/raid1/www/Hosts/bankrupt/TCR_Public/101102.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, November 2, 2010, Vol. 14, No. 304
Headlines
ACE CASH: S&P Downgrades Counterparty Credit Rating to 'B'
AMBAC FINANCIAL: To Seek Restructuring with Prepack Bankruptcy
AMERICAN MEDIA: Soliciting Votes for Prepackaged Ch. 11 Plan
AMERICANWEST BANCORP: Proposes $2MM of Financing from SKBHC
AMERICANWEST BANCORP: Files List of 6 Largest Unsecured Creditors
AMERICANWEST BANCORP: Section 341(a) Meeting Scheduled for Dec. 3
ANDREAS NOTTEBOHM: Case Summary & 7 Largest Unsecured Creditors
ANTIETAM FUNDING: Seeks Nod of $200MM Financing from Affiliate
ATHILON CAPITAL: S&P Corrects Issuer Credit Rating to 'BB'
AVP PRO: Case Summary & 20 Largest Unsecured Creditors
AVP, INC.: Case Summary & 20 Largest Unsecured Creditors
BERRIDGE, LLC: Case Summary & 7 Largest Unsecured Creditors
BLOCKBUSTER INC: Wins Nod to Tap Ordinary Course Professionals
BLOCKBUSTER INC: Bankr. Judge Lifts Automatic Stay for Bexar
BLOCKBUSTER INC: Lycos Wants Lift Stay to Dismiss Mass. Suit
BLOCKBUSTER INC: Reports on Non-U.S. Store Value and Operations
BOSTON SCIENTIFIC: Fitch Affirms Issuer Default Rating at 'BB+'
BOSTON SCIENTIFIC: Moody's' Affirms 'Ba1' Corporate Family Rating
BREWER INVESTMENT: SEC Gets Order Freezing Assets Over Fraud
BRIGGS & STRATTON: S&P Gives Positive Outlook, Affirms BB- Rating
BUCYRUS INTERNATIONAL: S&P Raises Corporate Credit Rating to 'BB+'
C&D TECHNOLOGIES: Elects to Not Make Interest Payment on Notes
CANAL CORP: Agrees to Settle U.S. Federal Income Tax Claims
CAREFREE WILLOWS: Section 341(a) Meeting Scheduled for Dec. 2
CATHOLIC CHURCH: District Court Affirms Ruling vs. Greens
CATHOLIC CHURCH: San Diego Releases Priests' Records
CATHOLIC CHURCH: Foundations and Cemeteries Seek Funds from PIA
CATHOLIC CHURCH: Dist. Ct. Reverses Contempt Order vs. Spokane
CELL THERAPEUTICS: Posts $15.6 Million Net Loss in Q3 2010
CELL THERAPEUTICS: Provides Update on Nasdaq Listing Compliance
CELL THERAPEUTICS: Reports $7.5 Million Net Loss in September
CHARTWELL INTERNATIONAL: Wins Confirmation of Prepackaged Plan
CHEM RX: Auction Canceled Due to Low Bid Turnout
CLAIM JUMPER: Proofs of Claim Must Be Filed by Nov. 30, 2010
CLAIM JUMPER: Landry's Restaurants Wins Auction
CLASSICSTAR MARE: Gastar Settles Suits for $21 Million
CODESSA TERRELL: Gets Nod to Tap Lawrence Szabo as Bankr. Counsel
CODESSA TERRELL: Section 341(a) Meeting Scheduled for Nov. 22
COMPETITIVE TECH: Accumulated Losses Cue Going Concern Doubt
CRISTAL INORGANIC: Moody's Upgrades Corp. Family Rating to 'B2'
CUMULUS MEDIA: Bank Debt Trades at 9% Off in Secondary Market
DAIRY FARMERS: Moody's Affirms Ba1 Rating on Preferred Stock
DELUXE ENTERTAINMENT: S&P Raises Issue-Level Rating on Debt to 'B'
DESIGN TEAM: Case Summary & Largest Unsecured Creditor
DEX MEDIA EAST: Bank Debt Trades at 19% Off in Secondary Market
DEX MEDIA WEST: Bank Debt Trades at 8% Off in Secondary Market
DOWNEY FINANCIAL: Ch. 7 Trustee Sues FDIC for Tax Refunds
DYNEGY INC: FERC OKs Blackstone Merger, Sale of 3 Plants to NRG
EMIVEST AEROSPACE: Taps DLA Piper to Assist in Marketing Assets
EMIVEST AEROSPACE: Taps Morgan Joseph as Financial Advisor
ENGLISH & AMERICAN: Scheme Creditors' Claims Due by April 11
FAIRPOINT COMMUNICATIONS: Creditors Investigating Verizon Spinoff
FIRST MERCURY: Moody's Affirms 'Ba2' Long-Term Issuer Rating
FLETCHER GRANITE: Judge Approve $7MM Asset Sale to Nesi Realty
FREESCALE SEMICON: Bank Debt Trades at 6% Off in Secondary Market
GENERAL MOTORS: Treasury Said to Cut Stake to 35% in IPO
GENERAL MOTORS: S&P Assigns 'BB+' Rating to $5 Bil. Senior Notes
GENERAL MOTORS: Fitch Assigns 'BB+' Rating to $5 Bil. Loan
GREAT ATLANTIC: S&P Downgrades Corporate Credit Rating to 'CC'
GSC GROUP: Black Diamond Wins Auction for Assets
GTC BIOTHERAPEUTICS: Earns $3.5 Million in September 30 Quarter
HAWKER BEECHCRAFT: Bank Debt Trades at 17% Off in Secondary Market
HCA INC: Fitch Affirms Issuer Default Rating at 'B'
HERBST GAMING: Bank Debt Trades at 44% Off in Secondary Market
HIGHWOODS PROPERTIES: Fitch Affirms Preferred Stock Rating at 'BB'
HUNTSMAN INTERNATIONAL: S&P Assigns 'B-' Rating to $180 Mil. Notes
IDS ACQUISITION: S&P Assigns 'B+' Corporate Credit Rating
INTERPUBLIC GROUP: Fitch Upgrades Issuer Default Rating From 'BB+'
JABIL CIRCUIT: Moody's Assigns 'Ba1' Rating to $300 Mil. Notes
JABIL CIRCUIT: S&P Assigns 'BB+' Rating on Senior Unsec. Debt
KRONOS INTERNATIONAL: Moody's Raises Corp. Family Rating to 'B2'
LANDAMERICA FIN'L: Citigroup Unit to Pay $96 Mil. to Trustee
LAS VEGAS SANDS: Bank Debt Trades at 7% Off in Secondary Market
LAS VEGAS SANDS: Bank Debt Trades at 5% Off in Secondary Market
LEHMAN BROTHERS: LBIE's Report on 2 Years of Administration
LEHMAN BROTHERS: Files 2009 Savings Plan Report
LEHMAN BROTHERS: LBI Delays Form 10-Q for Aug. 31 Quarter
LEHMAN BROTHERS: SIPA Trustee Files May-October Probe Report
LEHMAN BROTHERS: Proposes to Implement 2011 Incentive Program
LEHMAN BROTHERS: Wants to Allow Lloyd's to Pay $10-Mil. to Settle
LEHMAN BROTHERS: Asks for Court ok for 3 Insurers to Pay D&Os
LOAN EXCHANGE: Case Summary & 14 Largest Unsecured Creditors
LOCAL INSIGHT: Bank Debt Trades at 39% Off in Secondary Market
LONGVIEW POWER: S&P Downgrades Rating on Senior Loan to 'B'
LUPINE HILL: Case Summary & 5 Largest Unsecured Creditors
M/I HOMES: Moody's Assigns 'Caa1' Rating to Senior Unsec. Notes
M/I HOMES: S&P Assigns 'B-' Rating to $150 Mil. Senior Notes
M/I HOMES: Fitch Assigns 'B+/RR3' Rating to $200 Mil. Notes
MACATAWA BANK: Announces 2 New Appointments to Board of Directors
MACATAWA BANK: Reports $703,000 Net Income in September 30 Quarter
MARINER ENERGY: S&P Retains CreditWatch Positive on 'B+' Rating
MEDASSETS INC: Moody's Assigns 'B1' Corporate Family Rating
MEDASSETS INC: S&P Assigns 'B+' Corporate Credit Rating
METRO-GOLDWYN-MAYER: Bank Debt Trades at 54% Off
MGM MIRAGE: Bank Debt Trades at 0.27% Off in Secondary Market
MICHAELS STORES: Bank Debt Trades at 3% Off in Secondary Market
MIKE CARTER CONSTRUCTION: Case Summary & Creditors List
MIKE CARTER I: Case Summary & 3 Largest Unsecured Creditors
MOA HOSPITALITY: Voluntary Chapter 11 Case Summary
MOMENTIVE PERFORMANCE: Bank Debt Trades at 3% Off
MOOHAVEN DAIRY: Case Summary & 20 Largest Unsecured Creditors
MORTGAGE LENDERS: Trust Settles With BofA for $44 Million
MT3 PARTNERS: Gets OK to Hire Hartman & Hartman as Bankr. Counsel
MT3 PARTNERS: Section 341(a) Meeting Scheduled for Nov. 29
MUMTAZ GEORGE: Case Summary & 18 Largest Unsecured Creditors
NCL CORPORATION: Moody's Upgrades Corporate Family Rating to 'B2'
NETFLIX INC: S&P Raises Corporate Credit Rating to 'BB+'
NETWORK COMMUNICATIONS: Delays, Again, Filing of Form 10-Q
NIELSEN FINANCE: Fitch Assigns 'CCC'/RR6' Rating to Senior Notes
NIELSEN FINANCE: S&P Keeps 'B' Rating on 7.75% Sr. Unsec. Notes
OMNICOMM SYSTEMS: Amends Q2 2010 to Correct Accounting Errors
PACIFIC SAFETY: Reports Annual Results, Unveils Merger Deal
PACKAGING DYNAMICS: Moody's Affirms 'B2' Corporate Family Rating
PAULA FINANCIAL: To Pay Special Cash Dividend on November 24
PAXTON MEDIA: Moody's Assigns 'B2' Corporate Family Rating
PETTERS GROUP: XL Group Agrees to Pay $1M to Settle Coverage Suit
POOL AND SPA: Case Summary & 20 Largest Unsecured Creditors
PRODUCTION PROPERTIES: Case Summary & Largest Unsecured Creditor
PROLOGIS INC: Fitch Upgrades Issuer Default Rating to 'BB+'
QUALITY DISTRIBUTION: Moody's Puts Caa1 Rating on $225 Mil. Notes
QUALITY DISTRIBUTION: S&P Puts 'B-' Rating to CreditWatch Positive
QUANTUM CORP: Sept. 30 Balance Sheet Upside-Downy by $83.7MM
RASER TECHNOLOGIES: NYSE to Suspend Trading of Common Stock Nov. 3
R.D. MARINA: Voluntary Chapter 11 Case Summary
REALOGY CORP: Bank Debt Trades at 10% Off in Secondary Market
REGENERX BIOPHARMA: Receives Non-Compliance Notice From nyse
RENT-A-CENTER INC: Moody's Assigns 'Ba3' Rating to $300 Mil. Notes
RENT-A-CENTER INC: S&P Affirms 'BB' Corporate Credit Rating
RHI ENTERTAINMENT: Soliciting Votes for Prepackaged Chapter 11
RICHARD PEACOCK: Section 341(a) Meeting Scheduled for Nov. 24
ROOFING SUPPLY: S&P Assigns Corporate Credit Rating at 'B+'
ROTHSTEIN ROSENFELDT: Trustee to Depose Luxury-Goods Companies
RYLAND GROUP: Posts $29.9 Million Net Loss in Third Quarter
SCHUTT SPORTS: Committee Taps Lowenstein Sandler as Counsel
SCHUTT SPORTS: U.S. Trustee Forms Seven-Member Creditors Panel
SCHUTT SPORTS: Files Schedules of Assets and Liabilities
SEMINOLE TRIBE: Fitch Assigns 'BB+' Rating to $37.4 Mil. Bonds
SENSATA TECHNOLOGIES: Moody's Retains 'B2' Corporate Family Rating
SHAHIN MELAMED: Case Summary & 20 Largest Unsecured Creditors
S.H.S. RESORT: Voluntary Chapter 11 Case Summary
SLEEP HOLDINGS: Increases Shares as Part of Financing Plan
SMURFIT-STONE CONTAINER: Resolves Cleanup Claims for $15.4 Million
SNOQUALMIE ENTERTAINMENT: S&P Puts 'CCC' Rating on Positive Watch
SOUTH BAY EXPRESSWAY: Banks Win Mechanics' Lien Dispute
SPANSION INC: Fights $5-Mil. Fees for Ad Hoc Committee Attorneys
SPORTS AUTHORITY: Moody's Assigns 'B3' Rating to $300 Mil. Loan
STEPHANIE SERPA: Section 341(a) Meeting Scheduled for Nov. 22
STEPHANIE SERPA: Taps Belding Harris as Bankruptcy Counsel
STUYVESANT TOWN: CWCapital Buys Out Ackman-Led Junior Creditors
SYNIVERSE TECHNOLOGIES: S&P Puts 'BB-' Corporate Credit Rating
TERRESTAR NETWORKS: Wants to Tap Ordinary Course Professionals
TERRESTAR NETWORKS: Wants to Hire Fraser Milner as Counsel
TERRESTAR NETWORKS: Proposes Stikeman as Canadian Counsel
TERRESTAR NETWORKS: Ch.11 Filing Triggers Default Under Debt Pacts
TETRAGENEX PHARMACEUTICALS: Case Summary & Creditors List
TIMOTHY SCHWARTZ: Taps Thomas E. Laughlin as Bankruptcy Counsel
TIMOTHY SCHWARTZ: U.S. Trustee Wants Case Converted or Dismissed
TOWN SPORTS: Posts $18,000 Net Loss in September 30 Quarter
TRIBUNE CO: Unsecured Creditors Get Approval to Pursue Claims
UNIVERSAL BUILDING: Creditors Seek Conversion to Chapter 7
UNITED CONTINENTAL: In Talks with Labor Groups on Contracts
US FOODSERVICE: Bank Debt Trades at 10% Off in Secondary Market
VERTIS HOLDINGS: Extends Exchange Offers Until November 5
VIASAT INC: S&P Affirms 'B' Corporate Credit Rating
VIEW AT 101: Files for Bankruptcy Protection to Avert Foreclosure
VIKING ACQUISITION: Moody's Affirms 'B2' Corporate Family Rating
VITAMIN SHOPPE: S&P Raises Senior Secured Debt Rating to 'BB'
WASHINGTON MUTUAL: Examiner Clears FDIC-JPMorgan Sale Deal
WOLVERINE TUBE: Files for Ch. 11; Pursues Debt-for-Equity Swap
WOLVERINE TUBE: Case Summary & 30 Largest Unsecured Creditors
* Moody's: U.S. Retail to See Improvement in 2010 Holiday Season
* S&P's 2010 Global Corporate Default Tally Currently at 69
* Trustees Probe Law Firms, Mortgage Handlers in Bankruptcy Cases
* American Spectrum Taps Director of Receivership Practice
* Troutman Taps Two Gibbons Pros to Bankruptcy Team
* Large Companies With Insolvent Balance Sheet
*********
ACE CASH: S&P Downgrades Counterparty Credit Rating to 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
counterparty credit rating on ACE Cash Express Inc. to 'B' from
'B+'. The outlook is stable. S&P also lowered its ratings on
ACE's senior secured credit facility and unsecured notes to 'B'
from 'B+' and to 'CCC+' from 'B-', respectively. The '3' recovery
rating on the senior secured debt, indicating meaningful (50%-70%)
recovery of principal if a default occurs, is unchanged. Also
unchanged is the '6' recovery rating on the senior unsecured debt,
indicating negligible (0%-10%) recovery.
The downgrade reflects weakness in ACE's core check-cashing and
short-term consumer-lending businesses, which have been hurt in
recent years by high unemployment and regulatory changes in
certain states in which it operates. The corresponding decline in
ACE's EBITDA had weakened cash flow coverage metrics to a level
that was no longer consistent with the rating. At June 30, 2010,
debt-to-EBITDA was 4.7x and EBITDA interest coverage was 2.1x,
consistent with the new rating level.
The downgrade also reflects S&P's view that ACE's growth prospects
will be challenged in the short to medium term. In particular,
S&P see a weak recovery in check-cashing revenues (reflecting
continued high unemployment) and a highly uncertain regulatory
environment for short-term consumer lending.
The law authorizing payday lending in Arizona expired on June 30,
2010, effectively eliminating payday lending in that state. (6.5%
of ACE's short-term consumer loan revenue was generated in Arizona
during fiscal 2010.) Management introduced a number of ancillary
products to offset this revenue loss; however, it is unclear how
successful these initiatives will be. Other regulatory challenges
include the potential for increased regulation at the Federal
level. The new Consumer Financial Protection Bureau will have
broad authority to monitor and regulate consumer financial
products nationally.
S&P's expectation for relatively stable financial performance is
partially based on ACE's success at introducing a number of
ancillary financial products in its stores, including pre-paid
debit cards. ACE's balanced product mix and its operational
advantages vis-a-vis smaller competitors further support the
rating.
The stable outlook reflects ACE's leading market position in check
cashing and short-term consumer lending and cash flow coverage
metrics that are adequate for the rating.
"S&P could lower the rating if legislative/regulatory changes or
the still-tentative economic recovery further weaken
profitability," said Standard & Poor's credit analyst Kevin Cole.
Curtailing upward rating movement is ACE's limited financial
capacity to repay its senior secured and unsecured notes, which
are due in 2013 and 2014, respectively. S&P believes that the
company would have to facilitate such repayment through a public
stock offering or refinancing transaction, options that highly
depend on financial market conditions.
AMBAC FINANCIAL: To Seek Restructuring with Prepack Bankruptcy
--------------------------------------------------------------
Ambac Financial Group Inc. said it skipped a bond payment November
1 and will pursue a pre-packaged bankruptcy with a group of
creditors.
Ambac Financial said in a regulatory filing that on October 29,
2010, its board of directors decided not to make a regularly
scheduled interest payment on the Company's 7.50% Debentures due
May 1, 2023. The interest payment was scheduled to be made on
November 1, 2010. If the interest is not paid within 30 days of
the scheduled interest payment date, an event of default will
occur under the indenture for the 2023 Notes. The occurrence of
an event of default would permit the holders of the 2023 Notes to
accelerate the maturity of the notes.
As of June 30, 2010, the Company had total indebtedness of $1.622
billion. The next scheduled payment of interest on the Company's
indebtedness is November 15, 2010.
"To date, the Company has been unable to raise additional capital
as an alternative to seeking bankruptcy protection. As such, the
Company is currently pursuing with an ad hoc committee of senior
debt holders a restructuring of its outstanding debt through a
prepackaged bankruptcy proceeding," the Company said in a filing
with the Securities and Exchange Commission.
"There can be no assurance that any definitive agreement will be
reached. If the Company is unable to reach agreement on a
prepackaged bankruptcy in the near term, it intends to file for
bankruptcy under Chapter 11 of the United States Bankruptcy Code
prior to the end of the year. Such filing may be with or without
agreement with major creditor groups concerning a plan of
reorganization. The filing for bankruptcy protection would
accelerate the maturity of all of the Company's indebtedness."
Ambac Financial said a significant consideration for any
restructuring or reorganization is the impact, if any, on the
Company's estimated $7.0 billion net operating loss tax carry
forward. The Company considers the NOLs to be a valuable asset.
However, the Company's ability to use the NOLs could be
substantially limited if there were an "ownership change" as
defined under Section 382 of the Internal Revenue Code of 1986, as
amended. In general, an ownership change would occur if
shareholders owning 5% or more of the Company's stock increased
their percentage ownership (by value) in the Company by 50% or
more, as measured over a rolling three year period beginning with
the last ownership change. These provisions can be triggered by
new issuances of stock, merger and acquisition activity or normal
market trading. On February 2, 2010, the Company entered into a
Tax Benefit Preservation Plan to reduce the risk of an ownership
change resulting from the trading of the Company's stock.
The Company also said that if it files for bankruptcy protection,
stock issued to the Company's debt holders in connection with a
reorganization could trigger an ownership change if a significant
portion of the debt being exchanged had been held by such debt
holders for less than 18 months prior to the filing for bankruptcy
and certain other factual or legal exceptions were not applicable.
Accordingly, extensive buying of the Company's debentures prior to
a bankruptcy filing by persons who could hold 5% or more of the
Company's stock following a bankruptcy reorganization could
substantially limit the Company's ability to use its NOLs.
Prior to the occurrence of an event of default under the indenture
for the 2023 Notes, the Company intends either (i) to pay interest
on the 2023 Notes, (ii) to solicit acceptances for a prepackaged
plan of reorganization and, if such solicitation is successful,
then to file for bankruptcy with a related prepackaged plan or
(iii) to file for bankruptcy under Chapter 11 of the United States
Bankruptcy Code.
Several factors may influence which of the courses of action the
Company may take, including the status of negotiations with the ad
hoc committee of senior debt holders and actions required to
preserve the NOLs.
* * *
According to Bloomberg News, Ambac shares plunged 50% after the
company said it will miss the November 1 interest payment.
Bloomberg relates that the Company is seeking to restructure seven
months after Wisconsin Insurance Commissioner Sean Dilweg seized
$35 billion of the insurer's policies backing mortgage securities.
Mr. Dilweg said he was splitting Ambac's insurance unit in two to
segregate contracts on which Ambac expects to pay significant
claims, such as mortgage bonds, and preserve capital to protect
municipal-bond policyholders.
"I don't believe the holding company going bankrupt would stop
Ambac from paying claims," said Richard Larkin, a senior vice
president in Iselin, New Jersey, for Herbert J. Sims & Co., a
municipal securities firm, according to Bloomberg News. The
possible filing is "a reflection of the fact that Ambac's
insurance arm isn't able to make a profit and send that profit up
to the parent."
Ambac has not written new policies in two years, according to The
New York Times' DealBook.
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. Ambac Assurance Corporation is the principal operating
subsidiary of Ambac Financial.
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, 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 a $1.42 billion 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 MEDIA: Soliciting Votes for Prepackaged Ch. 11 Plan
------------------------------------------------------------
American Media Inc. disclosed its intention to engage in a
financial restructuring through solicitation of a prepackaged
Chapter 11 plan of reorganization. The Company has informed its
investors that, in approximately two weeks, upon receiving the
requisite number of votes from its creditors, the Company will
initiate a prepackaged Chapter 11 filing in order to confirm and
consummate its Chapter 11 plan. The Company's reorganization is
premised around a debt-for-equity exchange with a group of its
bondholders, approximately 80% of which have agreed to support the
restructuring by executing a restructuring support agreement with
the Company. Through the restructuring, the Company will
significantly de-lever its balance sheet and improve its already
strong cash flow and cash on hand, and ultimately will improve the
growth and success of the Company. During this time, all Company
operations should function seamlessly.
"I want to thank Mike Elkins and his team at Avenue Capital as
well as the team at Angelo Gordon for taking an active leadership
role in supporting this process by putting additional money into
AMI to facilitate our transaction," said David Pecker, Chairman,
President and CEO of American Media Inc. "This demonstrates their
total commitment to management and the Company. All of us are
very excited about the future of AMI under this new ownership
structure."
"For our advertisers, employees, customers and vendors, this short
period will be business as usual, with considerable upside in the
future," continued Mr. Pecker. "American Media is engaging in
this strategy from a position of financial strength and
confidence. It will provide us with the ability to compete even
more aggressively with our peers in the industry. During this
period, there should be no impact to our employees, vendors, or
advertisers, as well as our subsidiary company DSI and its
customers and partners."
Upon receiving the requisite votes on its prepackaged Chapter 11
plan during the period in which votes are being solicited, the
Company will file for chapter 11, and will thereafter seek to
emerge from bankruptcy in less than sixty days. That process
will, in turn, allow the Company to restructure its debt,
including the debt-for-equity exchange that will further improve
the Company's financial position.
"The reorganization should not affect American Media's operations.
Publications will function seamlessly, staff will be unaffected by
the reorganization and customers should not notice any difference
during the 60 day process. I want to thank in advance all of our
advertisers, vendors and publishing service clients for their
support," added Mr. Pecker. "They realize we will be a stronger
and healthier company after the consummation of the
restructuring."
AMI also announced today that it has terminated the previously
announced offer to exchange all of the outstanding 14% Senior
Subordinated Notes due 2013 issued by AMI's operating subsidiary,
American Media Operations, Inc., for a combination of cash and
shares of common stock, par value $0.0001 per share, of AMI, and
cash tender offer for all of AMO's outstanding 9% Senior PIK Notes
due 2013, and related consent solicitations. As a result of the
termination of the Offers, no Subordinated Notes or PIK Notes will
be accepted for exchange or purchase, and all such notes tendered
pursuant to the Offers will be promptly returned to their
respective tendering holders.
About American Media
Based in New York, American Media, Inc., publishes celebrity
journalism and health and fitness magazines in the U.S. These
include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health,
and The National Enquirer. In addition to print properties, AMI
manages 14 different Web sites. The company also owns
Distribution Services, Inc., the country's #1 in-store magazine
merchandising company.
In June 2010, Standard & Poor's Ratings Services lowered its
rating on Boca Raton, Fla.-based American Media Inc. to 'D' from
'CCC.' The ratings downgrade reflects American Media's ongoing
deferral of its May 1, 2010 interest payment on the 14% notes.
The Company stated that 75% of noteholders consented that the
May 1, 2010 interest payment be deferred until June 21, 2010.
In July 2010, Moody's Investors Service downgraded American Media
Operations, Inc.'s Probability of Default Rating to 'Ca' from
'Caa2' following the company's announcement that it has commenced
an exchange offer for all of its 14% Senior Subordinated Notes due
2013. In conjunction with the exchange announcement, Moody's put
on review for possible upgrade all other ratings given the
expected decrease in debt obligations by approximately $200
million net of expected fees and related expenses.
The downgrade of the PDR to 'Ca' reflects Moody's view that
American Media's proposed offer for all of the $355.8 million
outstanding 14% Senior Subordinate Notes, if successfully
concluded, is an effective distressed exchange event of default.
AMERICANWEST BANCORP: Proposes $2MM of Financing from SKBHC
-----------------------------------------------------------
AmericanWest Bancorporation seeks authority from the U.S.
Bankruptcy Court for the Eastern District of Washington to obtain
postpetition secured financing from SKBHC Hawks Nest Acquisition
Corp., and to use cash collateral.
The DIP Lender has committed to provide up to $2 million in
financing. It will be secured by first-priority senior secured
liens on all of the Debtor's unencumbered tangible and intangible
property and by a perfected lien upon all of the Debtor's tangible
and intangible property.
Dillon E. Jackson, Esq., at Foster Pepper PLLC, explains that the
Debtor needs the money to fund its Chapter 11 case, pay suppliers
and other parties. The Debtor will use the money in accordance
with the budget, a copy of which is available for free at:
http://bankrupt.com/misc/AMERICANWEST_budget.pdf
The DIP facility will mature 45 days after the date of the DIP
Credit Agreement (projected December 2010). The Debtor may extend
the scheduled maturity date to 60 days after the date of the DIP
Credit Agreement if not in default, if representations and
warranties remain true and correct in all material respects, and
if the Debtor pays a fee of 2.0% of the outstanding loan amount.
The DIP facility will incur interest at 9.00% per annum; provided,
however, that if the scheduled maturity is extended to a date 60
days after the date of the DIP Credit Agreement, the interest rate
will be 10.0% per annum starting on the 45th day after the date of
the DIP Credit Agreement and thereafter.
The Debtor will be granting the DIP Lender superpriority
administrative claims.
The Debtors' obligations under the DIP facility are secured by all
of the Debtor's assets, including all of the issued and
outstanding shares of common stock of the Debtor's bank.
The Debtor covenants that it will to provide further assurances to
effectuate agreement. Proceeds will be used only for working
capital and other approved purposes. The Debtor will preserve
corporate existence and continue business. The Debtor will to
provide updated 13-week budget on a weekly basis. There will be
restrictions on additional liens, indebtedness, investments,
dispositions, transactions with affiliates, or accounting changes.
There will be no fundamental changes, no speculative transactions,
and no formation of new subsidiaries.
A copy of the credit agreement is available for free at:
http://bankrupt.com/misc/AMERICANWESTBANCORP_creditpact.pdf
The hearing for the approval of the DIP Loan will be on
November 12, 2010.
Mr. Jackson said that the Debtor will also use the Cash Collateral
to provide additional liquidity.
About AmericanWest Bancorporation
Headquartered in Spokane, Washington, AmericanWest Bancorporation
(OTC BB: AWBC) -- http://www.awbank.net/- is a bank holding
company whose principal subsidiary is AmericanWest Bank, which
includes Far West Bank in Utah operating as an integrated division
of AmericanWest Bank. AmericanWest Bank is a community bank with
58 financial centers located in Washington, Northern Idaho and
Utah.
AmericanWest Bancorporation filed for Chapter 11 protection on
Oct. 28, 2010 (Bankr. E.D. Wash. Case No. 10-06097). The banking
subsidiary was not including in the Chapter 11 filing.
Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at
Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as
bankruptcy counsel.
The Debtor estimated assets of $1 million to $10 million and debts
of $10 million to $50 million. AmericanWest Bancorporation's
estimates exclude its banking unit's assets and debts. In its
latest Form 10-Q filed with the Securities and Exchange
Commission, AmericanWest Bancorporation reported consolidated
assets -- including its bank unit's -- of $1.536 billion and
consolidated debts of $1.538 billion as of Sept. 30, 2010.
AMERICANWEST BANCORP: Files List of 6 Largest Unsecured Creditors
-----------------------------------------------------------------
AmericanWest Bancorporation has filed with the U.S. Bankruptcy
Court for the Eastern District of Washington a list of its six
largest unsecured creditors:
Entity Claim Amount
------ ------------
AmericanWest Capital Trust III
c/o Wilmington Trust Company
1100 N. Market Street
Wilmington, DE 19890 $24,044,409
AmericanWest Statutory Trust I
c/o U.S. Bank NA, TFM
Corporate Trust Sv
One Federal Street, 10th Floor
Boston, MA 02110 $11,488,526
AmericanWest Capital Trust II
c/o Wilmington Trust Company
1100 N. Market Street
Wilmington, DE 19890 $8,460,274
Columbia Trust Statutory Trust I $3,422,296
Ceridian $3,432
Illinois Stock $193
About AmericanWest Bancorporation
Headquartered in Spokane, Washington, AmericanWest Bancorporation
(OTC BB: AWBC) -- http://www.awbank.net/- is a bank holding
company whose principal subsidiary is AmericanWest Bank, which
includes Far West Bank in Utah operating as an integrated division
of AmericanWest Bank. AmericanWest Bank is a community bank with
58 financial centers located in Washington, Northern Idaho and
Utah.
AmericanWest Bancorporation filed for Chapter 11 protection on
Oct. 28, 2010 (Bankr. E.D. Wash. Case No. 10-06097). The banking
subsidiary was not including in the Chapter 11 filing.
Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at
Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as
bankruptcy counsel.
The Debtor estimated assets of $1 million to $10 million and debts
of $10 million to $50 million. AmericanWest Bancorporation's
estimates exclude its banking unit's assets and debts. In its
latest Form 10-Q filed with the Securities and Exchange
Commission, AmericanWest Bancorporation reported consolidated
assets -- including its bank unit's -- of $1.536 billion and
consolidated debts of $1.538 billion as of Sept. 30, 2010.
AMERICANWEST BANCORP: Section 341(a) Meeting Scheduled for Dec. 3
-----------------------------------------------------------------
The U.S. Trustee for Region 18 will convene a meeting of
AmericanWest Bancorporation's creditors on December 3, 2010, at
9:00 a.m. The meeting will be held at US Courthouse Room 561 N,
920 W Riverside Ave, Spokane, WA.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About AmericanWest Bancorporation
Headquartered in Spokane, Washington, AmericanWest Bancorporation
(OTC BB: AWBC) -- http://www.awbank.net/- is a bank holding
company whose principal subsidiary is AmericanWest Bank, which
includes Far West Bank in Utah operating as an integrated division
of AmericanWest Bank. AmericanWest Bank is a community bank with
58 financial centers located in Washington, Northern Idaho and
Utah.
AmericanWest Bancorporation filed for Chapter 11 protection on
Oct. 28, 2010 (Bankr. E.D. Wash. Case No. 10-06097). The banking
subsidiary was not including in the Chapter 11 filing.
Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at
Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as
bankruptcy counsel.
The Debtor estimated assets of $1 million to $10 million and debts
of $10 million to $50 million. AmericanWest Bancorporation's
estimates exclude its banking unit's assets and debts. In its
latest Form 10-Q filed with the Securities and Exchange
Commission, AmericanWest Bancorporation reported consolidated
assets -- including its bank unit's -- of $1.536 billion and
consolidated debts of $1.538 billion as of Sept. 30, 2010.
ANDREAS NOTTEBOHM: Case Summary & 7 Largest Unsecured Creditors
---------------------------------------------------------------
Joint Debtors: Andreas Nottebohm
Therese Nottebohm
aka Tess Nottebohm
90 Sidney Court
San Rafael, CA 94903
Bankruptcy Case No.: 10-14145
Chapter 11 Petition Date: October 28, 2010
Court: U.S. Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtors' Counsel: Mitchell L. Abdallah, Esq.
ABDALLAH LAW GROUP
980 9th Street, 16th Floor
Sacramento, CA 95814
Tel: (916)446-1974
E-mail: mitch@abdallahlaw.net
Scheduled Assets: $1,484,995
Scheduled Debts: $1,691,619
A list of the Joint Debtors' seven largest unsecured creditors
filed together with the petition is available for free at:
http://bankrupt.com/misc/canb10-14145.pdf
ANTIETAM FUNDING: Seeks Nod of $200MM Financing from Affiliate
--------------------------------------------------------------
Antietam Funding LLC seeks authority from the U.S. Bankruptcy
Court for the District of Connecticut to obtain postpetition
secured financing from SageCrest Finance LLC and to use cash
collateral.
Douglas J. Buncher, Esq., at Neligan Foley LLP, explains that the
Debtor needs the money to fund its Chapter 11 case, pay suppliers
and other parties.
The DIP Lender has committed to provide up to $200 million, of
which $138,532,277 has been borrowed as of September 30, 2010. A
copy of the credit agreement is available for free at:
http://bankrupt.com/misc/ANTIETAM_FUNDING_dipfinancingpact.pdf
To fund its operations prior to the Petition Date, the Debtor
entered into that certain Revolving Credit Agreement, dated as of
August 1, 2005, with SageCrest II LLC. SC II subsequently sold,
transferred and assigned its rights and obligations under the
Credit Agreement to SC Finance. Advances under the Credit
Agreement were used to finance or fund payments of insurance
premiums. As of September 30, 2010, approximately $138,472,327.48
of principal was outstanding under the Credit Agreement, in
addition to amounts owing for, among other things, interest, fees,
costs, and expenses.
The DIP facility will mature on December 31, 2011. The DIP
facility will incur interest at 15% per annum. In the event of
default, the Debtors will pay a default interest of 17% per annum.
The obligations under the Credit Agreement are and will be secured
by a first priority, perfected security interest in, and lien
upon, all Accounts, Chattel Paper, Instruments, General
Intangibles, Documents, Equipment, Fixtures, Inventory, Financial
Assets and Investment Property, Insurance Contracts and all
products and Proceeds of the foregoing. All post-petition
advances under the Credit Agreement will constitute allowed
administrative expenses in the Debtor's Chapter 11 case.
To address its working capital needs and fund its reorganization
efforts, the Debtor also requires the use of cash collateral of SC
Finance. SageCrest Finance LLC consents to the Debtor's use of
cash collateral.
In exchange for the use of cash collateral, SC Finance will be
granted (a) a superpriority administrative claim; (b) a valid,
binding, continuing, enforceable fully-perfected first priority
replacement lien on and senior security interest upon any
unencumbered collateral; (c) a valid, binding, continuing,
enforceable fully-perfected first priority priming security
interest in and replacement lien upon all of the prepetition
Collateral; and (d) a valid, binding, continuing, enforceable
fully-perfected junior security interest and lien upon all of the
Collateral subject only to the Carve-Out and the liens securing SC
Finance's post-petition loans.
About Antietam Funding
Greenwich, Connecticut-based Antietam Funding, LLC, is a special
purpose limited liability company whose sole business is to lend
monies to finance payments of life insurance premiums and, in the
event the borrowers fail to repay the loans, to foreclose on and
own the underlying policies.
Antietam Funding filed for Chapter 11 bankruptcy protection on
October 19, 2010 (Bankr. D. Conn. Case No. 10-52523). Douglas J.
Buncher, Esq., at Neligan Foley LLP, assists 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
as of the Petition Date.
Affiliates Il Lugano, LLC (Bankr. D. Conn. Case No. 08-50811),
SageCrest Dixon Inc. (Bankr. D. Conn. Case No. 08-50844),
SageCrest Finance LLC (Bankr. D. Conn. Case No. 08-50755), and
SageCrest II, LLC (Bankr. D. Conn. Case No. 08-50754) filed
separate Chapter 11 petitions.
ATHILON CAPITAL: S&P Corrects Issuer Credit Rating to 'BB'
----------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
Athilon Capital Corp./Athilon Asset Acceptance Corp.: S&P
corrected its issuer credit rating on Athilon to 'BB' from BB-'
and its issue credit rating on Athilon's senior subordinate note
issues to 'B+' from 'CCC+' after S&P had detected that a CDO of
ABS was included in the calculation of the corporate backed
tranche's capital exposure in the capital report Athilon sent to
us on July 9, 2010; and S&P subsequently affirmed its 'BB' issuer
credit rating on Athilon and lowered its issue credit ratings on
Athilon's senior subordinated note issues to 'B' from 'B+', its
subordinated note issues to 'CCC-' from 'CCC', and its junior
subordinated note issues to 'CC' from 'CCC-' following Athilon's
commutation of a CDS on two tranches of one CDO of ABS
transaction.
Athilon is a credit derivative product company whose limited
purpose is to sell credit protections primarily on corporate
tranches in the form of credit default swaps. Athilon recently
commuted its exposure to two tranches of a collateralized debt
obligation of asset-backed securities transaction and currently
has no exposure to ABS or CDOs of ABS in its CDS portfolio.
S&P recently discovered that in the July 9, 2010, capital report
Athilon sent to us, Athilon included its exposure to the CDO of
ABS transaction in their corporate tranches portfolio when they
had calculated the corporate tranches' capital requirement. This
resulted in the July 9, 2010, capital report showing a greater
capital requirement than the amount reflecting Athilon's exposure
to corporate-backed tranches only. The loss projection on
Athilon's CDS on the CDO of ABS transaction was captured twice:
both in Athilon's corporate tranche loss projection and in S&P's
life-time loss projection for the CDO of ABS transaction.
The affirmation of S&P's issuer credit rating on Athilon and the
lowering of its issue credit ratings on Athilon's various note
issues follow Athilon's recent commutation of its CDS on the CDO
of ABS transaction and reflects the impact S&P believes this
commutation had on the company's available capital and the total
projected losses based on the Sept. 27, 2010, capital report S&P
received from Athilon.
S&P will continue to monitor Athilon's exposure to the corporate
tranches and take further rating actions as appropriate.
Ratings Corrected
Athilon Capital Corp./Athilon Asset Acceptance Corp.
Rating
------
Issue To From
----- -- ----
Issuer credit rating BB/Stable BB-/Stable
Senior subordinated note issues B+ CCC+
Ratings Affirmed
Athilon Capital Corp./Athilon Asset Acceptance Corp.
Issue Rating
----- ------
Issuer credit rating BB/Stable
Ratings Lowered
Athilon Capital Corp./Athilon Asset Acceptance Corp.
Rating
------
Issue To From
----- -- ----
Senior subordinated note issues B B+
Subordinated note issues CCC- CCC
Junior subordinated note issues CC CCC-
AVP PRO: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------
Debtor: AVP Pro Beach Volleyball Tour, Inc.
fka Association of Volleyball Professionals, Inc.
dba AVP, Inc.
960 Knox Street, Suite A
Torrance, CA 90502
Bankruptcy Case No.: 10-56761
Chapter 11 Petition Date: October 29, 2010
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Sheri Bluebond
Debtor's Counsel: Ian Landsberg, Esq.
LANDSBERG & ASSOCIATES APC
16030 Ventura Boulevard, Suite 470
Encino, CA 91436
Tel: (818) 705-2777
Fax: (818) 705-3777
E-mail: ilandsberg@landsberg-law.com
Scheduled Assets: $183,957
Scheduled Debts: $4,974,130
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/cacb10-56761.pdf
The petition was signed by Justin Kamm, chief executive officer.
AVP, INC.: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: AVP, Inc.
dba AVP Pro Beach Volleyball Tour, Inc.
fka Association of Volleyball Professionals, Inc.
960 Knox Street, Suite A
Torrance, CA 90502
Bankruptcy Case No.: 10-56777
Chapter 11 Petition Date: October 29, 2010
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Ernest M. Robles
Debtor's Counsel: Ian Landsberg, Esq.
LANDSBERG & ASSOCIATES APC
16030 Ventura Boulevard, Suite 470
Encino, CA 91436
Tel: (818) 705-2777
Fax: (818) 705-3777
E-mail: ilandsberg@landsberg-law.com
Scheduled Assets: $196,957
Scheduled Debts: $6,910,755
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/cacb10-56777.pdf
The petition was signed by Justin Kamm, chief executive officer.
BERRIDGE, LLC: Case Summary & 7 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Berridge, LLC, a California limited liability company
2000 Whitehall Lane
St. Helena, CA 94574
Bankruptcy Case No.: 10-14138
Chapter 11 Petition Date: October 28, 2010
Court: U.S. Bankruptcy Court
Northern District of California (Santa Rosa)
Debtor's Counsel: John H. MacConaghy, Esq.
MACCONAGHY AND BARNIER
645 1st Street W., #D
Sonoma, CA 95476
Tel: (707) 935-3205
E-mail: macclaw@macbarlaw.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 seven largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/canb10-14138.pdf
The petition was signed by Richard Berridge, managing member.
BLOCKBUSTER INC: Wins Nod to Tap Ordinary Course Professionals
--------------------------------------------------------------
Blockbuster Inc. and its units received approval from the
Bankruptcy Court to employ and retain, nunc pro tunc to the
Petition Date, professionals utilized in the ordinary course of
business without the need to submit separate employment
applications, and the issuance of separate retention orders for
each individual professional.
Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that the Debtors desire to continue to employ the
Ordinary Course Professionals to render a variety of professional
services to their bankruptcy estates in the same manner and for
the same purposes as the OCPs did prior to the Petition Date,
which legal services include those related to litigation,
intellectual property, corporate requirements, tax, real estate
and employment.
It is essential that the employment of the OCPs, many of whom are
already familiar with the Debtors' business and financial affairs,
be continued so as to avoid disruption of the Debtors' normal
business operations, Mr. Karotkin contends.
The Debtors submit that the proposed employment of the OCPs and
the payment of their monthly compensation will save the estates
the substantial expenses that would be associated with applying
separately for the employment of each OCP. Mr. Karotkin adds that
the relief requested will avoid the incurrence of additional fees
relating to the preparation and prosecution of interim fee
applications.
In retaining the OCPs, the Debtors propose that, within 30 days of
the later of (i) the entry of an order granting the request, and
(ii) the date on which the OCP commences services for the Debtors,
each OCP will provide to the Debtors' attorneys:
(a) an affidavit certifying that the professional does not
represent or hold any interest materially adverse to the
Debtors or their estates with respect to the matter in
which the professional is to be employed; and
(b) a completed retention questionnaire.
The Debtors will subsequently file the Ordinary Course
Professional Affidavit and Retention Questionnaire with the Court
and serve a copy of it upon (i) the Office of the U.S. Trustee,
and (ii) attorneys for the creditors' committee. The Reviewing
Parties will have 15 days following service to notify the Debtors,
the other Reviewing Party, and the relevant OCP of any objection
to the retention of the OCP based on the contents of the Ordinary
Course Professional Affidavit or Retention Questionnaire.
If, after the Objection Deadline, no objection is filed, the
retention, employment and compensation of the OCP will be deemed
approved, without further Court order, nunc pro tunc to the
Petition Date or the date the OCP is retained, as applicable. If
an objection is filed and the objection cannot be resolved within
21 days, the matter will be set for a hearing before the Court.
The Debtors propose that they be permitted to pay each OCP,
without a prior application to the Court by the professional, 100%
of postpetition fees and disbursements incurred, upon the
submission to, and approval by, the Debtors of an appropriate
invoice setting forth in reasonable detail the nature of the
services rendered and disbursements actually incurred, provided
that if any amount owed for an OCP's postpetition fees and
disbursements exceeds a total of $40,000 per month, then the full
amount of payments to the professional for that month will be
subject to the prior approval of the Court.
The Debtors also propose to cap payments to each OCP at $300,000
for the entire period in which the Chapter 11 cases are pending,
subject to further Court order. In the event that an OCP seeks
more than $40,000 per month, that professional will be required to
file a fee application for the full amount of its fees and
expenses for that month in accordance with Sections 330 and 331 of
the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy
Rules for the Southern District of New York, the Fee Guidelines
promulgated by the U.S. Trustee, and any and all orders of the
Court.
The Debtors reserve the right to amend the monthly compensation
limitation upon notice and hearing. In the event that an OCP
seeks more than $300,000 for the entire period in which the
Chapter 11 cases are pending, the OCP will be required to file a
retention application to be retained as a professional pursuant to
Section 327 of the Bankruptcy Code.
The initial OCPs identified by the Debtors as of September 24,
2010, are:
Professional Service Rendered
------------ ----------------
Alliance International Law Offices Corporate/Intellectual
Property Counsel
Baker Botts LLP Intellectual Property
Counsel
Baker Marquart & Crone LLP Anti-Trust/Litigation
Counsel
Bingham McCutchen Labor/Employment Counsel
Cassels Brock & Blackwell LLP Canadian Corporate
Counsel
Chiomenti Studio Legale Corporate Counsel
Cowan Liebowitz & Latman PC Intellectual Property
Counsel
Davis Polk & Wardwell LLP Anti-Trust Counsel
Durling & Durling Intellectual Property
Counsel
Estudio Bergstein Corporate/Intellectual
Property Counsel
Gowling Lafleur & Henderson Intellectual Property
Counsel
Haynes and Boone L.L.P. Labor and Employment/
Franchising Counsel
Hoet Pelaez Castillo & Duque Intellectual Property
Counsel
Hunton & Williams LLP General Corporate/
Outsourcing Counsel
Jackson Walker LLP Labor/Benefits Counsel
Jones Day Intellectual Property/
Licensing Counsel
K&L GATES Intellectual Property/
Licensing Counsel
Kestenbaum Eisner & Gorin LLP Intellectual Property
Counsel
Richards Layton & Finger PA General Corporate
Counsel
Shook Hardy & Bacon LLP Litigation Counsel
Stutman Treister Intellectual Property
Counsel
Thompson Coburn LLP Labor/Employment Counsel
WP Thompson & Company Intellectual Property
Counsel
Wyman Isaacs Blumenthal & Lynne LLP Litigation Counsel
The Debtors reserve the right to retain additional OCPs from time
to time, as the need arises, and to otherwise supplement the list
of OCPs from time to time as necessary.
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: Bankr. Judge Lifts Automatic Stay for Bexar
------------------------------------------------------------
U.S. Bankruptcy Judge Burton Lifland modified and lifted the
automatic stay to:
(a) permit the maintenance and prosecution to judgment of the
condemnation proceeding styled "County of Bexar, Condemnor
v. S & S Shopping Centers, Ltd., et al., Condemnees" at
Cause No. 2010ED0011, in Probate Court No. 1, Bexar
County, Texas; and
(b) permit the county of Bexar to enforce any judgment
obtained in the Condemnation Proceeding.
Judge Lifland directed the County to compensate Blockbuster
Distribution, Inc., its reasonable expenses for moving its
personal property to a location within a 50-mile radius of the
premises. He noted that nothing in the order will constitute a
waiver of whatever rights the Debtors may have to compensation
under Texas law in the Condemnation Proceeding.
As previously reported, Blockbuster Distribution is a tenant in a
retail shopping center property known as Northwest Plaza Shopping
Center, located in Bexar County, Texas. Bexar County seeks to
acquire the Property for the public purpose of constructing,
operating, repairing, and maintaining a detention basin to
alleviate downstream flooding and improve drainage within the
Woodlawn Lake Area of San Antonio.
The County has advised the parties to the Condemnation Proceeding
that tenants would have through the end of January 2011 to vacate
the Property.
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: Lycos Wants Lift Stay to Dismiss Mass. Suit
------------------------------------------------------------
Lycos, Inc., asks the United States Bankruptcy Court for the
Southern District of New York, pursuant to Section 362(d)(1) of
the Bankruptcy Code:
(i) for relief from the automatic stay to permit the dismissal
of certain multi-party patent litigation pending in the
United States District Court for the District of
Massachusetts, as applicable, and
(ii) for the consummation of an existing settlement agreement
that will benefit Blockbuster, Inc., among other parties.
Lycos, a provider of various online services based in Waltham,
Massachusetts, has filed a complaint against Blockbuster and
others relating to patent infringement.
Shaya M. Berger, Esq., at Dickstein Shapiro LLP, in New York --
bergers@dicksteinshapiro.com -- tells the Bankruptcy Court that
Lycos is seeking relief from the automatic stay so that
consummation of an existing settlement agreement may finally
occur. The Settlement Agreement, which was fully executed prior
to the Petition Date, resolves complex, multi-party litigation in
which Blockbuster is a nominal defendant.
The Settlement Agreement does not require Blockbuster to pay any
money, and does not otherwise prejudice the bankruptcy estate, Mr.
Berger avers. Rather, he notes, the Settlement Agreement benefits
Blockbuster and its bankruptcy estate by providing Blockbuster
with a license to use certain patents belonging to Lycos. For the
Settlement Agreement to become effective, however, the
Massachusetts District Court must enter an order approving a
previously filed consensual motion of dismissal of the pending
patent litigation, he adds.
Because Blockbuster is a nominal defendant in the Patent
Litigation, and because dismissal of the Patent Litigation and
consummation of the Settlement Agreement will have no adverse
effect on Blockbuster or its estate, it is dubious whether the
automatic stay applies to the actions sought by Lycos, Mr. Hahn
asserts.
As a matter of caution, however, and to provide assurance to the
Massachusetts District Court and others that dismissal of the
Patent Litigation does not run afoul of the Debtor's automatic
stay or otherwise violate the bankruptcy law, Lycos seeks approval
of the request.
The Court will convene a hearing on December 16, 2010, to consider
the request. Objections are due on December 10.
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: Reports on Non-U.S. Store Value and Operations
---------------------------------------------------------------
Blockbuster Inc. and its units filed with the U.S. Bankruptcy
Court a periodic report as of July 4, 2010, regarding value,
operations and profitability of Blockbuster Inc.'s non-Debtor
subsidiaries with non-U.S. store operations.
The Non-debtor subsidiaries consist of non-U.S. store operations
in Canada, United Kingdom, Mexico, Denmark, Italy, Argentina and
Uruguay.
The Report reveals total assets of $407.6 million, and a net loss
of $23.2 million.
A copy of the Report can be accessed for free at:
http://bankrupt.com/misc/BBI_Report_10252010.pdf
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles. Blockbuster said it
had assets of $1,017,035,832 and debts of $1,464,939,759 as of
August 1, 2010.
Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11
bankruptcy proceedings with a pre-arranged reorganization plan
in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No.
10-14997).
Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the Debtors. Rothschild
Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent.
A steering group of senior secured noteholders is represented by
James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin
LLP. U.S. Bank National Association as trustee and collateral
agent for the senior secured notes is represented by David
McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter
& Hampton LLP. BDO Consulting is the financial advisor for U.S.
Bank.
Lenders led by Wilmington Trust FSB are providing the DIP
financing. The DIP Agent is represented by Peter Neckles, Esq.
and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York.
Blockbuster's non-U.S. operations and its domestic and
international franchisees, all of which are legally separate
entities, were not included in the filings and are not parties to
the Chapter 11 proceedings.
Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Blockbuster Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
BOSTON SCIENTIFIC: Fitch Affirms Issuer Default Rating at 'BB+'
---------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating and
outstanding debt ratings on Boston Scientific Corp.:
-- IDR at 'BB+';
-- Unsecured bank credit facility at 'BB+';
-- Senior unsecured notes at 'BB+'.
The affirmation applies to approximately $6.1 billion of debt and
the Rating Outlook has been revised to Positive from Stable.
The rating action follows BSX's announcement that it will divest
its Neurovascular business for $1.5 billion in cash. At closing,
which is expected by yearend, BSX will receive $1.4 billion and
$100 million will be payable as various commercial and transition
benchmarks are met. The total after-tax proceeds are expected to
be roughly $1.2 billion. The company intends to use about half of
the net proceeds to pay down debt, while the other half will be
allocated for acquisitions. While Fitch views the divestiture and
subsequent debt paydown as a positive credit event, expected pro
forma leverage using LTM financial data at June 30, 2010 (total
debt/operating EBITDA) of 2.7 times after the anticipated paydown
remains reflective of a 'BB+' rating category for this firm.
