also mindful of the 2012 maturity of Rotech's senior subordinate notes, the majority of which need to be repaid by November 2011, and the refinancing pressure that will continue to build despite the current refinancing. Ongoing positive rating momentum would likely focus on sustainable liquidity, including the refinancing of the senior subordinated notes, as well as the ability to generate free cash flow despite the expansion of competitive bidding in 2013. Should the transaction not close as anticipated, the company's ratings would not be upgraded and could face negative rating pressure if financing alternatives did not seem likely. Ratings Under Review for Upgrade: Rotech Healthcare, Inc.: -- Corporate Family Rating at Caa2; -- Probability of Default Rating at Caa2; -- $287 million senior subordinated notes due 2012 at Caa3; Rating Assigned: -- Proposed $225 million senior secured first lien notes at (P)B1; -- LGD assessments are not under review. Moody's last rating action for Rotech was on August 13, 2009 when Moody's stabilized the outlook and affirmed the Caa2 corporate family rating and all other ratings. Rotech, headquartered in Orlando, Florida, is one of the largest providers of home medical equipment and related products and services in the US, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. Rotech provides equipment and services in 48 states through approximately 450 operating centers located primarily in non-urban markets. For the twelve months ended June 30, 2010, Rotech reported revenue of approximately $493 million. ROTECH HEALTHCARE: S&P Puts 'CCC' Rating on CreditWatch Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'CCC' corporate credit rating and 'CC' issue-level rating on Orlando, Fla.-based home health care provider Rotech Healthcare Inc. on CreditWatch with positive implications. The CreditWatch listing reflects the probability that Rotech will successfully complete the planned refinancing of its $225 million payment in kind term loan due in 2011 with $225 million new first-lien notes due in 2015. At the same time, S&P assigned issue-level and recovery ratings of 'B+' and '1' on the company's proposed $225 million first-lien notes. The positive CreditWatch listing could result in potential ratings change on the corporate credit rating and senior subordinated notes to 'B-'. The senior subordinated notes would be rated the same as the corporate credit rating given S&P's likely recovery rating revision on the notes to '4' from '6' in light of the new financing. "The rating on Rotech continues to reflect the company's operational exposure to the detrimental impact of Medicare reimbursement reductions for its products and services, although it is now manageable through the company's effective cost-cutting measures," says Standard & Poor's credit analyst Tahira Wright. "The rating also reflects limited liquidity given its near-term maturity on its debt due in 2011 and 2012, and its highly leveraged financial risk profile." Rotech's vulnerable business risk profile reflects its narrow focus in providing home respiratory care services (about 86% of revenues) with the balance comprising of durable medical equipment and other services and related challenges with government reimbursement that far outweigh the benefits of the company's position as the No. 3 provider in its niche industry segment. Although Rotech serves patients in 48 states through approximately 450 centers across the country, principally in non-urban markets, Rotech's concentration in respiratory therapy exposes the company to changes in the respiratory care field, including reimbursement pressures. In fact, Medicare, Medicaid, and other governmental payors constituted 58% of the company's revenues in 2009. This high exposure resulted in the company suffering from a number of reimbursement cuts. This included the 2008 Medicare reimbursement cuts for a number of key respiratory drugs -- including compounded budesonide, Xopenex, and DuoNeb. The passage of the Medicare Improvement for Patients and Providers Act in July 2008, which delayed the competitive bidding for some of the company's supplies, including oxygen equipment for 18 months, also reduced the Jan. 1, 2009, reimbursement for such supplies by 9.5%. The significant reimbursement reduction in 2009 relating to rental caps on oxygen equipment and reduced reimbursement on nebulizer medication also contributed to 2008 reimbursement cuts. As a result of these cuts, Rotech's revenues were negatively impacted by approximately $27 million and $52 million in 2008 and 2009, respectively. RUBICON US: Starwood-JPMorgan Units Complete Reorganization ----------------------------------------------------------- Citybiz Real Estate reports that affiliates of Starwood Capital Group, Kaufman Jacobs LLC and JPMorgan Chase & Co. have completed the reorganization of Rubicon US REIT whose primary tenant was the U.S. General Services Administration in a $550 million portfolio. According to Citybiz, the affiliates bought 100% of the corporate bonds of Rubicon US REIT as laid out in a reorganization plan approved June 21 by the U.S. Bankruptcy Court for the District of Delaware. About $80 million in bonds were exchanged for 100% of the common stock of Rubicon US REIT and the issuance of new corporate debt of $50 million to ensure adequate solvency for Rubicon US REIT. Class A preferred stockholders will retain their equity through the bondholders' plan. Unsecured creditors will also be paid in full, totaling approximately $1 million. About Rubicon US REIT Rubicon US REIT Inc. is a Chicago-based real estate investment trust. Rubicon filed for Chapter 11 bankruptcy protection on January 20, 2010 (Bankr. D. Del. Case No. 10-10160). Attorneys at Phillips, Goldman & Spence, have been tapped as bankruptcy counsel. Phillips, Goldman & Spence, P.A. is Delaware bankruptcy counsel Grant Thornton LLP is the Company's financial advisor. Garden City Group is the claims and notice agent. In its petition, the Company estimated $100 million to $500 million in assets and liabilities. The Company's affiliates -- Rubicon GSA II, LLC, et al. -- also filed Chapter 11 petitions. SANSWIRE CORP: Posts $4.1 Million Net Loss in June 30 Quarter ------------------------------------------------------------- Sanswire Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $4.1 million for the three months ended June 30, 2010, compared to a net loss of $7.3 million for the corresponding period last year. The Company had revenue related to sale of a 50% interest in the Company's SkySAT airship of $250,000 for the three months ended June 30, 2010, and no revenue for the three months ended June 30, 2009. The Company had a working capital deficit of $17.6 million and a stockholders' deficit of $15.9 million at June 30, 2010. Additionally, at June 30, 2010, the Company had an accumulated deficit of $139.5 million, compared to $134.7 million at December 31, 2009. Management believes it can continue to raise capital from various funding sources, which will be sufficient to sustain operations at its current level through December 31, 2010. The Company's balance sheet as of June 30, 2010, showed $3.6 million in total assets, $19.5 million in total liabilities, and a stockholders' deficit of $15.9 million. As reported in the Troubled Company Reporter on April 14, 2010, Rosen Seymour Shapss Martin & Company LLP, in New York, 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 experienced significant losses and negative cash flows, resulting in decreased capital and increased accumulated deficits. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bb7 About Sanswire Corp. Aventura, Fla.-based Sanswire Corp.'s primary business is the design, construction and marketing of a variety of aerial vehicles through a joint venture with TAO Technologies, Stuttgart, Germany, named Sanswire-TAO Corp. The High Altitude class of prospective airships are generally referred to as HAAs (High Altitude Airships) but have also been called HAPs (High Altitude Platform) and HALEs (High Altitude Long Endurance). They have been designed to be able to keep a station in one location in the Stratosphere, at approximately 65,000 ft. for durations of 30 days or more. SEA ISLAND: Oaktree-Led Auction Set for October 11 -------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reported that Sea Island Co. received approval from the bankruptcy judge on Sept. 15 for auction procedures to test whether there is a better offer for its properties. A company affiliated with Oaktree Capital Management LP and Avenue Capital Group is under contract to buy the business for $197.5 million. Procedures call for the submission of competing offers by Oct. 4. Absent higher and better offers at the auction, the Debtor will move seek confirmation of the current version of its proposed Chapter 11 plan at a hearing on Nov. 4, 2010. The Plan is premised upon the sale of the Company's holdings for about $197.5 million. Lenders including Synovus Bank, Bank of America and Bank of Scotland would recoup about $180 million, less than a third of outstanding loans. Unsecured creditors would be paid shares from a pool totaling just $3 million. They include former Sea Island president Dennie McCrary, who is owed about $27 million. The Company estimates that unsecured creditors, at best, would receive about 3 cents per dollar owed to them. About Sea Island St. Simons Island, Georgia-based Sea Island Company -- http://www.seaisland.com/-- aka Sea Island Shooting School, Sea Island Yacht Club, Sea Island Stables, and Cabin Bluff, is a private resort and real estate development company founded in 1926. Sea Island Company owns and operates Sea Island Resorts, featuring two of the world's most exceptional destinations: the Forbes Five-Star Cloister at Sea Island and The Lodge at Sea Island. Sea Island is filing a Chapter 11 plan based upon an agreement to sell substantially all of its assets to Sea Island Acquisition LP, a limited partnership formed by investment funds managed by the global investment firms Oaktree Capital Management, L.P., and Avenue Capital Group. Sea Island filed for Chapter 11 protection on August 10, 2010 (Bankr. S.D. Ga. Case No. 10-21034). Sarah R. Borders, Esq.; Harris Winsberg, Esq.; Sarah L. Taub, Esq.; and Jeffrey R. Dutson, Esq., at King & Spalding LLP, assists the Debtor in its restructuring effort. Robert M. Cunningham, Esq., at Gilbert, Harrell, Sumerford & Martin PC, is the Debtor's co-counsel. FTI Consulting, Inc., is the Debtor's restructuring advisor. Donald F. Walton, the U.S. Trustee for Region 21, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of Sea Island Company, et al. EPIQ Bankruptcy Solutions, LLC, is the Debtor's claims and notice agent. The official committee of unsecured creditors has retained Jordi Guso, Esq. and Berger Singerman, P.A. as its counsel. The Debtor estimated its assets and debts at $500 million to $1 billion as of the Petition Date. Affiliates Sea Island Coastal Properties, LLC; Sea Island Services, Inc.; Sea Island Resort Residences, LLC; Sea Island Apparel, LLC; First Sea Island, LLC; and Sical, LLC, filed separate Chapter 11 petitions on August 10, 2010. SHOPPES OF LAKESIDE: Gets Temporary OK to Use Cash Collateral ------------------------------------------------------------- The Hon. Paul M. Glenn of the U.S. Bankruptcy Court for the Middle District of Florida authorized, on an interim basis, Shoppes of Lakeside, Inc., to use cash securing its obligation to secured creditors. The Debtor would use the cash collateral to fund expenses necessary to preserve its business, including insurance, maintenance, repairs, property taxes, and adequate protection payments. