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Beard Group Corporate Restructuring Review For July 2012

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 July 2012, 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;

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. July 2012 Mega Cases

Now, let's review the largest chapter 11 cases in July 2012. Danilo Muoz reports that four companies with assets exceeding $100 million filed for Chapter 11 protection in July 2012. Three of those companies listed more than $1 billion in total assets. In contrast, only one hundred-million-dollar case was commenced in June 2012. Two Chapter 15 cases and one Chapter 9 case involving at least $100 million in total assets were also commenced in July. For the first seven months of 2012, a total of 42 companies with assets in excess of $100 million have sought Chapter 11 bankruptcy protection, a slight increase compared to the 38 filings during the same period in 2011, but substantially lower than the 64 mega filings during the first seven months of 2010. So far this year, a total of ten mega cases involved assets in excess of $1 billion. Five of those were filed in May. The largest Chapter 11 bankruptcy filing was by Dynegy Inc., which filed on July 6 with the Bankruptcy Court for the Southern District of New York [Case No. 12-36728]. Dynegy Inc. joined five
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affiliates, including Dynegy Holdings LLC, which filed for bankruptcy in November 2011. Dynegy Inc. listed total assets of $11.35 billion and total liabilities of $5.13 billion as of May 31, 2012. Dynegy Inc. entered bankruptcy to effectuate a settlement, which has already been approved by the bankruptcy court that provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and Dynegy Inc. filed with the Bankruptcy Court a Joint Chapter 11 Plan of Reorganization dated July 12, 2012. Dynegy Inc. produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. The second billion dollar case is by Patriot Coal Corporation. The company and nearly 100 affiliates filed voluntary Chapter 11 petitions on July 9, with the U.S. Bankruptcy Court for the Southern District of New York in Manhattan [Lead Case No. 1212900]. Patriot has arranged $802 million of financing to continue operations during the reorganization. Patriot is a producer and marketer of coal in the eastern United States, with 12 active mining complexes in Appalachia and the Illinois Basin. Patriot ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves.

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Patriot said its business outlook has been impacted by a number of challenges that are affecting the coal industry, including reductions in U.S. thermal coal demand due to competition from low priced natural gas, challenging environmental regulations affecting the cost of producing and using coal, and weaker international and domestic economies. The Company has reacted to the lower domestic demand by reducing production and increasing sales to the export markets. During recent months, the cancellation of customer contracts, lower thermal coal prices and rising expenditures for environmental and other liabilities have severely constrained the Company's liquidity and financial flexibility. Patriot listed $3.57 billion of assets and $3.07 billion of debts. Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor, Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition on July 10, 2012, with the Bankruptcy Court for the Middle District of Florida in Jacksonville [Case No. 12-04524], before Judge Jerry A. Funk. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean to purchase loans originated by Taylor Bean and sell the loans to third parties, including Freddie Mac. Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of assetbacked commercial paper. Prior to the Chapter 11 filing, Ocala entered into extensive negotiations with the Prepetition Indenture Trustee, DB, BNPP, the FDIC and the Taylor Bean Plan Trust with respect to a
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consensual plan of liquidation for Ocala, the funding of Ocala's Chapter 11 case, and certain related matters relating to the administration of the Chapter 11 case and the settlement of certain disputes, the result of which was the parties' execution of that certain Restructuring and Plan Support Agreement. FiberTower Corporation, an alternative provider of facilitiesbased backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services, together with affiliates filed for Chapter 11 protection on July 17, with the U.S. Bankruptcy Court for the Northern District of Texas [Case Nos. 12-44027 to 12-44031] before Judge D. Michael Lynn, together with a plan support agreement struck with prepetition secured noteholders. As of June 30, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. The Plan Support Agreement has been executed by holders of the 2016 Notes who in the aggregate hold approximately 65% of the outstanding principal amount of the notes. In summary, the proposed plan negotiated with the holders of 2016 notes provides that holders of 2016 secured notes issued by FiberTower Corp. will have their claims allowed in the amount of $132.0 million plus interest and fees and will receive (i) 100% of the New FiberTower common stock , and (ii) 100% of the equity in the debtorsubsidiaries.
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Holders of 2012 notes, general unsecured claims estimated to total $30 million, and equity interests in FiberTower Corp. will not receive any property under the Plan. They are deemed to reject the Plan. The Dynegy and FiberTower cases were prepackaged bankruptcies, raising the total number of prepack cases for the first seven months of the year to eight -- about 19% of the mega cases. For 2011, 13 of the 82 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 first seven months of 2012, the manufacturing sector continues to have the most mega bankruptcy filings with seven, closely followed by real estate, finance and information industries with five mega filings each. For the first seven months of 2012, the Bankruptcy Court for the Southern District of New York was the most favored venue for mega filers with 16, followed by the Bankruptcy Court for the District of Delaware with 9 mega filings. For 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.