The Positive Outlook reflects the fact that the anticipated debt
paydown accelerates Fitch's timeline for BSX to reduce leverage
below 2.5x, which is one key factor that could lead to an upgrade
to 'BBB-'. While BSX is still addressing share challenges related
to its implantable cardioverter defibrillators business, Fitch
believes the company has regained some of the lost market share
related to the ship-hold. Fitch would consider a one-notch
upgrade if BSX's operations demonstrated durable improvement and a
sustainable downward trend in leverage.
The key rating drivers for this credit are leverage measured as
total debt-to-EBITDA, EBITDA margins, free cash flow and general
operational stability. The 'BB+' leverage range for this credit
is approximately 2.5x-3.0x. Margin variability of less than 250
basis points, material free cash flow generation and relatively
stable operations are expected for this rating.
BSX's drug-eluting stent business continues to face pressure from
Abbott Lab's Xience DES in the Japanese market, and normal pricing
declines within most geographic markets continue. However,
moderate growth in procedural volume, increases in the number of
implants per procedure and higher year-over-year DES penetration
rates in the U.S. are helping to offset some of the pressure. BSX
has retained relatively stable market shares in the U.S. and
Europe. Importantly, BSX has recently introduced Promus Element
(its next generation DES) into the European market, and has gained
some traction. The company is also expected to launch Promus
Element into the U.S. market in 2012. It is worth noting that BSX
does not pay royalties on Promus Element sales, and there is no
identical stent in the marketplace or in development. On balance,
Fitch expects profitability and growth to improve for BSX's DES
segment during the next few years.
Revenue growth for BSX's Endosurgery, Electrophysiology and
Peripheral Interventions businesses persists. Moderate procedure
growth and relatively stable pricing remain supportive for
profitable growth in these segments. In addition, BSX remains
committed to ongoing investment in new product development for
these businesses.
BSX continues to resolve a significant number litigation issues,
including $1.725 billion in cash payments to Johnson & Johnson to
settle three patent lawsuits. Nevertheless, financial risk
related to unresolved litigation remains. Regulatory issues
regarding its drug-eluting stent and cardiac rhythm management
businesses have been largely rectified.
While the reform-related 2.3% excise tax (beginning in 2013) on
U.S. device sales are expected to moderately pressure margins in
the intermediate term, Fitch believes BSX's focus on cost
reduction and the continued development of new value-added, higher
margin devices will help mitigate this risk. The recently enacted
healthcare reform legislation is also expected to result in
moderate volume increases in 2014-2016, when the bulk of the
increase in the number of insured is expected to occur. While the
final rules and regulations have yet to be written for the reform
legislation, Fitch believes healthcare reform will not affect
BSX's credit rating.
Fitch expects BSX's acquisition strategy will remain targeted,
focusing on areas that offer innovation and growth. Share
repurchases are also expected to remain a low priority for the
firm in the intermediate term as it focuses on deleveraging and
growth opportunities. During 2010-2011, Fitch expects BSX will
operate with leverage (total debt/EBITDA) ranging between 2.4x-
2.7x. In 2010, Fitch expects BSX will generate $1.3 billion to
$1.6 billion in free cash flow, excluding approximately $2 billion
in litigation payments.
Free Cash Flow (Net Cash Flow From Operations Less Capital
Expenditures) for LTM ending June 30, 2010 was a negative
$151 million, which includes a $1 billion cash litigation payments
to Johnson & Johnson. BSX had approximately $811 million in
cash/short-term investments; full availability on its $2 billion
revolver, maturing on June 30, 2013; and full availability on its
$350 million 364-day accounts receivable facility, maturing in
August 2011. The company had approximately $6.05 billion in debt
with roughly $950 million maturing or amortizing in 2011,
$200 million in 2012, $700 million in 2013, $600 million maturing
in 2014 and $1.25 billion in 2015.
BOSTON SCIENTIFIC: Moody's' Affirms 'Ba1' Corporate Family Rating
-----------------------------------------------------------------
Moody's Investors Service raised Boston Scientific Corporation's
Speculative Grade Liquidity rating to SGL-1 from SGL-3 following
the announcement that the company has entered into a definitive
agreement to sell its neurovascular business to Stryker for about
$1.5 billion. At the same time, Moody's affirmed Boston
Scientific's existing debt ratings and the stable rating outlook.
The upgrade to an SGL-1 rating reflects expectations of very good
liquidity following the sale of this asset. Substantial sale
proceeds and solid cash flow generation should allow the company
to fund basic operating needs, including upcoming debt maturities,
with internal cash sources. The presence of an undrawn,
$2 billion multi-year revolver and $350 million AR facility --
coupled with better covenant cushions -- also contributes to an
improved liquidity profile.
Although Boston Scientific is exiting an area that does have
higher market growth potential, Moody's views positively the
allocation of 50% of sale proceeds toward debt repayment.
However, despite management's ongoing commitment to reducing debt
levels, the company continues to face near and intermediate term
challenges in its cardiac rhythm management and cardiovascular
business lines, including the need to avoid further market share
erosion by obtaining FDA approval of its Promus Element drug
eluting stent by mid-2012. Boston Scientific has earmarked the
remaining after-tax sale proceeds for acquisition activity, which
Moody's anticipate will increase as the company seeks to
restructure its portfolio to supplement weak growth rates in its
core businesses.
"The neurovascular sale could help Boston Scientific get back on
track with its previously articulated deleveraging goals, but
uncertainties in its core business lines remain," said Diana Lee,
a Moody's Senior Credit Officer.
Boston Scientific's Ba1 Corporate Family Rating reflects its large
revenue base and diverse product lines -- even after this
divestiture -- relative to other "Ba"-rated companies. However,
the rating also considers moderately high leverage, reliance on
modestly growing markets, declining sales trends related to a
ship-hold action in CRM as well as competition and pricing
pressure in cardiovascular product lines including DES, and
outstanding litigation.
Factors that could support an upgrade include improved sales
trends in its CRM, DES and other cardiovascular businesses, as
well as further deleveraging so that Debt/EBITDA can be sustained
well below 3.0 times. In addition, financial strength metrics
should be sustained comfortably within Moody's "Baa" ranges.
Conversely, factors that could result in pressure on the ratings
or outlook include continued sales declines and impairment in cash
flows, large acquisitions or negative litigation outcomes that
result in higher leverage, or setbacks in seeking U.S. approval of
the Promus Element stent.
The last rating action for Boston Scientific was taken on
February 1, 2010, when Moody's affirmed the company's Ba1 ratings
and stable outlook in conjunction with the announced litigation
settlement with J&J.
Ratings affirmed:
Boston Scientific Corporation:
-- Corporate Family Rating at Ba1
-- Senior unsecured notes at Ba1, LGD4, 51%
-- Senior shelf securities at (P)Ba1
-- PDR at Ba1
Rating changed:
-- Speculative Grade Liquidity rating to SGL-1 from SGL-3
Boston Scientific Corporation, headquartered in Natick,
Massachusetts, is a worldwide developer, manufacturer and marketer
of medical devices, specializing in a broad range of
interventional and cardiac rhythm management devices.
BREWER INVESTMENT: SEC Gets Order Freezing Assets Over Fraud
------------------------------------------------------------
The Securities and Exchange Commission on Friday obtained an
emergency court order freezing the assets of two Chicago-based
financial firms that were conducting a fraudulent offering of
promissory notes.
The SEC alleges that the firms' owners Steven Brewer and Adam
Erickson raised approximately $5.6 million from investors,
providing offering materials that misstated or concealed how their
funds would actually be used. Messrs. Brewer and Erickson also
misrepresented the risk level of the investment and the financial
condition of their companies while, unbeknownst to investors, they
funneled nearly all of the offering proceeds to subsidize their
parent company Brewer Investment Group and one of its subsidiaries
during a time when they were under significant financial distress.
"Brewer and Erickson raised substantial funds to capitalize their
own struggling business operations while leading unsuspecting
investors to believe their investments would be secured by
collateral," said Donald Hoerl, Director of the SEC's Denver
Regional Office. "They went so far as to continue selling
promissory notes to new investors even after they discontinued
making interest payments to earlier investors."
According to the SEC's complaint filed in federal court in
Chicago, Messrs. Brewer and Erickson conducted the fraudulent
offering through their broker-dealer Brewer Financial Services LLC
and investment adviser firm Brewer Investment Advisors LLC, and it
consisted of promissory notes issued by a company based in Isle of
Man. Messrs. Brewer and Erickson drafted, reviewed or approved
the offering documents for the notes, which implicitly and
explicitly represented that the proceeds of the offering would be
used to procure collateral to secure the promissory notes being
issued to investors. Instead, more than 90% of the proceeds were
disbursed to BIG and spent at Brewer's direction, and the promised
collateral was never obtained. The offering materials failed to
disclose the extent to which the Brewer companies were losing
money, the fact that BIG had failed to make required interest
payments on earlier investors' promissory notes, and the fact that
BIG had failed to meet its own payroll obligations.
The SEC's complaint alleges that all of the defendants violated
Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange Act of 1934 (Exchange
Act) and Rule 10b-5 thereunder. The complaint also alleges that
BFS violated, and Messrs. Brewer and Erickson aided and abetted
the violation of, Section 15(c) of the Exchange Act. The complaint
further alleges that BIA violated, and Messrs. Brewer and Erickson
aided and abetted the violation of, Sections 206(1) and 206(2) of
the Investment Advisers Act.
Upon the consent of all defendants, the Honorable Blanche M.
Manning in the U.S. District Court in Chicago granted the SEC's
request for an asset freeze against BFS and BIG and preliminary
injunctions and other remedies against Brewer, Erickson, BFS, BIA,
and BIG. In addition to the emergency relief for investors, the
SEC seeks permanent injunctions, disgorgement plus pre-judgment
interest, and financial penalties against all of the defendants.
This case was investigated by the enforcement staff in the SEC's
Denver Regional Office with the assistance of examination staff in
the SEC's Denver and Chicago offices. The Commission appreciates
the assistance of FINRA in this matter.
About Brewer Investment
Brewer Investment Group -- http://brewerinvestmentgroup.com/-- is
an independent, diversified wealth management firm serving
individual investors, small to mid-size businesses, institutions,
and financial advisors. Brewer Investment Group has six wholly
owned subsidiaries including Brewer Financial Services, Brewer
Investment Advisors, Brewer Insurance Group, Brewer Futures Group,
Brewer FX, and Advisor Resource -- offering a wide range of
financial products.
BRIGGS & STRATTON: S&P Gives Positive Outlook, Affirms BB- Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on Wisconsin-based Briggs & Stratton Corp. to positive
from stable. S&P also affirmed its 'BB-' corporate credit rating
and all other Briggs related ratings.
The rating actions reflect Briggs' improved credit metrics largely
due to strong cash flow generation and the company's continued
focus on debt reduction. In addition, operating performance is
beginning to show signs of recovery, though sales and margins
continue to lag pre-recessionary levels.
S&P's ratings on Briggs reflect the company's weak business risk
profile given the mature and competitive nature of the company's
end markets and the high degree of seasonality and earnings
volatility in its businesses, which are susceptible to adverse
weather conditions and the discretionary nature of lawn and garden
engine sales. In addition, S&P believes the company's financial
risk profile is significant given a moderately high level of
leverage. Still, Briggs benefits from a stable and sizable market
share position as a producer of air-cooled gasoline engines and
engine-powered outdoor equipment, with replacement cycle
initializing. In addition, the company's credit metrics have
strengthened.
The small engine industry is mature and competitive, characterized
by slow growth in end markets and the concentration of mass
merchandisers (which handle the distribution of more than 80% of
lawn and garden equipment sold domestically). Despite difficult
operating conditions during the past three years, Briggs &
Stratton's market share has remained strong; S&P estimate that the
company holds a roughly 50% share of the worldwide market for
three- to 25-horsepower engines, and more than 70% of all
residential lawnmowers in North America contain Briggs & Stratton
products. Moreover, S&P believes that competition from the lower-
cost Asian suppliers is principally in the small engine segment
and these companies still have not regained market share in North
America due to persistent higher transportation costs. With EPA
regulations in this segment becoming effective on Jan. 1, 2012,
Briggs competitors costs for Briggs and its competitors could go
up further to comply with these standards. Still, customer
concentration remains a risk. In fiscal 2010, Briggs & Stratton's
top three customers constituted about 48% and 33% of total engine
and power product sales, respectively. However, international
sales (primarily to European customers), representing about 28% of
fiscal 2010 engine sales, adds some diversity.
The outlook is positive. S&P expects modest revenue growth, as a
result of stabilizing economic conditions and higher replacement
demand, and relatively stable operating margins to result in
continued improvement in the company's credit metrics over the
next year. S&P would look for sustainable average debt to EBITDA
of about 3.0x, operating margins of roughly 10%, and successful
refinancing of its upcoming maturity of senior notes to drive a
one-notch upgrade. Alternatively, S&P could lower its ratings if
cushion on the company's debt to EBITDA ratio tightens to less
than 10% or if adjusted debt to EBITDA is significantly greater
than 4.5x at fiscal year-end. S&P believes this could occur if
EBITDA declines 24%, possibly because of weaker-than-expected
sales.
BUCYRUS INTERNATIONAL: S&P Raises Corporate Credit Rating to 'BB+'
------------------------------------------------------------------
Standard & Poor's Rating Services raised its corporate credit
rating on mining equipment manufacturer Bucyrus International Inc.
to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P
raised the issue-level ratings on the company's senior secured
debt to 'BB+' from 'BB'. We've kept S&P's recovery rating on the
company's senior secured debt unchanged at '3', indicating its
expectation of a meaningful recovery (50%-70%) in the event of
default.
The rating upgrade reflects the company's good operating
performance and FFO to total debt approaching 30%. S&P's
assessment of Bucyrus' business risk profile has improved as the
company continues to successfully integrate its February 2010
Terex mining acquisition. "S&P views the company's business risk
profile as satisfactory, given its leading position in the niche
market for manufacturing surface and underground mining
equipment," said Standard & Poor's credit analyst Robyn Shapiro.
"Bucyrus has benefited from its good operating performance and
credit ratios, which created some cushion for the company to
pursue its acquisition of Terex mining. Key business risks
include the company's exposure to the cyclical mining end market
and volatile commodity prices. The company benefits from its
sizable installed machine base, the high barriers to entry in the
mining equipment manufacturing industry, as well as the solid
aftermarket for its parts and services. The stable rating outlook
reflects S&P's expectation that favorable operating prospects
should allow the company's credit metrics to remain at a level S&P
would consider to be in line with the 'BB+' rating."
The company's backlog has rebounded somewhat recently, in part
due to backlog acquired as part of Terex mining; it stood at
$2.5 billion as of Sept. 30, 2010. Backlog levels declined in
2009, with bookings falling below shipment levels as customers
delayed original equipment orders and extend the life of their
existing machines. Bucyrus focuses on its higher-margin
aftermarket parts and services business during periods of weak
demand for new machines.
S&P views the company's financial risk profile as significant.
The company has made some sizable acquisitions over the past few
years. During the volatile mining cycle, S&P expects FFO to total
debt of 25%-30% at the current rating level; as of Sept. 30, 2010,
that ratio was approaching 30%.
The outlook is stable, reflecting S&P's expectation that favorable
operating prospects should allow the company's credit metrics to
remain at a level S&P considers commensurate with the 'BB+'
rating. "S&P could lower the ratings if either a decline in
market conditions or more-aggressive financial policies appear
likely to cause FFO to total debt to remain below 20%. S&P could
raise the ratings if Bucyrus' operating prospects remain adequate
and it demonstrates financial policies in line with an investment-
grade rating," Ms. Shapiro added.
C&D TECHNOLOGIES: Elects to Not Make Interest Payment on Notes
--------------------------------------------------------------
C&D Technologies, Inc. has elected not to make a semi-annual
interest payment due on its 5.25% Convertible Senior Notes due
2025 on November 1, 2010. The decision was made in light of the
Company's October 21, 2010 announcement of its plan to implement a
restructuring of its indebtedness pursuant to an offer to exchange
all of its outstanding 5.25% Notes and 5.50% Convertible Notes due
2026 for up to 95% of the shares of the Company's common stock,
which provides that if the Exchange Offer is consummated, all
outstanding principal of, plus accrued unpaid interest on,
properly tendered Notes will be included in the calculation of
each holder's pro rata share of the Company's common stock to be
issued to holders of Notes.
The Company believes that while the Exchange Offer is pending, the
prudent course of action is to preserve liquidity to support the
Company's business and operations during the Restructuring. The
Company expects to continue to manufacture its products and
service its customers in the normal course.
In connection with the Exchange Offer, the Company filed with the
U.S. Securities and Exchange Commission a registration statement
on Form S-4, a tender offer statement on Schedule TO and related
documents and materials. The Registration Statement has not yet
become effective and the Notes may not be exchanged nor may offers
to exchange be accepted prior to the time the Registration
Statement becomes effective.
A semi-annual interest payment on the Company's 5.50% Senior Notes
due 2026 will become due on November 15, 2010. Unless
circumstances change prior to such date, the Company currently
expects that it will also elect not to pay interest due on the
5.50% Notes. The consequences of failure to pay interest under
the indenture governing the 5.50% Notes are substantially the same
as those under the indenture governing the 5.25% Notes.
About C&D Technologies
Based in Blue Bell, Pennsylvania, C&D Technologies, Inc. (NYSE:
CHP) -- http://www.cdtechno.com/-- engineers, manufactures, sells
and services fully integrated reserve power systems for regulating
and monitoring power flow and providing backup power in the event
of primary power loss until the primary source can be restored.
The Company's balance sheet at July 31, 2010, showed
$239.4 million in assets, $251.1 million in total liabilities, and
a stockholders' deficit of $11.7 million.
* * *
In its Form 10-Q for the quarter ended July 31, 2010, the Company
discloses that its cumulative losses, substantial indebtedness and
likely future inability to comply with certain covenants in the
agreements governing its indebtedness, including among others,
covenants related to continued listing on a national automated
stock exchange and future EBITDA requirements, and in addition,
its current current liquidity situation, raise substantial doubt
as to its ability to continue as a going concern for a period
longer than 12 months from July 31, 2010.
On September 14, 2010, the Company entered into a restructuring
support agreement with two convertible noteholders who together
hold approximately 56% of the aggregate principal amount of the
2005 Notes and the 2006 Notes. The supporting noteholders have
agreed to a proposed restructuring of the 2005 Notes and the 2006
Notes which will be effected through (i) an offer to exchange the
outstanding 2005 Notes and 2006 Notes for up to 95% of the
Company's common stock, or (ii) a prepackaged plan of
reorganization under Chapter 11 of the U.S. Bankruptcy Code. The
Company has agreed to solicit votes from the Company's
stockholders and the holders of the Notes to accept the
prepackaged plan concurrently with the exchange offer.
The Company also continues to be engaged in active discussions
with lenders under its Credit Facility regarding a restructuring
of its capital structure.
CANAL CORP: Agrees to Settle U.S. Federal Income Tax Claims
-----------------------------------------------------------
In a regulatory filing Thursday, Canal Corporation discloses that
it has reached preliminary agreement on a compromise settlement
with the United States on the claims of the United States against
the Corporation for federal income taxes. The settlement is
subject to finalization with the Internal Revenue Service and
approval by the Bankruptcy Court.
The claim which is the subject of the proposed settlement relates
primarily to federal income taxes arising from a 1999 leveraged
partnership transaction involving the Corporation's former
commercial and industrial tissue business, Wisconsin Tissue Mills
Inc. The leveraged partnership transaction was intended to defer
income tax for the Corporation on the taxable gain on the
transaction for the duration of the partnership. The Corporation
sold its interest in the leveraged partnership, and paid the full
income tax associated with the taxable gain, in 2001.
The structure of the leveraged partnership was based on the advice
of professional advisors to the Corporation. The tax treatment of
the leveraged partnership transaction was challenged as a
"disguised sale" by the Internal Revenue Service and the issues
were litigated in the United States Tax Court (Canal Corporation
v. Commissioner, 135 T.C., No. 9). An opinion by Judge Diane
Kroupa of the Tax Court on August 5, 2010, found that the
Corporation's leveraged partnership transaction was a "disguised
sale" for federal tax purposes and that the Corporation was liable
for the interest on the tax on the gain, which tax was paid in
2001 rather than in 1999. The Court also found the Corporation
liable for an accuracy-related penalty for a substantial
underpayment of income tax in 1999, with interest thereon.
Based on the Tax Court's finding, the amount of the priority
interest claim on the income tax not paid in 1999 is approximately
$42 million. This amount substantially exceeds the assets of the
estates of the Corporation and its related Chapter 11 debtors.
The terms of the proposed settlement will be set forth in full in
the settlement agreement which must be filed with and approved by
the Bankruptcy Court. Generally, under the proposed settlement
the government's (i) priority interest claim of approximately
$42 million and (ii) penalty claim of approximately $36.7 million,
with interest thereon of approximately $28 million, would be
settled for an amount equal to 50% of the assets distributed under
a Chapter 11 plan to claimants with the same priority as the
government's priority interest claim or to lower priority claims.
If the settlement is approved, the Corporation estimates that the
government would receive approximately $2 million of the estate's
approximately $4 million currently estimated to be available for
priority claims or unsecured claims after approval of a Chapter 11
plan by the Bankruptcy Court.
The Corporation believes strongly that the opinion of Judge Kroupa
is wrong as a matter of law, both as to the characterization of
the leveraged partnership transaction as a "disguised sale" and as
to imposition of the accuracy-related penalty. In addition, Judge
Kroupa's opinion upholding the accuracy-related penalty fails to
mention key undisputed facts that are incompatible with her
conclusion.
After consultation with its advisors and a thorough review of the
alternatives related to the Tax Court decision, the Board of
Directors of the Corporation has concluded in its business
judgment that it is in the best interests of the Corporation,
including its creditors, to approve the proposed settlement with
the United States. The Board of Directors affirmed its belief
that the Tax Court decision is seriously flawed and erroneous, but
it cannot justify prosecuting an appeal of the Tax Court decision
as compared to accepting the proposed settlement with the United
States. Approval of the settlement by the Bankruptcy Court is
expected to be sought at a hearing on November 30, 2010. The
Corporation is filing a Notice of Appeal of the Tax Court decision
to protect its right to appeal if the agreement with the United
States is not finalized or approved by the Bankruptcy Court.
About Canal Corp.
Headquartered in Richmond, Virginia, Canal Corp., formerly
Chesapeake Corporation, supplies specialty paperboard packaging
products in Europe and an international supplier of plastic
packaging products to niche end-use markets. The Company has 44
locations in Europe, North America, Africa and Asia.
Chesapeake and 18 affiliates filed Chapter 11 petitions (Bankr.
E.D. Va. Lead Case No. 08-336642) on Dec. 29, 2008. Lawyers at
Hunton & Williams LLP represent the Debtors. Chesapeake tapped
Alvarez and Marsal North America LLC, and Goldman Sachs & Co. as
financial advisors. Tavenner & Beran PLC serves as conflicts
counsel and Hammonds LLP as special counsel. Kurtzman Carson
Consultants LLC serves as claims agent. The United States Trustee
for Region 4 appointed seven creditors to serve on an Official
Committee of Unsecured Creditors for the Debtors' Chapter 11
cases. Lawyers at Greenberg Traurig LLP represent the Committee.
In its petition, Chesapeake listed $936,600,000 in total assets
and $937,100,000 in total debts as of September 28, 2008.
CAREFREE WILLOWS: Section 341(a) Meeting Scheduled for Dec. 2
-------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Carefree
Willows LLC's creditors on December 2, 2010, at 3:00 p.m. The
meeting will be held at 300 Las Vegas Boulevard, South, Room 1500,
Las Vegas, NV 89101.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Las Vegas, Nevada-based Carefree Willows LLC filed for Chapter 11
bankruptcy protection on October 22, 2010 (Bankr. D. Nev. Case No.
10-29932). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson
Law Firm, assists the Debtor in its restructuring effort.
According to its schedules, the Debtor disclosed $30,604,014 in
total assets and $36,531,244 in total debts as of the Petition
Date.
CATHOLIC CHURCH: District Court Affirms Ruling vs. Greens
---------------------------------------------------------
Judge Ralph Beistline of the U.S. District Court for the District
of Alaska affirmed the Bankruptcy Court's order granting the
Catholic Bishop of Northern Alaska's request to show cause why
sanctions for violation of the automatic stay should not be
imposed against Louis Green Sr., Nancy Green and their attorney,
Bryon E. Collins, Esq.
To recall, the Greens commenced an action in state court asserting
quiet title to the Pilgrim Springs Property. The Diocese of
Fairbanks asked for the dismissal of the quiet title action due to
violation of the automatic stay. Mr. Collins, however, refused to
dismiss the Greens' complaint and stated his intent to continue
with the action. He alleged that the Bankruptcy Court lacked
jurisdiction over the Property because the Greens were the owners
of the Property.
In his 12-page memorandum decision, Judge Beistline opined that
the District Court has considered all other arguments raised by
the Appellants and finds them to be without merit. He explained
that the automatic stay is effective against commencement or
continuation against either the debtor or property of the estate,
and that it is self-executing and becomes operative upon the
filing of the petition, and no further action is required to
invoke it.
"On the effect of the automatic stay in bankruptcy cases and
jurisdiction, the Greens' arguments markedly misconstrue the law,"
Judge Beistline said.
About the Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/--
filed for Chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska
Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady
LLP represents the Debtor in its restructuring efforts. Michael
R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's
local counsel and Cook, Schuhmann & Groseclose Inc. as its special
counsel. Judge Donald MacDonald, IV, of the United States
Bankruptcy Court for the District of Alaska presides over
Fairbanks' Chapter 11 case. In its schedules, the Debtor
disclosed total assets of $13,316,864 and total liabilities of
$1,838,719 as of the Petition Date.
The church's plans to file its bankruptcy plan and disclosure
statement on July 15, 2008. Its exclusive plan filing period
expires on January 15, 2009. (Catholic Church Bankruptcy News;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: San Diego Releases Priests' Records
----------------------------------------------------
The Associated Press reports that lawyers for 144 people who claim
they were sexually abused by Roman Catholic priests in the San
Diego Diocese released thousands of pages of previously sealed
church documents on October 24, 2010, with details of complaints
against the priests that include medical records and
correspondence between priests and their superiors.
Judge William C. Pate ruled on October 22, 2010, that roughly
10,000 pages of internal records could be made public after a
years-long legal battle between those who claimed abuse and the
diocese. The records are from the personnel files of 48 priests
who were either credibly accused or convicted of sexual abuse or
named in a civil suit.
BishopAccountability.org says that the released documents are
important because they are the first public evidence of
allegations of misconduct against nine priests, including Peadar
Brennan, Joseph V. Clarkin and Bernard Waltos, O.F.M. Conv. The
released documents also provide crucial evidence that the sexual
abuse crisis is an international phenomenon, and they offer a
remarkably detailed history of mismanagement and concealment by
the San Diego Diocese's bishops and managers.
Copies of the released documents are available for free at
BishopAccountability.org:
http://www.bishop-accountability.org/docs/san_diego/
BishopAccountability.org aims to facilitate the accountability of
the U.S. bishops under civil, criminal, and canon law, according
to its Web site.
The 144 plaintiffs settled with the Diocese in 2007 for nearly
$200 million. The document release was a nonmonetary provision of
the San Diego settlement, as ordered on August 29, 2008, by Judge
Emilie Elias, of the Los Angeles Superior Court.
As previously reported, Judge Peter D. Lichtman of the Superior
Court of California for the county of Los Angeles issued an
"Allocation Order" on December 7, 2007, dividing among the
plaintiffs the $198,125,0000 global settlement reached on
September 6, 2007, with the Roman Catholic Bishop of San Diego and
other Catholic institutions as part of bankruptcy mediation.
The Diocese was to give the first payments in January 2008, and
the remaining balance in September 2008, according to The North
County Times. How much any individual victim was to receive has
been ordered sealed because of the sensitive nature of the claims.
Teri Figueroa of The North County Times reported that the sealed
portion of Judge Lichtman's order provided for the division of
$173,000,000 of the Settlement Amount to 126 victims, which left
$25,000,000 for the 18 victims, who held out from the allocation
process.
About the Roman Catholic Dioceses
Seven Roman Catholic dioceses have already filed for Chapter 11
protection to deal with lawsuits for sexual abuse. The last
filing was by The Diocese of Wilmington on Oct. 18, 2009 (Bankr.
D. Del. Case No. 09-13560). Previous filings were by the dioceses
in Spokane, Washington; Portland, Oregon; Tucson, Arizona;
Davenport, Iowa, Fairbanks, Alaska; and San Diego, California.
Bankruptcy Creditors' Service, Inc., publishes CATHOLIC CHURCH
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by various Roman Catholic dioceses.
(http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Foundations and Cemeteries Seek Funds from PIA
---------------------------------------------------------------
Catholic Diocese Foundation and Catholic Cemeteries, Inc., ask the
U.S. Bankruptcy Court for the District of Delaware for an order
authorizing and directing the Catholic Diocese of Wilmington,
Inc., to make a payment from the Pooled Investment Account to (i)
the Foundation for $715,000, and (ii) the Cemeteries for $23,250.
They also join in the Diocese's request for authority with respect
to withdrawals from the PIA.
To recall, Judge Sontchi issued an opinion and held that except
for the sub-accounts of St. Ann's Roman Catholic Church, the
entirety of the PIA Account is property of the bankruptcy estate
under Section 541(a) of the Bankruptcy Code.
Stephen E. Jenkins, Esq., at Ashby & Geddes, in Wilmington,
Delaware, relates that after the Court held that the funds in the
PIA were estate property, the Court nevertheless permitted certain
Pooled Investment Participants to withdraw additional funds from
the PIA up to the amounts set forth in those orders, including the
recent withdrawal by the Cathedral of St. Peter Roman Catholic
Church.
During the hearing on St. Peter's request, the Court explained its
view on applications like those made by St. Peters, Mr. Jenkins
says. He notes that the Court explained that "the status quo of
continuing to allow the mission of the Catholic Diocese of
Wilmington, i.e., its business reason to continue subject, of
course, to the Bankruptcy Code and to appropriate limitations, is
something that the Court should allow and will allow." He reminds
Judge Sontchi that the Court was informed that the Foundation
would be making the requests outlined in this motion.
In keeping with the discussion at the hearing, Mr. Jenkins informs
the Court that he sent an e-mail to the Creditors Committee's
counsel requesting that the Foundation be permitted to withdraw
$800,000, which is approximately 2% of its assets, from the PIA.
The funds will be used to pay real estate taxes, to operate St.
Paul School and to pay the legal fees. The counsel for the
Creditors Committee requested additional information for the taxes
and St. Paul School's request, but stated that it would not agree
to the legal fees.
Mr. Jenkins further relates that the request from the Cemeteries
came up suddenly due to an emergency repair situation. One of
Cemeteries' garden crypt locations was leaking, resulting in water
infiltration throughout the buildings and inside many of the
crypts, and needed to be caulked immediately. He adds that the
Committee counsel also requested a physical inspection of the
crypts, and has informed that if the inspection is satisfactory,
the Creditors Committee will agree to the expenditure.
The Court should grant the relief requested based on the
Foundation's and the Cemeteries' need for immediate funding to
sustain their viability and continue their operations, Mr. Jenkins
contends. He adds that any distributions made to them from the
PIA will be subject to a clawback provision, as set forth in the
proposed order -- that is, the $715,000 withdrawal by the
Foundation and $23,250 withdrawal by the Cemeteries will be
credited against any future claim payout under a plan of
reorganization.
Creditors Committee Objects to Payment
of Ashby Geddes Fees
The Official Committee of Unsecured Creditors tells the Court that
it does not object to the request of the Catholic Diocese
Foundation and Catholic Cemeteries, Inc., to authorize the Diocese
to make a limited distribution to them from the PIA. However, the
Creditors Committee opposes the request to the extent it seeks
authority for the Diocese to pay the fees of Ashby Geddes for
$348,000 from the PIA.
The request seeks payment to (i) the Foundation for $715,000, and
(ii) the Cemeteries for $23,250.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, relates that the Foundation seeks authority
for the Diocese to pay the legal fees of Ashby Geddes incurred
between November 2009 and August 2010 in connection with its
representation of the Pooled Investment Participants in the
Chapter 11 case and in the PIA Adversary Proceeding on the basis
that the payment constitutes either a payment in the ordinary
course of business under Section 363(c)(1) of the Bankruptcy Code
or a payment outside of the ordinary course of business under
Section 363(b)(1).
The fees incurred by Ashby Geddes have been for legal services to
the Pooled Investment Participants that are directly adverse to
the Diocese's bankruptcy estate because the sole purpose of those
services was to deprive the estate of the assets in the PIA, Ms.
Jones contends. While the request contains no description of the
services provided by Ashby Geddes for which it seeks payment from
the PIA, there can be no legitimate dispute that the great
majority, if not all, of the fees have been incurred in litigating
with the estate over whether the PIA is property of the estate,
she elaborates.
The request to pay Ashby Geddes cannot be granted on the merits,
Ms. Jones insists. She asserts that the Foundation has not cited
a single authority to the Court in which a payment was authorized
under either Section 363(c)(1) or Section 363(b)(1) for a
transaction adverse to the interests of the estate, let alone for
legal services adverse to the estate by counsel that has not been
employed pursuant to the provisions of the Bankruptcy Code.
Ms. Jones further contends that no showing or even representation
has been made that the Pooled Investment Participants do not have
access to other assets outside of the PIA with which to pay Ashby
Geddes' fees. She adds, among other things, that the request
acknowledges that while the Foundation seeks to pay all of Ashby
Geddes fees, the services have been provided on behalf of all the
Pooled Investment Participants.
13th & 14th Interim Orders on PIA Withdrawals
The U.S. Bankruptcy Court for the District of Delaware authorized
the Catholic Diocese of Wilmington, Inc., on a thirteenth and
fourteenth interim bases, to make certain withdrawals from the
pooled investment account for the benefit of the Diocese and
certain pooled investors.
Subject to the terms of the Custody Agreement, Judge Sontchi
authorized the Diocese to make withdrawals from the pooled
investment account and to process withdrawal requests of non-
debtor pooled investors without further Court order, up to these
applicable amounts:
Pooled Investor Aggregate Cap
--------------- -------------
Diocese $5,400,000
Foundation 1,450,656
Charities 328,729
Cemeteries 302,750
Corpus Christi 164,000
Siena Hall 159,009
Children's Home 151,316
Holy Family 135,897
Seton Villa 120,119
Holy Cross 50,000
Our Lady of Lourdes 40,000
Cathedral of St. Peter 25,000
Our Mother of Sorrows 23,620
St. Ann (Wilmington) 10,000
---------
Total $8,361,096
Notwithstanding any other provision of the Interim Orders, the
Custodian will have no liability for, or otherwise be in violation
of the Interim Orders, for acting in accordance with the Custody
Agreement or processing any withdrawal or investment requests made
by the Diocese.
Judge Sontchi also authorized the Diocese to continue to invest
and deposit funds into the pooled investment account in accordance
with its prepetition practices, without the need for a bond or
other collateral as required by Section 345(b) of the Bankruptcy
Code. The entities with which the Diocese's pooled investment
funds are deposited and invested will be excused from full
compliance with the requirements of Section 345(b) until 45 days
following the docketing of a final order directing compliance with
Section 345(b) as to specific accounts following the next hearing
on the requested relief.
Nothing contained in the Interim Orders will prevent the Diocese
from establishing any additional sub-funds within the Pooled
Investment Account as it may deem necessary and appropriate, and
the Account's Custodian is authorized to process the Diocese's
request to account for transactions with respect to the sub-fund.
In the event Pooled Investment Funds or their proceeds transferred
by the Diocese to a non-debtor Pooled Investor pursuant to the
Interim Orders are determined to have been property of the
bankruptcy estate at the time of transfer, the transfer will be
presumed to have been an unauthorized postpetition transfer within
the meaning of Section 549(a)(2)(B) of the Bankruptcy Code,
provided that the presumption may be rebutted by a showing that
the transfer was made in the ordinary course of business within
the meaning of Section 363(c)(1) of the Bankruptcy Code.
About the Diocese of Wilmington
The Diocese of Wilmington covers Delaware and the Eastern Shore of
Maryland and serves about 230,000 Catholics. The Delaware diocese
is the seventh Roman Catholic diocese to file for Chapter 11
protection to deal with lawsuits for sexual abuse. Previous
filings were by the dioceses in Spokane, Washington; Portland,
Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and
San Diego, California.
The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin October 19. There
are 131 cases filed against the Diocese, with 30 scheduled for
trial.
The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del.
Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor,
LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC,
is the financial advisor. The petition says assets range
$50,000,001 to $100,000,000 while debts are between $100,000,001
to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
CATHOLIC CHURCH: Dist. Ct. Reverses Contempt Order vs. Spokane
--------------------------------------------------------------
Judge Justin Quackenbush of the United States District Court for
the Eastern District of Washington reversed the contempt order
entered by Bankruptcy Judge Patricia C. Williams against The
Catholic Bishop of Spokane, also known as The Catholic Diocese of
Spokane, Gregory J. Arpin, Esq., and Paine Hamblen LLP.
To recall, Judge Williams imposed monetary sanctions against the
Contempt Parties after Plan Trustee, Gloria Z. Nagler, alleged
that they threatened her, through an e-mail, of personal liability
in connection with certain payment to future tort claimants.
Judge Williams subsequently supplemented her Contempt Order and
directed the payment of $50,907 in attorney's fees, $1,541 in
costs and $206 in interest to Ms. Nagler and her counsel.
Judge Williams also directed the Contempt Parties to pay $19,596
in attorney's fees and $346 in costs to Dillon E. Jackson, Esq.,
and his firm, Foster Pepper PLLC, for amounts incurred when they
were seeking an order enforcing the Plan.
The Contempt Parties appealed to the District Court from Judge
Williams' original and supplemental orders.
In his ruling, Judge Quackenbush said that the contempt finding
was erroneously ordered by Judge Williams, The Associated Press
reports. He opined that the e-mail should not have been construed
as a threat.
According to the report, Judge Quackenbush noted that Ms. Nagler
is not a lay person to be easily intimidated, but rather an
experienced attorney, who is billing the Diocese $290 per hour as
trustee. He also explained that attorneys often exchange letters
and e-mails like the one Ms. Nagler received that outline legal
theories as part of their "zealous and effective advocacy" for
their clients.
Despite this victory, the Diocese still needs to raise more than
$800,000 by fall to pay abuse claims, or risk losing certain
parishes to foreclosure. New claims of abuse continue to be
filed, approved and paid, which drained the $1 million fund for
those claims, and so, the Diocese needs to replenish the fund as
agreed on its settlement with the tort claimants.
About The Diocese of Spokane
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts.
The Diocese of Spokane, the Tort Claimants Committee, the Future
Claims Representative, and the Executive Committee of the
Association of Parishes delivered an Amended Plan of
Reorganization, and a Disclosure Statement describing that Plan to
the Court on Feb. 1, 2007. The Honorable Patricia C. Williams
approved the disclosure statement on March 8, 2007. On April 24,
2007, the Court confirmed Spokane's second amended joint plan.
That plan is effective May 31, 2007. (Catholic Church Bankruptcy
News; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CELL THERAPEUTICS: Posts $15.6 Million Net Loss in Q3 2010
----------------------------------------------------------
Cell Therapeutics, Inc., filed on October 28, 2010, its quarterly
report on Form 10-Q, reporting net loss attributable to common
shareholders of $15.6 million on $0 revenue for the three months
ended September 30, 2010, compared with a net loss attributable to
common shareholders of $48.8 million on $20,000 of revenue for the
same period last year. The reduction in net loss is mainly due to
lower operating expenses, lower deemed dividends on preferred
stock issuances and a one-time milestone modification expense
accounted for in 2009.
For the quarter ended September 30, 2010, total net operating
expenses decreased 52% to $13.0 million compared to $27.1 million
for the same period in 2009. The decrease was mainly due to
decreased expenses related to non-cash equity based compensation
and a reduction in research and development expense.
CTI had approximately $17.3 million in cash and cash equivalents
as of September 30, 2010. This amount was before the receipt of
$21.0 million in gross proceeds received from the Company's equity
financing in October 2010.
The Company does not expect that its existing cash and cash
equivalents, including the cash received from the issuance of its
Series 7 preferred stock and warrants, will be sufficient to fund
its presently anticipated operations beyond the first quarter of
2011. "This raises substantial doubt about our ability to
continue as a going concern."
Bankruptcy Warning
The Company says that if it fails to obtain additional capital
when needed, it may be required to delay, scale back, or eliminate
some or all of its research and development programs and may be
forced to cease operations, liquidate its assets and possibly seek
bankruptcy protection.
Balance Sheet
The Company's balance sheet at September 30, 2010, showed
$46.6 million in total assets, $38.9 million in total liabilities,
$13.4 million in common stock purchase warrants, and a
stockholders' deficit of $5.7 million.
Independent Auditors Issue Going Concern in 2009 Annual Report
Stonefield Josephson, Inc., in San Francisco, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company has sustained loss
from operations, incurred an accumulated deficit, and has
substantial monetary liabilities in excess of monetary assets as
of December 31, 2009.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6d3a
A full-text copy of the earnings release is available for free at:
About Cell Therapeutics
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.
(NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
CELL THERAPEUTICS: Provides Update on Nasdaq Listing Compliance
---------------------------------------------------------------
On May 3, 2010, Cell Therapeutics, Inc., received a notice from
The NASDAQ Stock Market indicating that for 30 consecutive trading
days the closing bid price of the Company's common stock was below
the minimum of $1.00 per share required for the continued listing
of its common stock on The NASDAQ Capital Market under NASDAQ
Marketplace Rule 5550(a)(2). NASDAQ Marketplace Rule
5810(c)(3)(A) provides the Company with a grace period of 180
calendar days, or until November 1, 2010, to regain compliance.
Compliance can only be achieved by demonstrating a closing bid
price of the Company's common stock of $1.00 per share or more for
a minimum of ten consecutive trading days before November 1, 2010.
Alternatively, the Company may be eligible for an additional
180-day grace period if the Company meets all of the initial
listing standards of NASDAQ, with the exception of the closing bid
price and the $15 million market value of publicly held shares
requirement, and if the Company affirmatively states to NASDAQ its
intention to cure the bid price deficiency by the end of the new
180-day period.
In a regulatory filing Friday, Cell Therapeutics, Inc., discloses
that it believes that it was in compliance with all of the initial
listing standards as of September 30, 2010, other than the
$5 million shareholders' equity and closing bid price
requirements.
As reported in the Company's quarterly report on Form 10-Q for the
period ended September 30, 2010, the Company's shareholders'
deficit on September 30, 2010, was approximately $5.7 million.
Subsequent to September 30, 2010, the Company completed the
previously announced Series 7 Preferred Stock and warrants
financing for gross proceeds of $21.0 million, which closed on
October 22, 2010. As a result of this financing, the Company
believes that its stockholders' equity exceeds the $5 million
shareholders' equity requirement for initial listing on The NASDAQ
Capital Market. In addition, the Company has advised NASDAQ of
its intent to cure the bid price deficiency by the expiration of
the next 180-day grace period. As a result, the Company is
awaiting confirmation from NASDAQ of its eligibility for the new
180-day grace period. The Company intends to make a further
announcement on its listing status following receipt of NASDAQ's
determination.
About Cell Therapeutics
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.
(NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
The Company's balance sheet at September 30, 2010, showed
$46.6 million in total assets, $38.9 million in total liabilities,
$13.4 million in common stock purchase warrants, and a
stockholders' deficit of $5.7 million.
Stonefield Josephson, Inc., in San Francisco, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company has sustained loss
from operations, incurred an accumulated deficit, and has
substantial monetary liabilities in excess of monetary assets as
of December 31, 2009.
CELL THERAPEUTICS: Reports $7.5 Million Net Loss in September
-------------------------------------------------------------
Cell Therapeutics, Inc., in a regulatory filing Friday, provided
a monthly update of certain information relating to the Company's
management and financial situation. The disclosure is pursuant to
a request from the Italian securities regulatory authority,
CONSOB, pursuant to Article 114, Section 5 of Italy's Unified
Financial Act.
The Company disclosed, among other things, that for the month
ended September 30, 2010, it incurred a net loss attributable to
common shareholders of $7,505,000.
Estimated research and development expenses were US$1.6 million
for the month.
A full-text copy of the update on the Company's management and
financial situation for the month of September 2010 is available
for free at http://researcharchives.com/t/s?6d3b
About Cell Therapeutics
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.
(NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
The Company's balance sheet at September 30, 2010, showed
$46.6 million in total assets, $38.9 million in total liabilities,
$13.4 million in common stock purchase warrants, and a
stockholders' deficit of $5.7 million.
Stonefield Josephson, Inc., in San Francisco, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company has sustained loss
from operations, incurred an accumulated deficit, and has
substantial monetary liabilities in excess of monetary assets as
of December 31, 2009.
CHARTWELL INTERNATIONAL: Wins Confirmation of Prepackaged Plan
--------------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court
confirmed Chartwell International's Prepackaged Plan of
Reorganization.
BData discloses that under the Plan, general unsecured creditors
are classified in Class 2 and receive a distribution valued at
8.4% of their allowed claims, to be distributed in the form of
common stock in the reorganized Debtor. The equity holders'
former 100% ownership was diluted so that they own 5% of the
Debtor's common stock.
Chartwell International, Inc., is a land and mineral rights owner,
listing assets of $6 million.
Chartwell filed for Chapter 11 bankruptcy protection on August 16,
2010 (Bankr. S.D.N.Y., Case No. 10-37462). Brian Guillorn, Esq.,
in New York, represent the Debtor as counsel. In its schedules,
the Debtor disclosed total assets of $1,368,500 and total debts of
$5,148,237.
Debtor-affiliate Middletown and New Jersey RR Comp also filed
separate Chapter 11 petition on August 6, 2010.
CHEM RX: Auction Canceled Due to Low Bid Turnout
------------------------------------------------
Bankruptcy Law360 reports that the auction for Chem Rx Corp. has
been canceled because only one qualified bid was submitted -
PharMerica Corp.'s $70.6 million stalking-horse proposal.
The Wednesday deadline passed with no other qualified bids
submitted, according to a notice filed by Dennis A. Meloro of
Greenberg Traurig LLP, which represents Chem RX, according to
Law360.
Chem Rx has a contract to sell its assets to PharMerica Corp. for
$70.6 million plus the assumption of specified liabilities, absent
higher and better bids for the assets. The Court scheduled a
November 2, 2010 hearing to consider approval of the sale.
Prior to selecting PharMerica as stalking horse bidder, Chem RX
signed 65 prospective buyers to confidentiality agreements.
PharMerica operates 90 institutional pharmacies in 41 states.
About Chem RX Corporation
Long Beach, N.Y.-based Chem RX Corporation, aka Paramount
Acquisition Corp. -- http://www.chemrx.net/-- is a major
institutional pharmacy serving the New York City metropolitan
area, as well as parts of New Jersey, upstate New York,
Pennsylvania and Florida. Chem Rx's client base includes skilled
nursing facilities and a wide range of other long-term care
facilities. Chem Rx annually provides more than six million
prescriptions to more than 69,000 residents of more than 400
institutional facilities.
The Company and five affiliates sought Chapter 11 protection
(Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis
A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg
Traurig, LLP, represents the Company in its restructuring.
Cypress Holdings, LLC, is the Company's financial advisor. RSR
Consulting, LLC, is the Company's chief restructuring officer.
Brunswick Group LLP is the Company's public relations consultant.
Grant Thornton LLP is the Company's independent auditor. Lazard
Middle Market LLC is the Company's investment banker. Eichen &
Dimeglio PC is the Company's tax advisor. Kurtzman Carson
Consultants is the Company's claims and notice agent.
The Company disclosed $169,690,868 in assets and $178,281,128 in
debts as of February 28, 2010.
CLAIM JUMPER: Proofs of Claim Must Be Filed by Nov. 30, 2010
------------------------------------------------------------
Creditors asserting claims against Claim Jumper Restaurants LLC
and Claim Jumper Restaurants Management, LLC, that arose prior to
Sept. 10, 2010, must file their proofs of claim by 4:00 p.m.,
prevailing Pacific Time, on Nov. 30, 2010. Governmental units
have until Mar. 9, 2011, to file their proofs of claim. Claim
forms must be delivered to Kurtzman Carson Consultants LLC, which
serves as the Claims Agent. Copies of the Debtors' Schedules of
Assets and Liabilities are available by sending a request to
claimjumperinfo@kcc.llc.com by e-mail.
About Claim Jumper
Irvine, California-based Claim Jumper Restaurants, LLC --
http://www.claimjumper.com/-- operates a chain of casual dining
restaurants. It was founded in 1977. It has locations in
Arizona, California, Colorado, Illinois, Nevada, Oregon,
Washington, and Wisconsin.
Claim Jumper sought chapter 11 protection (Bankr. D. Del. Case No.
10-12819) on Sept. 10, 2010. The Debtor estimated its assets at
$50 million to $100 million and debts at $100 million to
$500 million as of the Petition Date.
The Debtor's affiliate, Claim Jumper Restaurants Management,
LLC, filed a separate Chapter 11 petition (Bankr. D. Del.
Case No. 10-12820).
Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the
Debtors' local counsel. Milbank, Tweed, Hadley & Mccloy LLP is
the Debtors' general bankruptcy counsel. Piper Jaffray & Co. is
the Debtors' financial advisors and investment bankers. Kurtzman
Carson Consultants LLC is the Debtors' notice, claims and
solicitation agent.
The Creditors Committee has selected the law firms of Cooley LLP
and Klehr Harrison Harvey Branzburg LLP as its counsel.
Black Canyon affiliate GRP Acquisition Corp. has offered
$55.3 million (which includes a $27 million cash component) to
acquire substantially all of the Debtors' assets. The Honorable
Kevin Gross will review that offer at a hearing scheduled for
Nov. 2, 2010.
CLAIM JUMPER: Landry's Restaurants Wins Auction
-----------------------------------------------
Claim Jumper Restaurants, LLC disclosed that Landry's Restaurants,
Inc. has been selected as the highest and best bidder in a
competitive auction held October 28, 2010 for substantially all of
its assets. Landry's final bid has been valued by the Company and
the Official Committee of Unsecured Creditors at $76.6 million.
The proposed sale to Landry's is expected to be approved by the
Bankruptcy Court in Wilmington, Delaware on November 2, 2010. The
transaction is expected to close on a date mutually agreeable to
the Company and Landry's, subject to satisfaction or waiver of
customary closing conditions.
Piper Jaffray & Co. serves as exclusive financial advisor and
Milbank, Tweed, Hadley & McCoy serves as lead counsel to Claim
Jumper in its sale process.
About Claim Jumper
Irvine, California-based Claim Jumper Restaurants, LLC --
http://www.claimjumper.com/-- operates a chain of casual dining
restaurants. It was founded in 1977. It has locations in
Arizona, California, Colorado, Illinois, Nevada, Oregon,
Washington, and Wisconsin.
Claim Jumper filed for Chapter 11 bankruptcy protection on
September 10, 2010 (Bankr. D. Del. Case No. 10-12819). The Debtor
estimated its assets at $50 million to $100 million and debts at
$100 million to $500 million as of the Petition Date.
The Debtor's affiliate, Claim Jumper Management, LLC, filed a
separate Chapter 11 petition (Bankr. D. Del. Case No. 10-12820).
Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the
Debtors' local counsel. Milbank, Tweed, Hadley & Mccloy LLP is
the Debtors' general bankruptcy counsel. Piper Jaffray & Co. is
the Debtors' financial advisors and investment bankers. Kurtzman
Carson Consultants LLC is the Debtors' notice, claims and
solicitation agent.
The Creditors Committee has selected the law firms of Cooley LLP
and Klehr Harrison Harvey Branzburg LLP as counsel.
CLASSICSTAR MARE: Gastar Settles Suits for $21 Million
------------------------------------------------------
Gastar Exploration Ltd. said Monday it has entered into a
Settlement Agreement effective November 1, 2010, providing for the
settlement of the seven In re ClassicStar Mare Lease Litigation
matters. The plaintiffs allege that they were induced to
participate in a mare leasing program operated by the defendants,
including Gastar, and had been promised options to convert
interests in the mare leasing program for working interests in
wells or shares of Gastar stock owned by defendants other than the
Company. The plaintiffs assert several causes of action against
all defendants, including violations of the RICO Act, common law
fraud, negligent misrepresentation, constructive trust, unjust
enrichment, and negligence.
The Settlement Agreement reflects the definitive terms of the
settlement, contingent only upon approval of the bankruptcy court
overseeing the Chapter 7 liquidation of ClassicStar, LLC, the
United States Bankruptcy Court for the Eastern District of
Kentucky. It is anticipated that the Settlement Agreement will be
presented to the bankruptcy court for approval on or after
November 19, 2010.
