Beard Group Corporate Restructuring Review

For January 2011

Presented by
Beard Group, Inc.
P.O. Box 4250
Frederick, MD 21705-4250
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An audio recording of this presentation is available

at http://bankrupt.com/restructuringreview/
____________________________________________________

Welcome to the Beard Group Corporate Restructuring Review for

January 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 five

topics:

• first, last month's largest chapter 11 filings;

• 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;
 • 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 chapter 11
debtors.

January 2011 Mega Cases

Now, let's review the largest January 2011 chapter 11 filings.

Danilo Muñoz reports that there was a continued decrease in

large Chapter 11 filings. Five companies with assets of at least
$100 million filed for Chapter 11 bankruptcy in January 2011,
compared to eight mega filers in December, 13 in November,
three in October and six in September.

There was no Chapter 11 case in January 2011 involving a

company with more that $1 billion in total assets -- unlike
December 2010, when one billion-dollar case was filed; and
November, with two billion-dollar cases filed.

Last month's largest Chapter 11 case was by plastic bottle

maker Constar International, which filed on January 11 in the U.S.
Bankruptcy Court for the District of Delaware. Constar reported
$418 million in total assets and $414 million in total liabilities.

Other large bankruptcies in January 2011 were:

* Appleseed's Intermediate Holdings, which does business

as Orchard Brands. Orchard Brands sells clothing to people 55
and older. Appleseed's, the corporate entity, sought chapter 11
protection on January 19 in the District of Delaware, estimating its
assets at less than $500 million and its debts at more than $500
million;
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Beard Group Corporate Restructuring Review for January 2011 -- page 2

 * publisher Summit Business Media Holding Company,
sought protection on January 25, also in Delaware. Summit is a
business-to-business publisher and event organizer serving the
insurance, investment advisory, professional services and mining
investment markets. Summit estimate assets and debts of $100
million to $500 million in its Chapter 11 petition;

* FRE Real Estate, filed a Chapter 11 petition on January 4

in the Northern District of Texas, estimating assets and debts of
$100 million to $500 million; and

* Ultimate Acquisition Partners and CC Retail, filed their

Chapter 11 petitions on January 26 in Delaware. Ultimate
Acquisition and CC Retail own the Ultimate Electronics chain of
stores, selling high-end entertainment and consumer electronics.
The retailer estimated its assets and debts at $100 million to $500
million at the time of the filing.

A total of 113 mega-cases were filed in 2010. In January

2010, no billion-dollar case was filed. However, 15 companies
with more than $100 million in total assets sought Chapter 11
protection. The largest filer was Mesa Air Group, disclosing $975
million in total assets and $868 million in total liabilities.

Constar, Appleseed's Intermediate Holdings and Summit

Business Media commenced pre-negotiated cases in January
2011. Constar reached an agreement with the holders of more
than 75% of its Senior Secured Floating Rate Noteholders
regarding the terms of a consensual restructuring transaction that
will significantly deleverage its balance sheet. The restructuring
plan calls for, among other things, a reduction of the Company's
current debt level of US$220 million by roughly US$135 million to
US$150 million, with a significant corresponding reduction in cash
interest.
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Beard Group Corporate Restructuring Review for January 2011 -- page 3

 This is Constar's second trip to the bankruptcy court.
Constar sought Chapter 11 protection in December 2008, filing a
pre-negotiated Chapter 11 plan that reduced its debt load by
roughly $175 million. That plan took effect in May 2009.
Operating losses caused by a significant decline in demand for
the Company's products from Pepsi-Cola and other customers
caused the so-called Chapter 22 filing.

Appleseed's Intermediate Holdings reached an agreement

with over 80% of its first lien secured lenders and 100% of its
second lien secured lenders on the terms of a reorganization that
will cut its debt by over 55% from $420 million to about $310
million, and improve the Company's operating flexibility.
Appleseed's Intermediate Holdings will seek approval of the
Disclosure Statement explaining its Plan at a hearing on March 1,
2011, at 3:30 p.m.

Summit Business Media obtained approval from 83% of its

lenders for a debt restructuring plan that will cut its outstanding
debt obligations by more than half -- roughly $135 million -- and
materially enhance the Company's financial position. The
Company expects to emerge from its restructuring in the first half
of 2011.

For fiscal year 2010, a total of 35 prepackaged or pre-

arranged cases were filed -- about one in every three filings in
2010.

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.

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Beard Group Corporate Restructuring Review for January 2011 -- page 4

 Dow Jones' DBR Small Cap reports that the number of
businesses seeking bankruptcy protection in January 2011 fell
12.2% from the prior month, dropping total commercial filings to
their lowest level since July 2008.

Three-quarters of respondents in a recent American

Bankruptcy Institute Quick Poll predict that bankruptcy filings will
increase in fiscal year 2011. A total of 53% of respondents
"strongly agreed" that filings would increase, while 21%
"somewhat agreed" that filings would increase.

Total bankruptcies from October 1, 2009 to September 30,

2010, were nearly 1.6 million, up 14% from fiscal year 2009 with
1.4 million filings, according to the Administrative Office of the
U.S. Courts. Bankruptcies have increased each fiscal year since
2005, when Congress overhauled the Bankruptcy Code in an
attempt to reduce the number bankruptcy filings.

