Beard Group Corporate Restructuring Review For March 2013

Presented by Beard Group, Inc. P.O. Box 4250 Frederick, MD 21705-4250 Voice: (240) 629-3300 Fax: (240) 629-3360 E-mail: nina@beard.com

An audio recording of this presentation is available at http://bankrupt.com/restructuringreview/

____________________________________________________ Welcome to the Beard Group Corporate Restructuring Review for March 2013, brought to you by the editors of the Troubled Company Reporter and Troubled Company Prospector. In this month's Corporate Restructuring Review, we'll discuss five topics: first, last month's largest chapter 11 filings and other statistics; second, large chapter 11 filings TCR editors anticipate in the near-term; third, a quick review of the major pending disputes in chapter 11 cases that we monitor day-by-day;

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fourth, reminders about debtors whose emergence from chapter 11 has been delayed; and fifth, information you're unlikely to find elsewhere about new publicly traded securities being issued by 11 debtors. March 2013 Mega Cases

Now, let's review the largest chapter 11 cases in March 2013. Danilo Muoz reports that the number of bankruptcy filings that involved companies with more than $100 million in assets, increased to six in March 2013 from five cases in each of February and January. Of the six mega bankruptcy filings in March, three reported assets in excess of $1 billion, raising the billion-dollar cases' total to four so far this year. For the first two months of 2013, only one case involved assets in excess of $1 billion that of Readers Digest Association Inc. For fiscal year 2012, a total of 12 companies filed for Chapter 11 with excess of $1 billion in assets. Five of those cases were filed in May. There were a total of 64 mega filings with assets in excess of $100 million in 2012, compared to 82 mega filings during the same period in 2011 and 106 in 2010.

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The largest Chapter filing for the month of March -- and for the first quarter of 2013 -- was by Dex One Corp., which listed total assets of $2.84 billion and total liabilities of $2.79 billion. Dex One is a local business marketing services company that includes print directories and online voice and mobile search. Dex One and 11 affiliates sought Chapter 11 protection on March 17 and 18 with the Bankruptcy District of Delaware [Lead Case No. 13-10534]. Dex One has a prepackaged plan of reorganization designed to effectuate a merger with SuperMedia Inc., another yellow pages directory publisher. Dex One says an overwhelming majority of its secured lenders and shareholders have voted to accept the prepackaged chapter 11 plan, which provides for consummation of the merger. Dallas/Fort Worth-based SuperMedia, Dex One's merger partner, meanwhile, filed the month's second largest Chapter 11 petition. SuperMedia disclosed total assets of $1.4 billion and total debt of $1.9 billion as of the Petition Date. SuperMedia and three affiliates sought Chapter 11 protection on March 18, also with the Bankruptcy Court for the District of Delaware [Lead Case No. 13-10545] to effectuate the merger of equals with Dex One. This is SuperMedia's second stint in Chapter 11. Previously known as Idearc Inc., the Company and several affiliates sought bankruptcy protection in March 2009 and emerged in December 2009, reducing debt from more than $9 billion to $2.75 billion. At a special meeting of its stockholders of SuperMedia Inc. held on March 13, 2013, the Company's stockholders approved
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and adopted the proposed merger with Dex One. Also at the March 13 meeting, SuperMedia's stockholders and lenders each voted to accept the prepackaged plan. The third largest Chapter 11 filer in March was Revel AC Inc. and its affiliates, which listed total assets of $1.1 billion and total liabilities of $1.5 billion. Revel owns and operates the name-sake Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel along with four affiliates sought bankruptcy protection on March 25 with the Bankruptcy Court for the District of New Jersey [Lead Case No. 13-16253]. Revel AC negotiated a plan prior to the bankruptcy filing. Already accepted by creditors, the plan is designed to reduce debt for borrowed money by 82%, from $1.52 billion to $272 million. For a projected 19% recovery, holders of an $896 million secured term loan are to receive all the new equity. General unsecured creditors are to be paid in full. Geokinetics Inc., which listed $415.71 million in total assets and $590.79 million in total liabilities at Sept. 30, 2012, was the fourth largest filer. Geokinetics provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. Geokinetics and its nine affiliates sought Chapter 11 on March 10, with the Bankruptcy Court for the District of Delaware [Lead Case No. 13-10472]. Geokinetics has a prepackaged Chapter 11 plan that converts $300 million of senior secured notes into 100% of the reorganized Company's common stock. Virginia United Methodist Homes of Williamsburg Inc. and Otelco Inc. filed for Chapter 11 protection in March, each
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estimated assets and liabilities of between $100 million to $500 million. Virginia United Methodist Homes of Williamsburg does business as WindsorMeade of Williamsburg. It filed the bankruptcy petition on March 1 with the Bankruptcy Court for the Eastern District of Virginia [Case No. 13-31098]. WindsorMeade of Williamsburg is a continuing care retirement community located on a 105-acre parcel of real property leased by sponsor Virginia United Methodist Homes Inc. WindsorMeade of Williamsburg has signed an agreement with holders of 66% of the outstanding principal amount of the Series 2007A/B Bonds to support a restructuring of the bond debt via a Chapter 11 plan. Meanwhile, Otelco is a wireline telecommunication services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. It and 16 affiliated entities filed for Chapter 11 protection on March 24with the Bankruptcy Court for the District of Delaware [Case No. 1310593]. Otelco filed for chapter 11 to implement its "prepackaged" financial restructuring plan, which has already been accepted by 100% of the Company's senior lenders, as well as holders of over 96% in dollar amount of Otelco's senior subordinated notes who cast ballots. Otelco's restructuring plan will strengthen the Company by de-leveraging its balance sheet and reducing its overall indebtedness by approximately $135 million. All of the six Chapter 11 mega filings in March involved a prepackaged or pre-arranged Chapter 11 filing. During the first two months of the year, 4 of the 10 mega cases were prepacks.

