/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/101015.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, October 15, 2010, Vol. 14, No. 286 Headlines 4250 EAST: Involuntary Chapter 11 Case Summary 850 NEW BALLWIN: Case Summary & 4 Largest Unsecured Creditors ABITIBIBOWATER INC: Files 2nd Amended Plan & Disclosure Statement ABITIBIBOWATER INC: Bowater Wants to Unseal BCFC Special Report ABITIBIBOWATER INC: Bowater Wants to Disallow BCFC Contrib. Claim ACCENTIA BIOPHARMACEUTICALS: Can Use Cash Collateral Until Nov. 5 AGRI-BEST HOLDINGS: Move to New Plant Blamed for Filing AMBAC FINANCIAL: Rehabilitation Plan Filed for Ambac Assurance AMERICAN SAFETY: Former Executive Gets 30 Months for $1MM Fraud AMR CORP: To Report Third Quarter Results on October 20 AVA GLOBAL: Case Summary & 6 Largest Unsecured Creditors BASHAS' INC: Litigants Drop Objection to Chapter 11 Plan BETSEY JOHNSON: Cedes Control to Madden Under Restructuring Deal BLOCKBUSTER INC: Proposes to Grant First Priority Lien to FFIC BLOCKBUSTER INC: Proposes to Reject 50 Leases for Closed Stores BLOCKBUSTER INC: Sec. 341 Meeting of Creditors Set for November 1 BLOCKBUSTER INC: Facing Objections to $125 Mil. DIP Financing BMS REAL ESTATE: Inks Stipulation With LNV on Cash Collateral Use BRIGHAM EXPLORATION: Says Notations of Guarantees Have Terminated BROADSTRIPE LLC: Equitable Subordination Fight Continues BROWN JORDAN: S&P Withdraws 'B' Corporate Credit Rating C & C ORGANIZATION: Case Summary & 21 Largest Unsecured Creditors CAPITAL GROWTH: Gets $3 Million Financing from Tranche A Lender CHANA TAUB: Automatic Stay Does Not Apply to Marriage Dissolution CHARLES VIRZI: Case Summary & 6 Largest Unsecured Creditors CLEAR CHANNEL: Compensation Panel Okays Tiered Relocation Policy COACHMEN INDUSTRIES: Amends Articles to Increase Shares to 100MM COAST CRANE: Wins Court Approval to Auction Assets Next Month COMMERCIAL VEHICLE: Moody's Lifts Corp. Family Rating to 'Caa1' CYNERGY DATA: Asks for Jan. 11 Plan Exclusivity Extension D'AGOSTINO'S: Unloads All Three Stores in Westchester DAIRY PRODUCTION: Looming Foreclosure Prompts Ch. 11 Filing DAVID DENENNY: Voluntary Chapter 11 Case Summary DI-CO-JA INC.: Case Summary & 19 Largest Unsecured Creditors COLONIAL BANCGROUP: FDIC Wants Funds Deposited in Court Registry DANAOS CORPORATION: Sets November 8 Annual Meeting of Shareholders DAVID DENENNY: Voluntary Chapter 11 Case Summary EASTMAN KODAK: Board Elects McCorvey as Chief Financial Officer EPICEPT CORP: Has Until April 2011 to Regain NASDAQ Compliance ESCALON MEDICAL: Mayer Hoffman Raises Going Concern Doubt EXIDE TECHNOLOGIES: Claims Objection Deadline Extended to Oct. 31 EXIDE TECHNOLOGIES: Commences Adv. Proceeding Against EnerSys EXIDE TECHNOLOGIES: Judge Vacates 2006 Order on EnerSys Pacts FAIRPOINT COMMUNICATIONS: Amends 2009 Report to Add Disclosures FAIRPOINT COMMUNICATIONS: Proposes Rule 2004 Exam on Segnet FAIRPOINT COMMUNICATIONS: Proposes to Assume Nitel Amended Pact FLYING J: Cadre Services Wants Approved Plan Revisited FPD LLC: Gets Court Nod to Use M&T Cash Collateral Until March 31 FPD LLC: Wants to Continue & Renew PNC Bank Letters of Credit FORUM HEALTH: CHS to Invest $10 Million to Upgrade Facilities FREEPORT-MCMORAN COPPER: Moody's Lifts Sr. Debt Rating From 'Ba2' FREMONT BRUCE: Case Summary & 8 Largest Unsecured Creditors GENTA INC: Cancer Drug Granted Orphan Drug Designation GIBBS PATRICK: Files Schedules of Assets & Liabilities GLOBAL TEL*LINK: Moody's Affirms 'B2' Corporate Family Rating GLOBAL TEL*LINK: S&P Affirms 'B' Corporate Credit Rating GRAHAM BROTHERS: Komatsu Wants to Take Back Equipment GREAT ATLANTIC: Catsimatidis Said to Be Bidding for Emporium GREEN DIAMOND: Case Summary & 13 Largest Unsecured Creditors GREEN PASTURES: Minor Error Doesn't Defeat Tax Liens GUILLERMO ROJANO: Case Summary & 20 Largest Unsecured Creditors HENRY WILTON: Files Schedules of Assets & Liabilities HOLLYWOOD THEATERS: Moody's Junks Corporate Family Rating HRTEC INC: Case Summary & 12 Largest Unsecured Creditors INFOLOGIX INC: Borrows $1.5 Million from Hercules Technology INTEGRATED FREIGHT: Inks Agreement to Acquire Bruenger for $11MM INTERNATIONAL GARDEN: Organizational Meeting Set for Oct. 21 JEFFERSON COUNTY: Birmingham Water Works Eyes Sewer System JESUS IGLESIAS: Case Summary & 20 Largest Unsecured Creditors JRH-ONE, LLC: Case Summary & 20 Largest Unsecured Creditors KV PHARMACEUTICAL: In Talks for $20-Mil. Secured Loan LEHMAN BROTHERS: Fidelity Wants LCPI to Comply to Insurance Policy LEHMAN BROTHERS: Files Quarterly Report for Settled Loan Claims LEHMAN BROTHERS: Merit LLC Plan Filing Deadline Moved to Feb. 15 LEHMAN BROTHERS: Proposes Clyde Click as Special Counsel LEHMAN BROTHERS: Proposes Wollmuth as Special Counsel LEHMAN BROTHERS: Seeks Disallowance of William Kuntz's Claims LEHMAN BROTHERS: Wins Nod to Reject Revenue Bond Contracts LENNAR CORP: S&P Downgrades Corporate Credit Rating to 'B+' LEVI STRAUSS: Posts $26 Million Net Income in August 29 Quarter LOEHMANN'S CAPITAL: 50% of Bondholders Support Exchange Offer LOWER BUCKS: Can Continue Using Cash Collateral Until Dec. 31 MANITOWOC COMPANY: Moody's Assigns 'B3' Rating to $500 Mil. Notes MARSHA ARMSTRONG: Voluntary Chapter 11 Case Summary MARSICO PARENT: Moody's Cuts Ratings on Senior Loan to 'Caa2' MATTHEW WATKINS: Case Summary & 12 Largest Unsecured Creditors MERUELO MADDUX: Committee Wants Executive Bonuses Cut Off METABOLIC RESEARCH: Recurring Losses Cue Going Concern Doubt MGM RESORTS: To Get $125 Million from Macau Joint Venture MICHAEL DIMAURO, JR.: Case Summary & Creditors List MIREK KUCERA: Voluntary Chapter 11 Case Summary MPI AZALEA: Wants to Extend Cash Collateral Use Until Dec. 5 NAKNEK ELECTRIC: Reaches Stipulation to Use Cash Collateral NATIONAL ENVELOPE: Plan Exclusivity Extended to Jan. 6 NCD DEVELOPMENT: Voluntary Chapter 11 Case Summary OMC INC: Court Compels NPF to Accept Pension Payments PIER 39: Case Summary & 2 Largest Unsecured Creditors PRECISION PARTS: Plan Has 0.15% Recovery for Junior Creditors PRIME PROPERTIES: Court Allows JPMorgan Foreclosure on Apartments QUIGLEY CO: Pfizer Appeals Chapter 11 Plan Ruling RAVINDER PADDA: Voluntary Chapter 11 Case Summary REGENCY ENERGY: Moody's Assigns 'B1' Rating to $500 Mil. Notes RICHARD MATTISON: Court Suspends Atty. Wadsworth for Incompetence RONSON AVIATION: Committee Gets OK to Tap Lowenstein as Counsel RONSON AVIATION: Gets Nod to Tap Cole Schotz as Bankr. Counsel RONSON AVIATION: RCLC Unit Has Until January 3 to Propose Plan RUMSEY LAND: Wants Exclusivity Period Extended Until November 15 RYAN ZEBER: Case Summary & 8 Largest Unsecured Creditors SIRIUS XM: Moody's Upgrades Corporate Family Rating to 'B3' SIRIUS XM: S&P Raises Corporate Credit Rating to 'B+' SORRENTO MESA: Voluntary Chapter 11 Case Summary SPECIALTY PRODUCTS: Looks to Collect Asbestos-Claims Information SUMMIT MATERIALS: S&P Raises Corporate Credit Rating to 'BB-' TACO DEL MAR: Wins OK to Sell Assets, Including Brand Name TELECONNECT INC: Lenselink, et al., Fill 3 Vacancies at Board TRADE SECRET: Asks Judge to Dismiss Chapter 11 Proceedings TRIBUNE CO: Inks Deal With Creditors to Resolve LBO Claims TRIBUNE CO: Law Debenture Reinstates Plea to Stop LBO Payments TRIBUNE CO: Parties Have Until October 22 to File Competing Plans TRICO MARINE: Tidewater Offers to Buy 4 Ships for $76 Million TRUE NORTH: Reports Net Income of $22.2 Million in June 30 Quarter TRUMP ENTERTAINMENT: Global Settlement for All Litigation Approved TUBO DE PASTEJE: Seeks Jan. 5 Plan Exclusivity Extension ULTIMATE ESCAPES: U.S. Trustee Forms Six-Member Creditors Panel ULTIMATE ESCAPES: Committee Taps Gordon & Rees as Lead Counsel ULTIMATE ESCAPES: Committee Taps Polsinelli Shughart as Co-Counsel UNBREAKABLE NATION: Trade Creditor Discrimination Permitted US AIRWAYS: Officers Disclose Disposal/Acquisition of Stock US AIRWAYS: Reports September Traffic Results US AIRWAYS: Selects Aeroframe for A330 Airframe Maintenance US AIRWAYS: To Have Webcast of Q3 Results on Oct. 20 VALENCE TECHNOLOGY: Regains Compliance With NASDAQ Requirement VALENCE TECHNOLOGY: Expects $12 Million Revenue for 2nd Qtr 2011 WHEELER CADILLAC: Preparing to Sell 7-Acre Parcel in Pa. WIND ENERGY: Child Van Wagoner Raises Going Concern Doubt ZALE CORP: Incurs $94-Mil. Loss for Fiscal 2010 * FDIC Begins Floating Rules to Wind Down Failed Companies * Defaults by Junk-Rated Companies Continue to Decline * Focus Management Group Opens Washington DC Office * BOOK REVIEW: Declining Demand, Divestiture, And Corporate Strategy ********* 4250 EAST: Involuntary Chapter 11 Case Summary ---------------------------------------------- Alleged Debtor: 4250 East Broadway, L.L.C. 702 East Osborn Road, Suite 200 Phoenix, AZ 85014 Bankruptcy Case No.: 10-32567 Involuntary Chapter 11 Petition Date: October 8, 2010 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case, II Debtor's Counsel: Pro Se Petitioner's Counsel: Aryeh D. Schwartz, Esq. SCHWARTZ LAW FIRM, P.L.L.C. 201 N. Central Avenue, 33rd Floor Phoenix, AZ 85004 Tel: (602) 229-8000 Fax: (602) 229-8001 E-mail: ads@schwartzlawaz.com Creditor who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Victoria Properties Management, Management Fees $44,186 L.L.C. 637 South 48th Street, Suite 110 Phoenix, AZ 85281 850 NEW BALLWIN: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: 850 New Ballwin, LC 7116 Oakland Avenue Saint Louis, MO 63117 Bankruptcy Case No.: 10-51533 Chapter 11 Petition Date: October 6, 2010 Court: U.S. Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Kathy A. Surratt-States Debtor's Counsel: Michael A. Becker, Esq. WALTRIP & SCHMIDT 8151 Clayton Road, Suite 200 Clayton, MO 63117 Tel: (314) 721-9200 Fax: (314) 880-7755 E-mail: mab@mabeckerlaw.com Scheduled Assets: $1,401,494 Scheduled Debts: $1,444,460 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/moeb10-51533.pdf The petition was signed by Christine Zerjav, president of Adventure Learning Center LTD, sole member debtor. ABITIBIBOWATER INC: Files 2nd Amended Plan & Disclosure Statement ----------------------------------------------------------------- AbitibiBowater Inc. and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a revised version of their Second Amended Joint Plan of Reorganization on October 6, 2010, to: -- make certain modifications to the Plan in connection with the objections of various parties-in-interest; and -- reflect that the Debtor Bowater Canada Finance Corporation is no longer a plan proponent. BCFC has withdrawn its Plan and is no longer seeking confirmation as a proponent of the Joint Plan at this time. Accordingly, all references to the Debtors under the Revised 2nd Amended Plan exclude BCFC. A copy of the blacklined version of the Revised 2nd Amended Plan dated October 6, 2010 is available for free at: http://bankrupt.com/misc/ABH_2ndAmendedPlan_rev_blackline100610.pd f The Initial AbitibiBowater Plan was filed in August 2010. The hearing on confirmation of the Plan commenced on September 24, 2010, was continued on September 30 and is further set to be held on October 7 and 8, at 10:00 a.m. The Debtors will seek confirmation of the Revised Plan at the hearing and if approved, will file a clean version of the Revised Plan immediately after the hearing. According to Law360, AbitibiBowater's chief restructuring adviser took the stand on October 7 to defend the Debtors' Plan of allegations that it treats certain intercompany claims unfairly. The Debtors earlier informed the Court that it intended to call Steven Zelin, senior managing director of Blackstone Advisory Partners L.P., as a witness in support of confirmation of the Plan. In relation to the Confirmation, Mr. Zelin filed a declaration in support of confirmation of the Plan, which addresses a number of the standards required to be met in order for the Plan to be confirmed, as well as objections of various parties-in-interest. Greg Jones Opposes Plan Greg Jones filed an amended declaration with the Court in support of the Association of Western Pulp and Paper Workers Union's objection to the confirmation of the Debtors' Plan. Mr. Jones is the California/Arizona area representative of the AWPPW. "The chief cause of the labor dispute in my view is that AbitibiBowater is seeking to extract concessions from Ponderay Mill employees to that it was unable to extract from other union- represented Mills to effectuate the cost-cutting measures contemplated in the Plan for Reorganization," Mr. Jones says. The AWPPW is firmly committed to reaching a fair and equitable settlement of the labor dispute, but will not agree to shoulder a disproportionate share of the burden of the Debtors' labor cost- cutting, according to Mr. Jones. Mr. Jones says it is highly feasible that the labor dispute could be resolved in a matter of days if Ponderay Newsprint Company management would bring its bargaining demands into party with other represented mills. Shareholders Oppose Plan In separate filings, several shareholders of AbitibiBowater Inc. join in the objections asserted by an ad hoc committee of the Debtors' shareholders led by Dr. Henry Romero and Mrs. Elizabeth Romero. The Ad Hoc Shareholders Committee earlier expressed opposition to the confirmation of the Debtors' Plan on the bases that (1) the Debtors undervalued or failed to value multiple assets; (2) the Debtors are withholding recoveries until after Plan confirmation; (3) the Debtors' subsidiaries have not been properly valued; and (4) the Debtors are putting forward a Plan without concern for fundamental fairness. The Joining Shareholders are Robert Alan Cameron Gilbertson, Daniel R. Thornton, William Kovach, Joel Lambeth, Tamer Ziady, Pratik P. Shah, and Glenn Dombeck. Mr. Gilbertson particularly takes issue that the Debtors' management proposes to award themselves 8.5% of the shares in the emerging group at the expenses of creditors and potentially shareholders. In a related development, Kelly Nicholson of Childersburg, Alabama, wrote a letter to the Court asserting that Bowater should honor their promises and commitments to their retirees. Mr. Nicholson is a retiree of the Debtors. He said he cannot accept the $2,500 Bowater offered to buy out his benefits. Ad Hoc Shareholders' Committee React to Debtors' Omnibus Reply Dr. Henry Romero and Elizabeth Romero of Dickinson, Texas, reiterate that the proposed Chapter 11 Plan is not confirmable because it clearly: -- does not account for recent improvements in the Debtors' financial picture; -- appears to have overlooked substantial assets; -- reflects that the Debtors have conceded to points that clearly undermine the valuation analysis which they have refused to share with shareholders; -- shows individual Debtor valuations which makes it nearly impossible to ascertain Shareholder recoveries; and -- shows that management incentives undermine the fundamental fairness of the bankruptcy process. The Romeros aver that they represent an ad hoc committee of shareholders that hold about 27% outstanding shares in the Debtors. The Shareholders vehemently refute the Debtors' response that their confirmation objection arguments are unsubstantiated. The Romeros contend that the Debtors' omnibus reply to confirmation objection shows that the Debtors have not attempted to refute the substantial claim that they are withholding recoveries until after Plan confirmation to avoid distribution. "[Thus,] the valuation completed by Blackstone, which has not been shared with the Shareholders, needs to be recalculated with the pension liability removed, the $130 million for the NAFTA settlement added, the $108 million for the American Union settlement, and the present value of the negotiated reduced labor costs from the Canadian and American Union added to the EBITDA, at a minimum," the Romeros say. The valuation analysis needs to be recalculated not only on the Debtors as a whole, but on the Debtors individually, the Romeros insist. Even if the figures in and of themselves are not able to overcome the insolvency of the 'Company as a whole,' they might be able to overcome the insolvency of one or more Debtor and equity within one or more Debtor may very likely flow to the Shareholders, the Romeros point out. The Debtors have also failed address the argument that their own liquidation analysis shows three debtor entities are solvent right now -- Abitibi-Consolidated Finance LP, Bowater Incorporated, and Bowater Nuway Inc, the Romeros add. The Romeros further insist that the Bankruptcy Court never actually rejected the arguments presented by the Shareholders. The Shareholders also remind Judge Carey that the Debtors haven't addressed the Shareholders' argument that they were prevented from calling a shareholders' meeting to air their concerns during the bankruptcy process by implementing by-laws amended shortly before the Company entered bankruptcy. Moreover, the Shareholders note that the Debtors' management appears willing to pay a premium rate for almost a billion dollars in bonds when while clearly future projections and earnings are better than expected and the sector is improving as a whole. Debtors Update Omnibus Reply At the Bankruptcy Court's request, the Debtors filed on Sept. 28, 2010, an updated version of their Confirmation Objection Status Chart. The Updated Report includes further resolutions reached by the Debtors with certain objections. Among other things, the Debtors have reached consensual agreements with Custom Mechanical Contractors, Stein Construction Company Inc., ePlus Group, Paul Planet and Thor Thorsteinson, with respect to these parties' Plan-related objections. A blacklined version of the Debtors' Updated Confirmation Objection Status Chart is available for free at: http://bankrupt.com/misc/ABH_UpdtdObjectionStatusRpt_092810.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: Bowater Wants to Unseal BCFC Special Report --------------------------------------------------------------- Bowater Incorporated asks U.S. Bankruptcy Judge Kevin Carey to unseal the report prepared by AP Services LLC, as special advisor to Bowater Canada Finance Corporation. AP Services and Lisa Donahue, as BCFC vice president for restructuring, were retained in July 2010 and were directed by the Bankruptcy Court to prepare a formal report on the course of action to be taken by BCFC in connection with the assertion of certain BCFC noteholders of the existence of (i) a potential claim of BCFC against Bowater for contribution, and (ii) unspecified potential claims against Bowater Canadian Forest Products Inc. and certain Canadian affiliates in connection with certain 2001 to 2007 intercompany transactions -- the BCFC Allegations. The reports were to be made available, on a strictly confidential basis, to counsel for minority noteholders, counsel for the Indenture Trustee and any other stakeholder Ms. Donahue deemed appropriate. The Special Advisor Report was filed with the Bankruptcy Court on September 20, 2010. BCFC filed a written motion seeking authority to provide the Report to the Canadian Court on a confidential basis, but subsequently withdrew its request. The withdrawal may be because the Canadian Court issued an order on September 20, finding that the BCFC Allegations lacked merit. Paul D. Leake, Esq., at Jones Day, in New York, asserts that the Report on the BCFC Allegations should be made publicly available as no reason exists for maintaining it under seal. No party-in- interest will be prejudiced by unsealing the Report, he says. Moreover, many of the parties to the dispute already have access to the Report, according to Mr. Leake. Counsel to the other Debtors, counsel to the Noteholders, counsel to the Indenture Trustee and the Board of Directors of BCFC each have a copy of the Report. As the Report is filed with the Bankruptcy Court under seal, Judge Carey and the Office of the U.S. Trustee both have access to it. "To keep the Report from public view simply serves no legitimate purpose protected by Section 107 of the Bankruptcy Code." Mr. Leake adds that the Report may also be relevant in connection with the Minority BCFC Noteholders' confirmation objection and allegations of conflicts of interest of the BCFC Board of Directors, certain of the Debtors' professionals and the other Debtors in general. Bowater's request is set to be considered by the Bankruptcy Court at a hearing set for October 7, 2010. BCFC Issues Statement To assist the relevant parties and the Bankruptcy Court, BCFC filed a statement in Court setting out certain relevant facts, some of which may be known only to BCFC, APS, and Togut, Segal & Segal LLP as BCFC's conflicts counsel. Albert Togut, Esq., a member of the Togut Firm, disclosed that in the course of preparing the Report, APS and the Togut Firm undertook extensive due diligence, including (i) reviewing voluminous documents provided by Bowater and its Canadian counsel Stikeman Elliot, Bowater's financial advisors the Blackstone Group, and the Monitor appointed in the insolvency proceedings of the Canadian Debtors in Canada; (ii) performing legal research; (iii) coordinating their work; and (iv) engaging in consultations with the Noteholders' counsel several times before the draft Report was circulated. APS provided the Report in draft form to counsel for the Noteholders and the Indenture Trustee on September 10 and 11, 2010. The Togut Firm first received written comments on the draft Report by September 15 and promptly responded to those comments. The comments however did not change the Report's conclusions. By September 20, the final Report was filed with the Bankruptcy Court under seal. Wilmington Trust Objects Representing Wilmington Trust, Robert J. Dehney, Esq., at Morris, Nichols, Arhst & Tunnell LLP, in Wilmington, Delaware, argues that Bowater's request reflects a misunderstanding of the purpose of the Report -- the Report was to facilitate a resolution of between BCFC's Board and BCFC's creditors as to how to proceed with the transaction-based claims, but was not to disclose any potential weakness of BCFC's claims. Wilmington Trust serves as the sole indenture trustee for the 7.95% Notes due 2011 issued by BCFC. Contrary to the premise of Bowater's Unseal Motion, BCFC would be harmed by unsealing the Report, Mr. Dehney asserts. "It would make absolutely no sense for BCFC, which would be the claimant, to provide a Report reflecting alleged weaknesses in BCFC's claims to either: (a) the very authorities that likely would adjudicate those claims; or (b) BCFC's adversaries on those claims." Any prior access granted to the Report does not justify unsealing it, Mr. Dehney maintains. Mr. Dehney further says that unsealing the Report would not address allegations of improper conduct and would not aid the Confirmation Hearing. As BCFC is no longer part of the Joint Plan, BCFC's Mismanagement Claims would not be released under the Joint Plan, he points out. As to the Intercompany Claims, any confirmation objections easily could be dealt with through use of disputed claims reserves, he adds. Nevertheless, in the event the Report is to be unsealed, then it first should not be deemed not to have been filed on BCFC's behalf, Mr. Dehney contends. "The Report is simply not a report of an advocate for BCFC and should not be available on that basis." Mr. Dehney also points out that if the Report is to be unsealed, then the Court should also require Paul, Weiss, Rifkind, Wharton & Garrison LLP provide its memo on a Section 135 Claim for both BCFC and Bowater to any BCFC creditor that requests it. Paul Weiss previously represented BCFC and Bowater on the Section 135 Claim. 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: Bowater Wants to Disallow BCFC Contrib. Claim ----------------------------------------------------------------- Bowater Inc. asks U.S. Bankruptcy Judge Kevin Carey to disallow and expunge in its entirety: (i) an alleged claim related to the notes issued by Bowater Canada Finance Corporation and purported to arise under Nova Scotia law, or (ii) in the alternative, a claim based on Bowater Inc.'s guarantee of the BCFC Notes. BCFC is wholly owned by Bowater Inc. and is an unlimited liability company under Nova Scotia law. It owns preferred shares in Bowater Canada Holdings, Inc., also a direct subsidiary of Bowater and the indirect owner of Bowater Canadian Forest Products Inc. In October 2001, Bowater issued, and Bowater guaranteed, a series of 7.95% notes in the principal amount of $600 million. Bank of New York was the trustee of the indenture relating to the notes issuance. Aurelius Capital Management LP and Contrarian Capital Management LLC -- the Minority Noteholders -- are among the holders of BCFC Notes that have asserted that three specific and independent claims exist with respect to the BCFC Notes. The Minority Noteholders assert direct claims against BCFC as borrower of the BCFC Notes. The Noteholders also assert that Bowater is liable for two claims: (a) a Guarantee Claim, which is based on Bowater's guarantee of the BCFC Notes; and (b) a Contribution Claim, which is alleged to arise under Nova Scotia law. The Noteholders further alleged that various amorphous claims may exist against BCRI, BCFPI and/or certain of their Canadian affiliates in connection with certain intercompany transactions between the Canadian entities that took place between 2001 and 2007. BCFC filed on September 1, 2010, a proof of claim with respect to the Contribution Claim, asserting a claim against Bowater for "at least" $620 million. Paul D. Leake, Esq., at Jones Day, in New York, contends that the Bankruptcy Court should disallow either the Contribution Claim or the Guarantee Claim for these reasons: 1. Only one and not both claims could be enforced under applicable Canadian and New York laws that govern the claims. 2. Only one and not both claims could be allowed under general principles of U.S. bankruptcy law. 3. The Bankruptcy Code expressly requires disallowance of the contingent Contribution Claim. 4. Principles of partnership law dictate that either the Guarantee Claim be disallowed or the Contribution Claim subordinated. Mr. Leake explains that applicable Canadian law would not recognize the Contribution Claim and the Guarantee Claim as separate claims. Simply stated, a Canadian Court would conclude that the Guarantee Claim and the Contribution Claim are substitutes for one another and, as such, cannot both be enforceable against Bowater, he avers. Moreover, applicable Canadian law on the rule against double proofs would prevent recovery on both the Contribution Claim and the Guarantee Claim, he notes. New York law, which governs the Guarantee Claim, similarly dictates that only one recovery may be had against an entity on account of a single injury, Mr. Leake says. The Contribution Claim thus is not valid and not enforceable under applicable New York state law, he asserts. Section 502(e) of the Bankruptcy Code precludes allowance of the Contribution Claim because it is an attempted recovery that is redundant with the Guarantee Claim, Mr. Leake adds. Under the principles of partnership law, either the Guarantee Claims should be disallowed in its entirety or the Contribution Claim should be subordinated to all of Bowater's other creditors, Mr. Leake maintains. Mr. Leake continues to note that if both the Contribution Claim and Guarantee Claim are allowed -- which they should not be -- the Contribution Claim must by the amount the BCFC Noteholders receive on account of their other claims. To the extent allowed, the Contribution Claim cannot include unmatured interest, he argues. 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). ACCENTIA BIOPHARMACEUTICALS: Can Use Cash Collateral Until Nov. 5 ----------------------------------------------------------------- Accentia Biopharmaceuticals, Inc., et al., obtained authorization from the Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle District of Florida to continue using cash collateral until November 5, 2010. The Debtors will use cash collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/Accentia_Bio_Nov_budget.pdf On December 15, 2008, the Court entered a final order authorizing the Debtors to use cash collateral from November 10, 2008 until January 7, 2009. On February 3, 2009, the Court further extended the Debtors' use of cash collateral until February 11, 2009. On February 18, 2009, the Court extended the use of cash collateral until April 1, 2009. The Court further extended the use of cash collateral 12 times before extending it until September 22, 2010. By November 3, 2010, the Debtors will provide the counsel for Valens U.S. SPV I, LLC, and Valens Offshore SPV II Corp., and the counsel for the Committee of Unsecured Creditors operating budgets for Accentia and Biovest for the six-week period following the week ended November 5, 2010. The Court has set for November 5, 2010, at 1:30 p.m. a hearing on the continued use of cash collateral. Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically integrated biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The Company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. Additionally, the Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The Company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia BioPharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M.D. Fla. Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; and Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Adam H. Friedman, Esq., at Olshan Grundman Frome Rosenzweig, and Paul J. Battista, Esq., at Genovese Joblove & Battista PA, represent the official committee of unsecured creditors as counsel. In their bankruptcy petition, the Debtors disclosed assets of $134,919,728 and debts of $77,627,355 as of June 30, 2008. AGRI-BEST HOLDINGS: Move to New Plant Blamed for Filing ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Agri-Best Holdings LLC filed a Chapter 11 petition on Oct. 5 in Chicago (Bankr. N.D. Ill. Case No. 10-44595). Agri-Best is a Chicago-based processor and distribution of meat products for the restaurant industry. The Company, doing business as Protein Solutions, blamed the filing on the costs associated with moving to a new plant and the tendency of consumers to eat at home rather than in restaurants as a result of the recession. The Company owes $14.6 million to secured lender Wells Fargo Bank NA, which has a lien on accounts receivable and inventory with a book value of $14.2 million. There is another $5.9 million owing on a secured claim to equity holder Advantage Capital Partners. Advantage has a lien on all assets. The Debtor estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. The Company said in a court filing that the book value of all assets is just under $20 million. Annual revenue is around $140 million. AMBAC FINANCIAL: Rehabilitation Plan Filed for Ambac Assurance -------------------------------------------------------------- The rehabilitator of the Segregated Account of Ambac Assurance Corporation filed On October 8, 2010, with Dane County Circuit Court in the State of Wisconsin a plan of rehabilitation. Claims against the Segregated Account will be settled and paid in accordance with the terms and conditions of the Plan of Rehabilitation. Following confirmation of the Plan of Rehabilitation by the Court, any holder of a right to payment from the Segregated Account, regardless of when such right arises, is limited exclusively to the treatment afforded by the Plan of Rehabilitation. Holders of permitted claims for fees, costs and expenses of the administration of the Segregated Account will receive cash in the full amount of such claims. Holders of permitted policy claims will receive, in complete satisfaction of such claims, a combination of cash payments and 5.1% interest-bearing, unsecured surplus notes that are scheduled to mature on June 7, 2020. The cash/Surplus Note split will initially be 25% cash and 75% Surplus Notes. Holders of other claims submitted in compliance with the provisions of the Plan of Rehabilitation, which are not claims for administrative expenses of the Segregated Account or policy claims, will receive, in complete satisfaction of such claims, 5.1% interest-bearing, unsecured junior surplus notes in a principal amount equal to the dollar amount of such claims. Under the Plan of Rehabilitation, the Rehabilitator retains the flexibility to engage in alternative resolutions of claims where such resolutions are, in the Rehabilitator's sole and absolute discretion, equitable to the holders of policy claims generally. A full-text copy of the Plan of Rehabilitation is available for free at http://ResearchArchives.com/t/s?6c77 About Ambac Financial Headquartered in New York, Ambac Financial Group, Inc., through its subsidiaries, provided financial guarantees and financial services to clients in both the public and private sectors around the world. KPMG LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 financial results. The independent auditors noted of the significant deterioration of Ambac's guaranteed portfolio coupled with the inability to write new financial guarantees has adversely impacted the business, results of operations and financial condition of the Company's operating subsidiary. KPMG also noted of the Company's limited liquidity. Ambac Financial noted in its Form 10-Q for the quarter ended June 30, 2010 that its liquidity and solvency are largely dependent on dividends principal financial guarantee operating subsidiary, Ambac Assurance Corporation, and on the value of the subsidiary. Ambac Financial said that Ambac Assurance is "highly unlikely" to be able to make dividend payments to Ambac for the foreseeable future. Ambac Financial said it is currently pursuing raising additional capital and is also pursuing a restructuring of its outstanding debt through a prepackaged bankruptcy proceeding. The Company's balance sheet at June 30, 2010, showed $30.05 billion in total assets, $31.47 billion in total liabilities, and $1.42 billion in stockholders' deficit. Ambac once boasted top triple-A credit ratings. In November 2009, Ambac warned it could have problems paying off debt that comes due in 2011. Before the financial crisis, Ambac was the second- biggest bond insurer behind MBIA Inc. AMERICAN SAFETY: Former Executive Gets 30 Months for $1MM Fraud --------------------------------------------------------------- Bankruptcy Law360 reports that a former executive at American Safety Razor Co. has been sentenced to 30 months in prison after pleading guilty to fraud charges related to nearly $1 million in personal expenses he racked up through the Company's credit card- purchasing program. Joseph Scott Champion was sentenced by Judge Samuel G. Wilson of the U.S. District Court for the Western District of Virginia to 30 months on Wednesday, according to Law360. 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. AMR CORP: To Report Third Quarter Results on October 20 ------------------------------------------------------- AMR Corporation anticipates announcing third quarter 2010 earnings on Oct. 20, 2010. In conjunction with the announcement, on that date AMR will host a conference call with the financial community at 2:00 p.m. Eastern Time. During this conference call, senior management of AMR will review, among other things, details of AMR's third quarter financial results, the industry environment, recent strategic initiatives, the revenue environment, cash flow results, liquidity measures, capital requirements and will provide an outlook for the future. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. The Company's balance sheet for June 30, 2010, showed $25.8 billion in total assets, $9.3 billion in total current liabilities, $9.1 billion in long-term debt, $526.0 million in obligation under capital leases, $7.5 billion in pension and postretirement benefits, $3.1 billion in other liabilities, and a $3.9 billion stockholders' deficit. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. AVA GLOBAL: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Ava Global Enterprise LLC P.O. Box 2090 Gilroy, CA 95021 Bankruptcy Case No.: 10-60598 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Northern District of California (San Jose) Judge: Charles Novack Debtor's Counsel: Julian C. Roberts, Esq. LAW OFFICES OF JULIAN C. ROBERTS 553 S. Murphy Avenue Sunnyvale, CA 94086 Tel: (408) 730-4710 E-mail: julian@julianslaw.com Scheduled Assets: $4,940,000 Scheduled Debts: $4,193,462 A list of the Company's six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-60598.pdf The petition was signed by the Sayed Faquiryan, authorized agent. BASHAS' INC: Litigants Drop Objection to Chapter 11 Plan -------------------------------------------------------- Bankruptcy Law360 reports that Bashas' Inc. and a group of plaintiffs who had sued the company over workplace discrimination have reached an agreement that effectively ends the plaintiffs' objection to the grocery store operator's reorganization plan. On Tuesday, Bashas' and a group known as the Parra litigants, who have a $36 million claim in the bankruptcy, agreed that whatever court rules, Law360 says. About Bashas' Inc. Bashas' Inc. is a 77-year-old grocery chain that owns 158 retail stores located throughout Arizona. It is doing business as National Grocery, Bashas Food, Bashas' United Drug, Food City, Eddie's Country Store, A.J. Fine Foods, Western Produce, Bashas' Distribution Center, Sportsman's, and Bashas' Dine. The Company and its affiliates filed for Chapter 11 bankruptcy protection on July 12, 2009 (Bankr. D. Ariz. Case No. 09-16050). Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., assists the Debtors in their restructuring efforts. Michael W. Carmel, Ltd., is the Debtors' co-counsel. Deloitte Financial Advisory LLP serves as financial advisors. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. In its bankruptcy petition, Bashas' estimated assets and debts of $100 million to $500 million as of the Petition Date. BETSEY JOHNSON: Cedes Control to Madden Under Restructuring Deal ---------------------------------------------------------------- Steven Madden, Ltd., said last week that it has entered into a Restructuring Agreement with Betsey Johnson LLC to effect an out- of-court restructuring of the outstanding debt of BJ LLC purchased by Steven Madden in August 2010 for $27.6 million. Pursuant to the Restructuring Agreement, in consideration of the elimination of amounts owed under the outstanding debt, Steven Madden acquired (i) the trademarks and intellectual property of BJ LLC, including Betsey Johnson(R) and other related brand names and (ii) a 10% equity interest in BJ LLC. Steven Madden also made a new secured term loan to BJ LLC in the principal amount of $3 million, which bears interest at the rate of 8% per annum (payable at maturity) and matures on December 31, 2015. In addition, Castanea Partners, who has partnered with Betsey Johnson and BJ LLC for the past three years, has agreed to support BJ LLC's business with a further equity investment in BJ LLC. Steven Madden and BJ LLC also entered into two new license agreements under which Steven Madden has granted BJ LLC the exclusive license to (i) operate Betsey Johnson retail stores in the United States, Canada and London, England and (ii) manufacture and sell specified women's apparel under the Betsey Johnson(R) and Betsey Johnson Collection(TM) brand names. The transaction is expected to be accretive to Madden's earnings, contributing approximately $0.10 in diluted EPS in 2011. Edward Rosenfeld, chairman and chief executive officer of Madden, commented, "We are thrilled to add the Betsey Johnson brand to our growing portfolio of brands at Steve Madden. Betsey Johnson is an iconic brand with a rabid consumer following, and we believe it offers meaningful growth opportunity for our business. We are also pleased to have entered into a relationship with Betsey Johnson LLC in support of the continuation and growth of its apparel and retail businesses and look forward to working closely with Castanea in support of Betsey Johnson LLC going forward." Steve Madden, Founder and Creative and Design Chief, added, "Betsey is my hero - one of the great American designers. I have always admired how everything she does is instantly recognizable - it looks, feels, radiates Betsey. We want to do whatever we can to continue her creative vision and make the Betsey Johnson brand bigger and better than ever." Restructuring Agreement Steven Madden said in a regulatory filing that the term loan in the aggregate outstanding principal amount of $48,750,000, which was in default on the date of purchase, was purchased by the Steven Madden for an aggregate purchase price of approximately $27.6 million and was secured by substantially all BJ LLC's assets. Pursuant to the Restructuring Agreement, Steven Madden, through a wholly owned subsidiary, purchased from BJ LLC and certain affiliates (a) substantially all trademarks, service marks, trade dress, brand names, logos, trade names, business names, patents, copyrights, domain names, software, know how and other intellectual property, and all goodwill associated with any of the foregoing, owned or licensed by BJ LLC and certain affiliates, (b) certain intellectual property licenses including the right to receive royalties and other income with respect thereto, and (c) certain other contracts, including a lease under which BJ LLC leases its outlet store located in Riverhead, New York. The aggregate purchase price for the Purchased Assets was $27.4 million, paid by Steven Madden in the form of a credit against the outstanding principal balance of the Original Loan and, after giving effect to the credit, the cancellation of all outstanding obligations of BJ LLC arising out of the Original Loan. The Restructuring Agreement contains customary representations and warranties relating to the Purchased Assets as well as indemnification obligations of BJ LLC for a period of 18 months following the closing to indemnify Steven Madden and its affiliates and representatives from losses incurred arising out of the breach by BJ LLC of representations regarding the Purchased Assets. The Restructuring Agreement further provides for equity recapitalization of BJ LLC including issuance to Steven Madden of a number of Class B Preferred Shares of BJ LLC constituting 10% of the issued and outstanding shares of BJ LLC in exchange for a credit of $200,000 against the outstanding principal balance of the Original Loan. Simultaneously, Castanea Partners and its affiliates, majority owners of BJ LLC, made an investment of additional capital into BJ LLC. Also as a part of the transaction, Steven Madden made a new secured term loan to BJ LLC in the principal amount of $3,000,000 which loan bears interest at the rate of 8% per annum (payable at maturity) and matures on December 31, 2015. Pursuant to the terms of the secured promissory note, an early repayment of the new loan is required in the event of a sale of BJ LLC, a public offering of the equity securities of BJ LLC or the cessation of business by BJ LLC and the loan is secured by a first priority security interest in and lien upon substantially all of the remaining properties and assets of BJ LLC. License Agreements In connection with the closing of the transactions, Steven Madden and BJ LLC also entered into two intellectual property license agreements and a supply agreement with respect to the Purchased Assets pursuant to which, among other things, Steven Madden has granted to BJ LLC (i) a limited, exclusive license and right to use the Betsey Johnson(R) and Betsey Johnson Collection(TM) trademarks for the manufacture, promotion, sale and distribution of specified items of women's apparel in retail stores owned and operated by BJ LLC in London, England and Canada, in wholesale and retail sales in the United States, and in wholesale sales in certain other jurisdictions outside the United States, and (ii) a right and license to sell, via BJ LLC's e-commerce Web sites and in Betsey Johnson-branded retail stores located in Canada, London, England and the United States, products featuring designs created by or manufactured under license to third parties by Steven Madden. Under the license arrangements, Steven Madden is entitled to royalty payments based on net sales and, under one agreement, certain guaranteed minimum royalty payments and may purchase from BJ LLC Licensed Product at a discount from the listed wholesale price. Also, as previously disclosed, BJ LLC had been a licensor to Steven Madden, providing Steven Madden the right to use the Betsey Johnson(R) and Betseyville(R) trademarks in connection with the marketing and sale of handbags, small leather goods, belts and umbrellas. In connection with the transactions, BJ LLC and Steven Madden entered into a supply agreement, which terminated the Original License and provides BJ LLC and its affiliates with the right to buy footwear and accessories bearing the Betsey Johnson(R) or Betsey Johnson Collection(TM) trademarks from Steven Madden at a discount from the listed wholesale price. A full text of the Restructuring Agreement is available for free at http://researcharchives.com/t/s?6c7d About Steven Madden Steven Madden, Ltd., designs, sources, markets and sells footwear for women, men and children. The Company also designs, sources, markets and retails name brand and private label fashion handbags and accessories, through its Accessories Division. The Company distributes products, through its retail stores, its e-commerce Website, department and specialty stores throughout the United States and through distribution arrangements in Asia, Canada, Europe, Central and South America, Australia and Africa. BLOCKBUSTER INC: Proposes to Grant First Priority Lien to FFIC -------------------------------------------------------------- Blockbuster Inc. and its units ask the U.S. Bankruptcy Court for the Southern District of New York: (a) to grant First Insurance Funding Corp. or its successor or assigns a first priority lien on, and security interest in, unearned premiums in the Debtors' renewed property and casualty insurance policies; (b) to lift the automatic stay in the event of the Debtors' "payment default" under that certain premium financing agreement to be executed in connection with the Renewed Policies; and (c) for similar relief in connection with any other postpetition premium financing arrangement entered into between the Debtors and FIFC. In recent weeks, Blockbuster has renewed several of its insurance policies for the 2010/2011 policy period. In particular, Blockbuster renewed its property and casualty insurance programs, which expired on August 31, 2010, and September 30, 2010. In connection with these renewals, Blockbuster is obligated to pay approximately $3 million in premiums at the start of the policy period for the two insurance programs as of September 30, 2010. In light of the magnitude of the required premiums, Blockbuster determined that it would be prudent to conserve its liquidity by financing the premiums for the Renewed Policies through a PFA with FIFC. Blockbuster submits that, despite the authority granted to the Debtors to enter into the Property and Casualty PFA by previous Court order, FIFC has expressed an unwillingness to finance the Renewed Policies absent the relief requested. Given the absolute necessity of maintaining its Insurance Programs during their Chapter 11 cases, the Debtors are seeking expedited consideration of their request to ensure that the requisite funding occurs on October 19, 2010, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, tells the Court. FIFC has represented that a Court order approving the request will provide both it and the participating insurance carriers with the assurance they need that, in the event the Debtors' default on their payment obligations under the Property and Casualty PFA, FIFC is authorized to take all steps necessary and appropriate to cancel the Renewed Policies, collect the Collateral, and apply the Collateral against the payment default. The Debtors also sought and obtained a shortened notice period on the request. Hence, a hearing to consider the request will be held on October 19, 2010. Objections are due October 15. 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 Reject 50 Leases for Closed Stores --------------------------------------------------------------- Blockbuster Inc. and its units seek the Court's authority to reject 50 unexpired leases of nonresidential real property, effective as of September 30, 2010, and to abandon certain equipment, fixtures, furniture or other personal property located in the premises associated with the rejected Leases. A copy of the list of Leases can be obtained for free at: http://bankrupt.com/misc/BBI_2ndOmnMo_Leases.pdf Blockbuster has been analyzing and reviewing its extensive lease portfolio and the performance of each of its retail stores, relates Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York. In connection with that review, Blockbuster has determined that closure of certain underperforming stores would be in its best interest and would promote the Debtors' successful reorganization. Prior to the Lease Rejection Date, the retail stores associated with each of the Leases were closed and Blockbuster vacated the Leased Premises. In addition, Blockbuster has returned the keys to the Leased Premises and notified the counterparties to the Leases of Blockbuster's vacation of the Leased Premises and intention to reject the Leases, Mr. Karotkin says. He assures the Court that the Personal Properties abandoned at the Leased Premises are of de minimis value. Rejection of the Leases will maximize the value of the Debtors' bankruptcy estates and eliminate unnecessary costs associated with the Leases and the Leased Premises, Mr. Karotkin contends. As of the Petition Date, Blockbuster continues to be obligated to pay rent under the Leases even though it has ceased operations at the premises, he asserts. By rejecting the Leases, Blockbuster estimates that it will be able to achieve cost savings of approximately $5.7 million in rent and other related obligations over the remaining term of the Leases. 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: Sec. 341 Meeting of Creditors Set for November 1 ----------------------------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, will convene a meeting of creditors of Blockbuster Inc. and its 11 Debtor-affiliates on November 1, 2010, at 1:30 p.m., prevailing Eastern Time, at the Office of the U.S. Trustee at 80 Broad Street, 4th Floor, in New York. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Section 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. 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: Facing Objections to $125 Mil. DIP Financing ------------------------------------------------------------- Several school districts, cities and counties filed objections to the Debtors' request to obtain debtor-in-possession financing: Several school districts, cities, counties and landlords filed objections to the Debtors' request to obtain debtor-in-possession financing: -- Alamo Heights, Aransas County, et al.; -- Burleson ISD, et al.; -- Carrollton-Farmers Branch Independent School District, and Lewisville Independent School District; -- County of Anderson and La Vega Independent School District, et al.; -- Lyme Regis Partners, LLC; -- Inland US Management, LLC, Inland American Retail Management, LLC, Inland Southwest Management, LLC, Inland Continental Property Management Corp. and Inland Commercial Property Management, Inc.; -- Miami-Dade County Tax Collector; -- The Macerich Company, RREEF Management Company, Watt Management Company, West Valley Properties, Inc., Eden & Avant, Jones Lang LaSalle Americas, Inc., Madison Marquette, and Alecta Real Estate Investments, LLC; and -- Townview Retail, LLC. The Objecting Parties object to any priming of their senior, perfected and unavoidable tax liens on the Debtors' property. They require express clarification that their senior, perfected and unavoidable tax liens are not primed under either the Interim Order or any Final Order to be entered authorizing the DIP Financing. Representing Carrollton-Farmers and Lewisville, Andrea Sheehan, Esq., at the Law Offices of Robert E. Luna, P.C., in Dallas, Texas -- sheehan@txschoollaw.com -- avers that under Section 32.05(c) of the Texas Tax Code Annotated, the School Districts' secured tax liens, with limited exceptions not relevant in the case, "take[] priority over the claim of any creditor of a person whose property is encumbered by the lien[s] and over the claim of any holder of a lien on property encumbered by the tax lien[s], whether or not the debt or lien existed before the attachment of the tax lien[s]." Ms. Sheehan contends that the Interim DIP Financing Order indicates that the DIP Liens will not prime, and will be junior to, any valid, perfected, enforceable and unavoidable security interest and lien of any entity, other than the Senior Secured Obligations, existing immediately prior to the Petition Date if and to the extent the security interest and lien was senior to the lien securing the Senior Secured Obligations as of the Petition Date. The School Districts object to the Interim DIP Financing Order and DIP Financing Motion to the extent that the School Districts' statutory tax liens, for either pre- or postpetition taxes would be primed by the DIP liens and Adequate Protection Liens granted by the Interim Order. The Objecting Parties ask for clarification that their tax liens are not primed by the DIP liens or the Adequate Protection Liens and will retain the same priority as such liens are granted under state law. To the extent their liens are to be primed, they assert that the parties have not demonstrated that their liens are adequately protected as required by Section 364(d)(1)(B) of the Bankruptcy Code. The Objecting Parties also ask that any final order approving the DIP Financing Motion provide that proceeds from the sale of collateral will go to payment of taxes prior to payment of any junior liens, and provide or reserve the right of the School Districts to request at the time of any sale that tax liens will be retained in the event of a credit bid if taxes are not paid by the credit bidder at the time of sale. They also want that proceeds of the sale of their collateral in any non-ordinary course sale or in any credit bid sale be segregated and their liens be attached to the proceeds with the priority they otherwise hold pursuant to non-bankruptcy law. Macerich and the other Landlords relate that the Interim Order provides the lenders with a first lien on substantially all unencumbered property of the Debtors, but it also specifically excludes any lien in the leaseholds directly, limiting the liens to only the proceeds of the leaseholds. The Landlords object to the request to the extent the protections in their leases with the Debtors are removed or modified in the Final Order. The Court has scheduled a final hearing on the DIP request for October 19, 2010, at 10:00 a.m., prevailing Eastern time. The DIP Facility In a regulatory filing with the U.S. Securities and Exchange Commission on September 28, 2010, Rod McDonald, Esq., vice president, secretary and general counsel of Blockbuster Inc., says that in connection with the Debtors' bankruptcy filing, they entered into a Senior Secured, Super-Priority Debtor-in-Possession Revolving Credit Agreement with certain of the Company's subsidiaries, the lenders and Wilmington Trust FSB, as agent. As previously reported, pursuant to the terms of the DIP Credit Agreement, the Lenders agreed to lend up to $125,000,000 in the form of revolving loan advances; the Subsidiary Guarantors agreed to guarantee the Company's obligations; and the Company and Subsidiary Guarantors agreed to secure their obligations under the loan documents by granting the Agent, for the benefit of the Agent and the Lenders, a first-priority security interest in and lien upon all of the Company's and Subsidiary Guarantors' existing and after-acquired personal and real property. Mr. McDonald also discloses that the DIP Credit Agreement limits, among other things, Blockbuster's and the Subsidiary Guarantors' ability to: -- incur indebtedness; -- incur or create liens; -- dispose of assets; -- prepay subordinated indebtedness and make other restricted payments; -- enter into sale and leaseback transactions; and -- modify the terms of any subordinated indebtedness and certain material contracts of the Company and the Subsidiary Guarantors. In addition to standard obligations, the DIP Credit Agreement provides for (i) a periodic delivery by the Company of its budget that has to be approved by a requisite number of Lenders set forth in the DIP Credit Agreement, and (ii) specific milestones that the Company must achieve by specific target dates. 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) BMS REAL ESTATE: Inks Stipulation With LNV on Cash Collateral Use ----------------------------------------------------------------- BMS Real Estate, LLC, has reached a stipulation with LNV Corporation on the Debtor's interim use of cash collateral from July 19, 2010 to November 16, 2010 at 5:00 p.m. Mountain Standard Time. Cash collateral includes: (a) all rents and proceeds from the Property, including, but not limited to, rents collected from the following: Media.com; Wolf Designs; and Brown Motor Sports; and (b) all other cash proceeds arising from the sale, lease or other disposition or conversion of any item of LNV's collateral. October 16, 2007, the Debtor gave a deed of trust to First National Bank of Arizona securing property at 1435 East Old West Highway, Apache Junction, Arizona 85219. The Deed of Trust secures a note entered into between the Debtor and FNBA in the amount of $975,000. As of April 15, 2010, according to LNV, Debtor is indebted in the amount of $1,054,998 which includes principal, past due interest and other fees. LNV is now the owner and holder of the Deed of Trust and Note. LNV consents to Debtor's use of cash collateral to pay only these expenses as they come due during the term of this Stipulation: Property Taxes $1,681 per month Insurance $276 per month Utilities - SRP $1,000 per month Utilities - Water $450 per month Utilities - Trash $260 per month Utilities - Septic $83 per month Cleaning & Maintenance $100 per month ------------------ TOTAL $3,850 per month The Debtor will provide LNV with an accounting of all cash collateral received and expended from the Petition Date by the 30th of each month for the previous month. For purposes of this stipulation, a month begins and ends on the 19th day of a month. Any cash collateral that exceeds the expenses from the previous month must be paid to LNV by the 5th of the month, commencing September 5, 2010, and covering the period July 19 - August 19, 2010. LNV is granted replacement liens on and security interests in all of Debtor's tangible and intangible property that constituted the LNV's' collateral before the bankruptcy petition, including without limitation postpetition income, issues, proceeds, and profits produced by and/or derived from the collateral. The replacement liens and security interests will have the same priority, extent, and validity as LNV's security interests or other interests in the Cash Collateral used by the Debtor. In the event of default by the Debtor, and relief from the automatic stay, LNV may foreclose the replacement liens under the pre-petition loan documents. The Debtor will provide to LNV financial and operating reports and access to other books and records as LNV may from time to time reasonably request. LNV and the Debtor recognize that additional stipulations for cash collateral use may be negotiated and executed. About BMS Real Apache Junction, Arizona-based BMS Real Estate, LLC, filed for Chapter 11 bankruptcy protection on July 19, 2010 (Bankr. D. Ariz. Case No. 10-22387). J. Kent Mackinlay, Esq., at Warnock, Mackinlay & Carman, PLLC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $1,000,001 to $100,000,000 as of the Petition Date. BRIGHAM EXPLORATION: Says Notations of Guarantees Have Terminated ----------------------------------------------------------------- Brigham Exploration Company said on Sept. 13, 2010, it commenced a cash tender offer for any and all of the $160 million aggregate principal amount of its 9 5/8% Senior Notes due 2014 outstanding under the Indenture dated as of April 20, 2006, among the Company, the guarantors named therein, and Wells Fargo Bank, National Association, a national banking association, as trustee, as supplemented by a First Supplemental Indenture dated as of September 27, 2010. Pursuant to the Offer, the Company purchased $154.4 million aggregate principal amount of the 9 5/8% Notes. On October 8, 2010, the Company redeemed the remaining $5.6 million aggregate principal amount of the 9 5/8% Notes at a price of 104.813% of the principal amount thereof, plus accrued and unpaid interest on the 9 5/8% Notes to, but not including, the redemption date. The Company used the net proceeds from the previously reported issuance and sale of $300 million aggregate principal amount of its 8 3/4% Senior Notes due 2018 to pay the purchase or redemption price of the 9 5/8% Notes. As a result of the purchase or redemption of all the outstanding 9 5/8% Notes, the Indenture, the 9 5/8 Notes and related Notations of Guarantees have been terminated. About Brigham Exploration Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP) -- http://www.bexp3d.com/-- is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. In late 2007, the majority of the Company's drilling capital expenditures shifted from its historically active areas in the Onshore Gulf Coast, the Anadarko Basin and West Texas to the Williston Basin in North Dakota and Montana, where the Company is currently targeting the Bakken, Three Forks and Red River objectives. The Company's balance sheet at June 30, 2010, showed $862.21 million in total assets, $289.19 million in total liabilities, and stockholders' equity of $573.01 million. * * * Brigham carries 'Caa1' corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service. It has a 'B' corporate credit rating, with 'stable' outlook from Standard & Poor's Ratings Services. Moody's noted in June 2010 that that "[W]hile Brigham's recent results and 2010-11 drilling program are positive and provide cash flow visibility, the company remains very small measured by production and proven reserves and future growth and full-cycle reinvestment costs are fairly undiversified, being largely reliant on Bakken/Three Forks." Moody's Investors Service assigned a Caa2 rating to Brigham Exploration Company's proposed offering of $250 million senior unsecured notes due 2018. The Caa2 rating reflects the senior unsecured status of the notes, its position in the capital structure, and is consistent with the ratings on Brigham's other existing senior unsecured debt. Brigham's Caa1 Corporate Family Rating and SGL-1 Speculative Grade Liquidity Rating remain unchanged. The rating outlook is positive. Standard & Poor's Ratings Services assigned issue-level and recovery ratings to Austin, Texas-based Brigham Exploration Co.'s proposed $250 million senior unsecured notes due 2018. The issue- level rating is 'B+' (one notch above the corporate credit rating on the company). The recovery rating on this debt is '2', indicating S&P's expectation of substantial (70% to 90%) recovery in the event of a payment default. BROADSTRIPE LLC: Equitable Subordination Fight Continues -------------------------------------------------------- WestLaw reports that genuine issues of material fact existed as to whether two entities that were creditors of the Chapter 11 debtor acted inequitably in blocking the proposed sale of the debtor's cable television and related telecommunications properties in two regions and, as statutory insiders, in allegedly leading the debtor's management team to believe that the creditors would finance the acquisition of certain assets but then refusing to finance the deal. Accordingly, the bankruptcy court declined to grant summary judgment in an action by the official committee of unsecured creditors seeking, inter alia, the equitable subordination of the creditors' first lien and second lien investments. In re Broadstripe, LLC, --- B.R. ----, 2010 WL 3768003 (Bankr. D. Del.). Headquartered in Chesterfield, Missouri, Broadstripe LLC -- http://www.broadstripe.com/-- provides videos and telephone services to consumers and business in Maryland, Michigan, Washington and Oregon. The Company and five of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-10006) on Jan. 2, 2009. Attorneys at Ashby & Geddes, and Gardere Wynne Sewell LLP represent the Debtors in their restructuring efforts. The Debtors tapped FTI Consulting Inc. as their restructuring consultant, and Epiq Bankruptcy Consultants LLC as their claims agent. In its petition, Broadstripe estimated assets and debts between $100 million and $500 million. Because Broadstripe has been under Chapter 11 protection for more than 18 months, any creditor can file a plan at this juncture. BROWN JORDAN: S&P Withdraws 'B' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services withdrew its preliminary ratings on outdoor furniture manufacturer Brown Jordan International Inc., including the 'B' corporate credit rating, at the company's request. These preliminary ratings were based on issuance of the company's proposed $65 million senior secured term loan which was intended to refinance existing debt and pay fees and expenses. The transaction did not take place so S&P is withdrawing all related ratings. C & C ORGANIZATION: Case Summary & 21 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: C & C Organization dba Cask'N Cleaver 8651 Madrone Avenue Rancho Cucamonga, CA 91730 Bankruptcy Case No.: 10-43081 Chapter 11 Petition Date: October 12, 201 Court: U.S. Bankruptcy Court Central District of California (Riverside) Judge: Deborah J. Saltzman Debtor's Counsel: Stephen R. Wade, Esq. THE LAW OFFICES OF STEPHEN R. WADE 400 N. Mountain Avenue, Suite 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 E-mail: dlr@srwadelaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 21 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-43081.pdf The petition was signed by Charles L. Keagle, CEO. CAPITAL GROWTH: Gets $3 Million Financing from Tranche A Lender --------------------------------------------------------------- Capital Growth Systems Inc. together with its wholly owned subsidiaries have entered into debtor in possession financing with a Tranche A Lender that has funded $3,000,000 of secured financing and with a consortium of Tranche B Lenders who have advanced $6,250,000 in the aggregate to the Debtors. In addition, an affiliate of the Tranche B Lenders, Global Acquisition Newco Corp. was formed for purposes of making a stalking horse bid to purchase the Debtors' assets. The Debtors recently advised GAC that the exclusive period for making a stalking horse bid had lapsed and that the Company would be revising its bidding procedures to seek bids from prospective buyers without a stalking horse bidder. About Capital Growth Systems Headquartered in Chicago, Illinois, Capital Growth Systems, Inc., known as Global Capacity, and its subsidiaries operate in one reportable segment as a single source telecom logistics provider in North America and the European Union. The Company helps customers improve efficiency, reduce cost, and simplify operations of their complex global networks -- with a particular focus on access networks. Capital Growth Systems and its affiliates filed for Chapter 11 protection on. The lead debtor is Global Capacity Holdco LLC (Bankr. D. Del. Case No. 10-12302). Global Capacity Group Inc. estimated $10 million to $50 million in assets and debts in its petition. Douglas S. Draper, Esq., at Heller, Draper, Hayden, Patrick & Horn, L.L.C., and Francis A. Monaco, Jr., Esq., at Womble Carlyle Sandridge & Rice. CHANA TAUB: Automatic Stay Does Not Apply to Marriage Dissolution ----------------------------------------------------------------- The Hon. Elizabeth S. Stong rules that the automatic stay does not prevent Simon Taub, a chapter 7 debtor, and Chana Taub, a Chapter 11 debtor, from seeking a dissolution of their marriage. Accordingly, the Court lifts the automatic stay to permit a pending second divorce action in the Supreme Court, Kings County to proceed as scheduled. On September 29, 2010, Katalin Pota, as the sole petitioning creditor, filed an involuntary Chapter 7 petition for relief against Simon Taub. A copy of the Court's memorandum decision dated October 8, 2010, is available at http://is.gd/g1Trvfrom Leagle.com As reported by the Troubled Company Reporter on September 22, 2010, WestLaw said a bona fide dispute existed in an involuntary Chapter 7 case as to the alleged debtor's liability to his estranged wife, who thus was not eligible to be a petitioning creditor. The wife lacked standing to assert claims based upon the rents allegedly diverted by the alleged debtor from real property titled in her name or any other claims that were the property of her own bankruptcy estate. Instead, only the Chapter 11 trustee in the wife's bankruptcy case could assert those claims. In addition, the alleged debtor asserted colorable defenses to the wife's claim to the extent that it was based on purported support arrears, including that he had paid a substantial portion of the support payments called for by state- court orders, and that he had rights to set-off and reimbursement for expenses paid on the wife's behalf and for rents collected by her. In re Taub, --- B.R. ----, 2010 WL 3504097 (Bankr. E.D.N.Y.) (Craig, J.). The gory details about Ms. Taub and two friends filing an involuntary Chapter 7 petition (Bankr. E.D.N.Y. Case No. 10-48155) and other seemingly endless litigation against her estranged husband are outlined by the Honorable Carla E. Craig in her Decision dated Sept. 7, 2010, which is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100907660 The Troubled Company Reporter detailed Judge Stong's five significant attempts to move Ms. Taub's contentious bankruptcy case along on April 30, 2010, Sept. 28, 2009, Oct. 5, 2009, Oct. 15, 2009, and Jan. 11, 2010. Chana Taub filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 08-44210) on July 1, 2008, and is represented by Dennis W. Houdek, Esq., in Manhattan. CHARLES VIRZI: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Charles Carmello Virzi 33 Blue Coat Irvine, CA 92620 Bankruptcy Case No.: 10-24532 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Central District of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: David B. Dimitruk, Esq. 5 Corporate Park, Suite 220 Irvine, CA 92606 Tel: (949) 660-9090 Fax: (949) 975-1514 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A list of the Debtor's six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-24532.pdf Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Charles Virzi Construction, Inc. 10-24518 10/12/10 CLEAR CHANNEL: Compensation Panel Okays Tiered Relocation Policy ---------------------------------------------------------------- The Compensation Committee of the Board of Directors of CC Media Holdings, Inc., the parent entity of Clear Channel Communications, Inc., approved on Oct. 5, 2010, a tiered relocation policy that is applicable to the Company and all of its subsidiaries subject to, in the case of the subsidiary Clear Channel Outdoor Holdings, Inc. and its subsidiaries, the approval of the Compensation Committee of Clear Channel Outdoor Holdings, Inc. The Relocation Policy applies only in the case of a Company- requested relocation and provides different levels of benefits based on the employee's organizational level. Set forth below is a summary of the material terms of the benefits provided under the Relocation Policy tier for the Chief Executive Officer and the officers who report directly to the Chief Executive Officer and the tier for other exempt employees who report directly to a corporate function head. The Chief Executive Officer and Direct Reports and the Function Head Direct Reports are collectively referred to herein as the "Executive Tiers," and include the Company's named executive officers. Under the Relocation Policy, the Executive Tiers are reimbursed for most expenses associated with relocating, including moving expenses, temporary housing expenses, closing costs associated with the sale of the executive's existing home and the purchase of a new home in the destination location, as well as other miscellaneous amounts in connection with relocating to the destination location. The Relocation Policy also provides the Executive Tiers with assistance in marketing and selling the executive's existing home through a third-party relocation company whereby such relocation company will buy the existing home at the price of a bona fide offer by an outside buyer and will assume the risk if the sale to the outside buyer is cancelled. If a bona fide offer has not been presented within 90 days of the executive's existing home being listed for sale and the executive is in the Chief Executive Officer and Direct Reports tier, the executive may elect to have the relocation company purchase the home for its appraised value. Further, with the approval of the Chief Executive Officer of the Company, the Executive Tiers may receive loss-on-sale protection for any losses on the sale of the executive's existing home after the first 10% of such losses. The Executive Tiers may receive tax gross-up payments for all eligible taxable payments under the Relocation Policy. A full-text copy of the Relocation Policy for Guaranteed Purchase Offer is available for free at: http://ResearchArchives.com/t/s?6c73 A full-text copy of the Relocation Policy for Buyer Value Option is available for free at: http://ResearchArchives.com/t/s?6c74 About Clear Channel Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel Communications is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. Clear Channel carries a 'Caa2' corporate family rating from Moody's Investors Service. Clear Channel Capital I, LLC, the parent of Clear Channel Communications, disclosed assets of $17.286 billion, total debts of $24.495 billion, and a member's deficit of $7.209 billion. Clear Channel reported a net loss of $364.92 million on $2.753 billion of revenue for six months ended June 30, 2010. COACHMEN INDUSTRIES: Amends Articles to Increase Shares to 100MM ---------------------------------------------------------------- All American Group, Inc., formerly Coachmen Industries, Inc. amended its Articles of Incorporation to increase the number of its authorized common shares to 100,000,000 at the Special Shareholders Meeting held on September 28, 2010. The amended Articles of Incorporation became effective on October 5, 2010. About All American Group Elkhart, Indiana-based All American Group, Inc., formerly Coachmen Industries, Inc., (OTC:COHM.PK) says it is one of America's premier systems-built construction companies under the ALL AMERICAN BUILDING SYSTEMS(R), ALL AMERICAN HOMES(R), and MOD-U- KRAF(R) brands, as well as a manufacturer of specialty vehicles. At June 30, 2010, the Company had total assets of $81.310 million, total liabilities of $48.104 million, and shareholders' equity of $33.206 million. During the first quarter of 2010, the Company failed to meet certain financial covenants of the credit agreement with H.I.G. All American LLC. H.I.G. did not declare the Company to be in default of any covenant and on April 5, 2010, the Company and H.I.G. entered into the First Amendment to the Loan Agreement. H.I.G. waived specified Events of Default that had occurred under the Loan Agreement dated October 27, 2009 between the Company and H.I.G. prior to April 5, 2010. The Company said in its Form 10-Q report for the second quarter of 2010, that operating results for the six month period ended June 30, 2010, failed to meet the revised debt covenants set with H.I.G. in the First Amendment to the Loan Agreement. H.I.G. has waived the covenant defaults through July 31, 2010 in exchange for a waiver fee and expenses of $800,000 representing the value of the penalties prescribed in the First Amendment, plus expenses, and the issuance on August 24, 2010 of the Second Amended and Restated Tranche B Note. The Second Amendment provides that the waiver fee and expenses, plus accrued interest on the convertible debt thru August 24, 2010 of $800,000, be added to the principal amount of the convertible note. As a result of the Second Amendment, the Tranche B Note has a face value of $12.5 million. The Board of Directors and H.I.G. are currently in discussions to work out mutually acceptable agreements for the long-term. Since the Company cannot be assured it will be in compliance with the existing covenants after July 31, 2010 and discussions with H.I.G. regarding revised covenants are continuing. * * * McGladrey & Pullen LLP, in Elkhart, Indiana, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2009 results. The auditors noted that Coachmen has suffered recurring losses from operations and continues to operate in an industry where economic recovery has been very slow. COAST CRANE: Wins Court Approval to Auction Assets Next Month ------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Coast Crane Co. won bankruptcy-court approval to place its assets on the auction block next month. Seattle, Washington-based Coast Crane Company leases, sells and services tower cranes, forklifts, hoists, elevators, boom lifts, scissor lifts and other heavy equipment used in commercial construction throughout the world. Coast Crane filed for Chapter 11 bankruptcy protection on September 22, 2010 (Bankr. W.D. Wash. Case No. 10-21229). Brian L. Lewis, Esq., David C. Neu, Esq., and Michael J. Gearin, Esq., at K&L Gates LLP, assist the Debtor in its restructuring effort. The Debtor estimated its assets at $50 million to $100 million and debts at $100 million to $500 million. T. Scott Aliva at CRG Partners Group LLC is the Debtor's chief restructuring officer. COMMERCIAL VEHICLE: Moody's Lifts Corp. Family Rating to 'Caa1' --------------------------------------------------------------- Moody's Investors Service upgraded Commercial Vehicle Group, Inc.'s Corporate Family Rating to Caa1 from Caa2, and revised the ratings outlook to positive from negative. These actions recognize the continuing improvement in the build rates for commercial vehicles and the realized benefits of the company's operating and capital restructurings. Moody's also upgraded the $98 million 8% senior notes due 2013 to Caa2 from Caa3. Concurrently, Moody's raised CVGI's short term liquidity assessment to SGL-2 from SGL-4 reflecting Moody's expectation of sizeable unrestricted cash balances and continued improvement in operating cash flows. Ratings Rationale The positive actions reflect improved liquidity and Moody's expectation that credit metrics will continue to improve over the intermediate term as a result of cost actions taken during the economic downturn and continuing modest improvement in the North American OEM truck market. Moody's estimates that adjusted debt- to-EBITDA leverage remained at 10.0x for the trailing twelve months ended June 30, 2010, but expects leverage to trend to the 7-8 times range by end of the year. CVGI reported approximately $52 million of cash at June 30, 2010, largely the result of a $25 million equity offering and $21 million income tax refund received in the first half of 2010. Moody's believes the cash will help CVGI manage working capital needs and provide cushion given its thin operating margins. The Caa1 CFR reflects modest size, high debt leverage, and exposure to highly cyclical commercial vehicle end markets. Demand for commercial vehicle components is sensitive to both economic cycles and regulatory implementation schedules. The CFR considers high debt service costs and refinancing risk associated with debt maturities starting in 2012. However, Moody's recognizes the company's demonstrated ability to manage its cost structure and working capital position to minimize cash burn amidst a challenging economic environment. Moody's believes the company is positioned to benefit from additional modest improvement in commercial vehicle build rates through at least 2011. The positive rating outlook incorporates Moody's view that CVGI's performance improvements aided by increased class 8 vehicle build rates and cost restructuring should position the company to reduce leverage by another turn in 2011 and generate EBIT/Interest over 1x. The positive outlook also reflects Moody's expectations that CVGI is in a better position to maintain good liquidity to support its operations, and generate sufficient EBITDA to comfortably cover cash interest as interest on $42 million 11% (if paid in cash)/ 13% (if paid in kind) third lien secured notes becomes payable in cash starting in 2011. Moody's could consider upgrading the ratings if CVGI continues to improve its profitability, funds its working capital needs, and reduces debt leverage to the mid single digit range on a sustainable basis. Conversely, Moody's could consider downgrading the ratings or stabilize the outlook if Moody's believe credit metrics are likely to remain weak for the rating for an extended period (especially if EBIT/interest expense remains below 1 times), or if there is a deterioration in the company's liquidity position or in end market conditions. Use of cash outside of current expectations (notably if used for acquisitions or shareholder friendly activities) could also put downward pressure on the ratings and/or outlook. This summarizes the ratings actions taken: Commercial Vehicle Group, Inc. Ratings upgraded: -- Corporate Family Rating to Caa1 -- Probability of Default Rating at Caa1 -- $98 million 8% senior unsecured notes due 2013 to Caa2 (LGD4, 66%) from Caa3 The ratings outlook is positive. The Speculative Grade Liquidity Rating was raised to SGL-2 from SGL-4. Commercial Vehicle Group, Inc is a provider of customized products for the commercial vehicle market, including the heavy-duty truck, construction, agricultural, specialty and military transportation markets. The company is an amalgamation of several predecessor organizations whose products include cab structures & assembly, seats & seating systems, trim systems & components, wire harnesses, wipers, controls and mirrors. Revenues were $535 million for the LTM period ended June 30, 2010. CYNERGY DATA: Asks for Jan. 11 Plan Exclusivity Extension --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Cynergy Data LLC is asking for a January 11 extension of the exclusive right to propose a Chapter 11 plan. A hearing on the request for a fifth extension is scheduled for November 12. Mr. Rochelle relates that at the same Nov. 12 hearing, Cynergy is hoping the bankruptcy judge will approve the disclosure statement explaining the liquidating Chapter 11 plan filed in September. Remaining assets won't pay anything aside from lawsuit recoveries to anyone except holders of first-lien debt. The plan confirmation hearing is tentatively set for Dec. 21. The plan is founded on a settlement with secured lenders. About Cynergy Data Launched in 1995, Cynergy Data was a merchant credit card processing service provider. The Company and two affiliates -- Cynergy Data Holdings, LLC, and Cynergy Prosperity Plus, LLC -- filed for Chapter 11 bankruptcy protection on September 1, 2009 (Bankr. D. Del. Case No. 09-13038). Cynergy Data said that it had assets of $109.5 million against debts of $186.1 million as of June 30, 2009. The Company's legal advisor is Nixon Peabody LLP; its financial and restructuring advisor is CM&D Management Services LLC; its industry expert is Unicorn Partners, LLC; and its investment bankers are Stifel, Nicolaus & Company and Peter J. Solomon Company. The Company also hired Pepper Hamilton LLP as bankruptcy and restructuring counsel. Charles D. Moore of Conway MacKenzie, Inc., serves as chief restructuring officer. Kurtzman Carson & Consultants LLC serves as claims and notice agent. Cynergy Data filed for Chapter 11 to complete the sale of all of its assets to an affiliate of The ComVest Group. The $81 million sale was completed October 2009. The Debtor was renamed to Liquidation Co. LLC following the sale. D'AGOSTINO'S: Unloads All Three Stores in Westchester ----------------------------------------------------- Lisa Fickenscher, writing for Crain's New York Business, reports that family-owned D'Agostino's grocery-store chain is selling its only three stores in Westchester, according to a company insider. Those stores have struggled against competitors like Whole Foods, Super Stop & Shop and others, said supermarket consultant Burt Flickinger, according to Crain's. "It makes more sense for D'Agostino's to concentrate on New York City," Mr. Flickinger said. D'Agostino's did not return a call for comment, Crain's says. D'Agostino's -- http://www.dagnyc.com/-- has 15 stores in Manhattan and three in Westchester County. DAIRY PRODUCTION: Looming Foreclosure Prompts Ch. 11 Filing ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Dairy Production Systems-Georgia LLC, along with four affiliates, filed