In addition to the chapter 11 debtors mentioned in Mr.

Muñoz's report, 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.

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 has compiled a list of eight companies he's

convinced are nearing Chapter 11 bankruptcy:

Sbarro Inc.
Borders Group
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Beard Group Corporate Restructuring Review for January 2011 -- page 5

 LECG Corp.
Gametech International
United Western
Satelites Mexicanos
Tasty Baking
Harry & David

and we'll discuss each of these eight troubled situations.

(A) Satelites Mexicanos

Satelites Mexicanos, S.A. de C.V. is a Mexico-based satellite

service provider in Latin America. Satmex's fleet offers
hemispheric and regional coverage throughout the Americas.
According to Mr. Fernandez, Satmex has reached an agreement
with the holders of more than two-thirds of the outstanding
principal amount of its Second Priority Senior Secured Notes due
2013 regarding a comprehensive recapitalization to be effected
through the solicitation of a prepackaged plan of reorganization to
be filed in the United States bankruptcy court.

The recapitalization will provide the resources for the

Company to finance the timely completion of Satmex 8, a satellite
scheduled to be launched in 2012 to replace the Company's
Satmex 5 satellite, and to lay the groundwork for the future
construction of Satmex 7, which is intended to replace the
Company's Solidaridad 2 satellite.

Satmex has joined in a Restructuring Support Agreement

among the Supporting Holders and Holdsat Mexico S.A.P.I. de
C.V., a newly formed Mexican company to effect the proposed
recapitalization, and which will be majority controlled by certain
Mexican partners in compliance with applicable Mexican foreign
investment laws.

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Beard Group Corporate Restructuring Review for January 2011 -- page 6

 The Plan contemplates that the recapitalization will be
financed with the proceeds of an offering of up to $325 million in
new senior secured debt financing and the proceeds of a rights
offering.

Under the terms of the Plan, holders of Satmex's First

Priority Senior Secured Notes due 2011 will be paid out in cash at
par plus accrued interest. Holders of Satmex's Second Priority
Senior Secured Notes will receive their pro rata share of (i) a pool
of equity interests in the indirect parent of reorganized Satmex
and (ii) rights to invest in additional shares of the reorganized
company. If the Plan is consummated and certain other
conditions are satisfied, existing stockholders of Satmex will
receive their share of $6.25 million under a purchase agreement
with Holdsat Mexico S.A.P.I. de C.V. as part of the recapitalization
transactions.

Centerbridge Partners, L.P., Monarch Alternative Capital,

L.P., Moneda Asset Management, New Generation Advisors, LLC,
Outrider Management, LLC, and certain of their affiliates have
committed to exercise all of the rights granted to them under the
Plan as holders of the Second Priority Senior Secured Notes and
to purchase any interests which are not subscribed by other
holders.

Lazard and its Mexican alliance partner, Alfaro, Davila y

Rios, S.C., are serving as financial advisors to Satmex, and
Greenberg Traurig is serving as U.S. counsel and Santamarina y
Steta and Rubio Villegas & Asociados are serving as the
Company's Mexican counsel.

Jefferies & Company, Inc. is serving as the financial advisor

to certain holders of the Second Priority Senior Secured Notes,
and Ropes & Gray LLP is serving as U.S. counsel and Cervantes
Sainz as Mexican counsel to this group.
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Beard Group Corporate Restructuring Review for January 2011 -- page 7

 Satmex contemplates a prepackaged bankruptcy
reorganization in the U.S. less than five years after emerging from
a prior U.S. Chapter 11 case.

Satmex's balance sheet at June 30, 2010, showed $438

million in assets, $516 million in liabilities, and a $78 million
shareholders' deficit.

(B) LECG Corp.

Global business advisory services leader LECG Corporation

has obtained a limited duration waiver -- until February 28 -- from
its current lenders relating to LECG's compliance with certain
financial covenants under its term credit facility. LECG also
announced the receipt of an indication of interest to acquire the
firm.

The limited duration waiver is the third the Company has

received since November 15, 2010. The Term Credit Facility
matures on March 31, 2011, and approximately $27.8 million is
outstanding under the facility. The Company says it does not
have sufficient resources to repay amounts outstanding under the
facility at this time.

The Company, in conjunction with William Blair & Company,

the Company's financial advisor, continues to evaluate a variety of
possible senior and subordinated debt and equity financing
alternatives. The process is ongoing.

Separately, the Company received a non-binding indication

of interest with a view toward entering into a definitive acquisition
transaction for the entire firm. The non-binding indication of
interest sets the enterprise value of LECG at $104 million, on a

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Beard Group Corporate Restructuring Review for January 2011 -- page 8

cash free, debt free basis. LECG did not identify the party that
provided the indication of interest.

LECG is a global litigation; economics; consulting and

business advisory; and governance, assurance, and tax expert
services firm with approximately 1100 employees in offices
around the world. LECG had $248 million in assets and liabilities
of $127 million as of Sept. 30, 2010.