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the secured creditors: -- regular payments of 9,903 to Putnam State Bank beginning November 1, 2010; -- regular payments at contractual rate to Jacksonville Bank on 300 W. Adams beginning October 1; -- regular payments at contractual interest rate to Jacksonville Bank on 937 Main St. beginning November 1; and -- adequate protection payments to other cash collateral lenders of 4% interest only beginning 90 days from the entry of the order. The Debtor, on the interim basis, is only authorized to use Vystar Credit Union cash collateral to make insurance, utility and maintenance payments on the Vystar properties. About Shoppes of Lakeside, Inc. Neptune Beach, Florida-based Shoppes of Lakeside, Inc., filed for Chapter 11 bankruptcy protection on June 15, 2010 (Bankr. M.D. Fla. Case No. 10-05199). Bryan K. Mickler, Esq., who has an office in Jacksonville, Florida, assists the Company in its restructuring effort. The Company disclosed $39,894,050 in assets and $37,748,101 in liabilities. SHOREBANK CORP: Pacific and International Units Still Operating --------------------------------------------------------------- The operations of ShoreBank Corporation, its subsidiaries ShoreBank Pacific and ShoreBank International, and affiliates are unaffected by the receivership of ShoreBank's Midwest bank and continue as usual, according to the Web site http://www.shorebankcorp.com/ ShoreBank, Chicago, Illinois, was closed August 20 by Illinois regulators, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Urban Partnership Bank, Chicago, Illinois, a newly-chartered institution, to assume all of the deposits of ShoreBank. Pursuant to the agreement, the 15 branches of ShoreBank reopened as branches of Urban Partnership Bank, including those in Detroit, Michigan, and Cleveland, Ohio, under their normal business hours, including those offices with Saturday hours. As of June 30, 2010, ShoreBank, Chicago, had approximately $2.16 billion in total assets and $1.54 billion in total deposits. According to Bloomberg, ShoreBank Corp.'s community bank was under a March order from the FDIC to boost capital within 60 days. Tier 1 capital shrank to $4.1 million at the end of June from $26.3 million as of March 31 and $43.5 million at the end of last year, according to the FDIC. About ShoreBank Corp. Founded in 1973, ShoreBank Corp. has built a reputation on lending to low-and-moderate income borrowers. The holding company's subsidiary banks and not-for-profits help fund homeowners, investors, small businesses, and faith-based and not-for-profit organizations in diverse communities in the Midwest and Pacific Northwest. Northern Initiatives, ShoreBank Neighborhood Institute, ShoreBank Enterprise Cascadia, and ShoreBank Enterprise in Cleveland and Detroit offer small business loans, business development assistance, and employment services. ShoreBank has also taken its message overseas with ShoreBank International and ShoreCap Exchange, both of which offer microfinance and other services. ShoreBank posted a $119 million loss in 2009 and a $39.6 million loss in the first half of this year, according to Federal Deposit Insurance Corp. figures. It had a net loss of $9.3 million in 2008. SOUTHPOINT I: Podolsky Northstar Sells Building to KVH Industries ----------------------------------------------------------------- Southpoint I, six months after it went into receivership, has been sold to KVH Industries, Inc., rejournals.com reports. According to the report, Podolsky Northstar CORFAC International, which had served as court-appointed receiver, property manager and broker agent, then as the exclusive listing agent for the owner, arranged the sale of the property for Jefferson Pilot Investments, a subsidiary of Lincoln Financial Group. The report relates Jefferson Pilot was the lender of the property when the building went into receivership, and took ownership following foreclosure. "This represents one of those results that was beneficial for everyone," the report quoted Adam Tarantur, vice president, Podolsky Northstar CORFAC International, as saying. "KVH demonstrates its long term commitment to the area through the acquisition of the property, and Jefferson Pilot secured a more advantageous price than if the property had been sold to an investor," he added. The report notes that Podolsky and Tarantur represented building ownership in the transaction; Larry Johnson of CB Richard Ellis represented KVH. Dan Minor of Vorys, Sater Seymour & Pease LLP provided legal services for the seller; and Jay Gitles of Seyfarth Shaw represented the legal interests of the buyer. Southpoint I is a 100,415-square-foot building in the Tinley Crossings Corporate Center in Chicago's south suburbs. STERLING FINANCIAL: FDIC Lifts Cease Order on Sterling Bank ----------------------------------------------------------- Sterling Financial Corporation disclosed that its regulators -- the Federal Deposit Insurance Corporation and Washington Department of Financial Institutions -- have terminated a cease and desist order put in place in October 2009 with Sterling Savings Bank. "[The] announcement provides a clear indication of the progress of Sterling Savings Bank's recovery, following the completion in August of a $730-million recapitalization effort, as well as improvement in our operating results," said Greg Seibly, president and CEO of Sterling Financial Corporation. The lifting of the cease and desist order reflects Sterling Savings Bank's significantly strengthened balance sheet and capital position, which exceeded the regulatory requirements outlined in the order. In addition, it reflects the progress made by Sterling Savings Bank's board of directors and management to reduce the proportion of its loans and other assets classified as non-performing as well as measures taken by the Bank to realign its credit practices going forward. "This regulatory recognition of our progress marks another important milestone in Sterling Savings Bank's recovery efforts. Going forward, Sterling anticipates maintaining a Tier 1 capital ratio above 8 percent, which surpasses the current "well- capitalized" standard for banks and the proposed Basel III global banking standards," said Seibly. About Sterling Financial Spokane, Wash.-based Sterling Financial Corporation (NASDAQ: STSA) -- http://www.sterlingfinancialcorporation-spokane.com/-- is a bank holding company, organized under the laws of Washington State in 1992. The principal subsidiaries of Sterling are Sterling Savings Bank and Golf Savings Bank. Subsequent to June 30, 2010, Golf Savings Bank was merged with and into Sterling Savings Bank, with the mortgage banking operations of Golf Savings Bank continuing to operate as a division of Sterling Savings Bank. * * * As reported in the Troubled Company Reporter on March 22, 2010, BDO Seidman, LLP, in Spokane, Wash., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered significant net losses during 2009 and 2008, a decline in regulatory capital to support operations, and regulatory issues. Sterling currently is categorized as being significantly undercapitalized pursuant to regulatory guidelines. Both Sterling and Sterling Savings Bank are currently operating under regulatory agreements. Sterling has entered into a regulatory agreement with the Federal Reserve Bank of San Francisco, and Sterling Savings Bank has entered into a regulatory agreement with the FDIC and the Washington Department of Financial Institutions. Both agreements require, among other things, a return to "well capitalized" status. TAGISH LAKE: New Pacific Take-Over Bid to Expire September 27 ------------------------------------------------------------- New Pacific Metals Corp. wishes to remind the shareholders and debtholders of Tagish Lake Gold Corp. that the take-over bid by New Pacific for all of the outstanding common shares and the offer to purchase all the debt of Tagish Lake will expire at 11:59 p.m. (EST), September 27, 2010. New Pacific has taken up (or already owned) 76,106,723 Tagish Shares, representing approximately 53.2% of the issued and outstanding Tagish Shares. New Pacific notes that on September 23, 2010, the board of directors of Tagish Lake issued a directors' circular and notice of change recommending that Tagish Lake shareholders accept the Offer and reject the take-over bid made by YS Mining Company Inc. to acquire all of the Tagish Shares and debt of Tagish Lake dated September 8, 2010. YS Mining subsequently announced the withdrawal of its offer on September 24, 2010. The Tagish Board's stated reasons for recommending acceptance of the Offer include: -- New Pacific has taken up (or already owned) approximately 53.2% of the issued and outstanding Tagish Shares. -- The fairness opinion prepared by Evans & Evans, Inc. in connection with the Offer concludes that, subject to the matters stated therein, as at July 27, 2010 the consideration to be paid for the Tagish Shares under the initial terms of the Offer is fair from a financial point of view to Tagish shareholders. The consideration to be paid for the Tagish Shares under the current Offer is greater than the consideration to be paid for the Tagish Shares under the initial Offer. -- Tagish Lake has commenced proceedings under the Companies' Creditors Arrangement Act ("CCAA") and needs funds to pay its creditors. Tagish Lake's cash on hand is only sufficient to enable Tagish Lake to continue operations until late September, 2010. If Tagish Lake does not emerge from CCAA protection, it will likely face receivership or bankruptcy proceedings, either of which will lead to the liquidation of Tagish Lake's assets. -- At present, the Offer is the only offer for the Tagish Shares and debt that will be successful if accepted by securityholders of Tagish Lake. -- There can be no assurance as to the availability of any Acceptable liquidity opportunity for the securityholders of Tagish Lake if the Offer is not successful. New Pacific's offer per Tagish Share is: a. $0.10 in cash (the "Cash Election"); or b. 0.1370 of a common share of New Pacific (a "New Pacific Share") (the "Share Election"); or c. a combination of 50% in cash and 50% in New Pacific Shares (the "Combined Election"). For Tagish Lake shareholders who tender all their Tagish Shares under the Cash Election the enhanced $0.10 Cash Offer represents: a. a premium of approximately 150% over the $0.04 closing price of the Tagish Shares on the TSXV on July 2, 2010, the last trading day prior to the July 5, 2010 announcement of New Pacific's intention to make the Offer; and b. a premium of approximately 89% over the $0.053 volume weighted average price of the Tagish Shares on the TSXV for the year to date ended September 15, 2010, the last trading to prior to this Notice. For Tagish Lake shareholders who tender all their Tagish Shares under the Combined Election, based on the $1.10 closing price of the New Pacific Shares on September 15, 2010, the implied offer for each Tagish Share is approximately $0.125 which represents: a. a premium of approximately 213% over the $0.04 closing price of the Tagish Shares on the TSXV on July 2, 2010; and b. a premium of approximately 136% over the $0.053 volume weighted average price of the Tagish Shares on the TSXV for the year to date ended September 15, 2010. For Tagish Lake shareholders who tender all their Tagish Shares under the Share Election, based on the $1.10 closing price of the New Pacific Shares on September 15, 2010, the implied offer for each Tagish Share is approximately $0.15 which represents: a. a premium of approximately 275% over the $0.04 closing price of the Tagish Shares on the TSXV on July 2, 2010; and b. a premium of approximately 183% over the $0.053 volume weighted average price of the Tagish Shares on the TSXV for the year to date ended September 15, 2010. Investors may obtain a free copy of the Circular and other documents filed by New Pacific with the Canadian securities regulators at http://www.sedar.com/ The Circular, Letter of Transmittal, Notice of Guaranteed Delivery and other documents may also be obtained for free from New Pacific's website or by directing a request to New Pacific's investor relations department by telephone at 1-888-224-1881, fax to 604-669-9387 or e-mail to info@newpacificmetals.com/ or by contacting the Information Agent, Kingsdale Shareholder Services Inc., toll free at 1-888- 518-6812. Secured and unsecured creditors of Tagish Lake may obtain more information by contacting New Pacific at the above phone number, or by email to: debtinfo@newpacificmetals.com/ About New Pacific Metals New Pacific -- http://www.newpacificmetals.com/-- is engaged in the exploration and development of mineral resources and gold- poly-metallic projects in China and other jurisdictions. New Pacific has extensive experience in implementing high grade resource development projects. About Tagish Lake Tagish Lake Gold Corp. explores for and develops high grade gold- silver mineral deposits in the Yukon Territory of Canada. The Company is currently focused on its wholly owned, 178 km2 Skukum Mineral District located 80 km by road south of Whitehorse. The Skukum Mineral District hosts the Skukum Creek gold-silver deposit, the Goddell Gully and the Mt. Skukum gold deposits. In May 2010, Tagish Lake commenced proceedings in the Supreme Court of British Columbia pursuant to the Companies' Creditors Arrangement Act (Canada). Grant Thornton Limited was appointed as the Monitor for the Company. TAYLOR BEAN: Ex-Chair's Fraud Case Stays In Va., Judge Says ----------------------------------------------------------- Judge Leonie M. Brinkema of the U.S. District Court for the Eastern District of Virginia has refused to move a nearly $2 billion criminal fraud case against Lee Bentley Farkas, the former chairman and majority owner of Taylor Bean & Whitaker Mortgage Corp. to Florida, saying the alleged fraud is a national crime, according to Bankruptcy Law360. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean filed for Chapter 11 bankruptcy protection August 24 (Bankr. M.D. Fla. Case No. 09-07047). Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Florida, represents the Debtor. Troutman Sanders LLP is special counsel. BMC Group, Inc., serves as claims agent. TEGAL CORPORATION: Board Approves Bonuses to Company CEO and CFO ---------------------------------------------------------------- On September 15, 2010, the Compensation Committee of the Board of Tegal Corporation, approved discretionary bonuses for the following executive officers: Name Title Amount of Bonus ---- ----- --------------- Thomas Mika President, CEO $125,000 Christine Hergenrother Vice President, CFO $75,000 About Tegal Corporation Petaluma, Calif.,-based Tegal Corporation (Nasdaq: TGAL) -- http://www.Tegal.com/-- designs, manufactures, markets and services specialized plasma etch systems used primarily in the production of micro-electrical mechanical systems ("MEMS") devices, such as sensors and accelerometers as well as power devices. The Company's Deep Reactive Ion Etch ("DRIE") systems are also employed in certain sophisticated manufacturing techniques, such as 3-D interconnect structures formed by intricate silicon etching, also known as Deep Silicon Etch ("DSE") for so-called Through Silicon Vias ("TSVs"). The Company's balance sheet at June 30, 2010, showed $12.7 million in total assets, $3.0 million in total liabilities, and stockholders' equity of $9.7 million. * * * As reported in the Troubled Company Reporter on June 29, 2010, Burr Pilger Mayer, Inc., in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has suffered recurring losses from operations, has experienced a significant decrease in demand for its products, and is evaluating certain strategic alternatives which may significantly alter its ability to recover its assets in the normal course of business over the next twelve months. TEGAL CORPORATION: Posts $2.5 Million Net Loss in June 30 Quarter ----------------------------------------------------------------- Tegal Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $2.5 million on $319,000 of revenue for the three months ended June 30, 2010, compared with a net loss of $2.6 million on $1.1 million of revenue for the three months ended June 30, 2009. For the three months ended June 30, 2010, and for the fiscal year ended March 31, 2010, the Company financed its operations from existing cash on hand. The Company has engaged Cowen & Co., LLC to assist it in evaluating strategic alternatives for the Company, which may include a merger with or into another company, a sale of all or substantially all of its assets and the liquidation or dissolution of the Company, including through a bankruptcy proceeding. The Company's balance sheet at June 30, 2010, showed $12.7 million in total assets, $3.0 million in total liabilities, and stockholders' equity of $9.7 million. As reported in the Troubled Company Reporter on June 29, 2010, Burr Pilger Mayer, Inc., in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has suffered recurring losses from operations, has experienced a significant decrease in demand for its products, and is evaluating certain strategic alternatives which may significantly alter its ability to recover its assets in the normal course of business over the next twelve months. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bba About Tegal Corporation Petaluma, Calif.,-based Tegal Corporation (Nasdaq: TGAL) -- http://www.Tegal.com/-- designs, manufactures, markets and services specialized plasma etch systems used primarily in the production of micro-electrical mechanical systems ("MEMS") devices, such as sensors and accelerometers as well as power devices. The Company's Deep Reactive Ion Etch ("DRIE") systems are also employed in certain sophisticated manufacturing techniques, such as 3-D interconnect structures formed by intricate silicon etching, also known as Deep Silicon Etch ("DSE") for so-called Through Silicon Vias ("TSVs"). TERRANCE COSGROVE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Terrance L. Cosgrove c/o Armand J. Kornfeld Bush Strout & Kornfeld 601 Union St. #5000 Seattle, WA 98133 Bankruptcy Case No.: 10-21304 Chapter 11 Petition Date: September 23, 2010 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Armand J. Kornfeld, Esq. BUSH STROUT & KORNFELD 601 Union St., Ste 5000 Seattle, WA 98101 Tel: (206) 292-2110 E-mail: jkornfeld@bskd.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 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-21304.pdf TIX CORPORATION: To Be Delist From NASDAQ ----------------------------------------- Tix Corporation has been notified by the NASDAQ Stock Market ("NASDAQ") that the Company no longer meets the minimum $1.00 per share requirement for continued listing on the NASDAQ under Listing Rule 5550(a)(2). Additionally, the Company today also announced that its Board of Directors has approved a plan to voluntarily delist the Company's common stock from the NASDAQ. Following the delisting, the Company intends to move its common stock listing to the OTCQX U.S. Premier over-the-counter market, operated by Pink OTC Markets Inc. Subsequent to the delisting, the Company intends to deregister its common stock and suspend its reporting obligations under the Securities Exchange Act of 1934, as amended. The Company has submitted a No-Action Request to the Securities and Exchange Commission to deregister its common stock and suspend its reporting obligations under the Exchange Act. In the event the SEC approves the Company's No-Action Request, the Company will not file any future annual or quarterly reports with the SEC, including a Form 10-Q for the quarter ending September 30, 2010. The Company expects that its shares will continue to trade under the "TIXC" ticker symbol following the delisting from NASDAQ. The Company expects that, as a result of delisting and deregistering under the Exchange Act, it will save approximately $1.0 million annually and will free up considerable time for management to focus on the Company's strategy and operating performance. Mitch Francis, Chairman of the Board and CEO, stated, "We're taking this important step with our shareholders' interests in mind. The burden of reporting under the Exchange Act, and in recent years the added burden of Sarbanes-Oxley, has become too expensive for many small companies such as Tix Corporation. After careful consideration, the Company believes that by moving its stock listing to the OTCQX and deregistering its common stock, it can re-invest significant resources to help drive growth and profitability. We believe that by utilizing the OTCQX platform, material savings can be achieved while still providing reliable information to our shareholders." Notwithstanding the deregistration, the Company will continue to maintain a system of internal controls over financial reporting to ensure the continuing accuracy and reliability of results of operations reported to its stockholders. Following deregistration, the Company will no longer bear the financial burden of complying with the Exchange Act and the Sarbanes-Oxley Act of 2002, legal and auditor reviews of SEC disclosures, as well as, accounting and other administrative expenses related to the Company's NASDAQ listing and SEC reporting requirements. The Company chose the OTCQX marketplace because it believes it may provide shareholders a more liquid market than the Pink Sheets and requires member companies to adhere to a prescribed set of financial disclosures. Specifically, OTCQX-listed issuers are required to publicly disclose annual audited financial statements, unaudited quarterly financial statements and current information pertaining to material events. The Company believes that these disclosures will provide its shareholders with the ability to monitor the Company's results of operations and continue to make informed investment decisions. Procedural Details The Company has notified the NASDAQ of its intent to voluntarily delist its common stock from the NASDAQ and will file a Form 25 with the Securities and Exchange Commission (the "SEC") on or about October 12, 2010 to effect such voluntary delisting. The delisting of the Company's common stock will take effect no earlier than 10 days after filing the Form 25, or on or about October 26, 2010. As a result, the Company expects that the last day of trading of its common stock on the NASDAQ will be on or about October 26, 2010. The Company is currently taking the necessary steps to list its common stock on the OTCQX, and expects the common stock to be listed on or about October 29, 2010. In the event that the Company's common stock is not eligible for trading on the OTCQX at that time, the common stock will trade on the Pink Sheets. Following the effectiveness of the Form 25, the Company's common stock will no longer trade on the NASDAQ. The Company intends to comply with the OTCQX listing rules to enable its common stock to list on the OTCQX immediately upon delisting from the NASDAQ. These rules require at least one market maker to quote the Company's common stock after complying with certain filing and disclosure rules or by complying with the unsolicited customer order rule. In addition, the OTCQX requires companies to engage an approved dedicated advisor for disclosure, to advise them on proper disclosure under the OTCQX Alternate Reporting Standard, and to certify that listing and disclosure requirements have been met. Given that the Company is current in all of its SEC filings, it does not currently anticipate any difficulties in meeting all of the OTCQX listing requirements, although there can be no assurances that it will be able to do so. Subsequent to the effectiveness of the Form 25, the Company intends to file a Form 15 with the SEC to voluntarily deregister its common stock and suspend its reporting obligations under the Exchange Act. The Company has submitted a No-Action Request to the SEC to deregister under the Exchange Act. In the event that the SEC approves the Company's No-Action Request, the Company will not be filing any future annual or quarterly reports with the SEC, including a Form 10-Q for the period ending September 30, 2010. Upon the filing of the Form 15, the Company's obligation to file reports and forms with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, will be suspended immediately and all of the Company's other SEC reporting obligations will be suspended when the Form 15 becomes effective 90 days after filing. The Company intends to immediately begin reporting under the OTCQX Alternate Reporting Standard, including annual audited financial statements, unaudited quarterly financial statements and current information. The Company is eligible to deregister its common stock under the Exchange Act because it has fewer than 300 stockholders of record. As of September 23, 2010, the Company had approximately 215 registered shareholders of record. The decision by the Company's Board of Directors to voluntarily delist and deregister its common stock is in part a cost-savings measure to significantly reduce annual expenses associated with the Company's NASDAQ listing and compliance with SEC reporting requirements, including legal, accounting and other administrative expenses. Given the limited current public trading volume and liquidity of the Company's common stock, the Company believes the benefits of having its common stock listed on a national exchange and registered under the Exchange Act are outweighed by the associated annual costs. The Board of Directors believe that the Company's stockholders will be better-served if the Company spends more of its financial resources and management's time on the Company's business without the substantial cost and time associated with having to comply with NASDAQ rules and SEC reporting obligations. The Board of Directors determined to delist, deregister and suspend its public reporting obligations after extensive deliberations of the advantages and disadvantages