Beard Group Corporate Restructuring Review For September 2011

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

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

____________________________________________________ Welcome to the Beard Group Corporate Restructuring Review for September 2011, 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 four 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, reminders about debtors whose emergence from chapter 11 has been delayed; and

fourth, information you're unlikely to find elsewhere about new publicly traded securities being issued by chapter 11 debtors. September 2011 Mega Cases

Now, let's review the largest chapter 11 cases in September 2011. According to Danilo Muoz, the number of Chapter 11 cases with assets in excess of $100 million increased by 40% to seven in September, compared to five in August. For the first nine months of 2011, a total of 58 companies with assets of at least $100 million filed for Chapter 11 bankruptcy, or an average of 6 mega cases per month. In comparison, during the first nine months of 2010, there were a total of 71 mega cases, or an average of about 9 per month. The decrease in the number of mega cases for the first nine months in 2011 as compared to 2010 was about 18%. For fiscal year 2010, there were a total of 105 mega cases, or an average of about 9 per month. In September 2011, one company -- NewPage Corporation -sought Chapter 11 protection with assets in excess of $1 billion, joining book retailer Borders Group and hotel chain MSR Resort Golf Course, both of which filed earlier this year.

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Mega Cases by Asset Size In September 2010, there was also one billiondollar filer -- movie rental chain Blockbuster Inc. During the first nine months of 2010, three other billion-dollar companies filed for Chapter 11 -- Boston Generating LLC, which filed in August 2010, Innkeepers USA Trust and Capmark Financial's Protech Holdings LLC, both of which filed in July 2010.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 1 2 2 2 1 1 1 1 6 6
more than $1B $500MM-$1B $100-$500MM