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For fiscal year 2012, 13 of the 64 mega cases involved a prepackaged Chapter 11 filing, or about 20% of the mega cases. For 2011, 13 of the 83 mega cases involved a prepackaged Chapter 11 plan as of the Petition Date -- or about 16% of the large Chapter 11 filings. For fiscal year 2010, a total of 35 prepacks/pre-arranged cases were filed out of the 106 bankruptcy mega cases -- or about one in every three filings in 2010. For the month of March, four of the six mega filings involved the information industry. During the first quarter of 2013, 10 of the mega filings belonged to the information industry while two are involved in manufacturing. The distribution of bankruptcy mega cases by industry for 2012 is: Manufacturing Information Finance & Insurance Real Estate Transportation Others 10 cases 16% 8 cases 13% 7 cases 11% 6 cases 9% 5 cases 8% 28 cases 44%

The distribution of bankruptcy mega cases by industry for 2011 is: Manufacturing 14 cases 17% Accommodation & Food Services 12 cases Finance & Insurance 9 cases 11% Information 8 cases 10% Retail Trade 7 cases 8% Real Estate 7 cases 8% Others 26 cases 32% 14%

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For the first three months of 2013, the Bankruptcy Court for the District of Delaware cornered the lions share with 11 mega filings, while the Bankruptcy Court for the Southern District of New York had two. In 2012, the Southern District of New York Bankruptcy Court was the most favored venue for mega filers with 21, wresting away the lead from the Bankruptcy Court for the District of Delaware with 19 mega filings. In 2011, the Delaware Bankruptcy Court was the most favored of bankruptcy mega cases with 38 filings, or 46% of the mega cases, followed by the Southern District of New York with 16 filings, or 19% of the mega cases, and by the Northern District of Texas with 4 filings, or 5% of the mega cases. The rest of the bankruptcy mega cases are spread evenly throughout the various bankruptcy courts. Lehman Brothers Holding Corp. remains the biggest corporate bust in history. Lehman, which filed in 2008, had $639 billion in total assets and $613 billion in total debts at that time of its filing. For 2011, the largest Chapter 11 filing was filed by MF Global Holdings Ltd. and its affiliates. As of Sept. 30, 2011, MF Global had $41.05 billion in total assets and $39.68 billion in total liabilities. For 2012, the largest Chapter 11 filing was by Residential Capital LLC, which disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. For the first three months of 2013, Young Conaway Stargatt & Taylor LLP represented 4 of the 16 mega filings as counsel. The law firm represented the School Specialty, Penson
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Worldwide, Super Media and Otelco in their respective Chapter 11 cases. Anticipated Large Chapter 11 Filings Now, let's turn to the topic of large chapter 11 filings Troubled Company Reporter editors anticipate in the near-term. Carlo Fernandez identified 8 companies that may be close to filing for bankruptcy. These are Bronx Parking, Suntech Power, Affymax, Cengage Learning, Gatehouse Media, Fisker Auto, Gasco Energy, and Unigene Laboratories. (A) Bronx Parking Bronx Parking Development Corp., the operator of parking garages at the new Yankee Stadium, has hired Willkie Farr & Gallagher as bankruptcy attorneys, Bloomberg News reported mid-March, citing a filing with the Municipal Securities Rulemaking Board. Bronx Parking will pay Willkie Farr $18,750 a month, according to the filing. However, its chief restructuring officer, Edward Moran, told Bloomberg in a telephone interview that Bronx Parking is in discussions with creditors and isn't planning a bankruptcy filing. The company has not generated enough revenue to pay $240 million in tax-exempt debt. The garages and lots, which have about 9,300 spaces, have suffered as more fans take public transportation to Major League Baseball games and drivers balk at paying $35 to park.
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Nuveen Asset Management is the biggest holder of Bronx Parking debt, with $116.1 million of bonds maturing in 2037 and 2046 as of Feb. 28, according to data compiled by Bloomberg. Bronx Parking issued $237.6 million of municipal bonds in 2007 through New York City's Industrial Development Agency to build three garages, renovate two others and refurbish six lots near the 50,287-seat Yankee Stadium. (B) Suntech Power Suntech Power Holdings Co., Ltd. in March disclosed that it has received from the trustee of its 3% Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. Such event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. Suntech has entered into a forbearance agreement with holders of over 60% of the Notes, one of the terms of which is that the forbearing Note holders will cooperate with Suntech in addressing certain legal proceedings that may be initiated against it. Suntech is also continuing its efforts to restructure and increase the cost-efficiency of its operations, maintain business relationships with its existing customers and suppliers, and seek additional sources of capital to meet its ongoing operational requirements and debt repayment obligations. In addition, Suntech is in discussions with certain of its suppliers and lenders relating to various other claims for non-payment or nonperformance, which the Company hopes to resolve in a timely manner.