of no longer being a public reporting company and careful consideration of the recommendation of an independent committee and the advice of the Company's legal counsel and other outside advisors. The Board of Directors and management believe that the expense reductions inherent in delisting and deregistering the common stock will benefit the Company and its stockholders, and ultimately will serve to maximize the value of the Company. About TIX Corporation Tix Corporation is an integrated entertainment company providing discount and premium ticketing services, event and branded merchandising, and production / promotion of live concert and theatrical events. It currently operates eleven discount ticket stores in Las Vegas under the Tix4Tonight marquee, and offers up to a 50 percent discount for same-day shows, concerts, attractions and sporting events, as well as discount reservations for dining. The Company also offers premium tickets to concerts, theater and sporting events throughout the United States under its Tix4AnyEvent.com brand. The Company's Exhibit Merchandising operation is engaged in branded merchandise development and sales activities related to museum exhibitions and other events, including the King Tutankhamun and Real Pirates tours; selling themed souvenir memorabilia and collector's items in specialty stores in conjunction with the specific events and venues. Tix Productions is dedicated to live concert and theatrical promotion and production throughout the United States, Canada and Europe, and operates under the banners of Magic Arts & Entertainment and NewSpace Entertainment. TONY NGUYEN: Case Summary & 15 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Tony Nguyen Theresa Anh Vinh Tran aka Theresa LeVinh Tran 207 Chelan Court NE Renton, WA 98059 Bankruptcy Case No.: 10-21285 Chapter 11 Petition Date: September 23, 2010 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Jeffrey B. Wells, Esq. 500 Union St., Ste 502 Seattle, WA 98101 Tel: (206) 624-0088 E-mail: eajbwellaw@aol.com Scheduled Assets: $1,169,139 Scheduled Debts: $1,602,630 A list of the Joint Debtors' 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-21285.pdf THOMPSON PUBLISHING: Organizational Meeting Set for Oct. 1 ---------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on October 1, 2010, at 1:00 p.m. in the bankruptcy case of Thompson Publishing Holding Co., Inc., et al. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 2112, Wilmington, DE 19801. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Washington, DC-based Thompson Publishing publishes books, newsletters, audio conferences, web products and e-mail alerts to help customers with "the dynamic regulatory mandates facing their organizations," according to its website. The publications cover regulatory and compliance related issues in areas such as education, energy, environment and health care. Thompson is majority owned by Avista Capital Partners, which bought a 50 percent stake in the company for $130 million in 2006. Thompson Publishing filed for Chapter 11 bankruptcy protection on September 21, 2010 (Bankr. D. Del. Case No. 10-13070). Alissa T. Gazze, Esq., Chad A. Fights, Esq., and Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, LLP, assist the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts of $100 million to $500 million as of the Petition Date. Affiliates TPG AES Holding Co, Inc. (Bankr. D. Del. Case No. 10- 13072), Alex eSolutions, Inc. (Bankr. D. Del. Case No. 10-13074), AHC Media LLC (Bankr. D. Del. Case No. 10-13073), Thompson Publishing Group, Inc. (Bankr. D. Del. Case No. 10-13071), The Performance Institute, Inc. (Bankr. D. Del. Case No. 10-13075), and Thompson Publishing Development, LLC (Bankr. D. Del. Case No. 10-13076) filed separate Chapter 11 petitions. TRIBUNE COMPANY: Mediator Endorses Settlement --------------------------------------------- Tribune Company has reached agreement with Oaktree Capital Management, L.P. and Angelo, Gordon & Co, L.P. on a plan of reorganization that will settle claims surrounding "Step 1" of the company's 2007 going-private transaction. The settlement comes as a result of the court-ordered mediation requested by the company and overseen by U. S. Bankruptcy Court Judge Kevin Gross; it has been approved by the Special Committee of Tribune's Board of Directors, comprised of independent members of the company's board. Oaktree and Angelo Gordon, who will be co-proponents of this plan, both hold significant amounts of the Initial and Incremental Term Loan of Tribune Company. "The plan addresses two primary issues that are fundamental to a successful reorganization of Tribune," said Don Liebentritt, Tribune's Chief Restructuring Officer. "First, it enables the company to exit Chapter 11 and distributes the equity of the reorganized Tribune and its subsidiaries to the holders of the Initial and Incremental Term Loan claims. Second, to the extent not settled prior to confirmation, all claims identified by the Examiner's Report relating to 'Step 2' of the company's going- private transaction are preserved and placed in a litigation trust. We remain confident that additional settlements will be reached." The Litigation Trust will allow an independent litigation trustee to pursue legal action relating to the remaining fraudulent conveyance issues alleged by various unsecured creditors, while avoiding the possible negative impact these litigation issues might have on the company's business operations. The plan's settlement resolves claims associated with the financing of "Step 1" of the going-private transaction, all of which the Examiner found to have less than 50% probability of success. The settlement, which has been overseen by the court- appointed mediator, provides for Tribune Company's senior bondholders to receive a total distribution of $300 million (approximately 23% of their claim amount) in cash plus their interest in the Litigation Trust. Unsecured creditors of Tribune Company will receive the same percentage recovery, also in cash and an interest in Litigation Trust, which will allow them to seek redress for potential fraudulent conveyance issues. Unsecured creditors of Tribune Company's subsidiaries will have an opportunity to receive 50% of their claim amount in cash. The plan also provides for both Initial Term Loan Lenders and Incremental Term Loan Lenders to receive a pro rata distribution of cash, debt and equity of the reorganized Tribune and its subsidiaries pursuant to the terms of Credit Agreement. TRIBUNE is one of the country's leading multimedia companies, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel (South Florida), Orlando Sentinel, Hartford Courant, The Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable and Chicago's WGN-AM. Popular news and information websites complement Tribune's print and broadcast properties and extend the company's nationwide audience. At Tribune we take what we do seriously and with a great deal of pride. We also value the creative spirit and nurture a corporate culture that doesn't take itself too seriously. 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) TRUVO INTERMEDIATE: S&P Withdraws 'D' Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its 'D' (Default) long-term corporate credit rating on Delaware-based international publisher of classified directories TRUVO Intermediate LLC and its related entities. At the same time, the 'D' issue rating and associated recovery rating on the $200 million and ?395 million subordinated notes maturing in 2014, issued by TRUVO Subsidiary Corp., were also withdrawn. Prior to the withdrawal, the recovery rating on the notes was '6', indicating S&P's expectation of negligible (0%-10%) recovery for noteholders in the event of a payment default. "The withdrawals reflect the fact that S&P is not in a position to monitor its corporate credit, issue, and recovery ratings on Truvo due to a lack of updated financial information following the group's filing for Chapter 11 bankruptcy protection in the U.S.," said Standard & Poor's credit analyst Carlo Castelli. "In addition, there is a lack of visibility on the timing of the debt restructuring and Truvo's potential exit from Chapter 11." On Dec. 31, 2009, the group had total unadjusted debt of $2,222.4 million. On July 2, 2010, S&P lowered the long-term corporate credit rating on Truvo to 'D' from 'SD' (Selective Default) as a result of the filing for Chapter 11 bankruptcy protection in the U.S. ULTIMATE ESCAPES: Organizational Meeting to Form Panel on Oct. 1 ---------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on September 29, 2010, at 10:00 a.m. in the bankruptcy case of Ultimate Escapes Holdings, LLC, et al. The meeting will be held at Doubletree Hotel, 700 King Street, Wilmington, DE 19801. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. 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. CRG Partners Group LLC is the Debtors' chief restructuring officer. Ultimate Escapes estimated assets at $10 million to $50 million and debts at $100 million to $500 million as of the Petition Date. UNITED COMPONENTS: S&P Raises Corporate Credit Rating to 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said it has raised its corporate credit rating on United Components Inc. to 'B' from 'B-' and removed the rating from CreditWatch, where it was placed July 30, 2010, with positive implications. The outlook is positive. At the same time, S&P assigned its final 'B' issue rating and '3' recovery rating on the new $425 million term loan B and $75 million revolving credit line. These ratings had previously been assigned on a preliminary basis. S&P also withdrew its ratings on the company's term loan D, which S&P understand has been repaid, and on the subordinated notes, for which funds for repayment have been deposited with the trustee for repayment on Oct. 25. "The upgrade reflects S&P's view that near-term risks to the company's financial flexibility have been reduced by the senior debt refinancing," said Standard & Poor's credit analyst Nancy Messer. "In addition, S&P believes liquidity has been bolstered by the addition of a revolving credit facility, as UCI had no revolving line previously," she continued. Still, S&P also believe UCI will remain highly leveraged following the proposed senior debt transaction, with lease-adjusted total debt to EBITDA of about 6x. This ratio remains elevated, in S&P's view, because of pressures on EBITDA and cash flow in 2009, combined with accretion of indirect parent UCI International Inc.'s $235 million payment-in-kind notes, which S&P view as debt. UCI's revenues increased 6.7% in the first half of 2010, year over year, boosted by higher sales in all of the company's auto aftermarket channels, including retail, traditional, OES, heavy- duty truck, and OEM. S&P calculate that EBITDA for the first half of 2010 was $81 million, a 49% increase year over year. The EBITDA improvement resulted from better gross margin and lower administrative and selling costs than in 2009. Recent restructuring actions such as workforce reductions, wage freezes, and stricter discretionary spending have improved margins in the past year, and UCI continues to earn sufficient EBITDA to remain in compliance with its covenants. UCI had total balance sheet debt of $407 million at June 30, 2010, plus another $339 million in PIK notes held by a third party. UCI is a supplier to the U.S. automotive aftermarket. UCI's sales are narrowly focused on a few key products: filtration products, which accounted for 39% of 2009 revenues; fuel delivery systems, 25%; cooling systems, 17%; and vehicle electronics, 18%. UCI's weak business risk profile reflects the highly competitive character of the automotive aftermarket and the company's limited revenue diversity. Of UCI's revenues for 2009, 88% were derived from the aftermarket (replacement parts for older vehicles) and 12% from the original equipment manufacturing and service (OEM/OES) markets (relatively new vehicles). UCI's revenues are concentrated with its largest customer, AutoZone Inc. (BBB/Stable/A-2), the nation's largest automotive aftermarket retailer, which accounted for 30% of UCI's 2009 sales. UCI's earnings also are subject to volatility in costs for commodities and energy as well as changes in foreign currency exchange rates, both of which have affected profits in the past several years. UCI's credit measures remain weak, and its free cash flow generation is low relative to its debt load. S&P assume the company must be recapitalized or sold in the next few years because