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Dayton, Ohio-based NewPage commenced Chapter 11 proceedings on Sept. 7, with the U.S. Bankruptcy Court for the District of Delaware [lead case number 11-12804]. Judge Kevin Gross oversees the case. NewPage's balance sheet showed $3.4 billion in total assets and $4.2 billion in total liabilities. NewPage is engaged in the manufacture of coated paper in North America. The Company is a wholly owned subsidiary of NewPage Holding Corporation. The Company operates 20 paper machines at 10 paper mills located in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage is saddled with "burdensome long-term debt obligations" arising from the Company's 2005 acquisition by Cerberus Capital Management LP, which controls 80% of the equity. NewPage blamed its problems on "a significant decline" in the North American demand for coated paper. Although this decline has impacted many of the markets for the Debtors' key products, it has yet to result in a counterbalancing decrease in the production capacity trying to access those markets, says George F. Martin, president and CEO.
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September's second largest Chapter 11 was by Fremont, Calif.-based Solyndra LLC, which filed for Chapter 11 protection on Sept. 6 with the U.S. Bankruptcy Court for the District of Delaware [case number 11-12799] before Judge Mary Walrath. Solyndra estimated assets and debts to be between $500 million and $1 billion. Affiliate 360 Degree Solar Holdings, Inc. also filed. Solyndra is a manufacturer of cylindrical panels of copperindium-gallium-diselenide (CIGS) thin-film solar cells. Argonaut Ventures I, L.L.C., together with its affiliates, beneficially owns roughly 35.7% of the Company's outstanding common stock on an as-converted basis. W.G. Stover, Jr., the chief financial officer and senior vice president, said Solyndra failed because an oversupply of solar panels dramatically reduced solar panel pricing world-wide. The oversupply was due, in part, to the growing capacity of foreign manufacturers that utilized low cost capital provided by their governments to expand their operations. He added that demand for Solyndra's panels also fell as European governments reduced incentives for buying solar energy. Solyndra's ability to timely collect on its accounts receivables was negatively impacted as foreign competitors offered extended payment terms, resulting in Solyndra's customers refusing to honor their previously agreed payment terms. Five other mega-cases in September listed $100 million to $500 million in assets. These are Graceway Pharmaceuticals LLC, R.E. Loans LLC, Dallas Stars L.P., Hussey Copper Ltd., and East Harlem Property Holdings LP. Graceway and its affiliated companies sought Chapter 11 protection on Sept. 29 with the U.S. Bankruptcy Court for the District of Delaware [lead case number 11-13036] before Judge
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Mary F. Walrath. Graceway is a specialty pharmaceutical company focused on the dermatology, respiratory, and women's health markets. Graceway intends to sell essentially all of its assets under Section 363 of the Bankruptcy Code. Galderma has been selected as a stalking horse bidder, but the final buyer will be determined through an auction process and, ultimately, by the Bankruptcy Court over the course of the next few months. Dallas Stars is a professional ice hockey team. The club Stars and its affiliates filed for Chapter 11 protection on Sept. 15 with the U.S. Bankruptcy Court for the District of Delaware [case number 11-12935] before Judge Peter J. Walsh. Dallas Stars was formerly known as Minnesota North Stars before the team moved to Dallas in1993. The club filed for bankruptcy to implement a sale of the team. Before the Chapter 11 filing, the team solicited acceptances of the plan from creditors and signed up Vancouver businessman Tom Gaglardi to buy the hockey club. Reports have pegged Mr. Gaglardi's offer at $265 million. The deal is subject to higher and better offers; an auction is scheduled for Nov. 21. A combined hearing to approve the sale and confirm the prepackaged reorganization plan is set for Nov. 23, which puts the club in a position to exit bankruptcy around the end of November. The chapter 11 process has the support of the National Hockey League and the Dallas Stars' lenders, which voted to accept the prepackaged plan prior to filing. The prepackaged plan provides for a court-supervised auction of the Dallas Stars Club and other hockey-related assets.
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The purpose of the sale is to allow for a smooth transition in ownership, while ensuring that the Dallas Stars continue to play at the American Airlines Center in Dallas. The Plan provides that the Dallas Stars will pay and perform all of its obligations to its fans, players, employees, and vendors. Hussey Copper Corp. and its affiliates filed for Chapter 11 protection on Sept. 27 with the U.S. Bankruptcy Court for the District of Delaware [lead case number 11-13010] before Judge Brendan Linehan Shannon. Hussey is one of the leading manufacturers of copper products in the United States. Hussey Copper was founded in Pittsburgh in 1848. Hussey intends to use the chapter 11 process to sell its assets. Hussey has a deal on hand to sell the business to KHC Acquisitions LLC for $84.7 million, subject to adjustments. To allow them time to complete a sale and undertake a competitive bidding process, Hussey has secured a commitment for a $50 million DIP financing facility from certain of their pre-bankruptcy lenders and is also seeking authority to use existing cash collateral. East Harlem Property Holdings, LP, filed for Chapter 11 protection on Sept. 15 with the U.S. Bankruptcy Court for the Southern District of New York in Manhattan [case number 1114368] before Judge James M. Peck. East Harlem has membership interests in 27 special purpose entities which own roughly 1,200 residential units and 50 commercial units which are located across 47 buildings in New York City. The buildings are primarily located in the East Harlem neighborhood. The bankruptcy filing was a result of a Uniform
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Commercial Code foreclosure sale which had been scheduled to occur on Sept. 16. R.E. Loans LLC filed for Chapter 11 protection on Sept. 13, 2011, with the U.S. Bankruptcy Court for the Northern District of Texas in Dallas [case number 11-35865] before Judge Barbara J. Houser. R.E. Loans was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company.
Bankruptcy Mega Cases by Industry (YTD)

Othe r 19%

M anufactur ing 19%

& Trans portation Ware hous ing 5% Finance Ins ur ance 9% Re al Es tate 10% Infor m ation 10%

Accom odation Food Se rvice s 16%

Re tail Trade 12%

Mr. Muoz also reports that on September 2011, there was only one prepackaged Chapter 11 mega case. For the first nine months of 2011, 11 of the 58 mega cases involved a prepackaged Chapter 11 plan as of the Petition Date -- or about 19% of the large Chapter 11 filings. For fiscal year 2010, a total of 35 prepacks/pre-arranged cases were filed -- about one in every three filings in 2010.

Four of the seven mega cases in September 2011 were engaged in manufacturing. The rest were spread evenly among different industries.
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For the first nine months of 2011, companies engaged in manufacturing continue to lead large Chapter 11 filings with 11 such bankruptcies during the period. They are closely followed by accommodation and food services with 9, retail trade with 7, and information and real estate, with 6 each.