(C) Borders Group

The Wall Street Journal and Bloomberg News reported that

Borders Group is preparing for a possible bankruptcy-protection
within the next month. According to the Journal, Borders is still
finalizing certain aspects of its restructuring plans ahead of a
potential filing, including financing that would keep it afloat in court
and the number of stores it will need to close. Bloomberg News,
citing people familiar with the matter, said the retailer will likely
close at least 150 stores. Sources told the Journal that under the
bankruptcy plans currently being negotiated, Borders is likely to
close between 150 and 200 stores.

Borders President Michael Edwards said at the end of

January that the Company "is doing everything possible" to
maintain its relationships with vendors and publishers and avoid a
chapter 11 filing, and related that Borders has some kind of
commitment from General Electric Capital Corp. for out-of-court
financing. John Wiley & Sons has disclosed that it has stopped
shipping books to Borders.

The sources also told the Journal that Borders is in talks with
Bank of America Corp. and General Electric Co.'s finance arm
about a half-billion dollar debtor-in-possession financing pact that
would keep the company operating after a court filing, the people
said.
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Beard Group Corporate Restructuring Review for January 2011 -- page 9

 The New York Times' DealBook said that Borders has asked
publishers to take up to one-third of the company's reorganized
debt, but the exact percentage has not yet been determined. The
New York Times reported that the law firm Lowenstein Sandler
and the consulting firm Alvarez & Marsal represented publishers
during their meeting with Borders.

Jefferies & Co. is advising Borders on reworking its debt

load.

Headquartered in Ann Arbor, Michigan, Borders Group is a

specialty retailer of books as well as other educational and
entertainment items. It employs 19,500 throughout the U.S.,
primarily in its Borders(R) and Waldenbooks(R) stores. The Wall
Street Journal says Borders is the nation's second-largest
bookstore chain by revenue, behind Barnes & Noble. As of
October 30, 2010, Borders had total assets of $1.35 billion, total
liabilities of $1.40 billion, and a stockholders' deficit of $40.8
million.

[Borders filed for bankruptcy on Feb. 16]

(D) Sbarro Inc.

Sbarro, Inc., on January 31, determined that in light of its

current liquidity and capital resources, it will not make a $7.7
million interest payment due on February 1, 2011, to the holders
of its senior notes under the Indenture, dated as of January 31,
2007, among the Company, the guarantors named therein, and
The Bank of New York, as Trustee.

Sbarro said the failure to pay interest, if continued for 30

days, will constitute an Event of Default under the Indenture.
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Beard Group Corporate Restructuring Review for January 2011 -- page 10

 Accordingly, if the Company has not made this interest
payment by March 3, 2011, the Bank of New York or the holders
of at least 25% in principal amount of the outstanding senior notes
under the Indenture, will then have the right to provide an
acceleration notice to the Company declaring the principal and
unpaid interest on all the senior notes due and payable.

The Company's total outstanding obligations under the

Indenture as of February 1, 2011, including accrued but unpaid
interest, are $157.7 million.

In addition, if the Company fails to make the interest

payment before the expiration of the grace period on March 3,
2011, the failure will result in a new event of default under the
First Lien Credit Agreement and the Second Lien Credit
Agreement. As of February 1, 2011, there was $173.8 million
outstanding under the First Lien Credit Agreement and $33.5
million outstanding under the Second Lien Credit Agreement, in
each case including both principal and accrued but unpaid
interest.

The Company remains in discussions with its creditors and

other stakeholders regarding the Company's long-term capital
structure and potential strategic alternatives to address its long-
term needs.

Melville, N.Y.-based Sbarro, Inc., is the world's leading Italian

quick service restaurant concept and the largest shopping mall-
focused restaurant concept in the world. The Company has 1,056
restaurants in 41 countries.

The Company's balance sheet at Sept. 30, 2010, showed

$455 million in total assets and stockholder's equity of $16 million.

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Beard Group Corporate Restructuring Review for January 2011 -- page 11

 The Wall Street Journal says Sbarro has hired the law firm
Kirkland & Ellis to advise it on restructuring its balance sheet.
Sbarro has also hired Rothschild Inc. for restructuring advice.

(E) United Western Bancorp

United Western Bancorp Chairman Guy Gibson said in a

statement that regulators' seizure of United Western's subsidiary
bank could push the Company into bankruptcy and scuttle any
attempt to save the bank without using government funds.

United Western Bank of Denver, Colo., was closed on

January 21, 2011, by the Office of Thrift Supervision, which
appointed the Federal Deposit Insurance Corporation as receiver.
Deposits and assets were sold by the F.D.I.C. to First-Citizens
Bank & Trust Company of Raleigh, North Carolina.

Mr. Gibson said he was surprised by federal regulators'

seizure of United Western Bancorp's subsidiary bank because the
holding company had $149 million in committed funding toward a
$200 million capital raising needed to meet regulators'
requirements.

As of September 30, 2010, United Western Bank had around

$2 billion in total assets and $1.6 billion in total deposits. First-
Citizens Bank & Trust Company did not pay the FDIC a premium
for the deposits of United Western Bank.

Denver, Colorado-based United Western Bancorp, Inc., is a

holding company whose principal subsidiary, United Western
Bank, was a community bank focused on Colorado's Front Range
market and selected mountain communities. The holding
company reported $2.2 billion in assets and debts of $2.1 billion
as of June 30, 2010.