its capital structure includes the PIK notes that become cash-pay in 2012 and require a material cash payment in March 2012 and term loan amortization that rises significantly in 2012. The positive outlook reflects the possibility that S&P could raise the rating if UCI completes plans to issue common equity as described in the company's recently filed registration statement with the SEC. S&P believes the company will use the proceeds raised from this offering, combined with cash on hand, to fully pay down the $235 million principal amount of the PIK notes. S&P would revise the outlook to stable if S&P believed the company would not pursue an equity issuance in the next few months. URBAN BRANDS: Asks Court to Extend Schedules Filing Until 45 Days ----------------------------------------------------------------- Urban Brands, Inc., et al., ask for authorization from the U.S. Bankruptcy Court for the District of Delaware to extend the deadline for the filing of schedules of assets and liabilities, schedules of current income and expenditures, schedules of executor contracts and unexpired leases, and statements of financial affairs until 45 days after the Petition Date. The Debtors have more than 200 creditors and therefore, must file their schedules within 30 days after the Petition Date. The Debtors say that given the amount of work entailed in completing the schedules, and the competing demands upon the Debtors' limited staff to address numerous critical operational matters during the initial postpetition period, the Debtors won't be in a position to properly and accurately complete the schedules within the required 30-day period. Secaucus, New Jersey-based Urban Brands, Inc., operates as a women's specialty retailer. Its products include tops, such as knit tops, shirts and blouses, and tanks and camis; bottoms, which include shorts and capris, skirts, and pants; sweaters; and denim apparel, including denim jeans, skirts, denim sets, and jackets. The company also provides dresses, career and related separates, jackets, intimates, hosiery, swimwear, activewear, linen wear, extended sizes, bras and panties, maxi dresses, ruffles, tunics, and accessories. Urban Brands filed for Chapter 11 bankruptcy protection on September 21, 2010 (Bankr. D. Del. Case No. 10-13005). It estimated its assets at $10 million to $50 million and debts at $100 million to $500 million. Affiliates A.S. Interactive, Inc., et al., filed separate Chapter 11 petitions. Chun I Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton Finger, P.A., assist the Debtors in their restructuring efforts. BMC Group, Inc., is the Debtors' claims agent. URBAN BRANDS: Gets OK to Hire BMC Group as Claims & Noticing Agent ------------------------------------------------------------------ Urban Brands, Inc., et al., sought and obtained authorization from the Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ BMC Group, Inc., as claims and noticing agent. BMC will, among other things: a. prepare and serve required notices in the Chapter 11 cases; b. maintain copies of proofs of claim and proofs of interest filed; c. maintain an official claims register by docketing all proofs of claim on a register containing certain information; and d. create and administer a claims database. BMC will charge the Debtors its standard prices for its services, expenses and supplies at the rates or prices in effect on the day that the services and supplies are provided to the Debtors. The Debtors paid BMC a retainer of $10,000 to be applied immediately in satisfaction of the Debtors' obligations under the BMC service agreement, a copy of which is available for free at: http://bankrupt.com/misc/URBAN_BRANDS_claimsagentservicepact.pdf Tinamarie Feil, BMC's president, assured the Court that the firm is "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. Secaucus, New Jersey-based Urban Brands, Inc., operates as a women's specialty retailer. Its products include tops, such as knit tops, shirts and blouses, and tanks and camis; bottoms, which include shorts and capris, skirts, and pants; sweaters; and denim apparel, including denim jeans, skirts, denim sets, and jackets. The company also provides dresses, career and related separates, jackets, intimates, hosiery, swimwear, activewear, linen wear, extended sizes, bras and panties, maxi dresses, ruffles, tunics, and accessories. Urban Brands filed for Chapter 11 bankruptcy protection on September 21, 2010 (Bankr. D. Del. Case No. 10-13005). It estimated its assets at $10 million to $50 million and debts at $100 million to $500 million. Affiliates A.S. Interactive, Inc., et al., filed separate Chapter 11 petitions. Chun I Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton Finger, P.A., assist the Debtors in their restructuring efforts. URBAN BRANDS: Proposes New Ashley-Led Auction for Assets -------------------------------------------------------- Urban Brands, Inc., 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, encumbrances and interests. On September 21, 2010, the Debtors entered into a stalking horse asset purchase agreement with New Ashley Stewart, LLC. Under the agreement, New Ashley will (i) pay a purchase price of at least $6 million, consisting of (x) an amount equal to $13 million in cash and (y) a note in the initial aggregate outstanding principal amount of $2 million, or (ii) assume liabilities. In the event that the Debtors receive offers from other interested parties, the Debtors propose that an auction will be held on October 25, 2010. New Ashley will be paid, as break-up fee, cash equal to 3% of the estimated closing date cost value of the inventory. The Debtors paid New Ashley an expense reimbursement in the amount of $150,000 which was paid (i) $100,000 upon execution and delivery of the letter of intent and (ii) $50,000 on September 13, 2010. The Debtors have filed their proposed bidding procedures with the Court, a copy of which is available for free at: http://bankrupt.com/misc/URBAN_BRANDS_biddingprocedures.pdf The Debtors propose that: (i) a bidding procedures hearing be held on October 4, 2010; (ii) the submission deadline for required bid materials be October 22, 2010; (iii) a sale hearing be held on October 26, 2010; and (iv) a consummation of sale be on October 26, 2010. Bids must be at least $15,525,000. Qualified bidders must exceed New Ashley's stalking horse bid by at least $200,000 in total consideration for all bids made by qualified bidders. Minimum bid increments must be at least $150,000. The Debtors propose that within four business days following the Petition Date, the buyer will deposit into escrow an amount equal to $1,500,000. Secaucus, New Jersey-based Urban Brands, Inc., operates as a women's specialty retailer. Its products include tops, such as knit tops, shirts and blouses, and tanks and camis; bottoms, which include shorts and capris, skirts, and pants; sweaters; and denim apparel, including denim jeans, skirts, denim sets, and jackets. The company also provides dresses, career and related separates, jackets, intimates, hosiery, swimwear, activewear, linen wear, extended sizes, bras and panties, maxi dresses, ruffles, tunics, and accessories. Urban Brands filed for Chapter 11 bankruptcy protection on September 21, 2010 (Bankr. D. Del. Case No. 10-13005). It estimated its assets at $10 million to $50 million and debts at $100 million to $500 million. Affiliates A.S. Interactive, Inc., et al., filed separate Chapter 11 petitions. Chun I Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton Finger, P.A., assist the Debtors in their restructuring efforts. BMC Group, Inc., is the Debtors' claims and noticing agent. URBAN BRANDS: Organizational Meeting to Form Panel on Oct. 1 ------------------------------------------------------------ Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on October 1, 2010, at 11:00 a.m. in the bankruptcy case of Urban Brands, Inc. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 2112, Wilmington, DE 19801. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Urban Brands, Inc., operates as a women's specialty retailer. Its products include tops, such as knit tops, shirts and blouses, and tanks and camis; bottoms, which include shorts and capris, skirts, and pants; sweaters; and denim apparel, including denim jeans, skirts, denim sets, and jackets. The company also provides dresses, career and related separates, jackets, intimates, hosiery, swimwear, activewear, linen wear, extended sizes, bras and panties, maxi dresses, ruffles, tunics, and accessories. Urban Brands Inc. sought bankruptcy protection under Chapter 11 (Bankr. D. Del. Case No. 10-13005) on September 21, 2010. The Company estimated assets of $10 million to $50 million and debts of $100 million to $500 million in its Chapter 11 petition. Chun I Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton Finger, P.A., in Wilmington, Delaware, serve as counsel to the Debtors. BMC Group, Inc., is the claims and notice agent. US DATAWORKS: Silicon Valley Bank Forbearance Expires Sept. 30 -------------------------------------------------------------- US Dataworks, Inc., and Silicon Valley Bank on September 20, 2010, entered into a Forbearance to Loan and Security Agreement pursuant to which SVB has agreed to forbear from filing any legal action or instituting or enforcing any rights and remedies it may have against the Company arising out of the Company's failure to comply with (i) the financial covenants set forth in Section 6.7(a) of the Loan and Security Agreement dated as of February 9, 2010 -- as amended by the First Amendment to Loan and Security Agreement dated March 5, 2010 and the Second Amendment to Loan and Security Agreement dated April 23, 2010, for the April 2010, May 2010, June 2010 and July 2010 measuring periods -- (ii) the financial covenants set forth in Section 6.7(b) of the Loan Agreement for the May 2010, June 2010 and July 2010 measuring periods, and (iii) the restrictions on making payments with respect to Subordinated Debt in violation of Section 7.9 of the Loan Agreement and Section 3 of the Subordination Agreement dated as of February 9, 2010 between the Company, SVB and the subordinated creditors, for the period beginning on September 20, 2010 and ending on September 30, 2010. In consideration for the Forbearance Agreement, the Company paid a forbearance fee of $2,500. The Company and SVB are currently in discussions concerning an amendment to the Loan Agreement pursuant to which the Existing Defaults would be waived and the Company would be back in compliance with its covenants under the Loan Agreement and the Subordination Agreement. The Company currently expects that such an amendment would be in place by the end of the Forbearance Period. Based in Sugarland, Texas, US Dataworks, Inc., a Nevada develops, markets, and supports payment processing software for multiple market segments. Its customer base includes some of the largest financial institutions as well as credit card companies, government institutions, banker's banks and high-volume merchants in the United States. The Company was formerly known as Sonicport, Inc. At June 30, 2010, the Company had total assets of $5,671,723, total liabilities of $4,435,110, and shareholders' equity of $1,236,613. VICTOR VALLEY: Gets Court's Interim Nod to Use Cash Collateral -------------------------------------------------------------- Victor Valley Community Hospital sought and obtained interim authorization from the U.S. Bankruptcy Court for the Central District of California to use cash collateral through October 21, 2010. The Debtor owed these secured creditors: a. Statewide Health Planning and Development of the State of California approximately $5 million to Office; b. Physicians Hospital Management, LLC, approximately $6.1 million; and c. Corwin Medical Group, Inc., approximately $700,000. Samuel R. Maizel, Esq., at Pachulski Stang Ziehl & Jones LLP, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. In exchange for using the cash collateral, the Debtor will grant each Secured Creditor a replacement security interest in and lien upon the existing collateral and all postpetition proceeds thereof. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/VICTOR_VALLEY_budget.pdf The Court has set a final hearing for October 19, 2010, at 2:00 p.m. 