If the Settlement Agreement is approved by the bankruptcy court
as proposed, Gastar will pay to the plaintiffs an aggregate of
$21.15 million in cash, including an initial $18.0 million payment
to be paid within 10 business days of the approval date and the
remaining $3.15 million in 16 monthly payments, the first of which
will be $150,000 and the next 15 of which will be $200,000 each,
in exchange for dismissal of all existing and potential future
claims of the plaintiffs in all seven cases filed against Gastar.
Gastar admits no liability in connection with the seven lawsuits.
While it denies the allegations made by the plaintiffs in the
cases, Gastar entered into the settlement to avoid the risk and
expense of continued litigation.
Commenting on the settlement of the litigation, J. Russell Porter,
Gastar's President and Chief Executive Officer, stated," The
resolution of this litigation was important to remove the risk of
an adverse trial outcome, remove the on-going cost of defending
our position and remove an impediment to Gastar moving forward
with potential corporate actions. Gastar is well positioned with
attractive assets and a strong balance sheet that will allow us to
take advantage of opportunities created by the current
environment."
Based in Houston, Texas, Gastar Exploration Ltd. (NYSE Amex: GST)
-- http://www.gastar.com/-- is an exploration and production
company focused on finding and developing natural gas assets in
North America. The Company owns and operates exploration and
development acreage in the deep Bossier gas play of East Texas and
Marcellus Shale play in West Virginia and Pennsylvania. Gastar's
CBM activities are conducted within the Powder River Basin of
Wyoming.
CODESSA TERRELL: Gets Nod to Tap Lawrence Szabo as Bankr. Counsel
-----------------------------------------------------------------
Codessa M. Terrell sought and obtained authorization from the Hon.
Randall J. Newsome of the U.S. Bankruptcy Court for the Northern
District of California to employ Lawrence L. Szabo as bankruptcy
counsel.
Mr. Szabo will provide general legal representation of the
Debtor's bankruptcy estate before the Court and perform all legal
services for the estate that may be necessary in the case.
Mr. Szabo will be paid $400 per hour for his services.
Mr. Szabo assures the Court that he is "disinterested" as that
term is defined in Section 101(14) of the Bankruptcy Code.
Concord, California-based Codessa M. Terrell filed for Chapter 11
bankruptcy protection on October 20, 2010 (Bankr. N.D. Calif. Case
No. 10-72077). The Debtor estimated its assets at $10 million to
$50 million and debts at $1 million to $10 million as of the
Petition Date.
CODESSA TERRELL: Section 341(a) Meeting Scheduled for Nov. 22
-------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Codessa
M. Terrell's creditors on November 22, 2010, at 10:00 a.m. The
meeting will be held at the Office of the U.S. Trustee, 1301 Clay
Street Room 680N, Oakland, CA 94612.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Concord, California-based Codessa M. Terrell filed for Chapter 11
bankruptcy protection on October 20, 2010 (Bankr. N.D. Calif. Case
No. 10-72077). Lawrence L. Szabo, Esq., at Law Offices Of
Lawrence L. Szabo, assists the Debtor in its restructuring effort.
The Debtor estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million as of the Petition Date.
COMPETITIVE TECH: Accumulated Losses Cue Going Concern Doubt
------------------------------------------------------------
Competitive Technologies, Inc., filed on October 27, 2010, its
annual report on Form 10-K for the fiscal year ended July 31,
2010.
Mayer Hoffman McCann CPAs, in New York, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that at July 31, 2010, the Company
has incurred operating losses since fiscal year 2006.
The Company reported a net loss of $2.7 million on $2.0 million of
revenue for fiscal 2010, compared to a net loss of $3.5 million on
$348,240 of revenue for fiscal 2009.
The Company funds its liquidity requirements with a combination of
cash on hand and cash flows from operations, if any, including
royalty legal awards. At July 31, 2010, the Company had no
outstanding debt, and no credit facility.
The Company's balance sheet at July 31, 2010, showed $4.9 million
in total assets, $2.3 million in total liabilities, and
stockholders equity of $2.6 million.
A full-text copy of the Company's Form 10-K is available for free
at http://researcharchives.com/t/s?6d36
About Competitive Technologies
Fairfield, Conn.-based Competitive Technologies, Inc.
-- http://www.competitivetech.net/-- and its subsidiaries provide
distribution, patent and technology transfer, sales and licensing
services focusing on the needs of its customers, matching those
requirements with commercially viable technology or product
solutions.
CRISTAL INORGANIC: Moody's Upgrades Corp. Family Rating to 'B2'
---------------------------------------------------------------
Moody's Investors Service upgraded Cristal Inorganic Chemicals
Ltd.'s Corporate Family Rating to B2 from B3. The ratings on the
company's first lien debt was upgraded to Ba3 from B1 and the
second lien debt was upgraded to B3 from Caa1. The upgrades
reflect the company's improved liquidity, leverage and operating
performance, and expectations for continued strong titanium
dioxide industry fundamentals. The outlook is stable.
These summarizes the ratings activity:
Cristal Inorganic Chemicals Ltd.
* Corporate Family Rating -- B2 from B3
* Probability of Default Rating -- B2 from B3
* $100mm First Lien Revolving Credit Facility due 2012 -- Ba3
(LGD3, 31%) from B1 (LGD2, 29%)
* $550mm First Lien Term Loan due 2014 -- Ba3 (LGD3, 31%) from B1
(LGD2, 29%)
* $230mm Second Lien Term Loan due 2014 -- B3 (LGD5, 76%) from
Caa1 (LGD5, 73%)
Ratings Rationale
Cristal's CFR upgrade reflects its improved operating performance,
liquidity and credit metrics, as well as expectations that
continued favorable industry conditions will result in robust
financial results over the near-term. Low TiO2 inventory levels
throughout the supply chain and a tight supply-demand balance in
2010 has allowed producers to raise prices significantly (possibly
up around 20% for all of 2010), while selling as much product as
they can produce. The move to higher utilization rates and cost
reduction initiatives since 2009 are resulting in higher margins
and increased profits. The current favorable margins for
producers have not existed for many years, but some participants
believe the margins still lag behind those levels required to
justify investment in new capacity. As a result, the industry is
looking for pricing and margins to remain favorable over the next
year, despite the potential for raw material cost pressures.
The stable outlook reflects the company's improved liquidity
position and expectations that higher TiO2 operating rates and
prices will benefit financial results in 2011. The company's
improved earnings and positive free cash flow over the past year
have provided a greater cushion under its financial covenants and
allowed it to repay borrowings under its revolving credit
facility. The company's revolver is currently undrawn. The
additional flexibility is allowing the company to pursue capital
improvement projects, in addition to the normal maintenance capex
($25-40 million annually) and closure/remediation costs for the
former Le Havre plant. The improved performance has increased the
company's headroom for the financial covenants under its revolving
credit facility. The outlook could be moved to positive or CFR
upgraded if Cristal were to lower its leverage (Debt/EBITDA) to
around 4.0x and increase Free Cash Flow to Debt to 4% on a
sustained basis.
Cristal Inorganic Chemicals Ltd., headquartered in Hunt Valley,
Maryland, is the world's second largest producer of titanium
dioxide. The company is also a producer of performance chemicals,
including TiCl4 and ultrafine TiO2. Revenues were approximately
$1.4 billion for the twelve months ended June 30, 2010. Cristal
is a wholly owned subsidiary of The National Titanium Dioxide
Company Limited (Cristal Global), which operates a large, low-
cost, TiO2 facility in Yanbu, Saudi Arabia.
CUMULUS MEDIA: Bank Debt Trades at 9% Off in Secondary Market
-------------------------------------------------------------
Participations in a syndicated loan under which Cumulus Media Inc.
is a borrower traded in the secondary market at 91.10 cents-on-
the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 1.10
percentage points from the previous week, The Journal relates.
The Company pays 175 basis points above LIBOR to borrow under the
facility. The bank loan matures on June 11, 2014, and carries
Moody's Caa1 rating and Standard & Poor's B-rating. The loan is
one of the biggest gainers and losers among 198 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
Cumulus Media Inc. filed its quarterly report on Form 10-Q with
the Securities and Exchange Commission. The Company's balance
sheet at June 30, 2010, showed $324.1 million in total assets,
$683.6 million in total liabilities, and a $359.5 million
stockholders' deficit.
As previously reported by the TCR, Cumulus Media said in an
earnings release that net revenues for the three months ended June
30, 2010 increased $3.7 million, or 5.7%, to $69.7 million
compared to $66.0 million for the three months ended June 30,
2009, primarily due to an increase in revenue from national
accounts, political revenue generated by mid-term congressional
elections, and increases in internet related revenues. The
Company reported a net income of $12.3 million for the three
months ended June 30, 2010, compared with a net income of
$14.0 million for the same period a year ago.
About Cumulus Media
Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) --
http://www.cumulus.com/-- is the second largest radio broadcaster
in the United States based on station count, controlling 350 radio
stations in 68 U.S. media markets. In combination with its
affiliate, Cumulus Media Partners, LLC, the Company believes it is
the fourth largest radio broadcast company in the United States
when based on net revenues.
Cumulus Media carries a 'Caa1' corporate family rating, and 'Caa2'
probability-of-default rating from Moody's Investors Service.
DAIRY FARMERS: Moody's Affirms Ba1 Rating on Preferred Stock
------------------------------------------------------------
Moody's Investors Service affirmed the Baa2 long-term senior
unsecured rating and Prime-2 short-term rating of Dairy Farmers of
America, Inc., and revised the ratings outlook to positive from
stable. Moody's also affirmed the Baa3 rating on the trust
preferred securities of its guaranteed subsidiaries and the Ba1
rating on the preferred stock.
The positive outlook is based on Moody's expectation that DFA will
likely sustain credit metrics that are stronger than required of
similar companies rated Baa2.
"The cooperative has weathered two difficult years in the dairy
industry, during which time DFA has maintained relatively stable
operating performance," said Brian Weddington, Moody's senior
credit officer. "Recently firming milk prices create margin
pressure for the fluid affiliates, but has provided long-awaited
relief to dairy farmers," added Weddington.
Although Moody's expect the affiliate and value-added businesses
to continue to be a source of earnings volatility, DFA appears to
have a sufficient liquidity cushion. The divestiture of National
Dairy Holdings L.P. last year and the use of proceeds primarily
for debt reduction, contributed to the stronger liquidity profile
and improved debt protection measures.
DFA's Baa2/Prime-2 ratings are supported by the cooperative's
leading position as the largest farmer-owned dairy marketing
cooperative in the United States, and its large size and scale
relative to peers. The ratings also gain support from DFA's
significant network of affiliated bottlers and dairy product
manufacturers that provide stable outlets for members' milk. In
addition, DFA's cooperative structure provides important financial
flexibility that, in a stress scenario and on an infrequent basis,
would allow the company to quickly improve its cash flow through
adjustments in the bi-monthly milk payment.
The ratings are constrained by the underlying low margin,
commodity nature of the fluid milk business and related earnings
volatility that occurs in DFA's value-added and affiliate
businesses due to fluctuations in milk prices that are reflected
in input costs.
Ratings affirmed:
Dairy Farmers of America
-- $155 million of senior unsecured debt at Baa2;
-- $150 million preferred stock at Ba1;
Commercial paper at Prime-2;
DFA Preferred Capital Trust I subordinated debt
-- $83 million trust preferred securities at Baa3;
DFA Preferred Capital Trust II subordinated debt
-- $75 million trust preferred securities at Baa3;
Mid-Am Preferred Capital Trust I subordinated debt
-- $101 million trust preferred securities at Baa3.
Headquartered in Kansas City, Missouri, Dairy Farmers of America
is the largest dairy marketing cooperative in the United States,
as well as a manufacturer of cheese and other dairy food products.
The last rating action for Dairy Farmers of America, Inc., was on
May 9, 2005.
DELUXE ENTERTAINMENT: S&P Raises Issue-Level Rating on Debt to 'B'
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
Hollywood, Calif.-based entertainment industry services provider
Deluxe Entertainment Services Group Inc.'s first-lien senior
secured credit facilities to '2', indicating S&P's expectation of
substantial (70% to 90%) recovery for lenders in the event of a
payment default, from '3'. S&P also raised its issue-level rating
on this debt to 'B' -- one notch higher than its 'B-' corporate
credit rating on the company) from 'B-', in accordance with its
notching criteria for a '2' recovery rating.
The recovery rating revision reflects Deluxe's reduction of its
first-lien debt due to high mandatory amortization payments, which
improves recovery prospects for the balance of the facility in
S&P's simulated default scenario.
The corporate credit rating on Deluxe is 'B-' and the rating
outlook is stable. The rating reflects S&P's expectation that the
company's headroom under tightening covenants will remain narrow,
given its relatively high leverage and the financing of a special
dividend with debt in 2007. This underpins S&P's view of Deluxe's
financial risk profile as aggressive. S&P views the company's
business profile as vulnerable because of its exposure to a
widespread adoption of digital projection technology by motion
picture exhibitors, particularly in North America.
Ratings List
Deluxe Entertainment Services Group Inc.
Corporate Credit Rating B-/Stable/--
Ratings Revised
Deluxe Entertainment Services Group Inc.
To From
-- ----
Senior Secured First Lien B B-
Recovery Rating 2 3
DESIGN TEAM: Case Summary & Largest Unsecured Creditor
------------------------------------------------------
Debtor: Design Team West, Inc.
435 12th Street West
Bradenton, FL 34205
Bankruptcy Case No.: 10-26152
Chapter 11 Petition Date: October 29, 2010
Court: U.S. Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Catherine Peek McEwen
Debtor's Counsel: Richard C. Prosser, Esq.
STICHTER, RIEDEL, BLAIN & PROSSER PA
110 E. Madison Street, Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
E-mail: rprosser.ecf@srbp.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Michael M. Carter, president.
The list of unsecured creditors filed together with its petition
contains only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Manatee County Tax Collector -- $71,915
P.O. Box 25300
Bradenton, FL 34206
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
R.D. Marina, LLC 10-26144 10/29/10
R.D. Marina II, LLC -- --
Mike Carter I, Inc. 10-26153 10/29/10
Mike Carter Construction, Inc. 10-26156 10/29/10
Production Properties 10-26150 10/29/10
Michael M. and Jaymie Carter -- --
DEX MEDIA EAST: Bank Debt Trades at 19% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media East LLC
is a borrower traded in the secondary market at 80.65 cents-on-
the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 2.47
percentage points from the previous week, The Journal relates.
The Company pays 250 basis points above LIBOR to borrow under the
facility. The bank loan matures on October 24, 2014. The debt is
not rated by Moody's and Standard & Poor's. The loan is one of
the biggest gainers and losers among 198 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
About Dex Media East
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun &
Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the U.S.
It offers print directory advertising products, such as yellow
pages and white pages directories. R.H. Donnelley Inc., Dex
Media, Inc., and Local Launch, Inc., are the company's only direct
wholly owned subsidiaries.
Dex Media East, LLC, is a publisher of the official yellow pages
and white pages directories for Qwest Communications International
Inc. (Qwest) in the states, where Qwest is the primary incumbent
local exchange carrier, such as Colorado, Iowa, Minnesota,
Nebraska, New Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media, Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent.
DEX MEDIA WEST: Bank Debt Trades at 8% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Dex Media West LLC
is a borrower traded in the secondary market at 92.29 cents-on-
the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 1.19
percentage points from the previous week, The Journal relates.
The Company pays 450 basis points above LIBOR to borrow under the
facility, which matures on October 24, 2014. The debt is not
rated by Moody's and Standard & Poor's. The loan is one of the
biggest gainers and losers among 198 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
About Dex Media West
Dex Media West LLC is a subsidiary of Dex Media West, Inc., and an
indirect wholly owned subsidiary of Dex Media, Inc. Dex Media is
a direct wholly owned subsidiary of R.H. Donnelley Corporation.
Dex Media West is the exclusive publisher of the official yellow
pages and white pages directories for Qwest Corporation, the local
exchange carrier of Qwest Communications International Inc., in
Arizona, Idaho, Montana, Oregon, Utah, Washington, and Wyoming.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media, Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent.
DOWNEY FINANCIAL: Ch. 7 Trustee Sues FDIC for Tax Refunds
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy trustee for Downey Financial Corp.
sued the Federal Deposit Insurance Corp., asking the bankruptcy
court to decide who's entitled to receive almost $400 million in
federal income tax refunds. The FDIC was named receiver for
Downey Financial's savings bank unit when it was taken over.
According to Mr. Rochelle, the Chapter 7 trustee for Downey, which
didn't even try to reorganize in Chapter 11, contends that the
parent had the right under a tax-sharing agreement to file tax
returns for the bank subsidiary. The trustee likewise contends
that any refunds paid by the IRS aren't held in trust for the
bank, even though losses at the bank created the right to refunds.
The Chapter 7 trustee, Mr. Rochelle adds, believes that there is
nothing more than a debtor-creditor relationship between the
parent and the FDIC as receiver for the failed bank subsidiary.
Consequently, the trustee believes the FDIC is only an unsecured
creditor of the bankrupt parent.
According to the report, the IRS has already paid $17.5 million
which is being held in an escrow account under an interim
agreement between the trustee and the FDIC. The agreement
contemplates that a court will decide who's entitled to the
refund. The trustee for the parent has filed refund claims for
another additional $373.8 million.
Downey Financial Corp. filed a Chapter 7 petition (Bankr. D. Del.
08-13041) on Nov. 25, 2008, after the Office of Thrift Supervision
closed its banking unit Downey Savings & Loan Association, F.A.,
on Nov. 21, 2008, and appointed the FDIC as receiver. Montague S.
Claybrook serves as the Chapter 7 Trustee, and is represented by
William H. Stassen, Esq., at Fox Rothschild LLP.
As soon as the bank was taken over, the assets of the thrift
subsidiary were purchased by U.S. Bank NA in a transaction
assisted by the FDIC. The Downey bank failure cost the FDIC
insurance fund $1.4 billion, the agency said at the time.
DYNEGY INC: FERC OKs Blackstone Merger, Sale of 3 Plants to NRG
---------------------------------------------------------------
Dynegy Inc. on Monday said the Federal Energy Regulatory
Commission has approved the joint application of Dynegy and an
affiliate of The Blackstone Group L.P. (NYSE: BX) relating to the
acquisition of Dynegy by an affiliate of The Blackstone Group L.P.
In addition, the FERC order, dated October 29, 2010, approved the
joint application of an affiliate of The Blackstone Group L.P. and
NRG Energy (NYSE: NRG) for the acquisition by NRG of three Dynegy
power generation facilities operating in California (Morro Bay,
Moss Landing and Oakland) and one in Maine (Casco Bay), which will
occur concurrent with the completion of the acquisition of Dynegy
by an affiliate of The Blackstone Group L.P.
Completion of the acquisition of Dynegy by an affiliate of The
Blackstone Group L.P. is subject to additional conditions,
including approval of the proposal to adopt the merger agreement
by the affirmative vote of holders of a majority of Dynegy's
outstanding shares at a special meeting of Dynegy stockholders
currently scheduled for November 17, 2010.
The Dynegy-Blackstone and Blackstone-NRG transactions have
received Hart-Scott-Rodino antitrust clearance. Other pending
regulatory approvals include the issuance of a declaratory ruling
or approval of the New York Public Service Commission and the
expiration of the notice period under a prior filing with the
California PUC.
The consummation of the merger transaction between Dynegy and
Blackstone is contingent upon the concurrent closing of the NRG
Energy asset sale transaction. Assuming the stockholder vote is
successful and the other conditions to closing are met, both
transactions are expected to close by the end of November 2010.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE:DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Dynegy Inc. and Dynegy Holdings each has a 'B-' issuer default
rating from Fitch.
In October 2010, Moody's Investors Service lowered the ratings of
Dynegy Holdings, including its Corporate Family Rating, to Caa1
from B3 along with the ratings of various affiliates or parent
company Dynegy Inc. The rating outlook for DHI and Dynegy remains
negative. The rating action follows the expiration of the 40-day
"go shop" period, increasing the probability that Dynegy will be
acquired by an affiliate of The Blackstone Group L.P. in a
transaction valued at approximately $4.7 billion, including the
assumption of existing debt. Moody's said Dynegy's financial
profile is expected to be quite fragile, particularly during 2011
and 2012, when the company is projected to generate both negative
operating cash flow and negative free cash flow due to weak
operating margins and the required funding of their capital
investment programs. To the extent that the transactions with
Blackstone and NRG are not completed, Moody's said downward rating
pressure at DHI and Dynegy will continue to exist given the weak
financial prospects for the company over the next few years
coupled with the liquidity concerns.
EMIVEST AEROSPACE: Taps DLA Piper to Assist in Marketing Assets
---------------------------------------------------------------
Emivest Aerospace Corporation asks for authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ DLA Piper
LLP (US) as special counsel nunc pro tunc to the Petition Date.
DLA Piper will:
a. assist the Debtor in the marketing of its assets for sale
to potential purchasers;
b. advise and negotiate on behalf of the Debtor in connection
with the sale of all or substantially all of the Debtor's
assets to a potential purchaser;
c. prepare agreements, documents, and other papers in
connection with the sale of all or substantially all of
the Debtor's assets; and
d. represent the Debtor in certain currently pending
arbitration claims against certain shareholders of the
Debtor who were the former majority shareholders of the
Debtor.
The Debtor is also seeking to retain (a) Morris, Nichols, Arsht &
tunnel LLP as general bankruptcy counsel, (b) Morgan Joseph & Co.
Inc. as financial advisor, and (c) Donlin, Recano & Company, Inc.,
as claims, noticing and balloting agent. The firms work and will
work under the direction of the Debtor's management. The Debtor
is committed to minimizing any duplication of services. DLA Piper
will work closely with each professional to ensure that there is
no duplication of effort or cost.
DLA Piper will be paid based on the hourly rates of its personnel:
Partners $735 to $1,000
Counsel $365 to $895
Associates $310 to $715
Paraprofessionals $175 to $350
Timothy W. Walsh, Esq., a partner at DLA Piper, assures the Court
that the firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.
San Antonio, Texas-based Emivest Aerospace Corporation, fka Sino
Swearingen Aircraft, is an aircraft manufacturing company that
produces business jets, including light business jet SJ30. It
retails aircraft directly to individuals through a combination of
its own sales force and its three distributors, located in the
U.S., U.K. and Germany.
Emivest Aerospace filed for Chapter 11 bankruptcy protection on
October 20, 2010 (Bankr. D. Del. Case No. 10-13391). Daniel B.
Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, assists the
Debtor in its restructuring effort. Morgan Joseph & Co. Inc.
serves as financial advisor. The Debtor estimated its assets and
debts at $50 million to $100 million.
EMIVEST AEROSPACE: Taps Morgan Joseph as Financial Advisor
----------------------------------------------------------
Emivest Aerospace Corporation asks for authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ Morgan
Joseph & Co. Inc. as financial advisor, nunc pro tunc to the
Petition Date.
Morgan Joseph will, among other things:
a. assist and advise the Debtor with the analysis of the
Debtor's business, business plan, and strategic and
financial position;
b. assist with the formulation, evaluation, implementation of
various options for a restructuring, financing,
reorganization, merger, or sale of the Debtor, or its
assets or businesses;
c. provide financial advisory services to the Debtor in
connection with developing, and seeking approval for a
restructuring plan; and
d. assist the Debtor in negotiations with creditors,
shareholders and other appropriate parties-in-interest.
Concurrent with the closing of an interim financing transaction,
the Debtor will pay Morgan Joseph, from the proceeds of the
transaction as a cost of the transaction, an interim financing
transaction fee equal to $250,000. On every monthly anniversary
of the date of the interim financing transaction, the Debtor will
pay Morgan Joseph a non-refundable cash fee of $50,00per month.
The Debtor will pay Morgan Joseph a minimum of three monthly fees,
a total of $150,000, regardless of if and when the Debtor elects
to terminate the agreement pursuant to the terms of the engagement
letter. A copy of the letter is available for free at:
http://bankrupt.com/misc/EMIVEST_AEROSPACE_letteragreement.pdf
The Debtor will pay Morgan Joseph a restructuring transaction fee
of $1,000,000, a financing transaction fee of $1,000,000, and a
sale transaction fee of $1,000,000.
James D. Decker, Morgan Joseph's managing director, assures the
Court that the firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.
San Antonio, Texas-based Emivest Aerospace Corporation, fka Sino
Swearingen Aircraft, is an aircraft manufacturing company that
produces business jets, including light business jet SJ30. It
retails aircraft directly to individuals through a combination of
its own sales force and its three distributors, located in the
U.S., U.K. and Germany.
Emivest Aerospace filed for Chapter 11 bankruptcy protection on
October 20, 2010 (Bankr. D. Del. Case No. 10-13391). Daniel B.
Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, assists the
Debtor in its restructuring effort. DLA Piper LLP (US) has been
tapped as special counsel to assist in marketing the Debtor's
assets to potential purchasers. The Debtor estimated its assets
and debts at $50 million to $100 million.
ENGLISH & AMERICAN: Scheme Creditors' Claims Due by April 11
------------------------------------------------------------
In accordance with Schemes of Arrangement proposed under part 26
of the English Companies Act 2006 for English & American Insurance
Company Limited, The Insurance Corporation of Singapore (U.K.)
Limited, Baloise Insurance Ltd, City International Insurance
Company Limited, Dowa Insurance Company (Europe) Ltd, East West
Insurance Company Limited, Fuji International Insurance Company
Limited, Hiscox Insurance Company Limited, The Home Insurance
Company (In Liquidation), KX Reinsurance Company Limited,
Metropolitan Reinsurance Company (U.K.) Limited, Moorgate
Insurance Company Limited, Nippon Insurance Company of Europe
Limited, Polygon Insurance Company Limited, Swiss Re International
SE, UK Branch, and Tower Insurance Limited, sanctioned by the High
Court of Justice of England and Wales on Oct. 6, 2010, and
delivered to Registrar of Companies in England and Wales on
Oct. 12, 2010, Scheme Creditors must submit their Claim Forms by
5:00 p.m., prevailing U.K. time, on April 11, 2! 011, to:
EAUA Pools
PRO Insurance Solutions Limited
Bruton Court, Bruton Way
Gloucester, GL1 1DA UNITED KINGDOM
Telephone: +44 (0)1452 330 514
Fax: +44 (0)1452 523 437
E-mail: pro_eauapools@pro-ltd.co.uk
KPMG LLP Restructuring, the Scheme Manager and Foreign
Representative for English & American Insurance Company Limited,
commenced a section 304 proceeding (Bankr. S.D.N.Y. Case No. 93-
42685) in 1993. PRO Insurance Solutions Limited -- in its role as
the foreign representative Baloise Insurance Ltd, City
International Insurance Company Limited, Dowa Insurance Company
(Europe) Ltd, East West Insurance Company Limited, Fuji
International Insurance Company Limited, Hiscox Insurance Company
Limited, KX Reinsurance Company Limited, Metropolitan Reinsurance
Company (U.K.) Limited, Moorgate Insurance Company Limited, Nippon
Insurance Company of Europe Limited, Polygon Insurance Company
Limited, Swiss Re International SE, UK Branch, and Tower Insurance
Limited -- commenced chapter 15 proceedings (Bankr. S.D.N.Y. Case
No. 10-15358) on Oct. 14, 2010. PRO Insurance is represented in
the U.S. by Ken Coleman, Esq., Stephen Doody, Esq., and Jonathan
Cho, Esq., at Allen & Overy LLP.
FAIRPOINT COMMUNICATIONS: Creditors Investigating Verizon Spinoff
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although FairPoint Communications Inc., a local
exchange carrier, is progressing toward a confirmed reorganization
plan, the official creditors' committee is investigating the 2007
transaction where Verizon Communications Inc. spun off the
FairPoint business in Vermont, Maine and New Hampshire with
1.7 million access lines.
According to the report, the Creditors Committee wants to recover
documents from Merrill Lynch & Co., Houlihan Lokey Inc., Morgan
Stanley and Deutsche Bank AG, which were all involved in the
spinoff.
About FairPoint Communications
FairPoint Communications, Inc. (NYSE: FRP) --
http://www.fairpoint.com/-- 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
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.
FIRST MERCURY: Moody's Affirms 'Ba2' Long-Term Issuer Rating
------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 long-term issuer
rating of First Mercury Financial Corporation and the Baa2
insurance financial strength rating of First Mercury Insurance
Company following the group's announcement that it will be
acquired by Fairfax Financial Holdings for approximately
$294 million. The outlook for the ratings has been changed to
positive from negative given the anticipated benefits from being
part of a larger, more diversified group. The transaction is
expected to close in the first quarter of 2011, subject to
customary conditions, including approval by First Mercury's
stockholders and regulatory approvals.
Commenting on the acquisition, Moody's analyst Enrico Leo said,
"The positive outlook reflects the benefits that First Mercury
could realize over time from being a part of a larger organization
with greater flexibility and financial resources." Moody's also
expects that First Mercury's market presence could improve over
time.
First Mercury's ratings reflect the company's established position
in providing general liability insurance for the security
industry, its modest catastrophe exposure, good profit margins in
its core business, and commission and fee income from certain
subsidiaries. These strengths are partly offset by its modest
scale, risks associated with recent growth (both organic and via
acquisitions), and the company's focus on medium-tail casualty
business -- which results in uncertainty with respect to the
adequacy of loss reserves. During the third quarter of 2010,
First Mercury recorded $11.4 million of adverse reserve
development on prior accident years, or about 2.5% (after-tax) of
shareholders' equity, in the company's primary general liability
and professional liability lines of business. Moody's believes
that while the company has increased its pricing, reserving, and
risk management functions in recent years, the company's rapid
growth during the recent soft market could make reserves more
volatile in future periods.
While this transaction is expected to broaden Crum & Forster's
surplus lines and specialty platform, the companies are expected
to operate somewhat autonomously. The ratings of Crum & Forster
Holdings and its operating subsidiaries (Baa1 IFS) were not
affected by this action.
These ratings have been affirmed with a positive outlook:
* First Mercury Insurance Company -- insurance financial strength
at Baa2;
* First Mercury Financial Corporation -- long-term issuer rating
at Ba2;
First Mercury Financial Corporation, headquartered in Southfield,
Michigan, is the holding company for two insurance operating
companies, a wholesale insurance broker (CoverX Corporation), and
a managing general agency (American Management Corporation). Its
insurance subsidiaries provide specialty insurance products and
services to the excess and surplus lines market in the United
States, with particular expertise in the security industry (e.g.,
security guards, etc.). For the first nine months of 2010, First
Mercury reported $203 million in revenue, $7.3 million in net
income, and a 113.9% combined ratio. Shareholders' equity was
$302 million as of September 30, 2010.
The last rating action on First Mercury was on July 6, 2010, when
Moody's affirmed its Ba2 long-term issuer rating and Baa2 IFS
rating of its insurance subsidiary and changed its outlook to
negative following its announcement to purchase Valiant Insurance
Group.
FLETCHER GRANITE: Judge Approve $7MM Asset Sale to Nesi Realty
--------------------------------------------------------------
American Bankruptcy Institute reports that a Massachusetts judge
has approved a $7 million all-cash sale of Fletcher Granite Co.
LLC's assets to stalking-horse bidder Nesi Realty LLC.
About Fletcher Granite
Westford, Massachusetts-based Fletcher Granite Company LLC --
http://www.fletchergranite.com/-- produced granite for buildings,
bridges and road construction.
Fletcher Granite filed for Chapter 11 bankruptcy protection on
August 2, 2010 (Bankr. D. Mass. Case No. 10-43884). David J.
Reier, Esq., and Laura Otenti, Esq., at Posternak Blankstein &
Lund LLP, serve as counsel to the Debtor. The Debtor estimated
its assets at $10 million to $50 million and debts at $1 million
to $10 million in its Chapter 11 petition. The U.S. Trustee has
formed a five-member Official Committee of Unsecured Creditors.
FREESCALE SEMICON: Bank Debt Trades at 6% Off in Secondary Market
-----------------------------------------------------------------
Participations in a syndicated loan under which Freescale
Semiconductor Inc. is a borrower traded in the secondary market at
93.86 cents-on-the-dollar during the week ended October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 1.00
percentage points from the previous week, The Journal relates.
The Company pays 425 basis points above LIBOR to borrow under the
facility. The bank loan matures on Feb. 16, 2016, and carries
Moody's B2 rating and Standard & Poor's B- rating. The loan is
one of the biggest gainers and losers among 198 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
Freescale Semiconductor, Inc. -- http://www.freescale.com/-- once
Motorola's Semiconductor Products Sector, is one of the oldest and
most diverse makers of microchips in the world. It produces many
different kinds of chips for use in automobiles, computers,
industrial equipment, wireless communications and networking
equipment, and other applications. The company's global client
roster includes such blue-chip companies as Alcatel-Lucent, Bosch,
Cisco Systems, Fujitsu, Hewlett-Packard, QUALCOMM, and Siemens, as
well as former parent Motorola. Freescale nets about half of its
sales from the Asia/Pacific region. The Blackstone Group, The
Carlyle Group, Permira Advisers, and TPG Capital own the company.
As reported by the Troubled Company Reporter on September 16,
2010, Fitch Ratings affirmed these ratings for Freescale
Semiconductor Holdings I, Ltd.:
-- Issuer Default Rating at 'CCC';
-- Senior unsecured notes at 'C/RR6';
-- Senior subordinated notes at 'C/RR6'.
Freescale carries a B-/Stable/-- corporate credit rating from
Standard & Poor's. "The rating on Freescale," said Standard &
Poor's credit analyst Lucy Patricola, "reflects S&P's expectation
that the company will continue on its current path to generate
over $800 million of EBITDA for 2010. S&P expects leverage to
remain high but free cash flow to be slightly positive, preserving
existing cash balances of $1 billion."
GENERAL MOTORS: Treasury Said to Cut Stake to 35% in IPO
--------------------------------------------------------
The Wall Street Journal's Sharon Terlep and Randall Smith report
that the U.S. government will cut its ownership stake in General
Motors Co. below the symbolically important 50% to about 35% when
the car maker relists its stock later this month, according to new
figures the company plans to disclose Tuesday.
The Journal, citing people familiar with the plan, relates the new
projections by GM say the company could have a stock-market value
at the start of trading of $50 billion -- about the same as the
solidly profitable Ford Motor Co. -- and that it could be as high
as $60 billion. The Journal notes that for the U.S. to break even
through sales of the rest of its stake, the share price may need
to rise more than 60% from its initial level, to about $50.
Sources told the Journal the initial public offering plan
envisions the shares would be priced at $26 to $29 each. The
actual price of the stock to be sold in the IPO would be set about
Nov. 17, and the sale would take place the following day.
Through the IPO, GM plans to sell 24% of its total shares, or
about $10 billion worth, based on the midrange of the share-price
estimate.
According to the Journal, the people familiar with the plan said:
-- the Treasury would sell $7 billion of its shares, paring
its 61% stake to about 35%;
-- the United Auto Workers trust, which pays for retiree
health care, would sell $2 billion of its shares; and
-- the Canadian federal and provincial governments would
offload around $1 billion of their shares.
The Journal also reports details of the stock offering are
expected to be filed with the Securities and Exchange Commission
on Tuesday, in advance of a "road show" GM is set to launch
Wednesday to promote the IPO to prospective investors. According
to the Journal, GM executives will divide into two teams to pitch
the IPO. One team will spend two days in the New York area this
week, while the other will head to Toronto, according to people
familiar with the plan. On the road show, GM will likely face
tough questions about its untested management team, holes in its
product plans and the role the U.S. government will play in its
business operations -- all seen as key risks to GM's longer-term
success.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company -- http://www.gm.com/-- is one of the world's largest
automakers. GM employs 205,000 people in every major region of
the world and does business in some 157 countries. GM and its
strategic partners produce cars and trucks in 31 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang,
Opel, Vauxhall and Wuling. GM's largest national market is China,
followed by the United States, Brazil, Germany, the United
Kingdom, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. is 60.8% owned by the U.S. Government. It was
formed to acquire the operations of General Motors Corporation
through a sale under 11 U.S.C. Sec. 363 following Old GM's
bankruptcy filing. The deal was closed on July 10, 2009, and Old
GM changed its name to Motors Liquidation Co. Old GM remains
subject to a pending Chapter 11 reorganization case before the
U.S. Bankruptcy Court for the Southern District of New York.
At June 30, 2010, GM had $131.899 billion in total assets,
$101.00 billion in total liabilities, $6.998 billion in preferred
stock, and $23.901 billion in stockholders' equity.
New GM has a 'BB-' corporate credit rating from Standard & Poor's
and a 'BB-' issuer default rating from Fitch.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP serve as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long serve as counsel regarding
supplier contract matters. FTI Consulting, Inc., serves as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Committee. Legal Analysis Systems, Inc., serves as asbestos
valuation analyst.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: S&P Assigns 'BB+' Rating to $5 Bil. Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services said it has assigned its 'BB+'
issue rating on General Motors Holdings LLC's $5 billion senior
secured revolving credit facility maturing 2015. This rating is
two notches higher than the 'BB-' corporate credit rating on
parent automaker General Motors Co. and is based on its '1'
recovery rating assessment, indicating that S&P believes lenders
would receive very high (90% to 100%) recovery of principal in the
event of a default. GM announced that it had closed on this bank
facility.
GM also announced that it had repaid $2.8 billion (including
accrued interest) in United Auto Workers VEBA notes and announced
certain other debt-reduction actions it intends to take subject to
completion of an initial public offering of common stock. The
company stated that upon completion of the IPO, it intends to
repurchase $2.1 billion of its Series A preferred equity at
slightly above par and make a discretionary, $6 billion
contribution to its U.S. pension plan ($4 billion in cash and
$2 billion in equity). GM also indicated that it would terminate
a wholesale advance agreement with a financing partner; S&P
believes this will require an increased, but manageable,
investment in working capital by GM. S&P views these potential
actions as consistent with S&P's assumptions reflected in its
recent assignment of S&P's BB-/Stable/-- corporate credit rating
on GM.
Ratings List
General Motors Co.
Corporate credit rating BB-/Stable/--
New Rating
General Motors Holdings LLC
$5 bil. sr. sec. revolving credit
fac bank ln due 10/27/2015 BB+
Recovery Rating 1
GENERAL MOTORS: Fitch Assigns 'BB+' Rating to $5 Bil. Loan
----------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB+' to the new $5 billion
five-year secured revolving credit facility issued by General
Motors Holdings LLC, a wholly-owned subsidiary of General Motors
Company. Fitch also has assigned an Issuer Default Rating of
'BB-' to GM Holdings, and Fitch has affirmed its IDR of 'BB-' on
GM. The Rating Outlook for GM and GM Holdings is Stable.
The rating of 'BB+' assigned to the secured revolving credit
facility, two-notches above GM Holdings' IDR, is based on the
facility's substantial collateral coverage, which includes a first
priority security interest in most of the U.S. assets of GM and
its material U.S. subsidiaries. The collateral includes physical
assets, inventories, receivables, trademarks and technology. It
also includes stock in certain U.S. subsidiaries, 65% of the stock
of certain tier-one subsidiaries outside the U.S., certain
intercompany notes and GM's stock in Ally Financial Inc.
Significant assets not serving as collateral include the company's
cash, cash equivalents and marketable securities, as well as its
ownership stakes in GM Daewoo Auto & Technology Co., Delphi
Automotive LLP and its various Chinese joint ventures. The stock
of General Motors Financial Company (GM Financial) also is
excluded from the collateral package. The facility agreement
calls for the collateral to be released if GM's IDR (or its
equivalent) is rated investment-grade by two or more rating
agencies.
Fitch views the new credit facility as a positive enhancement to
GM's liquidity position. However, given the substantial cash
liquidity currently on the company's balance sheet, which included
over $31 billion in cash at June 30, 2010, Fitch does not expect
it will use the facility for any significant borrowings over the
intermediate term. Nonetheless, having access to the facility
will allow GM to maintain a lower cash balance going forward to
meet its day-to-day operational needs. Fitch projects that the
company's cash position at year-end 2010 will be lower than the
June 30 figure due, in part, to the acquisition of GM Financial
for $3.5 billion and the paydown of the remaining outstanding
secured Voluntary Employee Beneficiary Association (VEBA) notes
payable to the United Auto Workers' Retiree Medical Benefits Trust
for $2.8 billion, both of which were completed this month. The
paydown of the VEBA notes was required to free-up the collateral
that has been used to back the credit facility. In addition to
the preceding items, GM also has announced that, following the
initial public offering of its common stock, the company expects
to contribute at least $4 billion in cash (and $2 billion in
common stock) to its U.S. defined benefit pension plans and
repurchase $2.1 billion of outstanding preferred stock currently
held by the U.S. Treasury at 102% of the liquidation amount.
The credit facility is guaranteed by GM and certain U.S.
subsidiaries of GM Holdings. Among the various covenants included
in the credit facility agreement are two financial covenants, a
borrowing base covenant and a minimum liquidity covenant. The
borrowing base covenant requires that the facility's borrowing
base (as defined in the agreement) must exceed the amount of all
outstanding obligations secured by the facility's collateral on a
first-priority basis. The minimum liquidity covenant requires
that GM maintain at least $2 billion of liquidity in the U.S. and
$4 billion of liquidity globally. In both cases, liquidity
includes availability under the credit facility. In addition to
the financial covenants, GM is restricted in selling its four core
U.S. brands (Buick, Cadillac, Chevrolet and GMC). However, there
are no restrictions on GM's ability to invest in its business.
Fitch does not expect that the facility's covenants will pose any
meaningful risk to the company in the intermediate term.
The IDRs for GM and GM Holdings reflect the auto manufacturer's
strong liquidity position, low leverage, improved cost structure
and increasingly competitive product portfolio. However the
company continues to face a number of challenges over the next
several years, including projected weak industry volume growth,
heavily underfunded pension obligations and continued cash needs
tied to the restructuring of its European operations. Along with
the entire industry, GM also is confronted with an increasingly
stringent global regulatory environment that is forcing rapid
technological change and that will ultimately necessitate a
transition in the company's key product offerings. This will pose
particular challenges for GM over the intermediate term as the
company's will be required to meet significantly tighter fuel
economy and emissions targets for both its cars and trucks.
Fitch may upgrade the IDRs of GM and GM Holdings in the
intermediate term if the company continues to make progress on
reducing its debt and pension obligations while producing positive
free cash flow on a sustainable basis and maintaining a strong
liquidity position. This would most likely be accomplished by a
continued gradual improvement in automotive market conditions,
combined with the company preserving both market share and net
pricing strength in its key markets. Conversely, Fitch may
downgrade GM's IDR if external market conditions weaken
significantly, resulting in weakened free cash flow, a decline in
cash below $20 billion and, potentially, a meaningful increase in
leverage, all over a prolonged period. Fitch believes this would
require a significant reversal of current market trends, however,
and is unlikely in the intermediate term unless triggered by an
unexpected exogenous event.
GREAT ATLANTIC: S&P Downgrades Corporate Credit Rating to 'CC'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its ratings on
the Montvale, New Jersey-based Great Atlantic & Pacific Tea Co.
S&P lowered the corporate credit rating to 'CC' from 'CCC'. The
rating outlook is negative. The downgrade reflects weaker-than-
expected operating performance, which resulted in greater cash
usage in the quarter than S&P had estimated.
"The ratings on A&P reflect S&P's expectation that operating
performance will be weaker in the near term and the company will
continue to exhaust available liquidity," said Standard & Poor's
credit analyst Charles Pinson-Rose. S&P previously believed that
operating performance could stabilize from this point forward, but
now S&P currently anticipates that the negative sales could
continue for the next two quarters, leading to further profit
declines.
"Consequently," added Mr. Pinson-Rose, "S&P now foresees that the
company could have a difficult time paying its 2011 maturities,
even if it can raise liquidity through asset sales or if it
procures additional financing."
GSC GROUP: Black Diamond Wins Auction for Assets
------------------------------------------------
Black Diamond Capital Management, L.L.C. disclosed that, following
a three day competitive auction process held in accordance with
Section 363 of the Bankruptcy Code, Black Diamond and its
affiliate Black Diamond Commercial Finance, LLC, as agent for the
GSC lender group have been declared the winning bidders and have
executed a definitive agreement for the acquisition of
substantially all of the investment management business and
related assets of GSC Group, Inc. and certain of its affiliates.
Subject to other required approvals, Black Diamond expects that
the sale will be approved by the U.S. Bankruptcy Court for the
Southern District of New York at a hearing scheduled for
December 6, 2010.
Upon completion of the sale, Black Diamond intends to assume
active control of GSC's CLO, control distressed/private equity and
mezzanine funds, which combined have approximately $8 billion of
assets under management. The Company also intends to retain
Alfred Eckert, currently GSC's Chairman and Chief Executive
Officer, as a strategic advisor and Peter Frank, currently GSC's
President, as a Senior Managing Director. Black Diamond expects
that additional GSC employees will also join the Company following
the sale.
Commenting on the auction results, Stephen Deckoff, Managing
Principal of Black Diamond said, "I am extremely pleased that
following a competitive auction, Black Diamond and BDCF have been
declared the winning bidders for GSC's assets. GSC's CLO, control
distressed/private equity and mezzanine funds are natural
complements to Black Diamond's existing lines of business and,
combined, the two companies will provide an even stronger
foundation from which to maximize results for GSC's and Black
Diamond's investors." Continuing, Mr. Deckoff said, "I am looking
forward to developing deep relationships with GSC's clients and I
am pleased that Black Diamond will be able to draw on the talents
of Alfred Eckert and Peter Frank. Their depth of investment
experience will enable us to continue to capitalize on fundamental
market opportunities, as we strive to provide superior returns to
our investors."
About GSC Group
Florham Park, New Jersey-based GSC Group, Inc. --
http://www.gsc.com/-- is a private equity firm specializing in
mezzanine and fund of fund investments. It filed for Chapter 11
bankruptcy protection on August 31, 2010 (Bankr. S.D.N.Y. Case No.
10-14653). Michael B. Solow, Esq., at Kaye Scholer LLP, assists
the Debtor in its restructuring effort. Epiq Bankruptcy
Solutions, LLC, is the Debtor's notice and claims agent. Capstone
Advisory Group, LLC, is the Debtor's financial advisor. The
Debtor estimated its assets at $1 million to $10 million and debts
at $100 million to $500 million.
GTC BIOTHERAPEUTICS: Earns $3.5 Million in September 30 Quarter
---------------------------------------------------------------
GTC Biotherapeutics, Inc., filed its quarterly report on Form
10-Q, reporting net income of $3.5 million on $9.2 million of
revenue for the three months ended September 30, 2010, compared
with a net loss of $4.9 million on $749,000 of revenue for the
same period last year.
During the third quarter of 2010, as a result of the termination
of the Company's agreement with Lundbeck, GTC recognized
approximately $8.4 million of revenue relating to upfront
milestone payments which had previously been deferred.
The Company has an accumulated deficit of $333.4 million at
September 30, 2010. The Company also has negative working
capital of $7.8 million as of September 30, 2010. Based on the
Company's cash balance as of September 30, 2010, as well as
potential cash receipts primarily from the funding of programs
under the LFB collaboration, GTC believes its capital resources
will be sufficient to fund operations to the middle of December of
2010.
The Company's balance sheet at September 30, 2010, showed
$24.5 million in total assets, $48.2 million in total liabilities,
and a stockholders' deficit of $23.8 million.
As reported in the Troubled Company Reporter on March 15, 2010,
PricewaterhouseCoopers LLP, in Boston, expressed substantial doubt
about the Company's ability to continue as a going concern,
following the Company's results for the fiscal year ended
January 3, 2010. The independent auditors noted of the Company's
recurring losses from operations and limited available funds as of
January 3, 2010.
About GTC Biotherapeutics
Framingham, Mass.-based GTC Biotherapeutics, Inc. (OTC BB: GTCB)
-- http://www.gtc-bio.com/-- develops, supplies and
commercializes therapeutic proteins produced through transgenic
animal technology. ATryn(R), GTC's recombinant human
antithrombin, has been approved for use in the United States and
Europe.
In addition to ATryn(R), GTC is developing a portfolio of
recombinant human plasma proteins with known therapeutic
properties. These proteins include recombinant forms of human
coagulation factors VIIa and IX, which are being developed for the
treatment of patients with hemophilia, and recombinant
alpha-fetoprotein, which is being developed for the treatment of
myasthenia gravis and multiple sclerosis.
HAWKER BEECHCRAFT: Bank Debt Trades at 17% Off in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 82.84 cents-on-
the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 0.87
percentage points from the previous week, The Journal relates.
The Company pays 200 basis points above LIBOR to borrow under the
facility. The bank loan matures on March 26, 2014, and carries
Moody's Caa1 rating and Standard & Poor's CCC+ rating. The loan
is one of the biggest gainers and losers among 198 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, is a leading manufacturer of business jets,
turboprops and piston aircraft for corporations, governments and
individuals worldwide.
The Company's balance sheet at March 28, 2010, showed
$3.41 billion in total assets, $3.36 billion in total
liabilities, and stockholders' equity of $56.5 million.
Hawker Beechcraft reported a net loss of $63.4 million on $568.2
million of total sales for the three months ended March 28, 2010,
compared with net income of $53.1 million on $537.6 million of
sales for the three months ended March 29, 2009.
HCA INC: Fitch Affirms Issuer Default Rating at 'B'
---------------------------------------------------
Fitch Ratings has removed HCA's ratings from Rating Watch Positive
and has taken these rating actions:
-- Issuer Default Rating affirmed at 'B';
-- Secured bank credit facility affirmed at 'BB/RR1';
-- Senior Secured First lien notes affirmed at 'BB/RR1';
-- Senior Secured Second lien notes upgraded to 'BB-/RR2' from
'B+/RR3';
-- Senior unsecured notes affirmed at 'CCC/RR6'.
The Rating Outlook is Positive.
The ratings apply to approximately $26.8 billion of debt
outstanding at June 30, 2010. The Rating Outlook is Positive on
the basis of recent improvement in HCA's operating and credit
metrics, as well as the potential for significant debt reduction
using proceeds from the company's planned initial public offering.
Removal of the ratings from Watch Positive and assignment of a
Positive Outlook is supported by the fact that HCA's underlying
operating trend is strong enough to support positive ratings
momentum even absent the anticipated deleveraging impact of the
IPO.
Positive Credit Momentum Related To Ipo, But Timing Is Uncertain:
HCA's May 7, 2010 filing for an IPO of up to $4.6 billion and the
company's planned use of $2.5 billion of the proceeds for debt
reduction support Fitch's expectation that HCA will operate with
lower debt leverage as a publicly traded company. A ratings
upgrade of one-to-two notches to the 'B+' or 'BB-' IDR level is
likely if the company is able to successfully execute on its IPO
strategy and proceeds are applied to debt reduction as planned.
Based on its pro forma analysis of a post IPO capital structure,
Fitch believes the company could achieve post IPO debt leverage of
between 3.5 times and 4.0x, versus the June 30, 2010 4.9x level.
The timing of the execution of the IPO is uncertain, but HCA's
credit profile has positive momentum otherwise, as reflected in
improvement in operating and credit metrics since the 2006
leveraged buyout, but particularly over the past 12-18 months.
Even if the company's IPO strategy is not executed in the
intermediate term, there is the potential for a one-notch upgrade
for the IDR in the next 12-24 months assuming continuation of a
mildly positive operating trend.
Debt Levels Remain High From The Lbo, But Stable Industry
Operating Trends Are Supporting Lower Debt Leverage:
HCA's operating results have been fairly strong since the 2006
LBO. Despite the fact that the company did not undertake a
significant organizational restructuring post the LBO, Fitch
calculates that EBITDA has expanded by more than 25% or
$1.2 billion, to $5.5 billion for the latest 12 months period
ended June 30, 2010, from about $4.3 billion in 2006. Annual top
line revenue growth of 4%-6% has tracked the broader for-profit
hospital industry, and EBITDA growth has also been supported by
enhanced profitability as the EBITDA margin expanded by about 140
basis points since 2006 to an industry leading 18% at June 30,
2010. Debt equaled 4.9x LTM EBITDA at June 30, 2010, versus 6.6x
immediately post the LBO. The reduction in debt leverage has
been the combined result of expansion in EBITDA and a $1.6 billion
reduction in the debt balance to $26.8 billion versus
$28.4 billion post the LBO.
Fitch's base case operating outlook for HCA contemplates low
single digit top-line revenue growth, and slight expansion of the
EBITDA margin, leading to nominal but steady EBITDA growth in the
intermediate term. These expectations are in-line with Fitch's
near-term stable operating outlook for the for-profit hospital
industry. Fitch believes that the most important driver of the
sector's near-term operating outlook is the pace and progress of
economic recovery. Poor macroeconomic conditions are creating
significant headwinds for patient utilization and therefore top-
line revenue trends in the acute-care hospital industry. However,
Fitch expects certain offsets which are stabilizing revenue trends
and supporting the industry's recently improved profitability to
persist in the intermediate term. Some of these factors include a
low inflationary environment with respect to controllable
operating costs, strong commercial insurance pricing trends, and a
seemingly declining rate of acceleration in levels of
uncompensated care. Furthermore, Fitch believes the industry is
well positioned to weather scheduled cuts to Medicare
reimbursement in the early going of the implementation of
healthcare reform due to a strong focus on cost containment and
operational efficiency during the economic recession.