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Beard Group Corporate Restructuring Review for January 2011 -- page 12

 (F) Gametech International

GameTech International on February 1, 2011, received

written notice from U.S. Bank National Association, as agent for a
group of lenders, stating that the forbearance period under the
Company's credit facility expired on January 31, 2011. The letter
further states that the Lenders and the Agent have the immediate
right to commence action against the Company, enforce the
payment of the notes under the credit facility, commence
foreclosure proceedings under certain loan documents, and
otherwise enforce their rights and remedies against the Company.

GameTech said it is actively engaged in discussions with

U.S. Bank.

The Company's balance sheet at August 1, 2010, showed

$47.5 million in total assets, $37.7 million in total liabilities, and
$9.8 million in stockholders' equity. The outstanding balance
under the term loan is $24.8 million.

GameTech International designs, develops, manufactures,

and markets interactive computerized bingo equipment and
systems, video lottery terminals, slot machine gaming devices,
and related software.

(G) Tasty Baking

On January 14, 2011, Tasty Baking Company entered into a

waiver agreement and seventh amendment to its 2007 Credit
Agreement, with Citizens Bank of Pennsylvania, as administrative
agent, collateral agent, swing line lender and letter of credit
issuer; and Bank of America, N.A., Sovereign Bank, and
Manufacturers and Traders Trust Company, each as a Lender.

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Beard Group Corporate Restructuring Review for January 2011 -- page 13

 The Bank Agreement provides Tasty Banking with a $100
million secured credit facility, consisting of a $55 million fixed
asset line of credit, a $35 million working capital revolver and a
$10 million low-interest job bank loan from Citizens in partnership
with the Commonwealth of Pennsylvania. The Bank Amendment
provides that the Banks waive compliance with certain obligations
under the Bank Agreement that would otherwise constitute an
Event of Default until June 30, 2011.

Tasty Baking Company, founded in 1914 and headquartered

in Philadelphia, Pennsylvania, is one of the country's leading
bakers of snack cakes, pies, cookies, and donuts with
manufacturing facilities in Philadelphia and Oxford, Pennsylvania.
Tasty Baking Company offers more than 100 products under the
Tastykake brand name.

As of September 25, 2010, the Company had $185 million in

total assets and $169 million in total liabilities.

* * *

In addition to the challenged companies mentioned in Mr.

Fernandez's report, the Troubled Company Reporter provides on-
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.

Major Pending Disputes In Chapter 11 Cases

Next we'll quickly review major pending disputes in four large

chapter 11 cases that Troubled Company Reporter editors
monitor day-by-day.

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Beard Group Corporate Restructuring Review for January 2011 -- page 14

 (A) Bernard Madoff

Ivy Magdadaro reports that Judge Burton Lifland of the U.S.

Bankruptcy Court for the Southern District of New York approved
a settlement in mid-January in which the estate of Jeffrey Picower
would turn over $7.2 billion to victims of Bernard Madoff's Ponzi
scheme. The deal represents the largest amount ever returned
through a civil forfeiture proceeding, prosecutors said, according
to the Wall Street Journal.

Mr. Picower was a longtime investor in the Madoff scheme.

He's said to have invested in the Madoff firm since the 1970s, and
allegedly withdrew billions of dollars even though he invested only
about $600 million. He died of a heart attack in October 2009.
His widow, Barbara Picower, inked the $7.2 billion settlement. In
the settlement talks, Mrs. Picower maintained that her husband
did not in any way abet in Mr. Madoff's fraud.

A group of Madoff investors objected to the settlement,

saying it shielded the Picower estate from additional litigation.

The Picower settlement is a major victory for Madoff victims.

It brings to nearly $10 billion the amount that Irving Picard, the
court-appointed trustee for Mr. Madoff's firm, has recovered for
Madoff victims.

(B) Lehman Brothers

Ms. Magdadaro identified two major disputes in the Lehman

Brothers bankruptcy. The disputes involve litigation the Company
initiated against deep-pocket defendants Barclays Capital Inc.
and JPMorgan Chase in an effort to recover billions of dollars for
Lehman creditors.

(1) Lehman-JPMorgan Dispute

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Beard Group Corporate Restructuring Review for January 2011 -- page 15

 The dispute between Lehman and JPMorgan Chase stems
from Lehman seeking to recover $8.6 billion of collateral
JPMorgan allegedly extracted from Lehman using insider
information just a few days before the company filed for
bankruptcy.

In December 2010, JPMorgan filed a countersuit against

Lehman Brothers Holdings Inc. for allegedly misleading the bank
into lending the company $70 billion by assuring that Barclays
Capital Inc. would purchase all the Lehman broker-dealer's
securities, which it never did. Barclays is the UK-based bank that
acquired the assets of Lehman's broker dealer unit. JPMorgan
alleged that with Lehman's help, Barclays cherry picked the
securities that it wanted, took JPMorgan's $5 billion of margin,
and left billions of dollars of Lehman Brothers' worst securities
behind. JPMorgan further asserted that it was left with more than
$25 billion of outstanding loans to Lehman secured by a depleted
collateral pool.