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: Gets Interim Nod to Obtain DIP Financing ------------------------------------------------------- Victor Valley Community Hospital sought and obtained interim authorization from the U.S. Bankruptcy Court for the Central District of California to obtain postpetition secured financing from Prime Healthcare Services Foundation, Inc. The Lender has committed to provide a superpriority expense claim credit facility in an aggregate amount of up to $3,200,000. A copy of the DIP financing agreement is available for free at: http://bankrupt.com/misc/VICTOR_VALLEY_dipfinancingpact.pdf Samuel R. Maizel, Esq., at Pachulski Stang Ziehl & Jones LLP, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. Advances and all other outstanding obligations under the revolving facility will be immediately due and payable in full in cash, if not earlier, without further application to or order of the Court, on the earlier of (i) the effective date of a plan reorganization for the Debtor approved by the Lender; (ii) acceleration of maturity of the Obligations upon the occurrence of an Event of Default; (iii) the sale or liquidation of all or substantially all of the assets of the Debtor; (iv) 20 days after the Court enters an order (a) confirming a plan of reorganization for the Debtor that has not been approved in writing by Lender; or (b) granting a motion to sell substantially all of Debtor's assets pursuant to a transaction not approved in writing by Lender; (v) the date on which a plan or sale referred to in the prior subsection (iv) becomes effective or is consummated; or (v) December 31, 2010. Interest on outstanding advances under the Revolving Facility will accrue monthly in arrears on the first day of each calendar month at an annual rate equal to 1% calculated on the basis of a 360-day year and for the actual number of calendar days elapsed in each interest calculation period. Interest accrued on each Advance under the Revolving Facility will be due and payable in accordance with the procedures provided for in Section 2.2 and Section 2.6 of the DIP financing agreement, commencing the first business day of the first calendar month following the Closing Date, and continuing until the later of the expiration of the term and the full performance and irrevocable payment in full in cash of the obligations and termination of the DIP financing agreement. To secure the payment and performance of the obligations, the Debtor, upon entry of the final financing order, as applicable, by the Court, hereby grants to Lender a continuing subordinate security interest in and Lien upon, and pledges to Lender, all of its right, title and interest in and to all of its personal and real property and assets whether now owned or hereafter. All obligations under the DIP Facility, accrued or otherwise, will be due and payable in full on the earliest to occur of (i) October 15, 2010, unless a final court order has been entered by such date and if so entered, December 13, 2010. No fees, except the DIP Lender's out-of-pocket costs and expenses, will be paid out. 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. WALKER-CALLAHAM: Case Summary & Largest Unsecured Creditor ---------------------------------------------------------- Debtor: Walker- Callaham Joint Venture a Washington General Partnership 10804 NE Hwy 99 Vancouver, WA 98686 Bankruptcy Case No.: 10-47895 Chapter 11 Petition Date: September 24, 2010 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch Debtor's Counsel: John D. Nellor, Esq. NELLOR RETSINAS CRAWFORD PLLC 1201 Main St P.O. Box 61918 Vancouver, WA 98666 Tel: (360) 695-8181 E-mail: jd@nellorlaw.com Scheduled Assets: $15,550,000 Scheduled Debts: $7,753,584 The petition was signed by Clyde David Callaham. In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Clyde David Callaham Promissory Note $1,884,834 2023 NW Columbia Summit dated 2/20/10 Drive Camas, WA 98607 Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Clyde David Callaham 10-46294 7/30/10 WASHINGTON COMMONS: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Washington Commons Limited Partnership 106 E. North Street New Castle, PA 16101 Bankruptcy Case No.: 10-26792 Chapter 11 Petition Date: September 23, 2010 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Scott E. Schuster, Esq. BERNSTEIN LAW FIRM 2200 Gulf Tower 707 Grant Street Pittsburgh, PA 15219 Tel: (412) 456-8119 Fax: (412) 456-8273 E-mail: sschuster@bernsteinlaw.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 eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/pawb10-26792.pdf The petition was signed by Thomas J. George, vice president. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Grove Commons Limited Partnership 10-26791 09/23/10 WEST CORP: Gets Green Flag to Amend Credit Agreements ----------------------------------------------------- West Corporation has received lender consent to amend and restate the credit agreement governing its senior secured credit facilities. The amended and restated credit agreement is expected to modify the Company's senior secured credit facilities in several respects, including as follows: * Extend the maturity of a portion of the Company's $250 million revolving credit facility to January 2016 from October 2012; * Extend the maturity of up to $500 million of its term loans to July 2016 from October 2013 with the interest rate margins of such extended term loans increasing by 1.875 percent; * Increase the interest rate margins of approximately $985 million of its term loans due July 2016 by 0.375 percent to match the interest rate margins for the newly extended term loans; and * Modify the step-down schedule in the current financial covenants and modify certain covenant baskets. The effectiveness of these amendments will be subject to certain conditions, including the issuance of at least $500 million aggregate principal amount of senior unsecured notes to repay a portion of the Company's term loans and there being no more than $500 million of term loans due October 2013 outstanding after giving effect to the prepayment of term loans and the extension of term loan maturities. West Corporation CFO, Paul Mendlik stated: "These changes will improve West's capital structure by extending the weighted average maturity of funded debt from 4.4 to 5.5 years and provide greater flexibility for future growth plans." About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation --http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. West Corporation had total assets of $3,008,762,000, total liabilities of $4,068,914,000, Class L Common Stock of $1,413,958,000, and stockholders' deficit of $2,474,110,000 as of June 30, 2010. West Corp. carries a 'B2' corporate rating from Moody's and 'B+' corporate rating from Standard & Poor's. WEST CORP: Plans to Offer $500 Million Senior Unsec. Notes ---------------------------------------------------------- West Corporation said it intends to offer $500 million aggregate principal amount of senior unsecured notes due October 2018. Proceeds of the Notes will be utilized to repay a portion of its term loan facilities. The Notes have not been registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation --http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. West Corporation had total assets of $3,008,762,000, total liabilities of $4,068,914,000, Class L Common Stock of $1,413,958,000, and stockholders' deficit of $2,474,110,000 as of June 30, 2010. West Corp. carries a 'B2' corporate rating from Moody's and 'B+' corporate rating from Standard & Poor's. WHITE BIRCH: Senior Lenders Insist $175MM Bid Was Superior ---------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that a group of White Birch Paper Co.'s senior lenders say their $175 million cash bid for the company was a better offer than the bid from Black Diamond Capital Management LLC which won the auction for the newsprint maker. As reported in yesterday's Troubled Company Reporter, Black Diamond, White Birch's largest creditor, won an auction for the company. Black Diamond had estimated the total purchase price for operations in Quebec and the U.S. would be US$178 million -- including $90 million cash plus the repayment of certain obligations. A court hearing to approve the sale will be held on September 29. The deal is expected to close November 19, 2010. About White Birch White Birch Paper Company -- http://www.whitebirchpaper.com/-- is the second largest newsprint manufacturer in North America with operations in both Canada and the United States. The Company filed for Chapter 15 protection on February 24, 2010 (Chapter 15 E.D. Va. Case No. 10-31234). White Birch estimated assets of $100 million to $500 million and liabilities of $500 million to $1 billion. Its debtor-affiliate, Bear Island Paper Company, L.L.C., filed for Chapter 11 protection (Bankr. Case No. 10-31202). In its petition, Bear Island estimated assets of $100 million to $500 million and debts ranging from $500 million to $1 billion. WORKSTREAM INC: May 31 Balance Sheet Upside-Down by $20.1 Million ----------------------------------------------------------------- Workstream Inc. reported a net loss of $26.6 million on $16.5 million of revenue for the fiscal year ended May 31, 2010, compared with a net loss of $4.9 million of $21.5 million of revenue for the fiscal year ended May 31, 2009. The Company has incurred substantial losses in recent periods. At May 31, 2010, the Company has an accumulated deficit of $164.0 million and a shareholders deficit of $20.1 million. On May 31, 2010, the Company defaulted on the 2009 Secured Notes when the quarterly principal payment was not made and the Company fell out of compliance with certain covenants. Upon default, the interest rate on the 2009 Secured Notes increased by 5%. On August 13, 2010, the Company entered into separate 2010 Exchange and Share Purchase Agreements and a 2010 Exchange Agreement (collectively, the "2010 Exchange Agreements") with each of the Holders of its senior secured promissory notes pursuant to which, among other things, the Holders exchanged their existing 2009 Secured Notes (the aggregate principal amount of all the Notes, together with accrued but unpaid interest and penalties, was $22.4 million) for a total of 682,852,374 of the Company's common shares. As a result of the foregoing refinancing transactions, the Company says it nearly eliminated its outstanding debt and received the cash it needed to improve working capital to positive levels. The Company's balance sheet at May 31, 2010, showed $8.6 million in total assets, $28.7 million in total liabilities, and a stockholders' deficit of $20.1 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bc6 About Workstream Inc. Maitland, Fla.-based Workstream Inc. (OTC BB: WSTM.OB) provides enterprise workforce management solutions and services that help companies manage the entire employee lifecycle -- from recruitment to retirement. Workstream services customers with offices across North America. XENONICS HOLDINGS: Stock Delisted From NYSE Amex ------------------------------------------------ Xenonics Holdings, Inc.'s common stock has been delisted from NYSE Amex. The Company's common stock will be traded on the over-the- counter market and quoted on the OTC Bulletin Board and OTCQB(TM) Marketplace beginning, September 27, 2010 under the symbol "XNNH". As previously announced, on July 30, 2010 the Company received notice from the Exchange that the Company failed to regain compliance with continued listing standards and, accordingly, the Company's securities were subject to delisting proceedings. In accordance with the Company Guide, Xenonics appealed the Staff Determination by requesting a hearing before a Listing Qualifications Panel. This appeal was denied after a hearing held on September 14, 2010. About Xenonics Xenonics Holdings, Inc. -- http://www.xenonics.com/-- develops and produces advanced, lightweight and compact ultra-high- intensity illumination and low-light vision products for military, law enforcement, public safety, and commercial and private sector applications. Xenonics' NightHunter line of illumination products is used by every branch of the U.S. Armed Forces as well as law enforcement and security agencies. Its SuperVision high- definition night vision is designed for commercial and military applications. Employing patented technologies, Xenonics provides innovative solutions for customers who must see farther so they can do their jobs better and safer. Xenonics' products represent the next generation in small, high intensity, high efficiency illumination and low-light vision systems. Z TRIM: Incurs $3.6 Million Net Loss in June 30 Quarter ------------------------------------------------------- Z Trim Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.6 million on $201,138 of revenue for the three months ended June 30, 2010, compared with a net loss of $2.8 million on $162,960 of revenue for the corresponding period of 2009. The Company estimates that it will take from 15 to 21 months to achieve profitability. As of June 30, 2010, the Company had a cash balance of $583,495. Over the last several years, the Company has been funding our operations through the sale of both equity and debt securities. In the second quarter of 2010, the Company sold $200,000 worth of convertible notes. The Company's balance sheet as of June 30, 2010, showed $4.4 million in total assets, $14.8 million in total liabilities, and a stockholders' deficit of $10.4 million. As reported in the Troubled Company Reporter on April 12, 2010, M&K, CPAs, PLLC, in Houston, 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 recurring losses from operations and requires additional financing to continue in operation. The Company discloses in its latest 10-Q that it does not expect or anticipate that its concerns over its ability to continue as a going concern will have any impact on its ability to raise capital from internal and external sources. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6bc1 About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. * Bank Failures This Year Now Total to 127 ------------------------------------------ Regulators shut lenders in Florida and Washington on September 24, pushing the number of U.S. bank failures to 127 for the year. The Federal Deposit Insurance Corp., appointed as receiver, took over Haven Trust Bank Florida of Ponte Vedra Beach and Arlington, Washington-based North County Bank on Friday. The two failures cost the FDIC's deposit-insurance fund $104.7 million. According to Bloomberg News, banks are failing at a faster pace than last year, which saw the most failures since 1992, as real estate values remain depressed and economic recovery stays sluggish. Regulators closed 140 banks last year. The Wall Street Journal's Randall Smith and Robin Sidel wrote that some 279 banks have collapsed since Sept. 25, 2008, when Washington Mutual Inc. became the biggest bank failure on record. That dwarfed the 1984 demise of Continental Illinois, which had only one-seventh of WaMu's assets. The failures of the past two years shattered the pace of the prior six-year period, when only three dozen banks died. According to a report issued last Tuesday by Standard & Poor's, bank failures are expected to "persist for some time". According to the Journal, the top executive of investment-banking firm Keefe, Bruyette & Woods Inc., said between failures and consolidation, the number of U.S. banks could fall to 5,000 over the next decade from the current 7,932. The Journal notes that the upside of the bank failures is that they can represent a healthy cleansing of a sector that grew too fast, with bank assets more than doubling to $13.8 trillion in the decade that ended in 2008. Many banks that failed were opportunistic latecomers. According to SNL Financial, of the failed banks since February 2007, 75 were formed after 1999. 2010 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ----------- ----------------- ------------ Haven Trust Bank $148.6 First Southern $31.9 North County Bank $288.8 Whidbey Island $72.8 First Commerce $248.2 Community & Southern $71.4 Bank of Ellijay $168.8 Community & Southern $55.2 Bramble Savings Bank $47.5 Foundation Bank $14.6 Maritime Savings Bank $350.5 North Shore Bank $83.6 The Peoples Bank $447.2 Community & Southern $98.9 ISN Bank $81.6 Customers Bank $23.9 Horizon Bank $187.8 Bank of the Ozarks $58.9 Los Padres Bank $870.4 Pacific Western $8.7 Pacific State Bank $312.1 Rabobank, N.A. $32.6 ShoreBank $2,160.0 Urban Partnership $367.7 Butte Community Bank $498.8 Rabobank, N.A. $17.4 Sonoma Valley Bank $337.1 Westamerica Bank $10.1 Imperial Savings & Loan $9.4 River Community $3.5 Community National $67.9 CenterState Bank of Fla. $10.3 Independent National $156.2 CenterState Bank of Fla. $23.2 Palos Bank and Trust $493.4 First Midwest Bank $72.0 Ravenswood Bank $264.6 Northbrook Bank & Trust $68.1 Northwest Bank & Trust $167.7 State Bank and Trust $39.8 Bayside Savings Bank $66.1 Centennial Bank, Conway $16.2 Coastal Community Bank $362.9 Centennial Bank, Conway $94.5 The Cowlitz Bank $529.3 Heritage Bank $68.9 LibertyBank $768.2 Home Federal Bank $115.3 The Cowlitz Bank $529.3 Heritage Bank $68.9 Coastal Community $372.9 Centennial Bank $94.5 Bayside Savings $66.1 Centennial Bank $16.2 NorthWest Bank $167.7 State Bank and Trust $39.8 Williamsburg First $139.3 First Citizens Bank $8.8 Thunder Bank, Sylvan $32.6 The Bennington State $4.5 Community Security $108.0 Roundbank, Waseca $18.6 Crescent Bank $1,010.0 Renasant Bank $242.4 Sterling Bank $407.9 IBERIABANK $45.5 Home Valley Bank $251.8 South Valley Bank $37.1 SouthwestUSA Bank $214.0 Plaza Bank, Irvine $74.1 Turnberry Bank $263.9 NAFH National $34.4 First National Bank $682.0 NAFH National $74.9 Mainstreet Savings $97.4 Commercial Bank $11.4 Woodlands Bank $376.2 Bank of the Ozarks $115.0 Metro Bank of Dade $442.3 NAFH National $67.6 Olde Cypress Community $168.7 CenterState Bank $31.5 USA Bank, Port Chester $193.3 New Century Bank $61.7 Bay National Bank $282.2 Bay Bank, FSB $17.4 Ideal Federal Savings $6.3 -- None -- $2.1 Home National Bank $644.5 RCB Bank, Claremore $78.7 First National $252.5 The Savannah Bank $68.9 High Desert $80.3 First American $20.9 Peninsula Bank $644.3 Premier American $194.8 Nevada Security Bank $480.3 Umpqua Bank $80.9 Washington First $520.9 East West Bank $158.4 TierOne Bank $2,800.0 Great Western Bank $297.8 Arcola Homestead $17.0 -- None -- $3.2 First National Bank $60.4 Jefferson Bank $12.6 Sun West Bank $360.7 City National Bank $96.7 Granite Community $102.9 Tri Counties Bank $17.3 Bank of Fla- Southeast $595.3 EverBank $71.4 Bank of Fla- Southwest $559.9 EverBank $91.3 Bank of Fla- Tampa Bay $245.2 EverBank $40.3 Pinehurst Bank $61.2 Coulee Bank $6.0 Southwest Community $96.6 Simmons First Nat'l $29.0 New Liberty Bank $109.1 Bank of Ann Arbor $25.0 Satilla Community Bank $135.7 Ameris Bank $31.3 Midwest Bank & Trust $3,170.0 Firstmerit Bank $216.4 1st Pacific Bank $335.8 City National Bank $87.7 Access Bank $32.0 PrinsBank, Prinsburg $5.5 Towne Bank of Ariz $120.2 Commerce Bank $41.8 The Bank of Bonifay $242.9 First Federal Bank $78.7 Frontier Bank $3,500.0 Union Bank, NA $1,370.0 BC National Banks $67.2 Community First $11.4 Champion Bank $187.3 BankLiberty $52.7 CF Bancorp $1,650.0 First Michigan Bank $615.3 Westernbank PR $11,940.0 Banco Popular de PR $3,310.0 R-G Premier Bank $5,920.0 Scotiabank de PR $1,230.0 Eurobank, SJ, PR $2,560.0 Oriental Bank & Trust $743.9 Lincoln Park Savings $199.9 Northbrook Bank $48.4 Peotone Bank $130.2 First Midwest $31.7 Wheatland Bank $437.2 Wheaton Bank $133.0 New Century Bank $485.6 MB Financial $125.3 Citizens Bank&Trust $77.3 Republic Bank $20.9 Broadway Bank $1,200.0 MB Financial $394.3 Amcore Bank $3,800.0 Harris $220.3 Lakeside Community $53.0 People's United $11.2 Innovative Bank $268.9 Center Bank $37.8 City Bank $1,130.0 Whidbey Island $323.4 Butler Bank $233.2 People's United $22.9 AmericanFirst Bank $90.5 TD Bank, N.A. $10.5 First Federal $393.3 TD Bank, N.A. $6.0 Riverside National $3,420.0 TD Bank, N.A. $491.8 Tamalpais Bank $628.9 Union Bank, N.A. $81.1 Beach First National $585.1 Bank of NC $130.3 McIntosh Commercial $362.9 CharterBank, West Point $123.3 Desert Hills Bank $496.6 New York Community Bank $106.7 Unity National Bank $292.2 Bank of the Ozarks $67.2 Key West Bank $88.0 Centennial Bank $23.1 State Bank of Aurora $28.2 Northern State Bank $4.2 First Lowndes Bank $137.2 First Citizens Bank $38.3 Bank of Hiawassee $377.8 Citizens South Bank $137.7 Appalachian Community $1,010.0 Community & Southern $419.3 Advanta Bank Corp. $1,600.0 - None - $635.6 Century Security $96.5 Bank of Upson $29.9 American National $70.3 National Bank and Trust $17.1 The Park Avenue Bank $520.1 Valley National Bank $50.7 Statewide Bank $243.2 Home Bank, Lafayette $38.1 Old Southern Bank $315.6 Centennial Bank $94.6 LibertyPointe Bank $209.7 Valley National $24.8 Sun American Bank $535.7 First-Citizens Bank $103.8 Waterfield Bank $155.6 {FDIC Created} $51.0 Centennial Bank $215.2 Zions Bank $96.3 Bank of Illinois $211.7 Heartland Bank $53.7 Rainier Pacific Bank $446.2 Umpqua Bank, Roseburg $95.2 Carson River Community $51.1 Heritage Bank of Nevada $7.9 George Washington $412.8 FirstMerit Bank $141.4 La Jolla Bank $3,600.0 OneWest Bank, FSB $882.3 The La Coste Nat'l $53.9 Community National $3.7 Marco Community Bank $119.6 Omaha Bank $38.1 1st American State $18.2 Community Development $3.1 First National Bank $832.6 Community & Southern $260.4 Florida Community $875.5 Premier American Bank $352.6 American Marine Bank $373.2 Columbia State Bank $58.9 Marshall Bank, N.A. $59.9 United Valley Bank $4.1 First Regional Bank $2,180.0 First-Citizens Bank $825.5 Comm. Bank & Trust $1,210.0 SCBT, N.A. $354.5 Charter Bank $1,200.0 Charter, Albuquerque $201.9 Evergreen Bank $488.5 Umpqua Bank, Roseburg $64.2 Columbia River Bank $1,100.0 Columbia State Bank $172.5 Bank of Leeton $20.1 Sunflower Bank $8.1 Premier American Bank $350.9 Bond Street subsidiary $85.0 Town Community $69.6 Bank First American $17.8 St. Stephen State $24.7 First State Bank $7.2 Barnes Banking $827.8 {DINB Created} $271.3 Horizon Bank $1,400.0 Washington Federal $539.1 In 2009, there were 140 failed banks, compared with just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 829 Banks Now in FDIC's Problem List The Federal Deposit Insurance Corporation said the number of institutions on its "Problem List" rose to 829 at June 30, 2010 from 775 at March 31, 2010. However, the total assets of "problem" institutions declined from $431 billion to $403 billion. Also, while the number of "problem" institutions is the highest since March 31, 1993, when there were 928, it is the smallest net increase since the first quarter of 2009. The FDIC said 45 insured institutions failed during the second quarter. On Tuesday, the FDIC said commercial banks and savings institutions insured by the agency reported an aggregate profit of $21.6 billion in the second quarter of 2010, a $26 billion improvement from the $4.4 billion net loss the industry posted in the second quarter of 2009. The Deposit Insurance Fund balance improved for the second quarter in a row. The DIF balance -- the net worth of the fund -- improved from negative $20.7 billion to negative $15.2 billion during the second quarter. The improvement stemmed primarily from assessment revenues and from a reduction in the contingent loss reserve, which covers the costs of expected failures. The reserve declined from $40.7 billion to $27.5 billion during the quarter. The FDIC's liquid resources -- cash and marketable securities -- remained strong. Liquid resources stood at $44 billion at the end of the second quarter, a decline from $63 billion at the end of the first quarter. The decline in cash balances reflects previously anticipated outlays, primarily related to three bank failures in Puerto Rico on April 30th. "As we expected," Chairman Bair said, "demands on cash have increased this year. But our projections indicate that our current resources are more than enough to resolve anticipated failures." Total insured deposits declined by 0.7% ($39 billion) during the quarter. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ 2009 702 $402,800 140 $169,700 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 A copy of the FDIC's Quarterly Banking Profile for the quarter ended March 31, 2010, is available for free at: http://bankrupt.com/misc/FDIC_QBP_Q1_10.pdf * FDIC Puts Off Resolution Authority Rule Vote ---------------------------------------------- Bankruptcy Law360 reports that the Federal Deposit Insurance Corp. on Monday delayed presenting a final rule for the liquidation of failed investment banks and other large, interconnected financial institutions until it is before a council of regulators created under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2009. Law360 says the FDIC is consulting with the Financial Stability Oversight Council about the final details of its resolution authority, as required under the Dodd-Frank Act. * Akin Gump and Orrick Herrington in Preliminary Merger Talks ------------------------------------------------------------- Akin Gump Strauss Hauer & Feld and Orrick, Herrington & Sutcliffe are in "preliminary" merger talks, spokespersons from both firms have confirmed. According to The Wall Street Journal's Law Blog, David Schaefer, a spokesperson for Orrick, said: "Orrick and Akin Gump have held preliminary discussions about the possibility of a merger. At this time, it is premature and inappropriate to speak publicly in any detail about the process." Law Blog also relates Kathryn Holmes Johnson, a spokeswoman for Akin, said, "Akin Gump and Orrick are in exploratory discussions regarding the possibility of a merger." Zach Lowe, writing for The Am Law Daily, says the combined firm would have about 1,800 lawyers, according to the most recent Am Law 100 headcount numbers. Akin Gump had slightly higher profits per equity partner of $1.455 million in 2009 compared to a PPP figure of $1.36 million for Orrick, Mr. Lowe relates. * Cadwalader Wins M&A Advisor Turnaround Award of the Year ---------------------------------------------------------- Cadwalader, Wickersham & Taft LLP will be named the winner of the M&A Advisor's "Turnaround Award of the Year" at a ceremony at the Cornell Club in New York. The M&A Advisor awards honor the accomplishments of professionals and firms in mergers and acquisitions, financing, and turnarounds across seven geographic regions. Cadwalader's nod came in recognition of work on the Chapter 11 bankruptcy of LyondellBasell in which it served as debtor's counsel. Financial Restructuring Partner George Davis will accept the award on the firm's behalf. Cadwalader's successful representation of the global reorganization of chemical company giant LyondellBasell was completed on April 30, 2010. In addition to securing one of the largest commercial debtor-in-possession financings in the history of chapter 11, Cadwalader guided the company through the rationalization of its world-wide refining and petrochemical operations and paved the way for plan confirmation in just fifteen months. "LyondellBasell's plan of reorganization was the capstone of an historic and extremely successful global reorganization," said Christopher White, Chairman of Cadwalader. "The outstanding work of our team of talented and dedicated lawyers was an extraordinary accomplishment achieved in a very short period of time." In addition, the firm's top tier restructuring practice was recognized by U.S. News Media Group and Best Lawyers In America as one of the top practices in the country. Both nationally and in New York metropolitan rankings, Cadwalader placed in the first tier in Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law. These inaugural rankings showcased more than 8,500 law firms in one or more major practice areas. Responses from significant clients and leading lawyers asked to rate the law firms they consider best in their practice area were combined with evaluations of individual lawyers from the most recent Best Lawyers survey. About Cadwalader, Wickersham & Taft LLP Cadwalader, Wickersham & Taft LLP, -- http://www.cadwalader.com/- - established in 1792, is one of the world's leading international law firms, with offices in New York, London, Charlotte, Washington and Beijing. Cadwalader serves a diverse client base, including many of the world's top financial institutions, undertaking business in more than 50 countries in six continents. The firm offers legal expertise in antitrust, banking, business fraud, corporate finance, corporate governance, environmental, financial restructuring and reorganizations, healthcare, intellectual property, litigation, mergers and acquisitions, private client, private equity, real estate, regulation, securitization, structured finance, and tax. * Kramer Levin Haas 'Top 10 & 100' Attorneys on Super Lawyers List ------------------------------------------------------------------ Kramer Levin Naftalis & Frankel LLP congratulates the 60 members of the firm who were recognized in the 2010 edition of New York Super Lawyers. Two of these lawyers appeared in the "Top 10" and seven lawyers were listed in the "Top 100," which recognize the lawyers who received the highest point totals in the New York Super Lawyers balloting. Kramer Levin had more attorneys named to the "Top 10" and "Top 100" than any other firm. The selection process is based on a combination of peer recognition and professional achievement. Super Lawyers names only five percent of New York metro area lawyers to this honor. The seven Kramer Levin lawyers in the "Top 100" are Barry H. Berke, Thomas Moers Mayer, Gary P. Naftalis, Jay A. Neveloff, Ted Ruthizer, Paul D. Selver and Harold P. Weinberger. Mr. Berke and Mr. Naftalis were also listed in the top 10. Additionally, all of the firm's partners in the Tax, Land Use, Immigration and Real Estate groups were listed. The 60 Kramer Levin lawyers that received the "Super Lawyer" designation are: Peter A. Abruzzese - Intellectual Property Arthur H. Aufses, III - Securities Litigation Jay G. Baris- Securities & Corporate Finance Philip Bentley - Bankruptcy & Creditor/Debtor Rights Barry H. Berke - Criminal Defense: White Collar Jeffrey L. Braun - Business Litigation Jonathan H. Canter - Real Estate Jonathan S. Caplan - Intellectual Property Litigation Pamela M. Capps - Tax Nicholas L. Coch - Intellectual Property Litigation Michael J. Dell - Business Litigation Abbe L. Dienstag - Securities & Corporate Finance Matthew S. Dunn - Immigration Kenneth H. Eckstein - Bankruptcy & Creditor/Debtor Rights David S. Frankel - Criminal Defense: White Collar Alan R. Friedman - Securities Litigation Carl Frischling - Securities & Corporate Finance James P. Godman - Real Estate Cheryl E. Hader - Estate Planning & Probate Timothy P. Harkness - Securities Litigation Robert M. Heller - Antitrust Litigation Barry Herzog - Tax Robert N. Holtzman - Employment & Labor Maria T. Jones - Tax Mark D. Koestler - Immigration Kenneth P. Kopelman - Corporate Governance & Compliance Michael P. Korotkin - Real Estate Kevin B. Leblang - Employment & Labor Ezra G. Levin - Business/Corporate Samuel H. Lindenbaum - Land Use/Zoning Randy Lipsitz - Intellectual Property Litigation Christine Lutgens - Employee Benefits/ERISA Thomas Moers Mayer - Bankruptcy & Creditor/Debtor Rights Thomas E. Molner - Mergers & Acquisitions Gary P. Naftalis - Business Litigation Michael J. Nassau - Employee Benefits/ERISA Jay A. Neveloff - Real Estate John C. Novogrod - Estate Planning & Probate Michael S. Oberman - Business Litigation Paul M. Ritter - Employee Benefits/ERISA Adam C. Rogoff - Bankruptcy & Creditor/Debtor Rights Howard J. Rothman - Tax Theodore (Ted) Ruthizer - Immigration Robert T. Schmidt - Bankruptcy & Creditor/Debtor Rights Paul H. Schoeman - Criminal Defense: White Collar Naomi Schorr - Immigration Paul D. Selver - Land Use/Zoning Stephen R. Senie - Real Estate Michael T. Sillerman - Land Use/Zoning Howard T. Spilko - Mergers & Acquisitions Gary R. Tarnoff - Land Use/Zoning Eric A. Tirschwell - Criminal Defense: White Collar Jeffrey S. Trachtman - Bankruptcy & Creditor/Debtor Rights Neil R. Tucker - Real Estate Elise Wagner - Land Use/Zoning Jonathan M. Wagner - Intellectual Property Litigation Charles S. Warren - Environmental Ernest S. Wechsler - Securities & Corporate Finance Harold P. Weinberger - Intellectual Property Litigation Philip R. Weingold - Tax Kramer Levin Naftalis & Frankel LLP -- http://www.kramerlevin.com/ -- is a premier, full-service law firm with offices in New York and Paris. Firm lawyers are leading practitioners in their respective fields, who understand their clients' businesses, demonstrate a strong focus on client service and offer innovative and practical solutions. The firm represents Global 1000 and emerging growth companies, institutions and individuals, across a broad range of industries. The firm, its attorneys and practice groups have received the highest rankings, awards and honors for their work including from Best Lawyers, Chambers USA/Global, Lawdragon 500, American College of Trial Lawyers, National Law Journal, National Bankruptcy Conference, BTI Client Service All- Star Team for Law Firms, Benchmark Litigation, Institutional Investor, The International Who's Who of Corporate Immigration Lawyers, Dealflow Media, Investment Dealers Digest, IP Law & Business Almanac, Legal 500 (US and European), Real Estate Weekly and M&A Advisor, among many others. The firm has also been widely honored for its strong commitments to pro bono, community service and diversity efforts. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Sept. 22-23, 2010 (tentative) AMERICAN BANKRUPTCY INSTITUTE ABI/NYU Bankruptcy and Business Reorganization Workshop New York University School of Law, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Sept. 23-25, 2010 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 1, 2010 AMERICAN BANKRUPTCY INSTITUTE ABI/UMKC Midwestern Bankruptcy Institute Kansas City Marriott Downtown, Kansas City, Kan. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 1, 2010 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Oct. 11, 2010 AMERICAN BANKRUPTCY INSTITUTE Chicago Consumer Bankruptcy Conference Standard Club, Chicago, Ill. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 15, 2010 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Hilton New Orleans Riverside, New Orleans, La. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 28, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Level Professional Development Program Weil, Gotshal & Manges LLP, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 29, 2010 (tentative) AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium The Savoy, London, England Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. __, 2010 AMERICAN BANKRUPTCY INSTITUTE Delaware Views from the Bench and Bankruptcy Bar Hotel du Pont, Wilmington, Del. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 11, 2010 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Hyatt Regency Dearborn, Dearborn, Mich. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 29, 2010 RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP, INC. 17th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York City Contact: 1-903-595-3800; http://www.renaissanceamerican.com/ Dec. 9-11, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, a JW Marriott Resort & Spa, Scottsdale, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ January 26-28, 2011 TURNAROUND MANAGEMENT ASSOCIATION TMA Distressed Investing Conference Aria Las Vegas Contact: http://www.turnaround.org/ Jan. 27-28, 2011 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colo. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 3-5, 2011 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casuarina Resort & Spa, Grand Cayman Island Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 24-25, 2011 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 4, 2011 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Hyatt Regency Century Plaza, Los Angeles, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 7-9, 2011 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition Duberstein U.S. Courthouse, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - Florida Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10-12, 2011 AMERICAN BANKRUPTCY INSTITUTE SUCL/ Alexander L. Paskay Seminar on Bankruptcy Law and Practice Marriott Tampa Waterside, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 17-19, 2011 AMERICAN BANKRUPTCY INSTITUTE Byrne Judicial Clerkship Institute Pepperdine University School of Law, Malibu, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ April 27-29, 2011 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott, Chicago, IL Contact: http://www.turnaround.org/ May 5, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - New York City Association of the Bar of the City of New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ May 6, 2011 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Hilton New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ June 6, 2011 AMERICAN BANKRUPTCY INSTITUTE Canadian-American Cross-Border Insolvency Symposium Fairmont Royal York, Toronto, Ont. Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Mich. Contact: http://www.abiworld.org/ July 21-24, 2011 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 27-30, 2011 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Sanctuary at Kiawah Island, Kiawah Island, S.C. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 4-6, 2011 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: September 22, 2010 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2010. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***