Bankruptcy Mega Cases By State (YTD)

Othe r 28% De law are 44% Te xas , Northe rn 7% Ne w York , Southe rn 21%

Of the September mega cases, five were filed in Delaware, one was filed in the Southern District of New York and one was filed in the Southern District of Texas. For the first nine months of 2011, 26 mega-cases were filed in Delaware and 12 were filed in the Southern District of New York and four were filed in the Southern District of Texas. The rest were distributed among various bankruptcy courts throughout the U.S. 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 the first nine months of 2011, the largest Chapter 11 filing was NewPage's, which listed $3.4 billion in assets and $4.2 billion in liabilities. 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.
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Carlo Fernandez identified four companies that may be close to filing for bankruptcy. These are Dune Energy, Wastequip Inc., General Maritime and Eastman Kodak. (A) Dune Energy Dune Energy Inc. entered into a restructuring plan support agreement with noteholders who together hold 90% of the aggregate principal amount of Dune's outstanding 10-1/2% Senior Secured Notes due 2012 as well as a similar restructuring plan support agreement with a holder of roughly 64% of Dune's issued and outstanding 10% Senior Redeemable Convertible Preferred Stock. Dune intends to seek to eliminate all of the notes and the related cash interest expense in exchange for a combination of Dune equity securities, and either cash or new debt securities in an aggregate amount of $50 million. If fully subscribed, the exchange offer would result in the ownership of 97.25% of Dune's common stock on a post-restructuring basis by the noteholders. As an alternative to the out-of-court exchange offer, Dune has also agreed in the support agreements to solicit consents from its noteholders to approve a prepackaged plan of reorganization in a bankruptcy proceeding. In the event certain conditions to the exchange offer are not satisfied, Dune intends to pursue the prepackaged plan. If confirmed, the prepackaged plan would have principally the same effect as if 100% of the noteholders had tendered their notes in the exchange offer. If all conditions to consummating the exchange offer are satisfied, Dune will cease seeking support for the prepackaged plan.
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Dune does not anticipate any business interruption in its operations during the restructuring process, regardless of whether the restructuring is completed out of court or in court. Under the proposed plan, Dune will continue its operations in the normal course. Dune Energy is an independent energy company based in Houston, Texas. It has interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. The Company's balance sheet at June 30, 2011, showed $274.23 million in total assets against $369.71 million in total liabilities. (B) Wastequip Inc. Wastequip Inc. is seeking to refinance a credit agreement that comes due in the next 14 months. This would be a tough task for the maker of waste-handling equipment, which is burdened with heavy debt and challenging market conditions for its products, said analysts, according to Dow Jones' Daily Bankruptcy Review. Wastequip is the largest manufacturer of waste handling and recycling equipment used to collect, process, and transport solid and liquid waste in North America. Early October, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit and senior secured issue-level ratings, on Wastequip to 'CCC-' from 'CCC'. The outlook is negative.
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"The downgrade reflects our view that refinancing risks are increasing because Wastequip's revolving credit facility matures in less than six months," said S&P credit analyst Gregoire Buet. "Although the company's current and prospective cash balance should allow it to repay the largely drawn facility in full at maturity in February 2012, interest on its holding company notes also becomes payable in cash at that time. We are concerned that Wastequip's available liquidity to make payments under its various debt obligations could then become insufficient," Mr. Buet added. As of June 30, 2011, total debt amounted to about $600 million and lease-adjusted debt to EBITDA remained in excess of 15x. Debt also includes about $70 million of holding company notes. (C) General Maritime General Maritime Corp. moved closer to a restructuring when it signed a standstill agreement on Sept. 30 with affiliates of Oaktree Capital Management LP, lenders on three credits totaling $1.12 billion. The agreement requires the company to deliver an acceptable restructuring proposal. The standstill expires Nov. 10. Standard & Poor's Ratings Services recently lowered its long-term corporate rating on New York City-based General Maritime Corp. to 'SD' for selective default from 'CCC+'. The rating action on General Maritime follows the Sept. 30 amendment to the company's credit agreement that allowed it to pay down the revolver sublimit of its 2010 credit facility, in lieu of a scheduled principal amortization on the term loan portion of the facility.