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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. 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 five companies that may be close to filing for bankruptcy. These are: Capitol Bancorp, Broadview Networks, Aventine Renewable Energy, Champion Industries, and Edison Mission Energy. (A) Capital Bancorp Capitol Bancorp Limited is soliciting votes on a standby prepackaged joint plan of reorganization. The plan announced June 22 converts existing debt to equity and preserves Capitol's substantial deferred tax assets. The financial restructuring plan is being pursued on two simultaneous tracks: (1) an out-of-court restructuring and capital raise consisting of an exchange of its outstanding trust preferred securities, unsecured capital notes
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and Series A preferred stock, with the simultaneous infusion of new equity from outside investors; or alternatively (2) an in-court financial restructuring and simultaneous capital raise from outside investors. Capitol Bancorp Limited is a national community banking company, with a network of bank operations in 16 states. It had incurred losses for the past three years, including a net loss of $51.92 million in 2011. Assets were $2.05 billion in total assets and liabilities were $2.17 billion at the end of March. (B) Broadview Networks Broadview Networks has reached an agreement with holders of its senior secured notes and major equity holders on the terms of a comprehensive financial restructuring plan which will convert the Company's $300 million in senior secured notes into new fiveyear notes and the vast majority of the equity in the Company. This plan has the support from a group of investors who control approximately two-thirds of the outstanding notes as well as the Company's key shareholders. Under terms of the financial restructuring plan, Broadview Networks will convert its existing notes into a combination of new five-year notes and the vast majority of the equity in the reorganized Company. Existing preferred equity holders will receive a portion of the primary equity, as well as warrants to purchase additional equity in the reorganized Company. In the near future the Company intends to implement a "prepackaged" plan of reorganization in a brief, court-supervised, chapter 11 process.