Most Significnat Risk To The Credit Profile Is Debt Maturity
Schedule, Liquidity Is Otherwise Solid:
HCA has the most concerning debt maturity structure amongst the
Fitch-rated for-profit hospital provider universe; the company has
$7.5 billion of bank debt coming due in 2011-2013. HCA has
recently taken action to reduce its near-term maturity schedule.
Between February 2009 and March 2010, HCA accessed the high yield
bond market on four separate occasions, issuing an aggregate
$310 million second lien notes and $4.2 billion first lien notes
and applying the proceeds to reduce borrowings under the bank
facility term loans due 2012 and 2013. In April 2010, the company
entered into an amend-and-extend agreement with its bank lenders
to extend maturity of $2 billion of its $5.5 billion term loan B
to March 2017 from November 2013 in exchange for a 100 bp increase
in pricing. Credit risk related to the company's inability to
organically address its upcoming maturities is offset by its
recently demonstrated strong debt capital market access. For
example, the company's most recent note issuance in March 2010 was
oversubscribed and upsized to $1.4 billion from $1 billion.
At June 30, 2010, HCA's solid liquidity was provided by
$1.9 billion of availability on the company's bank credit
facilities and $350 million of cash on hand. HCA generated
$1.4 billion of free cash flow (calculated as cash from operations
less dividends and capital expenditure) in 2009, representing a
strong for the industry 4.8% FCF margin, and up significantly from
the 2008 level of $390 million. HCA has been successful in
converting its recent growth in EBITDA into improved cash flow,
and a reduced level of capital expenditure has also supported the
positive trend. June 30, 2010 LTM FCF of ($661) million was
significantly impacted by special dividend payments to the
company's private equity owners. So far the owners have monetized
$2.3 billion of their initial $4.7 billion equity investment;
taking dividend payments of $1.8 billion and $500 million in
February and May of 2010. The dividend payments were funded
through draws on the bank facility, somewhat undoing HCA's recent
progress in addressing the bank maturity cliff. If $2.5 billion
of IPO proceeds were applied to reduction of bank debt, it would
basically offset the draws to fund the dividend payments. Fitch
believes full year 2010 FCF may be negative on the basis of the
special dividends, but in 2011 expects FCF to rebound to above
$1 billion on the basis of a mildly positive operating outlook.
As of June 30, 2010, bond maturities through 2014 include:
approximately $624 million maturing in 2010, $273 million maturing
in 2011, $900 million maturing in 2012, $1 billion maturing in
2013, and $1.6 billion maturing in 2014. Bank debt maturities
through 2014 include: $240 million in 2011, $3.4 billion in 2012
and $3.9 billion in 2013. At June 30, 2010 debt-to-EBITDA equaled
1.8x through the bank facility, 2.6x through the first lien notes,
3.7x through the second lien notes and 4.9x through the unsecured
notes. Fitch believes HCA has ample room under its bank facility
financial maintenance covenants. Fitch calculates that EBITDA
would have to decline by 37% from the June 30, 2010 LTM level to
trip the 7.75x leverage covenant. Beginning with the quarter
ending March 31, 2011, the covenant level will step down by 50 bp
to 7.25x. Based on Fitch's projected EBITDA and debt level, HCA
is expected to maintain a solid EBITDA operating cushion even
under the tightened covenant.
Guidelines For Further Rating Actions:
A one-notch upgrade to a 'B+' IDR would be supported by debt-to-
EBITDA declining to between 4.5x and 4.0x, and a two-notch upgrade
to a 'BB-' IDR would be supported by an expectation of debt
leverage sustained at 4.0x or below. Reductions in debt leverage
could occur through some combination of growth in EBITDA due to
improved operating performance and the application of IPO proceeds
and/or FCF to debt reduction. Other factors that would support an
upgrade include continued progress in addressing the 2012-2013
debt maturity cliff, and sustained positive FCF generation of
around $1 billion annually.
Debt Issue Ratings:
HCA's recovery ratings reflect Fitch's expectation that the
enterprise value of the company and recovery rates for its
creditors will be maximized in a restructuring scenario (going
concern) rather than liquidation. Based on LTM June 30, 2010
EBITDA and employing a 40% EBITDA discount and 7.0x multiple,
Fitch estimates a distressed enterprise value of $23 billion for
HCA. The 'BB/RR1' rating for the bank facility and first lien
notes reflect an expectation of 100% recovery for these lenders
under a bankruptcy scenario. The one-notch upgrade of the second
lien notes reflects improved recovery prospects on the basis of a
stronger post-restructuring EBITDA estimate. The 'BB-/RR2' rating
reflects expectation of recovery in the middle of the 71%-91%
range. The 'CCC/RR6' rating on the unsecured notes reflects
expectation of 0% recovery.
Fitch anticipates that a one-or-two notch upgrade of the IDR to
'B+' or 'BB-' would result in a one-notch upgrade of the bank debt
and first lien notes to 'BB+' from 'BB'. If an upgrade occurs in
conjunction with first lien debt reduction -- for example, as a
result of applying IPO proceeds to pay down debt -- the rating on
the second lien notes would probably improve to on par with the
first lien rating. Assuming $2.5 billion of IPO proceeds is used
to pay down first lien debt, it would improve Fitch's estimated
recovery for the second lien holders to 100%, implying a two-notch
upgrade to 'BB+/RR1' at a 'B+' IDR. In any scenario, recovery for
the unsecured note holders will remain significantly prejudiced by
the large amount of secured debt in the capital structure
(currently 75% of debt is secured), making it likely the unsecured
notes will remain rated below the IDR by at least one-notch.
HERBST GAMING: Bank Debt Trades at 44% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Herbst Gaming,
Inc., is a borrower traded in the secondary market at 56.17 cents-
on-the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 2.00
percentage points from the previous week, The Journal relates.
The Company pays 187.5 basis points above LIBOR to borrow under
the facility. The bank loan matures on Dec. 8, 2013. Moody's has
withdrawn its rating, while Standard & Poor's does not assign a
rating, on the bank debt. The loan is one of the biggest gainers
and losers among 198 widely quoted syndicated loans with five or
more bids in secondary trading for the week ended Friday.
About Herbst Gaming
Headquartered in Reno, Nevada, Herbst Gaming, Inc. --
http://www.herbstgaming.com/-- is a diversified gaming company.
The Company and its subsidiaries focus on two business lines, slot
route operations and casino operations. The Company's route
operations involves the exclusive installation and, as of
September 30, 2009, operation of around 6,300 slot machines in
non-casino locations, such as grocery stores, drug stores,
convenience stores, bars and restaurants. The casino operations
consist of 16 casinos located in Nevada, Iowa and Missouri.
The Company and 17 of its affiliates filed for Chapter 11
protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-
50752). Thomas H. Fell, Esq., and Gerald M. Gordon, Esq., at
Gordon Silver, represented the Debtors in their restructuring
effort. Herbst Gaming had $919.1 million in total assets and
debts of $1.57 billion as of the Chapter 11 filing. The
Bankruptcy Court issued an order on January 22, 2010, confirming
the company's amended joint plan of reorganization. The plan
became effective February 5, 2010.
HIGHWOODS PROPERTIES: Fitch Affirms Preferred Stock Rating at 'BB'
------------------------------------------------------------------
Fitch Ratings has affirmed these ratings for Highwoods Properties,
Inc., and Highwoods Realty Limited Partnership:
Highwoods Properties, Inc.
-- Issuer Default Rating at 'BBB-';
-- Preferred stock at 'BB'.
Highwoods Realty Limited Partnership
-- IDR at 'BBB-';
-- Unsecured revolving credit facility at 'BBB-';
-- Senior unsecured notes at 'BBB-'.
The Rating Outlook is Stable.
The affirmation reflects the company's credit strengths, including
its manageable debt maturity and lease expiration schedules,
granular tenant base and the company's maintenance of leverage and
coverage ratios appropriate for the rating category, despite the
weak operating environment. The Stable Outlook reflects
Highwood's strong liquidity and unencumbered asset coverage of
unsecured debt, offset by expected soft property-level
fundamentals.
The company's portfolio benefits from tenant diversification with
the top 10 tenants representing 24.5% of annual base rent (ABR) of
June 30, 2010. The U.S. Government is the company's largest
tenant, contributing 9.5% of annual base rent.
Highwoods' leverage ratio remains consistent with a 'BBB-' IDR, as
the company's net debt divided by recurring operating EBITDA was
5.6x for the 12 months ended June 30, 2010, compared with 5.8x and
6.5x during 2009 and 2008, respectively. The improvement in
leverage since 2008 stems from the company's 2009 $143 million
follow on equity issuance which funded repayment under the line of
credit, acquisitions and general corporate purposes. Highwoods'
is slightly undercapitalized, measured by the book based risk-
adjusted capitalization ratio. Highwoods' risk-adjusted
capitalization ratio of 0.94x is slightly worse than last year due
to the property valuation decline in its markets, according to
PPR, resulting in higher capital charges for its unencumbered and
encumbered real estate assets.
Certain offsetting factors exist. The economic recovery remains
fragile, with the high unemployment rate continuing to adversely
impact the business prospects of many of Highwoods' tenants.
Highwoods' portfolio is focused in the Southeast region, with the
top five sub-markets being Raleigh (16.3% of cash revenue as of
June 30, 2010), Atlanta (15.1%), Tampa (14.8%), Nashville (14.2%)
and Kansas City (9.9%). Fitch views the company's presence in
Raleigh as a credit positive as Highwoods is a well established
operator in this submarket.
However, as a result of this geographic focus with exposure to
some weaker submarkets with low barriers to entry, the portfolio
experienced a 2.8% decline in same property cash net operating
income (NOI) in 2009, a 0.4% same property NOI decline in the
first quarter of 2010 (1Q'10) and a 4.2% decline in 2Q'10. PPR
projects negative 4% and negative 4.2% NOI declines for 2010 and
2011 for Highwoods' markets. Since 2006, Highwoods has
underperformed a selected office REIT peer group by approximately
130bps in same property NOI performance and 280bps in terms of
occupancy. However, Highwoods has outperformed its markets, as
followed by PPR, by more than 200bps in both NOI growth and
occupancy since 2007.
Occupancy and rent deterioration since 2008 have challenged the
operations of Highwoods, but these challenges have not adversely
affected fixed charge coverage. Despite declines in same property
NOI and occupancy, fixed charge coverage (defined as recurring
operating EBITDA less recurring capital expenditures less straight
line rent adjustments, divided by interest expense, capitalized
interest and preferred dividends) was 2.0x for the 12 months ended
June 30, 2010 as compared to 2.1x for the year ended Dec. 31,
2009. Revenues from new development and properties placed into
service have helped buffer the effect of the same property
declines. Additionally, current and projected coverage levels
remain appropriate for the ratings.
The Stable Outlook reflects Highwoods' large unencumbered property
pool, which gives the company financial flexibility as a source of
contingent liquidity. Unencumbered asset coverage of unsecured
debt (based on 2Q'10 annualized unencumbered property NOI
(calculated as defined under the company's credit facility
covenants) divided by an 8% capitalization rate reflective of the
portfolio) was 2.8x as of June 30, 2010, which is strong for the
'BBB-' IDR. Moreover, covenants within the company's unsecured
revolving line of credit agreement and bond indenture do not
currently restrict Highwoods' financial flexibility.
Highwoods' liquidity position is strong for the rating category.
Sources of liquidity (unrestricted cash, availability under the
company's unsecured revolving credit facility, expected retained
cash flows from operating activities after dividends and
distributions) divided by uses of liquidity (pro rata debt
maturities and expected recurring capital expenditures) for
July 1, 2010 to Dec. 31, 2011 result in a liquidity coverage ratio
of 1.5x, and 1.9x if maturing secured debt is refinanced at a rate
of 80% of current secured debt outstanding. Furthermore, the
company's debt maturity schedule is well laddered with no more
than 17% of debt maturing annually over the next five years.
The two-notch differential between Highwoods' IDR and its
preferred stock rating is consistent with Fitch's criteria for
corporate entities with a 'BBB-' IDR. Based on Fitch's report,
'Equity Credit for Hybrids and Other Capital Securities' (dated
Dec. 29, 2009, and available at 'www.fitchratings.com'), Highwoods
Properties, Inc.'s preferred units are 75% equity-like and 25%
debt-like since they are perpetual and have no covenants but have
a cumulative deferral option in a going concern. Net debt plus
25% of preferred stock to recurring operating EBITDA was 5.6x as
of June 30, 2010, compared with 5.9x and 6.6x, as of Dec. 31, 2009
and Dec. 31, 2008, respectively.
Guidelines for Further Rating Actions:
These factors may have a positive impact on Highwoods' ratings:
-- Maintaining a healthy liquidity surplus;
-- Maintaining a fixed charge coverage ratio above 2.0x (for the
12 months ended June 30, 2010, fixed charge coverage was
2.0x);
-- Net debt to recurring operating EBITDA remaining in a range
below 6.0x. (for the 12 months ended June 30, 2010, leverage
was 5.6x);
-- Demonstrated access to the unsecured debt markets.
Going forward, these factors may have a negative impact on
Highwoods' ratings:
-- Maintaining fixed charge coverage below 1.8x;
-- Maintaining leverage above 6.5x;
-- A sustained decline in unencumbered asset coverage below 2.0x
(as defined as the annualized unencumbered property net
operating income (calculated as defined under the company's
credit facility covenants) divided by a 8% capitalization
rate).
HUNTSMAN INTERNATIONAL: S&P Assigns 'B-' Rating to $180 Mil. Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B-'
issue rating and '6' recovery rating to Huntsman International
LLC's $180 million senior subordinated notes, indicating
expectations of negligible recovery (0%-10%) in the event of a
payment default. The 'B-' issue rating is two notches below the
'B+' corporate credit ratings on Huntsman International LLC and
its parent Huntsman Corp. The outlooks on both corporate credit
ratings are stable.
S&P expects Huntsman to use proceeds from the $180 million notes
due 2021 to pay down existing senior subordinated notes due 2014.
The notes are offered under an existing indenture with terms
expected to be consistent with the $350 million subordinated notes
placed in September 2010. S&P's ratings also factor in the
company's announced increase of revolving credit facility
commitments to $290 million from the previous level of
$225 million.
See Standard & Poor's research update on Huntsman, published
Sept. 13, 2010, for a detailed corporate credit rating rationale.
In addition, for an updated and detailed recovery analysis on
Huntsman, see its recovery report to be published shortly on
RatingsDirect.
Huntsman International LLC is wholly owned by its parent Huntsman
Corp., which is a holding company with diverse chemical operations
that generated annual sales of approximately $8.6 billion for the
12 months ended June 30, 2010. Through a strategic emphasis on
increasing its performance chemicals business, Huntsman has
decreased reliance on commodity product categories and positioned
the company among the largest differentiated chemical companies
worldwide. A key segment for the company is polyurethane
chemicals, which constituted about 38% of the company's 2009
revenue and about 62% of reported segment EBITDA. Key products
include MDI and its input propylene oxide, which Huntsman also
produces. Other segments consist of performance products;
advanced materials; textile effects; and pigments, which includes
titanium dioxide.
Ratings List
Huntsman Corp.
Huntsman International LLC
Corporate credit rating B+/Stable/--
New Ratings
Huntsman International LLC
$180 million senior subordinated notes B-
Recovery rating 6
IDS ACQUISITION: S&P Assigns 'B+' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' preliminary
corporate credit rating to Phoenix, Arizona-based IDS Acquisition
Corp. At the same time, S&P assigned a 'BB-' preliminary issue-
level rating to the company's proposed $215 million senior secured
credit facility, one notch higher than the corporate credit
rating. The preliminary recovery rating on this debt is '2',
indicating S&P's expectation of a substantial (70%-90%) recovery
in a default scenario. The outlook is stable.
"The ratings on IDS primarily reflect the company's aggressive
financial risk profile," said Standard & Poor's credit analyst
Helena Song. "Its weak business risk profile, characterized by
leading market position in a niche industry, good profitability,
and decent cash flow generation, partially offset this factor.
S&P expects the company's revenue will grow modestly in 2011 and
that it will use portions of its free operation cash flow to
reduce debt, resulting total debt to EBITDA of 5x or less by the
end of 2011. The ratings also reflect S&P's expectation that IDS'
new revolver and decent cash flows generation support its adequate
liquidity."
IDS' financial risk profile is aggressive. Pro forma for the new
debt issuance, S&P expects total debt to EBITDA to be about 5.4x.
Credit metrics would likely improve in the next few quarters to
reach about 5x or less by the end of 2011, amid gradual recovery
in end markets and modest debt pay-down from excess cash flow.
S&P expects IDS to maintain debt to EBITDA of 4x-5x for the
rating. its ratings do not incorporate the possibility of a
significant acquisition or other meaningful shareholder
initiatives.
The outlook is stable. S&P expects the company to operate within
credit measures commensurate for the rating over the business
cycle. "However, S&P could lower the ratings if a worse-than-
expected market downturn and/or debt-financed activities adversely
affect liquidity or result in a meaningful deterioration of credit
measures, for example, debt to EBITDA meaningfully higher than 5x
for an extended period. Conversely, if the long-term
competitiveness of IDS' business remains healthy, and if this is
supported by the company's credit measures, liquidity, and
financial policies, S&P could upgrade the company," Ms. Song
added.
INTERPUBLIC GROUP: Fitch Upgrades Issuer Default Rating From 'BB+'
------------------------------------------------------------------
Fitch Ratings has upgraded the Issuer Default Rating of the
Interpublic Group of Companies' to 'BBB' from 'BB+' and upgraded
IPG's debt issue ratings. Fitch has also revised the Rating
Outlook to Stable from Positive. A full rating list is shown
below.
Rating Rationale:
-- The upgrade reflects Fitch's view that, IPG has demonstrated
its ability to deliver competitive organic revenue growth and
is in a good position to continue to grow its EBITDA margins
and reach competitive levels over the next few years. The
ratings and the upgrade reflects IPG's conservative financial
management and its actions to both, turn the company around
between 2005 and 2008, and to weather the economic recession
in 2009. Management has demonstrated its willingness and
ability to achieve an investment-grade credit profile. Fitch
notes the company's major peers are also investment-grade
rated.
-- Fitch believes revenue and EBITDA will continue to grow from
their cyclical troughs, and drive further improvements to
credit metrics. The ratings reflect Fitch's expectation that
IPG will continue to reduce unadjusted gross leverage from
its current level of 2.8 times and manage unadjusted
gross leverage at a level below 2.5x.
-- IPG's rating reflects its position in the industry as one of
the largest global advertising holding companies, its diverse
client base, and the company's ample liquidity.
-- The rating incorporates Fitch's belief that over the next two
years, as visibility improves in the market, the company
could return cash to shareholders in the form of dividends
and/or a share repurchase program. Fitch does not expect any
debt funded share buybacks. The tender offer for the
preferred stock is viewed by Fitch as the first step of IPG
shifting some focus to shareholders by reducing the potential
dilutive effects the preferred shares could have if they were
converted to common stock. Fitch believes any dividend and
share buy back program will be instituted in a prudent and
measured manner.
-- While cash balances of $1.9 billion make liquidity strong,
Fitch notes that under more normalized conditions, prior to
its financial reporting and operational issues, IPG retained
cash in excess of seasonal working-capital swings. Cash
balances were typically between $500 million and $1 billion.
The ratings incorporate the possibility that current cash
balances could decline over time, but maintain sufficient
cash to handle seasonal working-capital swings.
-- While advertising is a cyclical industry, Fitch recognizes
IPG and its GHC peers have reduced exposure to U.S.
advertising cycles, by diversifying into international
markets and marketing services businesses. In addition, the
risk of revenue cyclicality is balanced by the company's, and
the other GHCs', scalable cost structure.
Key Rating Drivers:
-- Near-term rating upward momentum is unlikely given Fitch's
current projections, however, a public commitment by the
company to maintain gross unadjusted leverage below 2.0x
coupled with peer level revenue growth and competitive EBITDA
margins could warrant upgrade consideration.
-- An unexpected near-term reversal in operating trends that
pushed metrics below their current levels for a protracted
period of time could pressure the ratings.
-- Over the long-term, operating performance or a leveraging
transaction that drove unadjusted gross leverage to levels
above 2.5x could pressure the ratings.
-- Also, while Fitch is comfortable with management's
willingness and ability to maintain its 'BBB' rating, a
change in the company's posture toward maintaining adequate
bondholder protection over the near and long term could
affect the rating negatively.
As of the last 12 months ended Sept. 30, 2010, IPG generated
approximately $480 million in free cash flow, converting a
meaningful percentage (67%) of EBITDA to FCF, a higher percentage
than Fitch would expect over the long term (40%-60%). Under
Fitch's base case model FCF is expected to be positive at
approximately $350 million to $450 million.
The company's approximately $75 million in capital expenditures
(excluding equipment rents) as a percentage of revenue was 1.2%,
reflecting the low capital intensity of the advertising agency
business. Furthermore, Fitch believes the September 2010 LTM
spend is at or near maintenance levels, reflecting Fitch's belief
that expenditures are largely discretionary on the part of
management and could be reduced during periods of operating
pressure. Fitch has modeled 2010 capital expenditures of
approximately $75 million to $100 million. Also, the company's
worldwide pension programs were $212 million underfunded. Fitch
believes future pension contributions will be manageable and are
incorporated into Fitch's FCF forecast.
As of Sept. 30, 2010 (3Q'10), IPG's liquidity position is
supported by $1.9 billion in cash. The company's bank credit
facility due 2013 provides $650 million in capacity and has
$631 million in availability (reduced by the June 2010 letter of
credit [LOC] balance of $19 million). In order to preserve
liquidity under the revolver, IPG established a separate
uncommitted credit facility to facilitate the issuance of LOCs;
total facility sized at approximately $71 million (GBP45 million)
with $66 million in LOCs issued. This LOC facility may only be
used for LOC issuances and is not available for liquidity
purposes. While the company maintains non-U.S. uncommitted credit
facilities, the available capacity under these uncommitted
facilities are not factored into Fitch's liquidity considerations.
The $650 million bank credit facility contains three key covenants
(minimum EBITDA, leverage ratio and interest coverage). Fitch
expects that IPG will not have issues in meeting its financial
covenants, as EBITDA is expected to improve from its cyclical
lows.
As of Sept. 30, 2010, IPG had approximately $1.2 billion in senior
unsecured notes. In the near term, $191 million is due on
Nov. 15, 2010; and $36 million is due Aug. 15, 2011. Also, IPG's
$600 million in convertible notes become puttable in 2012
($400 million) and 2013 ($200 million).
Fitch also anticipates the company will periodically tap its
liquidity to make smaller strategic acquisitions but believes this
activity will be executed prudently without negatively affecting
the rating.
Fitch expects IPG to have the liquidity and financial flexibility
to cover earn-outs, a modest level of acquisitions, its maturing
debt obligations and the liquidity to satisfy any notes put to the
company for redemption.
Unadjusted gross leverage at the 3Q'10 was 2.8x (adjusted gross
leverage [using the NPV lease method] at approximately 3.0x), an
improvement from the 3.0x in 3Q'09 (adjusted gross leverage at
3.2x) and a dramatic improvement when compared to 12.4x in 2005.
The decline from 3Q'09 was driven primarily by improved EBITDA.
Fitch expects unadjusted gross leverage to strengthen and be in
the range of 2.7x to 2.5x by year end.
Organic revenue growth has been positive over the last two
quarters (8.5% in 2Q'10 and 9.4% in 3Q'10) and Fitch calculated
EBITDA margins at 11.4%, as of LTM Sept. 30, 2010. The current
rating reflects Fitch's belief that revenues will continue to grow
at a more normalized level (3% to 5%), in line with GDP, and
EBITDA margins will continue to expand, as the company leverages
its existing infrastructure.
Fitch has upgraded these ratings:
IPG
-- IDR to 'BBB' from 'BB+';
-- Senior unsecured notes (including convertibles) to 'BBB' from
'BB+';
-- Bank credit facility to 'BBB' from 'BB+';
-- Cumulative convertible perpetual preferred stock to 'BB+'
from 'BB-'.
JABIL CIRCUIT: Moody's Assigns 'Ba1' Rating to $300 Mil. Notes
--------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Jabil Circuit,
Inc.'s proposed $300 million senior unsecured notes due 2020. The
rating outlook is stable. Net proceeds are expected to be used to
repay a portion of the $340 million outstanding under the term
loan portion of the company's credit facility. The assigned
ratings are subject to review of final documentation and no
material change in the terms and conditions of the transaction as
advised to Moody's.
This is a summary of the rating actions and Moody's current
ratings for Jabil:
* $300 Million Senior Unsecured Notes due 2020 -- Ba1 (LGD-4, 51%)
* Corporate Family Rating -- Ba1
* Probability of Default Rating - Ba1
* $312 Million Senior Unsecured Notes due July 2016 - Ba1 (LGD-4,
51%)
* $400 Million Senior Unsecured Global Notes due March 2018 - Ba1
(LGD-4, 51%)
* Speculative Grade Liquidity Rating - SGL-1
Ratings Rationale
The Ba1 corporate family and senior notes rating is supported by
Jabil's status as a preferred Tier 1 EMS provider, with expanding
core competencies and increasing customer penetration across a
broad mix of complex products, including higher margin
industrial/instrumentation, medical and defense/aerospace. The
rating also reflects solid cash flow generation, conservative
financial policies and a strong liquidity position. The rating is
constrained by the company's weak historical free cash flow
compared to its EMS peers, operating performance volatility and
low ROA. In addition, the Ba1 rating reflects Jabil's smaller
scale relative to larger and diversified EMS players, limited
demand visibility, significant customer concentration, and high
fixed costs associated with its vertical operations. Finally, the
Ba1 rating captures the company's increasing exposure to the more
volatile consumer segment, heightened competition from Asian
outsourcers and increasing presence of other EMS providers in
higher margin vertical segments.
The stable rating outlook reflects Moody's expectation that Jabil
will continue to demonstrate measured operating performance
improvement and solid cash flow generation as a result of good
execution on customer penetration and new program wins in segments
that carry richer margins. Though the demand environment is
expected to soften in the coming quarters as the global recovery
loses steam, Moody's anticipates that Jabil's credit profile will
benefit from the continued ramp of vertical, higher margin
programs leading to improved cash flow generation.
The rating could experience upward pressure upon evidence of
higher sustainable levels of free cash flow and continued
improvement in working capital management resulting in reduced FCF
volatility. Ratings could also migrate higher to the extent:
Jabil's expanded manufacturing and vertical capabilities led to
new mandates and market share gains, especially in non-traditional
EMS segments; revenue contribution from value-added EMS activities
resulted in higher sustainable operating margins in the 3-4% range
(Moody's adjusted); adjusted operating income ROA (net cash)
improved to at least 7%; and adjusted total debt/EBITDA declined
below 2.5x on a sustained basis.
Ratings could be negatively influenced if the company experiences:
material customer/program losses without offsetting increases in
new customer wins/program ramps; a sustained decline in core
operating margins (excludes restructuring/impairment costs and
amortization of intangibles) below 1.5% (Moody's adjusted);
sustained reduction in retained cash flow to debt below 20% or
consistently negative FCF; or a notable increase in financial
leverage, as measured by adjusted total debt/EBITDA above 3.7x.
Jabil's SGL-1 rating reflects its very good liquidity position.
This is supported by balance sheet cash of $744 million and
Moody's expectation of continued improvement in FCF generation due
to better working capital management. Jabil can exhibit several
consecutive quarters of negative FCF due to working capital usage
associated with inventory-build for new customer programs ramping
simultaneously when manufacturing volumes and yields are typically
lower. In its fourth fiscal quarter (ended August 2010), the
company generated positive FCF of $186 million (Moody's adjusted),
which offset prior quarters of negative FCF. As manufacturing
efficiencies improve and working capital needs subside combined
with increasing cash flow from inter-quarter receivable
collections, Moody's expect higher levels of FCF over the coming
year. The liquidity rating is also supported by Jabil's access to
an $800 million unsecured revolver maturing 2012 and Moody's
expectation the company will remain covenant compliant over the
next twelve months.
The last rating action was on October 21, 2009 when Moody's
affirmed Jabil's Ba1 CFR and revised the outlook to stable from
negative.
Headquartered in St. Petersburg, Florida, Jabil Circuit, Inc., is
an electronic product solutions company providing comprehensive
electronics design, manufacturing and product management services
to global electronics and technology companies in the networking,
telecommunications, computing and storage, peripherals, consumer
products, automotive and instrumentation and medical industries.
Revenues for the fiscal year ended August 31, 2010, were
$13.4 billion.
JABIL CIRCUIT: S&P Assigns 'BB+' Rating on Senior Unsec. Debt
-------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB+'
senior unsecured rating and '4' recovery rating to St. Petersburg,
Florida-based Jabil Circuit Inc.'s senior unsecured notes due
2020. The '4' recovery rating indicates S&P's expectation for
average (30%-50%) recovery of principal in the event of payment
default. The company intends to use proceeds of the new notes
primarily to repay term debt outstanding under its existing credit
facility.
"The rating on Jabil," said Standard & Poor's credit analyst Molly
Toll-Reed, "reflects S&P's expectation that the company will
sustain annualized revenue and EBITDA growth in the near term.
Ratings also reflect the company's diversified end markets and
consistent profitability despite difficult market conditions.
Highly competitive industry conditions and cyclical capital
requirements partially offset those factors." S&P expects
leverage to remain near 2x, and discretionary cash flow to be
modestly negative in the near term, affected by growth-related
capital expenditures.
The proposed transaction does not affect the 'BB+' long-term
corporate credit rating or S&P's '4' recovery rating on senior
unsecured issues.
Ratings List
Jabil Circuit Inc.
Corporate Credit Rating BB+/Stable/--
New Rating
Jabil Circuit Inc.
Senior Unsecured Notes due 2020 BB+
Recovery Rating 4
KRONOS INTERNATIONAL: Moody's Raises Corp. Family Rating to 'B2'
----------------------------------------------------------------
Moody's Investors Service raised Kronos International, Inc.'s
Corporate Family Rating to B2 from B3 and the rating on the
EUR400 million senior secured notes due 2013 to B3 from Caa1.
The upgrade reflects KII's strong operating results, attractive
titanium dioxide market conditions and the expectation that the
company will continue to enjoy strong margins and positive free
cash flow. The outlook is positive.
This summarizes the ratings changes:
Ratings upgraded:
Kronos International Inc.
* Corporate family rating -- B2 from B3
* Probability of default rating -- B2 from B3
* EUR400 million 6.5% Sr Sec Notes due 2013 -- B3 (LGD5, 72%) from
Caa1 (LGD5, 71%)
* Outlook: Positive
Ratings Rationale
Kronos has benefited from very favorable TiO2 industry conditions
that have supported a rapid increase in prices and high sales
volumes. High TiO2 industry capacity utilization rates have
resulted from producers working off excess inventory in 2009,
limited appetite on the part of TiO2 customers to build inventory,
permanent plant closures and unplanned production outages during
2010. The industry's tight supply-demand dynamic and improved
margins are projected to continue in 2011 and the ability to raise
prices further is expected to allow producers to offset increases
in ore raw material costs. Kronos' sales volumes are exceeding
pre-crisis levels. Any further rebound in demand (e.g., in the
real estate / construction end markets) would also support
producers' economics.
KII's liquidity is supported by its positive cash flow from
operations, cash balances and unused availability under its
EUR80 million revolving credit. Total use of the revolver was
restored to the company after the improved profitability in 2010
allowed the company to meet the original financial covenants and
revert the credit facility to its pre-amendment terms and
conditions, including access to the full EUR80 million of
commitments.
The positive outlook assumes that the TiO2 market will continue to
support high operating rates and KII will maintain its profit
margins, generate positive free cash flow over the next twelve
months and successfully renegotiate its revolver. An upgrade
could be considered if KII were to refinance its revolver,
maintain strong liquidity, generate Retained Cash Flow/Total Debt
greater than 10% and maintain a Total Debt/EBITDA ratio below
4.0x, on a sustained basis. The rating and outlook could be
revised if the company were to make debt-financed acquisitions or
take on additional debt when it refinances its notes.
Kronos International, Inc., produces and markets TiO2 pigments in
Europe, and is a wholly owned subsidiary of Kronos Worldwide,
Inc., headquartered in Dallas, Texas. For the twelve months ended
September 30, 2010, the company reported sales of $963 million.
LANDAMERICA FIN'L: Citigroup Unit to Pay $96 Mil. to Trustee
------------------------------------------------------------
Bankruptcy Law360 reports that a Citigroup Inc. subsidiary has
agreed to pay the trustee overseeing the liquidation of a unit of
LandAmerica Financial Group Inc. $95.5 million to settle claims
regarding the alleged fraudulent sale of auction rate securities.
About LandAmerica Financial
LandAmerica Financial Group, Inc., provides real estate
transaction services with offices nationwide and a vast network of
active agents. LandAmerica and its affiliates operate through
approximately 700 offices and a network of more than 10,000 active
agents throughout the world, including Mexico, Canada, the
Caribbean, Latin America, Europe, and Asia.
LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at
Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-
counsel. Zolfo Cooper is the restructuring advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent.
Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner &
Beran, PLC, serve as counsel to the Creditors Committee of 1031
Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel
to the Creditors Committee of LFG.
In its bankruptcy petition, LFG reported total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of
Sept. 30, 2008.
On March 6, 2009, affiliate LandAmerica Assessment Corporation,
aka National Assessment Corporation, filed its own petition for
Chapter 11 relief. Affiliate LandAmerica Title Company filed for
for Chapter 11 relief on March 27, 2009. LandAmerica Credit
Services, Inc., filed for Chapter 11 in July 2009.
LandAmerica filed a Joint Plan of Liquidation on Sept. 9, 2009.
The Bankruptcy Court confirmed that plan on Nov. 23, 2009, and the
plan took effect on Dec. 7, 2009.
LAS VEGAS SANDS: Bank Debt Trades at 7% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Las Vegas Sands
Corp. is a borrower traded in the secondary market at 92.73 cents-
on-the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 0.69
percentage points from the previous week, The Journal relates.
The Company pays 275 basis points above LIBOR to borrow under the
facility. The bank loan matures on November 26, 2016, and carries
Moody's B rating. The loan is one of the biggest gainers and
losers among 198 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) --
http://www.lasvegassands.com/-- owns and operates The Venetian
Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo
and convention center. The company also owns and operates the
Sands Macao, the first Las Vegas-style casino in Macao, China.
Las Vegas Sands has a 'B-' corporate family rating from Standard &
Poor's Ratings Services. As reported in the TCR on July 30, 2010,
Standard & Poor's placed its 'B-' corporate credit rating on the
Las Vegas Sands Corp. family of companies, as well as its issue-
level ratings on the companies' debt, on CreditWatch with positive
implications. "In addition to announcing strong performance
across its portfolio of properties during the second quarter on
its earning call, Las Vegas Sands also indicated that it will
pursue an amend-and-extend transaction with lenders in its U.S.
credit facilities," S&P pointed out.
LAS VEGAS SANDS: Bank Debt Trades at 5% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Las Vegas Sands
Corp. is a borrower traded in the secondary market at 94.53 cents-
on-the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents an increase of 0.94
percentage points from the previous week, The Journal relates.
The Company pays 175 basis points above LIBOR to borrow under the
facility. The bank loan matures on May 1, 2014. Moody's has
withdrawn its rating but still carries Standard & Poor's B rating.
The loan is one of the biggest gainers and losers among 198 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) --
http://www.lasvegassands.com/-- owns and operates The Venetian
Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo
and convention center. The company also owns and operates the
Sands Macao, the first Las Vegas-style casino in Macao, China.
Las Vegas Sands has a 'B-' corporate family rating from Standard &
Poor's Ratings Services. As reported in the TCR on July 30, 2010,
Standard & Poor's placed its 'B-' corporate credit rating on the
Las Vegas Sands Corp. family of companies, as well as its issue-
level ratings on the companies' debt, on CreditWatch with positive
implications. "In addition to announcing strong performance
across its portfolio of properties during the second quarter on
its earning call, Las Vegas Sands also indicated that it will
pursue an amend-and-extend transaction with lenders in its U.S.
credit facilities," S&P pointed out.
LEHMAN BROTHERS: LBIE's Report on 2 Years of Administration
-----------------------------------------------------------
The Joint Administrators of Lehman Brothers International (Europe)
-- In Administration have updated the creditor community with
details of their progress over the two-year period of the
Administration.
Tony Lomas, Joint Administrator of LBIE and Partner at PwC said:
"We have achieved exceptional progress in the administration,
dealing with some GBP29bn of securities and cash, having now
returned almost GBP12bn of this to clients. Whilst there are
still numerous major challenges to address, our actions to date
have generated significant realizations for creditors which will
be paid to them in due course."
The Joint Administrators' report details the considerable progress
made to date in resolving complex issues through the development
of ground breaking and pragmatic solutions.
Tony Lomas continued:
"Following the successful launch of our innovative Claims
Resolution Agreeement, which has seen almost GBP2bn of Trust
assets returned since March, we have focused on developing a new
approach for the accelerated agreement of unsecured claims. For
those creditors who want to take advantage of it, this will give
them finality and certainty regarding their claims in a much
shorter timescale than could otherwise be acheived."
The Joint Administrators are currently unable to advise LBIE's
creditors on the timing or amount of an interim dividend.
Commenting on this fact, Tony Lomas added:
"Despite our best intentions and the significant progress made on
very many fronts, the Court of Appeal judgment in July relating to
Client Money has unfortunately impacted badly on our ability to
commence distributions in the short term, both to Client Money
claimants and to unsecured creditors. Despite these challenges,
we are determined to return Trust Property and agree creditors'
claims at the earliest possible opportunity such that once the
legal landscape is clearer, distributions can commence."
Key achievements to date:
* GBP11.9bn of cash has been recovered to 14 September 2010,
of which GBP1.8bn was realized within the last six months.
* A framework has been developed for the expedited
resolution of claims for financial trading counterparties.
The mechanism will provide eligible creditors with an
option to achieve finality and certainty regarding its
financial claim against LBIE.
* Considerable progress has been achieved on the many
affiliate company issues in the period, and Court
directions are currently being sought to determine
ownership of substantial assets claimed by different
Lehman affiliates.
* LBIE has returned almost GBP2bn of assets to clients since
the March 2010, bar date under the Claims Resolution
Agreement.
* The pre-Administration Client Money judgment was handed
down by the Court of Appeal in August 2010. The judgment
as it stands has a material impact for both Client Money
claimants and unsecured creditors of LBIE, resulting in
significant delay to distributions and substantial
additional costs. The Administrators now need to embark
on a complex tracing exercise to identify additional
Client Money claimants and cash or assets which might
possibly be subject to a trust claim. Given the
overwhelming adverse impact on the LBIE House estate, the
Administrators have sought permission to appeal to the
Supreme Court.
* A sustained headcount of over 480 Lehman staff and
contractors continue to support the Administration, in
addition to PwC staff and the Administrators' legal
advisers. The contribution and collaboration between the
teams is key to the outstanding achievements made to date.
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 2009 Savings Plan Report
-----------------------------------------------
Lehman Brothers Holdings Inc. filed with the U.S. Securities and
Exchange Commission on October 20, 2010 its savings plan report
for the year ended December 31, 2009.
The Lehman Brothers Savings Plan is a defined contribution plan.
The Plan became effective January 1, 1984 and was amended and
restated from time to time thereafter, including a restatement on
December 31, 2008. Additionally, the Plan was further restated
as of December 31, 2009 to take into account certain full vesting
for force reductions in 2008.
Under the terms of the Plan, qualified employees of Lehman
Brothers Holdings Inc. and its participating subsidiaries are
eligible to participate in the Plan as soon as administratively
practicable following their date of employment.
The December 2008 Plan restatement revised the Plan to
discontinue all further employer contributions under the Plan for
Plan Years ending on or after December 31, 2008 and to permit a
single individual to serve as the Committee. The restatement
also made certain changes required by legislative and regulatory
changes, including changes under the Pension Protection Act of
2006.
In May 2009, Neuberger Berman LLC began operating independently
from the Debtors. It was determined that effective January 1,
2010, Neuberger would sponsor its own Savings Plan. Participant
account balances from the Plan for employees of Neuberger who
were active on January 1, 2010 or who had terminated from
Neuberger prior to this date but who had balances in the
Neuberger Berman Value Equity Fund, were transferred to the
Neuberger Berman Group 401(k) Plan on December 31, 2009. In
addition, employees of the Lehman Trust Companies were
transferred from the Company to Neuberger Berman during 2010 and
the account balances of these employees were moved from the Plan
to the Neuberger Berman Group 401(k) Plan as of July 15, 2010.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
Records of all financial transactions involving Plan assets
including receipt of contributions and investment earnings,
payment of benefits and expenses, and purchase and sale of
investments, are maintained by Fidelity Management Trust Company
and its affiliates.
A full-text copy of the Lehman Brothers Savings Plan report on
Form 11-K is available for free at:
http://ResearchArchives.com/t/s?6cc1
Lehman Brothers Savings Plan
Statements of Net Assets Available for Benefits
As of December 31, 2009
ASSETS:
Investment, at fair value $601,077,000
Participant loans 4,582,000
Employee contribution receivables 0
------------
605,659,000
LIABILITIES:
Accrued expenses and other liabilities 127,000
------------
Net assets available for benefits, at fair value 605,532,000
Adjustment from fair value to contract value for
fully benefit-responsive investment contracts 0
------------
NET ASSETS AVAILABLE FOR BENEFITS $605,532,000
============
Lehman Brothers Savings Plan
Statements of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2009
Additions:
Additions to net assets attributed to:
Investment income:
Net realized and unrealized appreciation/
(depreciation) in fair value $262,822,000
Interest and dividends 16,891,000
-------------
Total investment income/(loss) 279,713,000
Contributions:
Participants 21,252,000
Rollovers 1,257,000
-------------
Total contributions 22,509,000
Transfers in from other Plans:
Capital Crossing Inc. 401(k) Plan 0
-------------
Total transfers 0
-------------
Total additions/(deductions) 302,222,000
Deductions:
Deductions from net assets attributed to:
Participant withdrawals (220,671,000)
Administrative fees (509,000)
-------------
Transfers out to other Plans:
Neuberger Berman Group 401(k)Plan (512,296,000)
-------------
Total transfers (512,296,000)
-------------
Total deductions (733,476,000)
-------------
Net decrease in net assets (431,254,000)
Net assets available for benefits:
Beginning of year 1,036,786,000
-------------
End of year $605,532,000
=============
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: LBI Delays Form 10-Q for Aug. 31 Quarter
---------------------------------------------------------
William J. Fox, the chief financial officer and executive vice
president of Lehman Brothers Holdings, Inc., discloses in an NT
10-Q filed with the Securities and Exchange Commission on October
15, 2010 that Lehman Brothers is not timely filing its quarterly
report on Form 10-Q for the fiscal quarter ended August 31, 2010
because of:
(1) Lehman Brothers' filing of a voluntary petition for relief
under Chapter 11 of the United States Code in the United
States Bankruptcy Court for the Southern District of New
York on September 15, 2008;
(2) the commencement of various administrative or civil
rehabilitation proceedings of subsidiaries comprising
significant parts of Lehman Brothers' European and Asian
businesses;
(3) the sale since September 15, 2008 of significant
businesses comprising the Registrant's historical
business; and
(4) the completion on May 4, 2009 of the transfer to Neuberger
Berman Group LLC of Lehman Brothers' investment management
business.
Mr. Fox relates that Lehman Brothers currently has neither access
to major components of its internal systems nor the ability to
prepare its consolidated financial statements and the remainder
of the report, with all the required disclosures, to have them
properly certified by its current executive officers, and have
them reviewed by its independent auditors.
Accordingly, Lehman Brothers will not be in a position to file by
the fifth calendar day following the required filing date,
October 15, 2010, as prescribed in Rule 12b-25.
Lehman Brothers has not filed its quarterly reports for the
fiscal quarters ended August 31, 2008; February 28, 2009; May 31,
2009; August 31, 2009; February 28, 2010; and May 31, 2010 and
has not filed its annual report for the fiscal years ended
November 30, 2008 and November 30, 2009.
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: SIPA Trustee Files May-October Probe Report
------------------------------------------------------------
James W. Giddens, as SIPA trustee for Lehman Brothers Inc.,
submitted his interim report for the period from May 11 to
October 26, 2010.
The Trustee related that as of October 26, he has administered
nearly $113,000,000,000 -- making LBI's SIPA liquidation the
largest and most complex broker-dealer liquidation ever
attempted, and one of the largest and most complex insolvency
proceedings of any kind in history. The Trustee added that he
has dealt with approximately 125,000 customer claims seeking the
return of nearly $180 billion. He notes that more than 110,000
of the claims, aggregating more than $92,300,000,000, were
resolved through account transfers to solvent broker-dealers in
prior report periods.
The Trustee disclosed that the remaining more than 14,000
customer claims seeking $88,000,000,000 are subject to the SIPA
customer claims process. He noted that during the Report Period,
and less than 15 months after the bar date for the filing of all
claims in the proceeding, each of the claimants had received a
notice of claim determination.
The Trustee also disclosed that as of October 26, more than
10,000 claims involving $47.6 billion have been resolved to final
determination and of the claims; more than 800 have been allowed
as customer claims with an allowed amount of roughly
$9,500,000,000; nearly 2,800 claims seeking $10,500,000,000 have
been reclassified as general creditor claims to be reconciled, if
appropriate, at a later date; and nearly 6,900 claims seeking
$27,500,000,000 have been denied.
"While the account transfer and claims processes have materially
advanced the administration of the LBI Estate, very substantial
claims and issues remain," the Trustee told Judge Peck of the
U.S. Bankruptcy Court for the Southern District of New York.
The claims include complex, omnibus claims filed by Lehman
Brothers Holdings Inc.; Lehman Brothers International (Europe);
and other affiliates of the global Lehman enterprise, as well as
claims of prime brokerage, institutional, pension, and retail
clients of the firm, any single group of which would rival if not
exceed the size of any prior SIPA liquidation, the Trustee added.
About 3,500 asserted customer claims seeking $40,500,000,000
remain pending, the Trustee noted. He added that many of the
claims are subject to objections to claims determinations that
primarily involve legal questions as to whether certain financial
products, valuation dates, or contractual arrangements qualify
for customer status under SIPA.
The Trustee related that he has a team dedicated to the
resolution of LBHI's customer claims that during the Report
Period has cooperatively reduced pending customer claims from
$19,900,000,000 to $7,900,000,000. The Trustee similarly has a
team dedicated to the resolution of LBIE's $22,200,000,000 claim
that during the Report Period lead to $6,200,000,000 for LBIE
customers.
The Debtor currently has $20,640,000,000 in assets, which
includes cash, cash equivalents, and other short-term liquid
assets totaling $7,690,000,000 and securities aggregating
$12,950,000,000.
A full text copy of the Trustee's report is available for free
at http://bankrupt.com/misc/LBITrstRprt10-26.pdf
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Proposes to Implement 2011 Incentive Program
-------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors seek
authority from Judge Peck of the U.S. Bankruptcy Court for the
Southern District of New York to implement a program to pay up to
$15 million of bonuses in 2011 to employees involved in unwinding
their derivatives business.
The program, which they call "derivatives employee incentive
plan," offers a performance-based bonus pool of up to $15
million, plus $15 million that has yet to be earned under an
incentive program previously approved by the Court.
Late last year, the Court approved a similar incentive program,
which offered a bonus pool of up to $50 million for Lehman
employees in the derivatives business. About $15 million of the
2010 bonus pool has yet to be earned and will be handed out next
year along with the $15 million the Debtors are seeking to set
aside through the proposed 2011 incentive plan.
The Debtors estimate that about 175 employees will be required in
2011 to wind down their derivatives business. Of this, 150
employees will work full-time while the rest will work part-time.
"The 2011 incentive plan was developed by the Debtors primarily
to maintain the momentum and the success the Debtors have
realized in the ongoing wind down of [their] derivatives
businesses," Robert Hershan, managing director of Alvarez and
Marsal, says in court papers.
Mr. Hershan adds that the Debtors have already recovered $2.5
billion in cash as of August 31, 2010, bringing the total amount
of cash recovered from their derivatives assets to more than $11
billion since September 15, 2008.
The incentive program will be less costly in 2011 because 95% of
derivatives contracts have been resolved, Mr. Hershan tells the
Court. At the outset, Lehman had 10,000 derivatives contracts
involving 1.7 million transactions, according to an October 28,
2010 report by Bloomberg News.
To be eligible for the 2011 incentive plan, a worker must be
employed by the Debtors or by LAMCO Holdings LLC and its
subsidiaries from January 1 to December 31, 2011. LAMCO is a new
subsidiary established by the Debtors to provide management
services and administer their assets. Many of LBHI's employees
were transferred to LAMCO in compliance with a prior court order.
Workers hired between January 1 to October 1, 2011, and are
employed through the end of the year as well as those who have
dedicated a portion of their time to unwind the Debtors'
derivatives businesses may also be eligible to earn incentives.
An employee will not be entitled to receive incentive payment if
he is terminated without cause before September 30, 2011.
However, he will receive his base salary, contractual bonus and
50% of the incentives he earned under the 2010 incentive program.
Meanwhile, an employee who is terminated without cause after
September 30, 2011 but before December 31, 2011, will not be
entitled to receive incentive payment unless the maximum amount
distributed to eligible employees is less than 75% of the $15
million incentive pool.
Under the 2011 incentive plan, the Debtors and the LAMCO entities
may offer to extend the contracts of their employees.
Contributions to the incentive pool will be calculated based upon
total recovery value in excess of the greater of $15 billion and
the total recovery value determined for the 2010 incentive
program as of December 31, 2010.
A full-text copy of the document comparing the Debtors' 2010 and
2011 incentive plans is available without charge at:
http://bankrupt.com/misc/LBHI_2011IncentivePlan.pdf
The Court will consider approval of the 2011 incentive plan at
the hearing scheduled for November 17, 2010. Deadline for filing
objections is November 10, 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: Wants to Allow Lloyd's to Pay $10-Mil. to Settle
-----------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's authority
for Lloyd's London and London Market Company to pay $10 million in
connection with a settlement deal involving their former officers.
Lloyd's is one of the firms tapped by Lehman Brothers Holdings
Inc. to provide insurance coverage to former and incumbent
directors and officers who are facing various lawsuits, some of
which stemmed from the company's bankruptcy filing in 2008. It
provides coverage of $10 million in excess of $45 million.
LBHI earlier entered into an agreement with Booth Foundation Inc.
to settle the lawsuits it filed against former Lehman officers
including Richard Fuld Jr. and Martin Shafiroff. The lawsuits
allege unsuitability and failure to supervise claims, which
stemmed from alleged activities of certain Lehman brokers in
connection with the sale to Booth Foundation of LBHI-issued
notes. The lawsuits are pending in the U.S. Court of Appeals for
the Second Circuit.
According to LBHI's lawyer, Richard Krasnow, Esq., at Weil
Gotshal & Manges LLP, in New York, the settlement deal will not
take effect unless the U.S. Bankruptcy Court for the Southern
District of New York permits Lloyd's to pay $10 million to Booth
Foundation as condition for the dismissal of the lawsuits.
Mr. Krasnow says that if Lloyd's is barred from paying out the
$10 million, Mr. Fuld could file a claim against LBHI for that
amount.
"Consequently, payment of the settlement amount under the Lloyd's
policy will reduce or eliminate the claims that Fuld could assert
against the Debtors," Mr. Krasnow says in court papers.
The settlement payment would equal about 5% of Lehman's total
insurance coverage for directors and officers from 2007 to 2008,
according to an October 28, 2010 report by Bloomberg News.
The Court will hold a hearing on November 17, 2010, to consider
approval of the request. Deadline for filing objections is
November 10, 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: Asks for Court ok for 3 Insurers to Pay D&Os
-------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors seek a
court order authorizing Zurich American Insurance Company and two
other insurance firms to pay the legal fees of their former
officers and employees.
The insurance policies of Zurich American, ACE Bermuda Insurance
Ltd. and St. Paul Mercury Insurance Co. cover the defense costs
of former executives and employees of LBHI who are facing a
number of lawsuits that stemmed from the company's bankruptcy
filing. Collectively, the three insurers provide $55 million in
coverage in excess of $70 million for the period May 16, 2007 to
May 16, 2008.
Richard Krasnow, Esq. at Weil Gotshal & Manges LLP, in New York,
says the proposed payment would ensure that the Lehman personnel
involved in the lawsuits have continued access to funding for
their defense costs in case the funds provided by LBHI's three
other insurers is exhausted.
LBHI anticipates that the $35 million being provided by
Continental Casualty Company, U.S. Specialty Insurance Company
and Lloyd's London and London Market Company will be exhausted by
the end of November 2010.
Continental Casualty's and Lloyd's insurance policies provide $10
million each while that of U.S. Specialty provides up to $15
million.
LBHI also seeks a court ruling approving the payment by XL
Specialty Insurance Company and Federal Insurance Company of
legal bills and costs that have been accruing since May 12, 2009.
The firms provide $35 million in coverage for the period May 16,
2008 to May 16, 2011.