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Wuxi, China-based Suntech Power Holdings produces solar products for residential, commercial, industrial, and utility applications. (C) Affymax Inc. Affymax, Inc., in mid-March disclosed that it will reduce its workforce as part of a plan to focus the company's resources on the ongoing investigation of reported hypersensitivity reactions in patients receiving OMONTYS (peginesatide) Injection following the nationwide voluntary recall of product from the market. This action will reduce the company's workforce by approximately 230 employees (or 75%), which includes its commercial and medical affairs field organizations as well as other officers and employees. The company also announced it will retain a bank to evaluate strategic alternatives for the organization, including the sale of the company or its assets, or a corporate merger. The company is considering all possible alternatives, including further restructuring activities, wind-down of operations or even bankruptcy proceedings. Affymax is a biopharmaceutical company based in Palo Alto, California. It aims to discover, develop and deliver innovative therapies that improve the lives of patients with kidney disease and other serious and often life-threatening illnesses. (D) Cengage Learning Cengage Learning Acquisitions, Inc., on March 20 borrowed $430 million, virtually the entire remaining available amount under its revolving credit facilities, to ensure Cengage Learning Holdings
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II, L.P. and its consolidated subsidiaries have sufficient liquidity to fund their working capital needs. As a result, Cengage Learning has approximately $490 million of cash on its balance sheet and an outstanding balance on its two revolvers of $518 million as of March 21, 2013. Separately, Cengage Learning has retained Alvarez & Marsal as restructuring advisor, Lazard as financial advisor, and Kirkland & Ellis LLP as legal advisor to advise the Company and its Board of Directors as part of ongoing efforts to assess its capital structure. In June 2012, Cengage disclosed it was in discussions with holders of its outstanding senior unsecured notes regarding potential transactions that would extend the maturity of the notes. Cengage at that time cautioned there can be no assurance that the discussions will result in the consummation of any such transaction. A report from The Wall Street Journal says Cengage has struggled as college students have moved toward digital textbooks and buying or renting used books to save money. Also, fewer students are expected to attend college over the next few years as tuitions rise. As of June 30, 2012, Cengage had total assets of $7.5 billion and debts of $5.6 billion. (E) Gatehouse Media GateHouse Media Inc., a Fortress Investment Group-owned newspaper company, has entered talks with attorneys at Cleary Gottlieb Steen & Hamilton LLP in an effort to restructure $1.2 billion in debt coming due next year and avoid bankruptcy,
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according to reports. GateHouse is asking creditors to either forgive their debt in exchange for some ownership in a reorganized company, or accept payments of 33 cents for every dollar they are owed. Emily Glazer and Mike Spector at Daily Bankruptcy Review report that GateHouse is weighing a streamlined bankruptcyprotection filing. GateHouse's core publications, which primarily serve local markets, include 78 daily newspapers geographically dispersed across 21 states, with the majority in the Midwest and Western U.S. (F) Fisker Auto Fisker Automotive Inc. has hired restructuring lawyers at Kirkland & Ellis LLP to prepare for a possible bankruptcy filing, though no final decisions have been made, according to reporting by the Wall Street Journal. Fisker faces an April 22 deadline to make a loan payment to the U.S. Department of Energy. Fisker currently carries about $192 million in debt under the DOE's Advanced Technology Vehicles Manufacturing Loan Program. WSJ says Fisker and the DOE have declined to reveal the precise amount Fisker owes on April 22. Fisker furloughed 200 U.S. workers in late March for a limited time to conserve cash. According to WSJ, people familiar with the matter have said Fisker's talks with Chinese auto makers, Zhejiang Geely Holding Group and Dongfeng Motor Group Co., have hit rough patches of
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late because of Fisker's desire to try to move forward with U.S. production at a former General Motors Co. plant in Delaware that Fisker now owns. Anaheim, Calif.-based Fisker is the maker of the $100,000 sports car Karma. It was funded in part by an Obama administration program to promote clean-energy vehicles. (G) Gasco Energy Gasco Energy, Inc. on April 8 disclosed it has elected not to make the $1.24 million semi-annual interest payment due April 5, 2013, on its outstanding 5.50% Convertible Senior Notes due 2015. The indenture governing the 2015 Notes provides that the failure to make such interest payment constitutes an event of default after a 30-day cure period. During the cure period, the Company intends to engage in discussions with the holders of the 2015 Notes regarding a forbearance agreement in connection with the interest payment and/or a modification of the indenture governing the 2015 Notes. The Company has engaged a financial advisor to assist it in evaluating potential strategic alternatives, such as a strategic restructuring, refinancing or other transaction to provide it with additional liquidity. Denver-based Gasco Energy is a natural gas and petroleum exploitation, development and production company engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region and in California's San Joaquin Basin.