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The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. Broadview has an Aug. 24 deadline to consummate an out of court restructuring or commence Chapter 11 cases from noteholders who signed the restructuring support agreement. Rye Brook, New York-based Broadview Networks is a communications and IT solutions provider in markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. The Company reported a net loss of $11.9 million for 2011, following a net loss of $18.8 million the year before that. The Company's balance sheet at the end of the first quarter showed $258 million in assets against $373 million in liabilities. (C) Aventine Renewable Energy Aventine Renewable Energy Holdings, Inc. entered into forbearance agreements with Citibank, N.A., and Wells Fargo Capital Finance, LLC. The lenders agreed not to take any action until Sept. 7 to enforce any rights or remedies under the parties' loan agreements which may result from the potential events of default. Aventine markets and distributes ethanol to many of the leading energy companies in the U.S. Aventine previously sought Chapter 11 protection in 2009 and emerged from bankruptcy the following year.
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But losses continued. The Company reported a net loss of $43.39 million in 2011, following a net loss of $25.46 million for most of 2010. The Company's balance sheet at the end of March showed $384.90 million in assets against liabilities of $248.91 million. (D) Champion Industries Champion Industries Inc. obtained from Fifth Third Bank an extension of the parties' forbearance agreement until Aug. 15. Fifth Third is the administrative agent for lenders owed just over $40 million. Champion acknowledged that as a result of the existing defaults, the Lenders are entitled to decline to provide further credit to Champion, to terminate their loan commitments, to accelerate the outstanding loans, and to enforce their liens. As part of the agreement, Champion agreed to submit a restructuring plan to Fifth Third mid-July. Champion Industries is a commercial printer, business forms manufacturer, and office products and office furniture supplier in regional markets in the United States. Champion's balance sheet at April 30 showed $58.28 million in assets against liabilities of $58.45 million. (E) Edison Mission Energy Edison Mission Energy latest financial report included a warning that the company may have to seek bankruptcy protection.
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Edison Mission had a net loss of $104 million on $406 million of operating revenues for the three months ended June 30, 2012, compared with a net loss of $32 million on $536 million of operating revenues for the same period during the prior year. The Company's balance sheet at June 30 showed $8.25 billion in assets against $6.59 billion in liabilities. At June 30, Edison Mission and subsidiaries had corporate cash and cash equivalents of $879 million, which includes Midwest Generation's cash and cash equivalents of $177 million. Edison Mission and Midwest Generation's previous revolving credit agreements have been terminated. Edison Mission has $3.7 billion of unsecured notes outstanding, $500 million of which mature in June 2013. Edison Mission is currently experiencing operating losses due to lower realized energy and capacity prices, higher fuel costs and lower generation at the Midwest Generation plants. Edison Mission expects that it will incur further reductions in cash flow and losses in the current year and in subsequent years. Edison Mission said it will need to consider all options available to it, including potential sales of assets, restructuring, reorganization of its capital structure, or conservation of cash that would be otherwise applied to the payment of obligations. Absent a restructuring of its obligations, Edison Mission said it may need to file for protection under Chapter 11 of the U.S. Bankruptcy Code. Edison Mission was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States.
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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 provides updates in the various disputes Lehman Brothers is involved in. Lehman Brothers Holdings was left with only limited claims to pursue against JPMorgan Chase Bank for actual fraudulent transfer of assets after the bankrupt investment bank lost a bid July 12 to revisit an April ruling that trimmed a lawsuit accusing JPMorgan of bilking Lehman $8.6 billion days before its collapse. U.S. Bankruptcy Judge James Peck rejected Lehman's motion for reconsideration, saying he saw no reason to revisit his earlier decision and that during oral argument of the case, he
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sufficiently examined the matter. Back in April, the judge ruled that Lehman cannot sue JPMorgan over transactions governed by so-called safe harbor laws. In its lawsuit filed in 2010, Lehman sought to recover around $8 billion that JPMorgan allegedly seized as collateral in the days leading to its bankruptcy. JPMorgan, which served as the company's main clearing bank in the 2008 financial crisis, has countersued. At a recent court filing around July 20, JPMorgan said Lehman's senior management is to blame for its "disastrous" high-risk strategy that resulted in a series of fraudulent transactions and led to its bankruptcy. Lehman's managers, according to JPMorgan, made large bets using the company's own balance sheet and "deliberately ignored, overrode, manipulated or otherwise failed to adhere to its own internal risk policies and procedures." Then, as the market began to crash "and Lehman began to feel the impact of what had become a disastrous strategy, Lehman engaged in a series of fraudulent transactions designed to conceal the company's true financial condition," the New York-based bank said. JPMorgan further said Lehman's use of Repo 105 "is only one of many such frauds' employed to mislead ratings companies, Wall Street analysts, the market and its creditors." Repo 105 is an accounting technique allegedly used by Lehman to move as much as $50 billion in assets off its balance sheet, which made it appear that the company had reduced its debt levels. JPMorgan is demanding a jury trial and wants the case to be heard by a U.S. District Court judge, not a bankruptcy judge.
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Lehman Brothers officially emerged from bankruptcy protection in March after more than three years in Chapter 11 and began repaying creditors in June under the estate's $65 billion bankruptcy plan. However, various lawsuits and claims fights could continue for years. (B) Tribune Co. The judge in Tribune Co's bankruptcy case confirmed a plan to transfer ownership of the Chicago-based media company to a group of senior creditors led by Oaktree Capital Management, but the controversy over the 2007 leveraged buy-out of the company could be kept alive in the courts for years. The bankruptcy court's confirmation order will set in motion a process that will likely allow Tribune Co. to emerge from bankruptcy protection later in the year. It will allow the Federal Communications Commission to move forward the company's application to transfer its TV and radio broadcast licenses to the new owners. It will also allow Tribune to accelerate work on some administrative and financial matters, which include nailing down a $1.1 billion in new debt financing and a $300 million line of credit. Junior creditors led by Aurelius Capital Management are taking an appeal from the confirmation ruling. However, few experts expect appeals to gain traction because of the careful way Judge Kevin Carey fashioned his confirmation opinion. Instead, junior creditors will likely shift their attention to a federal district court in New York where they are suing 35,000 Tribune Co. shareholders who cashed out in the company's 2007 leveraged buyout, certain current and former Tribune Co. directors and officers as well as Sam Zell, the deal's architect. The LBO-related litigation could go on for years.
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Mr. Zell bought out Tribune for $8.2 billion and turned the company private in 2007. Faced with $13 billion in debt several months after, Tribune filed for bankruptcy in December 2008. (C) Tronox Inc. Trial resumed July 24 in Tronox Inc.'s $25 billion lawsuit against ex-parent Kerr-McGee Corp. after negotiation talks among the parties failed. At the July 24 hearing, the defendant's first witness testified that a 2000 acquisition of a titanium dioxide business carried latent environmental liabilities that the company didn't know about. The lawsuit is over environmental claims and tort claims related to Tronox's 2005 spinoff from Kerr-McGee. Tronox initially sued Anadarko Petroleum Corp in 2009. Anadarko acquired the more profitable oil and gas assets of the parent three months after the spinoff. The Justice Department eventually took over the Tronox case on behalf of the Environmental Protection Agency. The government seeks to recover $25 billion to clean up 2,772 polluted site and compensate about 8,100 tort claimants. The trial started May 2012. It was halted around July 16 to allow the parties time to discuss settlement with the help of a mediator. But those talks weren't successful. No details on the settlement talks were divulged, as they were confidential. Anadarko's defense will include testimony from George Christiansen, who formerly worked in its uranium mining business and worked on setting reserves for environmental damages, and
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Joseph A. Flake, a former vice president at Kerr-McGee's chemical business, according to transcripts of depositions filed in court papers. In its lawsuit, the U.S. alleged that the company didn't set aside enough money for environmental obligations to the EPA and other agencies, and knew that the titanium-dioxide business wouldn't be strong enough to support the environmental debts once Tronox was spun off. Delayed Exits From Chapter 11 Julie Anne Lopez-Toledo reports about three Chapter 11 debtors whose emergence from Chapter 11 has been delayed: Tribune Co., WR Grace, and Quigley. (A) Tribune Co. Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware confirmed on July 23, 2012, the Fourth Amended Plan of Reorganization for Tribune Co. and its affiliated debtors. The confirmed plan was proposed by the Debtors, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo, Gordon & Co., L.P., and JPMorgan Chase Bank, N.A. The bankruptcy judge signed off the order after indicating that he would confirm the restructuring plan if changes were made to resolve objections from creditors. The court order gives a group of senior creditors control of the Chicago media company, which owns the Chicago Tribune,
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Los Angeles Times, KTLA-TV Channel 5 and other media properties. The confirmation is one of the two steps Tribune needs to emerge from bankruptcy protection. The company also needs to get approval from the Federal Communications Commission of its application to transfer its TV and radio broadcast licenses to the new owners. The new owners are led by Oaktree Capital Management, Angelo Gordon & Co. and JPMorgan Chase & Co. They will be seeking $1.1 billion in new debt financing and a $300 million line of credit for the restructuring plan. Junior creditors led by Aurelius Capital Management LP, a New York-based investment fund, have said they plan to appeal Judge Carey's July 23 decision. The group will ask the district court in Delaware to determine whether Judge Carey erred in approving the settlement of claims against the banks and arrangers who financed and facilitated the 2007 leveraged buyout of Tribune Co. The group says the settlement of claims which is part of the restructuring plan is unreasonable. The group said holders of some $2 billion in Tribune debt stand to recover very little under the settlement, and are being barred from suing the banks that financed the 2007 leveraged buyout of Tribune. The Aurelius-led group has filed a motion to stay, which if approved, would defer the consummation of the proposed plan until the final resolution of its appeal. The group is asking for expedited hearing on its request. Only a few experts expect appeals to gain traction because of the careful way Judge Carey fashioned his order. Instead,
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junior creditors likely will shift their attention to a federal district court in New York where they are suing 35,000 former Tribune shareholders who were cashed out in the company's 2007 buyout as well as its architect Sam Zell and certain Tribune directors and officers. Sources said the new owners, which also include distresseddebt investor Angelo Gordon & Co. and JPMorgan Chase & Co., are still mulling candidates for board seats and for chief executive, and have yet to set a clear game plan for what to do with their new investment. Tribune's newspaper group has shrunk in value to roughly $623 million, while its 23 television stations are worth $2.9 billion. It has some $2 billion in equity in other assets including the Food Network and CareerBuilder.com. Law Debenture Trust Co. of New York and Deutsche Bank Trust Co. also filed a motion to suspend the July 23 plan order. The bond trustees asked Judge Carey to put on hold temporarily his order until a higher court hears their appeal to review his decision. One of the issues raised in the appeal concerns the allocation of funds that will be distributed under the restructuring plan to certain Tribune creditors. The trustees said the plan undercompensates senior bondholders relative to other, similarly situated creditors. The bond trustees are seeking to have their case heard by the U.S. Circuit Court of Appeals for the Third Circuit in Philadelphia. A motion for certification of the appeal has already been filed with the appeals court.