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"Under our criteria, we view failure to make the scheduled principal payment as a selective default ('SD'), even though the nonpayment was permitted by an amendment to the credit agreement and the payment was applied to the revolving credit portion of the facility," S&P explained. General Maritime provides international shipping of crude oil. The company owns a fleet of 31 double-hull vessels with a total carrying capacity of 5.2 million deadweight tons, and also operates three chartered-in vessels. The Company has said it is considering various alternatives including seeking additional waivers, offerings of debt or equity, vessel sales, sale of all or a portion of its business, and potentially a reorganization under Chapter 11 of the Bankruptcy Code. "If General Maritime completes its debt restructuring, we will reassess its credit quality and assign new ratings reflecting our view of the company's operating prospects, capital structure, and liquidity position," S&P related. Moody's Investors Service said in September there is an "increasing prospect" for "a restructuring of the terms of certain of its credit facilities, if not the entirety of its debt." The majority of General Maritime's charter agreements expire in the next 15 months. For the six months ended June 30, General Maritime reported a $55.5 million net loss on revenue of $208.1 million. The operating loss in the period was $20.2 million. The Company's balance sheet at June 30, 2011, showed $1.78 billion in total assets against $1.44 billion in total liabilities, and $339.32 million in total shareholders' equity.
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Deloitte & Touche LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the 2010 results. (D) Eastman Kodak Eastman Kodak Company, in response to rumors circulating in the capital markets, said Sept. 30 it is "committed to meeting all of its obligations and has no intention of filing for bankruptcy." "It is not unusual for a company in transformation to explore all options and to engage a variety of outside advisers, including financial and legal advisers. Jones Day is one of a number of advisers that Kodak is working with in that regard," the statement said. Kodak said it continues to actively pursue its strategy to monetize its digital imaging patent portfolio. Kodak remains focused on meeting its commitments to customers and suppliers, and on delivering on its strategy to become a profitable, sustainable digital company. The Wall Street Journal has noted that Kodak debt is being traded at levels that indicate a high risk of default. Mike Spector and Dana Mattioli have reported that Kodak's bonds on Sept. 30 plunged and its shares fell 54%, or 91 cents, to 78 cents, after WSJ reported the hiring of restructuring advisers. Kodak has already hired investment bank Lazard Ltd. to advise it on selling a trove of patents, an auction the company deems critical for raising cash to reinvent itself. Moody's Investors Service and Fitch Ratings in late September downgraded Kodak's ratings deeper into junk territory.
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Fitch said its 'CC' rating signifies that default of some kind appears probable. Moody's said it lowered Kodak's ratings, including the corporate family and probability of default to Caa2 from Caa1, the senior unsecured to Caa3 from Caa2, the senior secured to B3 from B1 and the Speculative Grade Liquidity rating to SGL-3 from SGL-2. The outlook remains negative. The rating downgrade reflects Moody's expectations that "ongoing weakness in the company's core business operations in addition to a softening demand environment will pressure operating performance and liquidity over the foreseeable future," said Moody's senior vice president, Richard Lane. On Sept. 23, Kodak drew down $160 million from its $400 million secured revolving credit facility for "general corporate purposes". Moody's and Fitch said the move signals weaker cash flow prospects. Moody's noted the draw was just prior to what is usually Kodak's strongest cash flow quarter (the 4th quarter). Although Kodak had $957 million of cash balances at June 30, 2011 and no material debt maturities until November 2013, "we anticipate that Kodak will consume cash over the next year, thus weakening its liquidity profile," said Moody's Mr. Lane. Headquartered in Rochester, New York, Kodak provides imaging technology products and services to the photographic and graphic communications markets. The Company's balance sheet at June 30 showed $5.33 billion in total assets against $6.75 billion in total liabilities. * * *