for Chapter 11 protection to stop foreclosure proceedings initiated by Agricultural Funding Solutions LLC. Agriculture Funding had sought the appointment of receivers. According to the report, the Debtors owe $76.2 million to Agricultural Funding, which purchased the loan from the Federal Deposit Insurance Corp. after the original lender, New Frontier Bank of Greeley, Colorado, was taken over by regulators. Agricultural Funding bought the loans from the FDIC for about $22 million. The Debtors operate five dairy farms in Florida, Georgia, Mississippi and Texas. Together, the farms, based in High Springs, Florida, have about 10,500 head of cattle on farms that collectively encompass about 3,350 acres. The farms are owned by David P. Sumrall, who guaranteed much of the bank debt. The dairies, according to Mr. Rochelle, blamed their financial problems on the decline in the price of fluid milk, coupled with increases in feed and operating costs. Revenue declined to $48 million last year from $57.2 million in 2008 and the farms are operating at no more than 65% of capacity. Dairy Production Systems-Georgia LLC and its affiliates filed for Chapter 11 on Oct. 7, 2010 (Bankr. M.D. Ga. Case No. 10- 11752). Neil C. Gordon, Esq., and Sean C. Kulka, Esq., at Arnall Golden Gregory LLP, in Atlanta, Georgia,. DPS-Georgia estimated assets of $1,000,001 to $10,000,000 and debts of $10,000,001 to $50,000,000 in its Chapter 11 petition. DAVID DENENNY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: David M. Denenny 5042 CR 8940 West Plains, MO 65775 Bankruptcy Case No.: 10-62452 Chapter 11 Petition Date: October 7, 2010 Court: U.S. Bankruptcy Court Western District of Missouri (Springfield) Judge: Arthur B. Federman Debtor's Counsel: Jacob W. Stauffer, Esq. STAUFFER LAW FIRM, LLC 204 West Main Street West Plains, MO 65775 Tel: (417) 256-5140 Fax: (417) 256-5270 E-mail: stauffer@stauffer-law.com Scheduled Assets: $681,500 Scheduled Debts: $1,511,785 The Debtor did not file a list of creditors together with its petition. DI-CO-JA INC.: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Di-Co-Ja, Inc. dba Kwik Kar Lube & Wash On Custer Road dba Kwik Kar Lube, Tune & Wash On Custer Road 10101 Custer Road Plano, TX 75025 Bankruptcy Case No.: 10-43442 Chapter 11 Petition Date: October 4, 2010 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Mark I. Agee, Esq. 5401 North Central Expressway, Suite 220 Dallas, TX 75205 Tel: (214) 320-0079 Fax: (214) 320-2966 E-mail: dallasbankruptcylawyer@gmail.com Scheduled Assets: $900,000 Scheduled Debts: $2,313,895 A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txeb10-43442.pdf The petition was signed by Charles D. Whittington, president. COLONIAL BANCGROUP: FDIC Wants Funds Deposited in Court Registry ---------------------------------------------------------------- The Federal Deposit Insurance Corporation, as receiver for Colonial Bank, a bank owned by The Colonial BancGroup, Inc., asks the U.S. Bankruptcy Court for the Middle District of Alabama to: 1) require the Debtor or any recipient of proceeds from the Bond Claim to deposit the funds into the registry of the Court or an agreed-upon escrow, pending the result of existing litigation in the district court concerning whether the FDIC-Receiver or the Debtor is entitled to the proceeds; and 2) confirm that the automatic stay does not apply to the FDIC- Receiver's efforts to pursue its Bond Claim, or, in the alternative, grant the FDIC-Receiver relief from the automatic stay for that purpose. According to the FDIC, the Debtor and the FDIC were assureds under a fidelity bond policy. The FDIC suffered a bondable loss totaling approximately $1.8 billion. Upon discovery of the FDIC's loss, a claim for coverage was made under the Bond and is pending with the bond carrier (the Bond Claim). The FDIC relates that, among other things: -- the very fact that the Debtor suffered no losses that are compensable under the Bond severely undermines its claim to the Bond Proceeds; and -- modifying the automatic stay for the limited purposes sought by the FDIC-Receiver will not affect or prejudice the parties' competing claims to the Bond Proceeds, but rather it will ensure that recovery under the Bond is maximized. The FDIC adds that the order proposed by the FDIC-Receiver will protect the Debtor from any possible prejudice by permitting the Debtor to object to any proposed settlement with Federal and by requiring the FDIC-Receiver to deposit any Bond Proceeds into the Court registry or an agreed upon escrow pending a determination by the district court regarding entitlement to the Bond Proceeds. The FDIC is represented by: Michael A. Fritz, Sr., Esq. FRITZ AND HUGHES, LLC 7020 Fain Park Drive, Suite 1 Montgomery, AL 36117 Tel: (334) 215-4422 E-mail: michael@fritzandhughes.com About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking subsidiary. Colonial Bank -- http://www.colonialbank.com/-- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ala. Case No. 09-32303) on August 25, 2009. W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, assist the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. DANAOS CORPORATION: Sets November 8 Annual Meeting of Shareholders ------------------------------------------------------------------ Danaos Corporation will hold its 2010 Annual Meeting of Stockholders on Monday, November 8, 2010 at 10:00 a.m. Greek local time at the offices of the Company's manager, Danaos Shipping Co. Ltd., in Piraeus, Greece. The notice of annual meeting of stockholders, proxy statement, proxy card and the Company's 2009 Annual Report to Stockholders, as well as its Annual Report on Form 20-F, are available at http://www.danaos.agmdocuments.com/ At the meeting, these items will be considered: 1) To elect two directors to hold office until the annual meeting of stockholders in 2013 and one director to hold office until the annual meeting of stockholders in 2011 and, in each case, until their respective successors have been duly elected and qualified; 2) To ratify the appointment of the Company's independent auditors; and 3) To transact such other business as may properly come before the 2010 Annual Meeting and any adjournments or postponements thereof. About Danaos Corporation Headquartered in Piraeus, Greece, Danaos Corporation (NYSE: DAC) -- http://danaos.com/-- is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. The Company operates through a number of subsidiaries incorporated in Liberia and Cyprus. As of May 31, 2010, the Company had a fleet of 45 containerships aggregating 193,629 TEUs, making the Company among the largest containership charter owners in the world, based on total TEU capacity. The Company's balance sheet at June 30, 2010, showed $3.124 billion in total assets, $2.934 billion in total liabilities, and stockholders' equity of $189.8 million. * * * As reported in the Troubled Company Reporter on June 22, 2010, PricewaterhouseCoopers S.A., in Athens, Greece, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The Company noted of the Company's inability to comply with financial covenants under its current debt agreements as of December 31, 2009, and its negative working capital deficit. DAVID DENENNY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: David M. Denenny 5042 CR 8940 West Plains, MO 65775 Bankruptcy Case No.: 10-62452 Chapter 11 Petition Date: October 7, 2010 Court: U.S. Bankruptcy Court Western District of Missouri (Springfield) Judge: Arthur B. Federman Debtor's Counsel: Jacob W. Stauffer, Esq. STAUFFER LAW FIRM, LLC 204 West Main Street West Plains, MO 65775 Tel: (417) 256-5140 Fax: (417) 256-5270 E-mail: stauffer@stauffer-law.com Scheduled Assets: $681,500 Scheduled Debts: $1,511,785 The Debtor did not file a list of creditors together with its petition. EASTMAN KODAK: Board Elects McCorvey as Chief Financial Officer --------------------------------------------------------------- Eastman Kodak Company said that Antoinette P. McCorvey, the company's Director of Investor Relations and Vice President, has been elected by the board of directors to the position of Chief Financial Officer and Senior Vice President, effective Nov. 5. She will report to Antonio M. Perez, Kodak Chairman and Chief Executive Officer. Ms. McCorvey's promotion follows the resignation of Frank S. Sklarsky who is leaving effective Nov. 5 to accept a CFO post at another company. Ms. McCorvey is an 11-year veteran of Kodak with more than 30 years of financial management experience. She was appointed to her investor relations position in 2007. "I am pleased to announce Ann as our new CFO," Mr. Perez said. "She is smart, capable, and energetic, with a deep business and finance operations background and is experienced in working with the investment community. [Ms. McCorvey] will do an excellent job in using the tools of finance to support Kodak's digital strategy and long-term growth prospects. "I would also like to thank Frank for his contributions to the company and to wish him well in his future endeavors," Mr. Perez said. "Frank also groomed Ann to serve as his successor, so the company and its shareholders will be well served by the continuity in leadership this represents." McCorvey joined Kodak in 1999 as Director, Finance, Imaging Materials Manufacturing. She has held assignments of increasing responsibility including Director, Finance, Global Manufacturing and Logistics; Director, Finance, Corporate Financial Planning and Analysis, and Director, Finance and Vice President, Consumer Digital Imaging Group. Prior to Kodak, McCorvey had a 20-year career with Monsanto/Solutia. Her last assignment at Solutia, Inc., was Vice President/General Manager of Nylon, Plastics, Polymers and Industrial Fibers. Ms. McCorvey earned a degree in Finance and Accounting and an MBA from the University of West Florida in Pensacola. She is a Certified Management Accountant. "I am proud and honored to be given the opportunity to make a greater contribution to the transformation of Kodak," Ms. McCorvey said. "I have worked closely with the management team during my years at Kodak, and I know the potential this company has to achieve greater things. I look forward to doing my part to help Kodak achieve its goals, in conjunction with an exceptional corporate finance team." Mr. Sklarsky, who joined Kodak in 2006 from Conagra Foods Inc., will participate in the company's third-quarter conference call on Oct. 28. "It's been an honor and a privilege to work with Antonio and this remarkable Kodak team," Mr. Sklarsky said. "I have nothing but respect and admiration for the people of Kodak, and I am fully confident in the company's long-term business prospects. I am leaving because I received a professional opportunity that I simply could not pass up. I remain a huge supporter of Kodak, its products and its people, and I look forward to watching the company successfully complete its business transformation." About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. On February 19, 2010, Moody's revised its rating outlook on the Company from negative to stable, and affirmed its B3 corporate rating and Caa1 senior unsecured rating. On February 11, 2010, S&P revised its B- rating outlook on the Company to stable from negative. All ratings on the Company, including the B- Corporate Rating, were affirmed. The Company's balance sheet at June 30, 2010, showed $6.7 billion in total assets, $6.9 billion in total liabilities, and a stockholders' deficit of $208.0 million. EPICEPT CORP: Has Until April 2011 to Regain NASDAQ Compliance -------------------------------------------------------------- EpiCept Corporation has received two letters from the Nasdaq Listing Qualifications Department. One letter states that EpiCept is not in compliance with the continued listing requirements of The Nasdaq Capital Market because the bid price of EpiCept's common stock has closed below the minimum $1.00 per share requirement for 30 consecutive business days. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), EpiCept has been provided a period of 180 calendar days, or until April 4, 2011, to regain compliance with the minimum bid price rule. If at any time before April 4, 2011, the bid price of EpiCept's common stock closes at $1.00 per share or higher for a period determined by Nasdaq, Nasdaq will provide written notification to EpiCept that it complies with the Rule. In the event that EpiCept does not regain compliance with the minimum bid price rule by April 4, 2011, Nasdaq will determine whether EpiCept meets the initial listing criteria, with the exception of bid price, for The Nasdaq Capital Market and, if it does, EpiCept will be granted an additional compliance period of 180 calendar days. The second letter from Nasdaq states that EpiCept is not in compliance with the continued listing requirements of The Nasdaq Capital Market because the market value of EpiCept's listed securities has fallen below $35 million for 30 consecutive business days (pursuant to Listing Rule 5550(b)(2)). Pursuant to Nasdaq Listing Rule 5810(c)(3)(C), EpiCept has been provided a period of 180 calendar days, or until April 4, 2011, to regain compliance with the market value standard. If at any time before April 4, 2011, the market value of EpiCept's listed securities closes at $35 million or more for a period determined by Nasdaq, Nasdaq will provide written notification to EpiCept that it complies with the Rule. In the event that EpiCept does not regain compliance with the market value standard by April 4, 2011, EpiCept will receive written notice that its securities will be subject to delisting. In the event that EpiCept is not eligible for the minimum bid price additional compliance period, or if EpiCept does not regain compliance with the market value standard by April 4, 2011, EpiCept will have the right to appeal a determination to delist EpiCept's securities. EpiCept's securities would remain listed on The Nasdaq Capital Market until the completion of the appeal process. The Company is focused on regaining compliance with Nasdaq's requirements as soon as possible. About EpiCept Corporation EpiCept is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), which has been granted full marketing authorization by the European Commission for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. The Company has two oncology drug candidates currently in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. The Company's pain portfolio includes EpiCept(TM) NP-1, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. ESCALON MEDICAL: Mayer Hoffman Raises Going Concern Doubt --------------------------------------------------------- Escalon Medical Corp. filed on October 12, 2010, its annual report on Form 10-K for the fiscal year ended June 30, 2010. Mayer Hoffman McCann P.C., in Plymouth Meeting, Pa., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted of the ongoing debt payments on the debt related to the Biocode Hycel acquisition and continued losses from operations and negative cash flows from operating activities. The Company reported a net loss of $413,864 on $31.6 million of revenue for fiscal 2010, compared with a net loss of $13.0 million on $30.7 million of revenue for fiscal 2009. For the year ended June 30, 2010, the Company had net income from discontinued operations of $3.47 million which included a gain on the sale of certain vascular assets of $3.49 million. On April 30, 2010, the Company divested certain Vascular Access assets held by its Vascular Access subsidiaries to Vascular Solutions, Inc. The total sales price was $5.75 million, consisting of cash of $5 million at closing and $750,000 payable in cash upon the successful completion of the transfer of the manufacturing to Vascular Solutions, Inc., plus a one-time earn- out payment in an amount equal to 25% of the net sales of the VascuView TAP products sold by Vascular Solutions, Inc., between July 1, 2010, and June 30, 2011. The manufacturing transfer was completed on August 31, 2010. The Company's balance sheet at June 30, 2010, showed $22.0 million in total assets, $9.9 million in total liabilities, and stockholders' equity of $12.1 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?6c79 About Escalon Medical Escalon Medical Corp. (Nasdaq Capital Market: ESMC) -- http://www.escalonmed.com/-- develops, markets and distributes ophthalmic diagnostic, surgical and pharmaceutical products. Drew Scientific, which operates as a separate business unit, provides instrumentation and consumables for the diagnosis and monitoring of medical disorders in the areas of diabetes, cardiovascular diseases and hematology, as well as veterinary hematology and blood chemistry. The Company has headquarters in Wayne, Pennsylvania, and operations in Long Island, New York, New Berlin, Wisconsin, Lawrence, Massachusetts, Dallas, Texas, Waterbury, Connecticut, Miami, Florida, Barrow-in-Furness, U.K. and Le Rheu, France. EXIDE TECHNOLOGIES: Claims Objection Deadline Extended to Oct. 31 ----------------------------------------------------------------- Reorganized Exide Technologies sought and obtained an October 31, 2010, extension from the U.S. Bankruptcy Court for the District of Delaware of its deadline to file objections to claims. James O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, says the proposed extension will give Exide enough time to evaluate the remaining claims, file additional objections or even resolve those claims. More than 6,100 proofs of claim aggregating $4.4 billion had been filed against Exide. These do not include about 1,100 proofs of claim that were filed as unliquidated claims. As of July 28, 2010, about 6,060 claims had been reviewed and resolved, reducing the total amount of outstanding claims by more than $3.4 billion. Exide has already completed 20 quarterly distributions to creditors under its confirmed restructuring plan, consisting of distributions on about 2,608 claims for about $1.67 billion. Since April 2009, Exide has not filed any omnibus objections to claims but has resolved certain discovery disputes and has continued negotiating with creditors for settlement of their claims, according to Mr. O'Neill. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. The Company filed for Chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. The Court confirmed Exide's Amended Joint Chapter 11 Plan on April 20, 2004. The plan took effect on May 5, 2004. While it has emerged from Bankruptcy, reorganized Exide is still resolving claims filed against it in the Bankruptcy Court. * * * Reorganized Exide carries 'B' issuer credit ratings from Standard & Poor's. In August 2010, when it affirmed the ratings, S&P explained, "The ratings on Exide reflect S&P's expectation that sales and profitability will improve gradually as demand increases. The ratings also reflect Exide's vulnerable business risk profile, marked by tough competition in the automotive and industrial battery businesses, exposure to volatile lead prices, and high fixed costs and capital intensity." Exide has 'B3' corporate family and probability of default ratings from Moody's Investors Service. In July 2008, Moody's upgraded the rating to 'B3' from 'Caa1'. EXIDE TECHNOLOGIES: Commences Adv. Proceeding Against EnerSys ------------------------------------------------------------- Reorganized Exide Technologies filed a complaint, seeking a declaratory judgment against EnerSys Delaware Inc., f/k/a EnerSys, Inc., in the United States Bankruptcy Court for the District of Delaware. Reorganized Exide wants the Bankruptcy Court to interpret, implement, and enforce the confirmed Joint Plan of Reorganization filed by the Official Committee of Unsecured Creditors and the Debtors with respect to EnerSys' claims under a certain prepetition agreement. The prepetition agreement between Exide and EnerSys refers to EnerSys' license to use the Exide trademark on industrial batteries. The United States Court of Appeals for the Third Circuit issued on June 1, 2010, a ruling that held that the Agreement between Exide and EnerSys was not executory within the meaning of Section 365 of the Bankruptcy Code because, in the opinion of the Third Circuit, EnerSys had substantially performed the Agreement prepetition. By virtue of the Third Circuit's ruling and the Bankruptcy Court's confirmation of the Plan, EnerSys is not deemed to have an enforceable right to use the Exide trademark and trade name under the Agreement because the rights constitute a "claim" within the meaning of the Bankruptcy Code, James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, asserts. Mr. O'Neill acknowledges that as of the date Exide Technologies filed for bankruptcy, EnerSys had a claim for its rights under the Agreement, namely Exide's obligation to permit EnerSys' use of the EXIDE mark and Exide's obligation to forebear from using the EXIDE mark on industrial products. A breach of those obligations results in damages that can be calculated with a reasonable degree of certainty, thereby providing a monetary award as a viable alternative to any equitable remedy that EnerSys may have under applicable law, Mr. O'Neill explains. He notes that EnerSys itself submitted considerable evidence in Exide's bankruptcy case to substantiate its claim that it would allegedly suffer approximately $67 million in damages if it were not permitted to use the EXIDE mark under the Agreement. Moreover, because EnerSys has already conducted its business without using the EXIDE mark for more than two years, pursuant to the Bankruptcy Court's June 30, 2006 transition order, the Bankruptcy Court will be able to more readily determine an accurate amount of damages suffered by EnerSys, if any, as a result of not being allowed to use the EXIDE mark. "EnerSys holds a claim for prepetition damages under the Agreement that was discharged pursuant to the Plan and Section 1141 (d)(1)(A) of the Bankruptcy Code," Mr. O'Neill asserts. Separately, pursuant to Section 1141(c) of the Bankruptcy Code and the Plan, the EXIDE mark vested in Reorganized Exide, free and clear of all claims, encumbrances, and interests, including EnerSys' interest under the Agreement to use the mark and the encumbrance that Exide forebear from using the mark, Mr. O'Neill avers. "EnerSys participated in the bankruptcy case, and the confirmed Plan does not preserve EnerSys' interest to use the EXIDE mark under the Agreement nor does it preserve the encumbrance of Exide's forbearance from using the mark," Mr. O'Neill says. Against this backdrop, Reorganized Exide asserts three counts against EnerSys under the Complaint and asks the Bankruptcy Court, with respect to each particular count, to: I. enter a declaratory judgment that EnerSys has a claim against Exide under the Agreement that was discharged pursuant to Section 1141(d)(1)(A) of the Bankruptcy Code and the Plan, and EnerSys does not have an enforceable right post-confirmation to use the EXIDE mark under the Agreement; II. enter a declaratory judgment that, pursuant to Section 1141(c) of the Bankruptcy Code and the Plan, the EXIDE mark vested in the Reorganized Exide free and clear of any claims, encumbrances, and interests, including EnerSys' interest to use the mark under the Agreement, and therefore EnerSys does not have an enforceable right post- confirmation to use the EXIDE mark under the Agreement and that Reorganized Exide is not encumbered by any use restriction provided in the Agreement; and III. in the event the counts for declaratory judgment are denied, enter a transition plan to facilitate an orderly unwinding of the Court's prior orders. EnerSys Wants Complaint Dismissed "[T]he relief sought by Exide in the Complaint is barred by the doctrines of res judicata, judicial estoppel, waiver, forfeiture and laches," asserts counsel for EnerSys, Maria Aprile Sawczuk, Esq., at Stevens & Lee, PC, in Wilmington, Delaware. Ms. Sawczuk argues that there is no reason Exide could not have raised the discharge claim -- now asserted in Count I of the Complaint -- in 2003, at the same time it sought to reject the Trademark Agreement. And there is no reason Exide could not have raised the revesting claim -- now asserted in Count II of the Complaint -- immediately following the effective date of its Plan on May 5, 2004, about two years before the rejection litigation was decided by the Bankruptcy Court, she asserts. According to Ms. Sawczuk, since the discharge claim and the revesting claim arise out of the same facts, and seek the same relief, as the rejection litigation, Exide's failure to raise the discharge claim and the revesting claim in connection with the rejection litigation bars Exide from pursuing those claims now -- seven years after the fact. To the extent of any ambiguity in the terms of the Plan, Ms. Sawczuk clarifies, it is clear beyond debate that neither the parties nor the Court intended that EnerSys' rights under the Trademark Agreement be included within the scope of the terms "Claim, liens, charges or encumbrances," as used in the revesting section of Exide's Plan. "It is simply beyond question that no one, not Exide, not EnerSys, not this Court, not the District Court, and not the Court of Appeals, ever thought that the confirmation of the Exide plan revested the trademarks and tradenames licensed under the Trademark Agreement in Exide, free of all of EnerSys' rights under the Trademark Agreement and, thereby, mooted the pending rejection litigation," Ms. Sawczuk says. "For Exide to even suggest that such is the case raises real questions about its motives in filing the Complaint," she notes. Count III of the Complaint seeks a transition order in the event Counts I and II fail. "This Court has already denied Exide's request for a transition order in connection with the order vacating its original order approving rejection. As a result, Count III is barred by the doctrine of res judicata," Ms. Sawczuk maintains. "[E]ven if the relief sought by Exide in the Complaint were not procedurally barred, it is so obviously unavailable as a matter of law that one can only conclude that the filing of the Complaint is simply an attempt by Exide to prolong this already interminable dispute in hopes of gaining some tactical advantage," she adds. For these reasons, EnerSys asks the Bankruptcy Court to dismiss, with prejudice, the Complaint in its entirety. In a related development, Exide and EnerSys agreed, pursuant to a Court-approved briefing schedule, that: * Exide will file its responsive brief on or before Oct. 18, 2010; and * EnerSys will file its reply brief on or before November 5, 2010. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. The Company filed for Chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. The Court confirmed Exide's Amended Joint Chapter 11 Plan on April 20, 2004. The plan took effect on May 5, 2004. While it has emerged from Bankruptcy, reorganized Exide is still resolving claims filed against it in the Bankruptcy Court. * * * Reorganized Exide carries 'B' issuer credit ratings from Standard & Poor's. In August 2010, when it affirmed the ratings, S&P explained, "The ratings on Exide reflect S&P's expectation that sales and profitability will improve gradually as demand increases. The ratings also reflect Exide's vulnerable business risk profile, marked by tough competition in the automotive and industrial battery businesses, exposure to volatile lead prices, and high fixed costs and capital intensity." Exide has 'B3' corporate family and probability of default ratings from Moody's Investors Service. In July 2008, Moody's upgraded the rating to 'B3' from 'Caa1'. EXIDE TECHNOLOGIES: Judge Vacates 2006 Order on EnerSys Pacts ------------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware vacated the order he issued on April 3, 2006, for Exide Technologies' rejection of a series of agreements with EnerSys Delaware Inc., including a trademark license agreement which granted EnerSys a license to use the Exide trademark on industrial batteries. The Court entered its vacation order on August 27, 2010. Accordingly, Reorganized Exide's Motion to Reject six Yuasa Agreements is denied as moot, the Court specified. Judge Carey likewise vacated the order he entered on July 3, 2006, for the approval of a transition plan regarding the Exide Technologies trademark. EnerSys Wants Court to Reconsider Order Counsel for EnerSys, Joseph H. Huston, Jr., Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, tells Judge Carey that prior to the Court's entry of its Aug. 27 Order, EnerSys was directed to confer with Exide to come up with an agreed form of Order. Since both parties were unable to agree on one point, two proposed forms of the Order were submitted to the Court. The only difference between the two forms of proposed order was that the form submitted by Exide added the words "as moot" on the order denying the rejection. The effect of this addition was that rather than simply denying the Motion to Reject on the merits, the Court would deny the Motion to Reject "as moot," relates Mr. Huston. Because the Court has entered Exide's proposed form of Order, EnerSys asks the Court to reconsider and modify its order to eliminate the "as moot" phrase, for the reason that: (a) the Motion to Reject is not, and has never been "moot" and should be denied by the Court "on the merits;" and (b) denying the Motion to Reject "as moot" is fundamentally inconsistent with a ruling entered by the United States Court of Appeals for the Third Circuit ruling that the agreements are not executory and, thus, cannot be rejected. EnerSys requested for a shortened notice of hearing and objection period to its Reconsideration Motion but the Court denied the request following Exide's objection. Exide argued that EnerSys failed to assert the existence of any imminent harm or any other compelling reason to justify expedited consideration. At a hearing held October 12, 2010, Judge Carey entered a modified order holding that the Motion to Reject is denied on the grounds that the agreements between EnerSys and Exide are not executory. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. The Company filed for Chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. The Court confirmed Exide's Amended Joint Chapter 11 Plan on April 20, 2004. The plan took effect on May 5, 2004. While it has emerged from Bankruptcy, reorganized Exide is still resolving claims filed against it in the Bankruptcy Court. * * * Reorganized Exide carries 'B' issuer credit ratings from Standard & Poor's. In August 2010, when it affirmed the ratings, S&P explained, "The ratings on Exide reflect S&P's expectation that sales and profitability will improve gradually as demand increases. The ratings also reflect Exide's vulnerable business risk profile, marked by tough competition in the automotive and industrial battery businesses, exposure to volatile lead prices, and high fixed costs and capital intensity." Exide has 'B3' corporate family and probability of default ratings from Moody's Investors Service. In July 2008, Moody's upgraded the rating to 'B3' from 'Caa1'. FAIRPOINT COMMUNICATIONS: Amends 2009 Report to Add Disclosures --------------------------------------------------------------- FairPoint Communications, Inc., filed with the U.S. Securities and Exchange Commission an amendment to its annual report on Form 10-K for the year ended December 31, 2009. The Amendment dated September 29, 2010, is in response to comment letters received from the SEC requesting further clarification of certain disclosures in the Original Annual Report, Paul H. Sunu, chief executive officer of FairPoint, explains. The Amendment contains revisions and clarifications to these disclosures in the Original Annual Report: * Item 1 - Business - Chapter 11 cases; * Item 1A - Risk Factors - Risks Related to the Chapter 11 Cases; * Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Unregistered Sales of Equity Securities; * Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview; * Item 9A - Controls and Procedures - Material Weaknesses in Internal Control Over Financial Reporting; * Item 10 - Directors, Executive Officers and Corporate Governance; * Item 11 - Executive Compensation - General Principles and Programs; and * Item 11 - Executive Compensation - Executive Compensation Decisions for 2009. The Amendment speaks only as of the date the Original Annual Report was filed, and the Company has not undertaken to amend, supplement or update any information contained in the Original Annual Report to give effect to any subsequent events, Mr. Sunu clarifies. A full-text copy of the Amendment to the Original 2009 Annual Report is accessible for free at: http://ResearchArchives.com/t/s?6be1 Q1 and Q2 Reports Also Amended FairPoint Communications, Inc., submitted to the U.S. Securities and Exchange Commission an amendment to its quarterly report on Form 10-Q for the period ended March 31, 2010. The Amendment dated September 29, 2010, reflects changes in response to the comment letters received by FairPoint from the SEC, requesting further clarification of certain disclosures in the Original Quarterly Report. A full-text copy of the Amendment to the Original 2010 1st Quarterly Report is accessible for free at: http://ResearchArchives.com/t/s?6be2 FairPoint Communications, Inc., filed with the U.S. Securities and Exchange Commission an amendment to its quarterly report on Form 10-Q for the period ended June 30, 2010. The Amendment dated September 29, 2010, is in response to the comment letters received by FairPoint from the SEC, requesting further clarification of certain disclosures in the Original Quarterly Report. A full-text copy of the Amendment to the Original 2010 2nd Quarterly Report is available for free at: http://ResearchArchives.com/t/s?6be3 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 COMMUNICATIONS: Proposes Rule 2004 Exam on Segnet ----------------------------------------------------------- FairPoint Communications Inc. and its debtor affiliates ask Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York to compel segNET Technologies, Inc., and segTEL, Inc., to produce documents and witnesses for examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. James T. Grogan, Esq., at Paul Hastings Janofsky & Walker LLP, in New York, asserts that segTEL's and STI's claims include a myriad of claims and allegations that were filed without any supporting documentation. In this light, the Debtors seek to conduct an examination on segTEL and STI to: (i) assist in their analysis of the claims asserted by segTEL and STI; (ii) determine what basis exists for the allegations; (iii) assess the liability, if any, with respect to those Claims; (iv) focus on any defenses or affirmative counterclaims the Debtors may have; and (v) determine how the Claimants calculated the more than $5 million they seek to recover from the Debtors' estates. Resolution of the segTEL and STI Claims will certainly affect how the Debtors administer their estates, Mr. Grogan tells the Court. The Debtors assure the Court that their examination requests are narrowly tailored and directly relevant to the allegations contained in the Claims, a full-text copy of which is available for free at http://bankrupt.com/misc/FairPt_DocRequests.pdf 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 COMMUNICATIONS: Proposes to Assume Nitel Amended Pact --------------------------------------------------------------- FairPoint Communications, Inc., seeks the Court's permission to assume a services agreement with Nitel Inc., as amended. Pursuant to the Services Agreement, Nitel provides point-to-point private line, direct internet access, date and IP network connectivity, and other circuits and related services to FairPoint. FairPoint determined that it has an ongoing need for Nitel's services. To that end, FairPoint and Nitel entered into an amendment to the Services Agreement. The Amendments pertain to, among other things, the assumption of the Services Agreement and certain of the Service Orders, and pricing concessions in connection with that assumption. The salient terms of the Amended Agreement are: (a) Cure. FairPoint Communications will pay Nitel $142,000 to cure any and all defaults relating to the Amended Agreement, and in full satisfaction of Nitel's Claim No. 5902. (b) Pricing. For a period of no less than 12 months after the assumption of the Amended Agreement, Nitel will reduce the monthly price of certain circuits by an aggregate of $11,833 per month. (c) Releases. Nitel will release FairPoint Communications from all claims, causes of action, liabilities and other obligations arising before the date of the Amended Agreement. That release however will not apply to Service Orders that are not assumed under the Amended Agreement. James T. Grogan, Esq., at Paul Hastings Janofsky & Walker LLP, in New York, notes that FairPoint's entry into the Amended Agreement will result in savings of $141,996 for the 12-month period after its assumption of the Amended Agreement. The Amended Agreement also resolves disputes regarding the amount required to be paid as cure to Nitel. At this financially sensitive stage of FairPoint's business operations, an interruption in the services provided by Nitel will harm FairPoint's efforts to reorganize, he stresses. Against this backdrop, FairPoint asks the Court that any order approving the assumption of the Amended Agreement be deemed effective immediately and that the Court waive the 14-day stay period under Rule 6004(h) of the Federal Rules of Bankruptcy Procedure. 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. FLYING J: Cadre Services Wants Approved Plan Revisited ------------------------------------------------------ Bankruptcy Law360 reports that Cadre Services Inc. has asked Judge Mary F. Walrath to revisit Flying J Inc.'s reorganization plan, saying it unfairly limits Cadre's ability to recover millions of dollars in attorneys' fees related to a prepetition lawsuit over a construction contract. Flying J in July emerged from Chapter 11 bankruptcy protection. The Company's plan promised to repay in full the $1.4 billion owed its creditors, with the distributions on allowed claims of the company's creditors expected to commence before the end of July. About Flying J Inc. Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Young Conaway Stargatt & Taylor LLP, and Kirkland & Ellis LLP, represent the Debtors in their Chapter 11 effort. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J disclosed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FPD LLC: Gets Court Nod to Use M&T Cash Collateral Until March 31 ----------------------------------------------------------------- FPD, LLC, et al., sought and obtained final authorization from the Hon. Paul Mannes of the U.S. Bankruptcy Court for the District of Maryland to use the cash collateral of Manufacturers and Traders Trust Company until March 31, 2011. M&T Bank has consented to the Debtors' use of cash collateral. The Debtors will use cash collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/FPD_LLC_M&TcashcollateraLbudget.pdf Prior to the Petition Date, one or more of the Debtors guaranteed these M&T loans: (i) a $4,000,000 revolving acquisition and development loan; (ii) a $6,900,000 revolving acquisition and development loan; *iii) a $5,500,000 revolving construction loan; (iv) a $604,125 term loan; and (v) a $2,624,000 term loan. As of the Petition Date, the aggregate amount of loans outstanding is $11,486,555.90 in principal, plus $31,136.63 in interest accrued as of the Petition Date, together with costs, fees, expenses and other charges accrued, accruing or chargeable. As adequate protection for the use of cash collateral, M&T Bank is granted: (a) a replacement lien on property of the Debtors only to the extent the M&T cash collateral is used by the Debtors and reduces the value of its prepetition collateral as of the Petition Date and M&T Bank is determined to be undersecured; and (b) a superpriority claim. To account adequately for the cash collateral of the M&T Bank, the Debtors will maintain one or more debtors in possession accounts at M&T Bank for M&T cash collateral, deposits and disbursements to the Debtors' operating accounts. The Debtors will provide M&T Bank with weekly cash flow reports, showing cash receipts and disbursements made by the Debtors during the prior week. The Debtors will provide counsel to the official committee of unsecured creditors with the same cash flow reports delivered to M&T Bank. By February 28, 2011, the Debtors must pay all real property taxes for the July 1, 2010 tax year for all M&T prepetition collateral and postpetition collateral. By November 1, 2010, the Debtors must deliver to M&T one or more insurance certificates evidencing that the Debtors have in place builder's risk insurance with respect to all M&T prepetition collateral for the current year through March 31, 2011, that M&T Bank is named as a loss payee, that M&T will be given not less than 30 days' prior written notice of any cancellation or modification of said insurances. By December 15, 2010, the Debtors will deliver to M&T a fully- executed contract of sale for the Reece Road (Severn Hollow) property for a purchase price not less than $800,000, subject only to not more than a 30 day study period and a standard financing contingency, and otherwise in form and substance acceptable to M&T. By March 15, 2011, the Debtors must close on the sale of Reece Road (Severn Hollow) property, paid the applicable claim of M&T at closing and reserved one half of the net proceeds as postpetition collateral in an escrow account at M&T subject to the joint order of the applicable Debtor and M&T. The remaining one half of the net proceeds will be free and clear of all liens of M&T and available for the Debtors' use for the benefit of their estates. By December 31, 2010, the Debtors must close on sales of not less than four residences (in any M&T subdivision), in addition to the closings scheduled through September 30, 2010 in the Budget and must pay to M&T at closing the agreed release amounts due M&T. The remaining net proceeds are cash collateral and may be used by the Debtors in accordance with the Budget. By March 31, 2011, the Debtors must close on sales of two additional residences and three finished lots (in any M&T subdivision) and must pay to M&T at closing the agreed release amounts due M&T. The remaining net proceeds are cash collateral and may be used by the Debtors in accordance with the Budget. By February 15, 2011, in addition to all other sales, the Debtors will close on the sale of the residence known as Lot # 11 in the Aisquith Farm subdivision and will pay to M&T at closing the agreed release amount (including the building loan release amount of $100,000). The remaining net proceeds are cash collateral and may be used by the Debtors in accordance with the Budget. By February 15, the Debtors will propose to M&T further Performance Requirements for sales to occur during the second quarter of 2011. If agreement is reached between the Debtors and M&T, they will file and serve a stipulation concerning Performance Requirements and continuing use of cash collateral, including an extended budget for the extended time period. The Debtors will make "sale ready" the two incomplete residential units at Douglas Landing and two incomplete residential units at Wood Creek by November 30, 2010, and two additional incomplete residential units at Douglas Landing by December 31, 2010. By October 15, 2010, all obligors of the existing loans will have delivered their written consents to the final court order in form and substance acceptable to M&T. M&T Bank is represented by Ober, Kaler, Grimes & Shriver, P.C. The Debtors have two other bank lenders Wells Fargo Bank, N.A., and SunTrust Bank, with separate debts, liens, and collateral. A separate interim order will address the separate debt, liens, and cash collateral of Wells Fargo and future orders may address the separate debt, liens, and cash collateral of SunTrust Bank. About FPD Prince Frederick, Maryland-based FPD, LLC, filed for Chapter 11 bankruptcy protection on September 3, 2010 (Bankr. D. Md. Case No. 10-30424). G. David Dean, II, Esq., and Irving Edward Walker, Esq., at Cole Schotz Meisel Forman & Leonard P.A., assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $1 million to $10 million. Affiliates Acorn Land, LLC (Bankr. D. Md. Case No. 10-30437), Breezewood Homes, LLC (Bankr. D. Md. Case No. 10-30441), First Development Group, LLC (Bankr. D. Md. Case No. 10-30443), MD Homes, LLC (Bankr. D. Md. Case No. 10-30444), NC Homes, LLC (Bankr. D. Md. Case No. 10-30445), and Tidewater Land, LLC (Bankr. D. Md. Case No. 10-30446) filed separate Chapter 11 petitions in September 2010. Acorn Land, Breezewood Homes, and MD Homes estimated their assets and debts at $1 million to $10 million each. First Development estimated its assets and debts at $10 million to $50 million. The Debtors' bankruptcy cases are jointly administered. FPD LLC: Wants to Continue & Renew PNC Bank Letters of Credit ------------------------------------------------------------- FPD, LLC, et al., ask the U.S. Bankruptcy Court for the District of Maryland to authorize the continuation and renewal of two irrevocable letters of credit securing First Development Group, LLC's obligations to Baltimore County, Maryland, under a utility and right of way agreement. Prior to the Petition Date, FDG owned a real estate project known as "Roslyn Station" in Baltimore County. The Project constituted of 11 townhomes, all of which were sold prepetition. Accordingly, as of the Petition Date, FDG no longer owned any real property with respect to the Project. In connection with the Project, FDG entered into a utility agreement and a right of way agreement, under which FDG agreed to perform certain obligations in consideration for being permitted to develop the Project. FDG's obligations under the agreements are secured by letters of credit numbered 18104932 and 18104937 issued by PNC Bank, National Association, which total approximately $70,000. FDG agreed to indemnify PNC in the event that Baltimore County were to draw on the Letters of Credit. The indemnity agreement is secured by a certificate of deposit which FDG holds at PNC in the approximate amount of $95,000. The Letters of Credit are currently set to expire during the first week of November 2010. PNC has advised the Debtors that, unless the Debtors obtain an Order from this Court specifically approving the renewals of the Letters of Creditor and confirming that PNC's indemnity rights remain secured by the collateral post-petition, PNC will not renew the Letters of Credit. The Debtors do not believe that Court approval is necessary to continue and renew the Letters of Credit, or to confirm that the Obligations remain secured by the collateral. The Debtors say that they seek "authorization to obtain post-petition credit in an abundance of caution and upon the request of PNC". The Debtors do not believe they can obtain new letters of credit on an unsecured basis. The collateral already secures the obligations and PNC is not requesting additional collateral. The Debtors believe that if the Letters of Credit are not renewed, there is a likelihood that Baltimore County will draw on the Letters of Credit and PNC, in turn, will seek to set off the collateral. If the Letters of Credit are renewed, the Debtors expect to complete the work necessary to obtain a release of the Letters of Credit within the next three to four months. The Debtors estimate that the remaining work required to obtain a release of the Letters of Credit will cost approximately $10,000 to $15,000. The Debtors intend to complete the work and obtain releases and the return of the Letters of Credit, at which time PNC would release the collateral to the estates net of any outstanding draws, letter of credit fees, commissions and expenses incurred in connection with the Letters of Credit. The Court has set a hearing for October 25, 2010, at 3:00 p.m., on the Debtors' request for continuation and renewal of two irrevocable letters of credit. About FPD Prince Frederick, Maryland-based FPD, LLC, filed for Chapter 11 bankruptcy protection on September 3, 2010 (Bankr. D. Md. Case No. 10-30424). G. David Dean, II, Esq., and Irving Edward Walker, Esq., at Cole Schotz Meisel Forman & Leonard P.A., assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $1 million to $10 million. Affiliates Acorn Land, LLC (Bankr. D. Md. Case No. 10-30437), Breezewood Homes, LLC (Bankr. D. Md. Case No. 10-30441), First Development Group, LLC (Bankr. D. Md. Case No. 10-30443), MD Homes, LLC (Bankr. D. Md. Case No. 10-30444), NC Homes, LLC (Bankr. D. Md. Case No. 10-30445), and Tidewater Land, LLC (Bankr. D. Md. Case No. 10-30446) filed separate Chapter 11 petitions in September 2010. Acorn Land, Breezewood Homes, and MD Homes estimated their assets and debts at $1 million to $10 million each. First Development estimated its assets and debts at $10 million to $50 million. The Debtors' bankruptcy cases are jointly administered. FORUM HEALTH: CHS to Invest $10 Million to Upgrade Facilities ------------------------------------------------------------- The Youngstown (Ohio) Vindicator reports that just two weeks after acquiring bankrupt Forum Health, Community Health Systems has taken its first step in fulfilling its pledge to improve the hospital system. CHS said Thursday it will invest $10 million to acquire new medical technologies and upgrade physician equipment at Forum Health facilities by the end of the year. Vindicator notes capital investment is one of the terms of the Tennessee-based hospital company's $120 million purchase of the Forum system, which was finalized October 1. CHS has promised to invest at least $80 million in capital over the next five years. The initial $10 million investment follows a "head-to-toe assessment" of Forum's existing equipment, said David Fikse, the hospital system's newly appointed chief executive, according to Vindicator. Forum Health includes two acute care hospitals: a 346-bed Trumbull Memorial Hospital in Warren and a 398-bed Northside Medical Center in Youngstown. The system also includes Hillside Rehabilitation Hospital, a 69-bed facility in Warren, as well as several outpatient clinics and other ancillary facilities. In August 2010, an affiliate of CHS emerged from a bankruptcy auction with a successful bid of $120 million, plus the assumption of certain Forum Health liabilities, in exchange for Forum Health's assets. Prior to completing the transaction, the sale was approved by U.S. Bankruptcy Court and the Ohio Attorney General. Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems, Inc. (NYSE: CYH) is the largest publicly-traded hospital company in the United States and a leading operator of general acute care hospitals in non-urban and mid-size markets throughout the country. Through its subsidiaries, the Company currently owns, leases or operates 126 hospitals in 29 states with an aggregate of approximately 19,400 licensed beds. Its hospitals offer a broad range of inpatient and surgical services, outpatient treatment and skilled nursing care. In addition, through its subsidiary Quorum Health Resources, LLC, the Company provides management and consulting services to approximately 150 independent non-affiliated general acute care hospitals located throughout the United States. About Forum Health Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, serve as lead counsel to the Debtors. The Debtors also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. In its petition, Forum Health estimated $100 million to $500 million in assets and debts. FREEPORT-MCMORAN COPPER: Moody's Lifts Sr. Debt Rating From 'Ba2' ----------------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured debt of Freeport-McMoRan Copper & Gold to Baa3 from Ba2. At the same time Moody's downgraded the ratings on the company's $1.5 billion in bank revolving credit facilities to Baa2 from Baa1. FCX's Ba1 corporate family rating and probability of default rating and its SGL-1 speculative grade liquidity rating were withdrawn. The Baa2 rating on Freeport-McMoRan Corporation's (FKA Phelps Dodge Corporation) guaranteed senior unsecured notes was affirmed. This concludes the review for possible upgrade initiated June 29, 2010. Ratings Rationale The upgrade in FCX's senior unsecured rating to Baa3 from Ba2 reflects the significant reduction in debt to levels which Moody's believes better position the company to support its debt obligations without as high a degree of reliance on earnings and cash flow from PT Freeport Indonesia. The upgrade also considers the ability of the company to manage its operations in a difficult economic market such that it continues to maintain sound liquidity and acceptable metrics. The downgrade to Baa2 from Baa1 for the ratings of the bank revolving credit facilities reflects Moody's expectation that the security interests provided to these facilities will fall away with FCX attaining an investment grade rating, as provided for in the credit agreements. This possibility was indicated in the June 29, 2010 review press release. The bank facilities continue to benefit from upstream guarantees from wholly owned subsidiaries while the Freeport-McMoRan Corporation notes have a downstream guarantee from FCX. FCX's Baa3 senior unsecured rating considers the company's substantive proven and probable reserve position in copper, gold and molybdenum, which is relatively equally divided between its Indonesian, North and South American mineral holdings. The company's spread of mining operations, with roughly 63% of production in the Americas, is also a factor in the rating as is its consolidated low cost position -- although this is driven by its Indonesian operations with their high gold content. While revenues are relatively equally spread among the operating regions in a normal operating environment, Moody's believe that the Indonesian operations contribute a disproportionate share of earnings and cash flow generation. However, with the reduction in debt to roughly $5.6 billion at June 30, 2010 (including Moody's standard adjustments), Moody's believe that the contribution capability of the non Indonesian operations better supports the overall debt protection measurements. The stable outlook reflects Moody's view that copper markets will remain at a price point that allows FCX to generate strong earnings and cash flow. While Moody's expects that FCX will continue to look to invest its cash to meet strategic growth objectives and could in the future increase its debt position, the outlook incorporates Moody's expectation that the company will continue to manage its investments, cash use and debt position in a manner that does not cause deterioration in the capital structure. FCX's ability to maintain a free cash flow (after capital expenditures and shareholder returns) to debt ratio of at least 10% on a sustainable basis in different metal price environments and evidence geographic diversity in its production and earnings profile would have a favorable impact on its outlook or rating. At this time a downgrade appears unlikely given the company's strong liquidity and solid debt protection measures. Should the company become more levered such that debt/EBITDA exceeds 3x or operating cash flow minus dividends is less than 25% or the company becomes consistently negative free cash flow generative, the ratings could be negatively impacted. Upgrades: Issuer: Freeport-McMoRan Copper & Gold Inc. -- Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3 from Ba2 Downgrades: Issuer: Freeport-McMoRan Copper & Gold Inc. -- Senior Secured Bank Credit Facility, Downgraded to Baa2 from Baa1 Outlook Actions: Issuer: Freeport-McMoRan Copper & Gold Inc. -- Outlook, Changed To Stable From Rating Under Review Withdrawals: Issuer: Freeport-McMoRan Copper & Gold Inc. -- Probability of Default Rating, Withdrawn, previously rated Ba1 -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-1 -- Corporate Family Rating, Withdrawn, previously rated Ba1 -- Senior Secured Bank Credit Facility, Withdrawn, previously rated LGD1, 09% -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated LGD5, 74% Issuer: Phelps Dodge Corporation -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated LGD2, 16% Headquartered in Phoenix, Arizona, FCX is the second largest global copper producer with significant production of gold and molybdenum. The company's operations are based in the U.S., Indonesia, Chile, Peru, and Africa. LTM revenue to June 30, 2010, was $17 billion. FREMONT BRUCE: Case Summary & 8 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Fremont Bruce, LLC 18653 Ventura Boulevard, #227 Tarzana, CA 91356 Bankruptcy Case No.: 10-22890 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: M. Jonathan Hayes, Esq. LAW OFFICE OF M. JONATHAN HAYES 9700 Reseda Boulevard, Suite 201 Northridge, CA 91324 Tel: (818) 882-5600 Fax: (818) 882-5610 E-mail: jhayes@polarisnet.net Estimated Assets: $500,001 to $1,000,000 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/cacb10-22890.pdf The petition was signed by Arman Pezeshki. GENTA INC: Cancer Drug Granted Orphan Drug Designation ------------------------------------------------------ Genta Incorporated has been designated as an Orphan Drug by the European Medicines Agency for gastric cancer. The drug has previously received Orphan Drug designation by the U.S. Food and Drug Administration for both gastric cancer and melanoma, as well as Fast Track designation by FDA for gastric cancer. Orphan designation for a medicinal product by the EMA provides for scientific advice during the product-development phase, direct access to centralized marketing authorization, and certain financial incentives. The designation also provides 10 years of marketing exclusivity subsequent to approval. Orphan drugs are eligible for full reduction of fees associated with pre- authorization inspections, as well as full reduction of marketing application fees and annual fees for qualifying companies. Earlier this year, Genta's qualifying status for this purpose as a "small and medium-sized enterprise" was renewed by the EMA. About Genta Berkeley Heights, New Jersey, Genta Incorporated (OTCBB: GETA.OB) -- http://www.genta.com/-- is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. * * * Genta Incorporated's balance sheet at June 30, 2010, showed $24.11 million in total assets, $6.39 million in total current liabilities, $145.17 million in total long-term liabilities, and a stockholders' deficit of $127.44 million. GIBBS PATRICK: Files Schedules of Assets & Liabilities ------------------------------------------------------ Gibbs Patrick Farms, Inc., has filed with the U.S. Bankruptcy Court for the Middle District of Georgia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $4,444,072 B. Personal Property $936,700 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $5,153,476 E. Creditors Holding Unsecured Priority Claims $11,725 F. Creditors Holding Unsecured Non-priority Claims $5,098,508 ----------- ----------- TOTAL $5,380,772 $10,263,709 Omega, Georgia-based Gibbs Patrick Farms, Inc., filed for Chapter 11 bankruptcy protection on September 16, 2010 (Bankr. M.D. Ga. Case No. 10-71501). Austin E. Carter, Esq., at Stone And Baxter, LLP, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million and debts at $1 million to $10 million as of the Petition Date. Affiliates Heritage Farms, LLC (Bankr. M.D. Ga. Case No. 10-71502) and Patrick Farms Partnership (Bankr. M.D. Ga. Case No. 10-71203) filed separate Chapter 11 petitions. GLOBAL TEL*LINK: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed the B2 Corporate Family Rating for Global Tel*Link Corporation and assigned a B1 rating to its proposed $435 million first lien senior secured credit facilities and a Caa1 rating to its proposed $160 million second lien senior secured term loan. Moody's also changed the ratings outlook to negative from stable, incorporating reduced financial flexibility pro forma for the transaction. GTL intends to use the proceeds primarily to refinance its existing credit facilities, fund a shareholder return to its equity sponsors, and finance a strategic acquisition. The proposed transaction increases debt by approximately $250 million and weakens the credit profile, although the acquisition also increases scale and enhances GTL's competitive position, in Moody's opinion. Moody's estimates pro forma leverage will rise to the mid 5 times debt-to-EBITDA range from the high 3 times range, high for the B2 CFR, although Moody's anticipate some improvement as GTL integrates acquired businesses and achieves synergies. Furthermore, Moody's anticipate positive free cash flow even with the increase in interest expense. The ratings are: Global Tel*Link Corporation -- Corporate Family Rating, Affirmed, B2 -- Probability of Default Rating, Affirmed, B2 -- Existing First Lien Senior Secured Credit Facilities, B1 LGD3 37%, to be withdrawn -- $20 million First Lien Senior Secured Revolving Credit Facility due 2015, Assigned, B1 LGD3 37% -- $45 million First Lien Senior Secured Letter of Credit Facility due 2016, Assigned, B1 LGD3 37% -- $370 million First Lien Senior Secured Term Loan due 2016, Assigned, B1 LGD3 37% -- $160 million Second Lien Senior Secured Term Loan due 2017, Assigned, Caa1 LGD5 88% -- Rating Outlook, Revised to Negative from Stable Ratings Rationale The B2 CFR continues to reflect GTL's lack of scale and narrow business focus, as well as high leverage, which resulted primarily from shareholder returns. The company's low operating margins suggest an intense competitive environment, unlikely to change materially, although continued industry consolidation could ease conditions somewhat over time. Strong market share within the correctional telecommunications industry, GTL's track record of successful integration of acquisitions, high retention rates, some revenue visibility from long-term contracts, and good liquidity support the rating. The negative outlook reflects concerns over the reduced financial flexibility to deal with possible challenges such as continued reduction in call volume, the potential for a negative impact on GTL's business from budgetary pressures on states, or the unexpected loss of a major contract. Moody's would consider a downgrade based on expectations for negative free cash flow, lack of progress on reducing leverage to below 5 times debt-to-EBITDA, a deterioration of liquidity, or incremental shareholder returns. An adverse change in the regulatory environment or evidence that soft economic conditions are limiting end customers' willingness or ability to pay for GTL's phone services could also negatively impact the rating. Given management's track record of successful integration of acquisitions, another acquisition would not necessarily result in a negative rating action. Moody's would consider revising the outlook to stable based on expectations for leverage to decline to below 5 times and free cash flow in the mid single digit range as a percentage of debt. An upgrade is extremely unlikely given the weak positioning of the B2 CFR and expectations that shareholder returns will resume over time. The narrow business focus also limits upward momentum. However, Moody's could consider a positive outlook or upgrade with expectations for sustainable leverage below 3 times debt-to-EBITDA and free cash flow exceeding 10% of debt. Moody's most recent action on GTL occurred on February 9, 2010. At that time, Moody's assigned a B1 rating to GTL's first lien secured credit facility. Based in Mobile, Alabama, Global Tel*Link Corporation provides telecommunications services to correctional facilities. GTL acquired the former MCI corrections division from Verizon in July 2007; Digital Solutions, Inc. in June 2010; and announced plans to acquire Public Communications Services, Inc. in October 2010. Pro forma for these acquisitions, GTL will serve almost 2 thousand facilities and over 1 million inmates in 46 states, and have annual revenue of slightly over $500 million. GLOBAL TEL*LINK: S&P Affirms 'B' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on Mobile, Ala.-based prison phone provider Global Tel*Link Corp. The outlook is stable. S&P also assigned a 'B' issue-level rating and a '3' recovery rating to the company's proposed $370 million first-lien term loan, $20 million revolving credit, and $45 million letter of credit. S&P also assigned a 'CCC+' issue-level rating and a '6' recovery rating to its proposed $160 million second-lien term loan. The recovery rating of '3' indicates S&P's expectation for meaningful (50%-70%) recovery in the event of a payment default, while the '6' recovery rating reflects its expectation for negligible (0%-10%) recovery. The company intends to use proceeds from the new issues to refinance all existing debt, fund the acquisition of Public Communication Services, Inc., and finance an approximate $174 million shareholder dividend. At the same time, S&P affirmed its 'BB-' issue-level rating on the existing senior secured credit facility. However, since the company plans to repay these bank loans with proceeds from the new credit facilities, S&P expects to withdraw these issue-level ratings at closing of the financing transaction. "Pro forma for the proposed refinancing and acquisition, S&P expects GTL's total debt to EBITDA, including its adjustments, to increase to around 6x from about 5x as of June 30, 2010," said Standard & Poor's credit analyst Catherine Cosentino. S&P expects the approximate $250 million increase in debt from the proposed transaction, partially used to fund an approximate $174 million shareholder dividend, to more than offset the additional EBITDA from the PCS acquisition, resulting in the increased leverage. GRAHAM BROTHERS: Komatsu Wants to Take Back Equipment ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Komatsu Financial LP, which asserts an $11.5 million claim against Graham Brothers Construction Co., filed with the bankruptcy a motion for permission to take back 34 pieces of earth-moving equipment from Graham. Graham Brothers Construction Co. filed a Chapter 11 petition (Bankr. S.D. Ga. Case No. 10-30534) on Oct. 5 in Dublin, Georgia, its hometown. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million. Graham listed debts on equipment, including $11.7 million owed to Wells Fargo Equipment Finance Inc., $3.2 million to General Electric Capital Corp., $2.5 million to Caterpillar Financial Service, and $900,000 to Morris State Bank. Christopher W. Terry, Esq., and Ward Stone, Jr., Esq., at STONE & BAXTER, LLP, in Macon, Georgia, serve as counsel to the Debtor. GREAT ATLANTIC: Catsimatidis Said to Be Bidding for Emporium ------------------------------------------------------------ Lisa Fickenscher, writing for Crain's New York Business, reports that sources say supermarket magnate John Catsimatidis may be one of the two highest bidders for The Great Atlantic & Pacific Tea Co.'s Food Emporium supermarket chain. There are 16 Food Emporiums in New York that are up for grabs. Crain's reports that that, according to industry sources, investment bank Morgan Stanley and Mr. Catsimatidis are the two highest bidders for the portfolio. According to the Crain's report, Mr. Catsimatidis said a confidentiality agreement prevents him from discussing the sale, but he confirmed "it's no secret that we have interest in [Food Emporium]." Mr. Catsimatidis owns the Gristedes chain, which has about 30 stores in New York. As reported by the Troubled Company Reporter on October 13, 2010, The Wall Street Journal's Mike Spector and Timothy W. Martin reported that people familiar with the matter said A&P is sounding out restructuring advisers about reworking its debt-heavy balance sheet. Sources said A&P started contacting Wall Street restructuring shops over the summer for ideas on how to address some $1 billion in debt. According to the sources, investment banks in discussions with A&P include Lazard Ltd., Rothschild Inc. and Moelis & Co. The sources told the Journal the talks have focused in part on roughly $157 million in convertible bonds due June 15, the grocer's biggest near-term maturity. A&P hasn't yet decided whether to hire any restructuring practices, these people said. According to the Journal, a person close to A&P said the company has been in touch with a number of financial advisers to seek advice on managing its debt load. A&P is focused on its entire balance sheet and how to pay down or otherwise address its debt, the person said. It hasn't committed to any particular path for dealing with its debt and doesn't view its current efforts as a "restructuring," the person said. He also told the Journal A&P hasn't considered bankruptcy as an option or retained any restructuring advisers yet. The Journal, citing Capital IQ, a unit of rating agency Standard & Poor's, relates A&P has posted losses in 33 of its past 40 quarters. 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 eight 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." GREEN DIAMOND: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Green Diamond of Osceola, Ltd. 4800 Hollywood Boulevard, Suite 1A Hollywood, FL 33020 Bankruptcy Case No.: 10-41078 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B Ray Debtor's Counsel: Brian S. Behar, Esq. 2999 NE 191 Street, 5th Floor Aventura, FL 33180 Tel: (305) 931-3771 E-mail: bsb@bgglaw.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 13 largest unsecured creditors filed together with the petition is available for free at: The petition was signed by Marcos Fintz, president. GREEN PASTURES: Minor Error Doesn't Defeat Tax Liens ---------------------------------------------------- WestLaw reports that a Chapter 11 debtor-in-possession, as the party seeking to avoid federal tax liens on the theory that a minor error in identification of the debtor on notices of tax lien filed in a computerized recording index by the federal government rendered these tax liens unenforceable against a hypothetical bona fide purchaser of the property on the date the bankruptcy petition was filed, failed to satisfy its burden of showing that this error, consisting of a transposition of two vowels in the word "Christian," the third term in the debtor's name, rendered the government's lien not subject to discovery on reasonable inspection. While a search using all of the words in the debtor's name would not, under limitations imposed by the search software, have pulled up the government's lien notices, a search using only the first two words of the debtor's name would have resulted in discovery of the government's lien notices. Moreover, employees were on duty at the county recording office to explain the limitations of the search software and to assist a searcher in formulating a search. In re Green Pastures Christian Ministries, Inc., --- B.R. ----, 2010 WL 3538760, 106 A.F.T.R.2d 2010-6378 (Bankr. N.D. Ga.). Green Pastures Christian Ministries, Inc., based in Decatur, Ga. - - http://www.greenpastures.org/-- sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 07-80905) sought chapter 11 protection on Dec. 11, 2007. The church is represented by Dorna Jenkins Taylor, Esq., in Atlanta, Ga. At the time of the filing, the Debtor estimated its assets and debts at $1 million to $100 million. GUILLERMO ROJANO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Guillermo Rojano, Sr. 2221 S. 24th Street McAllen, TX 78504 Bankruptcy Case No.: 10-70706 Chapter 11 Petition Date: October 4, 2010 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtor's Counsel: Antonio Villeda, Esq. 5414 N 10th St McAllen, TX 78504 Tel: (956) 631-9100 E-mail: avilleda@mybusinesslawyer.net 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/txsb10-70706.pdf HENRY WILTON: Files Schedules of Assets & Liabilities ----------------------------------------------------- Henry L. Wilton has filed with the U.S. Bankruptcy Court for the Eastern District of Virginia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $4,679,658 B. Personal Property $9,229,133 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $28,167,104 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $65,098,636 ----------- ----------- TOTAL $13,908,791 $93,265,740 Henrico, Virginia-based Henry L. Wilton filed for Chapter 11 bankruptcy protection on September 16, 2010 (Bankr. E.D. Va. Case No. 10-36398). Robert A. Canfield, Esq., at Canfield, Baer, & Heller, LLP, assists the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts at $50 million to $100 million as of the Petition Date. HOLLYWOOD THEATERS: Moody's Junks Corporate Family Rating --------------------------------------------------------- Moody's Investors Service downgraded the corporate family and probability of default ratings for Hollywood Theaters, Inc., both to Caa1 from B3. The company is investing in digital and 3D upgrades, which have yet to meaningfully boost cash flow, and performance has broadly fallen short of Moody's expectations. Liquidity deteriorated primarily as a result of these factors, contributing to the downgrade. Absent material and unexpected improvement in performance over the next several years, Hollywood could again face a significant challenge in refinancing its debt when the secured bonds mature in June 2013. The revised CFR and PDR specifically incorporate this medium-term risk, and the potential for a restructuring of the capital structure either in conjunction with this maturity or prior to it. A summary of the actions follows. Hollywood Theaters, Inc. -- Probability of Default Rating, Downgraded to Caa1 from B3 -- Corporate Family Rating, Downgraded to Caa1 from B3 -- Senior Secured Bonds, Downgraded to Caa1 from B3, LGD adjusted to LGD3, 49% from LGD4, 50% Ratings Rationale Hollywood's constrained capital structure affords minimal flexibility to manage expansion and equipment upgrades, and its Caa1 corporate family rating reflects this risk. The inherent volatility of operating in an industry reliant on movie studios for product to drive the attendance that leads to cash flow from admissions and concessions compounds this challenge. Hollywood's leverage rose to the mid-7 times debt-to-EBITDA range and EBITDA less capital expenditures-to-interest was below 1 time for the trailing twelve months ended June 30. Moreover, the company failed to generate any positive free cash flow in 2008, 2009, or the trailing twelve months through June 30. Lack of scale further constrains the company's ratings, although Hollywood benefits from reasonably good geographic diversity. Hollywood's modern theater circuit requires modest maintenance capital expenditures and contributes to fairly healthy EBITDA margins, despite some noteworthy margin deterioration over the past year, and these factors support the ratings. Also, despite variability related to film popularity and low-to-negative growth prospects, Moody's considers the theater industry to be relatively stable over the long term, with typically only modest impact from economic conditions. The stable outlook incorporates expectations that leverage will remain around 7 times debt-to-EBITDA and the company will generate breakeven to modestly positive free cash flow. Moody's would consider a downgrade based on expectations for continued cash consumption in 2011 or leverage in the high 7 times debt-to-EBITDA range. Moody's would consider a positive outlook or upgrade with expectations for sustainable positive free cash flow, EBITDA less capital expenditures-to-interest in the mid 1 times range, and leverage below 7 times debt-to-EBITDA. Moody's most recent action for Hollywood occurred on June 24, 2009. At that time Moody's assigned a B3 rating to Hollywood's secured bonds and upgraded the corporate family rating to B3. Hollywood Theaters, Inc.'s ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Hollywood's core industry and Hollywood's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Portland, Oregon, Hollywood Theaters, Inc. operates 49 theaters and 546 screens primarily located in the continental United States and in Hawaii and the Pacific Islands. Revenue for the year ended 2009 was approximately $145 million. HRTEC INC: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------- Debtor: HRTEC, Inc. 2071 County Line Road Warrington, PA 18976 Bankruptcy Case No.: 10-18588 Chapter 11 Petition Date: October 1, 2010 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Magdeline D. Coleman Debtor's Counsel: Herman J. Weinrich, Esq. TIMONEY KNOX LLP 400 Maryland Drive Fort Washington, PA 19034-7544 Tel: (215) 540-2650 E-mail: hweinrich@timoneyknox.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 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/paeb10-18588.pdf The petition was signed by Francis Murray, Jr., president. INFOLOGIX INC: Borrows $1.5 Million from Hercules Technology ------------------------------------------------------------ InfoLogix Inc. and its subsidiaries have borrowed $500,000, and an additional $1,000,000, from Hercules Technology Growth Capital Inc. under its revolving credit facility pursuant to the Amended and Restated Loan and Security Agreement dated November 20, 2009, as amended. Each Discretionary Credit will be treated as an overadvance under the Loan Agreement and is repayable on demand and otherwise on the terms applicable to and at the interest rate charged on overadvances provided for in the Loan Agreement, which terms have not been modified for this borrowing, although the parties expect to enter into amendments to the Loan Agreement to eliminate the $500,000 limit on outstanding overadvances. About InfoLogix Inc. Based in Hatboro, Pennsylvania, InfoLogix, Inc. (NASDAQ: IFLG) -- http://www.infologix.com/-- provides end-to-end solutions for electronic medical record and supply chain implementation and mobilization, with experience in over 2,200 hospitals and businesses nationwide. InfoLogix assists its healthcare and commercial customers by implementing and optimizing EMR and SCM systems, offers mobility to caregivers and workforces by making data accessible directly at the point of care or point of activity, and manages operations with services to improve clinical and financial performance and supply chain with services to drive greater efficiency. The Company's balance sheet at March 31, 2010, showed $34.0 million in total assets, $39.0 million in total liabilities, and a stockholders' deficit of $4.9 million. McGladrey & Pullen, LLP, in Blue Bell, Pa., 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 negative working capital and an accumulated deficit as of December 31, 2009. INTEGRATED FREIGHT: Inks Agreement to Acquire Bruenger for $11MM ---------------------------------------------------------------- Integrated Freight Corporation (formerly Plangraphics, Inc.) announced last week that it has signed a definitive agreement to purchase Wichita, Kansas-based Bruenger Trucking Company and its subsidiary M. Bruenger & Co., Inc. The transaction is valued at roughly $11 million, and is poised to add $21 million in revenue to the IFCR platform. The closing is anticipated within 45 days, and is expected to bring the total annual revenue of IFC to over $60 million. Founded in 1936, M. Bruenger & Co. is one of Kansas' largest refrigerated and dry freight operators, with 2009 revenues of over $21 million. Paul Henley, CEO of Integrated Freight, stated, "The addition of Bruenger Trucking marks a significant milestone for IFC as we continue to assemble a high quality national freight network. Acquiring a company with the reputation and longevity of Bruenger in such a strategic geographic area is a watershed event for us. We look forward to the addition of Butch Bruenger as a leader of our team." Butch Bruenger, CEO of Bruenger Trucking, remarked, "This business combination with Integrated Freight will allow us to expand and strengthen our excellent customer service while providing employees with more opportunities within the larger IFC platform." About Integrated Freight Integrated Freight Corporation, formerly Plagraphics, Inc., (OTC BB: IFCR) -- http://www.integrated-freight.com/-- is a Sarasota, Florida headquartered motor freight company providing long-haul, regional and local service to its customers. The Company specializes in dry freight, refrigerated freight and haz-waste truckload services, operating primarily in well-established traffic lanes in the upper mid-West, Texas, California and the Atlantic seaboard. IFCR was formed for the purpose of acquiring and consolidating operating motor freight companies. On August 19, 2010, at a special stockholder's meeting the Company approved a reverse stock split, a relocation of its State of Incorporation to Florida and a change of its name to Integrated Freight Corporation. The Company's name change and State of Incorporation have been approved and are effective as of August 18, 2010. The reverse stock split has been approved but is not effective as of the date of this filing. The Company's balance sheet at June 30, 2010, showed $9.75 million in total assets, $13.27 million in total liabilities, and a stockholders' deficit of $3.52 million. * * * Sherb & Co., LLP, in Boca Raton, Fla., 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 and has a negative working capital position and a stockholders' deficit. INTERNATIONAL GARDEN: Organizational Meeting Set for Oct. 21 ------------------------------------------------------------ Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on October 21, 2010, at 12:30 p.m. in the bankruptcy case of International Garden Products, Inc., et al. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 5209, 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. Damascus, Oregon-based International Garden Products, Inc., was incorporated in 1996 as a holding company for Iseli Nursery, Inc., California Nursery Supply, Weeks Wholesale Rose Grower, and Old Skagit, Inc. The company's operating businesses, Iseli and Weeks, focus primarily on growing horticultural products for nationwide sale to independent garden centers, landscape suppliers, landscapers and similar parties. Iseli's is known in the industry as the premium source of dwarf conifers, Japanese maples and unique companion plants. Weeks is one of the largest wholesale breeders and growers of premium roses in the U.S. International Garden filed for Chapter 11 bankruptcy protection on October 4, 2010 (Bankr. D. Del. Case No. 10-13207). Andrew R. Remming, Esq., and Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell, assist the Debtor in its restructuring effort. Bryan Cave LLP is the Debtor's legal counsel. FTI Consulting is the Debtor's restructuring adviser. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Weeks Wholesale Rose Grower (Bankr. D. Del. Case No. 10-13208), California Nursery Supply (Bankr. D. Del. Case No. 10- 13209), Iseli Nursery, Inc. (Bankr. D. Del. Case No. 10-13210), and Old Skagit, Inc. (Bankr. D. Del. Case No. 10-13211) filed separate Chapter 11 petitions. JEFFERSON COUNTY: Birmingham Water Works Eyes Sewer System ---------------------------------------------------------- NBC 13 Alabama reports that the Birmingham Water Works is apparently interested to find out if it can afford to buy the county sewer system. Alabama's 13 reports that the water board confirmed afternoon of October 14 that they have commissioned a study to see if they can afford the sewer system, if it were to be declared bankrupt. A preliminary report is expected next week. Alabama's 13 further reports that in reaction to the study, commission President Bettye Fine Collins says she is against someone other than the county owning the sewer system, saying if someone owns both water and sewer, they control the county's future. As reported by the Troubled Company Reporter on October 12, 2010, Barnett Wright, writing for The Birmingham News, said Jefferson County Commission President Bettye Fine Collins and Commissioners Jim Carns and Bobby Humphryes -- who, together, make up a commission majority and all of whom will leave the commission after its November 9 meeting -- agree that bankruptcy is actively on the table as an option. Mr. Wright reported that the commissioners are now threatening to move the county into bankruptcy because negotiations with creditors have stalled since a court-appointed receiver seized the county sewer department last month. The commissioners said they may resort to bankruptcy before they leave office November 9 if they feel creditors who own the county's $3.2 billion sewer debt are trying to wring too much money out of the sewer system and its ratepayers. Mr. Wright also reported that even Commissioner Shelia Smoot, who has opposed bankruptcy and will also leave the commission next month, said Friday that the bankruptcy option is not off the table. Creditors appear to be waiting for "manna from the receiver" rather than working toward a deal, Ms. Collins said, according to the report. The report also noted Commissioner George Bowman, the only sitting commissioner still in the running to keep his seat after November, said bankruptcy is always a "last resort." "That card, until it's played, is always an option," he said. "I am not in favor of bankruptcy and never have been. I hope that we can find a solution short of bankruptcy and that position has not changed." According to Birmingham News, the officials said the county has presented its proposed settlement to Wall Street creditors including investment bank JPMorgan Chase & Co. and bondholders. While JPMorgan owns a majority of the county warrants, any settlement has to be approved by the other banks, such as Lloyds Bank of Scotland, State Street Bank of Boston, Societe Generale of Paris and the Bank of Nova Scotia in Canada. According to the report, Jeffrey Cohen, a partner at Patton Boggs, who has followed Jefferson County's financial crisis, said the threat of bankruptcy is a key negotiating tool for the county. "You're asking the creditors to take an almost 50 percent haircut," Birmingham News quoted Mr. Cohen as saying. "They're not going to do that willingly. I think, ultimately, there's going to have to be a plan of reorganization in Chapter 9 to write that debt down." According to the report, Mr. Cohen said the county may have already taken a first step toward bankruptcy. "One of the elements under the bankruptcy code is that the county negotiate, before the filing, with the creditors and try to arrange a plan with the creditors to repay the debt," he said. "I'm not so sure the creditors are really against it in the end. "They've been dealing with this. I'm sure they are frustrated. They would rather start getting regular payments and move on to the next problem." About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. Jefferson County is trying to restructure $3.2 billion in sewer debt. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion set by Orange County, California in 1994. According to the Troubled Company Reporter on September 24, 2010, Dow Jones Newswires' Kelly Nolan said Alabama Circuit Court Judge Albert Johnson named John S. Young Jr. LLC as receiver for the sewer system. * * * In August 2010, Standard & Poor's Ratings Services withdrew its underlying rating on Jefferson County, Ala.'s series 2001B general obligation warrants. S&P lowered the SPUR to 'D' from 'B' on Sept. 24, 2008, due to the county's failure to make a principal payment on the bank warrants due Sept. 15, 2008, in accordance with the terms of the Standby Warrant Purchase Agreement. The county and the banks entered into a forbearance agreement that effectively delayed payments due under the SWPA. JESUS IGLESIAS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Jesus O. Iglesias Dora E. Iglesias dba Jessies Food Stores dba New Texas Properties LTD P.O. Box 1270 Mission, TX 78573 Bankruptcy Case No.: 10-70703 Chapter 11 Petition Date: October 4, 2010 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtor's Counsel: Ellen C. Stone, Esq. THE STONE LAW FIRM PC 4900 N. 10th St., Suite A2 McAllen, TX 78504 Tel: (956) 630-2822 Fax: (956) 631-0742 E-mail: ignmca@ellenstonelaw.com Scheduled Assets: $6,005,580 Scheduled Debts: $11,460,162 A list of the Joint Debtors' 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txsb10-70703.pdf JRH-ONE, LLC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: JRH-ONE, LLC 1575 Worley Avenue Merritt Island, FL 32952 Bankruptcy Case No.: 10-18281 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: J. Christopher Crowder, Esq. FARO & CROWDER PA 503 N. Orlando Avenue, Suite 106 Cocoa Beach, FL 32931 Tel: (321) 784-8158 Fax: (321) 784-8159 E-mail: JCrowder@Farolaw.com Scheduled Assets: $2,878,254 Scheduled Debts: $14,920,525 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb10-18281.pdf The petition was signed by Michael McPhillips, MGMR. KV PHARMACEUTICAL: In Talks for $20-Mil. Secured Loan ----------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that KV Pharmaceutical Co. is negotiating a secured $20 million loan to fund its operations in coming months and to prepare for the reintroduction of its products to the market, but the company says the short-term measure won't be enough. On September 13, 2010, KV Pharma entered into a loan agreement with U.S. Healthcare I, L.L.C. and U.S. Healthcare II, L.L.C. for a $20 million loan secured by KV Pharma's assets. The loan agreement included a period of exclusivity through September 28, 2010, to negotiate an expanded, longer-term financial arrangement among the Registrant and U.S. Healthcare I, L.L.C. and U.S. Healthcare II, L.L.C. On September 28, 2010, at the request of U.S. Healthcare I, L.L.C. and U.S. Healthcare II, L.L.C., KV Pharma agreed to extend the exclusivity period through October 4, 2010. KV Pharma has yet to file its Quarterly Report on Form 10-Q for the Company's quarter ended June 30, 2010, with the U.S. Securities and Exchange Commission. In August, KV Pharma said it wasn't in a position to file the report due to (1) the time required to complete the filing of its Form 10-K for the fiscal year ended March 31, 2009, (2) the time required to complete the filings of its quarterly reports on Form 10-Q for the quarters ended June 30, 2009, September 30, 2009 and December 31, 2009, respectively, (3) the resignation of KPMG on June 25, 2010 as the Company's registered independent accounting firm, (4) the time required for BDO USA, LLP, the Company's newly engaged registered independent accounting firm, to conduct its audit of the Company's financial statements for the fiscal year ended March 31, 2010, and (5) the time required to complete the filing of its Form 10-K for the fiscal year ended March 31, 2010. Based on work completed to date by the Company on its year-end closing procedures and the preparation of its financial statements, the Company currently expects to file the Form 10-K during the fourth calendar quarter of 2010 and will then be able to begin work on the preparation and filing of Forms 10-Q for the quarters ended June 30 and September 30, 2010, respectively. The Company intends to file the Form 10-Q as soon as it is completed, but is unable, at this time, to estimate when the Form 10-Q will be filed. Upon completion of the Company's evaluation of its internal controls over financial reporting, the Company expects to report in its Form 10-K for the fiscal year ended March 31, 2010, when filed, a number of material weaknesses in internal controls over financial reporting. The Company expects to continue to report a number of material weaknesses in the Form 10-Q. In addition, the Company believes that there is substantial doubt regarding its ability to continue as a going concern and, as a result, the Company expects that the report of its independent registered public accounting firm accompanying its annual consolidated financial statements likely will include an explanatory paragraph disclosing the existence of substantial doubt regarding the Company's ability to continue as a going concern. The Company does not expect that the substantial doubt will be resolved as of the end of the period covered by the Form 10-Q. The Company anticipates that it will experience significant changes in its results of operations from the corresponding period for the last fiscal year to be reflected by the earnings statements to be included in the Form 10-Q when ultimately filed. As the Company previously disclosed, on March 2, 2009, the Company entered into a consent decree with the FDA regarding the Company's drug manufacturing and distribution, which was entered by the U.S. District Court, Eastern District of Missouri, Eastern Division on March 6, 2009. The consent decree requires, among other things, that, before resuming manufacturing, the Company retain and have an independent expert undertake a review of the Company's facilities and certify compliance with the FDA's current good manufacturing practice regulations. The Company's actions and the requirements under the consent decree have had a material adverse effect on the Company's results of operations and liquidity position. Also, on December 23, 2008, the Company announced it had voluntarily suspended all shipments of its FDA approved drug products in tablet form and, effective January 22, 2009, the Company voluntarily suspended the manufacturing and shipment of the remainder of its products, other than three products it distributes but does not manufacture and which do not generate a material amount of revenue for the Company. During the quarter ended June 30, 2010, while not generating any material revenues as a result of the suspension of shipments, the Company had to meet ongoing operating costs related to its employees, facilities and FDA compliance, as well as costs related to the steps the Company currently is taking to prepare for reintroducing the Company's approved products to the market. As a result, the Company anticipates that it likely will post a net loss for the quarter ended June 30, 2010. As of September 30, 2009, KV Pharma had total assets of $499,218,000, total liabilities of $466,053,000, and shareholders' equity of $33,165,000. As of March 31, 2009, shareholders' equity was $139,528,000. The September 30, 2009 balance sheet showed KV Pharma had $79,669,000 in total current assets and $173,632,000 in total current liabilities. About KV Pharmaceutical KV Pharmaceutical Co., with headquarters in St. Louis, Missouri, is a specialty pharmaceutical company that develops, manufactures and markets innovative branded, quality generic/non-branded and unique specialty ingredient products, utilizing proprietary drug delivery technologies. In addition to its comprehensive research & development and manufacturing processes, KV has broad marketing and sales capabilities through its two wholly owned subsidiaries, Ther-Rx Corporation, marketing branded products and ETHEX Corporation, marketing generic/non-branded products. LEHMAN BROTHERS: Fidelity Wants LCPI to Comply to Insurance Policy ------------------------------------------------------------------ Fidelity National Title Insurance Company has asked the Court to compel Lehman Commercial Paper Inc. to comply with the firm's insurance policies. The move came after LCPI allegedly refused to cooperate with Fidelity in investigating the company's claims as required under the insurance policies by denying the insurance firm access to information. Fidelity issued insurance policies to LCPI for the deeds of trust recorded against three real estate development projects to secure the loans provided for those projects. LCPI is the administrative agent of the loans totaling $395 million it provided to LBREP/L-SunCal Master I LLC to finance the projects in Southern California known as McAllister Ranch, McSweeny Farms and Summerwind Ranch. The projects are owned by LBREP's subsidiaries. LCPI filed claims under the insurance policies to seek defense and indemnification with respect to the lawsuits that were filed by contractors who hold mechanics' liens on the projects. The contractors recorded liens on the projects with face amount totaling $27,232,695, after LBREP defaulted on the loans and did not continue the projects. The lawsuits seek to foreclose on the liens, to recover money damages or both. Some of the contractors assert that their liens have priority over the deeds of trust insuring the projects. Fidelity has not yet determined whether it has an obligation to indemnify LCPI pending conclusion of its review and investigation of the claims, and that it needs cooperation from LCPI as it is the administrative agent of the loans, according to the insurance firm's lawyer, Joshua Cohen, Esq., at Day Pitney LLP, in New Haven, Connecticut -- jwcohen@daypitney.com The Court will consider approval of Fidelity's request 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: Files Quarterly Report for Settled Loan Claims --------------------------------------------------------------- Lehman Brothers Holdings Inc. and its units filed a quarterly report of all transactions they entered into to settle their claims with respect to their real estate loans for the period June 1 to August 31, 2010. The quarterly report showed that the Debtors made 15 discounted payoffs to settle their claims with respect to their commercial real estate loans, and nine discounted payoffs with respect to their residential real estate loans. The aggregate mark-to- market carrying value of the commercial real estate loans was $169,084,438 while that of the residential real estate loans was $32,000, according to the report. The quarterly report also showed that the Debtors entered into 86 transactions to modify the terms for their residential real estate loans. The aggregate mark-to-market carrying value of all residential real estate loans was $4,254,060. 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: Merit LLC Plan Filing Deadline Moved to Feb. 15 ---------------------------------------------------------------- Judge James Peck issued an order authorizing Merit LLC to file its Chapter 11 plan until February 15, 2011, and to solicit votes for that plan until April 15, 2011. The Lehman units only sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, says the Lehman units will spend the next five months to finalize a settlement with Somerset Associates LLC and Somerset Properties SPE LLC, and to engage in talks with other creditors. The Somerset entities earlier blocked court approval to extend the deadline for LB Somerset and LB Preferred to file their restructuring plans, saying they lack equity in their property and that their restructuring plan cannot be confirmed. Somerset Associates holds claims in the sum of $5,090,609 against each of the Lehman units, which claims stemmed from the Lehman units' failure to fulfill their obligations under an operating agreement with Falls of Neuse Investments LLC. The agreement was hammered out after FNI and the Lehman units formed Somerset Associates to acquire a real property in Raleigh, North Carolina. 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 Clyde Click as Special Counsel -------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors seek court approval to employ Clyde Click P.C. as their special counsel effective October 1, 2010. Clyde has served as one of the "ordinary course" professionals retained by the Debtors. The firm's fees and expenses, however, are expected to exceed the $1 million compensation cap for OCPs, prompting the Debtors to seek approval to employ the firm as special counsel pursuant to Sections 327 of the Bankruptcy Code. As special counsel, Clyde will continue to provide the same services including asset management and representing the Debtors in connection with loan restructuring and workout. The firm will also provide new services to the Debtors such as equity investment analysis, among other things. Clyde will be paid for its services on an hourly basis and will be reimbursed for its expenses. The hourly rates for the firm's professionals are $495 for partners, $415 for associates, and $230 to $250 for paraprofessionals. In a declaration, Clyde Click, Esq., a partner at Clyde, assures the Court that the firm does not represent or hold any interest adverse to the Debtors or their estates. Tracy Hope Davis, the United States Trustee for Region 2, said she has reviewed the Application. Based on that review and on her monitoring of the Debtors' bankruptcy cases, she said she has no objection to the Application. 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 Wollmuth as Special Counsel ----------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors filed an application to employ Wollmuth Maher & Deutsch LLP as special counsel effective September 9, 2010. The Debtors tapped the firm to serve as their conflicts and special litigation counsel in connection with the prosecution of avoidance actions and other claims. Wollmuth will provide legal assistance to the Debtors in connection with litigation to be brought against certain trustees, special purpose entities and debt holders that received distributions as a result of the enforcement of provisions in transaction documents that purport to reverse the priority of payments on the occurrence of an event of default. Wollmuth will be paid for its services on an hourly basis and will be reimbursed for its expenses. The firm's professionals and their hourly rates are: Professionals Hourly Rates ------------- ------------ Partners $495-$615 Counsel attorneys $495 Associates $250-$425 Paraprofessionals $95-$195 In an affidavit, Paul DeFilippo, Esq., at Wollmuth, assures the Court that the firm does not have interest materially adverse to the interest of the Debtors' estate, and that the firm is a "disinterested person" under section 101(14) of the Bankruptcy Code. Tracy Hope Davis, the United States Trustee for Region 2, said she has reviewed the Application. Based on that review and on her monitoring of the Debtors' bankruptcy cases, she said she has no objection to the Application. 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: Seeks Disallowance of William Kuntz's Claims ------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors seek a court order disallowing and expunging the proofs of claim filed by William Kuntz III. In court papers, Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York, says Mr. Kuntz does not have any valid claims and did not provide supporting documents when he filed Claim Nos. 33550, 33551, 33552, 35121 and 35430. Mr. Waisman says the claims "do not allege any contractual relationship with the Debtors but rather rely on a fictitious theory of liability" in an attempt to collect from Lehman Commercial Paper Inc. amounts with respect to a security owned by Mr. Kuntz that was issued by Grand Union Capital Corp. Mr. Kuntz alleged in court filings that he holds claims against LCPI by virtue of his claim against Grand Union. He reportedly did not receive a distribution from Grand Union under its restructuring plan, which was confirmed by a bankruptcy court in Delaware way back in 1995. Wilmington Trust Responds Wilmington Trust Company says Mr. Kuntz III made some "unfounded, misleading and irresponsible allegations" about its conduct with respect to the global proofs of claim it filed against the Debtors. WTC filed proofs of claim on behalf of holders of the securities issued under an indenture dated September 1, 1987, which it administers as trustee. WTC says that it took all appropriate actions to ensure the note holders knew that it would file the proofs of claim on their behalf, and that they did not need to file individual claims. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod to Reject Revenue Bond Contracts ---------------------------------------------------------- Lehman Brothers Holdings Inc. and its units received approval from the U.S. Bankruptcy Court for the Southern District of New York to reject revenue bond contracts. In connection with the issuance of revenue bonds, many state and local governments or their agencies establish a debt service fund to accumulate funds to pay debt service on the Revenue Bonds and a reserve fund to serve as a source of backup for payment of their debt service obligations on the Revenue Bonds. Revenue Bonds are generally issued pursuant to an indenture or similar agreement between the issuer and a trustee. The Trustee holds and administers the Debt Service Fund and the Reserve Fund and uses the assets of the Debt Service Fund to pay scheduled interest and principal payments on the Revenue Bonds and the assets of the Reserve Fund to pay scheduled interest and principal payments on the Revenue Bonds when sufficient funds are not otherwise available to the issuer. The Trustee typically invests the funds in a Debt Service Fund or a Reserve Fund in certain eligible investments. The eligible investments are restricted to qualifying securities, which generally are high quality securities with short terms to maturity. Under the debt service fund agreements and the reserve fund agreements, generally, Lehman Brothers Special Financing, Inc., agreed to sell Qualified Securities to the Trustee on scheduled dates throughout the term of an issuance of Revenue Bonds at a price that generates a specific fixed rate of return, thereby enabling the issuer and the Trustee to meet credit quality and liquidity requirements of the Debt Service Fund or Reserve Fund without exposure to decreases in interest rates. LBSF avers that it has been diligently reviewing its executory contracts to identify contracts that are appropriate for rejection, and has determined that the Contracts, a list of which is available for free at http://bankrupt.com/misc/lehm11201.pdf are not its receivables. Because the counterparties to the Contracts have not terminated the Contracts, LBSF is not able to fix its liabilities under the Contracts unless a Counterparty defaults or until the Contracts mature in accordance with their terms, which in most cases will not occur for a long period of time, the Debtors tell the Court. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LENNAR CORP: S&P Downgrades Corporate Credit Rating to 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Lennar Corp. to 'B+' from 'BB-'. At the same time, S&P lowered its issue ratings on the company's $2.4 billion senior unsecured notes to 'B+' from 'BB-'. Lastly, S&P revised the outlook to stable from negative. "S&P lowered its ratings on Lennar after the homebuilder drew down its unrestricted cash balance to fund a sizeable investment in three portfolios of distressed real estate assets," said credit analyst James Fielding. "S&P's ratings reflect its opinion that Lennar maintains an aggressively leveraged profile, including a liquidity position that S&P views to be more constrained than similarly rated homebuilders." S&P revised its outlook to stable to reflect its expectation for breakeven or modestly profitable homebuilding operations at current low sales levels. S&P would raise its rating by one notch over the next 12 months if profitability improves more quickly than S&P currently expect (such that debt-to-adjusted EBITDA moves much closer to 4.0x), and the company builds sufficient liquidity to meet maturities and working capital needs through 2013. S&P would lower S&P's rating by one or more notches if working capital needs, including investments in the Rialto segment, are larger than S&P currently anticipates, such that unrestricted cash and forward two-year FFO estimates were to fall significantly below current levels. LEVI STRAUSS: Posts $26 Million Net Income in August 29 Quarter --------------------------------------------------------------- Levi Strauss & Co. distributed a news release and filed a Form 10- Q for its financial results for the third quarter ended August 29, 2010. The Company reported net income of $26.62 million on $1.10 billion of net sales for the three months ended Aug. 29, 2010, compared with net income of $40.40 million on $1.02 billion of net sales for the three months ended Aug. 30, 2010. The Company's balance sheet at Aug. 29, 2010, showed $3.02 billion in total assets, $3.28 billion in total liabilities, and a stockholder's deficit of $269.54 million. According to the earnings release, third-quarter net revenues grew 7% year-over-year on a reported basis. Excluding the effects of currency, revenues grew 8 percent and were up in all three regions. Growth was driven by the strength of the Levi's brand in the Americas, the company's acquisitions in 2009, and the expansion of the company's dedicated store network worldwide. Revenue declines in the wholesale channel in certain markets partially offset this growth. In comparison to the third quarter of 2009, operating income declined from $98 million to $86 million as the benefits from the increase in net revenues and higher gross margin were offset by continued investment in the company's retail network and increased advertising and promotion activities. Below operating income, interest expense at $32 million was $6 million lower than the same quarter last year. Other expense was slightly higher at $8 million. Third-quarter net income attributable to the company was $28 million, a decline of $13 million compared with last year. The Company said in the earnings release that it maintained a strong liquidity position during the third quarter. At August 29, 2010, cash and cash equivalents were $261 million, complemented by $283 million available under the company's revolving credit facility. "Net revenue growth in the third quarter reflects the strength of the Levi's brand around the globe in spite of a challenging retail environment," said John Anderson, president and chief executive officer. "In the face of tough economic conditions, we achieved several key milestones in our overarching strategy to grow our business around the world. We realigned our management structure around our global brands, launched the Levi's Curve ID fit system for women and began the roll-out of the new Denizen brand in Asia. We're investing in these global product initiatives to help us capitalize on growth opportunities when the global economy truly recovers." Cash Flow and Balance Sheet The company ended the third quarter with cash and cash equivalents of $261 million, a decrease of $10 million from November 30, 2009. Cash provided by operating activities during the nine-month period was $96 million, compared with $174 million for the same period in 2009. In 2010, cash collections from customers increased on higher net revenues, offset by the investment in strategic initiatives and inventory build. Net debt of $1.6 billion at the end of the quarter was comparable to net debt at the end of 2009. "The third quarter results demonstrate our ability to deliver strong operating performance in the face of a challenging business environment around the world," said Blake Jorgensen, chief financial officer. "We are committed to investing in our strategic initiatives, while diligently controlling costs and managing inventories." A full-text copy of the Earnings Release is available for free at http://ResearchArchives.com/t/s?6c7a A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6c7b About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. * * * The Company carries a 'B+' corporate credit rating from Standard & Poor's, a 'B1' corporate family rating from Moody's Investors Service and a 'BB-' issuer default rating from Fitch Ratings. LOEHMANN'S CAPITAL: 50% of Bondholders Support Exchange Offer ------------------------------------------------------------- Loehmann's Capital Corp. said that -- in connection with its pending consent solicitation and private offer to exchange its outstanding 12% Senior Secured Class A Notes due 2011, Senior Secured Class A Floating Rate Notes due 2011 and 13% Senior Secured Class B Notes due 2011 for 12% Senior Secured Class A Notes due 2014, Senior Secured Class A Floating Rate Notes due 2014 and 13% Senior Secured Class B Notes due 2014 -- it has received valid consents from holders representing more than 50% in aggregate outstanding principal amount of the old notes. As a result, Loehmann's will now be able to achieve two of the purposes of the consent solicitation: (i) increasing the Priority Lien Cap under the Lease Agreement and the Intercreditor Agreement from $35 million to $45 million thereby allowing for a corresponding increase in the amount available under Loehmann's Operating Co.'s revolving credit facility and (ii) allowing Loehmann's Operating Co. to close up to 15 underperforming stores in the next 12 months and liquidate the inventory in those stores, as more fully described in the offering memorandum relating to the exchange offer and consent solicitation, dated September 24, 2010. Loehmann's also said it is increasing the consideration offered to eligible holders that validly tender their old notes on or prior to October 22, 2010. Accordingly, eligible holders that validly tender their old notes at or prior to 11:59 p.m., New York City time, on October 22, 2010, will receive $1,000 principal amount of new notes of the same class for each $1,000 principal amount of their old notes that are accepted for exchange. Eligible holders that validly tender their old notes after October 22, 2010 but at or prior to 11:59 p.m., New York City time, on October 27, 2010 will receive $970 principal amount of new notes of the same class for each $1,000 principal amount of their old notes that are accepted for exchange. The consummation of the exchange offer will be subject to customary conditions, including the receipt of valid and unrevoked tenders of at least 97% in principal amount of the outstanding old notes. Subject to applicable law, the company may terminate or amend, modify or waive the terms of the exchange offer and consent solicitation. As reported by the Troubled Company Reporter on October 5, 2010, Loehmann's Capital Corp. missed an October 1, 2010, interest payment on its senior secured notes. Standard & Poor's believes the company is not likely to make the payment within the 30-day grace period. S&P lowered its corporate credit rating on Loehmann's Holdings Inc. to 'D' from 'CC' and the issue-level rating on the senior secured notes to 'D' from 'C'. As reported by the TCR on June 18, 2010, Bill Rochelle, bankruptcy columnist at Bloomberg News, said Loehmann's hired three financial advisory firms with experience in turnarounds and bankruptcy reorganizations. The firms are AlixPartners LLP, Perella Weinberg Partners and Clear Thinking Group LLC, according to people with knowledge of the situation. Reuters on April 6 reported that Loehmann's said it was fulfilling its financial obligations in response to new questions about its ability to keep its operations afloat. According to Reuters, Loehmann's denied a report in The New York Post that it missed a $6 million interest payment on its debt the previous week. But a source briefed on the situation said the store chain had delayed payments to CIT Group Inc. in order to make the interest payment. Reuters also reported that the NY Post, citing sources close to the situation, also said suppliers to the company were holding back shipments due to its deteriorating financial situation. A source told Reuters that CIT had suspended its factoring approvals for Loehmann's because the company had slowed payments to vendors and to CIT due to the interest payment. It was not immediately clear if CIT had reinstated its factoring approval, Reuters said. Loehmann's received a speculative-grade "CC" corporate credit rating from Standard & Poor's. The ratings agency said in March 2010, "we believe that current cash on hand and availability under the company's revolver may not be sufficient to cover operating needs over the near term." Loehmann's is a discount retailer with more than 60 stores. The Bronx, New York-based company is owned indirectly by Istithmar PJSC, an investment firm owned by the government of Dubai. Loehmann's emerged from a 14-month Chapter 11 reorganization with a confirmed plan in September 2000. At the time, it operated 44 stores in 17 states. LOWER BUCKS: Can Continue Using Cash Collateral Until Dec. 31 ------------------------------------------------------------- Lower Bucks Hospital, et al., obtained interim authorization from the Hon. Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to continue using Bank of New York Mellon Trust Company, N.A.'s cash collateral until December 31, 2010. The Debtors will use cash collateral pursuant to this budget: http://bankrupt.com/misc/LOWER_BUCK_cashcollext_budget.pdf As adequate protection, the Bank is granted: (a) a security interest and replacement lien in all Unrestticted Gross Revenues acquired by LBH subsequent to the Petition Date; (b) a lien on Lower Bucks' real estate, subject only to that certain lien of the Tovraship of Bristol in the principal amount of approximately $133,000, which consists of several parcels comprising approximately 23 acres located at 501 Bath Road, Bristol, Pennsylvania 19007 and all improvements thereon including without limitation Lower Bucks' main hospital building; and (c) a superpriority claim with priority over all administrative expense claims. The Bank is permitted without further Court approval to make monthly distributions from the Debt Service Reserve Fund and the Debt Service Fund to pay itself, if permitted by the Indenture, the Bank's fees and expenses, including the reasonable fees and expenses of its counsel. The Debtors will provide a report to the Bank and the Committee within four business days of the last day of each bi-weekly period set forth in the Budget. The Court has set for December 20, 2010, at 11:00 a.m. a hearing on the Debtors' use of cash collateral. About Lower Bucks Hospital Bristol, Pennsylvania-based Lower Bucks Hospital is a nonprofit hospital based in Bristol, Pennsylvania. The Hospital is currently licensed to operate 183 beds. Together with affiliates Advanced Primary Care Physicians and Lower Bucks Health Enterprises, Inc., Lower Bucks owns a 36-acre campus with several medical facilities. The Hospital's emergency room serves approximately 30,000 patients annually. For the fiscal year ending June 30, 2009, Lower Bucks had $114 million in consolidated revenues. The Hospital filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. E.D. Pa. Case No. 10-10239). The Hospital's affiliates -- Lower Bucks Health Enterprises, Inc, and Advanced Primary Care Physicians also filed Chapter 11 petitions. Jeffrey C. Hampton, Esq., and Adam H. Isenberg, at Saul Ewing LLP, assist the Hospital in its restructuring effort. Donlin, Recano & Company, Inc., is the Hospital's claims and notice agent. The Hospital estimated $50 million to $100 million in assets and $50 million to $100 million in liabilities as of the Chapter 11 filing. MANITOWOC COMPANY: Moody's Assigns 'B3' Rating to $500 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Manitowoc's proposed $500 million of senior unsecured notes. Moody's affirmed the company's B2 corporate family rating and probability of default rating. The ratings outlook remains negative. Ratings Rationale The $500 million of proposed notes were rated B3 to reflect their pari passu position with other senior unsecured notes and considers their subordination to the bank credit facility. The bank credit facility was upgraded to Ba2 from B1 to reflect the proposed change in the company's capital structure and in particular the anticipated lower level of first lien debt that is expected to share on a first lien basis in the company's collateral. The company's 9.5% and 7.125% senior unsecured notes were upgraded to B3 from Caa1 to reflect the anticipated paydown of first lien debt with the proceeds from the new $500 million senior unsecured notes. As a result of the paydown of first lien debt, there will be less debt that is senior to the new unsecured notes. The refinancing also anticipates that covenant levels in the bank credit facility will be loosened given the slower than anticipated recovery of the Crane business. If the company fails to complete the proposed refinancing and bank amendment, the CFR, PDR and instrument ratings will be re-evaluated. The affirmation of the B2 CFR and PDR considers that while Manitowoc's leverage will likely remain at an elevated level for the rating category for at least the next year, it should generate positive free cash flow in 2010 and 2011. A primary consideration in the affirmation was the company's track record of generating cash during a downturn and the expectation that the company will maintain a debt reduction focus. Additionally, although the company is experiencing meaningful pressure in both its Crane business and its Foodservice Equipment business, the company benefits from international diversification and should also benefit from its position in various emerging markets that are growing faster than its domestic business. Upgrades: -- Senior Secured Bank Credit Facility, Upgraded to Ba2, LGD2, 18% from B1, LGD3, 33% -- Senior Unsecured Regular Bond/Debenture, Upgraded to B3, LGD5, 74% from Caa1, LGD5, 86% Assignments: -- Senior Unsecured Regular Bond/Debenture, Assigned a rating of B3, LGD5, 74% The ratings could be downgraded if EBITA/interest expense or Debt to EBITDA materially weakened from current levels over the next few quarters or if Debt to EBITDA is not expected to decline to about 5.5 times by the end of 2011. Currently, EBITA/interest for the LTM period was 1.2x while debt/EBITDA was 6.1 times. The rating outlook could be stabilized if leverage improves to about 5.5x on a sustainable basis. EBITA coverage of interest of over 1.5 times that was deemed to be improving would also support a stable ratings outlook. The Manitowoc Company, Inc., headquartered in Manitowoc, WI, is a diversified global manufacturer supporting the construction and foodservice end markets. LTM revenues through June 2010 were approximately $3.3 billion. MARSHA ARMSTRONG: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Marsha Feldman Armstrong 14821 Karl Avenue Los Gatos, CA 95030 Bankruptcy Case No.: 10-60607 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Northern District of California (San Jose) Judge: Charles Novack Debtor's Counsel: David A. Boone, Esq. LAW OFFICES OF DAVID A. BOONE 1611 The Alameda San Jose, CA 95126 Tel: (408) 291-6000 E-mail: ecfdavidboone@aol.com Scheduled Assets: $1,863,105 Scheduled Debts: $2,295,684 The Debtor did not file a list of creditors together with its petition. MARSICO PARENT: Moody's Cuts Ratings on Senior Loan to 'Caa2' ------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Marsico Parent Company, LLC's senior secured bank facilities to Caa2 from Caa1 and put them on review for further downgrade. In addition, the rating of Marsico Parent Holdco, LLC's senior notes was downgraded to C from Ca with a stable outlook. In the same rating action, Moody's also put the Caa3 corporate family rating of Marsico Parent on review for possible downgrade. Moody's affirmed Marsico Parent's senior unsecured notes at Ca and changed the outlook to stable from negative. Moody's stated that the downgrades reflect its estimate of the company's reduced corporate valuation caused by the continuing challenges Marsico faces in stabilizing its Assets under Management. Marsico initiated a debt restructuring plan on October 8, 2010 to decrease its debt leverage and fixed cash expenses, which it believes will support operations and provide it with the financial flexibility to execute on its business plan and create value. These ratings were impacted: Marsico Parent Company, LLC: -- Corporate family rating to Caa3 Rating Under Review for possible downgrade from Caa3(negative outlook); -- $1,024 million Senior secured bank facilities and $25 million revolving credit line to Caa2 Rating Under Review for possible downgrade from Caa1(negative outlook); -- $600 million Senior subordinated notes were affirmed at Ca; outlook changed to stable from negative. Marsico Parent Holdco, LLC (Parent Holdco): -- $550 million Senior notes rating to C from Ca; outlook changed to stable from negative Marsico Parent is the parent of Marsico Capital Management, LLC and Marsico Fund Advisors, LLC. Marsico Capital Management is a Denver-based asset management firm offering investment services to institutional and retail investors. The company held approximately $47.5 billion in AUM as of September 30, 2010. The last rating action was taken on December 10, 2009, when Moody's downgraded Marsico Parent's CFR to Caa3 from B3 resulting in rating downgrades of its secured bank credit facilities to Caa1 from B1and its senior unsecured notes to Ca from Caa1. The rating of Parent Holdco's senior notes was also downgraded to Ca from Caa2. Transaction Detail Under the restructuring plan announced by the company, $550 million of debt outstanding at Parent Holdco as well as $397 million notes and $119 million preferred stock issued by Marsico Parent Superholdco, LLC will be converted into the common equity of Marsico Holdings, LLC, a newly created entity, which is intended to hold essentially all of the equity of Marsico's operating companies after completion of the restructuring. Each class will receive a 16%, 2% and 1% stake, respectively, in the Newco assuming 100% participation. Moody's does not rate the debt and preferred issued by Superholdco. Additionally, the Company is offering to exchange $600 million debt issued by Marsico Parent due in 2016 for $600 million of notes maturing in 2020 issued by Newco. The interest on the new notes will vary between the applicable federal rate (currently 3.61%) and and an equivalent rate of 15% based on the company's performance. Subsequent to January 2015, Newco has the option to make payments-in-kind for interest payments of 11.625%. Marsico Parent note holders will also get a 30% equity stake in Newco. The restructuring also includes an amendment to the terms of the Marsico Parent and Marsico Holdings, LLC's $1.024 billion bank senior secured bank line. While the interest rate and term of the term loan under the proposal remain unchanged, the company expects a reduced financial covenant requiring at least $30 billion in AUM, down from $42 billion, in exchange for a 1% increase in quarterly amortization payments. Marsico expects at least 95% of the Marsico Parent note holders and more than 66% of the Parent Holdco and Superholdco note holders to accept the exchange offer. Marsico believes it will be successful in closing the exchange offer based on commitments received to date. Ratings Rationale In Moody's opinion, the debt restructuring and the exchange offer is intended to avoid default on Marsico Parent senior subordinated notes and Parent Holdco's senior notes. The transaction, if completed, would constitute a distressed exchange on these notes, which is an event of default according to Moody's. While the extent of ultimate recoveries remains uncertain at this point, Moody's expects the losses on promised principal and interest on the Marsico Parent's senior subordinated notes on the Parent Holdco notes to be significant The downgrades of the senior secured ratings to Caa2 reflects the increased probability of material credit losses for Marsico Parent's bank debt holders to the extent that the Company's announced exchange, if consummated, is unsuccessful in stabilizing the company. Marsico's credit profile continues to be challenged by persistent net outflows, poor relative investment performance during 2007-2009 period, and volatile equity markets. Furthermore, absent a sustained improvement in its funds' investment performance, there exists a real possibility that the company may lose sub-advisory and institutional relationships. Moody's recognizes the positives resulting from the restructuring including reduced overall debt levels, cash interest, and amortization requirements of junior stakeholders as well as a greater cushion relative to financial covenants on its bank debt. These changes will allow Marsico time to demonstrate improved investment performance, recover financially, and grow AUM without covenant pressure. These benefits must be weighed against the execution risk and the possible distraction of the debt restructuring plan to Marsico's clients, employees, and other key relationships. Whether, and to what extent, the proposed debt restructuring plan will be supportive of Marsico and its credit profile is as yet uncertain. Among the factors considered by Moody's during the review period will be the consummation of the restructuring plan and its impact on Marsico's clients and the operations of the Company. MATTHEW WATKINS: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Matthew M. Watkins aka Matt Watkins 67 Madison Avenue, Apt. 915 Memphis, TN 38103 Bankruptcy Case No.: 10-30707 Chapter 11 Petition Date: October 1, 2010 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: George W. Emerson Jr. Debtor's Counsel: P. Preston Wilson, Esq. GOTTEN, WILSON, SAVORY & BEARD 88 Union Avenue, 14th Floor Memphis, TN 38103 Tel: (901) 523-1110 Fax: (901) 523-1139 E-mail: ppwgwsb@bellsouth.net Scheduled Assets: $1,749,467 Scheduled Debts: $1,263,960 A list of the Debtor's 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnwb10-30707.pdf MERUELO MADDUX: Committee Wants Executive Bonuses Cut Off --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the official committee of unsecured creditors for Meruelo Maddux Properties Inc. is asking the bankruptcy court to compel the Debtor to terminate employment agreements with the top three officers -- Chief Executive Officer Richard Meruelo, Chief Operating Officer John Maddux and Chief Financial Officer Andrew Murray -- to avoid large priority claims if one of the competing reorganization plans is eventually confirmed. The motion is scheduled for hearing on Nov. 10. 