The Court will consider approval of the request at the hearing
scheduled for November 17, 2010. Deadline for filing objections
is November 10, 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)
LOAN EXCHANGE: Case Summary & 14 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Loan Exchange Group, a California General Partnership
100 N. Westlake Boulevard, #203
Westlake Village, CA 91362
Bankruptcy Case No.: 10-23699
Chapter 11 Petition Date: October 28, 2010
Court: U.S. Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: Marc A. Duxbury, Esq.
1901 Camino Vida Roble, Suite 114
Carlsbad, CA 92008
Tel: (760) 438-5291
E-mail: info@countylawcenter.com
Scheduled Assets: $12,050,570
Scheduled Debts: $4,920,968
The petition was signed by Roger S. McCurdy, managing general
partner.
Debtor's List of 14 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Elkhorn Land Co c/o M. Mitchel 2nd Deed of Trust $1,650,000
1718 Tecalote Drive, #20
Fallbook, CA 92028
Rubicon Mortgage Fund LLC 1st Deed of Trust $1,200,000
3575 Mt. Diablo Boulevard, #215
Lafayette, CA 94549
S & S Land Development -- $548,965
21 West Laurel Drive, #49
Salina, CA 93906
Raylene Miracle -- $327,206
4 Seaside Circle
Newport Beach, CA 92662
HP Gottscal c/o Henry Kurtz -- $300,000
100 N. Westlake Boulevard, Suite 203
Westlake Village, CA 91361
James Pettit 4th Deed of Trust $280,000
516 Dolan Road
Moss Landing, CA 93950
WP Gottschalk c/o Henry Kurtz -- $200,000
Henry Kurtz, CPA -- $110,000
Anthony Lewis 3rd Deed of Trust $100,000
Elizabeth Derry -- $70,000
Bohnen, Rosenthal & Kreeft Legal Fees $53,119
Hemraj D. Singh 3rd Deed of Trust $50,000
Susan Frankilin -- $20,000
Deborah Cutler Judgment $11,678
LOCAL INSIGHT: Bank Debt Trades at 39% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Local Insight
Regatta Holding, Inc., is a borrower traded in the secondary
market at 60.50 cents-on-the-dollar during the week ended Friday,
October 29, 2010, according to data compiled by Loan Pricing Corp.
and reported in The Wall Street Journal. This represents a drop
of 12.67 percentage points from the previous week, The Journal
relates. The Company pays 400 basis points above LIBOR to borrow
under the facility. The bank loan matures on April 15, 2015, and
carries Moody's Caa2 rating and Standard & Poor's CCC- rating.
The loan is one of the biggest gainers and losers among 198 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Local Insight Regatta
Headquartered in Englewood, Colorado, Local Insight Regatta
Holdings, Inc. is a leading provider of local search advertising
products and services, targeting small and medium-sized
businesses, with a range of lead-generating solutions that enable
consumers to find products and services they need. The company's
integrated suite of local advertising solutions includes print
Yellow Pages as well as a range of digital advertising products
and services designed to establish, maintain and optimize an
advertiser's online presence. For the 12 months ended June 30,
2010, the company reported revenues of approximately $554 million.
The company is an indirect, wholly-owned subsidiary of Local
Insight Media Holdings, Inc. whose primary owner is Welsh, Carson,
Anderson & Stowe.
According to the Troubled Company Reporter on Aug. 25, 2010,
Standard & Poor's Ratings Services lowered its ratings on
Englewood, Colo.-based Local Insight Regatta Holdings Inc. to
'CCC-' from 'CCC+'. The rating outlook is negative.
Moody's Investors Service downgraded Local Insight Regatta
Holdings, Inc.'s Corporate Family Rating and its Probability of
Default Rating, each to Ca from Caa1, and associated instrument
ratings detailed below. The multi-notch downgrades reflect
Moody's view that the company is likely to violate
financialcovenants for the September 30, 2010 reporting period and
will need to restructure its balance sheet in the near term.
Moody's estimate recovery prospects to be average for a Ca rating
with subordinated debt taking most of the loss. As announced on
September 8, 2010, management engaged a financial advisor to
evaluate the capital structure of its parent holding company,
Local Insight Media Holdings, Inc. These downgrades complete
Moody's review initiated on September 9, 2010.
LONGVIEW POWER: S&P Downgrades Rating on Senior Loan to 'B'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Longview
Power LLC's senior secured facilities to 'B' from 'BB-'. The
facilities consist of a $300 million first-lien term facility due
2014, a $350 million delayed-draw term facility due 2013, a
$250 million construction loan facility with term conversion due
2013, a $100 million revolving facility maturing 2013, and a
$100 million synthetic letter of credit facility maturing 2014.
All the facilities have a '2' recovery rating, indicating S&P's
expectation of substantial (70%-90%) recovery of principal in the
event of a payment default. The outlook is negative.
"The lower rating reflects the significantly heightened risks
posed by ongoing construction delays at the project," said
Standard & Poor's credit analyst Swami Venkataraman.
Specifically, the 'B' rating reflects these risks:
* Construction delays that now leave the project with only a one-
month cushion before an event of default under the lending
agreements;
* Substantial vulnerability to merchant energy prices in the PJM
market;
* Economic conditions that are likely to significantly push out
the expected tightening in PJM's reserve margins and hence heat
rates;
* Weak outlook for capacity auction prices for the PJM-RTO zone,
owing to a combination of low demand growth and strong demand
response resource participation; and
* Significant refinancing risk in 2014 that ranges from $1,000 to
$1,200 per kilowatt under various scenarios.
When S&P lowered the rating on the project facilities to 'BB-'
from 'BB' on May 19, 2010, the target date for substantial
completion was revised to March 19, 2011, from the original
guaranteed date of March 12, 2011. The delay was caused when Aker
Kaverner-Songer suspended boiler erection in December 2009 to
consult with Foster Wheeler, the manufacturer, on a dimensional
issue. It now appears that efforts undertaken since January 2010
to rectify the problem were themselves in error, and the revised
target for substantial completion is now July 29, 2011, about a
month ahead of the Aug. 31, 2011, "term conversion" date under the
lending facilities. Failure to achieve this deadline would be an
event of default.
Longview is a single-unit 695-megawatt supercritical, pulverized
coal-fired electric generating facility in the PJM market, located
in Monongalia County, W.Va. The project is 89.25% owned by
GenPower Holdings L.P., a joint venture that is 10% owned by power
project developer GenPower LLC and 90% owned by First Reserve Fund
XI L.P. Siemens Financial Services owns 10.75%. Fund XI is a
$7.8 billion private equity fund sponsored by First Reserve Corp.
The negative outlook reflects risks to credit quality that could
arise should further construction delays occur. S&P could lower
the ratings in the event of further delays or if commodity price
environment worsens further when the plant enters into operation
in 2011. S&P could revise the outlook to stable if construction
is completed on schedule and within cost, and if commodity price
conditions remain stable.
LUPINE HILL: Case Summary & 5 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Lupine Hill Vineyard, LLC
40 Lupine Hill Road
Napa, CA 94558
Bankruptcy Case No.: 10-14147
Chapter 11 Petition Date: October 28, 2010
Court: U.S. Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtor's Counsel: Michael C. Fallon, Esq.
LAW OFFICES OF MICHAEL C. FALLON
100 E. Street, #219
Santa Rosa, CA 95404
Tel: (707) 546-6770
E-mail: mcfallon@fallonlaw.net
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's five largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/canb10-14147.pdf
The petition was signed by Kimberly E. Frazier, managing member.
M/I HOMES: Moody's Assigns 'Caa1' Rating to Senior Unsec. Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to M/I Homes,
Inc.'s proposed $150 million senior unsecured notes due 2018. In
addition, Moody's affirmed the company's B3 corporate family
rating and probability of default rating, the Caa1 rating on its
senior unsecured notes due 2012, and the Caa3 rating on its
preferred stock. The outlook is stable.
Downgrades:
Issuer: M/I Homes, Inc.
-- Senior Unsecured Regular Bond/Debenture, Downgraded to LGD4,
65% from LGD4, 59%
Assignments:
Issuer: M/I Homes, Inc.
-- Senior Unsecured Regular Bond/Debenture, Assigned 65 - LGD4
to Caa1
Ratings Rationale
The B3 corporate family rating reflects weakness in many of M/I
Homes' key credits metrics, including interest coverage and return
on assets. The Caa1 rating on the proposed unsecured notes
results from their capital structure position beneath secured
obligations. Moody's expects these metrics to remain weak through
2011. In addition, free-cash-flow to debt and funds from
operations to debt, will likely remain weak absent the benefits of
inventory liquidation and tax refunds, and free-cash-flow may in
fact turn negative as working capital needs increase, due to
reinvestment in inventory.
At the same time, the company's corporate family rating is
supported by its relatively modest adjusted debt to capitalization
ratio relative to its similarly-rated peers, and its focus on
margin expansion and return to profitability. In addition, the
rating acknowledges M/I Homes' conservative and disciplined
operating strategy, which has helped the company stay relatively
clear of significant off balance sheet obligations and long land
positions.
The stable outlook acknowledges M/I Homes' success in improving
gross margins during 2010, quelling the pace of asset impairments,
and generating positive cash flow throughout the downturn, thus
building its unrestricted cash position relative to debt.
Improved profitability prospects in 2011 will likely enable the
company to gradually restore credit metrics.
Going forward, the ratings and/or outlook could be lowered if the
company's cash flow generation weakened significantly without
additional revenue growth, the size of its impairment charges
increased, or adjusted debt leverage increased to higher than 65%.
The ratings could be raised if the company augmented its liquidity
position, sustainably restored profitability, and held adjusted
gross debt leverage below 55%.
M/I HOMES: S&P Assigns 'B-' Rating to $150 Mil. Senior Notes
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue rating
and '4' recovery rating to M/I Homes Inc.'s $150 million senior
unsecured notes due 2018. The '4' recovery rating indicates S&P's
expectation that lenders can expect an average (30%-50%) recovery
in the event of a payment default. S&P's outlook is negative.
M/I Homes Corp. Inc. is the issuer of the new notes, which are
guaranteed by all of the company's subsidiaries, except for M/I
Financial Corp., M/I Title Agency Ltd., TransOhio Residential
Title Agency Ltd., Washington/Metro Residential Title Agency LLC,
K-Tampa LLC, and The M/I Homes Foundation. The new notes will
rank pari passu with all of the company's existing and future
senior unsecured obligations and subordinate to the company's
secured debt.
The company may redeem some or all of the notes at any time prior
to 2014 at a redemption price equal to 100% of par plus accrued
and unpaid interest expense and a variable make-whole amount. The
company may also redeem the notes anytime after 2014 under the
terms provided in the offering memorandum. If a change-of-control
event were to occur, holders of the new notes would have the right
to put the notes to the company at 101% of par plus accrued and
unpaid interest.
The company has indicated that it intends to use proceeds from the
offering to partially fund its recently announced tender for up to
$200 million of its 6.875% senior notes due 2012, as well as for
general corporate purposes, which may include the repurchase of
additional senior notes that remain outstanding. S&P also note
that the company could upsize the offering to $200 million if the
aggregate amount of the 6.875% senior notes due 2012 being
tendered exceeded the company's $140 million expectation.
This debt-for-debt transaction will push out the company's 2012
maturities to 2018 and meet a refinancing requirement governing
its secured credit facility. However, pro forma for the
transaction, S&P estimate that the company's interest incurred
will increase roughly $1 million per quarter, which will pressure
interest coverage and liquidity.
S&P's ratings on M/I Homes reflect the homebuilder's vulnerable
business risk profile, characterized by a smaller market position
and narrow geographic focus, as well as an aggressive financial
risk profile, given currently less-than-adequate liquidity, in
S&P's view, and weak interest coverage, though leverage is low
relative to rated homebuilder peers.
S&P's negative outlook reflects its view that higher interest cost
relating to the refinancing of the company's 2012 senior notes,
along with increased working capital expenditures on land
acquisition and development, will further constrain liquidity.
Ratings List
M/I Homes Inc.
Corporate credit rating B-/Negative/--
Rating Assigned
M/I Homes Inc.
$150 million senior unsecured notes due 2018 B-
Recovery rating 4
M/I HOMES: Fitch Assigns 'B+/RR3' Rating to $200 Mil. Notes
-----------------------------------------------------------
Fitch Ratings has assigned a 'B+/RR3' rating to M/I Homes, Inc.'s
$200 million 8.625% senior notes issuance that matures on Nov. 15,
2018. Proceeds from this notes issuance will be used to fund the
recently announced tender offer for the company's existing 6.875%
senior unsecured notes due 2012. As of Oct. 27, 2010, MHO
announced that approximately $117.5 million principal amount of
senior notes have been validly tendered and not withdrawn. The
tender offer expires on Nov. 10, 2010. Any remaining proceeds
from this offering will be used for general corporate purposes.
Fitch currently rates MHO:
-- Issuer Default Rating 'B';
-- Senior Unsecured Notes 'B+/RR3';
-- Series A non-cumulative perpetual preferred stock 'CCC/RR6'.
The Rating Outlook is Negative.
The Recovery Rating of 'RR3' on MHO's senior unsecured notes
indicates good recovery prospects for holders of this debt issue.
MHO's exposure to claims made pursuant to performance bonds and
the possibility that part of these contingent liabilities would
have a claim against the company's assets were considered in
determining the recovery for the unsecured debt holders. The
'RR6' on MHO's preferred stock indicates poor recovery prospects
in a default scenario. Fitch applied a liquidation value analysis
for these RRs.
The issuance of the senior notes and the renewal of the company's
revolving credit facility in June 2010 address Fitch's earlier
concern regarding near-term liquidity risk for MHO. The company
ended the 2010 third quarter with $43.9 million of unrestricted
cash and $34.5 million of borrowing availability under its
$140 million secured revolving credit facility.
The ratings and Outlook for MHO reflect the challenges still
facing the housing market. As expected, housing metrics (new home
sales, existing home sales and housing starts) have sharply
contracted following the expiration of the national housing tax
credit. Clearly, the credit 'stole' demand from upcoming months.
Fitch tends to think that the summer and fall months will be most
affected by the 'pull forward' of the housing credit but
'normalized' demand may not be evident until late winter and some
ratcheting up in demand (in response to even lower home prices,
low mortgage rates and better employment and consumer confidence)
may not be apparent until next spring. As such, Fitch has
moderated its housing forecasts for 2010 and 2011. Fitch
currently projects new housing starts to increase 3.6% in 2010 and
15.8% in 2011. New home sales are forecasted to fall 13.9% in
2010 and grow 14% in 2011. Fitch expects existing home sales to
decline 7.5% in 2010 and increase 6% in 2011.
MACATAWA BANK: Announces 2 New Appointments to Board of Directors
-----------------------------------------------------------------
Macatawa Bank Corporation announced Tuesday that Robert L. Herr
and Thomas P. Rosenbach have been appointed to the Macatawa Bank
Corporation Board of Directors.
Mr. Herr is a former Partner with Crowe Horwath LLP. He retired
in 2007 after 40 years with the firm.
Mr. Rosenbach has been a Partner with Beene Garter LLP since 1990
and he currently serves as Managing Partner of the firm.
Macatawa Bank Corporation's Chairman of the Board, Richard L.
Postma, commented, "We are very pleased to announce that Bob Herr
and Tom Rosenbach have joined our Board of Directors. Each brings
substantial expertise in financial and accounting matters to the
Board and each is a well-respected and well-known member of the
West Michigan business community. We believe the addition of Bob
and Tom to the Board is another important step in our efforts to
build accountability, confidence and performance in Macatawa
Bank."
About Macatawa Bank
Headquartered in Holland, Michigan, Macatawa Bank Corporation
(Nasdaq: MCBC) is the parent company for Macatawa Bank. Through
its banking subsidiary, the Company offers a full range of
banking, investment and trust services to individuals, businesses,
and governmental entities from a network of 26 full service
branches located in communities in Kent County, Ottawa County, and
northern Allegan County.
The Company's balance sheet at September 30, 2010, showed
$1.61 billion in total assets, $1.54 billion in total liabilities,
and stockholders' equity of $67.0 million.
As reported in the Troubled Company Reporter on April 7, 2010,
Crowe Horwath LLP, in Grand Rapids, Mich., expressed substantial
doubt about the Company's ability to continue as a going concern,
following the Company's 2009 results. The independent auditors
noted that the Company incurred significant net losses in 2009 and
2008, primarily from higher provisions for loan losses and
expenses associated with the administration and disposition of
non-performing assets at its wholly owned bank subsidiary Macatawa
Bank.
MACATAWA BANK: Reports $703,000 Net Income in September 30 Quarter
------------------------------------------------------------------
Macatawa Bank Corporation reported net income available to common
shares of $703,000 for the third quarter ended September 30, 2010,
compared to a net loss available to common shares of $20.9 million
for the third quarter 2009 and net income of $1.7 million for the
second quarter 2010. For the first nine months of 2010, the
Company's net loss available to common shares totaled
$18.7 million, compared to a net loss of $57.3 million for the
same period in 2009.
"We are pleased to have achieved two consecutive quarters of
profitability and improvements in several capital and performance
metrics," said Richard L. Postma, Chairman of Macatawa Bank
Corporation. "These results are the product of hard and focused
work by our people and the disciplined approach we continue to
implement across the Company. But to be clear, two profitable
quarters are only a beginning. We recognize that the results from
the two most recent quarters are preceded by six consecutive
quarters of high net losses. We must continue to focus our
efforts to build accountability, confidence and performance in
Macatawa Bank. Our goal remains to return to 'well-capitalized'
status, and we continue to work closely with regulators in our
efforts to comply with the terms of our consent order. We remain
committed to doing the things necessary to achieve sustained
profitability in order to serve West Michigan as a strong
community bank. There is much work yet to be done."
Net interest income for the third quarter 2010 totaled
$12.4 million, a decrease of $381,000 from the second quarter 2010
and a decrease of $757,000 from the third quarter 2009.
The provision for loan losses of $550,000 for the third quarter
2010 declined by $1.3 million from the second quarter 2010, and
was down $21.0 million from the third quarter 2009. Net charge-
offs were $4.6 million for the third quarter 2010, compared to
$6.3 million for the second quarter 2010 and $11.2 million for the
third quarter 2009.
At Sept. 30, 2010, the Company's non-performing loans were
$84.4 million (6.61% of total loans) compared to $95.1 million
(6.96% of total loans) at June 30, 2010, and $103.9 million (6.88%
of total loans) at December 31, 2009.
Total assets were $1.61 billion at Sept. 30, 2010, a decrease of
$219 million from $1.83 billion at Dec. 31, 2009. Total loans
were $1.28 billion at Sept. 30, 2010, down $233 million from
$1.51 billion at Dec. 31, 2009.
Two of the three regulatory capital ratios for Macatawa Bank,
including the tier one risk-based capital ratio and the tier one
leverage capital ratio, were maintained at levels in excess of
those ordinarily required to be categorized as "well capitalized"
under applicable regulatory capital guidelines. Despite these
ratios, the Bank was categorized as "adequately capitalized" as
its total risk-based capital ratio of 9.23% was below the 10.0%
minimum ordinarily required to be categorized as "well
capitalized." Because the Bank is subject to a consent order, the
Bank cannot be categorized as "well capitalized" regardless of its
capital levels. At Sept. 30, 2010, the Bank did not have capital
at levels required by its consent order.
The Company's balance sheet at September 30, 2010, showed
$1.61 billion in total assets, $1.54 billion in total liabilities,
and stockholders' equity of $67.0 million.
As reported in the Troubled Company Reporter on April 7, 2010,
Crowe Horwath LLP, in Grand Rapids, Mich., expressed substantial
doubt about the Company's ability to continue as a going concern,
following the Company's 2009 results. The independent auditors
noted that the Company incurred significant net losses in 2009 and
2008, primarily from higher provisions for loan losses and
expenses associated with the administration and disposition of
non-performing assets at its wholly owned bank subsidiary Macatawa
Bank.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6d38
A full-text copy of the earnings release is available for free at:
http://researcharchives.com/t/s?6d39
About Macatawa Bank
Headquartered in Holland, Michigan, Macatawa Bank Corporation
(Nasdaq: MCBC) is the parent company for Macatawa Bank. Through
its banking subsidiary, the Company offers a full range of
banking, investment and trust services to individuals, businesses,
and governmental entities from a network of 26 full service
branches located in communities in Kent County, Ottawa County, and
northern Allegan County.
MARINER ENERGY: S&P Retains CreditWatch Positive on 'B+' Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Mariner Energy Inc., including the 'B+' corporate credit rating,
remain on CreditWatch with positive implications, where they were
placed on April 15, 2010. The CreditWatch placement followed the
announcement that the company had entered into an agreement to be
acquired by Apache Corp. (A-/Stable/A-2). The agreement is
subject to regulatory clearance and stockholder approval.
Under the terms of the agreement, Apache has agreed to issue
0.17043 common shares of Apache and $7.80 in cash for each
outstanding share of Mariner common stock for a total transaction
value of $3.9 billion (including the assumption of about
$1.2 billion of existing Mariner debt).
"The combination will increase Apache's existing Gulf Shelf and
Permian Basin positions and provide deepwater E&P growth
opportunities," said Standard & Poor's credit analyst Marc
Bromberg. At year-end 2009, Mariner had 1.1Tcfe of proved
reserves (66% proved developed, 53% natural gas).
Upon completion of the company's acquisition by Apache Corp., S&P
plans to equalize the ratings with the 'A-' rating of Apache and
remove the ratings from CreditWatch.
MEDASSETS INC: Moody's Assigns 'B1' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service assigned B1 Corporate Family and
Probability of Default Ratings to MedAssets, Inc. Moody's also
assigned a Ba3 (LGD3, 32%) rating to the company's proposed senior
secured credit facility and a B3 (LGD5, 86%) rating to the
proposed senior unsecured note offering. Moody's understands that
the proceeds of the proposed credit facility and unsecured notes
will be used to fund the $850 million acquisition of The Broadlane
Group, Inc. and to refinance MedAssets' existing debt. The
outlook for the ratings is stable. Finally, Moody's assigned a
Speculative Grade Liquidity Rating of SGL-2. This is the first
time that Moody's has assigned public ratings to MedAssets.
This is a summary of Moody's actions.
Ratings assigned:
-- Corporate Family Rating, B1
-- Probability of Default Rating, B1
-- $150 million senior secured revolver due 2015, Ba3 (LGD3,
32%)
-- $600 million senior secured term loan due 2016, Ba3 (LGD3,
32%)
-- $360 million senior unsecured notes due 2018, B3 (LGD5, 86%)
-- Speculative Grade Liquidity Rating, SGL-2
Moody's has previously stated that it expects to withdraw the
ratings of Broadlane (including the B2 Corporate Family Rating) at
the close of the transaction.
Ratings Rationale
MedAssets' B1 Corporate Family Rating reflects the significant
leverage being taken on to complete the proposed acquisition of
Broadlane. Pro forma for the acquisition financing, MedAssets is
expected to increase its funded debt by over four times.
Therefore, pro forma leverage and interest coverage metrics are
initially expected to be weak for the rating category. However,
the rating contemplates the expectation that adjusted leverage can
be reduced quickly through a combination of the company's solid
cash flow and EBITDA growth. The rating also reflects the risks
associated with the fact that the proposed acquisition will be the
largest completed by MedAssets to date. However, Moody's believes
Broadlane's operations represent a sound strategic fit by adding
incrementally to MedAssets' existing service offerings in its
spend management business and will increase scale and market
presence.
The stable rating outlook anticipates that the company will focus
on reducing leverage through both debt repayment and EBITDA
expansion following the Broadlane transaction and remain
disciplined with respect to any additional acquisition activity in
order to improve credit metrics to levels that are more
appropriate for the B1 rating. Additionally, Moody's anticipate
that changes in the regulatory environment and continued
challenges to hospital's operating results will drive demand for
the company's offerings. This demand is expected to result in
continued revenue growth and stable cash flow generation.
The Speculative Grade Liquidity Rating of SGL-2 reflects Moody's
expectation that the company will maintain good liquidity in the
four quarters following the closing of the proposed transaction.
Moody's believe this will be reflected by more than sufficient
cash flow generation to fund all working capital and capital
spending needs, available revolver balances and ample headroom in
compliance with the new covenant requirements.
Given the prospective nature of the rating and the expectation of
initially weak credit metrics for the rating category, Moody's do
not anticipate a near term upgrade of the ratings. However, if
the company can effectively integrate the Broadlane business,
continue to report robust growth rates, and materially reduce
leverage through a combination of debt repayment and increased
profitability, Moody's could consider upward pressure on the
ratings. More specifically, Moody's would expect to see leverage
sustainably returning to 3.0x and free cash flow coverage of debt
of around 8.0% before changing the outlook to positive or
upgrading the ratings.
If the company does not quickly reduce leverage from pro forma
levels either because of integration issues, slower growth in any
of its business lines, or increased acquisition activity, Moody's
could change the outlook to negative or downgrade the ratings.
MedAssets provides technology-enabled products and services to
hospitals, health systems and other ancillary healthcare providers
in the areas of revenue cycle and spend management. Revenue for
the twelve months ended September 30, 2010 approximated
$380 million.
MEDASSETS INC: S&P Assigns 'B+' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B+'
corporate credit rating to Alpharetta, Georgia-based MedAssets
Inc. The rating outlook is stable.
At the same time, S&P assigned a preliminary 'BB?' issue credit
rating and a preliminary '2' recovery rating to MedAssets'
$750 million senior secured credit facility. The preliminary '2'
recovery rating indicates S&P's expectation for substantial (70%-
90%) recovery of principal in the event of default. The facility
consists of a $150 million revolving credit facility due in 2015
and a $600 million term loan B due 2016.
S&P also assigned a preliminary 'B-' issue credit rating and a
preliminary '6' recovery rating to MedAssets' $360 million of
senior unsecured notes due 2018. The preliminary '6' recovery
rating indicates S&P's expectation of negligible (0%-10%) recovery
in the event of payment default.
"The rating on MedAssets reflects the high leverage the company
will have following the acquisition of competitor group purchasing
organization The Broadlane Group," explained Standard & Poor's
credit analyst Michael G. Berrian. While this acquisition will
give the spend management business greater scale, the company is
still subject to competition from larger, more established players
Novation and Premier, and now has a majority of revenues that are
susceptible to economic weakness. Furthermore, MedAssets' revenue
cycle management business remains vulnerable to competitors with
deeper pockets and to technology risk.
"The acquisition of The Broadlane Group only modestly improves
S&P's assessment of MedAssets' business risk profile by increasing
the scale of its spend management business, which is composed
primarily of its GPO," added Mr. Berrian. Pro forma for this
acquisition, the spend management business will account for 60% of
the combined company's total revenues. The combined company has
strong customer retention and, in contrast to its larger
competitors, MedAssets does not require hospitals to use the
company as their sole provider of GPO services, nor does it
require members to take an equity stake in the company. It also
differentiates itself by giving providers information with which
to negotiate directly with manufacturers for lower pricing on
medical devices. MedAssets will now be able to cross-sell
Broadlane's service lines and products.
METRO-GOLDWYN-MAYER: Bank Debt Trades at 54% Off
------------------------------------------------
Participations in a syndicated loan under which Metro-Goldwyn-
Mayer Inc. is a borrower traded in the secondary market at 46.17
cents-on-the-dollar during the week ended Friday, October 29,
2010, according to data compiled by Loan Pricing Corp. and
reported in The Wall Street Journal. This represents an increase
of 1.58 percentage points from the previous week, The Journal
relates. The Company pays 275 basis points above LIBOR to borrow
under the facility, which matures on April 8, 2012. The debt is
not rated by Moody's and Standard & Poor's. The loan is one of
the biggest gainers and losers among 198 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
As reported by the Troubled Company Reporter on October 8, 2010,
Metro-Goldwyn-Mayer Inc. has begun a solicitation of votes from
its secured lenders for a pre-packaged plan of reorganization.
MGM expects to continue normal business operations throughout the
restructuring process. The Plan provides for MGM's employees,
vendors, participants, guilds, and licensees to be unimpaired.
The Plan provides for MGM's secured lenders to exchange more than
$4 billion in outstanding debt for approximately 95.3 percent of
equity in MGM upon its emergence from Chapter 11. Spyglass
Entertainment would contribute certain assets to the reorganized
company in exchange for approximately 0.52 percent of the
reorganized company. In addition, two entities owned by Spyglass
affiliates -- Cypress Entertainment Group, Inc. and Garoge, Inc. -
- will merge with and into a subsidiary of MGM, with the MGM
subsidiary as the surviving entity. The stockholders of Cypress
and Garoge will receive approximately 4.17 percent of the
reorganized company in exchange.
The Wall Street Journal's Mike Spector and Lauren A. E. Schuker
report that Metro-Goldwyn-Mayer Inc. is in the final stages of
preparing a prepackaged bankruptcy filing to address its more than
$4 billion in debt.
About Metro-Goldwyn-Mayer
Metro-Goldwyn-Mayer, Inc., is an independent, privately held
motion picture, television, home video, and theatrical production
and Distribution Company. The Company owns the world's largest
library of modern films, comprising approximately 4,000 titles,
and over 10,400 episodes of television programming. An investor
consortium, comprised of Providence Equity Partners, TPG Capital,
Sony Corporation of America, Comcast Corporation, DLJ Merchant
Banking Partners and Quadrangle Group, owns MGM.
MGM is grappling with $3.7 billion in debt. MGM has received a
series of forbearance agreements from its bondholders and lenders,
wherein the lenders extended the period during which MGM won't
have to pay principal and interest on its bank debt, including a
revolving credit facility. The latest forbearance agreement
expires October 29.
MGM tried to sell itself in March 2010 but received low bids. MGM
has hired investment bank Moelis & Company and the law firm
Skadden, Arps, Slate, Meagher & Flom. In August 2009, it hired
the restructuring expert Stephen F. Cooper to help lead the
company.
Metro-Goldwyn-Mayer Inc. said October 29 its secured lenders
voting in the Company's solicitation process have overwhelmingly
approved its proposed plan of reorganization. MGM said it will
now move expeditiously to implement that Plan, which will
dramatically reduce its debt load and put the Company in a strong
position to execute its business strategy. As of November 1,
2010, MGM has not yet filed its Chapter 11 petition.
MGM MIRAGE: Bank Debt Trades at 0.27% Off in Secondary Market
-------------------------------------------------------------
Participations in a syndicated loan under which MGM Mirage is a
borrower traded in the secondary market at 99.73 cents-on-the-
dollar during the week ended Friday, October 29, 2010, according
to data compiled by Loan Pricing Corp. and reported in The Wall
Street Journal. This represents an increase of 1.10 percentage
points from the previous week, The Journal relates. The Company
pays 400 basis points above LIBOR to borrow under the facility.
The bank loan matures on October 3, 2011. The debt is not rated
by Moody's and Standard & Poor's. The loan is one of the biggest
gainers and losers among 198 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
The Troubled Company Reporter said on October 29, 2010, that
Moody's changed MGM Resort International's rating outlook to
positive from stable and assigned a Caa1 rating to the company's
new $500 million 10% senior unsecured notes due 2016. MGM's Caa1
Corporate Family Rating, Caa2 Probability of Default Rating, B1
senior secured rating, Caa1 senior unsecured rating, and Caa3
senior subordinated ratings were affirmed. MGM's SGL-3
Speculative Grade Liquidity rating remains unchanged.
On October 27, 2010, the TCR reported Standard & Poor's Ratings
Services assigned its 'CCC+' issue-level rating to Las Vegas-based
casino operator MGM Resorts International's proposed $500 million
senior notes due 2016. In addition, S&P assigned the notes a
recovery rating of '4', indicating its expectation of average
(30% to 50%) recovery for noteholders in the event of a payment
default. The company will use proceeds from the notes offering to
repay a portion of the $1.2 billion owed to lenders under its
senior secured credit facility that have not elected to extent
their commitments beyond the existing maturity date of October
2011.
The corporate credit rating on MGM Resorts is 'CCC+' and the
rating outlook is stable. The corporate credit rating reflects
MGM's significant debt burden, S&P's expectation for meaningful
declines in cash flow generation in 2010, and the company's still
weak overall liquidity position. While MGM maintains a leading
presence on the Las Vegas Strip, 2010 will be another challenging
year for the Strip, and prospects for a meaningful rebound in 2011
are uncertain. This proposed notes offering, which follows a
recent primary offering of common stock, has bolstered liquidity.
However, the company's ability to weather the current downturn and
continue to service its debt obligations over the longer term
relies on a substantial rebound in cash flow generation.
MGM MIRAGE owns and operates casino and hotel properties
throughout the US. The company also has a 50% interest in
CityCenter Holdings, LLC, a mixed-use project on the Las Vegas
Strip and a 50% interest in MGM Grand Paradise Macau, a hotel-
casino resort in Macau S.A.R. MGM generates around $6.0 billion
of net revenue annually.
MICHAELS STORES: Bank Debt Trades at 3% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Michaels Stores
Inc. is a borrower traded in the secondary market at 96.85 cents-
on-the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents a drop of 0.56
percentage points from the previous week, The Journal relates.
The Company pays 225 basis points above LIBOR to borrow under the
facility. The bank loan matures on October 31, 2013, and carries
Moody's B2 rating and Standard & Poor's B+ rating. The loan is
one of the biggest gainers and losers among 198 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
As reported by the Troubled Company Reporter on October 8, 2010,
Moody's assigned Caa1 rating to Michaels Stores, Inc.'s proposed
$750 million senior unsecured bonds due 2018. Proceeds from the
note offering will be used to tender for an existing $750 million
series of unsecured notes. The refinancing, while improving the
maturity profile of the company, has no impact on Michaels'
current capital structure or ratings.
Michaels Stores Inc. filed its quarterly report on Form 10-Q,
reporting a net loss of $1 million for the quarter ended July 31,
2010, compared to net income of $2 million for the quarter ended
August 1, 2009. The Company had net sales of $831 million for the
quarter ended July 31, 2010, compared with $807 million during the
comparable period in 2009.
The Company's balance sheet at July 31, 2010, showed $1.58 billion
in total assets, $4.34 billion in total liabilities, and a
stockholders' deficit of $2.75 billion.
Headquartered in Irving, Texas, Michaels Stores, Inc., is the
largest arts and crafts specialty retailer in North America. As
of March 9, 2009, the Company operated 1,105 "Michaels" retail
stores in the United States and Canada and 161 Aaron Brothers
Stores.
MIKE CARTER CONSTRUCTION: Case Summary & Creditors List
-------------------------------------------------------
Debtor: Mike Carter Construction, Inc.
435 12th Street West
Bradenton, FL 34205
Bankruptcy Case No.: 10-26156
Chapter 11 Petition Date: October 29, 2010
Court: U.S. Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Catherine Peek McEwen
Debtor's Counsel: Richard C. Prosser, Esq.
STICHTER, RIEDEL, BLAIN & PROSSER PA
110 E. Madison Street, Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
E-mail: rprosser.ecf@srbp.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 four largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/flmb10-26156.pdf
The petition was signed by Michael M. Carter, president.
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
R.D. Marina, LLC 10-26144 10/29/10
R.D. Marina II, LLC -- --
Mike Carter I, Inc. 10-26153 10/29/10
Design Team West, Inc. 10-26152 10/29/10
Production Properties 10-26150 10/29/10
Michael M. and Jaymie Carter -- --
MIKE CARTER I: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Mike Carter I, Inc.
435 12th Street West
Bradenton, FL 34205
Bankruptcy Case No.: 10-26153
Chapter 11 Petition Date: October 29, 2010
Court: U.S. Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Catherine Peek McEwen
Debtor's Counsel: Richard C. Prosser, Esq.
STICHTER, RIEDEL, BLAIN & PROSSER PA
110 E. Madison Street, Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
E-mail: rprosser.ecf@srbp.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 three largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/flmb10-26153.pdf
The petition was signed by Michael M. Carter, president.
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
R.D. Marina, LLC 10-26144 10/29/10
R.D. Marina II, LLC -- --
Mike Carter Construction, Inc. 10-26156 10/29/10
Design Team West, Inc. 10-26152 10/29/10
Production Properties 10-26150 10/29/10
Michael M. and Jaymie Carter -- --
MOA HOSPITALITY: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: MOA Hospitality, Inc.
1925 S. Milestone Drive, Suite B
Salt Lake City, UT 84104
Bankruptcy Case No.: 10-24237
Chapter 11 Petition Date: October 28, 2010
Court: U.S. Bankruptcy Court
Southern District of New York (White Plains)
Judge: Robert D. Drain
Debtor's Counsel: Gerard DiConza, Esq.
DICONZA LAW, P.C.
630 Third Avenue, Seventh Floor
New York, NY 10017
Tel: (212) 682-4940
Fax: (212) 682-4942
E-mail: gdiconza@dlawpc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Lawrence Lopater, president.
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Paul F. Wallace, et al. 10-22998 05/20/10
MOMENTIVE PERFORMANCE: Bank Debt Trades at 3% Off
-------------------------------------------------
Participations in a syndicated loan under which Momentive
Performance Materials is a borrower traded in the secondary market
at 97.44 cents-on-the-dollar during the week ended Friday, October
29, 2010, according to data compiled by Loan Pricing Corp. and
reported in The Wall Street Journal. This represents an increase
of 1.11 percentage points from the previous week, The Journal
relates. The Company pays 250 basis points above LIBOR to borrow
under the facility. The bank loan matures on December 5, 2013,
and carries Moody's Ba3 rating and Standard & Poor's B rating.
The loan is one of the biggest gainers and losers among 198 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Momentive Performance
Momentive Performance Materials, Inc., is a producer of silicones
and silicone derivatives, and is engaged in the development and
manufacture of products derived from quartz and specialty
ceramics. As of Dec. 31, 2008, the Company had 25 production
sites located worldwide, which allows it to produce the majority
of its products locally in the Americas, Europe and Asia.
Momentive's customers include companies in industries, such as
Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola,
L'Oreal, BASF, The Home Depot and Lowe's.
As of March 30, 2010, Momentive had $3.22 billion in total assets,
$3.79 billion in total liabilities, and stockholders' deficit of
$565.8 million.
Momentive carries a 'CCC-' corporate credit rating from Standard &
Poor's Ratings Services.
Standard & Poor's Ratings Services said that it affirmed all its
ratings on Hexion Specialty Chemicals Inc., including the 'B-'
corporate credit rating. The outlook is stable. At the same
time, S&P placed all its ratings on Momentive Performance
Materials Inc., including the 'CCC+' corporate credit rating, on
CreditWatch with positive implications.
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on Momentive Performance Materials Inc. to
'B-' from 'CCC+'. In addition, S&P raised its second lien, senior
unsecured, and subordinated debt ratings by one notch to 'CCC'
(two notches below the corporate credit rating) from 'CCC-'. The
recovery ratings on these classes of debt remain unchanged at '6',
indicating S&P's expectation of negligible (0%-10%) recovery in
the event of a payment default.
Moody's Investors Service assigned a Caa1 rating to the guaranteed
senior unsecured notes due 2020 of Momentive Performance Materials
Inc. Proceeds from the notes will be used to fund the repayment
of roughly $1.2 billion of guaranteed senior unsecured notes due
2014 under the tender offer announced last week. The new notes
contain a springing lien and would obtain a second lien on
existing collateral if and when the existing $200 million second
lien notes are repaid. The outlook is stable.
MOOHAVEN DAIRY: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Moohaven Dairy LLC
aka Morell Farms Inc.
dba Brent Morell Farms
5061 Robinson Road
Cass City, MI 48726
Tel: (989) 545-5615
Bankruptcy Case No.: 10-72251
Chapter 11 Petition Date: October 21, 2010
Court: U.S. Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Walter Shapero
Debtor's Counsel: H. Dale Cubitt, Esq.
186 E. Huron Avenue
P.O. Box 178
Bad Axe, MI 48413
Tel: (989) 269-9903
E-mail: edcubitt@echoicemi.com
Scheduled Assets: $5,820,849
Scheduled Debts: $5,870,305
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/mieb10-72251.pdf
The petition was signed by Brent Morell, member and general
manager.
MORTGAGE LENDERS: Trust Settles With BofA for $44 Million
---------------------------------------------------------
Bankruptcy Law360 reports that Judge Peter J. Walsh of the U.S.
Bankruptcy Court for the District of Delaware on Wednesday signed
off on a $44 million settlement between the liquidating trustee
for Mortgage Lenders Network Liquidating Trust and Bank of America
NA stemming from the subprime lender's pre-filing dealings with a
Merill Lynch & Co. Inc. subsidiary.
Middletown, Connecticut-based Mortgage Lenders Network USA Inc. --
http://www.mlnusa.com/-- was once the 15th largest mortgage
lender in the United States. The Company filed for Chapter 11
protection on February 5, 2007 (Bankr. D. Del. Case No. 07-10146).
Pachulski Stang Ziehl & Jones LLP represents the Debtor. Blank
Rome LLP represents the Official Committee of Unsecured Creditors.
In the Debtor's schedules of assets and liabilities filed with the
Court, it disclosed total assets of $464,847,213 and total debts
of $556,459,464.
The Honorable Peter J. Walsh approved the Company's liquidating
Chapter 11 plan in February 2009. A full-text copy of the
Debtor's First Amended Liquidating Plan under Chapter 11 of the
Bankruptcy Code, dated December 19, 2008, is available at
http://is.gd/1a3YGat no charge.
MT3 PARTNERS: Gets OK to Hire Hartman & Hartman as Bankr. Counsel
-----------------------------------------------------------------
MT3 Partners, LLC, sought and obtained authorization from the Hon.
Gregg W. Zive of the U.S. Bankruptcy Court for the District of
Nevada to employ The Law Firm of Hartman & Hartman as bankruptcy
counsel.
Hartman & Hartman will represent the Debtor in connection with
reorganization matters.
Hartman & Hartman will be paid based on the hourly rates of its
personnel:
Hartman $400
Contract Lawyer $185
Legal Assistant $95
Jeffrey L. Hartman, Esq., a member at Hartman & Hartman, assures
the Court that the firm is "disinterested" as that term is defined
in Section 101(14) of the Bankruptcy Code.
Reno, Nevada-based MT3 Partners, LLC, filed for Chapter 11
bankruptcy protection on October 22, 2010 (Bankr. D. Nev. Case No.
10-54172). The Debtor estimated its assets at $50 million to
$100 million and debts at $10 million to $50 million.
MT3 PARTNERS: Section 341(a) Meeting Scheduled for Nov. 29
----------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of MT3
Partners, LLC's creditors on November 29, 2010, at 2:00 p.m. The
meeting will be held at 300 Booth Street, Room 3024, Reno, NV
89509.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Reno, Nevada-based MT3 Partners, LLC, filed for Chapter 11
bankruptcy protection on October 22, 2010 (Bankr. D. Nev. Case No.
10-54172). Jeffrey L. Hartman, Esq., at Hartman & Hartman,
assists the Debtor in its restructuring effort. The Debtor
estimated its assets at $50 million to $100 million and debts at
$10 million to $50 million.
MUMTAZ GEORGE: Case Summary & 18 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Mumtaz Hanna George
34010 Ramble Hills Drive
Farmington Hills, MI 48331
Bankruptcy Case No.: 10-72383
Chapter 11 Petition Date: October 22, 2010
Court: U.S. Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Thomas J. Tucker
Debtor's Counsel: Ethan D. Dunn, Esq.
MAXWELL DUNN, PLC
26339 Woodward Avenue
Huntington Woods, MI 48070
Tel: (248) 246-1166
E-mail: bankruptcy@maxwelldunnlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Debtor's 18 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/mieb10-72383.pdf
NCL CORPORATION: Moody's Upgrades Corporate Family Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service upgraded NCL Corporation Limited's
Corporate Family Rating to B2 from B3 and upgraded the company's
11.75% senior secured notes to B2 from B3. NCL's SGL-3
Speculative Grade Liquidity rating was affirmed. The rating
outlook is stable.
"The rating upgrade reflects NCL's better than expected earnings
performance due to increasing net revenue yields and continued
cost containment, as well as Moody's expectation of a further
improvement in leverage", said Moody's analyst, Peggy Holloway.
Moody's anticipates that NCL's debt/EBITDA -- based on an
estimated full year's earnings contribution from the recently
delivered Norwegian Epic -- will be around 6.5 times by year-end
2010. This compares to nearly 7.5 times at year-end 2009.
Moody's also expects that rising demand will translate into a
further earnings increase in 2011 as well as positive free cash
flow. As a result, NCL's debt/EBITDA is expected to decline
further as the company's free cash flow can be deployed toward
debt repayment in 2011.
Rating Rationale
NCL's B2 Corporate Family Rating continues to acknowledge that
despite the expectation of an improvement in EBITDA, leverage will
remain high. The ratings also consider specific industry risks
including heavy reliance on leisure travelers, the specialized
nature of the ship asset class, and the need for large non-
cancelable commitments of capital for new ships several years in
advance of delivery.
The stable rating reflects Moody's view that the recovery in
cruise demand will continue to drive earnings growth and further
deleveraging in 2011. The outlook also anticipates that NCL will
maintain its adequate liquidity profile. The ratings could be
upgraded if NCL reduces and sustains debt to EBITDA around 5.25
times and if the demand environment remains strong enough to
support a solid return on new ship building capital spending. The
ratings could be downgraded if the industry recovery stalls and
net revenue yields decline materially.
Ratings upgraded:
-- Corporate Family Rating to B2 from B3
-- Probability of Default Rating to B2 from B3
-- $450 million 11.75% guaranteed senior secured notes due
11/15/2016 to B2 (LGD 4, 50%) from B3 (LGD 4, 50%)
Rating affirmed:
-- Speculative Grade Liquidity rating at SGL-3
NETFLIX INC: S&P Raises Corporate Credit Rating to 'BB+'
--------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit and senior unsecured debt ratings on Los Gatos, Calif.-
based Netflix Inc. to 'BB+' from 'BB-'. The rating outlook is
stable.
The recovery rating remains a '3', indicating S&P's expectation of
meaningful (50%-70%) recovery for noteholders in the event of a
payment default. S&P's criteria limits the recovery rating on
'BB' category senior unsecured debt issues to the same level as
the corporate credit rating.
"The ratings on Netflix reflect S&P's view that the company has
transitioned its business from a DVD rental business to both a
streaming and DVD-by-mail business and has maintained a moderate
financial profile while rapidly growing," said Standard & Poor's
credit analyst Jayne Ross. Overall, S&P views the company's
business risk profile as fair, reflecting its position in the
highly competitive and rapidly evolving domestic media
entertainment industry, its dependence on decisions made by movie
studios, a growing subscriber base, and the technology and content
risks associated with delivery of video movies and streaming
content to the home. In addition, S&P views the company's
financial risk profile as intermediate, reflecting its good cash
flow-generating capabilities, credit protection measures that are
currently strong for the rating, and adequate liquidity.
NETWORK COMMUNICATIONS: Delays, Again, Filing of Form 10-Q
----------------------------------------------------------
In a regulatory filing Thursday, Network Communications, Inc.,
disclosed that it will not be able to file its quarterly report on
Form 10-Q for the period ended September 12, within the
prescribed time period without unreasonable effort and expense.
The Company has not filed its annual report on Form 10-K for the
fiscal year ended March 28, 2010, and its quarterly report for the
period ended June 20, 2010.
As reported on Form 8-K filed with the Security and Exchange
Commission on June 7, 2010, the Company and its parent, Gallarus
Media Holdings, Inc., entered into a forbearance agreement on
June 1, 2010, pursuant to which the lenders under the Company's
revolving credit agreement and under the Company's senior term
loan agreement agreed to, among other things, forbear from
exercising certain of the lenders' rights and remedies in respect
of or arising out of certain specified defaults that had occurred
on June 1, 2010, as a result of the Company not making the
interest payment of $9.4 million on its 10-3/4% Senior Notes due
2013. The Agreement was to expire on June 20, 2010. Effective on
June 18, 2010, July 9, 2010, July 30, 2010, August 31, 2010, and
September 30, 2010, respectively, Gallarus Media Holdings entered
into five amendments of the Agreement, pursuant to which the
lenders under the Senior Revolving Loan Agreement and the Senior
Term Loan Agreement agreed to extend the expiration date of the
Agreement to July 12, 2010, July 30, 2010, August 31, 2010,
September 30, 2010, and October 29, 2010, respectively.
"There can be no assurance that the Company can restructure its
debts or obtain a new amendment on its forbearance agreement after
October 29, 2010. A new amendment may limit our ability to fund
our operations. If a new amendment is not reached, the senior
lenders could require the Company to immediately repay all amounts
outstanding under the senior credit facility. In addition, there
would be defaults under the Company's senior secured notes and
senior subordinated notes. This would have a material adverse
effect on the business, financial condition, liquidity and
operations of the Company and raise substantial doubt about our
ability to continue as a going concern."
As a result of its annual assessment for impairment of goodwill,
indefinite-lived intangible assets and long-lived assets, the
Company determined, on July 30, 2010, that it had an impairment
loss and recorded a charge of $145.5 million in the fourth quarter
of the fiscal year ended March 28, 2010. The impairment loss is
comprised of $105.1 million for impairment of goodwill, roughly
$700,000 for impairment of indefinite-lived intangible assets,
$38.8 million for impairment on definite-lived intangible assets,
and roughly $900,000 million for impairment of property, equipment
and computer software. The impairment is related to the decline
in the Company's expectations and estimates for future growth in
its revenue and operating income.
About Network Communications
Lawrenceville, Ga.-based Network Communications, Inc., is a
leading local media company providing lead generation, advertising
and internet marketing services to the housing industry. The
Company's leading brands are Apartment Finder, The Real Estate
Book, DigitalSherpa, Unique Homes, New England Home and Atlanta
Homes & Lifestyles.
The Company's balance sheet at December 6, 2009, showed
$362.4 million in total assets, $330.3 million in total
liabilities, and stockholders' equity of $32.1 million.
NIELSEN FINANCE: Fitch Assigns 'CCC'/RR6' Rating to Senior Notes
----------------------------------------------------------------
Fitch Ratings has assigned a 'CCC'/RR6' to Nielsen Finance LLC and
Nielsen Finance Co.'s 7.75% senior unsecured due 2018 note
offering. Both companies are indirect wholly-owned subsidiaries
of The Nielsen Company, B.V. The company has indicated that the
notes will trade interchangeably with the recently issued
$750 million 7.75% senior unsecured notes due 2018.
Proceeds of the offering are expected to be used to redeem the
approximately $119 million remaining 10% senior unsecured notes
due 2014 and the $202 million (EUR150 million) 9% senior unsecured
notes due 2014 (both are Nielsen Finance issues).
Rating Rationale:
-- The Nielsen Company B.V.'s ratings are currently on Rating
Watch Positive which reflects the company's intention to
dedicate $1.7 billion of the proceeds of its proposed
$2 billion IPO toward debt reduction. Fitch believes the IPO
will result in gross unadjusted leverage in the mid-5 times
range compared with more than 6.4x at Sept. 30, 2010.
-- Since the company was acquired in 2006, new ownership has
meaningfully restructured the organization around key
business lines and aggressively streamlined costs. Given the
contractual and diversified nature of its revenue stream and
the benign competitive environment for key businesses,
Nielsen was much more resilient during the downturn than
other media companies, exhibiting revenue and EBITDA growth,
as well as positive free cash flow through the trough of the
downturn. Going forward, Fitch expects Nielsen will continue
to generate meaningful organic revenue growth and that growth
should be able to outpace the U.S. economy under most
economic conditions/scenarios.
-- Nielsen enjoys limited competition in its core audience
measurement business, and over time competitive threats could
emerge. There are meaningful barriers to entry. Fitch
believes there are significant investments that would be
required by any potential competitors and meaningful
complexity associated with attempting to replicate Nielsen's
offerings. While increased competition could result in
revenue pressure (lost share), incremental costs
(talent/sales/services), and some free cash flow
pressure(investments in offerings), this risk is accommodated
in the rating.
Key Rating Drivers:
-- An upgrade of the company's Issuer Default Rating is
possible if the IPO goes through as proposed. Even absent a
successful near-term IPO, Fitch expects that continued
improvement in operating trends over the next 12-24 months
could result in positive ratings momentum.
-- Near term, the most likely drivers of rating pressure include
a material debt-funded acquisition, a coercive debt exchange
that included a material reduction in terms for bondholders,
or if credit market conditions permitted an attempt by
private equity sponsors to extract capital through a
leveraged dividend.
Fitch believes Nielsen's liquidity is sufficient. At Sept. 30,
2010, liquidity was composed of $420 million of cash on hand and
$668 million available under the senior secured revolver due in
2012. The company returned to free cash flow generating in 2009
after using cash in 2007 and 2008, the result of higher EBITDA,
reduced working capital usage (approximately $50 million use,
versus $200 million use in 2008), and lower capital expenditures
($282 million, versus $370 million in 2008). In the 12 months
ended Sept. 30, 2010, Fitch calculates the company generated
$170 million of FCF. Going forward, Fitch anticipates capex to
remain below $300 million annually. As a result, Fitch expects
the company to continue to generate material positive FCF and
anticipates that it will be dedicated toward debt repayment,
smaller acquisitions, and eventually shareholder returns.