In addition to the challenged companies mentioned in Mr. Fernandez's report, the Troubled Company Reporter provides on_____________________________________________________________________________ Beard Group Corporate Restructuring Review for September 2011 -- page 14

going 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. Delayed Exits From Chapter 11 Julie Anne Lopez reports about five Chapter 11 debtors whose emergence from Chapter 11 has been delayed: Tribune Co., W.R. Grace & Co., Lehman Brothers, Washington Mutual, and Nebraska Book. (A) Tribune Co. In Tribune, Judge Kevin J. Carey said he hopes to issue a decision confirming a reorganization plan for Tribune Company and its debtor affiliates, soon. Judge Carey's prediction, though vague, represented his first indication on the timing of the confirmation ruling since July. "Don't sit by your computers yet," Judge Carey told a group of lawyers at a hearing held October 4, 2011. "But I hope to have something soon," the bankruptcy judge added. Judge Carey heard closing arguments with respect to the Chapter 11 plans proposed by Tribune and rival noteholders group led by Aurelius Capital Management LP on June 27, 2011. Judge Carey ended the hearing without saying which of the plans he will confirm. Instead, Judge Carey urged the rival groups to continue their talks for a consensual resolution of the case.

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Judge Carey also indicated that he might issue a confirmation ruling in July. However, in August 2011, Judge Carey did not state as to when he intends to rule on any of the Chapter 11 plans. The bankruptcy judge convened the hearing to consider, among other things, the Debtors' proposed incentives of up to $42.5 million to 640 employees. The bankruptcy judge approved the 2011 Management Incentive Plan, dubbing it as "reasonable and sensible." Tribune's bankruptcy counsel, Brian Gold, Esq., at Sidley Austin LLP, in Chicago, Illinois, told Judge Carey at the Oct. 4 hearing that despite continued underperformance in the Company's publishing unit, management is projecting it will be able to generate about $517 million in cash flow in 2011, $20 million more than originally projected. This would translate into a bonus pool of between $26.4 million and $32.4 million based on the plan formula. Mr. Gold further disclosed that the media company continues to wrestle with declining advertising revenue at its newspapers, including the Chicago Tribune and Los Angeles Times. Comparisons in the broadcast group are under pressure because 2010 benefited from strong election-year ad spending. Meanwhile, Tribune has obtained court authority to implement proposed changes to the official confirmation trial transcript regarding the competing Chapter 11 plans. Tribune's Chapter 11 reorganization began in December 2008. (B) W.R. Grace
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W.R. Grace & Co. continues to await final approval of its bankruptcy-exit plan from Judge Ronald Buckwalter of the Delaware District Court. The company already received confirmation of the plan from Bankruptcy Judge Judith Fitzgerald in January this year. The exit plan calls for Grace to pay creditors in full and set up a trust fund to pay victims of asbestos-related diseases. The plan needs approval from both the bankruptcy and district courts. In September, Judge Jeffrey Sherlock of the U.S. District Court for the District of Montana approved a $43 million settlement between the state of Montana and victims of the vermiculite mine in Libby, Montana, which Grace operated from 1960 to 1990. The settlement provides that the more than 1,300 victims will receive payments ranging from $500 to more than $50,000 for those afflicted with lung cancer or mesothelioma. Grace filed for Chapter 11 reorganization in 2001 to protect itself from more than 100,000 asbestos-related personal injury claims. (C) Lehman Brothers September marked the third year of Lehman Brothers' collapse. For its lawyer, three years in bankruptcy is not unusual. "For the largest bankruptcy case in the world? Three years is not a particularly long period," said the company's lead counsel, Harvey Miller, Esq., at Weil Gotshal & Manges LLP, in New York, in an interview with Alison Frankel of Thomson Reuters News & Insight.