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The move to suspend the bankruptcy judge's order drew support from Wilmington Trust Co., which filed a separate appeal. Wilmington Trust, which serves as trustee under an indenture governing Tribune's notes, said the structure for handling creditor claims unfairly discriminates against holders of those notes. Judge Carey signed off a scheduling order proposed by Tribune and other proponents of the plan. The scheduling order sets an August 6 deadline for filing motions to suspend the confirmation order and motions for certification of appeal. Responses have to be filed by August 8. Deposition of witnesses produced by a party who files a response is set for August 10. Judge Carey will hold a hearing on August 17 to consider approval of the motions. (B) W.R. Grace In July, W.R. Grace & Co reported a higher-than-expected quarterly profit and said it would seek to emerge from its 11-year asbestos-related bankruptcy in the expectation that court appeals would be unsuccessful. W.R. Grace filed for Chapter 11 bankruptcy in April 2001, weighed down by asbestos-related claims. A district court approved its reorganization plan earlier this year, clearing a major hurdle for it to emerge from bankruptcy protection. The plan was reaffirmed in June. Eight parties filed notices of appeal before a July 11 deadline.
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"We believe that the risk any of these appeals will succeed is remote," Chief Executive Fred Festa said on a conference call with analysts. "The legal and economic benefits of emerging with these appeals outstanding are greater than the benefits of remaining under Chapter 11 protection," he added. The timing of the emergence from Chapter 11 will depend on satisfaction or waiver of the conditions set forth in the reorganization plan, the company said in a statement. (C) Quigley Pfizer Inc.s non-operating Quigley Co. unit filed a new plan to exit bankruptcy that bars all asbestos claims against the two companies, except some made against Pfizer under Pennsylvania law. Quigley, in bankruptcy since 2004, filed the sixth version of its plan June 29. The new plan addresses an April appeals court ruling on how Pfizer can use Quigleys bankruptcy to protect itself from asbestos claims. The court found that law firm Peter G. Angelos PC can sue Pfizer based on manufacturer liability under Pennsylvania law. The new plans exception for claims under Pennsylvania law would be null and void if the Second Circuits decision is modified upon rehearing or on appeal to the U.S. Supreme Court, Quigley said in the plan, filed in U.S. Bankruptcy Court in Manhattan. The company will seek plan approval from U.S. Bankruptcy Judge Stuart Bernstein at a hearing set for Aug. 15.