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(H) Unigene Laboratories Unigene Laboratories, Inc., on April 8 disclosed that the Company has entered into a second amendment to a financing agreement with affiliates of Victory Park Capital Advisors, LLC, whereby Victory Park has agreed to purchase an additional $750,000 senior secured note, providing Unigene with additional working capital. Under the terms of this financing, proceeds from the sale of the note, which is convertible into shares of Unigene common stock at a conversion price of $0.09 per share, will be used for working capital purposes. In an effort to conserve capital and further extend its cash runway, Unigene also announced a strategic reorganization and downsizing, which involved a reduction of approximately 40% of its workforce. The majority of employees impacted by the reduction in workforce supported Unigene's Fortical manufacturing and recombinant calcitonin production operations, which have been negatively impacted by regulatory recommendations in Europe and by an advisory committee to the U.S. Food and Drug Administration. Unigene also announced on April 8 that it has been notified by Victory Park that Victory Park has declared an event of default under certain loan documents, including approximately $55.8 million in notes issued to Victory Park by Unigene. Victory Park has further declared these notes (including principal and interest) due and payable. In connection with the existence and continuation of the default, Victory Park has notified Unigene that, pursuant to Article 9 of the Uniform Commercial Code, Victory Park has initiated a public disposition of certain of Unigene's assets that constitute Victory Park's collateral. Those assets will be sold pursuant to
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public auction to be held at the offices of Katten Muchin Rosenman LLP on April 15. Unigene engages in the design, delivery, manufacture and development of peptide-based therapeutics. * * *

In addition to the challenged companies mentioned in Mr. Fernandez's report, the Troubled Company Reporter provides ongoing reporting about more than 3,000 companies experiencing financial distress or restructuring their balance sheets in a judicial proceeding. Stay tuned to learn more about obtaining a trial subscription to the TCR at no cost or obligation.