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 Creditors Committee is represented by Victor A. Sahn, Esq., Dean G. Rallis Jr., Esq., Asa S. Hami, Esq., and Tamar Kouyoumjian, Esq., at SULMEYERKUPETZ. The Debtors' financial condition as of December 31, 2008, showed $681,769,000 in assets and $342,022,000 of debts. METABOLIC RESEARCH: Recurring Losses Cue Going Concern Doubt ------------------------------------------------------------ Metabolic Research, Inc., filed on October 12, 2010, its annual report on Form 10-K for the year ended December 31, 2009. Hamilton, PC, in Denver, Colo., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations. The Company reported a net loss of $4.1 million on $4.8 million of revenue for 2009, compared with a net loss of $257,554 on $2.8 million of revenue for 2008. The Company's patent assignments (resulting from the issue of stock for patent assignments during 2007 and valued at the trading value of $10.3 million on the date of issue) were tested for impairment in 2009 under provisions of FASB 157, and accordingly the Company recognized a write-down of its patent asset in the amount of $3.7 million. The Company's balance sheet at December 31, 2009, showed $8.5 million in total assets, $841,910 in total liabilities, and stockholders' equity of $7.7 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?6c75 About Metabolic Research Tampa, Fla.-based Metabolic Research, Inc. (MBTR.PK) -- http://www.metabolicresearchinc.com/-- was incorporated on October 7, 1996, in the State of Indiana under the corporate name "MAS Acquisition VII Corp." Prior to August 11, 1999, the Company was a blank check company seeking a business combination with unidentified business. On August 11, 1999, the Company acquired 100% of the outstanding capital stock of Dimgroup, Inc., a corporation which was formed in Nevada on April 23, 1999. In February 2000 the Company changed its corporate name to "Dimgroup.com Inc." On April 5, 2001, the Company changed its corporate name to Datastand Technologies, Inc. On February 1, 2007, the Company changed its corporate name to Metabolic Research, Inc. On April 27, 2007, the Company incorporated in Nevada, filed its articles of merger and redomiciled to Nevada. The Company focuses on investigating technologies and other business opportunities in the life sciences and health care fields. The Company seeks to produce anti-inflammatory and analgesic products used to treat and cure inflammatory diseases. Its intended product includes Stemulite, a fitness formula for men and women. MGM RESORTS: To Get $125 Million from Macau Joint Venture --------------------------------------------------------- MGM Resorts International said certain recent developments and its preliminary expectations of financial results for the third quarter of 2010. The operating results in this release reflect preliminary expectations of financial results for the third quarter of 2010, have not been reviewed by the Company's auditors, and are subject to change. The Company expects to report its full results for the quarter, and conduct a conference call to discuss its earnings, during the week of November 1, 2010. The Company said it expects to receive approximately $125 million from MGM Macau during October 2010, which represents a partial repayment of principal and accrued interest on the Company's interest and non-interest bearing notes to that entity. The Company expects a third quarter diluted loss per share of approximately $0.72 compared to a loss of $1.70 per share in the prior year third quarter. The current year results include expected pre-tax impairment charges totaling $357 million, or $0.51 per diluted share, net of tax, including the impairment charge related to the Company's investment in CityCenter, a pre- tax charge of $46 million related to impairment of CityCenter's residential real estate inventory, and the impairment charge related to the Company's Borgata investment. The prior year results include pre-tax impairment charges totaling $1.17 billion, or $1.72 loss per diluted share, net of tax, including a pre-tax impairment charge of $956 million related to the Company's investment in CityCenter and a pre-tax impairment charge of $203 million related to impairment of CityCenter's residential real estate under development. At September 30, 2010, the Company had approximately $12.9 billion of indebtedness, including $3.4 billion of borrowings outstanding under its senior credit facility, with available borrowing capacity under the senior credit facility of approximately $1.3 billion. About MGM Resort MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company's balance sheet at June 30, 2010, showed $19.98 billion in total assets, $1.19 billion in total current liabilities, $2.65 billion in deferred income taxes, $13.04 billion in long-term debt $243.29 million in other long- term obligations, and $2.85 billion in total stockholders' equity. * * * As reported by the Troubled Company Reporter on July 1, 2010, Fitch Ratings affirmed these ratings for MGM Resorts: Issuer Default Rating affirmed at 'CCC'; Senior secured notes due 2013, 2014, and 2017 affirmed at 'B+/RR1' (91%-100% recovery band); Senior secured notes due 2020 rated 'B+/RR1' (91%-100%); Senior credit facility affirmed at 'B-/RR3' (51%-70%); Senior unsecured notes affirmed at 'CCC/RR4' (31%-50%); Convertible senior notes due 2015 rated 'CCC/RR4' (31%-50%); Senior subordinated notes affirmed at 'C/RR6' (0%-10%). MICHAEL DIMAURO, JR.: Case Summary & Creditors List --------------------------------------------------- Debtor: Michael J. Dimauro, Jr. 1004 Prospect Avenue Wilmington, DE 19809 Bankruptcy Case No.: 10-13295 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Mary F. Walrath Debtor's Counsel: Donna L. Harris, Esq. PINCKNEY, HARRIS & WEIDINGER, LLC 1220 N. Market Street, Suite 950 Wilmington, DE 19801 Tel: (302) 504-1499 - Direct Fax: (302) 442-7046 E-mail: dharris@phw-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A list of the Debtor's 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/deb10-13295.pdf MIREK KUCERA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Joint Debtors: Mirek Kucera Alena Kucera dba Caf� Prague 28 Arana Circle Sausalito, CA 94965 Bankruptcy Case No.: 10-13932 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtors' Counsel: Scott J. Sagaria, Esq. LAW OFFICES OF SCOTT J. SAGARIA 333 W. San Carlos Street, #1700 San Jose, CA 95110 Tel: (408) 279-2288 E-mail: sjsagaria@sagarialaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Joint Debtors did not file a list of creditors together with its petition. MPI AZALEA: Wants to Extend Cash Collateral Use Until Dec. 5 ------------------------------------------------------------ MPI Azalea, LLC, and its debtor-affiliates ask the Hon. Margaret H. Murphy of the U.S. Bankruptcy Court for the Northern District of Georgia to amend a final order authorizing the use of cash collateral for eight Wachovia Debtors. The Debtors will use cash collateral pursuant to this budget: http://bankrupt.com/misc/MPI_Azalea_cashcoll_budget.pdf Wachovia Bank, N.A., extended to the Wachovia Debtors certain prepetition financing and other financial accommodations. Wachovia Debtors executed a promissory note dated May 17, 2007, in the principal amount of $92.70 million. The total indebtedness due and owing under the Note, exclusive of any fees and other costs, expenses, and charges, is $73,300,544.20. On February 4, 2010, an agreed interim order authorizing cash collateral use for eight Wachovia Debtors was entered. On February 5, 2010, the Wachovia Debtors and Wachovia submitted an agreed supplemental interim order authorizing the cash collateral use. On April 26, 2010, a supplement to interim cash collateral order for eight Wachovia Debtors was entered. On April 28, 2010, upon submission by Wachovia Debtors and Wachovia an agreed supplement to interim cash collateral order for eight Wachovia Debtors was entered, which consists of the individual budgets for each of the Wachovia Debtors. On May 2010, the Court authorized the Debtors to use, on a final basis, to use cash collateral until September 30, 2010, at 5:00 p.m. (Eastern Time). Wachovia Debtors have been in active and sustained negotiations with Arbor Realty Finding, LLC, for a plan funding agreement, for which Letter of Intent dated August 9, 2010, has been executed, to pursue a plan-based sale of substantially all of Wachovia Debtors' assets. A motion for approval of the agreement is being finalized, and Arbor and Wachovia Debtors anticipate that it will be filed shortly. In conjunction with the contemplated sale-based plan process, the final cash collateral order must be amended to, principally, extend the termination date through December 5, 2010, and to incorporate certain milestones regarding the Debtors' efforts to emerge from bankruptcy by a plan jointly sponsored by Arbor or otherwise. The budget for the extended period will be submitted on an agreed basis by and between Debtors, Wells Fargo and Arbor. As adequate protection for any cash collateral expended by the Debtors, Wachovia was granted and will continue to have the replacement lien to secure an amount of Wachovia's prepetition claims in all postpetition cash collateral equal to the aggregate diminution in the value of prepetition collateral resulting from the Debtors' postpetition use of the cash collateral. In addition to the replacement lien, Wachovia was granted and will continue to have a superpriority claim. About MPI Azalea Atlanta, Georgia-based MPI Azalea, LLC, aka Highland Brooke Apartments and its affiliates filed for Chapter 11 on January 8, 2010 (Bankr. N.D. Ga. Lead Case No. 09-60803). Jimmy C. Luke, Esq., at Foltz Martin, LLC assists the Debtor in its restructuring effort. In its petition, the Debtor estimated assets and liabilities of $10 million to $50 million as of the petition date. NAKNEK ELECTRIC: Reaches Stipulation to Use Cash Collateral ----------------------------------------------------------- Naknek Electric Association, Inc., has reached a stipulation with the United States Department of Agriculture, Rural Utilities Service on the use of cash collateral. The Debtor asks the U.S. Bankruptcy Court for the District of Alaska to approve the stipulation. The Debtor is submitting a $40 million loan application to RUS and the creditor whose cash collateral the Debtor needs to use to continue to maintain the geothermal well and run the power generation plant. The recordation of a substantial writ of attachment in July forced the Debtor's Chapter 11 filing. The Debtor must, within the next six months, obtain the necessary financing to finish the geothermal project, or it will sell, or assign, or plug and abandon the geothermal project. Erik LeRoy, Esq., at Erik LeRoy, P.C., explains that the Debtor needs to use $323,354 of cash in the Debtor's possession and approximately $50,000 of receivables to be collected in the next 90 days. According to the Debtor, it needs the money so that it may continue to generate and distribute electricity in the Bristol Bay region and, for 30 days, continue to maintain and clean its geothermal well. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/NAKNEK_ELECTRIC_budget.pdf The Debtor will make an adequate protection payment of $18,000 to RUS by the close of business on October 29, 2010. As further adequate protection of RUS's security interest in the cash collateral to be used by Debtor, Debtor will grant RUS: (i) replacement liens on all of the estate's property purchased or acquired with cash collateral; and (ii) a security interest in all cash and accounts receivable generated by Debtor after the Petition Date, and in any other of the Collateral's proceeds, product, offspring, or profits acquired by the estate after the commencement of the case, to any extent that the Mortgage does not already grant such a security interest. If the replacement liens and other forms of protection are inadequate to protect RUS's interests, RUS will be entitled to priority over all other expenses of administration of the estate. The Debtor will furnish RUS weekly reports of Debtor's cash position, disbursements, receipts, accounts receivable and the use of the Cash Collateral. Naknek, Alaska-based Naknek Electric Association, Inc., operates an electric utility generation plant that is run by diesel powered generators. It provides electricity to 591 members of the cooperative. It also is developing a geothermal well. Naknek Electric filed for Chapter 11 bankruptcy protection on September 29, 2010 (Bankr. D. Alaska Case No. 10-00824). Erik LeRoy, Esq., at Erik Leroy P.C., assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million as of the Petition Date. NATIONAL ENVELOPE: Plan Exclusivity Extended to Jan. 6 ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that National Envelope Corp. received a January 6 extension of the exclusive right to propose a Chapter 11 plan. No objections were filed to the extension request. 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. In September 2010, National Envelope was bought in a roughly $208 million deal by The Gores Group LLC, a West Coast private equity firm that manages about $2.9 billion of capital. NCD DEVELOPMENT: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: NCD Development, Inc. 8250 Anderson Boulevard Fort Worth, TX 76120 Bankruptcy Case No.: 10-46416 Chapter 11 Petition Date: October 3, 2010 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: Randy Ford Taub, Esq. LAW OFFICE OF R. FORD TAUB 1004 Crystal Springs Drive Allen, TX 75013 Tel: (972) 678-2950 Fax: (972) 678-2953 E-mail: rfordtaub@msn.com Estimated Assets: $1,000,001 to $100,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Chirag Patel, president. OMC INC: Court Compels NPF to Accept Pension Payments ----------------------------------------------------- The Hon. Martin Glenn issued a 14-day temporary restraining order barring the Sheet Metal Workers' National Pension Fund from actions to restrict OMC Inc. from continuing to make required contributions and to provide the Debtor's employees with pension credits consistent with the collective bargaining agreement and pension plan documents. The Debtor will make required pension contributions to NPF on a weekly basis. The dispute arises from NPF's post-petition termination of the Debtor as a Contributing Employer to NPF, a multi-employer benefit fund created pursuant to the Taft-Hartley Act, 29 U.S.C. Sec. 186(c) and ERISA, 29 U.S.C. Sec. 1001, et seq. Pursuant to the CBA between the Debtor and Local 28, the Debtor is required to make pension contributions to NPF on behalf of its employees. Prior to filing its chapter 11 petition, the Debtor owed substantial arrears (approximately $1 million) to NPF. In July 2010, NPF obtained a default judgment against the Debtor for the unpaid contributions. On September 12, 2010, NPF advised the Debtor in writing that it would terminate the Debtor as a Contributing Employer as of October 1, 2010 if it did not cure the payment arrears by October 1, 2010. After the Debtor's September 15, 2010 chapter 11 bankruptcy filing, representatives of NPF communicated with the Debtor's employees advising them that they would no longer earn credits for pension benefits while employed by the Debtor. Several of the Debtor's employees then terminated their employment with the Debtor and went to work for a competitor. Additionally, the Debtor has offered evidence that it has lost two substantial contracts because NPF refuses to issue pension credits to Debtor's employees during the post-petition period. The TRO will remain in effect for a period of 14 days, until 4:30 p.m., October 27, 2010, unless the parties agree (subject to approval of the Court) to an extension of that time. The case is OMC, Inc., v. Local Union 28 of the Sheet Metal Workers' International Union, Sheet Metal Workers' International Union, AFL-CIO, Sheet Metal Workers' National Pension Fund, and Ralph Tortora, Adv. Pro. No. 10-3875 (Bankr. S.D.N.Y.), and a copy of the Court's TRO dated October 13, 2010, is available at http://is.gd/g1Ri6from Leagle.com. About OMC Inc. OMC Inc. is a subcontractor that makes and installs sheet metal ductwork for heating and cooling systems. OMC filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-14864) on Sept. 15, 2010. Jonathan S. Pasternak, Esq., at Rattet, Pasternak & Gordon Oliver, LLP, in New York, serves as counsel. The Debtor estimated assets of $1 million to $10 million, and debts of $10 million to $50 million. PIER 39: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------- Debtor: Pier 39, LLC 61679 Brompton Road South Bend, IN 46614 Bankruptcy Case No.: 10-34860 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Northern District of Indiana (South Bend Division) Judge: Harry C. Dees, Jr. Debtor's Counsel: Edward P. Benchik, Esq. SHEDLAK & BENCHIK LAW FIRM LLP 402 West Washington Street, Suite 200 South Bend, IN 46601 Tel: (574) 233-7701 Fax: (574) 233-7721 E-mail: epb@sandblawfirm.com Scheduled Assets: $1,750,000 Scheduled Debts: $1,939,011 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/innb10-34860.pdf The petition was signed by Talib Alway, president PRECISION PARTS: Plan Has 0.15% Recovery for Junior Creditors ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Precision Parts International Services Corp. has filed a plan, under which unsecured creditors with $103 million in claims stand to collect 0.15%. A hearing to consider approval of the disclosure statement was scheduled for October 12. PPI sold it assets in March for $16 million, with $9.8 million paid to secured creditors. After the Official Committee of Unsecured Creditors challenged the validity of the secured lenders' claim, it obtained a settlement in which $575,000 was carved out for the Company's creditors. In addition to $150,000 cash, unsecured creditors are to receive some recoveries from lawsuits, plus other excess cash, if any. About Precision Parts Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sells products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. PPI and its units operate six manufacturing facilities throughout north America, including a facility in Mexico operated on their behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Company and eight of its affiliates filed for Chapter 11 protection on December 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). Attorneys at Pepper Hamilton LLP are bankruptcy counsel to the Debtors. Alvarez & Marsal North America LLC is the Debtor's financial advisors and Kurtzman Carson Consultants LLC is the claims, noticing and balloting agent. PPI Holdings, Inc., estimated assets and debts between $100 million and $500 million in its Chapter 11 petition. PRIME PROPERTIES: Court Allows JPMorgan Foreclosure on Apartments ----------------------------------------------------------------- The Hon. Joel B. Rosenthal grants a request by JP Morgan Chase Bank, N.A., to lift the automatic stay to foreclose on property by Prime Properties of New York, Inc. The Court denies the Debtor's move to sell the property, free and clear of liens. JPMC alleged that the debtor lacks equity in the Property -- a multi-family residential apartment complex located at 300 and 304 Tenth Street, Brooklyn -- and was without a reasonable prospect of feasible reorganization. JPMC is the Special Servicer for Fannie Mae, owner of a Promissory Note dated April 30, 2007 for $8,000,000, and secured by a Mortgage and Security Agreement dated April 30, 2007, on the Property. JPMC filed a proof of claim, with respect to the Note and Mortgage and on behalf of Fannie Mae, for $9,746,471.60. JPMC valued the Property at $6,570,000 The Debtor filed a sale motion on December 9, 2009. The Debtor has or had entered into a contract to sell the Property for $5,250,000, subject to court approval. The Debtor believed that its Contract would generate an extra $250,000 that could be distributed through a plan of reorganization. The Court notes the Debtor is a single asset real estate which has not filed a plan of reorganization in the 14 months since filing its petition. The Debtor has not provided any basis for the Court to find that there is a reasonable prospect of feasible reorganization. The Court also holds that the Debtor failed to allege that there is any applicable nonbankruptcy law that permits the sale of the property free and clear and that the JPMC's interest is in a bona fide dispute. A copy of the Court's Decision and Order dated October 13, 2010, is available at http://is.gd/g1SxKfrom Leagle.com. Prime Properties of New York, Inc., filed a voluntary Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 09-46912) on August 12, 2009. QUIGLEY CO: Pfizer Appeals Chapter 11 Plan Ruling ------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Pfizer Inc. has moved to overturn a ruling that it engaged in bad-faith vote buying in a bid to shake an estimated $900 million worth of asbestos liabilities. As reported by the Troubled Company Reporter on September 9, 2010, Tiffany Kary at Bloomberg News said U.S. Bankruptcy Judge Stuart M. Bernstein in New York on September 8 rejected Quigley's fourth reorganization plan and said parties should discuss dismissal of the case. He said the plan was filed in "bad faith" by Pfizer and cited testimony that asbestos claims directed at Quigley could total $4.45 billion over the next 42 years. "In a nutshell, Pfizer bought enough votes to assure that any plan would be accepted," Judge Bernstein wrote. According to the report, in a 90-page ruling that covers Pfizer's failed attempts to deal with its growing asbestos liabilities since June 1985, Judge Bernstein noted that a lawyer who represented both Quigley and Pfizer settled claims against Quigley and got releases for Pfizer at no additional cost. "We are disappointed in the court's ruling as we continue to believe that Pfizer has no liability for Quigley's conduct," a Pfizer spokesman, Chris Loder, said in a telephone interview with Bloomberg. The Chapter 11 Plan Under the proposed Chapter 11 plan, Pfizer is paying about $450 million into a trust to satisfy claims about products for which it allegedly has derivative liability. According to Bloomberg's Tiffany Kary, the "channeling injunction" of the Bankruptcy Code would direct all future claims into the trust, covering death or personal injury claims related to Insulag, Panelag and Damit, products for the steel industry that contained asbestos and were made from the time of World War II to the 1970s. About Quigley Co. Quigley Co. was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s. In September 2004, Pfizer and Quigley took steps that were intended to resolve all pending and future claims against the Company and Quigley in which the claimants allege personal injury from exposure to Quigley products containing asbestos, silica or mixed dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11 plan and a settlement with Chrysler. Quigley filed for Chapter 11 bankruptcy protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to implement a proposed global resolution of all pending and future asbestos-related personal injury liabilities. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed $155,187,000 in total assets and $141,933,000 in total debts. RAVINDER PADDA: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Ravinder Kaur Padda 2896 Klein Road San Jose, CA 95148 Bankruptcy Case No.: 10-60567 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Scott J. Sagaria, Esq. LAW OFFICES OF SCOTT J. SAGARIA 333 W. San Carlos Street, #1700 San Jose, CA 95110 Tel: (408) 279-2288 E-mail: sjsagaria@sagarialaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of creditors together with its petition. REGENCY ENERGY: Moody's Assigns 'B1' Rating to $500 Mil. Notes -------------------------------------------------------------- Moody's Investors Service assigned a rating of B1 (LGD 5, 76%) to a proposed $500 million senior note issuance by Regency Energy Partners LP. Proceeds from the issue will be used to refinance existing senior notes via a concurrent tender offer and for general corporate purposes, including the repayment of a portion of the borrowings under Regency's revolving credit facility. Ratings Rationale The proposed financing does not affect Regency's Ba3 corporate family and probability of default ratings, although the point estimate for the loss given default will be reduced to 76% for the new and existing senior notes. The rating outlook is positive. Regency's prorata debt will increase only modestly since the bulk of the proceeds will be used to refinance existing debt. In addition, the average life of Regency's debt will lengthen with the repayment of 2013 note maturities. Liquidity will also improve as a result of the paydown of revolver borrowings, increasing availability under the facility, which matures in 2014, to $615 million. Regency's Ba3 corporate family rating reflects its growing scale and diversification, and an evolving business risk profile that includes an increasing component of lower risk fee-based revenues generated by recently added assets. These assets include a 49.9% stake in Midcontinent Express Pipeline gained when Energy Transfer Partners acquired Regency's general partner in May 2010; and Zephyr Gas Services, acquired in September 2010. Zephyr engages in natural gas treatment and related services, with operations concentrated in growing non-conventional gas basins such as the Haynesville and Eagle Ford shale plays. The positive outlook reflects the potential in the medium-term for these assets to contribute a larger and more stable earnings stream that could potentially help de-lever the company. In addition, Regency issued $400 million of equity in August 2010, providing a benefit to its leverage and liquidity. However, Regency's ratings continue to be constrained by elevated financial leverage, with proforma Debt/EBITDA of about 5.5x, which may be difficult to reduce as the MLP continues to pursue internal growth and acquisition strategies to support asset growth and a growing distribution. RICHARD MATTISON: Court Suspends Atty. Wadsworth for Incompetence ----------------------------------------------------------------- The Hon. Margaret H. Murphy suspends Joel S. Wadsworth, Esq., indefinitely from practice in the Bankruptcy Court for the Northern District of Georgia. Mr. Wadsworth serves as bankruptcy counsel to Richard C. Mattison, M.D., LLC, d/b/a Tuxedo Aesthetic Surgery Center. The Court held that from the very beginning of the case, Debtor's attorney has failed to competently handle his obligations as Debtor's attorney. Richard C. Mattison, M.D., LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ga., Case No. 09-87487) on October 16, 2009, and was dismissed April 15, 2010. Debtor filed a skeletal petition and failed to file the mailing matrix required by the local rules. Inadequate schedules and a Bankruptcy Rule 2016 disclosure statement were filed November 2, 2010. No application to approve the employment of Debtor's attorney was filed, despite directions from the court to do so, until after dismissal. Even then, however, the application was deficient. Debtor also failed to comply with requests by the U.S. Trustee made at the initial debtor interview, including establishing a DIP bank account, amending the Bankruptcy Rule 2016 disclosure statement, and filing all the information required by 11 U.S.C. Secs. 521 and 1116. To excuse his actions or lack thereof, Debtor's attorney cited his personal medical problems6 and his attention to relocating his home and offices. The Court says the case appears to have been filed as a doorstop to prevent eviction from the business premises by a debtor who did not legally exist, but even if the legally existing iteration of Debtor or the individual who was the professional/ principal of the corporations had been named as the debtor, Debtor's attorney failed to show any likelihood that Debtor could propose a successful reorganization. The Court directs Mr. Wadsworth to file a certificate listing all the bankruptcy cases currently pending in the district in which he is the debtor's attorney and certifying that he has obtained new counsel for each such debtor. Mr. Wadsworth is required to complete 30 hours of continuing legal education in Chapter 11 bankruptcy law. Thereafter, Mr. Wadsworth may move to lift the suspension as to Chapter 11 cases. Upon completion of 20-25 hours of continuing legal education in consumer bankruptcy law (Chapter 7 and 13), Mr. Wadsworth may move to lift the suspension as to Chapter 7 and 13 cases. A copy of the Court's suspension order dated October 13, 2010, is available at http://is.gd/g1QqOfrom Leagle.com RONSON AVIATION: Committee Gets OK to Tap Lowenstein as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Ronson Aviation, Inc.; RCLC, Inc., fka Ronson Corporation; and RCPC Liquidating Corporation's bankruptcy case sought and obtained authorization from the Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey to employ Lowenstein Sandler PC as counsel. Lowenstein Sandler will, among other things: (a) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business, potential claims, and any other matters relevant to the cases or to the formulation of a plan of reorganization; (b) participate in the formulation of a Plan; (c) provide legal advice as necessary with respect to any disclosure statement and Plan filed in these cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; and (d) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers. The hourly rates of Lowenstein Sandler's personnel are: Partners $440-$825 Senior Counsel / Counsel $340-$575 Associates $235-$450 Legal Assistants $145-$215 Mary E. Seymour, Esq., a member of Lowenstein Sandler, assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Trenton, New Jersey-based Ronson Aviation, Inc., filed for Chapter 11 protection on August 17, 2010 (Bankr. D. N.J. Case No. 10- 35315). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, assists the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and its debts at $1 million to $10 million. Affiliates RCLC, Inc. (Bankr. D. N.J. Case No. 10-35313), and RCPC Liquidating Corporation (Bankr. D. N.J. Case No. 10-35318) filed separate Chapter 11 petitions on August 17, 2010, each estimating their assets at $1 million to $10 million and debts at $1 million to $10 million. RONSON AVIATION: Gets Nod to Tap Cole Schotz as Bankr. Counsel -------------------------------------------------------------- Ronson Aviation, Inc.; RCLC, Inc., fka Ronson Corporation; and RCPC Liquidating Corporation sought and obtained authorization from the Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey to employ Cole, Schotz, Meisel, Forman & Leonard, P.A., as bankruptcy counsel. Cole Schotz will, among other things: (a) prepare administrative and procedural applications and motions as may be required for the sound conduct of the cases, including, but not limited to, the Debtors' schedules and statement of financial affairs; (b) review and object to claims; (c) advise the Debtors concerning, and assisting in the negotiation and documentation of, debtor-in-possession financing, debt restructuring and related transactions; and (d) review the nature and validity of agreements relating to the Debtors' businesses and properties and advise the Debtors in connection therewith. The hourly rates of Cole Schotz's personnel are: Members $315-$725 Special Counsel $335-$415 Associates $210-$415 Paralegals $140-$230 Michael D. Sirota, Esq., a shareholder at Cole Schotz, assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Trenton, New Jersey-based Ronson Aviation, Inc., filed for Chapter 11 protection on August 17, 2010 (Bankr. D. N.J. Case No. 10- 35315). The Debtor estimated its assets at $10 million to $50 million and its debts at $1 million to $10 million. Affiliates RCLC, Inc. (Bankr. D. N.J. Case No. 10-35313), and RCPC Liquidating Corporation (Bankr. D. N.J. Case No. 10-35318) filed separate Chapter 11 petitions on August 17, 2010, each estimating their assets at $1 million to $10 million and debts at $1 million to $10 million. RONSON AVIATION: RCLC Unit Has Until January 3 to Propose Plan -------------------------------------------------------------- The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey directed RCLC, Inc., a debtor-affiliate of Ronson Aviation, Inc., to file a proposed Plan of Reorganization and Disclosure Statement by January 3, 2011. Headquartered in Trenton, New Jersey, Ronson Aviation, Inc., filed for Chapter 11 protection on August 17, 2010 (Bankr. D. N.J. Case No. 10-35315). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, assists the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and its debts at $1 million to $10 million. Affiliates RCLC, Inc. (Bankr. D. N.J. Case No. 10-35313), and RCPC Liquidating Corporation (Bankr. D. N.J. Case No. 10-35318) filed separate Chapter 11 petitions on August 17, 2010, each estimating their assets at $1 million to $10 million and debts at $1 million to $10 million. RUMSEY LAND: Wants Exclusivity Period Extended Until November 15 ---------------------------------------------------------------- The Hon. Howard R. Tallman of the U.S. Bankruptcy Court for the District of Colorado extended Rumsey Land Co., LLC's exclusive period to file its Disclosure Statement until November 15, 2010. The Debtors have already filed a proposed Chapter 11 Plan of Reorganization. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the explanatory Disclosure Statement. Denver, Colorado-based Rumsey Land Co., LLC, filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Colo. Case No. 10-10691). Aaron A. Garber, Esq., who has an office in Denver, Colorado, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million. RYAN ZEBER: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Ryan W. Zeber 19432 Barrett Hill Circle Santa Ana, CA 92705 Bankruptcy Case No.: 10-24485 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Central District of California (Santa Ana) Debtor's Counsel: Matthew E. Faler, Esq. 17330 Brookhurst Street, Suite 240 Fountain Valley, CA 92708 Tel: (714) 465-4433 Fax: (714) 965-7823 E-mail: mfaler@faler-law.com Scheduled Assets: $1,804,176 Scheduled Debts: $3,540,392 A list of the Debtor's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-24485.pdf SIRIUS XM: Moody's Upgrades Corporate Family Rating to 'B3' ----------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating for Sirius XM Radio Inc. to B3 from Caa1, its Probability-of-Default Rating to B2 from B3, and the ratings for individual instruments, including those for its wholly-owned subsidiary, XM Satellite Radio Inc., as outlined below. Moody's also assigned a B3, LGD4 - 65% rating to the proposed $550 million offering of senior unsecured notes due 2018 to be issued by XM Radio. The speculative grade Liquidity Rating remains unchanged at SGL-2 and the rating outlook is stable. Net proceeds from the proposed debt issuance will be used to tender for XM Radio's 11.25% senior secured notes due 2013 and pay related fees and expenses. The planned repayment of the 11.25% senior secured notes would reduce 2013 maturities to approximately $780 million, resulting in enhanced financial flexibility not only through the maturity extension but also through the reduction (and elimination of most) of the company's secured debt. Assignments: Issuer: XM Satellite Radio Inc. -- NEW $550 million Senior Unsecured Notes due 2018, Assigned a B3, LGD4 - 65% Upgrades: Issuer: Sirius XM Radio Inc. -- Corporate Family Rating, Upgraded to B3 from Caa1 -- Probability of Default Rating, Upgraded to B2 from B3 -- 9.75% Senior Secured Notes due 2015, Upgraded to Ba3, LGD2 - 12% from B1, LGD2 - 22% -- 8.75% Senior Unsecured Notes due 2015, Upgraded to B3, LGD4 - 65% from Caa1, LGD5 - 73% Issuer: XM Satellite Radio Inc. -- 11.25% Senior Secured Notes due 2013, Upgraded to Ba3, LGD2 - 12% from B2, LGD3 - 32% -- 13% Senior Unsecured Notes due 2013, Upgraded to B3, LGD4 - 65% from Caa2, LGD5 - 76% -- 9.75% Senior Unsecured Notes due 2014, Upgraded to B3, LGD4 - 65% from Caa2, LGD5 - 76% (to be withdrawn) Unchanged: Issuer: Sirius XM Radio Inc. -- Speculative Grade Liquidity Rating, SGL-2 Ratings Rationale The upgrade of Sirius XM's CFR to B3 reflects Moody's view that EBITDA (incorporating Moody's standard adjustments) less capital spending to interest expense will grow and comfortably exceed 1x in 2011, reflecting higher than anticipated subscribers and revenue and reduced debt service and programming costs. As announced on October 1, 2010, the company expects to add more than 1.3 million subscribers in FY2010, bringing the year end total to 20.1 million and exceeding prior expectations. Despite high churn in the subscriber base, vulnerability to cyclical consumer spending, and increasing wireless competition, Moody's believe subscriptions will grow through the end of 2011 as the economy and automotive sales recover. Heightened capital spending related to the ongoing construction and launch of two satellites will likely limit free cash flow generation in 2011. The rating also reflects the company's sizable debt burden as well as the need to invest significantly in programming, marketing, launching new services, and maintaining a satellite fleet to attract subscribers in addition to delivering content. The stable rating outlook reflects Moody's expectation that annual sales of new automobiles will increase over the near term and credit metrics will improve as the company reduces debt balances with free cash flow. Given that Sirius XM equipment is installed in greater than 50% of new automobiles being sold in the U.S., more new vehicles enhances the potential subscriber base. Moody's research provides a base case forecast for the sales volume of light vehicles in the U.S. indicating an estimated 13.5 million units to be sold in 2011 compared to 11.5 million units estimated for 2010. A growing subscriber base, improving EBITDA margins, and sustained lower leverage could result in an upgrade. Sirius XM would also need to maintain sufficient liquidity to be upgraded. Ratings could be downgraded if subscriber losses, functional problems with satellite operations, or unplanned capital investments reduce free cash flow below expected levels. A weakening of the liquidity position including an inability to access capital markets or generate sufficient cash flow to proactively address 2013-2014 debt maturities could lead to downward rating pressure. Liberty Media Corporation holds preferred stock that is convertible into approximately 40% of common shares of Sirius XM as a result of $530 million in loan commitments made in 2009 which were subsequently repaid. Liberty Media Corporation is not likely to increase its ownership prior to March 2012, the third anniversary of the preferred stock transaction, due to internal revenue code rules governing ownership changes and NOL's. As of June 30, 2010, Liberty also owned an aggregate $374 million of notes (face value) issued by Sirius XM and XM Radio across several issues. Moody's expects to withdraw ratings on the 11.25% senior secured notes after they are fully tendered or redeemed, and, consistent with Moody's practice, Moody's will withdraw ratings on the stub 9.75% senior unsecured notes due 2014 based on their de minimis amount. The last rating action was on February 1, 2010, when Sirius XM's CFR was upgraded to Caa1 from Ca and its PDR was upgraded to B3 from Caa3. Sirius XM's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Sirius XM's core industry and believes Sirius XM's ratings are comparable to those of other issuers with similar credit risk. Sirius XM Radio Inc. is headquartered in New York, New York and provides satellite radio services in the United States and Canada. The company offers a programming lineup of more than 130 channels of commercial-free music, sports, news, talk, entertainment, and traffic and weather. Sirius XM also provides music channels that offer music genres, ranging from rock, pop and hip-hop to country, dance, jazz, Latin, and classical; channels of sports; talk and entertainment channels; comedy channels; national, international, and financial news channels; and religious channels. Sirius XM had approximately 19.5 million subscribers as of June 30, 2010, and generated revenue of approximately $2.7 billion for the trailing 12 months ended June 30, 2010. SIRIUS XM: S&P Raises Corporate Credit Rating to 'B+' ----------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Sirius XM Radio Inc. and its subsidiaries, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. (which S&P analyzes on a consolidated basis), to 'B+' from 'B'. The corporate credit and related issue-level ratings were removed from CreditWatch, where they were placed on Sept. 30 with positive implications. The rating outlook is stable. "The action is based on the company's improving operating performance, declining debt leverage, and the prospects for continued improvement in credit measures for full-year 2010 and 2011," explained Standard & Poor's credit analyst Hal Diamond. At the same time, S&P assigned XM Satellite Radio Inc.'s proposed $550 million senior unsecured notes due 2018 S&P's issue-level rating of 'B+' (at the same level as the 'B+' corporate credit rating) with a recovery rating of '4', indicating S&P's expectation of average (30%-50%) recovery for debtholders in the event of a payment default. The notes will be privately placed under Rule 144A. The company plans to use proceeds to back the tender offer for XM's $526 million 11.25% senior secured notes due June 15, 2013. In addition, S&P revised its recovery rating on XM Satellite Radio Inc.'s existing unsecured debt to '4' from '6'. The issue-level rating on this debt was raised to 'B+' from 'CCC+', in accordance with the corporate credit rating change and S&P's notching criteria for a recovery rating of '4'. The recovery rating revision reflects the planned refinancing of the secured debt in XM's capital structure. S&P also revised its recovery rating on Sirius XM's unsecured debt to '3', indicating its expectation of meaningful (50%-70%) recovery for debtholders in the event of a payment default, from '4'. The issue-level rating on this debt was raised to 'B+' from 'B'. The revision of the recovery rating is based on improved operating trends and S&P's use of a higher EBITDA multiple than in its previous analysis. New York City-based Sirius XM had total debt outstanding of $3.1 billion as of June 30, 2010. The 'B+' rating reflects Sirius XM's high debt leverage and dependence on weak U.S. automotive sales. The company's position as the only U.S. satellite radio operator, integration-related operating synergies, and cost savings arising from the 2008 acquisition of XM Satellite Radio Holdings Inc. are modest positives that do not offset these risks. S&P views Sirius' business risk profile as weak because of its dependence on U.S. automotive sales and consumer discretionary spending for growth, as well as competition from alternative media. The company has a highly leveraged financial profile, in S&P's view, because of very high debt usage. The company's five-year agreement with radio talk show host Howard Stern expires on Dec. 31, 2010. Despite onerous contract costs, S&P believes Stern has been important to the growth of the service due to his loyal fan base and exclusive content, which is not available on terrestrial radio. S&P believes that subscriber churn would increase, potentially dramatically, should he decide not to renew his contract. Still, S&P believes that that Sirius XM will be able to maintain debt leverage in line with the rating irrespective of the status of the Howard Stern contract, and adhere to a financial policy that will facilitate debt leverage of less than 6x. XM Satellite Radio Inc. is a wholly owned unrestricted subsidiary of Sirius XM Radio Inc. Each company has a separate capital structure, and the cash flows generally cannot be intermingled. The company is evaluating options to consolidate the XM capital structures into Sirius XM Radio Inc. Consolidating the capital structures would have no impact on the corporate credit rating, as S&P analyzes the companies on a consolidated basis. SORRENTO MESA: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Sorrento Mesa Hand Car Wash & Spa, Inc. 6609 Mira Mesa Boulevard San Diego, CA 92121 Bankruptcy Case No.: 10-18144 Chapter 11 Petition Date: October 12, 2010 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Peter W. Bowie Debtor's Counsel: Gino Pietro, Esq. PIETRO & ASSOCIATES, APLC 1605 East Fourth Street, Suite 250 Santa Ana, CA 92701 Tel: (714) 542-5004 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 Kamran Syed, secretary. SPECIALTY PRODUCTS: Looks to Collect Asbestos-Claims Information ---------------------------------------------------------------- Specialty Products Holding Corp. wants to probe those holding alleged asbestos-related claims against it, saying the information will help the company to determine its estimated liability in the case, Dow Jones' DBR Small Cap reports. According to the report, the company wants to use its bankruptcy proceedings to create a trust that would distribute funds to asbestos victims. But before the trust can be established, the company said it must estimate the total cost of those claims so that it can equip the trust with proper funding, the report relates. To that end, the report notes, the company is asking the U.S. Bankruptcy Court in Wilmington, Del., to allow it to proceed with a request to collect information from the alleged claimants. It wants to distribute a questionnaire to those holding alleged asbestos personal injury claims against it - a method it says will save time and money. Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection on May 31, 2010 (Bankr. D. Del. Case No. 10-11780). Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100,000,001 to $500,000,000. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100,000,001 to $500,000,000. SUMMIT MATERIALS: S&P Raises Corporate Credit Rating to 'BB-' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Washington, D.C.-based Summit Materials Cos. I LLC to 'BB-' from 'B+'. The rating outlook is stable. At the same time, S&P raised its issue-level rating on Summit's senior secured credit facilities, which consists of a $50 million revolving credit facility and a $239 million term loan, to 'BB' (one notch above the corporate credit rating) from 'B+'. In addition, S&P revised the recovery rating on this debt to '2' from '3', reflecting its expectation that lenders can expect to achieve substantial (70%-90%) recovery in the event of a payment default. "The upgrade reflects Summit's execution of an acquisition strategy to date that has increased the company's size, profitability, and geographic diversity while maintaining credit measures that are in line with a higher rating," said Standard & Poor's credit analyst Thomas Nadramia. S&P expects this trend to continue given that significant equity investment funds for acquisitions remain at the company's disposal. The stable rating outlook reflects S&P's expectation that end- market demand for Summit's asphalt paving and aggregates products will not decline materially over the next 12 months because infrastructure spending will likely post a modest increase, offsetting further declines in nonresidential construction activity. As a result, credit metrics are likely to remain in line with the rating given the company's weak business profile, with leverage likely remaining below 4x. In addition, S&P believes liquidity, in terms of cash, availability under its revolving credit facility, and cash flow from operations, will be sufficient to meet fixed charges over the next year of about $20 million. For a higher rating, S&P would expect Summit to expand the size and scale of its businesses materially, as well as increasing its geographical diversity, through additional acquisitions and subsequently maintaining pro forma leverage at or below 3x. A negative rating action seems less likely in the near term given S&P's expectation for stable end-market demand for aggregates and asphalt driven by highway spending. However, S&P could take a negative rating action if reductions or delays in highway, road, and bridge spending causes commercial construction activity to decline more than expected, or if a significant acquisition fails to produce anticipated operating results. As a result, the company's credit measures could fall below anticipated levels and liquidity could narrow meaningfully. Specifically, S&P could lower the rating if the cushion with regard to the company's leverage covenant were to fall below 10%, or if leverage were to exceed 4.5x. TACO DEL MAR: Wins OK to Sell Assets, Including Brand Name ---------------------------------------------------------- Taco Del Mar Franchising Corp. won court approval to sell such assets as its brand name to a company tied to the founders of the Subway restaurant chain, Dow Jones' DBR Small Cap reports. Founded in Seattle, Washington, in 1992 by brothers James and John Schmidt, Taco Del Mar is a quick-service casual restaurant chain inspired by southern Baja, Mexico, and coastal beach shacks known for serving some of the tastiest burritos and tacos. Today, Taco Del Mar operates in more than 225 locations throughout the U.S., Canada and Guam. Taco Del Mar Franchising Corp. and its affiliate, Conrad & Barry Investments Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No. 10-10528) on January 22, 2010. George S. Treperinas, Esq. at Karr Tuttle Campbell represents the Debtor in its restructuring effort. The Official Unsecured Creditors' Committee is represented by Geoffrey Groshong, Esq. at Miller Nash LLP. The Company estimated assets at $10 million to $50 million and liabilities at $50 million to $100 million. TELECONNECT INC: Lenselink, et al., Fill 3 Vacancies at Board ------------------------------------------------------------- Teleconnect Inc said that Kees Lenselink, Les Pettitt and Gustavo Gomez were appointed as members of the Board of Directors of Teleconnect Inc. to fill the remaining three vacancies, and they shall serve until the next annual meeting of the shareholders or until their successors are duly elected and qualified effective October 8, 2010. The Board of Directors also appointed Mr. Les Pettitt and Mr. Gustavo Gomez to the positions of Chief Financial Officer and Chief Compliance Officer, respectively, of the Corporation, where they shall serve for an undefined period of time or until their successors are duly elected and qualified. Mr. Pettitt, CPA, of American nationality, is a certified public accountant with twenty-seven years of public accounting experience. For the last 12 years, the emphasis of his work has been on international public company regulatory filings. Mr. Pettitt is a member of the American Institute of Certified Public Accountants and the Oklahoma Society of Certified Public Accountants. Mr. Lenselink of Dutch nationality, is a Certified Dutch Chartered Auditor specialized in corporate valuations. Mr. Lenselink holds various executive and non-executive board functions within multinational organizations. Mr. Gomez of Spanish nationality, has an Electrical Engineering degree from McGill University in Canada as well as an Exec-MBA from Spain's Instituto de Empresa. Mr. Gomez has been an advisor to the Company since December 2008. The Company has also put into place an Audit committee and a Stock Bonus Plan committee both made up of members of the Board of Directors. About Teleconnect Inc. Based in Breda, The Netherlands, Teleconnect Inc. (OTC: TLCO) -- http://teleconnect.es/-- derives its revenues from continuing operations primarily from the sale of multimedia kiosks and hardware components to retail chains in the Netherlands. These kiosks and components can be applied to different functions such as recharging prepaid telephone cards. On May 3, 2010, the Company signed a letter of intent to acquire 100% of Hollandsche Exploitatie Maatschappij BV (HEM) in The Netherlands. The purchase price contemplated by the letter of intent is 12% of the outstanding common stock of the Company, post emission. The purchase of HEM is subject to due diligence by Teleconnect as well as shareholders' approval. HEM, established in 2007, developed an age validation system, "Ageviewers", which utilizes the Company's products in its processes. TRADE SECRET: Asks Judge to Dismiss Chapter 11 Proceedings ---------------------------------------------------------- Dow Jones' DBR Small Cap reports Trade Secret Inc. is seeking to have its bankruptcy case dismissed, saying it has no funds left to distribute to unsecured creditors as part of a plan. The report relates that about one month after seeing a judge approve the sale of its assets to Regis Corp. in a transaction valued at $45 million, the one-time owner of 612 salons and retail stores wants to put an end to its Chapter 11 case. "There is no business to reorganize and the debtors have insufficient funds to confirm a plan of liquidation," Trade Secret said in papers filed with the U.S. Bankruptcy Court in Wilmington, Del., the report notes. The company and its affiliates "no longer have any basis or purpose for continuing these Chapter 11 cases," the report says. The report notes that following its sale to Regis Corp., the company says it lacks "assets of any value" which could potentially be liquidated for the benefit of creditors. In addition, the company's ability to tap cash collateral has expired, the report adds. Premier Salons Beauty Inc., Trade Secret Inc., and six affiliates filed for bankruptcy protection on July 6 (Bankr. D. Del. Lead Case No. 10-12153). The Chapter 11 petitions of Premier Salons and Trade Secret each estimated assets of up to $50,000 and debts of up to $50 million. Trade Secret and its affiliates currently own and operate approximately 612 retail and salon locations in shopping malls and strip centers throughout the United States and Puerto Rico, on a collective basis. The Trade Secret Group consists of stores operating primarily under four trade names: Trade Secret, Beauty Express, BeautyFirst, and PureBeauty(R). Joseph M. Barry, Esq., at Young, Conaway, Stargatt & Taylor, represents the Debtors in their Chapter 11 effort. Epiq Bankruptcy Solutions, LLC, is claims agent to the Debtors. Non-debtor affiliates Premier Salons, Inc. and Premier Salons Ltd. and its U.S. and Canadian corporate affiliates own and operate 340 hair and cosmetic service salons throughout North America, with locations in specialty stores such as Saks, Sears, and Macy's. TRIBUNE CO: Inks Deal With Creditors to Resolve LBO Claims ---------------------------------------------------------- Tribune Company and its debtor affiliates said the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo, Gordon & Co, L.P., and JPMorgan Chase Bank, N.A., have reached terms on a plan of reorganization that will settle certain claims surrounding both "Step 1" and "Step 2" of the company's 2007 going-private transaction. The settlement, according to Judge Kevin Gross, as Court-appointed mediator in the bankruptcy cases, is a result of the series of mediation sessions that started since late August. The mediation was set up so parties will resolve disputes in connection with the formulation and proposal of a confirmable plan of reorganization, including the appropriate resolution of the leveraged buyout- related Causes of Action. The settlement, Tribune says, expands upon the previously- announced settlement with Oaktree and Angelo Gordon with respect to Step 1. The settlement resolves "Step 1" and "Step 2" LBO-Related Causes of Action in exchange for: (a) approximately $402 million in reallocation of value away from holders of Senior Loan Claims; and (b) $120 million in cash from the "Step Two Disgorgement Settlement." The joint plan proposed by the Debtors, the Creditors' Committee, Oaktree, Angelo Gordon and JPMorgan, and endorsed by the Mediator, will constitute an offer to settle: (a) claims against any current or former holder of Senior Loans or Bridge Loans for disgorgement of principal, interest and fees paid on account of the Incremental Term Loan B tranche of the Senior Loan Agreement or the Bridge Loan Agreement; and (b) claims against JP Morgan Chase Bank, N.A., Merrill Lynch Capital Corporation, Bank of America, N.A. and Citigroup North America, Inc. and each of their affiliates each in their capacity as agents and arrangers of the Step Two Loans, for an aggregate of $120 million. According to Tribune, an important component of the recent settlement is the contribution of $120 million in cash by recipients of pre-bankruptcy payments on the Incremental tranche of the Tribune Senior Loan and the Bridge Loan facilities through an optional settlement of those claims, with the arrangers for those facilities providing a backstop to ensure that the estates receive the full settlement payment on the plan's effective date. This additional settlement payment, together with additional contributions by holders of the Senior Loans, allows for Tribune's bondholders to receive $420 million, representing 32.73 cents on the dollar upon emergence plus their interest in a litigation trust, and provides for trade creditors of Tribune's operating subsidiaries to be paid in full, Tribune said. As with the previously-announced settlement, the recent agreement allows for the distribution of the equity of the reorganized Tribune and its subsidiaries pro rata to the holders of the Initial and Incremental Senior Loan claims. In addition, claims and causes of action against various parties (including advisors, directors and officers involved in the 2007 transactions) will be preserved and placed in a litigation trust and pursued for the benefit of creditors of Tribune. The first $90 million of recoveries from the trust will be allocated to Tribune's general unsecured creditors, including its bondholders. 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 minimizing the possible negative impact these litigation issues might have on the company's business operations. The settlement has been endorsed by Judge Gross and approved by the Special Committee of Tribune's Board of Directors, comprised of independent members of the company's board. Oaktree, Angelo Gordon, and JPMorgan hold significant amounts of the Initial and Incremental Senior Loans of Tribune Company, and the Official Committee represents the interests of all unsecured creditors in the Tribune bankruptcy cases. "With the able assistance of Judge Gross, we continue to achieve success in our mediation efforts, and are pleased to have now expanded the plan settlement to include the Official Committee of Unsecured Creditors," said Don Liebentritt, Tribune's Chief Restructuring Officer, in a press release. "The additional value being allocated to our bondholders and other unsecured creditors represents a fair and equitable settlement for all of our constituencies. We remain confident that Tribune continues on a path toward resolution of its Chapter 11 cases that maximizes the value of the bankruptcy estates, preserves all stakeholders' legitimate entitlements and enables the company to conclude its bankruptcy proceedings as soon as possible." A term sheet for the Joint Plan by the Debtors, the Creditors' Committee, Oaktree, Angelo Gordon and JPMorgan, and endorsed by the Mediator, is available for free at: http://bankrupt.com/misc/Tribune_MedRep2.pdf Judge Gross says he does not consider the Mediation to be closed and will continue to seek to include additional parties. 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 have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Law Debenture Reinstates Plea to Stop LBO Payments -------------------------------------------------------------- Law Debenture Trust Company of New York, as successor indenture trustee under an Indenture dated March 19, 1996 between Tribune Company and Citibank, N.A., for the 6.61% Debentures due 2027 and the 7-1/4% Debentures due 2096, submitted with the Court a supplement to its motion to terminate Debtor affiliates' undisclosed payment of LBO Lenders' fees and expenses. Law Debenture previously filed a motion reinstating its application for the entry of an order compelling and directing: (i) the Debtors to cause any non-debtor affiliate or subsidiary to terminate the Unauthorized Fee Payments; (ii) the LBO Lenders to provide an accounting of all unauthorized fee payments; and (iii) the LBO Lenders to disgorge the unauthorized fee payments. Law Debenture relates that pursuant to the agreement of the Debtors and the other parties to the Stipulation, upon filing of the Reinstated Motion, "the record presented to the Bankruptcy Court in connection with the Fee Motion will be restored." Law Debentures notes that it was understood that this restoration of the record included adherence by the Debtors to their statement during the March 26, 2010 hearing that "we've agreed not to make the payments [to the lenders] pending further guidance from Your Honor." According to Law Debenture, the Debtors have acknowledged that on August 31, 2010, six days after the Reinstated Motion was filed, Tribune (FN) Cable Venture, Inc. made a series of payments in connection with the fees of the senior lenders for $3,106,256. The fact that these amounts, according to the Debtors, relate to those fees invoiced and billed prior to the filing of the Reinstated Motion, does not change the fact that the Debtors made the payment after the date of the Reinstated Motion, Law Debenture asserts. Moreover, Law Debenture notes, many of these fees were incurred and billed following the breach of and withdrawal from that certain Settlement Support Agreement by JPMorgan Chase and Angelo Gordon on August 9, 2010. As a result of the August 31 Payments, the aggregate payment by TCV to the lenders increased to approximately $50,235,970, Law Denture says. Additionally, the Debtors have disclosed that on April 29, 2010, TCV made a payment to Davis Polk for $6,150,000 and a payment to FTI Consulting for $500,000 for the express purpose of replenishing the retainer held by each entity. According to Law Debenture, the payment of a retainer was never contemplated by the parties, nor embodied in the Settlement Support Agreement or the Stipulation. The Retainer Payments enabled the lenders to violate the Settlement Support Agreement by taking prepayment of their fees before they breached the Settlement Support Agreement which terminated ongoing payments, Law Debenture avers. Accordingly, Law Debenture asserts that both the August 31 Payments and the Retainer Payments constitute Unauthorized Fee Payments and should be disgorged in concert with the relief requested in the Reinstated Motion. Law Debenture says it has requested that the Debtors demand reimbursement of these amounts from the lenders, but the Debtors have not responded to its request. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on 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 have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Parties Have Until October 22 to File Competing Plans ----------------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware gives the Debtors until October 22, 2010, to file a plan of reorganization and other parties-in-interest until October 29 to file competing plans of reorganization, the Chicago Breaking News reported. According to the report, a hearing on the disclosure statement explaining the plan will be held on November 29, 2010. Judge Carey previously set October 15 as the deadline for creditors to file competing plans for Tribune. Judge Carey acknowledged that mediation between Tribune and its creditors was going in a very bad way, and added that if mediation fails, there could be three or more Chapter 11 plans, the Courthouse News Service said. "We'd like to see some kind of a deal break out rather than a dozen plans get filed," Bloomberg News quoted Thomas Lauria, Esq., at White & Case, in Miami, Florida, who represents holders of some $900 million worth of Tribune bridge loans, as saying. Mediation Parties Argue Over Deadlines A status conference was held on October 4 concerning, among other things, the status of any plans of reorganization with respect to Tribune Company and its debtor affiliates' Chapter 11 proceedings. At the October 4th Status Conference, the Court scheduled a hearing date and established certain deadlines in connection with the adequacy of certain disclosure documents that may be proposed in connection with any plans of reorganization and directed the Debtors to submit a proposed order with respect to those hearing date and deadlines. Subsequent to the October 4th Status Conference, the Debtors circulated a draft form of order to the Mediation Parties for consideration. After receipt of comments with respect to the draft order, the Mediation Parties held a teleconference to address outstanding issues with respect to the form of order. In an effort to address certain procedural issues that were raised with respect to the Court-ordered hearing date, and to facilitate an agreed-upon schedule with respect to certain anticipated filings, the Mediation Parties agreed to certain additional deadlines for the filing of plan-related documents. All of the Mediation Parties have agreed to the terms of a procedural order other than the deadlines for filing plan-related documents and the date of the hearing to consider approval of the General Disclosure Statement, any Specific Disclosure Statement, and any responsive Statements to be incorporated into the Master Disclosure Statement. The Debtors, Oaktree Capital Management, LP, Angelo Gordon & Co. LP, JPMorgan and EGI-TRB, LLC, filed a proposed order, a full-text copy of which is available for free at: http://bankrupt.com/misc/Tribune_DeadlineProp.pdf The Step One Credit Agreement Lenders also agreed to a proposed order proposing for the Debtors file their plan of reorganization on or prior to October 15 and for any party-in-interest to file a Competing Plan on or prior to October 22 rather than October 15. A modified Proposed Order reflecting the modifications proposed by the SOCAl is available for free at: http://bankrupt.com/misc/Tribune_DeadlineModified.pdf Certain other Mediation Parties, including Aurelius Capital Management, LP, Wilmington Trust Company, Wells Fargo, as Agent, the Official Committee of Unsecured Creditors, the Ad Hoc Opco Trade Committee and Deutsche Bank Trust Company Americas, propose an alternative schedule set forth in the proposed order scheduling a hearing and establishing certain deadlines to consider approval of certain disclosure documents, a full-text copy of which is available for free at: http://bankrupt.com/misc/Tribune_DeadlineAlternative.pdf The Alternative Schedule provides that the Debtors will (i) on or prior to October 8 circulate to the Mediation Parties a proposed draft of the General Disclosure Document and (ii) on or prior to October 15 file with the Court (x) their plan of reorganization, (y) a Specific Disclosure Statement describing their Plan and (z) the General Disclosure Document. In addition, any party-in- interest that wishes to file a plan of reorganization will file a Competing Plan and a Specific Disclosure Document on or prior to October 29. The Mediation Parties requested a brief telephonic hearing, at the Court's earliest convenience, to address the Court regarding the rationale for the proposed revised schedule set forth in the Modified Proposed Order and Alternative Proposed Order. 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 have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRICO MARINE: Tidewater Offers to Buy 4 Ships for $76 Million ------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Tidewater Inc. is offering $76 million to purchase four of Trico Marine Services Inc.'s ships. An earlier report by DBR, according to the Troubled Company Reporter on October 12, said Trico Marine won permission to sell two of its ships in a transaction it says will bring "much-needed liquidity" to the company's bankruptcy case. New Orleans-based Tidewater owns 396 vessels, the world's largest fleet of vessels serving the global offshore energy industry. Texas-based Trico Marine Services, Inc. -- http://www.tricomarine.com/-- provides subsea services, subsea trenching and protection services, and towing and supply vessels. Trico filed for Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B. Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor disclosed $30,562,681 in assets and $353,606,467 in liabilities as of the Petition Date. Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No. 10- 12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico Marine International, Inc. (Case No. 10-12650), Trico Marine Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No. 10-12652) filed separate Chapter 11 petitions. Cahill Gordon & Reindell LLP is the Debtors' special counsel. Alix Partners Services, LLC, is the Debtors' chief restructuring officer. Epiq Bankruptcy Solutions is the Debtors' claims and notice agent. Postlethwaite & Netterville serves as the Debtors' accountant and Ernst & Young LLP serves as tax advisors. Pricewaterhousecoopers LLC provides the independent accountants and tax advisors for the Debtors. TRUE NORTH: Reports Net Income of $22.2 Million in June 30 Quarter ------------------------------------------------------------------ True North Finance Corporation filed its quarterly report on Form 10-Q, reporting net income of $22.2 million on $52,620 of interest and fee income for the three months ended June 30, 2010. Results for the current quarter include a gain of $26.6 million from the deconsolidation of net assets of the Company's subsidiary, Capital Solutions Monthly Income Fund, LP. At the time of the spin-off, Capital Solutions Monthly Income Fund, LP's liabilities exceeded its assets by $26.6 million. Accordingly, the Company recognized a gain for this amount as a gain from deconsolidation on June 30, 2010. The results of operations are related to CS Fund General Partner, LLC, as the predecessor company pursuant to the reverse acquisition accounting rules. Accordingly, the Company's operating results (pre-Merger) include the operating results of CS Fund General Partner, LLC, prior to the date of the Merger (June 30, 2009). Prior to June 30, 2009, CS Fund General Partner, LLC, had $0 operating income. The Company's balance sheet at June 30, 2010, showed $7.3 million in total assets, $21.1 million in total liabilities, and a stockholders' deficit of $13.8 million. As reported in the Troubled Company Reporter on June 2, 2010, L.L. Bradford & Company, LLC, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted that the Company has incurred recurring losses and its current liabilities exceed its current assets. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6c7c About True North True North Finance Corporation -- http://www.truenorthfinance.com/ -- was formerly known as CS Financing Corporation. On June 22, 2009, CS Financing Corporation changed its name to True North Finance Corp. The Company is primarily a real estate lending company. CS Fund General Partner, LLC, became a wholly owned subsidiary of True North Finance Corporation pursuant to a merger on June 30, 2009. Although CS Fund General Partner, LLC, was considered the acquiring entity for accounting purposes, the Merger was structured so that CS Fund General Partner, LLC, became a wholly owned subsidiary of True North Finance Corporation. TRUMP ENTERTAINMENT: Global Settlement for All Litigation Approved ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey approved the global settlement agreement that would resolve all pending litigation among Trump Entertainment Resorts Inc., et al. The settlement will provide the opportunity for the Debtors to concentrate exclusively on their efforts to stabilize their hotel and casino operations, and finally put these Chapter 11 Cases behind them. The agreement was entered among (i) the Reorganized Debtors; (ii) Beal Bank, SSB, in its capacity as administrative agent and collateral agent under the Prepetition First Lien Credit Agreement and the Amended and Restated Credit Agreement and as administrative agent, collateral agent, and as a prior lender under the Prepetition First Lien Credit Agreement; and (iii) Icahn Partners, Icahn Partners Master Fund LP, Icahn Partners Master Fund II LP, and Icahn Partners Master Fund III LP. The highlights of the Settlement Agreement are: a. Dismissal of all pending litigation: The Parties agreed that the Recharacterization Motion, the Confirmation Appeal, the Intercreditor Lawsuit, the CRDA Lawsuit, the Fee Objections, the Prepayment Disallowance Motion and the First Lien Lenders' administrative expense claims will each be withdrawn and dismissed with prejudice. In addition, the First Lien Lenders and First Lien Agent agreed that they will not seek payment of, and will not be allowed, any prepayment premium, prepayment penalty or prepayment fee arising under or resulting from the Prepetition First Lien Credit Agreement, the Final Cash Collateral Order or the Plan. b. Mutual Releases: Each of the Parties agreed to provide mutual releases. c. New Term Loan Amendment: The principal balance of the interest-bearing portion of the New Term Loan as of the Plan Effective Date will be increased by $12.5 million to $346.5 million, and the non-interest bearing portion of the New Term Loan will be eliminated as of the plan Effective Date. The remaining terms of New Term Loan will remain unaltered. d. Allowance of First Lien Lender Claims: The First Lien Lender Claims, including all payments made to the First Lien Lenders during the Chapter 11 Cases, will be allowed and no longer subject to recharacterization. e. Lender Consent to CRDA Transaction: The First Lien Lenders and First Lien Agent consent to the CRDA credit donation transaction pursuant to which the Debtors release a CRDA investment of approximately $27 million and receive approximately $9.6 million in cash, which may be used by the Reorganized Debtors as general working capital. f. Fees and Expenses: All accrued and unpaid fees and expenses, as of the Settlement Effective Date, of the First Lien Lenders and First Lien Agent in connection with the Chapter 11 Cases, the Litigation Matters, or the settlement have been fixed at $15 million. Upon the Settlement Effective Date, the Reorganized Debtors will make a $15 million cash payment to the First Lien Lenders on account of such fees and expenses. In addition, the First Lien Lenders and First Lien Agent have agreed to support the final fee applications filed by the Debtors' professionals well as the Section 503(b) Application filed by the Ad Hoc Committee. About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 protection on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. Garden City Group is the claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TUBO DE PASTEJE: Seeks Jan. 5 Plan Exclusivity Extension -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Tubo de Pasteje SA and subsidiary Cambridge-Lee Holdings Inc. for a second time are seeking a January 5 extension of the exclusive right to propose a Chapter 11 plan. The Company reports "significant progress" in discussions with noteholders on a Chapter 11 plan. The Company hopes that it will "soon" have agreement allowing the filing of a consensual reorganization plan. A hearing on the request is scheduled for November 2. Tubo de Pasteje SA and subsidiary Cambridge-Lee Holdings Inc. filed Chapter 11 petitions December 7, 2009 (Bankr. D. Del. Case No. 09-14353) following a Nov. 15 payment default on US$200 million in 11.5% senior notes due 2016. Tubo and its subsidiary filed for Chapter 11 protection when the 30-day grace period was nearing its end. Tubo is a subsidiary of Mexico City-based Industrias Unidas SA de CV, a manufacturer of copper and electrical products. The U.S. subsidiary Cambridge-Lee is based in Reading, Pennsylvania. IUSA is the issuer of the notes which were secured by a pledge of the stock of Cambridge-Lee. ULTIMATE ESCAPES: U.S. Trustee Forms Six-Member Creditors Panel --------------------------------------------------------------- Roberta DeAngelis, the U.S. Trustee for Region 3, appointed six members to the official committee of unsecured creditors in the Chapter 11 cases of Ultimate Escapes, Inc., et al. The Creditors Committee members are: 1. Strauss Zelnick 19 West 44th St., 18th Fl. New York, NY 10036 Tel: (212) 223-1383 Fax: (212) 223-1384 2. Clive Buckley 24 Palomino Coto de Caza, CA 92679 Tel: (949) 350-4042 Fax: (949) 713-4596 3. World Hotels Attn: Thomas Griffiths 7009 Dr. Phillips Blvd. Orlando, FL 32819 Tel: (407) 363-9300 ext. 305 4. Creg McDonald 2704 Wendover Place Champaign, IL 61822 Tel: (217) 493-8341 Fax: (217) 359-8093 5. Marcus W. Acheson 28 Ridge Rd. Barrington, IL 60010 Tel: (847) 382-4392 6. George Rose 9763 Suffolk Dr. Beverly Hills, CA 90210 Tel: (310) 255-2603 Fax: (310) 255-2102 The U.S. Trustee originally appointed seven members to the Creditors Committee but Trump International Hotel & Tower resigned from the committee effective October 5, 2010. 