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The plan builds on a fifth version, under which New Yorkbased Pfizer increased contributions to a proposed trust into which all future asbestos lawsuits against the two companies would be channeled. Such channeling injunctions allow companies with ongoing liabilities to exit bankruptcy. We are pleased that the Quigley bankruptcy proceeding is moving forward, Pfizer spokesman Christopher Loder said in an e-mailed statement. Quigley, founded in 1916, made three products for the steel industry from the 1940s to the 1970s that contained asbestos. Pfizer bought Quigley in 1968. The unit stopped most operations in 1992 and filed for bankruptcy in 2004. Pfizer, the worlds largest drugmaker, has said it never made or sold any Quigley products. Some claimants havent released Pfizer from alleged derivative liability, according to the company. Under the sixth amended plan, Pfizer will contribute $260 million in cash to a trust that will pay most future asbestos claims brought against it and Quigley. Pfizer will also forgive a secured claim of $95 million against Quigley, a loan of $19 million to Quigley, and an unsecured claim of $33 million. It will also contribute insurance benefits that cover asbestos personal injury claims. Pfizer will also contribute a property leased to a distributor of Anheuser-Busch in Orange County, California, to pay future asbestos claims. The property has an estimated value of $43.6 million and produced cash flow of $1.9 million in the first 12 months since Pfizer acquired it, according to court papers.