Major Pending Disputes In Chapter 11 Cases Next, we'll quickly review major pending disputes in large chapter 11 cases that Troubled Company Reporter editors monitor day-by-day. (A) Lehman Brothers Ivy Magdadaro reports that on March 13, Manhattan Bankruptcy Judge James Peck gave creditors of Lehman Brothers the green light to subpoena former JP Morgan Chase & Co trader Bruno Iksil, the so-called London Whale, in an $8.6 billion lawsuit against the bank. Judge Peck rejected arguments from JP Morgan that Mr. Iksil had little to do with the allegations in
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the lawsuit, which centers on JP Morgans role as Lehmans main clearing bank in the days leading up to its September 15, 2008 bankruptcy filing. Under the billion dollar lawsuit, Lehman and its unsecured creditors committee accused JP Morgan of using its access to Lehman to extract $8.6 billion of collateral in the four business days ahead of the Chapter 11 filing. They argued that Mr. Iksil had a "practice of intentional mismarking," and wanted to review trades that led to an "unjustified" $273.3 million collateral call on September 9, 2008, which JPMorgan reversed the next day. Mr. Iksil gained notoriety after his activities were linked to $6.2 billion of trading losses at JPMorgan's Chief Investment Office. The French national had worked in London for the New York-based bank. In court papers, JPMorgan had argued that getting Mr. Iksil involved in the case would waste time and money, particularly in light of statements by former U.S. Treasury Secretaries Timothy Geithner and Henry Paulson that the collateral requests did not cause Lehman to fail. JP Morgan said Lehman pointed to nothing that shows the bank's Chief Investment Office had any role in the collateral requests at the center of Lehman's lawsuit. In April 2012, Judge Peck narrowed but refused to dismiss Lehman's lawsuit, saying the company could pursue claims that JPMorgan had acted in a "commercially unreasonable" manner. The JPMorgan case is captioned Lehman Brothers Holdings Inc et al v. JPMorgan Chase Bank NA, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-03266. Lehman emerged from Chapter 11 in March 2012, aiming to repay creditors about $65 billion.
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In other news, Barclays Plc filed the last brief in the last week of March on the question of whether U.S. District Judge Katherine B. Forrest was correct when she ruled in June 2012 that the bankruptcy judge was wrong in requiring the bank to pay $1.5 billion to the trustee liquidating the brokerage subsidiary of Lehman Brothers Holdings. The dispute has been tentatively set for argument during the last week of May in the U.S. Court of Appeals in Manhattan. James W. Giddens, the Lehman brokerage trustee, wants the circuit court to reinstate a ruling from the bankruptcy judge giving him $1.5 billion. London-based Barclays says it's entitled to keep the $1.5 billion and recover even more from the Lehman brokerage trustee. In the brief, Barclays pointed out how it bought Lehman's North American Investment banking business "amid the chaos and financial uncertainty of September 2008." Without the sale, there would have been a "catastrophic liquidation," Barclays said, with billions in losses for the Lehman broker and its customers. As a consequence of the losses avoided by the sale, Barclays pointed to how the trustee will be able to pay customer claims in full. Mr. Giddens contends the appeal comes down to whether the bankruptcy judge approved a sale of the Lehman broker and in the process gave the parties "pre-approval" to modify the contract without notice to the court or interested parties. Mr. Giddens says that allowing a bankrupt to modify an approved sale agreement "would pose a grave danger" to bankruptcy sales. The appeal, in large part, centers around a so-called clarification letter not even written when the bankruptcy judge approved the sale. Barclays said it paid $50 billion for the Lehman brokerage "amidst a worldwide financial crisis."
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Lehman obtained confirmation of its Chapter 11 plan in December 2011. That plan was declared effective in March 2012. Lehman's brokerage subsidiary is under control of Giddens, a trustee appointed under the Securities Investor Protection Act. The Lehman brokerage has yet to make a first distribution to noncustomers. Also in March, Lehman Brothers negotiated a settlement of a $59.3 billion claim from affiliate Lehman Brothers Finance AG on account of a pre-bankruptcy guaranty. Holdings agreed to give that subsidiary's liquidators an unsecured claim for $942 million. Although the claim was previously reduced to $15.4 billion, it was still among the largest in the case. The Lehman brokerage subsidiary settled last year with the liquidators for the Swiss affiliate. Holdings had challenged the enforceability of the guarantee. It filed a $14.2 billion claim in the Swiss liquidation, based on intercompany loans. The Swiss liquidators took the position that the parent's claim should be treated as though it were stock. As part of the settlement, Holdings will have a claim of about 9.55 billion Swiss francs or US$10.11 billion. The claim will be partly subordinated so non-affiliated creditors recover $1.275 billion before the parent begins receiving payment on its claim. The settlement is subject to U.S. Bankruptcy Court approval at an April 24 hearing.

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(B) Idearc Creditors of Idearc Inc. are relying on a technicality to resurrect a $9.8 billion lawsuit against Verizon Communications, Inc. that a federal district judge tossed out largely, if not entirely. In a court filing in the second week of March, Idearc creditors contend the Company was never properly formed, so Verizon remained liable for the debt even though Idearc emerged from Chapter 11 reorganization. Idearc was spun off from Verizon in November 2006. In March 2009 Idearc filed for Chapter 11 bankruptcy under the weight of $9 billion in debts. The Company emerged in January 2012 pursuant to a restructuring plan that was worked out before the bankruptcy filing. The plan reduced the debt to $2.75 billion and created a trust to file lawsuits on behalf of creditors, including the one against Verizon. In January, U.S. District Judge A. Joe Fish in Dallas wrote an opinion that could be the death knell for the entire suit. After a trial without a jury, Judge Fish ruled that Idearc was worth $12 billion at the time of the spinoff and therefore was solvent. Judge Fish said the finding of solvency meant claims for constructive fraudulent transfer must be dismissed. He asked both sides to file additional papers on the question of whether any of the creditors' other claims could survive after a finding of solvency. The creditors' trust filed papers on Feb. 8 explaining how several claims should survive, including claims for an illegal dividend. The creditors also argued that the board never properly authorized the dividend paid to Verizon. Verizon responded with its own papers explaining why the entire lawsuit should be dismissed given the solvency finding.
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(C) Tronox Additional hundreds of pages of post-trial papers were filed in the lawsuit commenced by a trust for Tronox Inc. creditors against the company and its former parent, Kerr-McGee. The lawsuit, began in Manhattan bankruptcy court in May 2009, seeks $14 billion in damages from Kerr-McGee. The suit alleges Kerr-McGee accumulated "massive" environmental and retiree liabilities during 70 years in business. The creditors accuse that to shed actual and contingent debt, Kerr-McGee first transferred so-called "clean" businesses into a new company, leaving behind what would be known as Tronox. The leftovers were spun off as Tronox in March 2006, so valuable oil and gas properties wouldn't be liable for environmental claims. Tronox proceeded to file for Chapter 11 protection in January 2009 and implemented a confirmed Chapter 11 plan in February 2011. The plan created a trust to prosecute the suit on behalf of creditors. Trial in the lawsuit ran its course from May to November 2012. Closing arguments were heard in December last year. Tronox contended in court papers that there is no actual creditor in existence on which the trust can base the fraudulent transfer suit. The creditors answered that argument and what it called "a kitchen sink of damages arguments that are unprecedented, irrelevant and unprincipled, and renege on a number of admissions they previously made to the court." It remains unclear whether Bankruptcy Judge Allan Gropper will be able to issue a so-called final judgment in view of a Supreme Court decision called Stern v. Marshall. Tronox believes the judge can only render a proposed ruling, so that a federal district judge might conduct the trial all over again. There is disagreement on whether the so-called Stern defenses can be
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waived. Judge Gropper might conclude that he can render a final ruling if Tronox didn't make a timely objection to his right to issue a final judgment. Not long after the spinoff, Kerr-McGee was acquired by Anadarko Petroleum Corp. Anadarko had been a defendant in the suit until May when the judge dismissed the complaint as to it.