In recent developments, Lehman filed a motion on January

31 with the U.S. Bankruptcy Court for the Southern District of New
York seeking dismissal of the JPMorgan counter-lawsuit. Lehman
argued that if JPMorgan has a complaint at all, it is with Barclays.
Lehman pointed out that the allegations raised in the counter-suit
are directed to Barclays including an allegation that the U.K. bank
directly told JPMorgan that it would purchase the broker-dealer's
assets. Lehman also said that the counter-suit should be
dismissed because it does not allege that anyone at the company
made a false statement to JPMorgan at the time of the company's
collapse.

Lehman, its Official Committee of Unsecured Creditors,

JPMorgan and bankruptcy examiner Anton Valukas have inked an
agreement to keep confidential the documents they subpoenaed
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Beard Group Corporate Restructuring Review for January 2011 -- page 16

from the examiner. The agreement, which is yet to be approved
by the Bankruptcy Court, requires the examiner to produce the
documents for use solely in connection with Lehman's lawsuit,
subject to the confidentiality protection of the Court's September
2010 order.

(2) Lehman-Barclays Dispute

Another dispute Lehman has is with Barclays Capital Inc.,

where Lehman sued Barclays to undo an alleged $11 billion
windfall in relation to Barclays' acquisition of Lehman's broker
dealer unit. Lehman alleged that the sale that was closed
involved an exchange of assets priced to be between $50-52
million for only a payment of $45 billion. The lawsuit was filed in
November 2009. Since then, Barclays has countersued for $3
billion.

The suit was litigated extensively last year and a trial

concluded on Nov. 22, 2010, when parties made their final closing
arguments. Post-trial briefs were submitted in late November.

To date, no ruling has been issued by the Court. The

Financial Times reports that a decision on this matter is expected
this month or next. The FT further notes that a decision on the
Lehman-Barclays controversy could impact the dispute between
Lehman and JPMorgan relating to seized collateral.

(C) Tribune Corp.

In Tribune Co., the major dispute is the alleged fraudulent

conveyance of the $13 billion leveraged buy-out of the company
in 2007 by Sam Zell and certain other executives of the Company.

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Beard Group Corporate Restructuring Review for January 2011 -- page 17

 The Official Committee of Unsecured Creditors in Tribune
Co.'s chapter 11 case filed separate complaints concerning the
2007 LBO back in November. The lenders in the transaction, on
the one hand, and the company's shareholders, directors and
officers, on the other hand, were sued by the Creditors Committee
for their roles in the LBO. Among the lenders being sued are
JPMorgan Chase and Merrill Lynch Capital Corporation.

At the request of the Committee, Judge Kevin Carey of the

U.S. Bankruptcy Court for the District of Delaware stayed
prosecution of the Committee complaint against the LBO lenders.
The Complaint seeks to avoid and recover payments of principal
or interest on the LBO loans made by Tribune within 90 days prior
to the company's bankruptcy filing. The Complaint seeks to
recover not less than $178 million. The Committee said the stay
was warranted to conserve estate resources and preserve the
status quo pending the outcome of ongoing plan negotiations.

Tribune's plan process has been complicated, with four

competing plans vying for confirmation. Two of those four plans
have been abandoned. The so-called Step Lenders withdrew
their Plan in December. The so-called Bridge Lenders withdrew
their Plan in late January, after reaching a settlement that calls for
$64.5 million in cash plus distributions under a trust created under
the Tribune Plan. Thus, two competing plans are left -- one is
backed by Tribune Co., and the other is backed by Aurelius
Capital Management, one of the company's largest bondholders.

The Tribune-backed plan calls for the settlement of

bankruptcy-related legal claims. The company's Plan could wipe
out any recovery by bondholders. The Aurelius-backed plan calls
for a legal strategy to recover billions of dollars from lenders
involved in funding the 2007 buy-out of the company.

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Beard Group Corporate Restructuring Review for January 2011 -- page 18

 A hearing to consider approval of the plans in Tribune's case
has been scheduled in March 2011.

Tribune is the second largest newspaper publisher in the

United States. It filed for bankruptcy in Dec. 2008.

(D) Washington Mutual

In Washington Mutual's chapter 11 proceeding, the major

dispute is between WaMu and JPMorgan case, which revolves
around $4 billion in JPMorgan's possession. WaMu and
JPMorgan filed lawsuits against each other in relation to the funds
dispute in 2009.

The parties have agreed to a global settlement pact that calls

for the division of about $10 billion in bank deposits, tax refunds
and other assets among JPMorgan, WaMu and the Federal
Deposit Insurance Corporation. Under the settlement, $7 billion
would go to WaMu, mostly to be distributed under the company's
reorganization plan, and the remaining $3 billion would be divided
between JPMorgan and the FDIC. The global settlement also
provides for paying off WaMu creditors and ending lawsuits
WaMu, JPMorgan and the FDIC filed against one another after
WaMu's collapse. The global settlement is the core of the
Chapter 11 Plan before Judge Mary Walrath in Delaware. The
global settlement, however, hasn't been executed because on
January 7, Judge Walrath refused to confirm the WaMu
bankruptcy plan in its entirety.