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The April ruling from an appeals court had come after Pfizer had appealed a ruling that found the bankruptcy didnt bar certain lawsuits against the drug company. Angelos began bringing lawsuits against Pfizer in 1999, saying that because the drug companys logo appeared on Quigley products, it should have liability for the asbestoscontaining products. During Quigleys bankruptcy, Judge Bernstein has said that Pfizer manipulated the bankruptcy process, and refused to allow Quigley to exit Chapter 11 court protection under a deal with Pfizer. The company has also been at odds with an ad hoc committee of tort victims, which asked in October 2010 to have Quigleys bankruptcy dismissed so it could bring tort claims, which are otherwise blocked by bankruptcy law. The U.S. Trustee had asked the bankruptcy court to end Quigleys Chapter 11, citing the fact that creditors alleging asbestos-related health issues have been unable to sue Pfizer during the case, and many of them have died. Asbestos claims against Quigley may total $4.45 billion during the next 42 years, according to testimony cited by Judge Bernstein in September. In November, Pfizer reported a $701 million third-quarter charge for asbestos litigation related to Quigley. * * *

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.
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New Publicly Traded Securities There were five companies who 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 July 2012. These are: Hawker Beechcraft, Hemcon Medical, Prince Sports, Nebraska Book, and Delta Petroleum. (A) Hawker Beechcraft Hawker Beechcraft Inc., the private-jet maker owned by Goldman Sachs Group Inc. and Onex Corp., filed a plan to reorganize that would give control of the company to secured creditors. Holders of secured debt valued at $921.6 million would get 81% of the new common stock in the reorganized company. Estimated recoveries for unsecured creditors and holders of subordinated notes werent disclosed. Other interests in the company would be canceled, leaving nothing for existing shareholders, including funds affiliated with New York-based Goldman Sachs and Onex. Each owned 49 percent of Hawker stock. Former managers and directors held the remainder, according to court papers. The plan, however, has been put on hold as the Company holds exclusive talks with Chinese firm, Superior Aviation Beijing Co., Ltd. regarding a $1.79 billion strategic combination. As part of the exclusivity agreement, Superior is providing $50 million to sustain Hawker Beechcraft's jet business.
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Any definitive agreement reached with Superior would be subject to approval by the Committee on Foreign Investment in the United States and other regulatory agencies. In addition, any definitive agreement with Superior will be subject to termination if another potential purchaser succeeds in the mandatory competitive auction process which will be overseen by the U.S. Bankruptcy Court. If negotiations with Superior are not concluded in a timely manner, Hawker Beechcraft will proceed with seeking confirmation of the Joint Plan of Reorganization. Superior's legal representative is Locke Lord LLP and its financial advisor is Grant Thornton. (B) HemCon Medical HemCon Medical Technologies, Inc., has an August 9 hearing to seek approval of the disclosure statement explaining its proposed Chapter 11 Plan of Reorganization. According to the Disclosure Statement, the reorganized Debtor will recapitalize by raising $8 million to $12 million in new capital. The Debtor plans to sell between 1 million and 1.5 million shares of Series A Preferred Stock to angel investors (including unsecured creditors and equity security holders), and to sell between 2 million and 3 million shares to private equity funds or other institutional investors. A total of between 3 million and 4.5 million shares is expected to be sold in the offering. The Series A Preferred Shares will be issued at roughly $2.50 per share. It will have a liquidation preference of par plus 5% per annum per share and be converted into Common Stock
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when the Company conducts a public offering of its Common Stock at a price of at least $7.50 per share. The Company has already engaged in substantial discussions with various parties and received a written indication of interest from private equity. One million shares of Common Stock will be reserved for issuance under potential stock options for employees. Holders of general unsecured claims, which are impaired under the Plan, will be issued approximately a total of $1.1 million shares of common stock. Common Stock will be issued at the rate of one share for each $50 of unsecured debt. Each holder of an unsecured Claims equal to or less than $5,000 or who elects to reduce their unsecured claim to $5,000 not receive shares but will instead be paid 50% of the allowed amount of the claim within 60 days following the later of the effective date. Bank of America, as administrative agent, holds a secured claim on account of debt owed to BoA, Bank of the West and Silicon Valley Bank. The Company's secured claim will be fixed at $5 million and payable with interest from and after the Effective Date at a fixed rate equal to 4.5% per annum with interest-only payments on a monthly basis until the fifth anniversary of the Effective Date, at which time the principal balance and any remaining unpaid interest shall be paid. The claim will continue to be secured by a security interest in Reorganized Debtor's assets of the same kind and category and with the same priority that it held as of the Petition Date. The amount of debt in excess of BoA's allowed secured claim will be treated as a general unsecured claim.
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Holders of equity securities will not be entitled to any distributions on account of their existing interests, although they will have the opportunity to acquire Series A Preferred Stock in Reorganized Debtor. (C) Prince Sports Prince Sports Inc., a pioneer of the modern oversized tennis rackets, won court approval of its restructuring plan giving ownership of the company to lenders. Under Princes reorganization plan, lender ABG-Prince LLC will get all the reorganized companys equity in exchange for its $67.2 million secured debt. Unsecured creditors owed about $13.8 million will get proceeds from lawsuits and cash for an estimated recovery of 2.7%. (D) Nebraska Book Nebraska Book's Third Amended Joint Plan of Reorganization became effective and the Company emerged from Chapter 11 protection. On the effective date, the Debtors obtained access to $80 million in new capital in the form of a term loan a new $75 million revolving credit facility. The new money term loan is fully backstopped by a subset of holders of pre-petition 10% senior secured notes due December 1, 2011, issued by Nebraska Book, including one of the largest holders of pre-petition senior secured notes in dollar principal amount. Holders of prepetition senior secured notes will receive their pro rata share of: (a) $100 million in new take-back notes and (b) their pro rata share of substantially all of the reorganized Debtors'
_____________________________________________________________________________ Beard Group Corporate Restructuring Review for July 2012 -- page 26