Pro forma for the transactions (includes adjustments for the
$750 million in notes issued in mid-October), book value of total
debt at Sept. 30, 2010, was $8.5 billion, consisting primarily of
the $4.5 billion in secured term loan ($1.8 billion due 2013 and
$2.7 billion due 2016); a $500 million secured term loan due 2017;
approximately $300 million of senior notes due 2014; $1.1 billion
of new senior notes due 2018 and approximately $1.9 billion of
senior subordinates notes and senior notes due 2016. The company
has been active in managing its near-term maturities, and they are
manageable over the next several years.
Fitch currently rates Nielsen and Nielsen Finance:
Nielsen
-- IDR 'B';
-- Short-term IDR 'B';
-- Senior Unsecured Notes 'CC'/RR6.
Nielsen Finance
-- IDR 'B';
-- Short-term IDR 'B';
-- Senior Secured Bank Facility 'BB-'/RR2;
-- Senior Unsecured Notes 'CCC'/RR6;
-- Senior Subordinated Notes 'CC'/RR6.
All of the above ratings are on Rating Watch Positive.
NIELSEN FINANCE: S&P Keeps 'B' Rating on 7.75% Sr. Unsec. Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on the
7.75% senior unsecured notes due 2018 co-issued by Nielsen Finance
LLC and Nielsen Finance Co. are unaffected by the upsizing of the
notes to $1.08 billion from $750 million. The issue-level rating
on the notes remains at 'B' (one notch lower than the 'B+'
corporate credit rating on parent company The Nielsen Co. B.V.)
with a recovery rating of '5', indicating S&P's expectation of
modest (10% to 30%) recovery for noteholders in the event of a
payment default. The company plans to use proceeds to repay its
$870 million 10% senior notes due 2014 and to redeem the 9% senior
notes due 2014.
The corporate credit rating on New York City-based media research
company Nielsen is 'B+' and the rating outlook is positive. The
'B+' rating reflects the company's high leverage, though S&P
expects Nielsen to continue to reduce leverage going forward. The
rating does not incorporate specific expectations as to the size
and certainty of the company's planned IPO. Further assumptions
in S&P's rating conclusion include the ongoing investment required
to remain competitive and likely continuing customer pressure on
prices and service levels that require an efficient cost
structure.
Ratings List
Nielsen Co. B.V. (The)
Corporate Credit Rating B+/Positive/--
Rating Affirmed
Nielsen Finance LLC
Nielsen Finance Co.
$1.08B 7.75% sr unsecd nts due 2018 B
Recovery Rating 5
OMNICOMM SYSTEMS: Amends Q2 2010 to Correct Accounting Errors
-------------------------------------------------------------
OmniComm Systems, Inc., filed on October 27, 2010, Amendment No. 1
to its quarterly report on Form 10-Q for the three months ended
June 30, 2010, originally filed with the Securities and Exchange
Commission on September 3, 2010, to amend and restate the
Company's interim unaudited consolidated financial statements for
the period ended June 30, 2010, and the related disclosures.
The Company has concluded that there were material accounting
errors with respect to certain customer accounts receivable issued
during December 2009 and March 2010. Subsequent to filing its
financial statements for the year ended December 31, 2009, and for
the quarter ended March 31, 2010, the Company determined that
certain customer receivables totaling $2,425,423 that were
recorded at December 31, 2009, should instead have been recorded
in January 2010. In addition, the Company determined that certain
customer receivables totaling $687,970 that were recorded at
March 31, 2010, should instead have been recorded in April 2010.
The receivables in question relate to client contracts for
on-going projects that, although long-term in nature, are
considered executory contracts under GAAP since the services are
expected to be rendered on a go-forward basis. Given this
accounting treatment, the client billings should have been
recorded as a receivable and in turn a deferred revenue obligation
in the month the obligations are expected to be collected.
The effects of the restatement on certain line items within the
Company's consolidated statement of cash flows for the six months
ended June 30, 2010, are as shown below:
For the Six Months Ended
June 30, 2010
As Restated As Previously Filed
----------- -------------------
Changes in assets
and liabilities:
Accounts receivable ($428,084) ($281,272)
Deferred revenue $2,451,436 $2,304,624
A full-text copy of the Form 10-Q/A is available for free at:
http://researcharchives.com/t/s?6d37
About OmniComm Systems
Ft. Lauderdale, Fla.-based OmniComm Systems, Inc. (OTC: OMCM.OB)
-- http://www.OmniComm.com/-- provides customer-driven Internet
solutions to pharmaceutical, biotechnology, research and medical
device organizations that conduct life changing clinical trial
research.
* * *
As reported in the Troubled Company Reporter on April 6, 2010,
Greenberg & Company LLC, in Springfield, N.J., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company has incurred losses
and has a net capital deficiency.
PACIFIC SAFETY: Reports Annual Results, Unveils Merger Deal
-----------------------------------------------------------
Pacific Safety Products Inc. on Friday reported financial results
for the three months and year ended June 30, 2010. The Company
said sales for the year were $29.8 million, approximately 14.8%
lower than last year's sales of $35.0 million. The gross margin
percentage for the year was 19.8%, down 4.3% from 24.1% last year
representing a decrease of approximately $2.5 million or 30.0%.
Operating expenses of $7.6 million improved $1.0 million or 11.3%
from the prior year. Other items including the loss on sale of
assets, tax and restructuring charges amounts to $1.4 million
compared to $8.9 million in the prior year. Adjusted Earnings
Before Interest, Taxes, Depreciation and Amortization was a loss
of $0.5 million compared to income of $1.2 million in the prior
year. Working capital eroded from $2.2 million to $100,000
excluding assets held for sale.
On August 18, 2010, the Company issued a $1 million unsecured
convertible debenture in favor of a group of investors. The
Company also sold certain of PSP's headborne system assets, in
particular, the helmet liner capability, to Revision Eyewear Inc.
for $275,000 and a 4% royalty on gross sales over a 5-year period.
On September 14, 2010, Revision exercised an option to purchase
the remainder of the headborne systems for an additional $100,000
and a 2.5% royalty on gross sales over a 5-year period.
The Company signed a forbearance agreement with its principal
Canadian Bank on August 17, 2010. Under the terms of the
Forbearance Agreement, additional general and financial covenants
have been placed on the Company. At September 30, 2009, December
31, 2009, March 31, 2010 and June 30, 2010, the Company did not
meet certain covenants as stipulated in its credit facility. In
particular, the Company did not achieve its target ratio of debt
to tangible net worth. The Bank has agreed, pursuant to the
Forbearance Agreement, not to take steps to realize under the
facility prior to February 28, 2011, unless a terminating event as
defined in the Forbearance Agreement occurs.
On October 20, 2010, the Company announced that it had signed a
letter of intent to complete a business combination by way of a
court approved plan of arrangement of Zuni Holdings Inc., an NEX
listed company. PSP has agreed to acquire all of the outstanding
common shares of Zuni in exchange for PSP common shares at an
agreed exchange ratio of one PSP common share for each Zuni common
share. Following completion of the Merger, PSP will be owned
45.8% by current PSP shareholders and 54.2% by current Zuni
shareholders, based on the current shares issued and outstanding.
On a partially diluted basis, assuming exercise or conversion of
all outstanding warrants and debentures of PSP, PSP will be owned
55.7% by current PSP shareholders and 44.3% by current Zuni
shareholders. Subject to certain closing conditions, and non-
solicitation and termination provisions, the Merger is currently
expected to close in late December, 2010. PSP believes this
transaction will solidify its capital position and allow it to
take advantage of significant growth opportunities that are
available to the Company.
About PSP
Based in Kanata, Ontario, Pacific Safety Products Inc. (TSX
VENTURE: PSP) produces, distributes and sells high-performance and
high-quality safety products for the defense and security market.
These products include body armor to protect against ballistic,
stab and fragmentation threats, ballistic blankets to reduce blast
effects, and protective products against chemical and biological
hazards. The Company, through its U.S. subsidiary Sentry Armor
Systems Inc., provides body armor products to U.S. based law
enforcement and private security firms. The Company also produces
tactical clothing. Pacific Safety Products is a reporting issuer
in British Columbia, Alberta and Ontario, Canada and publicly
trades under the symbol PSP on the TSX Venture Exchange.
PACKAGING DYNAMICS: Moody's Affirms 'B2' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service raised Packaging Dynamics Corporation's
ratings outlook to positive from negative. Concurrently, all
other ratings were affirmed, including the B2 Corporate Family
Rating.
The change in outlook to positive from negative reflects
considerable improvement in key credit metrics and Moody's
expectation that Packaging Dynamics will address the June 2011
maturity of its asset-based revolver in a timely manner. Since
December 2008, the company has reduced outstanding debt by
approximately $56 million while margin expansion has led to
significant EBITDA growth. Including Moody's standard adjustments
for operating leases and the elimination of certain non-recurring
items such as the Alternate Fuel Mixture Credit, financial
leverage (total debt / EBITDA) has declined to 3.7 times as of
June 30, 2010 from 6.4 times at the end of 2008. Over the same
period, interest coverage has improved to 2.4 times from 1.1
times.
The B2 Corporate Family Rating is constrained by highly cyclical
end market demand for industrial, building, and specialty papers,
the volatility of input costs, and overall revenue size.
Additionally, the near-term maturity of the revolver limits the
company's liquidity profile and financial flexibility. The
ratings continue to be supported by the recession-resistant demand
for food packaging products and from restructuring initiatives
that have helped to reduce operating costs and expand margins
across all three segments.
Moody's affirmed these ratings:
-- Corporate Family Rating, B2
-- Probability of Default Rating, B2
-- $119 (formerly $130) million senior secured term loan due
2013, B1 / LGD3 (to 33% from 34%)
-- $150 million 10% senior subordinated notes due 2016, Caa1 /
LGD5 (to 82% from 83%)
The last rating action occurred on August 26, 2009, when Moody's
confirmed all of Packaging Dynamics' ratings and changed the
outlook to negative.
Packaging Dynamics Corporation is a manufacturer and converter of
value-added food packaging products, specialty bleached and
unbleached lightweight papers, and flexible adhesive and extrusion
lamination structures. Headquartered in Chicago, Illinois, the
company is privately held and generated revenues of about
$710 million in the last twelve months ended June 30, 2010.
PAULA FINANCIAL: To Pay Special Cash Dividend on November 24
------------------------------------------------------------
PAULA Financial board of directors has declared a cash dividend in
the amount of $0.53 per common share. The distribution will be
paid to holders of record as of November 10, 2010 and shall be
paid on November 24, 2010.
The Company has been in the process of liquidation since the sale
of its only operating subsidiary in February 2008. Recently a
number of post transaction contingencies have been resolved and
the Board of Directors believes the announced cash distribution to
stockholders is appropriate at this time.
The current dividend to be paid of $0.53 per share combined with
previous distributions totaling $5.50 per share, represent 87% of
total proceeds from the sale of assets and 100% of net deal
consideration (as adjusted for transaction costs, taxes and
accruals for liquidation expenses).
The Company's remaining cash reserves shall be held largely for
liquidation expenses and as reserves for known contingencies and
unknown claims. Future cash distributions to PFCO stockholders, if
any, cannot be evaluated by the Board at this time.
The Company's board of directors has determined that the purpose
of the upcoming 2011 meeting of the PFCO stockholders will be to
approve a final Plan of Liquidation and Dissolution to be filed
with the State of Delaware where the Company is domiciled.
About PAULA Financial
Headquartered in Pasadena, California, PAULA Financial (Pink
Sheets:PFCO) -- http://www.pfco.cc/-- is a specialty distributor
of commercial insurance products and services. The company's
subsidiaries, Pan American Underwriters, Inc. and Pan American
Underwriters Insurance Agents and Brokers, Inc., place an array of
commercial insurance products on behalf of its customers, for
which it is paid commission income by the carriers it represents.
The Company has been in the process of liquidation since the sale
of its only operating subsidiary in February 2008
PAXTON MEDIA: Moody's Assigns 'B2' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service assigned Paxton Media Group, LLC, a B2
Corporate Family Rating and a B3 Probability-of-Default Rating.
Additionally, B2 instrument ratings were assigned to the company's
new $10 million senior secured revolver and its new $230 million
of senior secured term loans. The new revolver and term loans
refinance existing credit facilities and notes which were unrated
and scheduled to mature March 2011 and June 2012, respectively.
Assignments:
Issuer -- Paxton Media Group, LLC
* Corporate Family Rating -- B2
* Probability-of-Default Rating -- B3
* Senior Secured Revolver due 2015 -- B2, LGD 3, 33%
* Senior Secured Term Loan A due 2013 -- B2, LGD 3, 33%
* Senior Secured Term Loan B due 2016 -- B2, LGD 3, 33%
The rating outlook is stable.
Ratings Rationale
The B2 corporate family rating reflects the company's high
leverage, decreasing circulation levels, the secular decline in
demand for print advertising, and a weak economic environment. In
addition, Paxton Media lacks national or super regional scale and
is concentrated in southeast and mid-western U.S. markets. The
company is well positioned in the B2 rating category and is
supported by good EBITDA margins, 14%-15% free cash flow as a
percentage of debt as well as meaningful required term loan
reductions. The combined term loans amortize at a minimum of 6%
annually and 75% of excess cash flow is required to reduce term
loan outstandings when the Leverage Ratio (as defined by the
credit agreement) exceeds 3.0x. Liquidity is adequate and
enhanced by the proposed $10 million revolver which is expected to
be largely undrawn. Although revenues and EBITDA are expected to
be flat over the rating horizon, credit metrics including debt-to-
EBITDA leverage and interest coverage ratios should improve as
free cash flow is applied to reduce term loan balances. Moody's
believe management is motivated to reduce debt balances and lower
annual debt service to gain operational flexibility as well as to
be in a position to reinstate distributions to family owners.
The stable outlook reflects Moody's view that revenue and EBITDA
will remain in line with expectations and that free cash flow will
be applied to reduce debt balances. Moody's outlook also
incorporates the potential for annual distributions up to $2.5 or
$5.0 million whenever the Leverage Ratio (as defined in the credit
agreement) is below 3.0x or 2.0x, respectively.
Ratings could be considered for an upgrade if the economic
environment improves resulting in a rebound in advertising
revenues, stable circulation, and debt-to-EBITDA leverage ratios
being sustained comfortably below 3.5x (including Moody's standard
adjustments). Ratings could be downgraded if revenues were to
decrease, EBITDA margins erode, or liquidity becomes strained as a
result of a weak economy and/or secular declines.
Paxton Media Group, LLC, is a family controlled, privately held
media company that owns and operates 32 community newspapers in
nine states with total daily circulation of approximately 291,895.
The company also owns the NBC affiliate in Paducah, Kentucky, and
numerous weekly, shopper and niche publications located primarily
in the southeast and mid-western United States. The company was
founded in 1896 and is headquartered in Paducah, Kentucky. The
Paxton family owns approximately 98.7% of economic and voting
control with the remaining interests held by families of current
and former managers. Paxton Media reported approximately
$154 million in revenues for the 12 months ended September 2010.
PETTERS GROUP: XL Group Agrees to Pay $1M to Settle Coverage Suit
-----------------------------------------------------------------
Bankruptcy Law360 reports that an affiliate of insurer XL Group
PLC has agreed to pay about $1 million to the receiver for the
bankrupt companies of convicted Ponzi schemer Thomas J. Petters
to settle a coverage dispute over litigation related to a
$3.7 billion fraud.
About Petters Group Worldwide
Based in Minnetonka, Minn., Petters Group Worldwide LLC is named
for founder and chairman Tom Petters. The group is a collection
of some 20 companies, most of which make and market consumer
products. It also works with existing brands through licensing
agreements to further extend those brands into new product lines
and markets. Holdings include Fingerhut (consumer products via
its catalog and Web site), SoniqCast (maker of portable, WiFi MP3
devices), leading instant film and camera company Polaroid
(purchased for $426 million in 2005), Sun Country Airlines
(acquired in 2006), and Enable Holdings (online marketplace and
auction for consumers and manufacturers' overstock inventory).
Petters formed the company in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide, LLC. Petters Company, Inc., Petters
Group Worldwide, LLC, and eight other affiliates filed separate
petitions for Chapter 11 protection (Bankr. D. Minn. Case No.
08-45257) on Oct. 11, 2008. James A. Lodoen, Esq., at
Lindquist & Vennum P.L.L.P., represents the Debtors as counsel.
In its petition, Petters Company, Inc., estimated its debts at
$500 million and $1 billion. Its parent, Petters Group
Worldwide, LLC, estimated its debts at not more than $50,000.
As reported in the Troubled Company Reporter on October 7, 2008,
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy
protection with the U.S. Bankruptcy Court for the District of
Minnesota on October 6, 2008 (Case Nos. 08-45136, 08-35197 and 08-
35198). Petters Aviation, LLC is a wholly owned unit of Thomas
Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's
parent company.
POOL AND SPA: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: The Pool and Spa Depot, LLC
5764 Crossing Boulevard
Antioch, TN 37013
Bankruptcy Case No.: 10-11669
Chapter 11 Petition Date: October 27, 2010
Court: U.S. Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: Keith M. Lundin
Debtor's Counsel: Griffin S. Dunham, Esq.
MGLAW PLLC
2525 West End Avenue, Suite 1475
Nashville, TN 37203
Tel: (615) 846-8000
Fax: (615) 846-9000
E-mail: gsd@mglaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/tnmb10-11669.pdf
The petition was signed by Peter Von Hopffgarten, chief executive
officer.
PRODUCTION PROPERTIES: Case Summary & Largest Unsecured Creditor
----------------------------------------------------------------
Debtor: Production Properties, a Florida General Partnership
435 12th Street West
Bradenton, FL 34205
Bankruptcy Case No.: 10-26150
Chapter 11 Petition Date: October 29, 2010
Court: U.S. Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Catherine Peek McEwen
Debtor's Counsel: Richard C. Prosser, Esq.
STICHTER, RIEDEL, BLAIN & PROSSER PA
110 E. Madison Street, Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
E-mail: rprosser.ecf@srbp.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Michael M. Carter, general partner.
The list of unsecured creditors filed together with its petition
contains only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Manatee County Tax Collector -- $71,915
P.O. Box 25300
Bradenton, FL 34206
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
R.D. Marina, LLC 10-26144 10/29/10
R.D. Marina II, LLC -- --
Mike Carter I, Inc. 10-26153 10/29/10
Design Team West, Inc. 10-26152 10/29/10
Mike Carter Construction, Inc. 10-26156 10/29/10
Michael M. and Jaymie Carter -- --
PROLOGIS INC: Fitch Upgrades Issuer Default Rating to 'BB+'
-----------------------------------------------------------
Fitch Ratings has upgraded the credit ratings of ProLogis:
-- Issuer Default Rating to 'BB+' from 'BB';
-- $2.3 billion global line of credit to 'BB+' from 'BB';
-- $4.7 billion senior notes to 'BB+' from 'BB';
-- $1.8 billion convertible senior notes to 'BB+' from 'BB';
-- $350 million preferred stock to 'BB-' from 'B+'.
The Rating Outlook has been revised to Stable from Negative.
The upgrade of PLD's Issuer Default Rating to 'BB+' from 'BB'
centers on significant expected reductions in the industrial
REIT's leverage. Proceeds from the company's recently priced
follow on common equity offering and the sale of industrial
properties and other assets to affiliates of Blackstone Real
Estate Advisors will be used to reduce borrowings under the
company's global line of credit, address a November 2010 senior
note maturity, and tender for longer-dated senior notes. Over the
next 12 months, Fitch estimates PLD's net debt to recurring
operating EBITDA will approach 9.0 times. The company's fixed
charge coverage ratio is also expected to improve due to the de-
levering transactions, while downward mark-to-market rate
reductions on the core portfolio are also ebbing. Overall, Fitch
believes that PLD's long-term credit profile is now consistent
with the higher end of the 'BB' rating category.
Credit concerns revolve around Fitch's view that PLD's ability to
continue monetizing its significant land holdings remains
vulnerable to execution risk due to the fragile economic recovery.
In addition, Fitch favorably views PLD's strategy to increase
exposure to major logistics corridors through asset sales and
development from a long-term demand standpoint; however, the sale
of certain properties outside of major corridors may result in
lower stabilized property cash flows if demand for new industrial
space stalls.
The revision of the Outlook to Stable reflects PLD's high-quality
unencumbered industrial property portfolio that provides value to
bondholders, its good liquidity position, staggered debt maturity
schedule, and management's focus on strengthening the balance
sheet.
PLD's leverage ratio, defined as net debt to recurring operating
EBITDA including Fitch's estimate of recurring cash distributions
from unconsolidated investees, was 12.2x as of Sept. 30, 2010,
compared with 12.5x and 15.0x as of Dec. 31, 2009 and Dec. 31,
2008, respectively. Pro forma for $1.1 billion of net proceeds
from the recently priced equity offering (80 million shares with
an additional 12 million shares to cover overallotments at $12.30
per share) and the Blackstone asset sale at a purchase price of
$1.02 billion to repay debt and tender for longer-dated bonds,
PLD's leverage ratio would be approximately 10.2x. Fitch
previously stated that a leverage ratio of below 10.0x would have
a positive impact on the ratings and/or Outlook. Over the next 12
months, Fitch anticipates leverage approaching 9.0x due to the
incremental cash flow from completed development properties in
lease-up as well as same-store cash flow stabilization.
While the economic recovery remains tenuous as evidenced by the
high unemployment rate and sluggish U.S. GDP growth, PLD benefits
from a global platform, and operating fundamentals are improving
modestly. During the third quarter of 2010 (3Q'10), same-store
rental rates on lease turnovers decreased by 8.5% compared with a
15.7% decline in 2Q'10. Same-store net operating income increased
by approximately 0.3% in 3Q'10 after declining by 3.1% and 4.2% in
2Q'10 and 1Q2010, respectively, and declining by 4.2% for full-
year 2009. Improvement stems principally from the company's
increasing occupancy, with the leased rate in the direct owned
operating portfolio increasing to 86% as of Sept. 30, 2010, from
84.8% as of June 30, 2010.
PLD's fixed charge coverage ratio (defined as recurring operating
EBITDA including Fitch's estimate of recurring cash distributions
from unconsolidated investees less recurring capital expenditures
less straight-line rent adjustments, divided by cash interest
expense, capitalized interest and preferred dividends) was 1.4x
for the trailing 12 months ended Sept. 30, 2010, unchanged from
full year 2009. The company has outperformed its industrial
markets through market cycles, and Fitch anticipates that same-
store net operating income will grow incrementally in 2011 and
2012 due to improving fundamentals and expected improvements in
occupancy on completed development space. The company's
reductions in cash interest expense via repayments of debt through
the equity capital raise, Blackstone asset sale, and expected
tender offer, offset by the reduction in net operating income from
assets sold to Blackstone, are projected to improve PLD's fixed
charge coverage ratio to a range between 1.5x and 2.0x during 2011
and 2012.
PLD's ability to monetize its land held for development will occur
gradually, which is incorporated into the 'BB+' IDR. The company
held 157 completed development properties that were 73.1% leased
as of Sept. 30, 2010 and an additional 10 properties under
development that were 65.6% leased as of Sept. 30, 2010. However,
land held for development was $2.4 billion (12.8% of gross assets)
as of Sept. 30, 2010, which is slightly down from $2.6 billion
(13.9% of gross assets) as of Dec. 31, 2009.
PLD's recently announced initiative to increase its exposure to
major logistics corridors from 71% of direct-owned and pro rata
investment management properties to a range of 80% to 90% should
position the company to grow property cash flows in major
population and distribution hubs. That being said, the sale of
certain direct-owned properties outside of major corridors may
result in lower stabilized property cash flows if demand for new
development continues to be incremental.
The Stable Outlook reflects PLD's high-quality unencumbered
industrial property portfolio that provides value to bondholders.
Unencumbered asset coverage (calculated as unencumbered assets --
based on a 7.5% capitalization rate on NOI pro forma for the
stabilization of completed development and the Blackstone asset
sale -- divided by senior debt pro forma for the repayment of debt
via the equity offering and tender offer) was 1.6x, up from 1.3x
as of Sept. 30, 2010. Unencumbered asset coverage of senior debt
would be 1.8x when considering 50% of the book value of PLD's
land. Overall, the covenants within PLD's global line of credit
agreement and bond indenture, which include unencumbered asset
covenants, are not expected to limit the company's financial
flexibility following the company's de-levering transactions.
PLD also has a good liquidity position, driven by staggered near-
term debt maturities, a sizeable borrowing capacity from the
global line of credit, and improved organic liquidity via a
recently announced dividend reduction. Sources of liquidity
(unrestricted cash, availability under the company's global line
pro forma for the repayment of outstanding borrowings and net of
letters of credit, projected retained cash flows from operating
activities after dividends and other distributions pro forma the
company's reduction in its common stock dividend to $0.1125 per
share per quarter from $0.15 per share per quarter) divided by
uses of liquidity (pro rata debt maturities pro forma for the
repayment of the November 2010 bond maturity and projected capital
expenditures including remaining development costs to incur)
result in a liquidity coverage ratio of approximately 1.2x for
Oct. 1, 2010 through Dec. 31, 2012. Assuming the company
refinances its consolidated and pro rata share of property fund
mortgage debt at 80% of outstanding principal (consistent with
refinancing activity in PLD's Mexico Industrial Fund in 3Q'10 and
expected refinancing activity in PLD's North American Properties
Fund I in 4Q'2010), liquidity coverage would be 1.6x.
Pro forma for the repayment of borrowings under the company's
revolving credit facility and assuming a tender for bonds maturing
beyond 2012, PLD's debt maturity schedule is manageable with no
more than 15% of debt maturing annually over the next five years.
Management's focus on improving the balance sheet while also
positioning the company to take advantage of moderating market
fundamentals also provides stability to the rating at the 'BB+'
level.
The two-notch differential between PLD's IDR and its preferred
stock rating is consistent with Fitch's criteria for corporate
entities with an IDR of 'BB+'. Based on Fitch's criteria report,
'Equity Credit for Hybrids & Other Capital Securities,' the
company's preferred stock is 75% equity-like and 25% debt-like
since they are perpetual and have no covenants but have a
cumulative deferral option in a going concern. Net debt plus 25%
of preferred stock to recurring EBITDA (including Fitch's estimate
of recurring cash distributions from unconsolidated investees) was
12.4x as of Sept. 30, 2010, but is expected to decline to 10.3x
pro forma for the de-levering equity capital raise.
These factors may have a positive impact on the ratings and/or
Outlook:
-- Net debt to recurring operating EBITDA including Fitch's
estimate of recurring cash distributions from unconsolidated
investees sustaining below 8.5x (as of Sept. 30, 2010,
leverage was 12.2x but is expected to be approximately 10.2x
pro forma for de-levering transactions and approach 9.0x over
the next 12 months);
-- Material improvements in leasing of the completed development
portfolio which could result in increased fixed charge
coverage;
-- Unencumbered asset coverage -- calculated as applying a 7.5%
capitalization rate on unencumbered NOI -- to senior debt
maintaining above 2.0x (as of Sept. 30, 2010, unencumbered
asset coverage was 1.6x pro forma for the Blackstone asset
sale and repayment of debt).
These factors may have a negative impact on the ratings and/or
Outlook:
-- Net debt to recurring operating EBITDA sustaining above
10.0x;
-- Fitch-defined fixed charge coverage maintaining below 1.5x;
-- A liquidity shortfall.
ProLogis is an equity REIT that owns, manages, and develops
distribution facilities, with operations in 23 major logistics
corridors and other markets across North America, Europe, and
Asia. As of Sept. 30, 2010, the company owned and managed more
than 475 million square feet of industrial space leased to more
than 4,400 customers including manufacturers, retailers,
transportation companies, and third-party logistics providers. As
of Sept. 30, 2010, PLD had $34.9 billion in total assets owned and
under management, $18.6 billion in gross book assets, a common
equity market capitalization of $5.6 billion, and a total market
capitalization of $14.1 billion.
QUALITY DISTRIBUTION: Moody's Puts Caa1 Rating on $225 Mil. Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned a Caa1 rating to the
planned $225 million second lien notes of Quality Distribution
LLC. All other ratings, including the corporate family and
probability of default ratings of Caa1 and the $16 million 9%
subordinated notes due November 2010 of Caa3 remain unchanged.
The rating outlook is positive.
Ratings assigned, subject to review of final documentation:
-- $225 million second lien notes due 2018, Caa1, LGD4, 58%
Ratings affirmed:
-- Corporate family and probability of default, Caa1
-- $16 million 9% subordinated notes due November 2010, Caa3,
LGD 6, 90%
Ratings Rationale
The proposed transaction extends maturities and is leverage
neutral. The Caa1 corporate family rating continues to reflect
high financial leverage, low asset coverage, and limited free cash
flow against an adequate liquidity profile and Quality's strong
position within its niche. While the rating encompasses that
Quality's decreasing ownership of tractors / terminals and greater
dependence on affiliates for these transport assets could limit
future earnings declines, affiliates could also gain bargaining
power, customer retention issues could more quickly develop in a
stress scenario, and the need to financially support affiliates
represents a potential liability.
The Caa1 rating assigned the planned notes, reflects their
preponderance in the anticipated capital structure. Second lien
notes proceeds would replace all of Quality's senior unsecured
debt and would reduce subordinated debt to $35 million from
$98 million. The instrument rating contemplates some collateral
deficiency claim since asset coverage is low and Quality's
tractors/trailers will not be pledged to the notes. Moody's
expect some revolver borrowing will be repaid through the
transaction and that Quality will not borrow heavily on its
revolver. The revolver holds a first lien on basically all of
Quality's assets, including tractors/trailers. As of June 30,
2010 the revolver's eligible borrowing base was $163 million.
The positive rating outlook considers that better volumes,
initially evidenced in the first half of 2010, could improve free
cash flow generation from relatively low levels. Loads grew 4%,
year-over-year, during the first six months of 2010 (9% during the
second quarter of 2010). Increased working capital growth
prevented flow-through of higher volumes to free cash but working
capital should stabilize in the second half of 2010. Planned low
capital spending and Quality's net operating loss tax shield
further support the debt reduction potential. Material debt
reduction in the second half of 2010 and expectation of a 5% free
cash flow to debt ratio over the intermediate-term could trigger a
ratings upgrade. (As of June 30, 2010 free cash flow to debt was
about 1%.)
Further debt reduction and expectation of free cash flow to debt
of 5% or higher over the intermediate term could trigger a ratings
upgrade. Debt to EBITDA in the mid-5.0x range, net profitability
and adequate liquidity profile would also likely accompany an
upgrade. Although unexpected, the ratings could be downgraded if
liquidity profile adequacy were to come into question, or if EBIT
to interest were to fall below 0.7x with funds from operations to
debt below 6%. (All metrics, Moody's adjusted basis.). Also
unexpected, if the revolver utilization level were to
significantly increase, the second lien instrument rating could be
notched down from the corporate family rating.
Moody's last rating announcement on Quality occurred October 15,
2010 when the rating outlook was changed to positive from stable.
Quality'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 Quality's core industry and Quality's ratings are
believed to be comparable to those of other issuers of similar
credit risk.
Quality Distribution, LLC, and its parent holding company, Quality
Distribution, Inc., are headquartered in Tampa, Florida. The
company is a transporter of bulk liquid and dry bulk chemicals.
The company's 2009 revenues were $614 million. Apollo Management,
L.P., owns 48.9% of the common stock of Quality Distribution, Inc.
QUALITY DISTRIBUTION: S&P Puts 'B-' Rating to CreditWatch Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' corporate
credit rating and other long-term ratings on Quality Distribution
on CreditWatch Positive. At the same time, S&P assigned a 'B-'
rating on the company's $225 million senior secured notes due 2018
with a recovery rating of '5', indicating its expectations that
lenders would receive modest (10%-30%) recovery of principal in a
payment default scenario. S&P based all ratings on preliminary
offering statements, and they are subject to review of final
documentation.
"The rating action reflects the potential improvement in Quality
Distribution's financial profile as a result of lower interest
expense, improved cash flow adequacy, and a substantial reduction
in debt maturities over the next few years following its proposed
debt offering," said Standard & Poor's credit analyst Anita
ogbara. "The ratings on Quality Distribution reflect its market
position as the largest bulk tank truck carrier in North America.
The company's low margins, participation in a highly fragmented
industry, and highly leveraged financial profile more than offset
this strength. Given improving chemicals volumes and stable
pricing trends, S&P expects Quality Distribution to generate funds
from operations in the $30 million-$40 million range in 2010."
For the 12 months ended Sept. 30, 2010, Quality Distribution
reported revenues and EBITDA of $672 million and $62 million, up
7% and 20%, respectively, from 2009. Year-to-date chemical
volumes have rebounded on improving demand for industrial
chemicals and increased demand for chemicals used in domestic
vehicle production. As a result of the company's reliance on
owner operators and cost control initiatives, its profitability
has improved. Quality Distribution contracts with independent
firms to operate its terminals and with owner operators--
independent contractors who supply one or more drivers, tractors,
or tanks for Quality Distribution and affiliate use. This
business model shifts fixed costs to variable costs for Quality
Distribution, compared with a wholly owned network that uses
company drivers. This model also allows the company to expand
with minimal capital investment for fixed assets. Over the past
year, the company has shifted a greater proportion of its work to
owner operators and affiliates, in response to the weak economy
and decreased revenue. For the six months ended June 30, 2010,
affiliates generated 93% of transportation revenue versus 63%
during the comparable period in 2009.
"If the refinancing is complete as proposed, S&P expects to raise
the corporate credit rating to a 'B' and assign a stable outlook.
S&P would also withdraw ratings on the company's existing
$135 million senior notes due 2013, and raise the 'CCC' issue
rating on the company's existing $82 million senior subordinated
PIK notes due 2013," Ms. Ogbara added.
QUANTUM CORP: Sept. 30 Balance Sheet Upside-Downy by $83.7MM
------------------------------------------------------------
Quantum Corp. reported results for the second quarter of fiscal
2011 ended Sept. 30, 2010.
The Company's balance sheet at Sept. 30, 2010, showed
$459.56 million in total assets, $192.65 million in total current
liabilities, $350.59 million in total long-term liabilities, and a
stockholder's deficit of $83.68 million.
In an earnings release, the Company said revenue for the quarter
totaled $168 million which, primarily due to an expected reduction
in OEM deduplication software revenue, was down from $175 million
for the same period last year. However, total revenue was up $5
million sequentially, as branded growth more than offset the
reduced OEM revenue. Excluding royalty revenue, Quantum's branded
revenue increased 4 percent year-over-year and 11 percent
sequentially and represented 80 percent of total non-royalty
revenue for the quarter. Branded disk systems and software
revenue was a key contributor to this growth, increasing 29
percent from FQ2'10 and 19 percent sequentially.
For FQ2'11, GAAP net income was $3 million, or 1 cent per diluted
share, compared to GAAP net income of $11 million, or 4 cents per
diluted share, for the same period in the prior year. Non-GAAP net
income for the quarter was $13 million, or 6 cents per diluted
share, compared to non-GAAP net income of $23 million, or 11 cents
per diluted share, in FQ2'10.
"Our September quarter results were better than the prior quarter
in nearly every area where we are focused, including revenue,
gross margin, operating income, net income and cash generation,"
said Rick Belluzzo, chairman and CEO of Quantum. "We achieved all
this while absorbing an anticipated $9 million sequential
reduction in OEM deduplication software revenue, which
demonstrates the strength of our business model. In short, our
second quarter performance can be viewed as a foundation on which
to drive greater revenue growth in the second half of the fiscal
year, leveraging the refresh and expansion of nearly our entire
product line over the past 12 months and the progress we are
making in generating more business through the independent
reseller channel."
Quantum ended FQ2'11 with $98 million in total cash and cash
equivalents and $307 million in total debt. The company generated
$26 million in cash from operations and paid off the remaining
$22 million of its convertible debt.
A full-text copy of the earnings release is available for free
at http://ResearchArchives.com/t/s?6d2a
About Quantum Corp.
Based in San Jose, California, Quantum Corp. (NYSE:QTM) --
http://www.quantum.com/-- is a storage company specializing in
backup, recovery and archive. Quantum provides a comprehensive,
integrated range of disk, tape, and software solutions supported
by a world-class sales and service organization.
RASER TECHNOLOGIES: NYSE to Suspend Trading of Common Stock Nov. 3
------------------------------------------------------------------
Raser Technologies, Inc., received two notices from the New York
Stock Exchange that the Company fell below certain listing
standards criteria outlined in the NYSE's Listed Company Manual.
The first notice was received on April 27, 2010, and related to
the Company's inability to maintain a minimum average closing
price of $1.00 for a 30-day trading period under Section 802.01C
of the NYSE's Listed Company Manual. The second notice was
received on July 30, 2010, and related to the Company's inability
to maintain a total market capitalization of at least $50 million
over a 30-day trading period and stockholders' equity of at least
$50 million as outlined in Sections 801 and 802 of the NYSE's
Listed Company Manual.
Subsequent to receiving the two notices from the NYSE, the Company
submitted a plan to the NYSE requesting additional time to cure
the deficiencies and detailing the path the Company planned to
follow to regain compliance with NYSE listing standards. After
reviewing these materials, however, the NYSE decided to proceed
with suspension of trading of the Company's common stock on the
NYSE and informed the Company on October 26, 2010, of its
intention to suspend trading of the Company's common stock prior
to the market opening on November 3, 2010. The NYSE also notified
the Company of its intention to file an application with the
Securities and Exchange Commission to delist the Company's common
stock from the NYSE, pending completion of applicable NYSE
procedures, which includes the Company's right to appeal the
NYSE's decision.
The Company has taken steps to have its common stock quoted on the
Over-the-Counter Bulletin Board ("OTCBB") and expects its stock to
be quoted on the OTCBB starting November 3, 2010. The Company
will be assigned a new ticker symbol the day before it begins
trading on the OTCBB. The OTCBB is a regulated quotation service
that displays real-time quotes, last-sale prices, and volume
information in over-the-counter equity securities. The Company's
common stock will continue to trade on the NYSE through
November 2, 2010.
About Raser Technologies
Provo, Utah-based Raser Technologies, Inc. (NYSE: RZ)
-- http://www.rasertech.com/-- is an environmental energy
technology company focused on geothermal power development and
technology licensing. Raser's Power Systems segment develops
clean, renewable geothermal electric power plants with one
operating plant in southern Utah and eight active and early stage
projects in four western United States: Utah, New Mexico, Nevada
and Oregon, as well as a concession for 100,000 acres in
Indonesia. Raser's Transportation and Industrial segment focuses
on extended-range plug-in-hybrid vehicle solutions and using
Raser's award-winning Symetron(TM) technology to improve the
torque density and efficiency of the electric motors and drive
systems used in electric and hybrid-electric vehicle powertrains
and industrial applications.
The Company's balance sheet as of June 30, 2010, showed
$90.0 million in total assets, $130.6 million in total
liabilities, and a stockholders' deficit of $40.6 million.
Hein & Associates LLP, in Denver, Colo., expressed substantial
doubt about the Company's ability to continue as a going concern,
following its 2009 results. The independent auditors noted that
the Company has suffered recurring losses, has used significant
cash for operating activities since inception, has significant
purchase commitments in 2010 and has a lack of sufficient working
capital.
R.D. MARINA: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: R.D. Marina, LLC
dba Riviera Dunes Marina Resort
Riviera Dunes Marina
435 12th Street West
Bradenton, FL 34205
Bankruptcy Case No.: 10-26144
Chapter 11 Petition Date: October 29, 2010
Court: U.S. Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Catherine Peek McEwen
Debtor's Counsel: Richard C. Prosser, Esq.
STICHTER, RIEDEL, BLAIN & PROSSER PA
110 E. Madison Street, Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
E-mail: rprosser.ecf@srbp.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Michael M. Carter, manager.
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Mike Carter Construction, Inc. 10-26156 10/29/10
R.D. Marina II, LLC -- --
Mike Carter I, Inc. 10-26153 10/29/10
Design Team West, Inc. 10-26152 10/29/10
Production Properties 10-26150 10/29/10
Michael M. and Jaymie Carter -- --
REALOGY CORP: Bank Debt Trades at 10% Off in Secondary Market
-------------------------------------------------------------
Participations in a syndicated loan under which Realogy Corp. is a
borrower traded in the secondary market at 90.46 cents-on-the-
dollar during the week ended Friday, October 29, 2010, according
to data compiled by Loan Pricing Corp. and reported in The Wall
Street Journal. This represents an increase of 0.69 percentage
points from the previous week, The Journal relates. The Company
pays 300 basis points above LIBOR to borrow under the facility.
The bank loan matures on September 30, 2013, and carries Moody's
B1 rating and Standard & Poor's CCC- rating. The loan is one of
the biggest gainers and losers among 198 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
About Realogy Corp.
Realogy Corp. -- http://www.realogy.com/-- a global provider of
real estate and relocation services with a diversified business
model that includes real estate franchising, brokerage, relocation
and title services. Realogy's world-renowned brands and business
units include Better Homes and Gardens Real Estate, CENTURY 21,
Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group,
ERA, Sotheby's International Realty, NRT LLC, Cartus and Title
Resource Group. Collectively, Realogy's franchise systems have
around 15,000 offices and 270,000 sales associates doing business
in 92 countries around the world.
Headquartered in Parsippany, N.J., Realogy is owned by affiliates
of Apollo Management, L.P., a leading private equity and capital
markets investor. Realogy fully supports the principles of the
Fair Housing Act.
The Company's balance sheet at June 30, 2010, showed $8.18 billion
in total assets, $9.13 billion in total liabilities, and a
stockholders' deficit of $951.00 million.
Realogy carries a 'CC' corporate credit rating with a "developing"
outlook from Standard & Poor's. S&P noted that leverage was high,
at 15x at March 2010, although this was an improvement compared to
20x one year ago.
It has 'Caa2' corporate family and probability of default ratings,
with negative outlook, from Moody's.
REGENERX BIOPHARMA: Receives Non-Compliance Notice From nyse
------------------------------------------------------------
RegeneRx Biopharmaceuticals, Inc. was notified by the Compliance
Staff of the NYSE Amex LLC that the Company has not timely
regained compliance with Section 1003(a)(iii) of the Exchange's
Company Guide due to stockholders' equity of less than $6,000,000.
As a result, the notice indicated that the Company's securities
are subject to delisting from the Exchange unless the Company
requests a hearing before the Exchange's Listing Qualifications
Panel. As previously disclosed, by letter dated June 24, 2009,
the Staff granted the Company's request for an extension to
evidence compliance with the Exchange's stockholders' equity
requirement through October 25, 2010.
RegeneRx intends to request a hearing before the Panel at which it
will request continued listing pending its return to compliance.
Based on the hearing request, it is expected that the Company's
securities will remain listed and eligible for trading on the
Exchange until the Panel renders a decision following the hearing.
However, there can be no assurance that following the hearing the
Panel will grant the Company's request for continued listing on
the Exchange.
About RegeneRx Technology
T 4 is a synthetic version of a naturally occurring peptide
present in virtually all human cells. It is a first-in-class,
multi-faceted molecule that promotes endothelial cell
differentiation, angiogenesis in dermal tissues, keratinocyte
migration, and collagen deposition, while down-regulating
inflammation. RegeneRx has identified several molecular
variations of T 4 that may affect the aging of skin, among other
properties, and could be important candidates as active
ingredients in pharmaceutical and consumer products. Researchers
at the National Institutes of Health, and at other academic
institutions throughout the world, have published numerous
scientific articles indicating T 4's in vitro and in vivo efficacy
in accelerating wound healing and tissue protection under a
variety of conditions. Abstracts of scientific papers related to
RENT-A-CENTER INC: Moody's Assigns 'Ba3' Rating to $300 Mil. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Rent-a-Center,
Inc.'s, proposed $300 million guaranteed senior unsecured notes
due 2020. In addition, Moody's upgraded the company's Probability
of Default Rating to Ba2 from Ba3. Moody's also affirmed the
company's Ba2 Corporate Family Rating and Ba1 senior secured bank
facility ratings. The outlook is stable.
Ratings Rationale
Proceeds from the proposed $300 million senior unsecured note
offering will be used to repay approximately $200 million of
senior secured bank debt, while the remaining net proceeds will be
used to repurchase shares of the company's common stock.
Rating assigned;
-- $300 million guaranteed senior unsecured notes due 2020 rated
Ba3 (LGD 5, 79%)
Rating upgraded;
-- Probability of Default Rating to Ba2 from Ba3
Ratings affirmed are;
-- Corporate Family Rating at Ba2
-- $350 million guaranteed senior secured revolver, due
9/30/2013, rated Ba1 (LGD 2, 25%)
-- $82.5 million guaranteed senior secured term loan A, due
6/20/2011, rated Ba1 (LGD 2, 25%)
-- $82.5 million guaranteed senior secured term loan A, due
9/30/2013, rated Ba1 (LGD 2, 25%)
-- $184 million guaranteed senior secured term loan B, due
6/30/2012, rated Ba1 (LGD 2, 25%)
-- $300 million guaranteed senior secured term loan B, due
3/31/2015, rated Ba1 (LGD 2, 25%)
The outlook is stable.
The upgrade of the Probability of Default rating to Ba2 from Ba3
reflects RCII's improved operating performance and more manageable
debt maturity profile pro forma for the proposed note offering.
"The affirmation of the Ba2 Corporate Family Rating reflects
RCII's relatively strong debt protection measures, good liquidity,
and leading position in the consumer rent-to-own industry" stated
Bill Fahy, Senior Analyst at Moody's. "However, ratings are
constrained by the impact on operating performance from a shift in
RCII's customer and product mix in its core business, the
potential impact from new government legislation, and the
challenges of the company expanding outside of its core U.S.
markets " stated Fahy.
The Ba3 rating on the $300 million senior unsecured notes reflects
their effective subordination to the company's senior secured bank
credit facility.
The stable outlook reflects Moody's expectation that debt
protection metrics will improve as management continues to focus
on debt reduction while operating performance gradually improves.
The outlook also reflects Moody's view that liquidity will remain
good and that management will maintain a conservative financial
policy.
Factors that could result in an upgrade include a steady increase
in rental volume and average price per unit, resulting in a
sustained improvement in operating performance. A higher rating
would also require RCII to be able to sustain stronger debt
protection metrics with debt to EBITDA of under 4.0 times and
EBITA coverage of interest of over 2.5 times, while maintaining
good liquidity. Other factors needed for a higher ratings would
include RCII maintaining a conservative financial policy and
successfully managing international expansion.
Factors that could cause a downgrade include a sustained
deterioration in operating performance or liquidity.
Specifically, a downgrade could occur if debt to EBITDA exceeded
4.5 times or EBITA to interest deteriorated below 2.0 times.
Deterioration in liquidity or adoption of a more aggressive
financial policy towards dividends and share repurchases could
also negatively impact ratings. Additionally, the introduction of
either federal or state legislation that caused RCII to modify or
change its business model in a manner that negatively impacts
sales, earnings, or credit risk could also result in downward
ratings pressure.
Moody's last rating action for RCII occurred on November 24, 2009,
when the company's Corporate Family Rating was upgraded to Ba2
from Ba3 with a stable outlook.
Rent-A-Center, Inc, with headquarters in Plano, Texas operates the
largest chain of consumer rent-to-own stores in the U.S. with
3,001 company operated stores located in the U.S., Canada, and
Puerto Rico. Rent-A-Center also franchises 206 rent-to-own stores
that operate under the "ColorTyme" and "Rent-A-Center" banners.
Annual revenues are approximately $2.7 billion.
RENT-A-CENTER INC: S&P Affirms 'BB' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'BB'
corporate credit rating on Plano, Texas-based Rent-A-Center Inc.
This action comes as the company is issuing $300 million of senior
unsecured notes due in 2020. $200 million of the proceeds are
expected to repay outstanding balances of its senior secured term
loan. S&P expects the remaining proceeds will be used for stock
buybacks. As a result of the senior secured debt reduction, S&P
is raising the company's senior secured recovery rating to '1'
from '2' and thus raising the senior secured issue level ratings
to 'BBB-' from 'BB+'. The '1' recovery rating indicates S&P's
expectation of very high (90-100%) recovery of principal in the
event of default. S&P is also assigning a 'BB-' issue-level
rating and '5' recovery rating to the company's senior unsecured
notes. The '5' recovery rating indicates S&P's expectation of
modest (10-30%) recovery of principal in the event of payment
default.
"The rating on Rent-A-Center reflects S&P's expectation that the
company can increase profits modestly in the near term and will
reduce debt with free cash flow over time, leading to relatively
modest credit ratio enhancement," said Standard & Poor's credit
analyst Charles Pinson-Rose.
S&P believes the overall rent-to-own industry and economic
environment should be modestly positive for Rent-A-Center going
forward. Demand for consumer electronics, furniture, and
appliances has largely bottomed out, and S&P believes high
unemployment and the consumer lending environment left many
consumers with limited or no access to credit. Consequently, many
consumers may opt for a RTO agreement. On the other hand, many of
the industry's previous and existing customers may no longer be
able to afford the rental payments or may opt for less expensive
items. This could lead to both lower demand and greater inventory
losses. However, Rent-A-Center has shown that it can manage
inventory collections and returns in the challenging economic
environment, which is evident in its lower inventory write downs
and margin expansion in the current fiscal year. S&P further
believes the company can increase same-store sales in the low
single digits going forward and slightly improve its same-store
sales performance of a 0.3% increase in its third quarter.
RHI ENTERTAINMENT: Soliciting Votes for Prepackaged Chapter 11
--------------------------------------------------------------
RHI Entertainment, Inc. and certain of its direct and indirect
subsidiaries on November 1, 2010, commenced a solicitation of
votes on a joint chapter 11 plan of reorganization from lenders of
record as of October 29, 2010 under the Company's first lien
credit agreement, as amended, and second lien credit agreement, as
amended.
The solicitation period will expire on November 15, 2010. If
sufficient votes are received for the Prepackaged Plan, the
Debtors intend to file voluntary petitions for relief under
Chapter 11 of the U.S. Bankruptcy Code and seek prompt
confirmation of the Prepackaged Plan. Under certain
circumstances, the Debtors may file for bankruptcy prior to the
expiration of the solicitation period.
If voluntary prepackaged bankruptcy cases are filed under
Chapter 11, the Debtors intend to continue operating their
businesses in the ordinary course and to promptly seek the
necessary relief from the bankruptcy court to pay the claims of
certain critical, priority and foreign vendors and the vast
majority of their employees' claims in full and on time in
accordance with their existing business terms. If the Company
receives sufficient votes for the Prepackaged Plan, and following
the subsequent filing under Chapter 11 the Prepackaged Plan is
confirmed by the bankruptcy court, the Company's current
equityholders will have no continuing interest in the assets and
operations of the Company.
If the Debtors do not receive sufficient votes to accept the
Prepackaged Plan by the end of the solicitation period, they
nonetheless intend to proceed to file one or more Chapter 11 cases
on a prearranged or traditional, non-prepackaged basis. If the
Debtors do not receive sufficient votes to accept the Prepackaged
Plan by the end of the solicitation period, any filing under
Chapter 11, whether relating to another prepackaged plan, a
prearranged plan or otherwise, would also likely result in the
Company's current equityholders receiving no continuing interest
in the assets and operations of the Company.
The New Securities being offered pursuant to the proposed
Prepackaged Plan will not be and have not been registered under
the Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.
The Disclosure Statement and Prepackaged Plan are available on the
public Web site of the voting agent at http://www.loganandco.com/
under case RHI Entertainment.
Rothschild, Conway Del Genio on Board
The Company's board of directors engaged Rothschild, Inc. as a
financial advisor in the fourth quarter of 2009 to assist in
negotiating and implementing a restructuring transaction, and the
Company is in the midst of in-depth discussions with its lenders
and other creditors with respect to restructuring its indebtedness
and capital structure. Management expects these discussions to
likely result in a significant or complete dilution of the
Company's existing equityholders' interest through an issuance of
preferred stock or common stock of RHI Entertainment, LLC (or its
successor) to some or all of its lenders and/or creditors.
The Company has also engaged Robert Del Genio of Conway, Del
Genio, Gries & Co., LLC as Strategic Planning Officer of the
Company. Mr. Del Genio is reporting to the Company's board of
directors, and is, among other functions, communicating frequently
with the Company's lenders and their representatives regarding the
Company's activities, cash flows, cost controls and restructuring
efforts. Mr. Del Genio also is assisting the Company in
connection with the preparation for, and administration of, any
Chapter 11 filing.
About RHI Entertainment
RHI Entertainment, Inc., based in New York, develops, produces and
distributes new made-for-television movies, mini-series and other
television programming worldwide. Its business is comprised of
the licensing of new film production and the licensing of existing
content from its film library in territories around the world.
At June 30, 2010, the Company had total assets of
$544.625 million, total liabilities of $827.833 million, and a
stockholders' deficit of $283.208 million.
RICHARD PEACOCK: Section 341(a) Meeting Scheduled for Nov. 24
-------------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of Richard
Peacock's creditors on November 24, 2010, at 1:30 p.m. The
meeting will be held at Flagler Waterview Building, 1515 N Flagler
Dr Room 870, West Palm Beach, FL 33401.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Vero Beach, Florida-based Richard Peacock filed for Chapter 11
bankruptcy protection on October 21, 2010 (Bankr. S.D. Fla. Case
No. 10-42195). Bradley S. Shraiberg, Esq., who has an office in
Boca Raton, Florida, 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.