The company scored a partial victory as Judge Walrath

found that the global settlement is reasonable. However, the
court did not find certain non-debtor releases under the plan to be
reasonable. Judge Walrath said the releases for directors,
officers and other professionals granted by the proposed plan

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Beard Group Corporate Restructuring Review for January 2011 -- page 19

were "much too broad" and "inappropriate" and must be limited to
a specific list.

Business & Law relates that WaMu filed a proposal to

address Judge Walrath's comments on January 18. The
proposed changes involve rewording of the plan and re-soliciting
creditors' votes on the plan releases. The changes were
presented to Judge Walrath at a January 20 status conference.

WaMu shareholders, who have been consistent in opposing

the WaMu Plan, did not waste time in appealing Judge Walrath's
approval of the $10 billion global settlement. On January 19, the
shareholders said they want the U.S. Court of Appeals for the
Third Circuit to directly consider their appeal. The shareholders
question whether the global settlement can be found reasonable
without any evidentiary record.

No final ruling on the plan has been entered as of January

31, which technically means that J.P. Morgan and the FDIC have
the option to cancel the settlement.

On top of a delay in obtaining confirmation, WaMu has also

been hounded with insider trading allegations.

Weil Gotshal & Manges LLP's Brian Rosen, counsel to

WaMu, has said the company is eyeing a bankruptcy exit in
March. Dow Jones Daily Bankruptcy Review reports that WaMu
is set to take a revamped plan to Judge Walrath on March 28.

* * *

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.
_____________________________________________________________________________

Beard Group Corporate Restructuring Review for January 2011 -- page 20

 Delayed Exits From Chapter 11

Julie Anne Lopez reports about six Chapter 11 debtors

whose emergence from Chapter 11 has been delayed -- Tribune
Co., WR Grace & Co., Lehman Brothers, Oriental Trading,
Washington Mutual and Pfizer Inc.'s Quigley unit.

(A) Tribune

On January 28, Judge Kevin Gross, the Court-appointed

mediator in Tribune's Chapter 11 case, disclosed that settlement
discussions have resulted in the bridge lender group's acceptance
of the plan of reorganization proposed by the Debtors. The bridge
lenders include Marathon Asset Management LP and King Street
Capital LP.

The Bridge Loan Settlement provides that the bridge lenders

group will support Tribune's proposed Plan, and accept $64.5
million in cash as well as attorney fees and their share of
distributions from trusts that will pursue legal claims on the
effective date of the Plan.

In exchange, the Bridge Plan Proponents will withdraw their

proposed plan of reorganization.

Accordingly, only two competing plans for ending Tribune's

two-year stay in bankruptcy are left and will compete for court
approval at the confirmation hearing scheduled to begin March 7.

The two remaining plans differ in their approach to resolving

legal claims relating to the pre-petition leveraged buy-out
transaction. The company’s plan proposes to settle these claims
and wipe out billions of dollars of bond debt. The bondholder
group led by Aurelius Capital Management proposes an
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Beard Group Corporate Restructuring Review for January 2011 -- page 21

aggressive litigation strategy to recover billions of dollars from the
lenders they blame for funding the LBO transaction that handed
real estate developer Sam Zell control of the company.

Parties have until February 15 to file objections to

confirmation of the Plans.

(B) W.R. Grace

W.R. Grace marked its ninth year in bankruptcy on April 2,

2010 -- one of the longest in the history of corporate restructuring.
On January 31, 2011, Judge Judith Fitzgerald confirmed W.R.
Grace's Joint Plan of Reorganization, overruling all unresolved
objections, and finding that the Plan satisfies all of the
requirements under Section 1129 of of the Bankruptcy Code.

Judge Fitzgerald said the Joint Plan is the result of years of

litigation and arms'-length negotiations, and there is no evidence
that the Joint Plan was proposed in bad faith

The confirmed reorganization plan calls for setting up two

asbestos trusts to compensate personal injury claimants and
property owners.

Grace's Joint Plan will now go to the United States District

Court for the District of Delaware for a final stamp of approval.
This is a necessary step before Grace may exit Chapter 11.

While the plan must still be confirmed by a federal District

Court in Delaware, the decision by Judge Fitzgerald is key to
Grace exiting bankruptcy.

"She blessed the plan and her blessing is very, very

important," the Baltimore Sun quoted Peter A. Chapman,
president of Bankruptcy Creditors' Service, as saying. Mr.
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Beard Group Corporate Restructuring Review for January 2011 -- page 22

Chapman said District Court judges, who get involved in
bankruptcy cases involving the compromise and settlement of
personal injury claims, usually follow the lead of the bankruptcy
judge. He predicted that the District Court would rule quickly,
perhaps within 30 days.

Bankruptcy Creditors' Service publishes newsletters about

major corporate restructurings, including W.R. Grace Bankruptcy
News. More information about those newsletters is available at
http://bankrupt.com/newsstand/

(C) Lehman Brothers

In Lehman Brothers' chapter 11 cases, an amended Chapter

11 plan of reorganization and accompanying disclosure statement
was filed on January 25. The amended plan offers bondholders
more money after some creditors didn't support the company's
prior proposals. Under the amended plan, creditors that hold
senior unsecured claims against Lehman recover 21.4% of their
claims, up from 17.4% in the original plan. The company's
general unsecured creditors recover 19.8% of their claims, up
from 14.7%.