new common equity, subject to dilution from a management equity incentive plan to be implemented pursuant to the Plan and the warrants. Holders of the prepetition 8.625% Senior Subordinated Notes due March 15, 2012, issued by Nebraska Book, will receive their pro rata share of warrants for up to an aggregate amount of 22% of the fully diluted new common equity, in two tranches: (x) up to 7.0% of the fully diluted new common equity in the form of 7-year warrants with a strike price determined based on an equity value of $100.0 million; and (y) up to 15.0% of the fully diluted new common equity in the form of 7-year warrants with a strike price determined based on an equity value of $150.0 million. Pursuant to the Plan, the prepetition 11% Senior Discount Notes due December 15, 2013, issued by the Company, will be cancelled and extinguished, and holders of pre-petition senior discount notes will receive no distribution on account of such holdings. (E) Delta Petroleum Delta Petroleum filed with the U.S. Bankruptcy Court an Amended Chapter 11 Plan of Reorganization and related Disclosure Statement. The Plan allows the Debtors to deleverage their balance sheets through their agreement with the Plan Sponsor to form a new limited liability company with assets contributed by the Plan Sponsor and the Debtors, including each party's oil and gas, surface real estate, and related assets located in Garfield and Mesa Counties, Colorado. Reorganized Delta will retain (i) a 33.34% interest in the Joint Venture Company, and (ii) $75 million in Cash, subject to certain adjustments set forth in the Contribution Agreement,
_____________________________________________________________________________ Beard Group Corporate Restructuring Review for July 2012 -- page 27

drawn from a senior secured term loan credit facility obtained by the Plan Sponsor on behalf of the Joint Venture Company Approximately $75,000,000 in proceeds from the JV Company Credit Facility will be applied, along with certain other funds)and Holders of General Unsecured Claims who choose either affirmatively or by default to receive 15% of the Allowed amount of their General Unsecured Claim in Cash. The Plan further provides that the Holders of General Unsecured Claims and Noteholder Claims will receive their Pro Rata shares of Reorganized Delta's New Common Stock (and in the case of Holders of Noteholder Claims, any distribution that such Holder is entitled to receive from Debtors other than Delta) in full satisfaction of their Claims, although unless Holders of General Unsecured Claims elect to receive New Common Stock, they will instead receive Cash equal to 15% of the Allowed amount of their Claims on the Effective Date as the default option. Holders of General Unsecured Claims against Delta should be aware of certain risks relating to their treatment under the Plan. First, the Debtors are not representing that the 15% cash option is equivalent in value to the New Common Stock of Reorganized Delta. The Debtors believe that fifteen cents on the dollar could be substantially less than the return implied by the receipt of the New Common Stock of Reorganized Delta, subject to the risk factors described herein, including the limited liquidity and market for the New Common Stock. Second, the existing Holders of Noteholder Claims will own the substantial majority of the New Common Stock after the Effective Date and as such, will control the operations and corporate decision-making of Reorganized Delta. * * *

_____________________________________________________________________________ Beard Group Corporate Restructuring Review for July 2012 -- page 28

That ends the Beard Group Corporate Restructuring Review for July 2012, 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 September 16th. Thank you for listening.

_____________________________________________________________________________ Beard Group Corporate Restructuring Review for July 2012 -- page 29

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