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. The creditors committee is represented by: Peter W. Ito, Esq. GORDON & REES LLP 55 Seventeenth Street, Suite 3400 Denver, CO 80202 - and - Christopher A. Ward, Esq. POLSINELLI SHUGHART PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801 About Ultimate Escapes, Inc. Ultimate Escapes, Inc. -- http://www.ultimateescapes.com/-- is a luxury destination club that sells club memberships offering members reservation rights to use its vacation properties, subject to the rules of the club member's Club Membership Agreement. The Company's properties are located in various resort locations throughout the world. Kissimmee, Florida-based Ultimate Escapes Holdings, LLC, filed for Chapter 11 bankruptcy protection on September 20, 2010 (Bankr. D. Del. Case No. 10-12915). Affiliates Ultimate Resort, LLC; Ultimate Operations, LLC; Ultimate Resort Holdings, LLC; Ultimate Escapes, Inc. (fka Secure America Acquisition Corporation); P & J Partners, LLC; UE Holdco, LLC; UE Member, LLC, et al., filed separate Chapter 11 petitions. Scott D. Cousins, Esq., Matthew L. Hinker, Esq., and Nancy A. Mitchell, Esq., at Greenberg Traurig LLP, assist the Debtors in their restructuring efforts. CRG Partners Group LLC is the Debtors' chief restructuring officer. BMC Group Inc. is the Company's claims and notice agent. Ultimate Escapes estimated assets at $10 million to $50 million and debts at $100 million to $500 million as of the Petition Date. ULTIMATE ESCAPES: Committee Taps Gordon & Rees as Lead Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Ultimate Escapes, Inc., et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Gordon & Rees LLP as its lead counsel. G&R will, among other things: -- advise the Committee and represent it with respect to proposals an pleadings submitted by the Debtors or others to the Court; -- represent the Committee with respect to all aspects of the Debtors proposed sale of substantially all of their assets; and -- represent the Committee with respect to any Chapter 11 plan proposed in the cases. G&R intends to work diligently with the Committee, local counsel, any financial advisor selected by the Committee and any other professionals the Committee may employ to ensure that there is no unnecessary duplication of services performed. The hourly rates of G&R personnel are: Peter W. Ito, partner $500 Megan M. Adeyemo, senior associate $250 Ross A. Hoogerhyde, associate $225 Paralegals $185 To the best of the Committee's knowledge, G&R is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: GORDON & REES LLP 55 Seventeenth Street, Suite 3400 Denver, CO 80202 About Ultimate Escapes, Inc. Ultimate Escapes, Inc. -- http://www.ultimateescapes.com/-- is a luxury destination club that sells club memberships offering members reservation rights to use its vacation properties, subject to the rules of the club member's Club Membership Agreement. The Company's properties are located in various resort locations throughout the world. Kissimmee, Florida-based Ultimate Escapes Holdings, LLC, filed for Chapter 11 bankruptcy protection on September 20, 2010 (Bankr. D. Del. Case No. 10-12915). Affiliates Ultimate Resort, LLC; Ultimate Operations, LLC; Ultimate Resort Holdings, LLC; Ultimate Escapes, Inc. (fka Secure America Acquisition Corporation); P & J Partners, LLC; UE Holdco, LLC; UE Member, LLC, et al., filed separate Chapter 11 petitions. Scott D. Cousins, Esq., Matthew L. Hinker, Esq., and Nancy A. Mitchell, Esq., at Greenberg Traurig LLP, assist the Debtors in their restructuring efforts. CRG Partners Group LLC is the Debtors' chief restructuring officer. BMC Group Inc. is the Company's claims and notice agent. Christopher A. Ward, Esq., at Polsinelli Shughart PC represents the creditors committee. Ultimate Escapes estimated assets at $10 million to $50 million and debts at $100 million to $500 million as of the Petition Date. ULTIMATE ESCAPES: Committee Taps Polsinelli Shughart as Co-Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Chapter 11 cases of Ultimate Escapes, Inc., et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Polsinelli Shughart PC as co-counsel to the proposed lead counsel -- Gordon & Rees LLP. Polsinelli will, among other things: -- assist the co-counsel in the investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' businesses, and any matter relevant to the cases or to the formulation of a plan or plans of reorganization or liquidation; -- as requested by co-counsel, prepare on behalf of the Committee necessary applications, motions, complaints, answers, orders, agreements and other legal papers; and -- review, analyze and respond to all pleadings filed by the Debtors and appear in Court to present necessary motions, applications and pleadings and to otherwise protect the interest of the Creditors Committee. Polsinelli and Gordon & Rees will coordinate their services to the Creditors Committee so as to avoid any unnecessary duplication of services. The hourly rates of Polsinelli's personnel are: Shareholders $250 - $475 Associates and Senior Counsel $175 - $295 Paraprofessionals $75 - $175 The primary attorneys and paralegals expected to represent the Creditors Committee and their respective hourly rates are: Christopher A. Ward, shareholder $425 Shanti M. Katona, associate $255 Lindsey M. Suprum, paralegal $185 Polsinelli has not received any retainer from the Debtors, the Creditors Committee, or any other entity in the cases. To the best of the Committee's knowledge, Polsinelli is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Christopher A. Ward, Esq. POLSINELLI SHUGHART PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801 About Ultimate Escapes, Inc. Ultimate Escapes, Inc. -- http://www.ultimateescapes.com/-- is a luxury destination club that sells club memberships offering members reservation rights to use its vacation properties, subject to the rules of the club member's Club Membership Agreement. The Company's properties are located in various resort locations throughout the world. Kissimmee, Florida-based Ultimate Escapes Holdings, LLC, filed for Chapter 11 bankruptcy protection on September 20, 2010 (Bankr. D. Del. Case No. 10-12915). Affiliates Ultimate Resort, LLC; Ultimate Operations, LLC; Ultimate Resort Holdings, LLC; Ultimate Escapes, Inc. (fka Secure America Acquisition Corporation); P & J Partners, LLC; UE Holdco, LLC; UE Member, LLC, et al., filed separate Chapter 11 petitions. Scott D. Cousins, Esq., Matthew L. Hinker, Esq., and Nancy A. Mitchell, Esq., at Greenberg Traurig LLP, assist the Debtors in their restructuring efforts. CRG Partners Group LLC is the Debtors' chief restructuring officer. BMC Group Inc. is the Company's claims and notice agent. Gordon & Rees LLP is the Committee's lead counsel. Ultimate Escapes estimated assets at $10 million to $50 million and debts at $100 million to $500 million as of the Petition Date. UNBREAKABLE NATION: Trade Creditor Discrimination Permitted ----------------------------------------------------------- WestLaw reports that a Chapter 11 debtor had a reasonable basis for placing, in a class separate from the general unsecured class, creditors whose unsecured claims were not for trade debt or other unsecured debt that the debtor incurred in the ordinary course of its business, but which arose exclusively out of their status as shareholders in the debtor's predecessor. Not only did these claims arise in a manner unique from the claims of general unsecured creditors, but they were potentially subject to mandatory subordination under 11 U.S.C.. Sec. 510(b). A bankruptcy judge in Pennsylvania also found that the plan, which provided $50,000 to each unsecured class and provided the members of each class with percentage payments on their claims differing by only 0.25%, did not "discriminate," let alone "unfairly discriminate," in violation of the requirements for "cramdown." In re Unbreakable Nation Co., --- B.R. ----, 2010 WL 2038870 (Bankr. E.D. Pa.). Unbreakable Nation Co., based in Kennett Square, Pa., sought Chapter 11 protection (Bankr. E.D. Pa. Case No. 09-10131) on Jan. 7, 2009, and is represented by Kevin W. Gibson, Esq., at Gibson & Perkins, PC, in Media, Pa. At the time of the filing, the Debtor estimated its assets at less than $500,000 and its liabilities at more than $1 million. US AIRWAYS: Officers Disclose Disposal/Acquisition of Stock ----------------------------------------------------------- In separate filings with the U.S. Securities and Exchange Commission, officers of U.S. Airways Group, Inc., disclosed disposal of the company's common stock: Securities Director/ Transaction Amount at the end of Officer Date Disposed Price Transaction --------- ----------- -------- ----- ------------- Robert D. Isom 07/26/10 800 $10.63 60,790 18,161 $10.62 42,629 1,000 $10.61 41,629 3,300 $10.6 38,329 4,800 $10.59 33,529 13,000 $10.58 20,529 Elise R. Eberwein 07/27/10 11,033 $10.49 57,851 44,182 $10.52 13,669 09/10/10 1,025 $8.87 12,644 C.A. Howlett 07/27/10 10,717 $10.8 90,621 10,551 $10.8 80,070 14,199 $10.8 65,871 6,200 $10.78 59,671 500 $10.775 59,171 750 $10.76 58,421 10,487 $10.75 47,934 2,700 $10.71 45,234 2,500 $10.7 42,734 2,700 $10.64 40,034 6,600 $10.63 33,434 1,300 $10.62 32,134 2,500 $10.61 29,634 5,000 $10.6 24,634 17,547 $10.5638 7,087 Derek J. Kerr 07/27/10 30,715 $11.0317 8,935 Prior to Ms. Eberwein's disposition of the disclosed shares, she acquired 37,334 shares of common stock at $3.1 per share on July 27, 2010, which resulted to her beneficially owning 68,884 shares of USAir common stock. Also, on July 27, 2010, Ms. Eberwein disposed of 37,334 shares of common stock of which she has derived ownership. Prior to Mr. Howlett's disposition of shares, he acquired these shares of common stock, resulting to his owning 101,338 shares of USAir stock: Securities Director/ Transaction Amount at the end of Officer Date Acquired Price Transaction --------- ----------- -------- ----- ------------- Howlett 07/27/10 37,334 $3.1 66,984 17,007 $6.7 83,991 17,347 $8.84 101,338 Mr. Howlett also disposed of derived stock appreciation rights: Securities Director/ Transaction Amount at the end of Officer Date Disposed Price Transaction --------- ----------- -------- ----- ------------- Howlett 07/27/10 37,334 - 0 17,007 - 0 17,347 - 0 About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. US AIRWAYS: Reports September Traffic Results --------------------------------------------- US Airways Group, Inc. (NYSE: LCC) announced September, quarter and year-to-date 2010 traffic results. Mainline revenue passenger miles (RPMs) for the month were 4.9 billion, up 7.5 percent versus September 2009. Mainline capacity was 6.0 billion available seat miles (ASMs), up 3.8 percent versus September 2009. Mainline passenger load factor was a record 82.1 percent for the month of September, up 2.8 points versus September 2009. US Airways President Scott Kirby said, "Our September consolidated (mainline and Express) passenger revenue per available seat mile (PRASM) increased approximately 12 percent versus the same period last year while total revenue per available seat mile increased approximately 13 percent on a year-over-year basis." For the month, US Airways' preliminary on-time performance as reported to the U.S. Department of Transportation (DOT) was 87.1 percent with a completion factor of 99.4 percent. The following summarizes US Airways Group's traffic results for the month, quarter and year-to-date ended September 30, 2010 and 2009, consisting of mainline operated flights as well as US Airways Express flights operated by wholly owned subsidiaries PSA Airlines and Piedmont Airlines. US Airways Mainline September 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 3,546,493 3,342,592 6.1 Atlantic 1,110,698 1,060,644 4.7 Latin 252,579 163,865 54.1 --------- --------- Total 4,909,770 4,567,101 7.5 Mainline Available Seat Miles (000) Domestic 4,340,971 4,173,018 4.0 Atlantic 1,316,566 1,360,708 (3.2) Latin 319,702 224,216 42.6 --------- --------- Total 5,977,239 5,757,942 3.8 Mainline Load Factor (%) Domestic 81.7 80.1 1.6 pts Atlantic 84.4 77.9 6.5 pts Latin 79.0 73.1 5.9 pts --------- --------- Total Mainline Load Factor 82.1 79.3 2.8 pts Mainline Enplanements Domestic 3,747,809 3,445,666 8.8 Atlantic 269,907 267,861 0.8 Latin 180,206 134,133 34.3 --------- --------- Total Mainline Enplanements 4,197,922 3,847,660 9.1 Quarter to Date 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 11,495,725 11,389,857 0.9 Atlantic 3,481,735 3,470,558 0.3 Latin 1,181,362 858,804 37.6 ---------- ---------- Total 16,158,822 15,719,219 2.8 Mainline Available Seat Miles (000) Domestic 13,638,639 13,437,280 1.5 Atlantic 4,091,117 4,236,924 (3.4) Latin 1,413,235 1,044,056 35.4 ---------- ---------- Total 19,142,991 18,718,260 2.3 Mainline Load Factor (%) Domestic 84.3 84.8 (0.5) pts Atlantic 85.1 81.9 3.2 pts Latin 83.6 82.3 1.3 pts --------- --------- Total Mainline Load Factor 84.4 84.0 0.4 pts Mainline Enplanements Domestic 11,748,019 11,464,620 2.5 Atlantic 856,328 874,567 (2.1) Latin 882,908 709,818 24.4 ---------- ---------- Total Mainline Enplanements 13,487,255 13,049,005 3.4 Year to Date 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 32,921,912 33,731,251 (2.4) Atlantic 7,798,842 7,456,906 4.6 Latin 4,021,454 3,365,274 19.5 ---------- ---------- Total 44,742,208 44,553,431 0.4 Mainline Available Seat Miles (000) Domestic 39,455,987 40,126,936 (1.7) Atlantic 9,579,701 9,573,992 0.1 Latin 5,126,138 4,306,488 19.0 ---------- ---------- Total 54,161,826 54,007,416 0.3 Mainline Load Factor (%) Domestic 83.4 84.1 (0.7) pts Atlantic 81.4 77.9 3.5 pts Latin 78.4 78.1 0.3 pts --------- --------- Total Mainline Load Factor 82.6 82.5 0.1 pts Mainline Enplanements Domestic 33,924,939 34,278,927 (1.0) Atlantic 1,922,491 1,901,663 1.1 Latin 3,005,938 2,718,038 10.6 ---------- ---------- Total Mainline Enplanements 38,853,368 38,898,628 (0.1) US Airways Express (Piedmont Airlines, PSA Airlines) September 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 197,048 182,501 8.0 Express Available Seat Miles (000) Domestic 266,963 266,010 0.4 Express Load Factor (%) Domestic 73.8 68.6 5.2 pts Express Enplanements Domestic 701,144 675,913 3.7 Quarter To Date 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 602,027 580,330 3.7 Express Available Seat Miles (000) Domestic 823,779 822,940 0.1 Express Load Factor (%) Domestic 73.1 70.5 2.6 pts Express Enplanements Domestic 2,131,306 2,148,093 (0.8) Year To Date 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 1,624,849 1,607,574 1.1 Express Available Seat Miles (000) Domestic 2,310,786 2,377,324 (2.8) Express Load Factor (%) Domestic 70.3 67.6 2.7 pts Express Enplanements Domestic 5,887,978 5,949,502 (1.0) Consolidated US Airways Group, Inc. September 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 3,743,541 3,525,093 6.2 Atlantic 1,110,698 1,060,644 4.7 Latin 252,579 163,865 54.1 --------- --------- Total 5,106,818 4,749,602 7.5 Consolidated Available Seat Miles (000) Domestic 4,607,934 4,439,028 3.8 Atlantic 1,316,566 1,360,708 (3.2) Latin 319,702 224,216 42.6 ---------- ---------- Total 6,244,202 6,023,952 3.7 Consolidated Load Factor (%) Domestic 81.2 79.4 1.8 pts Atlantic 84.4 77.9 6.5 pts Latin 79.0 73.1 5.9 pts ---------- ---------- Total 81.8 78.8 3.0 pts Consolidated Enplanements Domestic 4,448,953 4,121,579 7.9 Atlantic 269,907 267,861 0.8 Latin 180,206 134,133 34.3 ---------- ---------- Total 4,899,066 4,523,573 8.3 Quarter To Date 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 12,097,752 11,970,187 1.1 Atlantic 3,481,735 3,470,558 0.3 Latin 1,181,362 858,804 37.6 ---------- ---------- Total 16,760,849 16,299,549 2.8 Consolidated Available Seat Miles (000) Domestic 14,462,418 14,260,220 1.4 Atlantic 4,091,117 4,236,924 (3.4) Latin 1,413,235 1,044,056 35.4 ---------- ---------- Total 19,966,770 19,541,200 2.2 Consolidated Load Factor (%) Domestic 83.6 83.9 (0.3) pts Atlantic 85.1 81.9 3.2 pts Latin 83.6 82.3 1.3 pts ---------- ---------- Total 83.9 83.4 0.5 pts Consolidated Enplanements Domestic 13,879,325 13,612,713 2.0 Atlantic 856,328 874,567 (2.1) Latin 882,908 709,818 24.4 ---------- ---------- Total 15,618,561 15,197,098 2.8 Year To Date 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 34,546,761 35,338,825 (2.2) Atlantic 7,798,842 7,456,906 4.6 Latin 4,021,454 3,365,274 19.5 ---------- ---------- Total 46,367,057 46,161,005 0.4 Consolidated Available Seat Miles (000) Domestic 41,766,773 42,504,260 (1.7) Atlantic 9,579,701 9,573,992 0.1 Latin 5,126,138 4,306,488 19.0 ---------- ---------- Total 56,472,612 56,384,740 0.2 Consolidated Load Factor (%) Domestic 82.7 83.1 (0.4) pts Atlantic 81.4 77.9 3.5 pts Latin 78.4 78.1 0.3 pts ---------- ---------- Total 82.1 81.9 0.2 pts Consolidated Enplanements Domestic 39,812,917 40,228,429 (1.0) Atlantic 1,922,491 1,901,663 1.1 Latin 3,005,938 2,718,038 10.6 ---------- ---------- Total 44,741,346 44,848,130 (0.2) AUGUST TRAFFIC RESULTS US Airways Group, Inc. (NYSE: LCC) announced August and year-to- date 2010 traffic results. Mainline revenue passenger miles (RPMs) for the month were 5.5 billion, up 0.6 percent versus August 2009. Mainline capacity was 6.5 billion available seat miles (ASMs), up 1.2 percent versus August 2009. Mainline passenger load factor was 85.2 percent for the month of August, down 0.5 points versus August 2009. US Airways President Scott Kirby said, "Our August consolidated (mainline and Express) passenger revenue per available seat mile (PRASM) increased approximately 15 percent versus the same period last year, while total revenue per available seat mile also increased approximately 15 percent on a year-over-year basis. "In addition, we would like to thank our 31,000 team members for doing an exceptional job of taking care of our customers during the busy summer travel season. As a result of their hard work, US Airways posted back-to-back first place finishes in both on-time performance and customer satisfaction among the top five network carriers as measured by the U.S. Department of Transportation (DOT) for May and June. We look forward to maintaining this momentum as we head into the fall." For the month, US Airways' preliminary on-time performance as reported to the DOT was 85.0 percent with a completion factor of 99.2 percent. The following summarizes US Airways Group's traffic results for the month and year-to-date ended August 31, 2010 and 2009, consisting of mainline operated flights as well as US Airways Express flights operated by wholly owned subsidiaries PSA Airlines and Piedmont Airlines. US Airways Mainline August 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 3,918,315 3,950,770 (0.8) Atlantic 1,173,523 1,208,596 (2.9) Latin 440,429 338,021 30.3 --------- --------- Total 5,532,267 5,497,387 0.6 Mainline Available Seat Miles (000) Domestic 4,585,241 4,581,590 0.1 Atlantic 1,389,579 1,435,871 (3.2) Latin 516,838 397,989 29.9 --------- --------- Total 6,491,658 6,415,450 1.2 Mainline Load Factor (%) Domestic 85.5 86.2 (0.7) pts Atlantic 84.5 84.2 0.3 pts Latin 85.2 84.9 0.3 pts --------- --------- Total Mainline Load Factor 85.2 85.7 (0.5) pts Mainline Enplanements Domestic 4,015,507 3,949,221 1.7 Atlantic 281,034 304,134 (7.6) Latin 327,991 277,871 18.0 --------- --------- Total Mainline Enplanements 4,624,532 4,531,226 2.1 Year to Date 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 29,375,446 30,388,659 (3.3) Atlantic 6,688,202 6,396,262 4.6 Latin 3,769,163 3,201,409 17.7 ---------- ---------- Total 39,832,811 39,986,330 (0.4) Mainline Available Seat Miles (000) Domestic 35,115,018 35,953,918 (2.3) Atlantic 8,263,135 8,213,284 0.6 Latin 4,806,437 4,082,272 17.7 ---------- ---------- Total 48,184,590 48,249,474 (0.1) Mainline Load Factor (%) Domestic 83.7 84.5 (0.8) pts Atlantic 80.9 77.9 3.0 pts Latin 78.4 78.4 - pts --------- --------- Total Mainline Load Factor 82.7 82.9 (0.2) pts Mainline Enplanements Domestic 30,190,239 30,833,261 (2.1) Atlantic 1,643,467 1,633,802 0.6 Latin 2,821,826 2,853,905 9.2 ---------- ---------- Total Mainline Enplanements 34,655,532 35,050,968 (1.1) US Airways Express (Piedmont Airlines, PSA Airlines) August 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 202,988 192,725 5.3 Express Available Seat Miles (000) Domestic 278,988 276,252 1.0 Express Load Factor (%) Domestic 72.8 69.8 3.0 pts Express Enplanements Domestic 721,003 715,417 0.8 Year To Date 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 1,427,800 1,425,073 0.2 Express Available Seat Miles (000) Domestic 2,043,830 2,111,314 (3.2) Express Load Factor (%) Domestic 69.9 67.5 2.4 pts Express Enplanements Domestic 5,186,834 5,273,589 (1.6) Consolidated US Airways Group, Inc. August 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 4,121,303 4,143,495 (0.5) Atlantic 1,173,523 1,208,596 (2.9) Latin 440,429 338,021 30.3 --------- --------- Total 5,735,255 5,690,112 0.8 Consolidated Available Seat Miles (000) Domestic 4,864,229 4,857,842 0.1 Atlantic 1,389,579 1,435,871 (3.2) Latin 516,838 397,989 29.9 ---------- ---------- Total 6,770,646 6,691,702 1.2 Consolidated Load Factor (%) Domestic 84.7 85.3 (0.6) pts Atlantic 84.5 84.2 0.3 pts Latin 85.2 84.9 0.3 pts ---------- ---------- Total 84.7 85.0 (0.3) pts Consolidated Enplanements Domestic 4,736,510 4,664,638 1.5 Atlantic 281,034 304,134 (7.6) Latin 327,991 277,871 18.0 ---------- ---------- Total 5,345,535 5,246,643 1.9 Year To Date 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 30,803,246 31,813,732 (3.2) Atlantic 6,688,202 6,396,262 4.6 Latin 3,769,163 3,201,409 17.7 ---------- ---------- Total 41,260,611 41,411,403 (0.4) Consolidated Available Seat Miles (000) Domestic 37,158,848 38,065,232 (2.4) Atlantic 8,263,135 8,213,284 0.6 Latin 4,806,437 4,082,272 17.7 ---------- ---------- Total 50,228,420 50,360,788 (0.3) Consolidated Load Factor (%) Domestic 82.9 83.6 (0.7) pts Atlantic 80.9 77.9 3.0 pts Latin 78.4 78.4 - pts ---------- ---------- Total 82.1 82.2 (0.1) pts Consolidated Enplanements Domestic 35,377,073 36,106,850 (2.0) Atlantic 1,643,467 1,633,802 0.6 Latin 2,821,826 2,583,905 9.2 ---------- ---------- Total 39,842,366 40,324,557 (1.2) US Airways is also providing a brief update on notable company accomplishments during the month of August: * Named one of the 50 best companies for Latinas to work for in the United States by LATINA Style magazine in its LATINA Style 50 Report for 2010. US Airways was the only airline included among the top 50 companies. * Announced new service to seven cities from New York's LaGuardia Airport. New service includes Asheville, N.C., Hartford, Conn., Columbia, S.C., Greenville-Spartanburg, S.C., Washington, D.C. (Dulles), Lexington, Ky., and Harrisburg, Pa. In addition to the seven new markets, three additional cities are seeing an increase in roundtrips to LaGuardia, including Charleston, S.C., Columbus, Ohio, and Syracuse, N.Y. The new and expanded service begins Oct. 31 and will be operated by US Airways Express partners Air Wisconsin, Chautauqua Airlines, Piedmont Airlines, PSA Airlines and Republic Airways. * Launched FastPathSM - an expedited airport experience for customers traveling between Boston and Philadelphia. FastPath features dedicated facilities for curbside check- in and bag drop, ticket counter check-in, security checkpoint lanes, departure gates and baggage claim carousels. JULY TRAFFIC RESULTS US Airways Group, Inc. (NYSE: LCC) announced July and year-to-date 2010 traffic results. Mainline revenue passenger miles (RPMs) for the month were 5.7 billion, up 1.1 percent versus July 2009. Mainline capacity was 6.7 billion available seat miles (ASMs), up 2.0 percent versus July 2009. Mainline passenger load factor was 85.7 percent for the month of July, down 0.7 points versus July 2009. US Airways President Scott Kirby said, "Our July consolidated (mainline and Express) passenger revenue per available seat mile (PRASM) increased approximately 16 percent versus the same period last year while total revenue per available seat mile increased approximately 17 percent on a year-over-year basis. This improvement was largely driven by continued year-over-year strength in business demand and yield." For the month, US Airways' preliminary on-time performance as reported to the U.S. Department of Transportation (DOT) was 82.1 percent with a completion factor of 98.9 percent. This following summarizes US Airways Group's traffic results for the month and year-to-date ended July 31, 2010 and 2009, consisting of mainline operated flights as well as US Airways Express flights operated by wholly owned subsidiaries PSA Airlines and Piedmont Airlines. US Airways Mainline July 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 4,030,974 4,096,495 (1.6) Atlantic 1,197,628 1,201,317 (0.3) Latin 488,656 356,918 36.9 --------- --------- Total 5,717,258 5,654,730 1.1 Mainline Available Seat Miles (000) Domestic 4,712,427 4,682,673 0.6 Atlantic 1,384,972 1,440,346 (3.8) Latin 576,695 421,850 36.7 --------- --------- Total 6,674,094 6,544,869 2.0 Mainline Load Factor (%) Domestic 85.5 87.5 (2.0) pts Atlantic 86.5 83.4 3.1 pts Latin 84.7 84.6 0.1 pts --------- --------- Total Mainline Load Factor 85.7 86.4 (0.7) pts Mainline Enplanements Domestic 4,007,382 4,069,733 (1.5) Atlantic 290,855 302,572 (3.9) Latin 366,783 297,814 23.2 --------- --------- Total Mainline Enplanements 4,665,020 4,670,119 (0.1) Year to Date 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 25,457,161 26,437,888 (3.7) Atlantic 5,514,736 5,187,666 6.3 Latin 3,328,749 2,863,388 16.3 ---------- ---------- Total 34,300,646 34,488,942 (0.5) Mainline Available Seat Miles (000) Domestic 30,529,777 31,372,328 (2.7) Atlantic 6,873,556 6,777,413 1.4 Latin 4,289,598 3,684,283 16.4 ---------- ---------- Total 41,692,931 41,834,024 (0.3) Mainline Load Factor (%) Domestic 83.4 84.3 (0.9) pts Atlantic 80.2 76.5 3.7 pts Latin 77.6 77.7 (0.1) pts --------- --------- Total Mainline Load Factor 82.3 82.4 (0.1) pts Mainline Enplanements Domestic 26,184,302 26,884,040 (2.6) Atlantic 1,357,018 1,329,668 2.1 Latin 2,489,813 2,306,034 8.0 ---------- ---------- Total Mainline Enplanements 30,031,133 30,519,742 (1.6) US Airways Express (Piedmont Airlines, PSA Airlines) July 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 202,007 205,10 (1.5) Express Available Seat Miles (000) Domestic 277,830 280,678 (1.0) Express Load Factor (%) Domestic 72.7 73.1 (0.4) pts Express Enplanements Domestic 709,234 756,763 (6.3) Year To Date 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 1,224,828 1,232,348 (0.6) Express Available Seat Miles (000) Domestic 1,764,837 1,835,062 (3.8) Express Load Factor (%) Domestic 69.4 67.2 2.2 pts Express Enplanements Domestic 4,465,906 4,558,172 (2.0) Consolidated US Airways Group, Inc. July 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 4,232,981 4,301,598 (1.6) Atlantic 1,197,628 1,201,317 (0.3) Latin 488,656 356,918 36.9 --------- --------- Total 5,919,265 5,859,833 1.0 Consolidated Available Seat Miles (000) Domestic 4,990,257 4,963,351 0.5 Atlantic 1,384,972 1,440,346 (3.8) Latin 576,695 421,850 36.7 ---------- ---------- Total 6,951,924 6,825,547 1.9 Consolidated Load Factor (%) Domestic 84.8 86.7 (1.9) pts Atlantic 86.5 83.4 3.1 pts Latin 84.7 84.6 0.1 pts ---------- ---------- Total 85.1 85.9 (0.8)pts Consolidated Enplanements Domestic 4,716,616 4,826,496 (2.3) Atlantic 290,855 302,572 (3.9) Latin 366,783 297,814 23.2 ---------- ---------- Total 5,374,254 5,426,882 (1.0) Year To Date 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 26,681,989 27,670,236 (3.6) Atlantic 5,514,736 5,187,666 6.3 Latin 3,328,749 2,863,388 16.3 ---------- ---------- Total 35,25,474 35,721,290 (0.5) Consolidated Available Seat Miles (000) Domestic 32,294,614 33,207,390 (2.7) Atlantic 6,873,556 6,777,413 1.4 Latin 4,289,598 3,684,283 16.4 ---------- ---------- Total 3,457,768 43,669,086 (0.5) Consolidated Load Factor (%) Domestic 82.6 83.3 (0.7) pts Atlantic 80.2 76.5 3.7 pts Latin 77.6 77.7 (0.1) pts ---------- ---------- Total 81.7 81.8 (0.1) pts Consolidated Enplanements Domestic 30,650,208 31,442,212 (2.5) Atlantic 1,357,018 1,329,668 2.1 Latin 2,489,813 2,306,034 8.0 ---------- ---------- Total 34,497,039 35,077,914 (1.7) US Airways is also providing a brief update on notable company accomplishments during the month of July: * Announced new bilateral codeshare agreement with Star Alliance partner, Turkish Airlines. US Airways customers will have access to Istanbul via Turkish Airlines service from Frankfurt, Munich and Zurich and will gain access to four new destinations including Adana, Izmir, Antalya and Ankara via Istanbul. In addition, US Airways customers may opt for nonstop travel to Istanbul via Turkish Airlines service at New York's John F. Kennedy International Airport and Chicago O'Hare International Airport. * Paid out $150 to each employee for delivering top DOT rankings for the month of May 2010 in on-time performance, baggage handling and customer satisfaction among the five largest network carriers. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. US AIRWAYS: Selects Aeroframe for A330 Airframe Maintenance ----------------------------------------------------------- AEROFRAME announced that US Airways has selected its Lake Charles operation for airframe base maintenance on its A330 aircraft beginning in October 2010. Aeroframe has been providing maintenance for all Airbus products since 2005 when the facility was purchased from EADS. CEO for Aeroframe Roger Porter stated, "This marks the beginning of an extremely important relationship with one of the leading U.S. Airlines and a significant expansion of our services in the Lake Charles area." Aeroframe has made significant investments in tooling and docking for the 530,000 square foot facility to support A300, A310, A318, A319, A320, A321, A330 and A340 Airbus aircraft. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. US AIRWAYS: To Have Webcast of Q3 Results on Oct. 20 ---------------------------------------------------- US Airways Group, Inc. (NYSE: LCC) will conduct a live audio webcast of its third quarter 2010 financial results conference call with the financial community on Wednesday, Oct. 20, at 1:00 p.m. EDT (10:00 a.m. PDT). The webcast will be available to the public on a listen-only basis at the company's Web site http://www.usairways.com Listeners to the webcast will need a current version of Windows Media Player software and at least a 28.8 kbps connection to the Internet. Confidential Treatment of Q3 Results Exhibits US Airways Group, Inc., and US Airways, Inc., submitted an application under Rule 24b-2 with the U.S. Securities and Exchange Commission requesting confidential treatment for information it excluded from the Exhibits to a Form 10-Q filed on July 21, 2010. Based on representations by US Airways Group, Inc., and US Airways, Inc., that this information qualifies as confidential commercial or financial information under the Freedom of Information Act, 5 U.S.C. 552(b)(4), the Division of Corporation Finance has determined not to publicly disclose it. Accordingly, excluded information from Exhibit 10.1 to a Form 10-Q filed on July 21, 2010, will not be released to the public through June 30, 2019. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative. VALENCE TECHNOLOGY: Regains Compliance With NASDAQ Requirement -------------------------------------------------------------- Valence Technology Inc. has regained compliance with the minimum bid price requirement of NASDAQ Listing Rule 5550(a)(2). On Oct. 11, 2010, Valence received a letter from The NASDAQ Stock Market confirming that the closing bid price of the company's common stock has been at $1.00 per share or greater for at least 10 consecutive business days. On June 29, 2010, Valence received written notice from The NASDAQ Stock Market indicating that the company was not in compliance with the $1.00 minimum bid price requirement for continued listing on the NASDAQ Capital Market, as set forth in Listing Rule 5550(a)(2). The company was provided a 180-day grace period, scheduled to end December 27, 2010, to regain compliance with the Listing Rule. As a result of Valence having satisfied the minimum bid price requirement for at least 10 consecutive business days, this matter is now closed. About Valence Technology Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. The Company's balance sheet at June 30, 2010, showed $22.75 million in total assets, $94.51 million in total liabilities, and a stockholders' deficit of $80.37 million. PMB Helin Donovan LLP expressed substantial doubt about Valence Technology Inc.'s ability as a going concern following the Company's fiscal 2010 results. The Company has incurred operating losses each year since its inception in 1989 and had an accumulated deficit of $581 million as of March 31, 2010. For the fiscal years ended March 31, 2010, 2009, and 2008 the Company sustained net losses available to common stockholders of $23.2 million, $21.4 million, and $19.6 million, respectively. VALENCE TECHNOLOGY: Expects $12 Million Revenue for 2nd Qtr 2011 ---------------------------------------------------------------- Valence Technology Inc. said it expects revenue of approximately $12 million for its fiscal 2011 second quarter ended September 30, 2010. This would surpass the high end of the $8 million to $10 million revenue guidance range issued by the Company on August 4, 2010. "Fiscal year 2011 is proving to be a dynamic growth year for Valence. Our strategy to seek growth opportunities for our proprietary advanced energy storage solutions within the fleet sector is showing strong results. As evidenced by our recently announced multi-year contract with Wrightbus, Valence is becoming the battery provider of choice for leading fleet providers globally. In addition, we have targeted opportunities with existing and new customers and business continues to be very positive with increasing orders from existing customers such as Segway and Smith Electric Vehicles," commented president and chief executive officer Robert L. Kanode. "Our bookings are robust, our short term component supply issues have improved and our manufacturing output has been increased in response to customer demand. We are very pleased with our strong top line results for the second quarter and feel that Valence's position within the market continues to strengthen," summarized Mr. Kanode. No conference call will be held in conjunction with this news release. However, on November 3, 2010, Valence will release its second quarter financial results after the market closes and Company management will conduct a conference call that day at 3:30 p.m. CT (4:30 p.m. ET) to discuss the results. About Valence Technology Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. The Company's balance sheet at June 30, 2010, showed $22.75 million in total assets, $94.51 million in total liabilities, and a stockholders' deficit of $80.37 million. PMB Helin Donovan LLP expressed substantial doubt about Valence Technology Inc.'s ability as a going concern following the Company's fiscal 2010 results. The Company has incurred operating losses each year since its inception in 1989 and had an accumulated deficit of $581 million as of March 31, 2010. For the fiscal years ended March 31, 2010, 2009, and 2008 the Company sustained net losses available to common stockholders of $23.2 million, $21.4 million, and $19.6 million, respectively. WHEELER CADILLAC: Preparing to Sell 7-Acre Parcel in Pa. -------------------------------------------------------- Wheeler Cadillac-Pontiac, Inc., is asking the U.S. Bankruptcy Court for the Western District of Pennsylvania for permission to sekk, 7.175 acres of improved real property and the improvements erected thereon and the fixtures situate therein situate in Richland Township, Cambria County, Pa., which is more fully described in as more fully shown on a survey prepared by Hinks & Locher, Inc., dated January 26, 1996, and being the same premises conveyed to Wheeler Cadillac-Pontiac, Inc. by deed dated December 10, 1996, and recorded in the Recorder Of Deeds Office of Cambria County on April 11, 1997 in R.B.V. 1464, at page 914, said parcel being identified in the Tax Assessment Records of Cambria County as parcel 50-10-133.006 An Order has been issued setting deadlines for objections to the sale of property and for the date of the hearing on the sale. On or before October 14, 2010, any objections shall be filed with the U.S. Bankruptcy Clerk in Pittsburgh, with a copy served on all interested parties. A hearing is scheduled for October 21, 2010, at 10:00 a.m., before the Honorable Jeffery A. Deller in Johnstown, Pa., at which time any higher or better offers will be considered and objections to the sale will be heard. Wheeler Cadillac-Pontiac, Inc., aka Wheeler Cadillac-Pontiac Mitsubishi, based in Johnstown, Pa., sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 09-71450) on Dec. 10, 2009. The Debtor is represented by David J. Novak, Esq., and James R. Walsh, Esq., at Spence Custer Saylor Wolfe & Rose in Johnstown, Pa. THe Debtor estimated its assets and debts at less than $10 million at the time of the filing. WIND ENERGY: Child Van Wagoner Raises Going Concern Doubt --------------------------------------------------------- Wind Energy America, Inc., filed on October 12, 2010 its annual report on Form 10-K for the fiscal year ended June 30, 2010. Child, Van Wagoner & Bradshaw, PLLC, in Salt Lake City, Utah, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has recurring losses and negative working capital. The Company reported a net loss of $5.4 million on $42,142 of revenue for fiscal 2010, compared to a net loss of $1.9 million on $0 revenue for fiscal 2009. The increased loss is attributable to a $2.3 million increase in management fees, $1.1 million increase in general and administrative expenses, $102,566 increase in depreciation expense on operating wind projects, and $71,759 increased impairment and abandonment expense. The Company's balance sheet at June 30, 2010, showed $16.4 million in total assets, $3.5 million in total liabilities, and stockholders' equity of $12.9 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?6c78 About Wind Energy Eden Prairie, Minn.-based Wind Energy America, Inc., has, since early 2007, been engaged solely in the wind power segment of the renewable energy industry. The Company owns, either through wholly-owned subsidiaries, or though minority equity interests, portions of 59.1 megawatts (MW) of nameplate wind generating capacity. Through wholly-owned subsidiaries, the Company had 2.0MW in operation and 2.0MW of this capacity under construction as of June 30, 2010, in Osceola County, Iowa. Also through wholly-owned subsidiaries, the Company had 0.8MW in operation and 0.8MW of this capacity under construction in Lincoln County, Minnesota as of June 30, 2010. The Company also owns, through a wholly-owned subsidiary, minority equity interests in three wind farms in Minnesota in an active wind energy production region called Buffalo Ridge. These projects, in which the Company owns a minority equity interest, have a capacity of 53.5MW. The Company will not receive any material revenue from these minority equity interests until these projects reach certain milestones, the projects reach their "flip" dates, and its minority equity interests are converted into larger percentage ownership. ZALE CORP: Incurs $94-Mil. Loss for Fiscal 2010 ----------------------------------------------- Zale Corporation filed its annual report on Form 10-K, Reporting a net loss of $93.67 million on $1.62 billion of revenues for the year ended July 31, 2010, compared with a net loss of $166.35 million on $1.78 billion of revenues for the same period a year ago. The Company's balance sheet at July 31, 2010 showed $1.16 billion in total assets, $388.31 million in total liabilities, $284.68 million in long-term debt, $179.37 million in other liabilities, and stockholders' equity of $308.02 million. A full-text copy of the annual report on Form 10-K is available for free at http://ResearchArchives.com/t/s?6c76 About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at www.zales.com, www.zalesoutlet.com, www.gordonsjewelers.com and www.pagoda.com. As reported by the Troubled Company Reporter on February 10, 2010, The Deal.com's Sara Behunek reported that analysts said bankruptcy looms for Zale if it fails to restructure its debt and put in place a solid merchandising strategy. * FDIC Begins Floating Rules to Wind Down Failed Companies ---------------------------------------------------------- Bankruptcy Law360 reports that the Federal Deposit Insurance Corp. is moving to implement the new orderly liquidation authority for large financial companies established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, starting with a proposed rule that would require the company's creditors to shoulder substantial losses on their claims unless the FDIC says otherwise. Law360 says the FDIC Board of Directors voted Friday to release a proposed rule clarifying how it will treat certain creditor claims in resolution proceedings. * Defaults by Junk-Rated Companies Continue to Decline ------------------------------------------------------ Bloomberg News reports that Moody's Investors Service said that worldwide defaults for junk-rated companies declined from 6.2% in the second quarter to 4% at the end of the third quarter. In the U.S., the junk default rate contracted to 4% from 6.4% between the second and third quarters. One year ago, the global junk default rate was 13.2%. The default rate now is below the 4.8% average for the years 1983 through 2009. While the default rate is down between quarters, the number of companies with debt trading at distressed levels hasn't declined as much. Moody's index for distressed debt was 15% at the end of the third quarter, down from 16% at the close of the second quarter. One year ago, the distress index was 32.5%. So far this year, there have been 40 defaults by companies that Moody's rates. In the first nine months of 2009, there were 237 defaults. Moody's, according to Bloomberg, predicts that the global default rate will decline to 2.7% by the end of 2010 and to 2 percent by the third quarter of 2011. * Focus Management Group Opens Washington DC Office --------------------------------------------------- Focus Management Group has opened its new office in Washington D.C. The new location will serve as a base for the firm's increasing demand for its services in both the commercial and government sectors. "Our customer base is steadily increasing, and as a result, we saw a need to broaden our nationwide coverage to the Washington D.C. area to best serve our clients in both the commercial and government sector," said President, J. Tim Pruban. "Our team will bring interdisciplinary expertise and tactical skills to help government institutions and commercial businesses in this era of financial reform, both in the DC area and nationwide, as well as minimize risks in the current environment." Out of its Washington D.C. office, Focus will provide a full portfolio of financial and operational consulting services to distressed companies and their stakeholders, as well as a variety of specialized services to organizations operating in the government sector. Overseeing the Washington DC office is President, J. Tim Pruban and Managing Director, Gerry Paez. Mr. Pruban is a turnaround management specialist with over 25 years experience in operations management, strategic business planning, bankruptcy, organizational restructuring and interim management. Mr. Paez has over 25 years of hands-on experience in financial restructuring, capital raising, debt/sub-debt financing and investment banking. Mr. Pruban can be reached at (301) 968-2414 or via e-mail at t.pruban@focusmg.com. Mr. Paez can be reached at (301) 968-2414 or via e-mail at g.paez@focusmg.com About Focus Management Focus Management Group -- http://www.focusmg.com/-- provides nationwide professional services in turnaround management, insolvency proceedings, business restructuring and operational improvement with a senior-level team of 130 professionals. Headquartered in Tampa, FL, with offices in Atlanta, Chicago, Cleveland, Columbus, Dallas, Los Angeles, Philadelphia and Washington DC, the firm provides a full portfolio of services to distressed companies and their stakeholders, including secured lenders and equity sponsors. Focus Management Group's Washington D.C. office is located at 5425 Wisconsin Avenue, Suite 600, Chevy Chase MD 20815. * BOOK REVIEW: Declining Demand, Divestiture, And Corporate Strategy ---------------------------------------------------------------- Author: Kathryn Rudie Harrigan Publisher: Beard Books, Washington, D.C. 2003 (reprint of 1980 book published by D.C. Heath and Company). 424 pages. $34.95 trade paper, ISBN 1-58798-196-3. Product life cycle is at the center of this book. Every product - - including services -- has a life cycle. A typical life cycle has ups and downs. In this typical cycle which is an inherent part of being in business, there is no serious, concentrated thought that a product is in irreversible decline leading to its end. There may be the concern of this at the margins of management's recognition of a down phase of the typical cycle. But few companies know how to or are willing to face the fact that a product is not going to pull out of a decline. Ms. Harrigan deals comprehensively and professionally with this subject most businesspersons are reluctant to come to grips with. Admitting that a product is in its "endgame" (a term Ms. Harrigan uses frequently) goes against the grain of most businesspersons; who in general are disposed to be optimistic about prospects, have a stake in the success of a product and a company, have experienced down phases of a business cycle before, and want to rise to the challenge of keeping a product viable. Thus the reasons management usually does not recognize an endgame involve experience, identity, hopefulness, faulty research or data, and analytic failures. The author takes up each of these. She is equally pertinent and constructive for psychological and technical aspects of the subject. While there are similarities to a down phase and an endgame, there are technicalities and signs which help management to distinguish the difference. Ms. Harrigan gives these as fewer competitors, constriction of varieties of a product, withdrawal from smaller markets, and the reduction of promotional and developmental budgets by competitors. Ms. Harrigan shows that product endgame is ordinarily part of decline or endgame of an industry sector. Management looks to competitors and also changes in the sector for unmistakable signs of a product endgame. Though criteria for recognizing an endgame apply to any business sector, strategies for dealing with it vary from sector to sector. Thus besides advising company leaders how to recognize an endgame, Ms. Harrigan gives examples of endgame management over a broad range of industries using particular and in many cases well-known companies and brands. Consumer products industries are baby foods, cigars, electric percolators, and rayons. Soda ash and acetylene are manufacturers of products for industrial use and consumer goods which are not so well known outside of their sectors. Within these industries, one runs across the names of Consolidated Cigar, Mirro Aluminum, Beech-Nut Foods, Gerber Products, Allied Chemical, and Carbide Process, Ms. Harrigan covers each industry by an overview of it and the conditions bringing about the endgame, description of the endgame for industries in it, and an analysis citing mistaken and helpful measures taken by management under the circumstances. In all, 60 companies in seven industry sectors are studied. Ms. Harrigan has gathered enough diversified material and organized and analyzed it so thoroughly and knowledgeably that she is able to make comparisons among not only the different sectors, but also industries within them for the comprehension and applicability of endgame circumstances and strategies for company management. When she first wrote this book about 1980, it had a leading influence on establishing the new field of endgame management. Endgames are inevitable in any modern economy. Ms. Harrigan tells how managers can face the unique, usually unwelcome challenges of these to lessen adverse effects as much as possible. An award-winning scholar and author of many articles and books, Kathyrn Rudie Harrigan is the Henry Kravis Professor of Business Leadership at Columbia University. ********* 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 ***