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The bankruptcy case may soon be drawing to a close. Mr. Miller said the final obstacle will be getting the votes from creditors needed to approve its payout plan. Lehman has obtained bankruptcy court permission to poll creditors on its $65 billion Chapter 11 plan. It hopes to get the plan confirmed December 6, 2011, and begin making payouts to creditors early next year. Mr. Miller said the biggest hurdle is an objection by Lehman's European affiliate over whether its $8.9 billion claim can be treated as a customer claim. If so, it would receive higher payback priority and would be more likely to be repaid in full at the expense of other claims. "It's been a remarkable case," Mr. Miller told Reuters. "Think of all the different interests and conflicting views, and over a period of time, the parties have come together to reach a consensus." Mr. Miller was quick to point out that of the 110,000 creditors to receive Lehman's disclosure statement, only 17 have objected, which is not bad for a firm facing $360 billion in allowed claims, most of which won't be repaid. LBHI and Lehman Brothers International Europe, the largest of the company's foreign affiliates, announced in a September 16, 2011 statement that they have reached an agreement in principle resolving the claims. Creditors entitled to vote on the Plan have until November 4, 2011, to cast their ballots. Lehman Brothers Holdings Inc. was the fourth largest investment bank in the United States. For more than 150 years,
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Lehman Brothers served the financial needs of corporations, governmental units, institutional clients and individuals worldwide. It filed for bankruptcy protection with $639 billion in assets on September 15, 2008. (D) Washington Mutual Bankruptcy Judge Mary Walrath in Wilmington, Delaware, has said Washington Mutual must try to settle differences among shareholders, hedge funds and other creditors before making its third attempt to exit bankruptcy. Judge Walrath rejected Seattle-based WaMus proposal to limit mediation so the company could try to quickly end its threeyear-old bankruptcy and distribute $7 billion to creditors. She set a Nov. 7 deadline for a mediator to report on whether mediation has succeeded, has failed or needs more time. Judge Raymond T. Lyons of the U.S. Bankruptcy Court in New Jersey is Judge Walrath's choice for mediator. Washington Mutual, however, may put up a candidate of its own, she said. I am not going to have another contested confirmation without trying, Judge Walrath said at a hearing Oct. 6. All the issues have to be on the table, she said. She has twice rejected WaMus reorganization proposal after holding multi-day confirmation hearings involving dozens of lawyers and witnesses arguing about the fairest way to distribute the money. Lawyers for the company and creditors have told the Court that each month of delay in confirmation means an estimated $30 million of value is being eroded from the bottom of the pyramid of debts to be paid under the Chapter 11 plan. They urged mediation only for the insider-trading matter and a fast payday for
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everyone else, including the bulk of the holders of $4 billion in senior notes. Judge Walraths broad-ranging mediation order could be a crucial one for investors in WaMu debt. Uncertainty about whether the current Chapter 11 plan can move forward in revised form, without a re-vote, has left hedge funds stuck with the securities they voted, the company noted. It wasnt clear whether the court-ordered mediation would produce a plan that had been revamped so significantly that creditors would be asked to vote again. WaMu filed for bankruptcy on Sept. 26, 2008, the day after its banking unit was taken over by regulators and sold to JPMorgan Chase & Co. for $1.9 billion. Washington Mutual Bank had more than 2,200 branches and $188 billion in deposits. (E) Nebraska Book Nebraska Book Co. has delayed a court hearing seeking approval of its bankruptcy exit plan, saying it needs more time to secure $250 million in financing. The college bookstore operator said institutions that have agreed to arrange financing for the company have voiced concerns over the prospects of getting a loan in the current economy. Citing the "tightening of capital markets" and other "macroeconomic" concerns raised by the institutions, Nebraska Book adjourned until Oct. 27 its confirmation hearing initially slated for Oct. 4. The delay will also give the company more time to try to satisfy the loan arrangers' desire for final financial results from the company's back-to-school rush, according to its filing.
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The lenders want to see the results of back-to-school sales before committing to a new loan, the filing said. Sale results won't be available from the stores until the end of October, and then several weeks can be required to get behind the numbers, the company said. If confirmed, the restructuring plan would give control of the 96-year-old company, based in Lincoln, Nebraska, to bondholders. Nebraska Book, whose 280 locations make it among the largest U.S. college bookstore operators, filed for bankruptcy in June with a prepackaged restructuring proposal that would pay back secured lenders in full. The plan would give subordinated noteholders a 78% equity stake, $110 million in unsecured notes and $30.6 million in cash. * * *

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 about four companies that issued or will issue shares of new common stock upon emergence pursuant to the plans of reorganization they filed in their Chapter 11 cases in September 2011. These are: Perkins & Marie Callender's Inc., FGIC Corp., Harry & David's Holdings, and Nebraska Book Corp.