ROOFING SUPPLY: S&P Assigns Corporate Credit Rating at 'B+'
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Dallas-based Roofing Supply Group LLC. The
rating outlook is stable.
At the same time, S&P assigned an issue-level rating of 'B+' (the
same as the corporate credit rating on the company) to RSG's
proposed $225 million senior secured notes due 2017. The recovery
rating is '3', indicating S&P's expectation of average (50%-70%)
recovery for lenders in the event of a payment default, albeit
under at the low end of the range. These securities are being
issued pursuant to Rule 144A of the Securities Act of 1933 without
registration rights.
The company intends to use proceeds of the proposed notes,
together with cash-on-hand, to repay outstanding borrowings under
its existing senior secured bank credit facility and repurchase
its existing subordinated notes.
"The 'B+' corporate credit rating on RSG reflects the combination
of S&P's assessment of its aggressive financial risk profile,
marked by leverage of about 5x, and weak business risk profile
that incorporates geographic diversity limited to the U.S.,
relatively small size and scale of operations, highly competitive
end markets, and exposure to volatile construction cycles and
unpredictable weather patterns," said Standard & Poor's credit
analyst Thomas Nadramia. The ratings also reflect S&P's
expectation that leverage will likely decline to about 5x by the
end of 2010, and to below 5x in 2011 compared with a pro forma
level of about 5.4x. In addition, S&P expects interest coverage
of about 2.6x and funds from operations to total debt of just
under 20%. S&P considers these credit measures to be consistent
with its view of its aggressive financial risk profile.
S&P expects end-market demand for RSG's roofing products to
increase modestly over the next 12 months because of a likely
uptick in housing starts, which S&P think will offset further
weakness in nonresidential construction.
In S&P's view, an upgrade is unlikely in the near term, although
S&P could consider raising the ratings if RSG's operating
prospects during the next several quarters exceeds its current
expectation due to stronger-than-expected housing starts and
higher roof replacement volumes because of increased consumer
confidence. Under this scenario, the company's adjusted leverage
could improve to below 4x on a sustained basis while it increases
its size and geographic diversity.
S&P could take a negative rating action during this period if raw
material cost volatility or intense price competition brings
operating margins to below 5%, causing the company's credit
measures to deteriorate below expected levels and liquidity to
narrow. Specifically, S&P could lower the ratings if leverage
exceeded 5.5x and if total liquidity, including cash and revolving
credit availability, fell below $25 million.
ROTHSTEIN ROSENFELDT: Trustee to Depose Luxury-Goods Companies
--------------------------------------------------------------
The official liquidating Scott Rothstein's law firm will depose
representatives of more than a dozen jewelers and watchmakers -
including Harry Winston and Chopard - to uncover information about
the spending habits of the convicted Ponzi-scheme operator and his
wife, Dow Jones' DBR Small Cap reports.
According to the report, Chapter 11 trustee Herbert Stettin on
Wednesday filed papers notifying the U.S. Bankruptcy Court in Fort
Lauderdale, Fla., of the 16 depositions that will take place
between Nov. 10 and Nov. 16. The report relates in addition to
giant rough-diamond producer De Beers and high-end jeweler Harry
Winston, Stettin is also seeking to depose representatives of
luxury watchmakers Chopard, Piaget and Tourneau, as well as
celebrity jeweler Jacob & Co.
The report notes Mr. Stettin is asking the companies to turn over
various records, including all invoices reflecting jewelry and
watches purchased by Scott Rothstein, wife Kimberly Rothstein, and
Rothstein's law firm, Rothstein Rosenfeldt Adler PA.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA, has been suspected of running a $1.2 billion Ponzi scheme.
U.S. authorities claimed in a civil forfeiture lawsuit filed
November 9, 2009, that Mr. Rothstein, the firm's former chief
executive officer, sold investments in non-existent legal
settlements. Mr. Rothstein pleaded guilty to five counts of
conspiracy and wire fraud on January 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the Chapter
11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
RYLAND GROUP: Posts $29.9 Million Net Loss in Third Quarter
-----------------------------------------------------------
The Ryland Group Inc. reported results for its third quarter ended
September 30, 2010.
For the third quarter ended September 30, 2010, the Company
reported a consolidated net loss of $29.9 million compared to a
consolidated net loss of $52.5 million for the same period in
2009. For the third quarter ended September 30, 2010, the Company
had pretax charges for inventory and other valuation adjustments
and write-offs that totaled $16.7 million, compared to pretax
charges that totaled $39.1 million for the same period in 2009.
The Company's balance sheet at Sept. 30, 2010, showed $1.70
billion in total assets, $1.11 billion in total liabilities, and
stockholder's equity of $585.75 million.
For the nine months ended September 30, 2010, the Company reported
a consolidated net loss of $66.0 million compared to a
consolidated net loss of $201.5 million for the same period in
2009. For the nine months ended September 30, 2010, the Company
had pretax charges for inventory and other valuation adjustments
and write-offs that totaled $30.2 million, compared to pretax
charges that totaled $135.9 million for the same period in 2009.
Additionally, the Company had pretax charges that totaled $19.3
million related to debt repurchases during the nine months ended
September 30, 2010, compared to a net gain that totaled $10.6
million related to debt reduction for the same period in the prior
year.
A full-text copy of the Company's earnings release is available
for free at http://ResearchArchives.com/t/s?6d30
About Ryland Group
Headquartered in Calabasas, California, The Ryland Group, Inc.
(NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's
largest homebuilders and a leading mortgage-finance company.
Since its founding in 1967, Ryland has built more than 285,000
homes and financed more than 240,000 mortgages. The Company
currently operates in 15 states and 19 homebuilding divisions
across the country and is listed on the New York Stock Exchange
under the symbol "RYL."
* * *
As reported by the Troubled Company Reporter on June 21, 2010,
Fitch Ratings has affirmed Ryland Group, Inc.'s ratings -- Issuer
Default Rating at 'BB'; and Senior unsecured debt at 'BB'. The
Rating Outlook has been revised to Stable from Negative.
Ryland Group carries Moody's "Ba3" corporate family rating, "Ba3"
probability of default rating, "Ba3" senior unsecured notes
rating, and "SGL-2" speculative grade liquidity rating. Ryland
Group carries Standard & Poor's Ratings Services' 'BB-' corporate
credit and senior unsecured note ratings.
SCHUTT SPORTS: Committee Taps Lowenstein Sandler as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Schutt Sports, Inc., asks the U.S. Bankruptcy Court for
the District of Delaware for permission to employ Lowenstein
Sandler PC as its counsel.
Lowenstein Sandler will, among other things:
-- participate in the formulation of a Plan;
-- provide legal advice as necessary with respect to any
disclosure statement and Plan filed in this case and with
respect to the process for approving or disapproving
disclosure statements and confirming or denying confirmation
of a Plan; and
-- preparing 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 $410 - $765
Counsel $320 - $520
Associates $220 - $380
Legal Assistants $120 - $215
To the best of the Committee's knowledge, Lowenstein Sandler is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Schutt Sports, Inc.
Headquartered in Litchfield, Illinois, Schutt Sports, Inc. -- fka
Schutt Manufacturing Company, Schutt Sports Manufacturing Co.,
Schutt Sports Distribution Company, and Schutt Athletic Sales
Company -- and its affiliates manufacture team sporting equipment,
primarily for football, baseball and softball.
Schutt Sports filed for Chapter 11 bankruptcy protection on
September 6, 2010 (Bankr. D. Del. Case No. 10-12795). Victoria
Watson Counihan, Esq., at Greenberg Traurig, LLP, assists the
Debtor in its restructuring effort. Ernst & Young is the Debtor's
financial advisor. Oppenheimer & Co., Inc., is the Debtor's
investment banker.
The Debtor estimated is assets and debts at $50 million to
$100 million.
SCHUTT SPORTS: U.S. Trustee Forms Seven-Member Creditors Panel
--------------------------------------------------------------
Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, appointed
seven members to the official committee of unsecured creditors in
the Chapter 11 cases of Schutt Sports, Inc., et al.
The Creditors Committee members are:
1. Ponderosa International Corp.
Attn: George Lu
3F Ming Tsu West Rd.
Taipei, Taiwan 10364
Tel: (886)(2) 2593-6111
Fax: (886)(2) 2592-2551
2. Genn Shang Ind Co. Ltd.
Attn: Jason Lee
I-14 Matou Kow Makow Li
Matou Chen, Tainan, Taiwan 721
Tel: (886)(6) 570-3281
Fax: (886)(6) 570-3456
3. United Parcel Service
Attn: Steven D. Sass
307 International Circle, Suite 270
Hunt Valley, MD 21030
Tel: (410) 773-4040
Fax: (410) 773-4057
4. NOCSAE
Attn: Michael Oliver
11020 King St., Suite 215
Overland Park, KS 66210
Tel: (913) 498-8814
Fax: (913) 498-8817
5. SABIC Innovative Plastics
Attn: Val Venable
9930 Kincey
Huntersville, NC 28078
Tel: (704) 992-5075
Fax: (866) 585-2386
6. Scarbrough International, Ltd.
Attn: Doug Ferrell
10841 Ambassador Drive
Kansas City, MO 64153
Tel: (816) 891-2400
Fax: (816) 584-2505
7. Zhuhai Putuo Commerce & Trading Company Ltd.
Attn: Yan Wu
RM 1001 101F
Tai Yau Bld, Hong Kong
Tel: (00852) 28898833
Fax: (00852) 28898433
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.
Headquartered in Litchfield, Illinois, Schutt Sports, Inc. -- fka
Schutt Manufacturing Company, Schutt Sports Manufacturing Co.,
Schutt Sports Distribution Company, and Schutt Athletic Sales
Company -- and its affiliates manufacture team sporting equipment,
primarily for football, baseball and softball.
Schutt Sports filed for Chapter 11 bankruptcy protection on
September 6, 2010 (Bankr. D. Del. Case No. 10-12795). Victoria
Watson Counihan, Esq., at Greenberg Traurig, LLP, assists the
Debtor in its restructuring effort. Ernst & Young is the Debtor's
financial advisor. Oppenheimer & Co., Inc., is the Debtor's
investment banker.
The Debtor estimated is assets and debts at $50 million to
$100 million.
SCHUTT SPORTS: Files Schedules of Assets and Liabilities
--------------------------------------------------------
Schutt Sports, Inc., filed with the U.S. Bankruptcy Court for the
District of Delaware its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $2,216,031
B. Personal Property $51,876,745
+ Undertermined
C. Property Claimed as
Exempt
D. Creditors Holding $34,435,344
Secured Claims + Undertermined
E. Creditors Holding $220,592
Unsecured Priority + Undertermined
Claims
F. Creditors Holding $30,636,961
Unsecured Non-priority + Undertermined
Claims
----------- -----------
TOTAL $54,092,776 $65,292,897
+ Undertermined + Undertermined
A full-text copy of the schedules is available for free at:
http://bankrupt.com/misc/SchuttSports_SAL.pdf
Headquartered in Litchfield, Illinois, Schutt Sports, Inc. -- fka
Schutt Manufacturing Company, Schutt Sports Manufacturing Co.,
Schutt Sports Distribution Company, and Schutt Athletic Sales
Company -- and its affiliates manufacture team sporting equipment,
primarily for football, baseball and softball.
Schutt Sports filed for Chapter 11 bankruptcy protection on
September 6, 2010 (Bankr. D. Del. Case No. 10-12795). Victoria
Watson Counihan, Esq., at Greenberg Traurig, LLP, assists the
Debtor in its restructuring effort. Ernst & Young is the Debtor's
financial advisor. Oppenheimer & Co., Inc., is the Debtor's
investment banker.
The Debtor estimated is assets and debts at $50 million to
$100 million.
SEMINOLE TRIBE: Fitch Assigns 'BB+' Rating to $37.4 Mil. Bonds
--------------------------------------------------------------
Fitch Ratings assigns a 'BB+' rating to $37.4 million Seminole
Tribe of Florida's gaming division bonds, series 2010A (tax-
exempt) and to $330 million STOF's gaming division bonds, series
2010B. About $275 million of the proceeds will be used for
capital expansion projects across four different gaming properties
with the remainder to be allocated for tribal purposes and
issuance fees. The largest projects being funded are gaming space
reconfigurations and parking additions at the Coconut Creek and
Tampa facilities.
Both series A and B will have bullet maturities in 2017 and will
be on parity with approximately $526 million of existing gaming
division bonds and about $1 billion of bank term loans secured by
the first lien on the gaming revenues of the Seminole Gaming
Division. The bonds will be issued pursuant to a 2010
supplemental indenture. Main items in the supplement that differ
from the outstanding 2005 indenture are the additions of the
restricted payments covenant and a fixed charge coverage test,
which is being added to the debt service coverage test. The
restricted payment covenants limit distributions to the tribe if
the tribe is in default or maintains below investment grade
ratings unless its fixed charge coverage is above 2.5 times and
its senior leverage is below 3.5x. The fixed charge coverage test
calculation omits principal amortization but includes all debt
guaranteed by the tribe and secured by the pledged revenues.
The additional debt does not have a material impact on STOF's
Issuer Default Rating of 'BB' given Fitch's view that the
financial credit profile of the tribe's gaming operations remains
strong relative to the rating category. Pro forma for the
transaction the latest 12 months June 30, 2010 gross leverage is
approximately 2.2x (including the tribe's special obligation bonds
and accounting for approximately $76 million of debt that was
amortized in October 2010), up from 1.9x without the new debt.
The tribe's issuer rating, which was lowered to 'BB' from 'BBB-'
in June 2010, incorporates Fitch's escalated concern related to
STOF's governance at the tribal level, precipitated by the Notice
of Violation letter the tribe received from the National Indian
Gaming Commission. The NOV was related to the tribe's failure to
adhere to the use of gaming revenue proceeds provisions set by
'IGRA, NIGC regulation, and the tribe's own ordinances' and listed
potential penalties, among them possible casino closures.
The tribe has settled the NOV with the NIGC and agrees to undergo
future audits:
Since the NOV, STOF has shared with Fitch NIGC signed
documentation stating that the NOV penalties were cured. STOF
also entered into a pending Civil Fine Assessment agreement with
the NIGC related to the NOV settlement whereby the tribe pays a
fine of $500,000 and agrees to undergo an annual audit of its
adherence to the use of net gaming revenue provisions. STOF will
be able to deduct $250,000 from the fine to cover the cost of the
audits, which will span three years and will be conducted by the
tribe's current auditor (Deloitte) with the audit reports being
submitted to NIGC no later than June 30 following each fiscal year
(fiscal year ends Sept. 30). The tribe further agrees to be
assessed a $1.5 million fine per violation that is found in the
audit and remains uncured within a stipulated timeframe. Fitch
views the CFA agreement positively as it will provide a timelier
and more transparent reporting framework pertaining to STOF's
progress in implementing policies and control measures related to
the tribal distributions from the gaming revenues. Upward rating
momentum would be considered if the tribe can demonstrate through
these reports and other means a sustained track record of adhering
to the gaming revenue allocation policies.
Increased state revenue share impacting margins but revenue trends
remain stable:
In light of the increased competition from the Broward County
pari-mutuel facilities and the negative trends in gaming revenues
nationwide, STOF's gaming revenue trends have been resilient with
the preliminary gross revenues for fiscal 2010 being flat relative
to the prior year. The gaming operations' fiscal 2010 EBITDA
declined by 6%, which captures the increased revenue share
payments related to the new Class III state compact that became
effective in July 2010 when the compact was recorded in the
federal register. For the first 24 months following the effective
date of the compact STOF will pay $150 million in revenue share to
the state per year relative to $104 million paid in fiscal 2009.
Thereafter, state revenue share will be formula driven with STOF
guaranteeing $233 million per year until year five of the compact.
As mentioned in the June release, the overall provisions of the
compact were within the scope of Fitch's previous expectations and
are largely credit neutral.
Revenue trends have been softer in STOF's southern Florida market
where the tribe is facing new competition from pari-mutuel
facilities, specifically Calder and Flagler opened slot operations
in late 2009/early 2010, adding about 2,000 additional slot
machines into the market. STOF's southeastern Florida flagship
facility -- Hollywood Hard Rock -- experienced a 4% decline
through fiscal nine-months ended June 30, 2010, relative to the
same period in the prior year. This decline was largely offset by
STOF's Tampa Hard Rock, which -- being in a much more protected
market -- experienced an increase of 4% in revenues during the
same period. Fitch expects that the currently planned capital
projects will aid in maintaining the steady growth in Tampa while
easing the declines in south Florida. Overall, Fitch expects
measured growth in revenues as new capacity is added by the
projects and slightly negative to flat EBITDA growth, which will
be impacted over the next three years by the ramp up in the state
revenue share payments. The anticipated stable trends are further
supported by Fitch's view that the ramp up in slot capacity by the
pari-mutuels has reached a plateau as evidenced by the number of
machines at the pari-mutuels declining to 5,399 in September 2010
from 5,627 in July.
Project pipeline remains modest relative to the operations:
Of the $275 million of the proceeds to be used for gaming capital
projects, $125 million will be directed towards the Coconut Creek
facility where gaming operations will be increased sizably. The
gaming floor will be increased through a construction of a
permanent structure, with the number of slot machines there going
up to approximately 2,400 from the current level of about 1,500.
Additional parking and table games will also be added. The second
largest improvement will be at the Tampa facility, where STOF
plans to spend approximately $75 million to also add gaming space
and parking among other improvements. The remainder will be spent
on general improvements and more modest expansions at Hollywood
Hard Rock ($50 million) and the Hollywood Classic ($25 million).
Fitch views this development pipeline as conservative as it is
fully funded with this issuance and spread amongst multiple
properties. Longer term Fitch thinks that STOF may undertake
significantly larger expansion projects particularly in Tampa
where the market remains relatively unpenetrated, but this concern
is somewhat tempered by the state compact limiting gaming
operations to STOF's current facilities (although replacements are
permitted). Also offsetting this concern is STOF's historically
measured approach to capital expansions and Fitch's belief that
any sizable project would be funded conservatively.
Compact summary:
The 2010 compact confirms the tribe's ability to operate table
games at most of its facilities but limits the authorized period
for table games to five years, after which the tribe has to seek
reauthorization. The revenue share provision of the 2010 compact
relative to the 2007 compact under which the tribe had been
operating are not substantially different. Importantly, the Tampa
Hard Rock, which generates roughly half of the EBITDA for the
gaming enterprise, should not see considerable slots competition
at least until 2030. However, the compact ratification in the
state's legislature also included a reduction on the pari-mutuels'
slot machine operations tax rate to 35% from 50%, which could spur
additional investment and promotional spending by the commercial
operators.
Liquidity remains strong:
STOF's gaming division liquidity profile is strong, characterized
by robust cash flow generation prior to distributions to the tribe
and the fully funded nature of the current project pipeline.
Although much of STOF's debt has level debt service, it does face
a $773 million term loan maturity coming due in fiscal 2014, which
Fitch believes will need to be refinanced. Negative rating
momentum could occur if that maturity is not addressed within the
next two years.
Fitch currently rates STOF:
-- Issuer rating of 'BB';
-- Special obligation bonds, series 2007A & B, series 2008 A
'BB';
-- Gaming division bonds, series 2005A & B, 'BB+';
-- Term loan facility, series 2007 B-1, B-2 & B-3, 'BB+'.
The Rating Outlook is Stable.
The one-notch distinction between the 'BB' transaction rating on
the special obligation bonds and the 'BB+' transaction rating on
the gaming revenue bonds and term loan reflects the special
obligation bondholders' subordinated interest in the cash flows of
the gaming division. Debt service on the special obligation bonds
is payable from gaming division cash flows after debt service
requirements on the gaming revenue bonds and term loan are met.
STOF has entered into a distribution agreement with the trustee,
pursuant to which it covenants that debt service on the special
obligation bonds will be paid before the residual gaming revenues
are used for any governmental purposes, including per capita
payments to members.
SENSATA TECHNOLOGIES: Moody's Retains 'B2' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service said that Sensata Technologies B.V. B2
Corporate Family Rating and positive outlook remain unchanged
following the announcement of its public holding company, Sensata
Technologies Holding N.V., that it has reached a definitive
agreement to acquire the "Automotive on Board" sensors business of
Honeywell International for $140 million in cash.
Moody's last rating action on Sensata was August 26, 2010, when
the company's Corporate Family and Probability of Default ratings
were upgraded to B2 from B3 and the ratings outlook was changed to
positive.
Sensata Technologies B.V., incorporated under the laws of The
Netherlands, is a global designer, manufacturer, and marketer of
customized and highly-engineered sensors and control products.
Sensata is a wholly-owned subsidiary of Sensata Technologies
Holding, N.V. Its sensors segment accounts for approximately 60%
of the company's 2009 revenues, and supplies sensors and
transducers to the commercial, industrial and automotive markets.
Core applications include HVAC, engine efficiency, ride
stabilization, transmission and steering effectiveness. Its
controls segment represents about 40% of Sensata's 2009 revenues,
and provides electrical protection and circuit breaker systems
designed to prevent damage from overheating and fires in
commercial aviation, commercial HVAC, appliances, automotive and
lighting applications. Revenue for the LTM period ended 9/30/10
approximated $1.5 billion.
SHAHIN MELAMED: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Shahin Melamed
14663 Deervale
Sherman Oaks, CA 91403
Bankruptcy Case No.: 10-23818
Chapter 11 Petition Date: October 31, 2010
Court: U.S. Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Geraldine Mund
Debtor's Counsel: Arthur F. Stockton
STOCKTON THORTON LLP
27322 Calle Arroyo, Suite 36C
San Juan Capistrano, CA 92675
Tel: (866) 682-8776
Fax: (866) 207-4082
E-mail: art@stocktonlawoffices.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Americas Servicing Co Conventional Real $925,076
P.O. Box 10328 Estate Mortgage
Des Moines, IA 50306
Citibank NA Home Equity Line $199,370
P.O. Box 769006 of Credit
San Antonio, TX 78245
Omni Bank NA -- $114,364
111 N. Atlantic Boulevard
Monterey Park, CA 91754
Omni Bank NA -- $114,176
Bank of America Credit Card $101,234
Thd/Cbsd Charge Account $24,101
Wells Fargo Credit Card $16,442
Amex Credit Card $14,835
Discover Fin Svcs LLC Credit Card $13,283
Thd/Cbsd Charge Account $10,489
Chase Credit Card $9,294
Discover Fin Svcs LLC Credit Card $8,961
Lvnv Funding LLC (Original Factoring Company $7,409
Creditor) Account Citibank
Sears
Sears/Cbsd Credit Card $7,291
Toyota Motor Credit Co Automobile $6,730
National City Card Ser Credit Card $5,687
Sears/Cbsd Charge Account $5,102
HSBC/Bstby Charge Account $3,887
Harvard Collections (Original Collection Sprint $1,926
Creditor)
Verizon Wireless Other $1,641
S.H.S. RESORT: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: S.H.S. Resort, LLC
aka Safety Harbor Resort and Spa
105 N. Bayshore Drive
Safety Harbor, FL 34695
Bankruptcy Case No.: 10-25886
Chapter 11 Petition Date: October 28, 2010
Court: U.S. Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Michael G. Williamson
Debtor's Counsel: Steven M. Berman, Esq.
Hugo S. de Beaubien, Esq.
SHUMAKER, LOOP & KENDRICK, LLP
101 E. Kennedy Boulevard, Suite 2800
Tampa, FL 33602
Tel: (813) 229-7600
(813) 221-7425
Fax: (813) 229-1660
E-mail: sberman@slk-law.com
bdebeaubien@slk-law.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by William E. Touloumis, managing member,
Olympia Inv. Grp., LLC, manager.
SLEEP HOLDINGS: Increases Shares as Part of Financing Plan
----------------------------------------------------------
Sleep Holdings, Inc. Chairman Don Hodge disclosed that, "The
recent bankruptcy proceedings of a corporation whose stock and
notes were believed to constitute an important potential asset for
our company has caused us to begin designing a new plan for
financing going forward." Total authorized shares have been
increased to 500 million. In addition, a Note Holder exchanged
its $2,750,000 Note (plus approximately $500,000 of unpaid
interest) for common shares for 300 million shares of common stock
thereby becoming the largest shareholder. A negotiation is
underway, but not completed, for the conversion of the company's
outstanding Series A Preferred Shares ($2,600,000 plus accrued
dividends).
Also the Treasurer resigned. Thomas Bower added those
responsibilities, on an interim basis, to his role as Secretary
and member of the Board of Directors. Alex Vickers has resigned
as a Director. Also the company has decided to adopt a new name.
Once the name change completes regulatory compliance review a new
name (and trading symbol) will be announced.
Sleep Holdings Inc. is seeking, and has identified several
opportunities in several ventures that appear at this time to be
attractive. However, none of the opportunities have yet reached a
review or due diligence stage where the company can be comfortable
in the business plan and / or the company's ability to fund the
opportunity with outside investors. As a result the company
believes there is no reason for increased trading volume or
increased pricing in the common stock except pure speculation.
SMURFIT-STONE CONTAINER: Resolves Cleanup Claims for $15.4 Million
------------------------------------------------------------------
Bankruptcy Law360 reports that the U.S. Environmental Protection
Agency has reached a deal with Smurfit-Stone Container Enterprises
Inc. that requires company to distribute $15.4 million in stock to
pay for environmental cleanup costs at several Superfund sites.
According to Law360, the proposed settlement, filed Thursday in
the U.S. Bankruptcy Court for the District of Delaware, covers
federal claims at six Superfund sites as well as claims brought by
Smurfit-Stone's co-defendants.
About Smurfit-Stone
Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/--
is one of the leading integrated manufacturers of paperboard and
paper-based packaging in North America and one of the world's
largest paper recyclers. The Company operates 162 manufacturing
facilities that are primarily located in the United States and
Canada. The Company also owns roughly one million acres of
timberland in Canada and operates wood harvesting facilities in
Canada and the United States. The Company employs roughly 21,250
employees, 17,400 of which are based in the United States. For
the quarterly period ended September 30, 2008, the Company
reported roughly US$7.450 billion in total assets and
US$5.582 billion in total liabilities on a consolidated basis.
Smurfit-Stone and its U.S. and Canadian subsidiaries filed for
Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead
Case No. 09-10235). Certain of the company's affiliates,
including Smurfit-Stone Container Canada Inc., a wholly owned
subsidiary of SSCE, and certain of its affiliates, filed to
reorganize under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice in Canada.
Smurfit-Stone joined pulp- and paper-related bankruptcies as
rising Internet use hurts magazines and newspapers. Corporacion
Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy
in October. Quebecor World Inc., a magazine printer and Pope &
Talbot Inc., a pulp-mill operator, also sought cross-border
bankruptcies for their operations in the U.S. and Canada.
James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M.
Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in
Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton,
Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware,
serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers
LLC, serves as the Debtors' financial and investment consultants.
Lazard Freres & Co. LLC acts as the Debtors' investment bankers.
Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and
claims agent.
The Company's Plan of Reorganization, which was confirmed by the
U.S. Bankruptcy Court on June 21, 2010, and recognized by a
Canadian court order, became effective July 1.
The Plan provides that 2.25% of the new Smurfit-Stone common stock
pool will be distributed pro rata to the Company's previous
preferred stockholders and 2.25% percent of the New Smurfit-Stone
common stock pool will be distributed pro rata to the Company's
previous common stockholders.
SNOQUALMIE ENTERTAINMENT: S&P Puts 'CCC' Rating on Positive Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings for King
County, Wash.-based Snoqualmie Entertainment Authority, including
the 'CCC' issuer credit rating, on CreditWatch with positive
implications. The Snoqualmie Entertainment Authority is an
unincorporated instrumentality of the Snoqualmie Indian Tribe,
which was created to develop and operate the Snoqualmie Casino.
"The positive CreditWatch listing reflects S&P's belief that,
given substantially improved operating performance in recent
quarters, the Authority is in position to successfully address the
covenant issues surrounding the furniture, fixtures, and equipment
facility," said Standard & Poor's credit analyst Michael Halchak.
Although Snoqualmie does not publicly disclose its financial
information, the Authority has experienced double-digit growth in
revenue and EBITDA, which has exceeded S&P's expectations.
However, S&P does not believe that Snoqualmie will generate a
level of EBITDA that will allow it to meet covenants in December
2010 as they currently stand under the FF&E facility. However,
strong performance trends will allow the Authority, in S&P's view,
to pursue options to address the expected near-term covenant
violation:
The Authority could negotiate an amendment with FF&E lenders that
provides sufficient covenant headroom for the foreseeable future.
S&P note that the Authority has successfully negotiated two prior
amendments to the facility.
It could refinance the FF&E facility.
It could repay all or part of the FF&E facility with excess cash.
A successful resolution of the issues surrounding the FF&E
facility, coupled with the strong operating performance, would
likely lead us to upgrade S&P's rating for the Authority into the
'B' category. S&P expects that any upgrade would be limited to
two notches (to 'B-'), given the Authority's limited operating
history and a lack of clarity around the Tribe's financial policy.
In resolving the CreditWatch listing, S&P will monitor
management's progress toward addressing covenant issues related to
the FF&E facility. In the event the covenant issue is addressed,
S&P expects to raise the issuer credit rating by two notches to
'B-'. Prior to any upgrade, however, S&P will review the terms of
the resolutions and update S&P's performance expectations to
ensure that covenant pressures have been alleviated over the
intermediate term.
SOUTH BAY EXPRESSWAY: Banks Win Mechanics' Lien Dispute
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that secured lenders to South Bay Expressway LP came out
on top in a lawsuit with mechanics' lien holders about who is
entitled to be paid first.
According to the report, contractor Otay River Constructors
contended that holders of mechanics' lien should come ahead of the
secured lenders' claims under California law. South Bay, the
owner of a nine-mile toll road near San Diego, said it couldn't
propose a reorganization plan until the lawsuit was decided.
U.S. Bankruptcy Judge Louise DeCarl Adler in San Diego, in two
rulings last week, said "that the lenders who lent money have a
senior priority interest over the mechanics' lien holders,"
attorney Robert Pilmer said in an interview, according to the
report. Mr. Pilmer, with the Los Angeles office of Kirkland &
Ellis LLP, represents the expressway.
Judge Adler, according to Mr. Rochelle's report, rejected an
argument that the contractors hadn't filed their liens on time.
She said the filings were timely, thus making the mechanics' liens
valid. Although valid, the banks are entitled to payment first,
she ruled.
Otay is a joint venture between Washington Group International
Inc. and an affiliate of Fluor Corp. On account of the ruling,
Fluor announced it would take a charge of about $95 million.
Wells Fargo Bank NA is agent for the secured lenders, which
include Banco Bilbao Vizcaya Argentaria SA.
About South Bay
South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed
for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No.
10-04516). Its affiliate, California Transportation Ventures
Inc., also filed for bankruptcy.
The Debtors developed and operate a four lane, nine mile express
toll road in Southern California commonly referred to as the South
Bay Expressway or State Road 125. Both estimated assets and debts
of $500 million to $1 billion in their bankruptcy petitions.
Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the
Debtors in their restructuring effort. PricewaterhouseCoopers LLP
is auditor and tax advisor. Imperial Capital LLC is financial
advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice
agent.
The Debtors say that as of the bankruptcy filing, they have
roughly $640 million in book value of total assets and roughly
$570 million in book value of total liabilities.
SPANSION INC: Fights $5-Mil. Fees for Ad Hoc Committee Attorneys
----------------------------------------------------------------
Spansion Inc. fought against nearly $5 million in attorneys' fees
requested by two ad hoc committees in its Chapter 11 case Friday,
saying the committees' efforts only hindered the process and did
not make a substantial contribution to the case, Bankruptcy Law360
reports.
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of September 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
SPORTS AUTHORITY: Moody's Assigns 'B3' Rating to $300 Mil. Loan
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to The Sports
Authority, Inc.'s proposed $300 million senior secured term loan,
and revised the company's ratings outlook to stable from negative.
The company's B3 Corporate Family and Probability of Default
ratings were affirmed. The ratings are subject to the receipt and
review of final documentation upon closing of the proposed
refinancing transaction.
Proceeds from the proposed term loan will be used to refinance the
company's existing term loan and a portion of its senior
subordinated notes (unrated by Moody's), as well as pay fees and
expenses related to the transaction.
The proposed term loan will be secured by a first lien on the
company's property, plant and equipment and intangible assets,
and a second lien on the collateral securing the company's
$725 million asset based revolving credit facility (not rated by
Moody's).
Ratings Rationale
The outlook change to stable reflects TSA's improved
profitability, strengthened liquidity profile through maturity
extension, and leading competitive position within the sporting
goods retail sector. The change also recognizes the company's
weak, but improving credit metrics. Finally, the stable outlook
incorporates a tolerance for nominally negative free cash flow,
given the company's existing plans for revamped store growth.
TSA's B3 Corporate Family Rating continues to reflect the
company's weak credit metrics, highlighted by adjusted leverage
above 7.0x (pro forma for refinancing). Moody's expects continued
improvement in TSA's profitability in the near term to offset the
high leverage, driven by a modest recovery in store performance
and enhanced operating discipline. Liquidty should remain
adequate as the company faces no near term maturities and
maintains ample cushion under its revolving credit facility.
In Moody's opinion, TSA is in the early stages of rebounding from
the impact of recessionary economic conditions, and therefore, a
ratings upgrade is less likely in the near term.
The stable outlook reflects Moody's anticipation of ongoing
deleveraging as the company's performance strengthens. A failure
to sustain improvements in operating performance and degradation
in credit metrics could pressure the ratings downward.
This rating has been assigned:
-- $350 million Senior Secured Term Loan due 2017 B3 (LGD 3,
47%)
These ratings have been affirmed:
-- Corporate Family Rating at B3
-- Probability of Default Rating at B3
-- $275 million Senior Secured Term Loan due 2013 at B3 (LGD3,
48%)
STEPHANIE SERPA: Section 341(a) Meeting Scheduled for Nov. 22
-------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Stephanie
Serpa Ream's creditors on November 22, 2010, at 3:00 p.m. The
meeting will be held at 300 Booth Street, Room 3024, Reno, NV
89509.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Los Gatos, California-based Stephanie Serpa Ream filed for Chapter
11 bankruptcy protection on October 20, 2010 (Bankr. D. Nev. Case
No. 10-54146). Stephen R. Harris, Esq., at Belding, Harris &
Petroni, LTD, assists the Debtor in its restructuring effort. The
Debtor estimated its assets at $10 million to $50 million and
debts at $1 million to $10 million.
STEPHANIE SERPA: Taps Belding Harris as Bankruptcy Counsel
----------------------------------------------------------
Stephanie Serpa Ream asks for authorization from the U.S.
Bankruptcy Court for the District of Nevada to employ Belding,
Harris & Petroni, Ltd., as bankruptcy counsel.
Belding Harris will, among other things:
a. prepare and file schedules and statement of financial
affairs;
b. attend at and be responsible for hearings, pretrial
conferences, and trials arising from the bankruptcy filing
or any litigation arising in connection therewith;
c. prepare, file and present to the Court any pleadings
necessary to protect the legal interests of the Debtor,
including sales of real and personal property, injunctive
relief requests and any appropriate adversary actions; and
d. prepare, file and present to the Court a disclosure
statement and plan of reorganization.
Belding Harris will be paid based on the hourly rates of its
personnel:
Stephen R. Harris $400
Gloria M. Petroni $375
Chris D. Nichols $375
Paraprofessional $225
Stephen R. Harris, Esq., at Belding Harris, assures the Court that
the firm is "disinterested" as that term is defined in Section
101(14) of the Bankruptcy Code.
Los Gatos, California-based Stephanie Serpa Ream filed for Chapter
11 bankruptcy protection on October 20, 2010 (Bankr. D. Nev. Case
No. 10-54146). The Debtor estimated its assets at $10 million to
$50 million and debts at $1 million to $10 million.
STUYVESANT TOWN: CWCapital Buys Out Ackman-Led Junior Creditors
---------------------------------------------------------------
PSW NYC, LLC, a venture between Winthrop Realty Trust (NYSE:FUR)
and funds managed by Pershing Square Capital Management, L.P., has
settled the outstanding litigation with CWCapital Asset Management
LLC, acting as special servicer on behalf of the Trusts that it
represents, relating to PSW's foreclosure on the Peter Cooper
Village/Stuyvesant Town Mezzanine 1-3 loans.
The settlement provides, in part, for the payment to PSW of
$45 million and the transfer to CWCAM, on behalf of the Trusts,
the Mezzanine 1-3 loans previously owned by PSW.
Winthrop is entitled to receive $10.125 million of the settlement
payment on account of its 22.5% interest in PSW.
Winthrop Realty Trust -- http://www.winthropreit.com/-- is a
NYSE-listed real estate investment trust headquartered in Boston,
Massachusetts.
* * *
The Wall Street Journal's Lingling Wei last week reported the
settlement cleared the path for a group of senior creditors to
take over the property in a way that could save it at least
$100 million in state and local taxes.
According to the Journal's Ms. Wei, under the deal, CW Capital,
which represents holders of the main $3 billion mortgage on the
11,200-apartment property, paid off a rival group of creditors --
led by hedge fund chief Bill Ackman. The Journal notes Mr.
Ackman's group purchased a key piece of the junior debt for
$45 million in August and has since been maneuvering for control.
CW bought out Mr. Ackman's group for $45 million, meaning his
group basically broke even while falling short in his goal to
acquire the housing complex, according to the Journal. The
property's future ownership has been in limbo since January, when
the current owners, a group led by Tishman Speyer, defaulted on
debt used in a $5.4 billion purchase of the complex.
According to the Journal, CW said in a statement it now will focus
"on ensuring a stable transition of the property and maximizing
recovery" of the mortgage debt. A representative for Mr. Ackman's
group declined to comment.
Stuyvesant Town-Peter Cooper Village comprises 56 multi-story
buildings, situated on 80 acres, and includes a total of 11,227
apartments. The loan sponsors, Tishman Speyer Properties, LP and
BlackRock Realty, acquired the property with the intent of
converting rent-stabilized units to market rents as tenants
vacated the property; however, the conversion of units has since
been determined to be illegal by the New York State Court of
Appeals. In addition to the $3 billion securitized balance,
there is an additional $1.5 billion of mezzanine debt held
outside the trust. As reported by the TCR on January 26, 2010, a
group led by Tishman Speyer Properties has decided to give up the
Peter Cooper Village and Stuyvesant Town apartment complex in
Manhattan to its creditors. The decision comes after the venture
between Tishman and BlackRock defaulted on the $4.4 billion debt
used to help finance the acquisition of those properties.
SYNIVERSE TECHNOLOGIES: S&P Puts 'BB-' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'BB-'
corporate credit rating and all other ratings on Tampa, Florida-
based Syniverse Technologies Inc. on CreditWatch with negative
implications.
The rating action follows the company's announcement that it
entered into a definitive agreement to be acquired by private-
equity sponsors The Carlyle Group in a LBO transaction valued at
around $2.6 billion. Under the agreement, Carlyle will acquire
all of Syniverse's outstanding common shares for $31 per share in
cash, representing a 35% premium over the average closing share
price during the last 30 days ended Oct. 26, 2010. S&P expects
the transaction to close in the first quarter of 2011.
The transaction has fully committed financing, which consists of a
combination of equity contributed by Carlyle and external debt
financing. Despite strong operating trends, leverage reduction,
and solid free cash flow generation over the past few years, the
proposed financing will likely result in higher leverage from 2.2x
as of June 30, 2010.
"The CreditWatch placement is based on S&P's expectations for
higher debt leverage associated with the transaction," said
Standard & Poor's credit analyst Allyn Arden. S&P plans to review
the specific terms of the proposed financing and its effect on
leverage and cash flow to resolve the CreditWatch listing.
"A downgrade, if any, could be more than one notch," added Mr.
Arden.
TERRESTAR NETWORKS: Wants to Tap Ordinary Course Professionals
--------------------------------------------------------------
TerreStar Networks Inc. and its units ask the U.S. Bankruptcy
Court for authority to employ and compensate certain professionals
utilized in the ordinary course of their business. The Debtors
also reserve the right to retain additional OCPs from time to time
during the pendency of their Chapter 11 cases.
The OCPs provide services for the Debtors in a variety of matters
unrelated to the Chapter 11 cases, including legal services with
regard to specialized areas of the law, like securities, tax,
corporate governance and Federal Communications Commission
regulation, relates Ira S. Dizengoff, Esq., at Akin Gump Strauss
Hauer & Feld LLP, in New York.
A list of the Debtors' current OCPs is available for free at:
http://bankrupt.com/misc/TSN_OCPs.pdf
The Debtors also employ, in the ordinary course of business,
professional service providers. Although some of the Service
Providers have professional degrees and certifications, they
provide services to the Debtors that are integral to the day-to-
day operation of the Debtors' business and do not directly relate
to or materially affect the administration of the Chapter 11
cases.
Mr. Dizengoff asserts that the continued employment and
compensation of the OCPs and Service Providers is in the best
interests of the Debtors' estates, creditors and other parties-
in-interest.
Although the Debtors anticipate that the OCPs and Service
Providers will wish to continue to represent them during their
Chapter 11 cases, many would not be in a position to do so if the
Debtors could not pay them on a regular basis, Mr. Dizengoff
tells the Court. He asserts that without the background
knowledge, expertise and familiarity that the OCPs and Service
Providers have relative to the Debtors and their operations, the
Debtors undoubtedly would incur additional and unnecessary
expenses in educating and retaining replacement professionals.
It would be impractical, inefficient and extremely costly for the
Debtors and their legal advisors to prepare and submit individual
applications and proposed retention orders for each OCP and
Service Provider, Mr. Dizengoff points out, in light of the
substantial number of OCPs and Service Providers, and the
significant costs associated with the preparation of employment
applications for professionals who will receive relatively modest
fees.
Although some of the OCPs and Service Providers may hold
relatively small unsecured claims against the Debtors in
connection with services rendered to the Debtors prepetition, the
Debtors do not believe that any of the OCPs or Service Providers
have an interest materially adverse to them, their creditors or
other parties-in-interest, according to Mr. Dizengoff.
Against this backdrop, the Debtors have designed streamlined
procedures for the retention and compensation of OCPs after the
Petition Date. The OCP Procedures will enable the Debtors to
employ OCPs upon the filing of a declaration of
disinterestedness, and a brief objection period for certain
parties, including the United States Trustee for the Southern
District of New York and any statutory committee appointed in
these Chapter 11 cases. Among other things, each Declaration of
Disinterestedness will state that the respective OCP does not
have any material interest adverse to the Debtors or their
estates.
The OCP Procedures further provide that all OCP fees and
expenses, excluding costs and disbursements, must not exceed
$50,000 per month and that each OCP's fees, excluding costs and
disbursements, must not exceed $300,000 in the aggregate during
the pending of the Debtors' Chapter 11 cases.
A copy of the Proposed OCP Retention and Compensation Procedures
is available for free at:
http://bankrupt.com/misc/TSN_OCPProcs.pdf
About TerreStar Networks
Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR)
-- http://www.terrestar.com/-- is in the mobile communications
business through its ownership of TerreStar Networks, its
principal operating subsidiary, and TerreStar Global.
TerreStar Networks, in cooperation with its Canadian partners,
TerreStar Canada and TerreStar Solutions, majority-owned
subsidiaries of Trio 1 and 2 General Partnerships, plans to launch
an innovative wireless communications system to provide mobile
coverage throughout the United States and Canada using integrated
satellite-terrestrial smartphones and other devices. This system
build out will be based on an integrated satellite and ground-
based technology intended to provide communication service in most
hard-to-reach areas and will provide a nationwide interoperable,
survivable and critical communications infrastructure. The
Company intends to provide multiple communications applications,
including voice, data and video services.
As of June 30, 2010, the Company had four wholly owned
subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar
Holdings Inc., and TerreStar New York Inc. Motient Ventures
Holding Inc., a wholly owned subsidiary of MVH Holdings Inc.,
directly holds approximately 89.3% and 86.5% interest in TerreStar
Networks and TerreStar Global, respectively.
TerreStar Networks Inc. and Its affiliates filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No.
10-15446).
The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not
among the Chapter 11 filers.
The Garden City Group, Inc. will act as claims and noticing agent
in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq.,
and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira
Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq.,
at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy
counsel to the Debtors. Blackstone Advisory Partners LP is the
financial advisor.
Bankruptcy Creditors' Service, Inc., publishes TerreStar
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by TerreStar Networks Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TERRESTAR NETWORKS: Wants to Hire Fraser Milner as Counsel
----------------------------------------------------------
TerreStar Networks Inc. and its units ask the U.S. Bankruptcy
Court for authority to employ Fraser Milner Casgrain LLP as their
Canadian counsel to represent them on all Canadian issues in
connection with their ongoing restructuring efforts in the Chapter
11 cases and the proceedings pursuant to the Companies' Creditors
Arrangement Act in the Ontario Superior Court of Justice
(Commercial List) in Toronto, Ontario, Canada, nunc pro tunc to
the Petition Date.
The Debtors relate that they have selected Fraser Milner as their
Canadian counsel because of the firm's institutional knowledge of
their businesses and financial affairs and the firm's recognized
expertise in cross-border reorganizations.
Fraser Milner will render these professional services on behalf
of the TerreStar Canada Debtors, as applicable, among others:
(a) represent TerreStar Networks, Inc. as the proposed foreign
representative in the Canadian Proceeding;
(b) advise the Debtors with respect to Canadian issues
impacting their rights, powers and duties in the Chapter
11 cases and the Canadian Proceeding;
(c) assist and advise the Debtors and take all necessary or
appropriate actions at the Debtors' direction with respect
to Canadian issues that relate to protecting and
preserving the Debtors' estates, including the defense of
any actions commenced against the Debtors in Canada, and
the negotiation of Canadian disputes in which the Debtors
are involved;
(d) draft all necessary or appropriate motions, applications,
answers, orders, reports, and other papers in connection
with the administration of the Canadian Proceeding;
(e) represent the Debtors in negotiations with Canadian
governmental or quasigovernmental authorities or other
parties-in-interest as it relates to Canadian issues
affecting the estates;
(f) appear on behalf of TerreStar Networks Inc. as the
proposed foreign representative at all hearings and other
proceedings in the Canadian Proceeding;
(g) assist and advise the Debtors with respect to any legal
issue which may arise in the context of their relationship
with the TerreStar Canada Debtors;
(h) take all necessary or appropriate actions as directed by
the Debtors in connection with developing and negotiating
a plan or plans of reorganization and related disclosure
statements and all related documents, and other further
actions as may be required in connection with the
administration of the Debtors' estates and the Canadian
Proceeding; and
(i) perform other legal services as the Debtors may require in
connection with the Chapter 11 cases and the Canadian
Proceeding.
The Debtors propose to pay Fraser Milner according to the firm's
standard hourly rates, which currently are:
-- $475 to $1,000 for partners and senior consultants;
-- $310 to $500 for associates; and
-- $100 to $320 for paraprofessionals, including articling
students.
The current hourly rates for the Fraser Milner lawyers with
primary responsibility in the Debtors' cases are:
Professional Position Hourly Rate
------------ -------- -----------
Alex L. MacFarlane Partner - Insolvency $750
and Restructuring
Michael J. Wunder Partner - Insolvency $750
and Restructuring
Ryan C. Jacobs Counsel - Insolvency $600
and Restructuring
Kirsten Embree Partner - Communications $525
Jarvis Hetu Associate - Insolvency $310
and Restructuring
In addition, the Debtors seek to reimburse Fraser Milner for the
firm's all actual and necessary out-of-pocket expenses incurred,
including, but not limited to, photocopying services, printing,
delivery charges, filing fees, postage, and computer research
time.
Michael J. Wunder, Esq., a partner at Fraser Milner, assures the
Court that his firm is a "disinterested person" as the term is
defined under Section 101(14) of the Bankruptcy Code.
About TerreStar Networks
Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR)
-- http://www.terrestar.com/-- is in the mobile communications
business through its ownership of TerreStar Networks, its
principal operating subsidiary, and TerreStar Global.
TerreStar Networks, in cooperation with its Canadian partners,
TerreStar Canada and TerreStar Solutions, majority-owned
subsidiaries of Trio 1 and 2 General Partnerships, plans to launch
an innovative wireless communications system to provide mobile
coverage throughout the United States and Canada using integrated
satellite-terrestrial smartphones and other devices. This system
build out will be based on an integrated satellite and ground-
based technology intended to provide communication service in most
hard-to-reach areas and will provide a nationwide interoperable,
survivable and critical communications infrastructure. The
Company intends to provide multiple communications applications,
including voice, data and video services.
As of June 30, 2010, the Company had four wholly owned
subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar
Holdings Inc., and TerreStar New York Inc. Motient Ventures
Holding Inc., a wholly owned subsidiary of MVH Holdings Inc.,
directly holds approximately 89.3% and 86.5% interest in TerreStar
Networks and TerreStar Global, respectively.
TerreStar Networks Inc. and Its affiliates filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No.
10-15446).
The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not
among the Chapter 11 filers.
The Garden City Group, Inc. will act as claims and noticing agent
in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq.,
and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira
Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq.,
at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy
counsel to the Debtors. Blackstone Advisory Partners LP is the
financial advisor.
Bankruptcy Creditors' Service, Inc., publishes TerreStar
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by TerreStar Networks Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TERRESTAR NETWORKS: Proposes Stikeman as Canadian Counsel
---------------------------------------------------------
TerreStar Networks Inc. and its U.S. affiliates ask the U.S.
Bankruptcy Court for authority to employ Stikeman Elliott LLP as
Canadian counsel for the TerreStar Canada Debtors nunc pro tunc to
the Petition Date.
The TerreStar U.S. Debtors note that they are contemporaneously
seeking to retain Fraser Milner Casgrain LLP as their Canadian
counsel to represent them -- other than the TerreStar Canada
Debtors -- on all Canadian issues in connection with their
ongoing restructuring efforts in the Chapter 11 cases and the
Canadian Proceeding, as well as to act as counsel to TerraStar
Networks, Inc. as the proposed foreign representative in the
Canadian Proceeding.
The TerreStar Canada Debtors -- TerreStar Networks Holdings
(Canada) Inc. and TerreStar Networks (Canada) Inc. -- are not
majority owned nor controlled by TSN. TSN has a minority
interest in the TerreStar Canada Debtors. Accordingly, the
TerreStar Canada Debtors need Stikeman as Canadian counsel to
provide them independent legal advice in connection with the
Chapter 11 cases and in the Canadian Proceeding.
The representation of the TerreStar Canada Debtors by distinct
Canadian counsel is required and appropriate in the circumstances
given, inter alia, that the TerreStar Canada Debtors and the
other Debtors do not have the same majority and controlling
shareholders, Jeffrey Epstein, TerreStar Networks, Inc.'s
president and chief executive officer, relates. "The appointment
of a distinct Canadian counsel is required for the proper
exercise of the fiduciary duties of the directors of the
TerreStar Canada Debtors."
The TerreStar Canada Debtors relate that they have selected
Stikeman as their Canadian counsel because of the firm's
institutional knowledge of their businesses and financial affairs
and the firm's recognized expertise in cross-border
reorganizations.
As Canadian Counsel, Stikeman Elliott will:
(a) advise the TerreStar Canada Debtors with respect to
Canadian issues impacting their rights, powers and duties
in these cases and in the Canadian Proceeding;
(b) assist and advise the TerreStar Canada Debtors and take
all necessary or appropriate actions at the TerreStar
Canada Debtors' direction with respect to Canadian issues
that relate to protecting and preserving the TerreStar
Canada Debtors' estates, including the defense of any
actions commenced against the TerreStar Canada Debtors in
Canada, and the negotiation of disputes in Canada in which
the TerreStar Canada Debtors are involved;
(c) represent the TerreStar Canada Debtors in negotiations
with Canadian governmental or quasi-governmental
authorities or other parties-in-interest as it relates to
Canadian issues affecting their estates;
(d) assist and advise the TerreStar Canada Debtors with
respect to any legal issue which may arise in the context
of their relationship with TSN, including, without
limitation, as shareholder of the TerreStar Canada
Debtors;
(e) take all necessary or appropriate actions as directed by
the TerreStar Canada Debtors in connection with developing
and negotiating a plan or plans of reorganization and
related disclosure statement(s) and all related documents,
and further actions as may be required in connection with
the administration of the TerreStar Canada Debtors'
estates in the cases and in the Canadian Proceeding; and
(f) perform other legal services as the TerreStar Canada
Debtors may require in connection with the cases and in
the Canadian Proceeding.
The Debtors propose to pay Stikeman Elliott's services at the
firm's standard hourly rates, which currently are:
-- C$475 to C$1,000 for partners and senior counsel;
-- C$240 to C$700 for associates; and
-- C$150 to C$390 for paraprofessionals including articling
students.
The current hourly rates for the Stikeman lawyers with primary
responsibility for the matter are:
Professional Position Hourly Rate
------------ -------- -----------
Sidney M. Horn Partner - Corporate C$925
and Commercial
Sean F. Dunphy Partner - Insolvency C$940
and Restructuring
Claire Zikovsky Partner - Corporate C$650
and Commercial
Guy P. Martel Partner - Insolvency C$625
and Restructuring
Claire Zikovsky, Esq., a member of Stikeman Elliott, assures the
Court that her firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
About TerreStar Networks
Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR)
-- http://www.terrestar.com/-- is in the mobile communications
business through its ownership of TerreStar Networks, its
principal operating subsidiary, and TerreStar Global.