Delayed Exits From Chapter 11 Julie Anne Lopez-Toledo reports about two Chapter 11 debtors whose emergence from Chapter 11 has been delayed: Flintkote and W.R. Grace. (A) Flintkote The Flinkote Company and Flintkote Mines Limited filed an eight amendment to the Plan Supplement of their Amended Joint Plan of Reorganization on January 23, 2013. The Eight Amendment contains two exhibits: (i) a further amended List of Settling Asbestos Insurance Companies, and (ii) a blacklined version of the List of Settling Insurance Companies indicating changes as compared to the prior filed version. The list has been updated to include RiverStone as defined in the Settlement and Policy Buyback Agreement and Release between the Debtors and Riverstone as approved by the Court. The Order approving the settlement with Riverstone became final on August 29, 2012. The order confirming Flintkote's Amended Joint Plan of Reorganization provides that, post-confirmation, certain additional Asbestos Insurance Companies may be identified by the Plan
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Proponents as Settling Asbestos Insurance Companies in the Plan Supplement, and if so identified, subject to any limitations and conditions identified in the Plan Supplement, will be entitled to all rights, protections and benefits provided to Settling Asbestos Insurance Companies pursuant to the Plan. Therefore, RiverStone, as the additional Settling Asbestos Insurance Company is entitled to all rights, protections and benefits provided to Settling Asbestos Insurance Companies. The U.S. Bankruptcy Court for the District of Delaware entered an order on December 21, 2012, confirming Flintkote's Amended Joint Plan of Reorganization. The Flintkote Company filed for Chapter 11protection on April 30, 2004.

(B) W.R. Grace W.R. Grace & Co. is still awaiting the effective date of its joint plan of reorganization, which plan incorporates a settlement of lawsuits asserting asbestos-related personal and property damage claims relating to Zonolite Attic Insulation, according to the Company's February 27, 2013, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2012. Upon the occurrence of the effective date under the Joint Plan, all pending and future Property Damage claims would be channeled for resolution to the so-called PD Trust. PD Claims other than U.S. and Canadian Zonolite property damage claims would be litigated in the Bankruptcy Court or a U.S. District Court, including all claims and defenses that would have been available
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to the parties prior to the filing of the Chapter 11 Cases as well as any defenses based on the March 31, 2003 bar date. Grace has been in Chapter 11 protection for more than 12 years since it delivered its petition to the U.S. Bankruptcy Court for the District of Delaware on April 2, 2001. Grace projects it could complete its reorganization by the end of this year. * * *