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(A) Perkins & Marie Perkins & Marie Callender's Inc., the operator of familydining and casual-dining restaurants, obtained approval from the Bankruptcy Court for the District of Delaware of the disclosure statement explaining its proposed plan of reorganization, subject to the Company filing the final version of the Disclosure Statement. Approval of the Disclosure Statement clears the way for the Company to solicit votes from creditors with respect to the Plan. The Bankruptcy Court has established a voting deadline of October 14, 2011 for creditors that are eligible to vote on the Plan and scheduled a hearing regarding confirmation of the Plan for October 31, 2011. The Company's Plan contemplates the issuance of shares of new common stock on the effective date. The estimated range of reorganization value from operations of the Reorganized Debtors is assumed to be roughly $161 million to $208 million, with an approximate mean value of $177 million, as of an assumed emergence date of November 15, 2011. The estimated range of the reorganization value from operations of the Reorganized Debtors does not include any value for tax attributes that may or may not be available in the future. Based on the assumed range of the reorganization value from operations of the Reorganized Debtors of $161 million to $208 million and an assumed total funded debt amount of roughly $118.3 million, investment banker Whitby Santarlasci & Co. has determined an imputed estimate of the range of equity value for the Reorganized Debtors of between $43 million and $90 million, with an approximate mean value of $59 million.
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The Plan provides that each holder of an Allowed General Unsecured Claim less than or equal to $5,000,000, unless the holder elects to receive Reorganized PMC Holding Membership Interests, and each holder of an Allowed Senior Notes Claim less than or equal to $5,000,000 that elects to receive Cash, will receive Cash in an amount equal to: (a) the lesser of (i) 14% of the holder's Allowed General Unsecured Claim or Allowed Senior Notes Claim or (ii) the holder's Pro Rata share of the Cash Cap Amount ($7,000,000); plus (b) the holder's Pro Rata share of the Avoidance Action Recovery Pool. Each other holder of an Allowed General Unsecured Claim -those Claims greater than $5,000,000 that are not reduced to $5,000,000 or less so that the Cash option can be received, and those Claims of $5,000,000 or less where the Class 5 Equity Election is made -- and each other holder of an Allowed Senior Notes Claim greater than $5,000,000 who does not reduce its Claim or who does not make the Cash Election -- will receive the holder's Pro Rata share of Reorganized PMC Holding Membership Interests. (B) FGIC Corp. FGIC Corp., a privately held insurance holding company, may have three superior plans of reorganizations brewing, after its prepackaged reorganization plan fell apart. The three proposals for a new Chapter 11 plan will give unsecured creditors more than the aborted plan. FGIC filed for reorganization in August 2010 with a plan under which creditors would become owners of the bond insurance subsidiary, Financial Guaranty Insurance Co. The plan became unfeasible when an exchange offer failed.
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FGIC is attempting to reorganize by using $4 billion in net tax-loss carryforwards. FGICs assets consist of $10 million cash, the insurance subsidiary, and the opportunity to use the tax losses. The plan developed before bankruptcy anticipated dividing the cash and new stock among lenders on the $46 million revolving credit and the $345 million in unsecured notes. The holders of 90% of the common stock agreed to go along with the original plan and waive their $7.2 million unsecured claim. (C) Harry & David's Harry & David Holdings' Chapter 11 Plan of Reorganization became effective and the Company emerged from Chapter 11 protection in mid-September after five and a half months under court protection. The multi-channel specialty retailer and producer of branded premium gift-quality fruit, gourmet food products and other gifts filed for Chapter 11 protection on March 28, 2011, listing $243 million in total prepetition assets. The Plan will convert around $200 million in outstanding public notes to equity of the reorganized company. The Plan also includes an equity capital raise that will generate $55 million in equity financing upon the Company's emergence. A group of the Company's existing noteholders have agreed to backstop the equity capital raise. The Company will utilize proceeds from the equity capital raise to satisfy obligations arising from its $55 million postpetition term loan. Additionally, the Company has a $100 million revolving loan commitment to finance its operations after exiting Chapter 11.
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(D) Nebraska Book Nebraska Book Co., the college bookseller that can't land $250 million in financing to finance an exit from Chapter 11, is requesting a four-month extension of the exclusive right to propose a Chapter 11 plan. If approved by the bankruptcy court at an Oct. 18 hearing, the new deadline will be Feb. 22. The Company has said prospective lenders have "interest" in making a loan although they aren't willing as yet to commit financing required for implementation of the plan. The reorganization was largely worked out before the Chapter 11 filing in late June. The plan confirmation hearing has been pushed back to Oct. 27. The plan would exchange existing debt for new debt, cash and the new stock, after first-lien and second-lien debt is paid in full. The stock would be divided mostly among subordinated noteholders of the operating company and holders of notes issued by the holding company. The plan was crafted to remove $150 million of debt from the balance sheet. * * *

That ends the Beard Group Corporate Restructuring Review for September 2011, 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
_____________________________________________________________________________ Beard Group Corporate Restructuring Review for September 2011 -- page 25

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 November 16th. Thank you for listening.

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