TerreStar Networks, in cooperation with its Canadian partners,
TerreStar Canada and TerreStar Solutions, majority-owned
subsidiaries of Trio 1 and 2 General Partnerships, plans to launch
an innovative wireless communications system to provide mobile
coverage throughout the United States and Canada using integrated
satellite-terrestrial smartphones and other devices. This system
build out will be based on an integrated satellite and ground-
based technology intended to provide communication service in most
hard-to-reach areas and will provide a nationwide interoperable,
survivable and critical communications infrastructure. The
Company intends to provide multiple communications applications,
including voice, data and video services.
As of June 30, 2010, the Company had four wholly owned
subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar
Holdings Inc., and TerreStar New York Inc. Motient Ventures
Holding Inc., a wholly owned subsidiary of MVH Holdings Inc.,
directly holds approximately 89.3% and 86.5% interest in TerreStar
Networks and TerreStar Global, respectively.
TerreStar Networks Inc. and Its affiliates filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No.
10-15446).
The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not
among the Chapter 11 filers.
The Garden City Group, Inc. will act as claims and noticing agent
in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq.,
and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira
Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq.,
at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy
counsel to the Debtors. Blackstone Advisory Partners LP is the
financial advisor.
Bankruptcy Creditors' Service, Inc., publishes TerreStar
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by TerreStar Networks Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TERRESTAR NETWORKS: Ch.11 Filing Triggers Default Under Debt Pacts
------------------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission, TerreStar Corporation disclosed that the Chapter 11
filing of TerreStar Networks Inc. and certain TerreStar
affiliates last October 19, 2010, constitutes an event of default
that triggered repayment obligations under certain of the
Company's debt documents and agreements.
This event of default under each of TerreStar's Debt Documents
causes all unpaid principal of, and premium, if any, and accrued
and unpaid interest on all of the outstanding Debt Instruments to
become immediately due and payable.
The Debt Documents are:
(1) The Indenture, dated as of February 14, 2007, among
TerreStar Networks, as issuer, the guarantors party
thereto and U.S. Bank National Association, as trustee, as
amended from time to time, pursuant to which 15.0% senior
secured payment-in-kind notes were issued by TerreStar
Networks.
(2) The Indenture, dated as of February 7, 2008, among
TerreStar Networks, as issuer, the guarantors from time to
time party thereto, and U.S. Bank National Association, as
trustee, as amended from time to time, pursuant to which
6.5% senior exchangeable payment-in-kind notes were issued
by TerreStar Networks.
(3) The Purchase Money Credit Agreement dated February 5,
2008, among TerreStar Networks, as the borrower, U.S. Bank
National Association, as collateral agent, and EchoStar
Corporation and Harbinger Capital Partners Master Fund I,
Ltd., Harbinger Capital Partners Special Situations Fund,
L.P., as lenders.
The Debtors believe that any remedies that may exist related to
the event of default under each of the Debt Documents are stayed
under the Bankruptcy Code.
About TerreStar Networks
Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR)
-- http://www.terrestar.com/-- is in the mobile communications
business through its ownership of TerreStar Networks, its
principal operating subsidiary, and TerreStar Global.
TerreStar Networks, in cooperation with its Canadian partners,
TerreStar Canada and TerreStar Solutions, majority-owned
subsidiaries of Trio 1 and 2 General Partnerships, plans to launch
an innovative wireless communications system to provide mobile
coverage throughout the United States and Canada using integrated
satellite-terrestrial smartphones and other devices. This system
build out will be based on an integrated satellite and ground-
based technology intended to provide communication service in most
hard-to-reach areas and will provide a nationwide interoperable,
survivable and critical communications infrastructure. The
Company intends to provide multiple communications applications,
including voice, data and video services.
As of June 30, 2010, the Company had four wholly owned
subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar
Holdings Inc., and TerreStar New York Inc. Motient Ventures
Holding Inc., a wholly owned subsidiary of MVH Holdings Inc.,
directly holds approximately 89.3% and 86.5% interest in TerreStar
Networks and TerreStar Global, respectively.
TerreStar Networks Inc. and Its affiliates filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No.
10-15446).
The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not
among the Chapter 11 filers.
The Garden City Group, Inc. will act as claims and noticing agent
in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq.,
and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira
Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq.,
at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy
counsel to the Debtors. Blackstone Advisory Partners LP is the
financial advisor.
Bankruptcy Creditors' Service, Inc., publishes TerreStar
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by TerreStar Networks Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TETRAGENEX PHARMACEUTICALS: Case Summary & Creditors List
---------------------------------------------------------
Debtor: Tetragenex Pharmaceuticals, Inc.
fka Innapharma, Inc.
6901 Jericho Turnpike, Suite 221
Jericho, NY 11791
Bankruptcy Case No.: 10-78439
Chapter 11 Petition Date: October 26, 2010
Court: U.S. Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Robert E. Grossman
Debtor's Counsel: Paul Rachmuth, Esq.
GERSTEN SAVAGE LLP
600 Lexington Avenue
New York, NY 10022
Tel: (212) 752-9700
Fax: (212) 980-5192
E-mail: prachmuth@gerstensavage.com
Estimated Assets: $50,001 to $100,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/nyeb10-78439.pdf
The petition was signed by Martin Schacker, chief executive
officer.
TIMOTHY SCHWARTZ: Taps Thomas E. Laughlin as Bankruptcy Counsel
---------------------------------------------------------------
The Hon. Manuel Barbosa of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Timothy L. Schwartz to
employ Thomas E. Laughlin under a general retainer to represent
the Debtor in the Chapter 11 proceedings.
To the best of the Debtor's knowledge, Mr. Laughlin is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Algonquin, Illinois-based Timothy L. Schwartz filed for Chapter 11
bankruptcy protection on January 4, 2010 (Bankr. N.D. Ill. Case
No. 10-70004). Mr. Scwartz's affiliates, Boulevard Shoppes, LLC;
Naples Sunshine, LLC; and Oakridge Development Co., also
filed separate bankruptcy petitions last year. James E. Stevens,
Esq., at Barrick, Switzer, Long, Balsley & Van Ev, assists
Mr. Scwartz in his restructuring effort. Mr. Schwartz disclosed
$29,709,122 in assets and $32,287,602 in liabilities as of the
Petition Date.
TIMOTHY SCHWARTZ: U.S. Trustee Wants Case Converted or Dismissed
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
will convene a hearing on November 24, 2010, at 10:30 a.m., to
consider the request to dismiss or convert the Chapter 11 case of
Timothy L. Schwartz to one under Chapter 7 of the Bankruptcy Code.
William T. Neary, the U.S. Trustee for Region 11, requested for
the dismissal or conversion of the Debtor's case because the
Debtor failed to file monthly operating reports for May, June, and
July 2010.
Algonquin, Illinois-based Timothy L. Schwartz filed for Chapter 11
bankruptcy protection on January 4, 2010 (Bankr. N.D. Ill. Case
No. 10-70004). Mr. Scwartz's affiliates, Boulevard Shoppes, LLC;
Naples Sunshine, LLC; and Oakridge Development Co., also
filed separate bankruptcy petitions last year. James E. Stevens,
Esq., at Barrick, Switzer, Long, Balsley & Van Ev, assists
Mr. Scwartz in his restructuring effort. Mr. Schwartz disclosed
$29,709,122 in assets and $32,287,602 in liabilities as of the
Petition Date.
TOWN SPORTS: Posts $18,000 Net Loss in September 30 Quarter
-----------------------------------------------------------
Town Sports International Holdings Inc. announced its results for
the third quarter ended September 30, 2010. Net Loss for Q3 2010
was $18,000 compared to net loss of $1.5 million for Q3 2009.
The Company's balance sheet at Sept. 30, 2010, showed
$467.39 million in total assets, $476.11 million in total
liabilities, and a stockholder's deficit of $8.72 million.
Robert Giardina, Chief Executive Officer of TSI, commented: "We
continue to make solid progress on our new initiatives and are
beginning to see positive trends in membership. Overall, while our
third quarter sales results did not meet our expectations, we were
pleased with many aspects of our business, including the ability
to manage expenses tightly and exceed our bottom line targets. We
are also encouraged by the impact of our updated marketing
campaign, the efforts of our expanded base of sales consultants
and the positive response we are getting from other traffic
generating campaigns. These improvements, which drove new member
sign-ups in September, coupled with our lower attrition rate, are
positioning us in the fourth quarter to post our first year over
year membership increase since the first quarter of 2009."
Total revenue for Q3 2010 decreased $7.3 million compared to Q3
2009. For Q3 2010, revenues increased $688,000 at the seven clubs
opened or acquired subsequent to September 30, 2008 offset by
decreases in revenue of 5.7% or $6.6 million at the Company's
clubs opened or acquired prior to September 30, 2008 and
$1.2 million related to the 11 clubs that were closed subsequent
to September 30, 2008.
Revenue at clubs operated for over 12 monthsdecreased 5.0% in Q3
2010 compared to Q3 2009.
Outlook
The Company said it is limiting its guidance to the fourth quarter
of 2010. Based on the current business environment, recent
performance and current trends in the marketplace and subject to
the risks and uncertainties inherent in forward-looking
statements, its outlook for the fourth quarter of 2010 includes
the following:
* Revenue for Q4 2010 is expected to be between $110.0 million
and $111.0 million versus $114.3 million for Q4 2009. As
percentages of revenue, the Company expects Q4 2010 payroll
and related expenses to approximate 39.5%, club operating
expenses to approximate 38.0% and general and administrative
expenses to approximate 7.0%.
* The Company expects a net loss for Q4 2010 of between $0 and
$500,000, and loss per share to be in the range of per share
to per share, assuming a 67% effective tax rate and 22.6
million weighted average fully diluted shares outstanding.
A full-text copy of the Company's earnings release is available
for free at http://ResearchArchives.com/t/s?6d2e
A full-text copy of the quarterly report on Form 10-Q is available
for free at http://ResearchArchives.com/t/s?6d2f
As of June 30, 2010, Town Sports International Holdings, Inc.,
through its wholly owned subsidiary, Town Sports International,
LLC, operated 161 fitness clubs comprised of 109 clubs in the New
York metropolitan market under the "New York Sports Clubs" brand
name, 25 clubs in the Boston market under the "Boston Sports
Clubs" brand name, 18 clubs (two of which are partly-owned) in the
Washington, D.C. market under the "Washington Sports Clubs" brand
name, six clubs in the Philadelphia market under the "Philadelphia
Sports Clubs" brand name and three clubs in Switzerland. The
Company's operating segments are New York Sports Clubs, Boston
Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs
and Swiss Sports Clubs.
TRIBUNE CO: Unsecured Creditors Get Approval to Pursue Claims
-------------------------------------------------------------
American Bankruptcy Institute reports that Bankruptcy Judge Kevin
Carey last week gave Tribune Co.'s unsecured creditors committee
standing to pursue actions against some of the parties involved in
the company's failed leveraged buyout.
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)
UNIVERSAL BUILDING: Creditors Seek Conversion to Chapter 7
----------------------------------------------------------
DBR Small Cap, October 28, 2010, 392 words English
Unsecured creditors say Universal Building Products Inc.'s
bankruptcy case has "spiraled out of control," leaving it with
only one option: conversion to a Chapter 7 liquidation. In recent
weeks, the company has seen its lender withdraw support for its
creditor-repayment plan, according to court papers. In addition,
Universal Building Products has allegedly defaulted on its
bankruptcy funding, also provided by lender UBP Acquisition Corp.,
by allowing its budget to expire and failing to win confirmation
of its plan by a deadline memorialized in the loan deal. These
roadblocks have led the official committee representing unsecured
creditors in the case to conclude that the company's "confirmation
process has been derailed," according to court papers. With no
money left for Universal Building Products to pay administrative
or priority expenses, there can be no Chapter 11 plan, the
creditors said, adding that the outlook is particularly grim for
their constituency....
UNITED CONTINENTAL: In Talks with Labor Groups on Contracts
-----------------------------------------------------------
Pilots at United Air Lines, Inc. and Continental Airlines, Inc.
have agreed to a two-month extension to negotiate a contract with
the newly combined carrier, Mary Schlangestein of Bloomberg News
reports.
Jay Pierce, chairman of the Continental pilots, said in an e-
mailed statement to Bloomberg the parties have made sufficient
progress that they believe the talks should continue.
The Air Line Pilots Association groups at each airline said in
July they would ask the National Mediation Board to join the
discussions if an accord wasn't reached by Oct. 12 with United
Continental Holdings Inc., the carriers' parent company. In light
of the recent developments, Mr. Pierce said pilot leaders delayed
seeking such help until Dec. 17, Bloomberg notes.
Meanwhile, flight attendants with Continental said they will not
join in contracts talks with fellow flight attendants at United,
Reuters relates in another report, citing Bloomberg. United
flight attendants believe that they would have more leverage if
they worked together, Bloomberg adds.
About United Continental
United Continental Holdings, Inc. (NYSE: UAL) is the holding
company for both United Airlines and Continental Airlines.
Together with United Express, Continental Express and Continental
Connection, these airlines operate a total of approximately 5,800
flights a day to 371 airports throughout the Americas, Europe and
Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston,
Los Angeles, New York, San Francisco, Tokyo and Washington, D.C.
United and Continental are members of Star Alliance, which offers
more than 21,200 daily flights to 1,172 airports in 181 countries
worldwide through its 28 member airlines. United's and
Continental's more than 80,000 employees reside in every U.S.
state and in many countries around the world.For more information
about United Continental Holdings, Inc., go to
UnitedContinentalHoldings.com. For more information about the
airlines, see http://www.united.com/and
http://www.continental.com/, and follow each company on Twitter
and Facebook.
United Continental carries 'B2' corporate family and probability
of default ratings, with stable outlook, from Moody's, 'B' issuer
credit ratings, with stable outlook, from Standard & Poor's, and
'B-' issuer default rating from Fitch.
UAL Corp filed for Chapter 11 protection on Dec. 9, 2002 (Bankr.
N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc
Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba,
Esq., at Kirkland & Ellis, represented the Debtors in their
restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein
Nath & Rosenthal LLP represented the Official Committee of
Unsecured Creditors. Judge Eugene R. Wedoff confirmed a
reorganization plan for United on Jan. 20, 2006. The Company
emerged from bankruptcy on Feb. 1, 2006.
At June 30, 2010, UAL had $20.134 billion in total assets against
total current liabilities of $8.573 billion, long-term debt of
$6.281 billion, long-term obligations under capital leases of
$1.01 billion, other liabilities and deferred credits of
$7.022 billion, and a stockholders' deficit of $2.756 billion.
US FOODSERVICE: Bank Debt Trades at 10% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which U.S. Foodservice,
Inc., is a borrower traded in the secondary market at 89.89 cents-
on-the-dollar during the week ended Friday, October 29, 2010,
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. This represents a drop of 0.80
percentage points from the previous week, The Journal relates.
The Company pays 275 basis points above LIBOR to borrow under the
facility. The bank loan matures on July 3, 2014, and carries
Moody's B2 rating while it is not rated by Standard & Poor's. The
loan is one of the biggest gainers and losers among 198 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
U.S. Foodservice, Inc. -- http://www.usfoodservice.com/-- is a
foodservice supplier serving some 250,000 customers from more than
70 distribution facilities. The Company supplies restaurants,
hotels, school, and other foodservice operators with a wide
variety of food products, including canned and dry foods, meats,
frozen foods, and seafood. It also distributes kitchen equipment
and cleaning supplies among other non-food supplies. U.S.
Foodservice distributes both national brand products and its own
private labels. Tracing its roots to 1853, the company is owned
by private equity firms KKR & Co. and Clayton, Dubilier & Rice.
VERTIS HOLDINGS: Extends Exchange Offers Until November 5
---------------------------------------------------------
Vertis Holdings, Inc., on Monday unveiled the extension of its
comprehensive refinancing of substantially all of its principal
operating subsidiary Vertis, Inc.'s outstanding secured and
unsecured indebtedness. The purpose of the Refinancing
Transactions is to reduce overall debt and interest costs which
would improve Vertis' financial condition.
To achieve the goals of the Refinancing Transactions, Holdings
continues to pursue and expects to announce important amendments
in the near future to the terms of the Refinancing Transactions,
including:
(i) the private exchange offer, tender offer and consent
solicitation relating to its 13-1/2% Senior Pay-in-Kind
Notes due 2014; and
(ii) private exchange offer and consent solicitation relating
to its 18-1/2% Senior Secured Second Lien Notes due 2012.
The amendments will likely include changing the consideration
offered to holders of Notes.
Holdings also continues to evaluate the appropriate term loans and
revolving credit facility to best achieve its operating and
financial goals. Holdings continues to consider the changes and
there can be no assurance that Holdings will effect these
amendments or that Holdings will not make other changes to the
Refinancing Transactions or pursue other transactions.
Holdings also announced that it will subsequently make available
certain important supplemental materials regarding the Offers.
The supplemental materials will contain important updates
regarding any changes to the consideration offered to Holders, any
expiration of the Withdrawal Period, any changes to the New
Expiration Time, any changes to the other components of the
Refinancing Transactions and other information regarding Vertis,
its restructuring efforts and the Offers. Holders are advised to
carefully review the supplemental materials when available. Until
such materials are available, except as set forth herein, the
terms of the Offers as currently set forth in the Offering
Memorandum remain in effect.
As a result, Holdings has extended the expiration dates of the
Offers from 5:00 p.m., New York City time, on October 29, 2010, to
5:00 p.m., New York City time, on November 5, 2010.
Holders who have tendered their Notes pursuant to the Offers
continue to be given the opportunity to withdraw their tendered
Notes and revoke their consents until further notice. Holders who
validly withdraw their Notes and revoke their consents will not
receive the consideration for their Notes in the applicable Offer
unless such Notes are validly re-tendered in the applicable Offer
at or prior to the New Expiration Time. It is expected that as
part of the amendments, Holders will be required to re-tender
their Notes if they desire to participate in the amended offer.
Vertis may elect to extend one or both of the Offers. The Offers
are subject to the terms and conditions set forth in the
applicable confidential offering memorandum and consent
solicitation statement and the related letters of transmittal,
each dated April 15, 2010 and as may be amended by the
supplemental materials. Vertis reserves the right to waive, amend
or modify in whole or in part any of the conditions of the Offers
in its sole discretion, including the minimum participation
conditions. The Existing Second Lien Notes Offer is being
extended without a dealer manager.
As of 5:00 p.m., New York City time, on October 29, 2010,
approximately $198.6 million aggregate principal amount (or
approximately 77%) of the Senior Notes were validly tendered in
the Senior Notes Offer and the related consents thereby delivered,
and not validly withdrawn.
In addition, as of 5:00 p.m., New York City time, on October 29,
2010, approximately $373.7 million aggregate principal amount (or
approximately 90%) of the Existing Second Lien Notes (not
including Existing Second Lien Notes held by Avenue Capital) were
validly tendered in the Existing Second Lien Notes Offer and the
related consents thereby delivered, and not validly withdrawn.
About Vertis
Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. --
http://www.vertisinc.com/-- provides targeted print advertising
and direct marketing solutions to America's retail and consumer
services companies.
Vertis Holdings' Vertis Inc. and its subsidiaries disclosed that
as of June 30, 2010, it had $1,467,320,000 in total assets,
including $257,193,000 in cash and cash equivalents; and
$1,493,277,000 in total liabilities, including $265,734,000 in
total current liabilities, and a stockholders' deficit of
$25,957,000.
The company and its six affiliates previously filed for Chapter 11
protection on July 15, 2008 (Bankr. D. Del. Case No. 08-11460).
In August 2008, it emerged from bankruptcy, after completing a
merger with ACG Holdings.
* * *
As reported by the Troubled Company Reporter on April 27, 2010,
Moody's Investors Service assigned Vertis, Inc., a Caa1 Corporate
Family Rating, Caa1 Probability of Default Rating and SGL-3
Speculative Grade Liquidity rating. Moody's said Vertis' Caa1 CFR
reflects the company's high leverage, thin coverage of total
interest costs, and long-term price and volume pressure on the
print-based advertising and direct marketing products and services
that comprise the majority of the company's revenue. Moody's
noted Vertis' proposed refinancing transactions would be a second
restructuring closely on the heels of Vertis' 2008 bankruptcy
reorganization.
VIASAT INC: S&P Affirms 'B' Corporate Credit Rating
---------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its ratings on
ViaSat Inc., including its 'B' corporate credit rating and 'B'
issue rating on the company's unsecured debt. S&P also revised
the outlook to positive from stable.
"The outlook revision reflects S&P's view that there is at least a
one-third possibility that S&P could raise the ratings on ViaSat
over the next year," said Standard & Poor's credit analyst
Catherine Cosentino. Given the company's leverage of 3x debt to
rolling-12-month EBITDA as of June 30, 2010, S&P now consider its
financial profile to be aggressive, an improvement from the former
assessment of highly leveraged.
In addition, launch and initial operation of its ViaSat 1
satellite, which S&P expects to occur in the first half of
calendar 2011, could provide the platform for material growth in
its WildBlue consumer satellite-based broadband business. S&P
believes S&P could raise the ratings when ViaSat 1 becomes
commercially operational, absent any deterioration in the
company's financial metrics or liquidity.
VIEW AT 101: Files for Bankruptcy Protection to Avert Foreclosure
-----------------------------------------------------------------
Michael Clark, staff writer at pressofAtlanticCity.com, reports
that the View at 101 Boardwalk filed for Chapter 11 bankruptcy
protection to avoid foreclosure.
According to the report, the filing came after owner Steven Kates
won a battle against the city, which had tried to have a judge put
the property into receivership. New York Community Bank filed to
foreclose on the property. New York Community Bank's complaint
includes an attempt to enlist a rent receiver to act as a
financial manager for the building.
Mr. Kates said that New York Community Bank moved for foreclosure
because of false statements the city made to the lender -- those
statements allegedly included the state and city code violations
that he claims have been cured, relates Mr. Clark. The bank
originally provided two loans to Mr. Kates on Feb. 16, 2007, one
for about $16.7 million and another for $500,000. For the first
three years, the bank required M. Kates to make only interest
payments.
View at 101 Boardwalk is a landmark apartment complex in the
city's South Inlet section.
VIKING ACQUISITION: Moody's Affirms 'B2' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service affirmed all the ratings of Viking
Acquisition, Inc.'s, the acquirer of the global autocare business
of The Clorox Company, including its B2 corporate family rating,
its Ba3 rating of its $350 million senior secured bank facilities
rating as well as the company's Caa1 rating on its $275 million
(upsized by $25 million) senior unsecured notes offering. The
company's SGL-3 Speculative Grade Liquidity rating was also
affirmed. The outlook is stable.
Proceeds of the proposed senior unsecured notes along with
$350 million in senior secured bank facilities and approximately
$260 million in common equity contributed by Avista Capital
Partners will be used to fund Viking's acquisition of the Global
Autocare business from Clorox (rated Baa1). Proceeds from the
incremental $25 million of senior unsecured notes will be used to
provide additional liquidity to the company.
Ratings affirmed of Viking include these: (LGD point estimates
revised)
-- Corporate Family Rating at B2
-- Probability of Default Rating at B2
-- $50 million senior secured revolving credit facility due 2015
at Ba3 (LGD 2, 25%)
-- $300 million senior secured term loan B due 2016 at Ba3 (LGD
2, 25%)
-- $275 million senior unsecured notes due 2018 at Caa1 (LGD 5,
80%)
-- Speculative Grade Liquidity Rating at SGL-3
-- The outlook is stable
Ratings Rationale
Vikings ratings reflect the company's high leverage (proforma
leverage of approximately 6.0 times), relatively small scale and
limited product diversification in the highly fragmented and
competitive auto-care products business. Moreover, organic growth
has been generally weak and the company's strategies to accelerate
growth through new product development initiatives and heightened
marketing is yet unproven.
Despite these constraints, Viking's ratings benefit from the
company's strong brand recognition, high profitability, low
capital requirements and global distribution capabilities. In
addition, the company's historically strong cash flow from
operations will be muted by near-term working capital requirements
resulting from its spin-off from Clorox. Accordingly, near-term
debt reduction is likely to be minimal. Liquidity is adequate
with no near-term maturities, however the company will need to
utilize its revolver in the next twelve month as its cash flow
from operations is not sufficient to cover its working capital
requirements. The ratings are also constrained by Viking's
ownership by private equity partner, Avista Capital due to Moody's
expectation that over time the shareholders will prioritize
shareholder-oriented activities, including debt financed
acquisitions and/or distributions.
Viking's ratings could be upgraded if the company was able to
maintain a Debt to EBITDA ratio below 4.5 times and an Interest
Coverage ratio above 2.5 times. The degree of any ratings
improvement, however, is constrained by the company's relatively
small scale, limited product diversification and potential for
aggressive financial policies.
Conversely, Viking's ratings could be downgraded should it's
operating performance deteriorate, or if it made a sizable debt
financed acquisition or share repurchases such that its Debt to
EBITDA ratio remained above 6.0 times for an extended period and
its EBITA to interest expense ratio approached 1.75 times.
Moody's last rating action on Viking was on October 25, 2010,
when Moody's assigned a Caa1 rating to the company's proposed
$250 million offering of senior unsecured notes.
Viking Acquisition, Inc., based in Oakland, California, is global
producer of auto-care products under variety of brands including
Armour-All autocare appearance products and STP performance
autocare additives. Viking, a business of the Clorox Company
(rated Baa1, stable), is being acquired by Avista Capital Partners
and management in an all-cash transaction valued at $765 million.
The transaction is expected to close in November 2010.
VITAMIN SHOPPE: S&P Raises Senior Secured Debt Rating to 'BB'
-------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its senior
secured debt rating on North Bergen, New Jersey-based Vitamin
Shoppe Industries Inc.'s second-priority secured notes due 2012 to
'BB' from 'BB-' and revised the recovery rating to '1' from '2'.
The '1' recovery rating indicates S&P's expectations for very high
(90%-100%) recovery in the event of a payment default. The
revision reflects the significant reduction in the amount of notes
outstanding. S&P estimate about $55 million will be outstanding
after the $20 million redemption on Nov. 26, 2010.
In addition, S&P revised the outlook to positive and affirmed its
'B+' corporate credit rating on the company.
"The ratings on Vitamin Shoppe reflect S&P's expectations for
moderately higher sales, some widening in operating margins, and
for credit metrics to improve over the next year," said Standard &
Poor's credit analyst Jayne Ross. The company's financial risk
profile is aggressive given its leveraged capital structure and
cash flow protection measures. S&P continues to view the business
risk profile as weak based on the risks associated with it
participation in the highly competitive and fragmented retail
vitamin industry, narrow product focus, and the risks associated
with its rapid store expansion plans.
WASHINGTON MUTUAL: Examiner Clears FDIC-JPMorgan Sale Deal
----------------------------------------------------------
Dan Fitzpatrick, writing for The Wall Street Journal, reports that
Joshua Hochberg, the court-appointed examiner for Washington
Mutual Inc., said in a 369-page report submitted Monday to the
Bankruptcy Court that he found no evidence that Federal Deposit
Insurance Corp. and J.P. Morgan Chase & Co. acted improperly when
regulators seized WaMu and sold its banking assets to JPMorgan for
$1.88 billion in September 2008 and gave JPMorgan $188 billion in
deposits and a coast-to-coast presence for the first time. There
are "no known facts to establish the government acted in bad
faith," the examiner's report said.
The Journal also reports Mr. Hochberg concluded that a proposed
billion-dollar settlement between Washington Mutual's parent
company, J.P. Morgan, and the FDIC is reasonable after more than
two years of fighting among the various parties.
According to the Journal, the examiner, however, noted that the
FDIC's bidding process was "less than optimal" and "could have
been better." For example, the Sept. 16 call from FDIC chairman
Sheila Bair to JPMorgan CEO James Dimon came "before any formal
opening of the bidding process" on Sept. 22, 2008.
The Journal further reports the examiner noted that JPMorgan and
FDIC "negotiated and changed various provisions" of their
agreement between Sept. 22 and Sept. 26 even though the FDIC told
all bidders that the agreement "was not negotiable." After
JPMorgan was declared the winner, according to the examiner, there
is evidence that J.P. Morgan asked FDIC for a clause protecting it
from $500 million in potential legal claims and FDIC granted the
request.
According to the Journal, the examiner, however, said the facts
don't suggest an "unfair process," "or that a different process
would have changed the outcome." FDIC's bidding procedures, the
examiner said, have to be viewed in the context of the uncertainty
and panic that gripped the financial system in September 2008.
The Journal relates an FDIC spokesman said the examiner's report
confirms "there has been no undue influence on any party."
The Journal says the examiner's report paves the way for an
eventual approval of WaMu's exit plan by a U.S. Bankruptcy Court
judge.
As reported by the Troubled Company Reporter on October 19, 2010,
WaMu disclosed that the Bankruptcy Court has approved the
Disclosure Statement filed in connection with the Company's
proposed Plan of Reorganization, subject to WMI filing the final
version of the Disclosure Statement with the Bankruptcy Court.
Approval of the Disclosure Statement allows WMI to solicit
approval of the Plan from its creditors.
The Bankruptcy Court has set the voting deadline for November 15,
2010, for eligible stakeholders. The Court has scheduled a
hearing to consider the approval of the Plan beginning on
December 1, 2010.
On October 6, 2010, WMI filed with the Court the proposed Plan and
Disclosure Statement. The Plan and Disclosure Statement are
premised upon consummating an amended and restated global
settlement agreement and JPMorgan. The Plan, Disclosure
Statement, and the Settlement have the full support of the FDIC,
JPMC, certain holders of indebtedness issued by the Company and
Washington Mutual Bank, as the case may be, and the Official
Committee of Unsecured Creditors, which was appointed by the
Bankruptcy Court.
The Plan contemplates, among other things, distribution of funds
to holders of allowed claims against the estate in excess of
approximately $7 billion, including approximately $4 billion of
previously disputed funds on deposit with JPMC. WMI believes the
Settlement will result in significant recoveries for the estate's
stakeholders and is in the best interests of the estate.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500,000,000 to $1,000,000,000 with zero
debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, serve as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP, serves as legal counsel to WMI with
responsibility for the Chapter 11 case.
WOLVERINE TUBE: Files for Ch. 11; Pursues Debt-for-Equity Swap
--------------------------------------------------------------
Wolverine Tube Inc. and its affiliates filed for Chapter 11
protection (Bankr. D. Del. Case No. 10-13522) on November 1, 2010.
Wolverine Tube has a Chapter 11 reorganization plan supported by
holders of 71% of the $131 million in senior secured notes and
Plainfield Asset Management LLC, a secured noteholder and
preferred shareholder.
The reorganization plan, which Wolverine said it would file
"shortly," provides for these terms:
* The secured notes will be converted into all of the new
common equity plus a new secured note for $30 million.
* General unsecured creditors of as much as $6.7 million will
be paid in the ordinary course of business or otherwise be
rendered unimpaired.
* Existing common and preferred shareholders won't receive or
retain any property.
The Plan is contingent upon, among other things, a termination of
the pension plan and the treatment of the resulting claim of the
Pension Benefit Guaranty Corp. on terms acceptable to the
noteholders. The Debtors began negotiations with the PBGC
prepetition.
According to Bloomberg News, in May 2009, Wolverine completed an
exchange offer where $122 million of maturing 10.5% unsecured
notes were exchanged for 15% senior secured notes that would have
matured in 2012. The notes traded on Oct. 25 at about 47.5 cents
on the dollar, according to Trace, the bond-price reporting system
of the Financial Industry Regulatory Authority.
Harold M. Karp, president and chief operating officer of Wolverine
Tube, blamed the Chapter 11 filing on, among other things,
"increasingly constrained" liquidity due to the steep rise and
significant volatility in the prices of copper and other metals,
the precipitous increase in funding obligations associated with
its pension plan, and the high level of interest expense relating
to its $131 million of senior secured notes. It also blamed the
decline in operating revenues as a result of the global economic
downturn in the industries it serves. For 2010, revenue is
estimated to be $281 million.
The Debtors said that confirming the Plan as soon as possible is
critical to the preservation of their business. The Plan Support
Agreement has set these milestones:
-- The Plan and related Disclosure Statement must be filed
within 14 days of the Petition Date;
-- The Disclosure Statement must be approved within 70 days of
the Petition Date;
-- The Plan must be confirmed within 115 days of the Petition
Date; and
-- The Plan must be effective within 130 days of the
confirmation date.
Wolverine said in a statement it expects to emerge from Chapter 11
within approximately 90 days.
A copy of the Plan Support Agreement is available for free at:
http://bankrupt.com/misc/WT_PSA.pdf
Wolverine Tube disclosed assets of $115.6 million against debt
totaling $237.5 million in documents attached to the petition.
The Company said it believes its cash on hand, together with the
cash generated from ongoing operations, will be sufficient to fund
its normal business obligations through the financial
restructuring.
"Once completed and approved by the Court, the financial
restructuring will reduce the Company's debt by approximately $110
million, leaving Wolverine with $30 million of debt at much more
attractive terms and a substantial positive shareholder's equity,"
said Steven S. Elbaum, Chairman of Wolverine. "We are very
pleased to have reached this agreement with noteholders. It is a
very positive step for Wolverine, our customers, suppliers and
employees because it underscores confidence in Wolverine's ability
to achieve sustained profitable growth. Over the last three years
Wolverine has successfully restructured its operations, improved
its cost structure and competitiveness and repaid a substantial
amount of debt. It is highly focused on its core business and
customers. The announced restructuring will firmly position
Wolverine to successfully compete in the global markets it
serves."
"On an operational level, Wolverine has a strong foundation in
place with a cash position that is more than sufficient to run its
business during this period," added Elbaum. "A court-supervised
process will accelerate - and finalize - Wolverine's financial
restructuring while ensuring that current business operations
continue without impediment."
First Day Motions
Wolverine has also filed a variety of customary motions to support
its employees and suppliers during the restructuring process. As
part of these motions, the Company has asked the Court for
additional authorizations, including permission to continue paying
employee wages and salaries, provide employee benefits, and pay
trade creditors in full without interruption.
A hearing to consider approval of the first day pleadings is
scheduled today, November 2, 2010 at 3:00 p.m. (Eastern Time).
About Wolverine Tube
Wolverine Tube, Inc., is a global manufacturer and distributor of
copper and copper alloy tube, fabricated products, and metal
joining products. The Company currently operates seven facilities
in the United States, Mexico, China, and Portugal. It also has
distribution operations in the Netherlands and the United States.
WOLVERINE TUBE: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Wolverine Tube, Inc.
200 Clinton Avenue W.
Suite 1000
Huntsville, AL 35801
Bankruptcy Case No.: 10-13522
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Tube Forming,L.P. 10-13523
Wolverine Joining Technologies, LLC 10-13524
TF Investor Inc. 10-13525
WT Holding Company, Inc. 10-13526
Type of Business: Wolverine Tube, Inc., is a global manufacturer
and distributor of copper and copper alloy tube,
fabricated products, and metal joining products.
The Company currently operates seven facilities
in the United States, Mexico, China, and
Portugal. It also has distribution operations
in the Netherlands and the United States.
Chapter 11 Petition Date: November 1, 2010
Bankruptcy Court: U.S. Bankruptcy Court
District of Delaware
Bankruptcy Judge: Peter J. Walsh
Debtor's
Counsel : Cozen O'Connor, Esq.
Mark E. Felger, Esq.
Simon E. Fraser, Esq.
1201 North Market Street
Suite 1400
Wilmington, DE 19801
Tel.: (302) 295-2000
Debtor's
Special
Corporate
& Tax
Counsel : Scott K. Rutsky, Esq.
Adam T. Berkowitz, Esq.
PROSKAUER ROSE LLP
1585 Broadway
New York, NY 10036-8299
Tel.: (212) 969-3000
Debtor's
Financial
Advisor : DELOITTE FINANCIAL ADVISORY SERVICES LLP
Debtor's
Claim
Agents : DONLIN RECANO & COMPANY, INC.
Total Assets: $115,624,000
Total Debts : $237,548,000
The petition was signed by Harold M. Karp, president and chief
operating officer.
Debtor's List of 30 Largest Unsecured Creditors:
Entity/Person Nature of Claim Claim Amount
------------- --------------- ------------
U.S. Bank National 15% Senior Secured $139,152,771
Association Notes Due 2012
Paul L. Henderson
Two Midtown Plaza
1349 W. Peachtree Street
NW Suite 1050
Atlanta, GA 30309
G D Copper USA Supplier $156,634
800 W Sam Houston Pkwy
Houston, TX 77024
Carrollton Farmers Branch Property Taxes $143,198
Isd
Anna M. Brady
P.O. Box 110611
Carrollton, TX 75011-0511
John R Ames, Cta Tax Property Taxes $135,185
Assessor
Arrowhead Lumber Sales, Supplier $97,820
Inc.
Sue Jac, Inc. Contractors $95,568
Foerster Instruments, Inc. Contractors $89,375
Damar Manufacturing Co. Supplier $76,655
Etna Products Inc. Supplier $76,586
Alpha Packaging Inc. Shipping $74,178
Gea Fes Inc. Supplier $73,469
Pallet Logistics of America Shipping $72,164
Franklin Industries, Inc. Metals $65,211
Oracle America Inc. Supplier $63,242
Prime Industrial Recruiters Contractors $56,997
Fastenal Co Distributor $56,835
Ati Firth Sterling Supplier $56,614
Elliott Tool Technologies Supplier $54,758
Ltd.
Zhejiang Jinghyi Pipe Supplier $54,261
Fittings
Advance Chemical Solutions Supplier $52,242
Hussey Copper, Ltd Supplier $50,731
Oerlikon Balzers Coating Supplier $48,620
USA
Lenox - Irwin Industrial Supplier $45,591
Tool
Industrial Motion Control Supplier $45,238
LLC
Compton Industrial Service Supplier $41,869
Glen Carbide Inc Supplier $41,273
Kaman Industrial Tech Corp Distributor $41,244
City of Warwick Municipality $38,534
Siemens Industry Inc Supplier $36,990
Action Inc. Supplier $36,886
* Moody's: U.S. Retail to See Improvement in 2010 Holiday Season
----------------------------------------------------------------
As retailers have generally exhausted their ability to drive
earnings growth from expense cuts and the economy continues to be
sluggish, the U.S. retail industry will see only modest operating
income growth in 2011, Moody's Investors Service says in its
annual industry outlook. Specifically, Moody's expects operating
income for the industry to grow at a 3.5% rate in 2011,
significantly slower lower than the 6.5% rate estimated for 2010.
Pent-up demand, as well as consumers becoming more used to
economic uncertainty and returning to a more normalized level of
spending, had been driving sizable sales growth in 2010. However,
Moody's expects this trend subsided in the third quarter. Retail
sales growth will track the growth in the broad economy.
For the upcoming holiday season, Moody's expects sales and margins
to be marginally better than they were last year. Growth in
operating income in the fourth quarter will slow to a single digit
rate.
"Promotional activity will increase, as will sales-related
compensation expenses, resulting in more-muted improvement in
operating income this holiday season," says Margaret Taylor,
Moody's Vice President-Senior Credit Officer. "We expect that
specialty toy and electronic retailers will perform well, and that
'value' retailers will also give a strong performance amid the
sluggish economy."
Looking ahead to 2011, Moody's expects the discounters,
drugstores, auto retailers and convenience stores to remain the
most stable segments in retail. The home-improvement sector will
remain stable as well, supported by pent-up demand for repair and
replacement projects as well as lower-priced do-it-yourself
projects.
Specialty retailers, which have recently experienced healthy
revenue and earnings growth, will begin to see growth levels
diminish as they face more-challenging prior-year comparisons,
says Moody's.
Supermarkets, as a group, will see flat to nominal revenue growth
as alternative food retailers continue to pressure growth in sales
volume and pricing.
Department store performance will remain split, with the large
national chains performing reasonably well while the smaller
chains continue to struggle. Overall, department stores will
underperform the retail industry.
Moody's has had a stable outlook on the U.S. retail industry since
September 22, 2010, when Moody's lowered it from positive.
Called "Sluggish Economy Will Limit Earnings Growth in 2011," this
annual outlook is available on moodys.com.
* S&P's 2010 Global Corporate Default Tally Currently at 69
-----------------------------------------------------------
The year-to-date 2010 global corporate default tally remains
unchanged at 69 after no issuers defaulted last week, said an
article published October 29 by Standard & Poor's, titled "Global
Corporate Default Update (Oct. 22 - 28, 2010) (Premium)."
By region, the current year-to-date default tallies are 46 in the
U.S., three in Europe, nine in the emerging markets, and 11 in the
other developed region (Australia, Canada, Japan, and New
Zealand).
So far this year, missed interest or principal payments are
responsible for 24 defaults, Chapter 11 and foreign bankruptcy
filings account for 22, distressed exchanges account for 18,
receiverships are responsible for three, and regulatory directives
and administration account for one each.
Of the global corporate defaulters in 2010, 42% of issues with
available recovery ratings had recovery ratings of '6' (indicating
our expectation for negligible recovery of 0% to 10%), 12% of the
issues had recovery ratings of '5' (modest recovery prospects of
10% to 30%), 8% had recovery ratings of '4' (average recovery
prospects of 30% to 50%), and 17% had recovery ratings of
'3' (meaningful recovery prospects of 50% to 70%). And for the
remaining two rating categories, 12% of the issues had recovery
ratings of '2' (substantial recovery prospects of 70% to 90%) and
10% had recovery ratings of '1' (very high recovery prospects of
90% to 100%).
* Trustees Probe Law Firms, Mortgage Handlers in Bankruptcy Cases
-----------------------------------------------------------------
A Justice Department unit is using its watchdog role to pressure
law firms and a large U.S. mortgage processor to ensure they
properly handle foreclosure proceedings, Dow Jones' DBR Small Cap
reports.
According to the report, in recent months, the U.S. Trustee
Program has intervened in two cases, in Mississippi and Louisiana.
Bankruptcy trustees are examining whether law firms and Lender
Processing Services Inc., a Jacksonville, Fla., mortgage
technology and information provider, bungled foreclosures and hurt
borrowers, according to court documents. The law firms and Lender
Processing deny wrongdoing, the report says.
In an unusual move, a trustee in the Louisiana case installed a
two-year program to monitor how a law firm handles bankruptcy
proceedings, according to a document filed in bankruptcy court in
New Orleans, the report adds.
* American Spectrum Taps Director of Receivership Practice
----------------------------------------------------------
American Spectrum Realty, Inc. said its wholly owned subsidiary,
American Spectrum Realty Management, LLC, appointed Steven M.
Speier as Director of Receivership, Bankruptcy and Litigation
Services.
Mr. Speier will head the Special Assets Group's newly formed
Receivership, Litigation and Bankruptcy Practice. Although the
division is new to ASRM, the team's combined experience exceeds 25
years within the receivership industry. While realizing an ever
expanding need for the special attention that real estate assets
and the various forms of real estate ownership experiences in this
challenging time, ASRM sought the experience and leadership of
Steven M. Speier to lead this highly technical group.
Mr. Speier and ASRM are not new to one another, having worked
extensively together during the 1990s, during which time they
collectively oversaw and managed hundreds of active receiverships,
real estate corporation workouts and restructuring assignments.
Mr. Speier joins ASRM with over 30 years of real estate lending
experience and almost 20 years experience as a top level court
appointed receiver. Mr. Speier has been an active U.S. Bankruptcy
Chapter 7 Trustee since 1998 and is currently President of the
California Bankruptcy Forum.
Jonathan Brohard, President of ASRM, expressed his excitement for
this appointment by stating, "Steve's depth of experience is
virtually unparalleled. The knowledge and leadership he will
bring to an already seasoned receivership team allows ASRM to
handle a broad array of real estate related needs, ranging from
traditional transactional activity to the most highly complex real
estate structures."
American Spectrum Realty, Inc., is a real estate investment
company that owns 30 offices, industrial and retail properties
aggregating approximately 2.7 million square feet in California,
Texas, Arizona and the Midwest, and has been publicly traded on
the Exchange since 2001. American Spectrum Management Group,
Inc., a wholly-owned subsidiary of American Spectrum Realty, Inc.,
manages and leases all properties owned by American Spectrum
Realty, Inc.
* Troutman Taps Two Gibbons Pros to Bankruptcy Team
---------------------------------------------------
Bankruptcy Law360 reports that Troutman Sanders LLP has bolstered
the ranks of its bankruptcy team with the addition of two
practitioners from Gibbons PC's financial restructuring and
creditors' rights group.
John P. Campo will join Troutman Sanders as a partner, and John S.
Kinzey has been added as senior counsel, the firm said in a
statement Wednesday, according to Law360.
* Large Companies With Insolvent Balance Sheet
----------------------------------------------
Total
Total Share-
Total Working Holders'
Assets Capital Equity
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ ------- --------
ABRAXAS PETRO AXAS US 173.9 (0.5) (1.1)
ABSOLUTE SOFTWRE ABT CN 124.3 (5.1) (2.6)
ACCO BRANDS CORP ABD US 1,097.3 261.9 (97.3)
AEGERION PHARMAC AEGR US 3.3 (23.4) (22.7)
AFC ENTERPRISES AFCE US 114.5 (0.2) (4.0)
ALASKA COMM SYS ALSK US 624.8 2.6 (15.3)
AMER AXLE & MFG AXL US 2,071.4 61.9 (469.1)
AMR CORP AMR US 25,357.0 (2,102.0) (3,643.0)
ARQULE INC ARQL US 118.5 53.9 (4.1)
ARRAY BIOPHARMA ARRY US 159.2 39.4 (116.7)
ARVINMERITOR INC ARM US 2,817.0 313.0 (909.0)
AUTOZONE INC AZO US 5,571.6 (452.1) (738.8)
BLUEKNIGHT ENERG BKEP US 297.3 (431.2) (149.9)
BOARDWALK REAL E BOWFF US 2,364.5 - (64.6)
BOARDWALK REAL E BEI-U CN 2,364.5 - (64.6)
BOSTON PIZZA R-U BPF-U CN 110.2 2.3 (117.7)
BRAVO BRIO RESTA BBRG US 159.1 (32.6) (64.7)
CABLEVISION SY-A CVC US 7,631.6 3.8 (6,183.6)
CARDTRONICS INC CATM US 472.6 (25.3) (2.1)
CC MEDIA-A CCMO US 17,286.8 1,240.8 (7,209.3)
CENTENNIAL COMM CYCL US 1,480.9 (52.1) (925.9)
CENVEO INC CVO US 1,553.4 199.9 (183.8)
CHENIERE ENERGY CQP US 1,769.5 37.3 (503.5)
CHENIERE ENERGY LNG US 2,607.5 134.2 (386.6)
CHOICE HOTELS CHH US 403.3 (11.5) (75.5)
CLEVELAND BIOLAB CBLI US 12.8 (5.7) (3.8)
COMMERCIAL VEHIC CVGI US 276.9 111.2 (10.4)
CONSUMERS' WATER CWI-U CN 887.2 3.2 (258.0)
DENNY'S CORP DENN US 296.7 (23.2) (112.9)
DISH NETWORK-A DISH US 9,031.0 608.6 (1,580.3)
DISH NETWORK-A EOT GR 9,031.0 608.6 (1,580.3)
DOMINO'S PIZZA DPZ US 425.7 104.1 (1,241.9)
DUN & BRADSTREET DNB US 1,632.5 (475.7) (783.9)
EASTMAN KODAK EK US 6,929.0 1,406.0 (213.0)
EPICEPT CORP EPCT SS 11.4 3.3 (10.2)
EXELIXIS INC EXEL US 419.7 12.8 (214.7)
FORD MOTOR CO F US 183,156.0 (23,512.0) (3,541.0)
FORD MOTOR CO F BB 183,156.0 (23,512.0) (3,541.0)
GENCORP INC GY US 981.8 150.8 (224.9)
GLG PARTNERS INC GLG US 400.0 156.9 (285.6)
GLG PARTNERS-UTS GLG/U US 400.0 156.9 (285.6)
GRAHAM PACKAGING GRM US 2,096.9 228.4 (612.2)
GREAT ATLA & PAC GAP US 2,531.0 (141.5) (679.9)
HALOZYME THERAPE HALO US 51.5 38.3 (14.1)
HEALTHSOUTH CORP HLS US 1,796.9 124.3 (394.9)
HOVNANIAN ENT-A HOV US 1,909.8 1,264.2 (207.4)
HOVNANIAN ENT-B HOVVB US 1,909.8 1,264.2 (207.4)
IDENIX PHARM IDIX US 63.1 24.0 (21.3)
INCYTE CORP INCY US 493.7 340.3 (104.8)
INTERMUNE INC ITMN US 143.9 107.5 (67.7)
IPCS INC IPCS US 559.2 72.1 (33.0)
JAZZ PHARMACEUTI JAZZ US 97.3 (24.2) (16.3)
JUST ENERGY INCO JE-U CN 1,780.6 (470.0) (279.3)
KNOLOGY INC KNOL US 648.0 48.7 (13.5)
LIN TV CORP-CL A TVL US 782.4 21.2 (146.9)
LIONS GATE LGF US 1,592.9 (783.4) (1.6)
LORILLARD INC LO US 3,504.0 1,665.0 (38.0)
MAGMA DESIGN AUT LAVA US 74.6 9.6 (6.1)
MANNKIND CORP MNKD US 305.1 76.5 (181.4)
MEAD JOHNSON MJN US 2,217.6 414.5 (415.7)
MITEL NETWORKS C MITL US 624.5 162.6 (48.1)
MOODY'S CORP MCO US 2,348.2 508.8 (322.0)
MORGANS HOTEL GR MHGC US 774.4 50.5 (4.3)
NATIONAL CINEMED NCMI US 725.5 90.2 (381.7)
NAVISTAR INTL NAV US 9,418.0 2,011.0 (1,040.0)
NEWCASTLE INVT C NCT US 3,594.5 - (837.5)
NEXSTAR BROADC-A NXST US 584.5 33.0 (187.2)
NPS PHARM INC NPSP US 193.8 129.0 (179.5)
OTELCO INC-IDS OTT-U CN 333.3 25.6 (1.2)
OTELCO INC-IDS OTT US 333.3 25.6 (1.2)
PALM INC PALM US 1,007.2 141.7 (6.2)
PDL BIOPHARMA IN PDLI US 271.5 (66.5) (434.9)
PETROALGAE INC PALG US 6.1 (8.9) (47.4)
PLAYBOY ENTERP-A PLA/A US 189.0 (12.4) (27.6)
PLAYBOY ENTERP-B PLA US 189.0 (12.4) (27.6)
PRIMEDIA INC PRM US 218.9 (5.9) (102.1)
PROTECTION ONE PONE US 562.9 (7.6) (61.8)
QUALITY DISTRIBU QLTY US 291.7 35.3 (134.3)
QUANTUM CORP QTM US 459.6 127.8 (83.7)
QWEST COMMUNICAT Q US 18,959.0 (424.0) (1,241.0)
REGAL ENTERTAI-A RGC US 2,575.0 (219.7) (283.5)
REVLON INC-A REV US 794.8 86.9 (991.8)
RSC HOLDINGS INC RRR US 2,736.4 (175.7) (37.5)
RURAL/METRO CORP RURL US 288.5 34.6 (101.2)
SALLY BEAUTY HOL SBH US 1,517.1 345.6 (523.9)
SANDRIDGE ENERGY SD US 3,128.7 (109.4) (118.5)
SINCLAIR BROAD-A SBGI US 1,539.8 52.1 (170.4)
SINCLAIR BROAD-A SBTA GR 1,539.8 52.1 (170.4)
STEREOTAXIS INC STXS US 50.9 (0.2) (0.8)
SUN COMMUNITIES SUI US 1,164.1 - (131.0)
TAUBMAN CENTERS TCO US 2,529.7 - (541.1)
TEAM HEALTH HOLD TMH US 828.2 80.0 (37.8)
THERAVANCE THRX US 212.6 161.1 (141.1)
UNISYS CORP UIS US 2,840.1 472.1 (1,034.2)
UNITED CONTINENT UAL US 20,055.0 (1,186.0) (2,206.0)
UNITED RENTALS URI US 3,744.0 188.0 (15.0)
VECTOR GROUP LTD VGR US 850.0 288.8 (19.6)
VENOCO INC VQ US 709.1 14.1 (118.6)
VIRGIN MOBILE-A VM US 307.4 (138.3) (244.2)
WARNER MUSIC GRO WMG US 3,655.0 (546.0) (174.0)
WEIGHT WATCHERS WTW US 1,090.1 (344.4) (693.5)
WORLD COLOR PRES WC CN 2,641.5 479.2 (1,735.9)
WORLD COLOR PRES WCPSF US 2,641.5 479.2 (1,735.9)
WORLD COLOR PRES WC/U CN 2,641.5 479.2 (1,735.9)
WR GRACE & CO GRA US 4,209.6 1,333.7 (175.1)
YRC WORLDWIDE IN YRCW US 2,843.3 (291.1) (77.3)
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard
C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez,
Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2010. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***