The Troubled Company Reporter provides detailed reporting about every chapter 11 filing nationwide. Stay tuned to learn more about obtaining a trial subscription to the TCR at no cost or obligation. New Publicly Traded Securities Psyche Maricon Castillon reports of seven companies who issued or will issue shares of new common stock upon emergence pursuant to the plans of reorganization they filed or intend to file in their Chapter 11 cases in March 2013. These companies are: Conexant Systems, Ahern Rentals, Southern Air, Pinnacle Airlines, LodgeNet Interactive, Otelco, and Revel. (A) Conexant Systems Conexant Systems, Inc., filed a Chapter 11 petition and a prepackaged Chapter 11 plan of reorganization. As part of the restructuring, the secured lender, QP SFM Capital Holdings Limited, an entity managed by Soros Fund Management LLC, will
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exchange approximately $195 million of secured debt into equity in the reorganized Company. In addition, the Secured Lender will receive $76 million of unsecured notes issued by a holding company, which can elect to either pay interest in cash or accrue interest in kind. The new unsecured notes will be non-recourse to the reorganized Conexant operating company. Upon implementation, this restructuring will (i) eliminate debt at the operating company, (ii) reduce annual cash payment of interest by approximately $19.7 million and (iii) cut excess real estate expenses by approximately $7 million annually. To effectuate the restructuring, the Secured Lender will provide $15 million through a debtor-in-possession financing facility that will convert into equity in the reorganized Company. The Disclosure Statement explaining the Plan provides for these terms: 1. Soros will convert the secured portion of its existing senior secured notes claim totaling approximately $80 million into (a) new equity in the reorganized Debtors and (b) $76 million in unsecured "payable in kind" ("PIK") notes to be issued by a newly formed holding company on the effective date of the Plan. Projected recovery by Soros is 41%. 2. Holders of administrative claims, non-priority tax claims and other secured claims will recover 100% provided that the claims do not exceed the caps set for those claims. 3. Holders of allowed unsecured claims will receive a pro rata share of $2.0 million; provided that if the class of unsecured creditors votes in favor of the Plan, Soros has agreed to waive its unsecured deficiency claim totaling approximately $114.5 million. If unsecured creditors accept the Plan, they'll recover 4.1% but if they reject, they'll recover only 1.2%.
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4. Holders of existing interests in Conexant will not receive any distribution on account of their interests, and the existing interests will be cancelled and discharged on the effective date. (B) Ahern Rentals Ahern Rentals Inc. and a group of holders of the Company's 9-1/4% Senior Secured Second Lien Notes due 2013 will face off at a confirmation hearing beginning June 3, each trying to convince U.S. Bankruptcy Judge Bruce T. Beesley in Reno, Nevada, that its reorganization plan is the one worthy of the court's approval. Both plans propose to pay unsecured creditors in full. The lenders' plan fully pays unsecured creditors when the plan is implemented. Ahern Rental's plan pays them over a year, thus giving unsecured creditors the right to vote only on the company plan. Ahern's plan offers the junior lenders $160 million cash and new debt if they accept the plan. If they don't, they're slated to receive all new debt, for eventual full payment. The lenders' plan pays all creditors in full other than the $267.7 million in secondlien debt that converts to equity. (C) Southern Air Southern Air Holdings, Inc. on March 14 disclosed that it has received confirmation of its "pre-arranged" Plan of Reorganization from the U.S. Bankruptcy Court in Wilmington, Delaware, which has been overseeing the Company's Chapter 11 proceedings following its voluntary filing on September 28, 2012. The Plan
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received substantial support from key secured creditors as well as unsecured creditors. The revised plan will fund a trust for unsecured creditors with $2.5 million. Unsecured creditors are now told to expect a recovery between 2.4% and 2.6%. Under the revised plan, the recovery is pegged at 10.4% to 17.5%. Secured lenders will participate in the litigation trust only after unsecured creditors recover 10%. Oak Hill is to retain the other 17.5% in return for making payments to cover lease obligations and provide capital. (D) Pinnacle Airlines U.S. Bankruptcy Judge Robert Gerber approved on March 7 the plan outline, whereby Pinnacle Airlines Corp. will become a wholly-owned subsidiary of Delta Air Lines Inc. The bankruptcy judge also authorized Pinnacle to begin the solicitation of votes from creditors. Creditors entitled to vote have until April 10 to cast their ballots. They are required to follow a process governing the solicitation of votes, which Judge Gerber also approved in his March 7 order. A court hearing to consider confirmation of the plan was set for April 17. Objections were due by April 10. The plan was laid out in an agreement among Delta, Pinnacle, and the creditors' committee announced on Jan. 3. After bankruptcy, Pinnacle will continue as a feeder airline for Atlanta-based Delta operating 81 regional jets with 76 seats. Currently, Pinnacle is operating about 190 regional jets for Delta, mostly the 50-seat variety.