Creditors of Lehman's subsidiaries also see better

recoveries. Lehman Commercial Paper Inc.'s general unsecured
creditors would recover 51.9% of their claims while those of
Lehman Brothers Commodity Services Inc. recover 49.8%.
Creditors of Lehman Brothers Special Financing Inc. recover
22.3% of their general unsecured claims.

Lehman's Chief Executive, Bryan Marsal said the amended

plan represents a "fair economic compromise", will expedite the
administration of the Chapter 11 cases, and will accelerate
distributions to creditors.

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Beard Group Corporate Restructuring Review for January 2011 -- page 23

 The amended plan has received the support of the Official
Committee of Unsecured Creditors. The processing of the
amended plan is subject to acceptance by the requisite majorities
of creditors entitled to vote on the plan.

Lehman said it has reached tentative deals with affiliates in

Germany and The Netherlands for the consent to the amended
plan.

The UK group led by Lehman Brothers International

(Europe) said it could present its own plan if it was unhappy with
the proposed compromise, according to a January 26, 2011 report
by the Financial Times.

Linda Sandler and David McLaughlin of Bloomberg News

noted that the document outlining the Plan didn't list a voting
deadline or propose a date for the confirmation hearing.
According to the Financial Times, Lehman hopes to present a
disclosure statement explaining its chapter 11 plan to the
Bankruptcy Court for approval by July and win creditors' support
by November 2011.

Confirmation of the amended plan is conditioned on the

Bankruptcy Court issuing a confirmation order and an order
approving a so-called "derivative claims framework" -- a
methodology that will be applied to calculate the allowed amount
of a derivative claim or derivative guarantee claim against
Lehman and its affiliated debtors.

Over the coming weeks, meetings will be arranged with

various stakeholder groups to provide briefings on the amended
plan.

Lehman has been in bankruptcy since Sept. 15, 2008.

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Beard Group Corporate Restructuring Review for January 2011 -- page 24

 (D) Oriental Trading

In Oriental Trading Co., Ms. Lopez says the company's exit

from Chapter 11 is still up in the air. The company sought
Chapter 11 protection on August 25, 2010, and obtained
confirmation of its plan on December 16.

In January, Bloomberg News said the company was

scheduled to conduct a roadshow presentation for prospective
lenders under a $200 million loan exit financing facility. On
January 25, Krista Giovacco at Bloomberg News, citing a person
familiar with the transaction, said Oriental Trading cut the interest
rate it will pay on the $200 million exit financing pact by one
percentage point.

Oriental Trading proposes to pay 5-1/2 percentage points

more than the London interbank offered rate on the six-year term
loan, said the person who declined to be identified because the
terms are private, according to Bloomberg. Libor, the rate banks
charge to lend to each other, will have a 1.5% floor, compared to
1.75% as initially proposed. The report further said the company
tightened the so-called original issue discount by one cent, to 99
cents on the dollar.

[Oriental Trading emerged from Chapter 11 on Feb. 14.]

(E) Washington Mutual

Weil Gotshal's Brian Rosen, the attorney overseeing

Washington Mutual's bankruptcy, said the company could be out
of bankruptcy in March after reworking its recently rejected plan of
reorganization, according to Tom Hals at the International
Business Times. IBT said once the company's reorganization

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Beard Group Corporate Restructuring Review for January 2011 -- page 25

plan is approved and goes into effect, it will begin distributing
more than $7 billion to creditors.

On January 7, Judge Mary Walrath rejected Washington

Mutual's plan of reorganization but approved a legal settlement
the company had proposed.

Washington Mutual filed for bankruptcy in September 2008

after its savings and loan was seized by regulators in the biggest
bank failure in U.S. history. The seized bank was sold by the
F.D.I.C. to JPMorgan for $1.88 billion, setting off 18 months of
legal battles that were resolved with the settlement plan.

Judge Walrath rejected the reorganization in part because of

various provisions that protected certain parties from being sued.

Washington Mutual subsequently filed a proposal to resolve

Judge Walrath's criticisms. Many proposed changes involved
amending the wording of the plan, but some proposals will be
more time consuming, like soliciting some creditors again over the
granting of releases from lawsuits.

The official committee of shareholders is asking the court for

permission to obtain documents and take depositions from a
group of hedge funds that supported the company's
reorganization plan. The shareholders seek to investigate insider
trading allegations made by an individual investor, Nate Thoma,
during the company's confirmation hearings.

(F) Quigley

Dow Jones Newswires' Pat Fitzgerald reported on January

21 that motions filed by an ad hoc committee of asbestos
claimants to push Pfizer's Quigley unit out of bankruptcy and
allow them to start suing Pfizer for an estimated $900 million of
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Beard Group Corporate Restructuring Review for January 2011 -- page 26

liability for asbestos damages are on schedule. The Dow Jones
report said talks aimed at a deal that will produce a Chapter 11
plan for Quigley have been successful so parties expect an end to
the hostilities with the ad hoc committee.

Brown Rudnick's Edward Weisfelner told Judge Stuart

Bernstein at a Jan. 13 hearing in the case that the parties are
"dangerously close to a resolution." Mr. Weisfelner predicted that
final documents will be on the table within another couple of
weeks.