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Under the plan, secured creditors will be paid in full while union and unsecured creditors will recover less than 1% on claims. A trust will be created for general unsecured claims, according to the plan outline. (E) Lodgenet Interactive The Bankruptcy Court entered an order confirming the prepackaged plan of reorganization of LodgeNet Interactive Corporation. On Jan. 27, 2013, LodgeNet and all of its direct and indirect domestic subsidiaries filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York. The bankruptcy case was filed to effect the Company's prepackaged plan of reorganization, which is based on the recapitalization in which a syndicate of investors led by an affiliate of Colony Capital, LLC, will invest $60 million. The Plan was voted on and accepted by the holders of in excess of two-thirds in amount of the Company's secured debt and a majority of such holders. On Jan. 29, 2013, the Company filed with the Bankruptcy Court the proposed Plan and related disclosure statement in accordance with the Bankruptcy Code. The Plan provides for the reorganization of the Company. On the Effective Date, a group of investors led by an affiliate of Colony Capital will purchase 100% of the shares of new common stock in the Reorganized Company for $60 million and certain investors will purchase warrants to purchase additional shares of new common stock. All creditors of the Company will be paid in full, with interest, in respect of allowed claims. The holders of the Company's
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secured debt, however, will receive an amended and restated credit agreement. All shares of the Company's common stock and the Company's 10% Series B Cumulative Convertible Perpetual Preferred Stock will be cancelled under the Plan and holders of these securities will not receive any distributions thereunder. All options and warrants to purchase any securities of the Company will also be cancelled. (F) Otelco Inc. Wireline telecommunication services provider Otelco Inc. and its affiliates filed for Chapter 11 protection in late March and filed a prepackaged financial restructuring plan that already has been accepted by 100% of the Company's senior lenders, as well as holders of over 96% in dollar amount of Otelco's senior subordinated notes. The Plan provides for: -- Each holder of the senior secured term loan claims will receive its pro rata share of (i) term loan obligations of the Company under the new senior secured credit facility of not more than $142 million, maturing on April 30, 2016; (ii) a cash payment of no less than $20 million and (iii) the New Class B Common Stock representing 7.5% of the total economic and voting interest in reorganized Otelco. -- Allowed senior secured revolving loan claims, as amended, will be reinstated, with availability of up to $5 million, pursuant to the new senior secured credit facility agreement and each holder of the Company's outstanding subordinated notes to receive a pro rata share of the New Class A Common Stock.
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-- Allowed general unsecured claims will be reinstated and paid in full, provided, that, if holders of Class 5 subordinated notes claims vote to reject the Plan, holders of allowed general unsecured claims shall receive a cash payment equal to 40.5% of the allowed amount of such general unsecured claim. -- All of the Company's existing equity interests will be cancelled. (G) Revel AC Revel AC Inc., owner of the struggling Revel casino in Atlantic City, New Jersey, sought bankruptcy protection and filed a prepackaged plan that will reduce its debt by more than 82% from $1.52 billion to $272 million, through a debt-for-equity conversion. The Prepackaged Plan provides for these terms: -- $208 million in loans outstanding under the 2012 credit agreement (Class 1) will be repaid in full in cash by the proceeds of the DIP facility or the second lien exit facility, as applicable; provided, that unless otherwise agreed, any letters of credit issued as of the Petition Date shall be deemed to be issued under the DIP Facility or cash collateralized at 103% of any letter of credit exposure. Lenders' recovery is projected to be 100%. -- Approximately $923 million of loans outstanding under the term loan credit agreement (Class 2) will be converted into 100% of new common equity to be issued by the Reorganized Debtors. Lenders are impaired and their recovery is projected to the 19%.
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-- Holders of the approximately $388 million in obligations under the second lien notes (Class 3) will receive their Pro Rata share of the "contingent payment rights" of up to an aggregate amount of $70 million. The contingent payment rights will be nonrecourse to the Reorganized Debtors and shall expire on the earlier of (a) 20 years after the State of New Jersey first reimburses the Debtors with an ERG Grant Payment, and (b) the date upon which the ERG Proceeds disbursed on account of the contingent payment rights equal an aggregate amount of $70 million. The noteholders are impaired, and they are projected to recoup 18%. -- Holders of priority non-tax claims (Class 4), and other secured claims (Class 5) are unimpaired and are deemed to accept the Plan. The claimholders are expected to be paid in full. -- General Unsecured Claims (Class 6) will reinstated, paid in the ordinary course of business, or paid upon the later of the Effective Date, the date on which the general unsecured claim against the reorganized debtors becomes an allowed general unsecured claim, or such other date as may be ordered by the Bankruptcy Court. Unsecured creditors are deemed to accept the plan and expected to recoup 100%. -- All intercompany claims (Class 7) will be reinstated in full or in part or cancelled or discharged in full or in part, in each case, to the extent determined appropriate by the Reorganized Debtors. The claimants are unimpaired, deemed to accept the plan. They are expected to recoup 100%. -- All existing interests, including all warrants, will be extinguished and existing equity holders (Class 9) and warrant holders (Class 8) will not receive or retain on account of such interests any property under the Plan. They are impaired and deemed to reject the Plan.
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That ends the Beard Group Corporate Restructuring Review for March 2013, brought to you by the editors of the Troubled Company Reporter and Troubled Company Prospector. If you'd like to receive the Troubled Company Reporter for 30-days at no cost -- and with no strings attached -- call Nina Novak at (240) 629-3300 or visit bankrupt-dot-com-slash-free-trial and we'll add you to the distribution list. That telephone number, again, is (240) 629-3300 and that Web site address, again, is bankrupt-dot-comslash-free-trial. Tune in to our next monthly Restructuring Review on May 16th. Thank you for listening.

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