Mr. Weisfelner represents the ad hoc panel that was

successful in its campaign to block Pfizer's original Chapter 11
proposal for the Quigley unit, which they said shortchanged them.

Pfizer spokesman Christopher Loder told Dow Jones in

December that the company is ready "to contribute additional
funds to the Quigley plan to satisfy the court's concerns."

Pfizer has denied it is liable for any asbestos damage

stemming from Quigley, a defunct manufacturer of industrial
goods. However, Pfizer wants an end to Quigley's bankruptcy. In
September, Judge Bernstein held that Pfizer engaged in bad faith
and vote-buying in connection with the original Chapter 11 plan.

Pfizer bought Quigley in 1968, and operated it for a brief

period while it continued to make items containing the deadly
material. As of 2004, when Pfizer put Quigley into Chapter 11
protection, the companies were grappling with more than 400,000
claims for asbestos-related damages, notes the report.

New Publicly Traded Securities

Moving on, Psyche Maricon Castillon reports that three

bankrupt companies, which have filed plans of reorganization or
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Beard Group Corporate Restructuring Review for January 2011 -- page 27

obtained confirmation of their reorganization plans, contemplate
the issuance of new publicly traded stocks. These are: Mesa Air,
Innkeepers USA Trust, and Loehmann's.

(A) Mesa Airlines

Judge Martin Glenn in the U.S. Bankruptcy Court for the

Southern District of New York entered a final order confirming
Mesa Airlines' Third Amended Plan of Reorganization on January
20. Mesa Air said it expects to emerge from bankruptcy in
February as a private company. The reorganized company will
issue new notes, common stock and warrants to creditors.

Mesa sought protection under Chapter 11 in January 2009

after it failed to reduce its debt enough in an out-of-court
restructuring. The plan the company submitted to the court
restructures its debt of more than $2 billion and keeps the carrier
flying connector flights for US Airways and United Airlines.

The plan also gives control of the carrier to unsecured

creditors, in addition to a 10% equity stake to US Airways. While
in bankruptcy, Mesa cut its fleet to 76 planes from 178 and
rejected more than 70% of the leases it held at the time of its
Chapter 11 filing.

(B) Innkeepers USA Trust

Innkeepers USA Trust has reached a deal with its major

creditors that will cut the bankrupt hotel chain's debt by over $400
million and clear the way for the company to emerge from
Chapter 11 protection.

As part of the deal, asset management firm Five Mile Capital

Partners LLC and Lehman ALI, a unit of Lehman Brothers
Holdings Inc, together agreed to provide $174.1 million in equity
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Beard Group Corporate Restructuring Review for January 2011 -- page 28

capital to the company. Five Mile and Lehman also agreed to
convert $200.3 million of their debt into 100 percent equity in the
reorganized Innkeepers.

Judge Chapman of the U.S. Bankruptcy Court for the

Southern District of New York rejected an earlier agreement
between Innkeepers and Lehman ALI.

The latest deal is backed by Midland Loan Services Inc, a

special servicer to a $825 million fixed rate mortgage loan which
will be reduced to $622.5 million under the proposed plan.

Innkeepers said the Five Mile/Lehman bid values the

company at about $1.14 billion. The deal is yet to receive
bankruptcy court approval.

Bankruptcy Law360 reported that Judge Chapman has

extended the company's exclusive right to file a restructuring plan
until March 29.

(C) Loehmann's

The U.S. Bankruptcy Court confirmed Loehmann's Plan of

reorganization at a hearing February 7. Loehmann is expected to
exit bankruptcy by the end of the month.

Loehmann filed the Plan in December 2010. The Plan

provides, among other things, for a $25 million equity investment
in Loehmann's Holdings, Inc. pursuant to a Rights Offering
through which Eligible Holders of Class A Notes Claims that vote
to accept the Plan will be granted the opportunity to exercise
rights to purchase shares of New Convertible Preferred Stock on
the Effective Date and the conversion of the Class A Notes Claims
into New Common Stock.

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Beard Group Corporate Restructuring Review for January 2011 -- page 29

 Only those Holders of Class A Notes Claims that are Eligible
Holders -- meaning those Holders that are Qualified Institutional
Buyers acting on their own behalf or on behalf of other Qualified
Institutional Buyers -- that vote to accept the Plan will be
permitted to participate in the Rights Offering. If Class 4 -- the
holders of the Class B Notes Claims -- accepts the Plan, the
Holders of Class B Notes Claims will receive New Common
Stock. If Class 4 does not vote to accept the Plan, the Holders of
Class B Notes Claims will receive no distribution under the Plan.

Loehmann's plan met objections from the U.S. Trustee

relating to plan releases, a priority tax creditor, and several
Michigan tax authorities who complained that the plan will deny
them nearly $330,000 in unpaid taxes.

Loehmann's obtained approval of the disclosure statement

explaining its plan in early January.

That ends the Beard Group Corporate Restructuring Review for

January 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 Nancy Frasier or
Charlie Covell 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-com-slash-free-trial.

Tune in to our next Restructuring Review on March 16th.

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Beard Group Corporate Restructuring Review for January 2011 -- page 30