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Beard Group Corporate Restructuring Review For June 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 June 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;

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fourth, reminders about debtors whose emergence from chapter 11 has been delayed; and fifth, information you're unlikely to find elsewhere about new publicly traded securities being issued by chapter 11 debtors. June 2012 Mega Cases

Now, let's review the largest chapter 11 cases in June 2012. Danilo Muñoz reports there was only one company with assets exceeding $100 million sought Chapter 11 bankruptcy protection in June 2012. This number is the lowest since 2010. However, there were two Chapter 15 filers that involved over $100 million in assets in June. The lone filer raises the total number of mega bankruptcy cases for the first six months of 2012 to 36. This is a slight increase from the 34 filings during the same period in 2011, but substantially fewer than the 57 mega filings during the first half of 2010. For the months of March to May this year, 20 companies with over $100 million in assets sought Chapter 11 protection, including nine in May, six in April and five in March. Five of the May filers had assets in excess of $1 billion. For the first half of the year, six bankrupt companies had in excess of $1 billion in assets. The lone Chapter 11 mega filer for June is Northstar Aerospace, which sought creditor protection on June 14, with the Bankruptcy Court for the District of Delaware [Lead Case No. 12_____________________________________________________________________________ Beard Group Corporate Restructuring Review for June 2012 -- page 2

11817]. Northstar Aerospace has a deal to sell its business to affiliates of Wynnchurch Capital, Ltd., which is subject to higher and better offers. Chicago, Illinois-based Northstar Aerospace [-http://www.nsaero.com/ --] is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. As of March 31, 2012, Northstar had total assets of $165.1 million and total liabilities of $147.1 million. Roughly 60% of the assets and business are with the U.S. entities. Northstar Aerospace (USA) Inc. and its Canadian parent intend to conduct an auction in Chicago where private-equity investor Wynnchurch Capital will open the bidding with a $70 million offer, pursuant to joint cross-border bidding procedures approved by courts in Canada and the U.S. U.S. Bankruptcy Judge Mary Walrath in Delaware authorized Northstar Aerospace to conduct an auction on July 17 at 10:00 a.m. Meanwhile, Cinram International Inc. and its affiliates commenced proceedings under Chapter 15 in Delaware to Bankruptcy Court ensure that they are protection from creditor actions in the U.S. and to assist with the global implementation of the sale. Cinram reached an agreement to sell substantially all of its assets and operations to Najafi Companies for $82.5 million.
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With headquarters in Toronto, Ontario, Canada, Cinram is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. The balance sheet at the end of 2011 showed total assets of $452.7 million and liabilities of $527.8 million, including $148.8 million in accounts payable. Also, liquidators of Luxembourg-based SLS Capital S.A. filed a petition under Chapter 15 of the U.S. Bankruptcy Code with the Bankruptcy Court for the Southern District of New York [Case No. 12-12707] to seek recognition of proceedings in Luxembourg as a "foreign main proceeding". SLS was a financial services company whose primary business was the issuance of bonds to persons residing outside the United States. In the operation of its business, SLS had counterparties and advisors in the United States and had significant assets held in custodial asset and cash accounts in New York City. The assets held in the United States were the primary collateral for the bonds that SLS issued. Maitre Yann Baden, the liquidator and foreign representative, estimated SLS Capital to have assets and debts of $100 million to $500 million. For June 2012, there was no prepackaged Chapter 11 filing. For the first six months of 2012, six of the 38 mega cases involved a prepackaged or pre-negotiated Chapter 11 filing, or about 16% of the mega cases. Three of those prepack cases were filed in May. 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
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prepack/pre-arranged cases were filed out of the 106 bankruptcy mega cases -- or about one in every three filings in 2010. For the first six months of 2012, the manufacturing sector continues to lead the mega filings with seven, closely followed by real estate with five. The finance, transportation and information industries have four mega filings each. The Bankruptcy Court for the Southern District of New York so far has been the most favored venue for mega filers during the first half of 2012. About 15 mega cases have been in that District since January, decisively wresting the lead from the Bankruptcy Court for the District of Delaware with 9 mega filings. In 2011, the Delaware Bankruptcy Court was the venue for 38 mega cases -- or 46% -- followed by the Southern District of New York with 16 filings, or 19%. The Northern District of Texas had 4 filings, or 5%. The rest of the mega cases were spread evenly throughout the various bankruptcy courts. Lehman Brothers Holding Corp. remains the biggest corporate bust in history. Lehman, which filed in 2008, had $639 billion in total assets and $613 billion in total debts at that time of its filing. For 2011, the largest Chapter 11 filing was filed by MF Global Holdings Ltd. and its affiliates. As of Sept. 30, 2011, MF Global had $41.05 billion in total assets and $39.68 billion in total liabilities. In the first six months of 2012, the largest filer so far is Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc. The Company filed for bankruptcy protection on May 14 with the Bankruptcy Court for the Southern District of New York [Lead Case No. 12-12020]. ResCap disclosed $15.68
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billion in assets and $15.28 billion in liabilities as of March 31, 2012. ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. ` 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 two companies that may be close to filing for bankruptcy. These are Globalstar and Capital Bancorp. (A) Globalstar Inc. Globalstar Inc. announced on May 16 the decision of arbitrators in a commercial arbitration concerning its 2009 satellite manufacturing contract with Thales Alenia Space France. Although the Company and Thales may agree to other terms, the arbitrators' ruling requires Globalstar to pay Thales approximately EUR53 million in Phase 3 termination charges by June 9, 2012. The Company disputes the merits of the Award and is currently considering its options to oppose, seek to vacate, or otherwise challenge the Award. On June 11, Globalstar said it did not make payment of the Award to Thales on or prior to June 9. As a result, among other
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things, the Award has begun to accrue simple interest. The Company continues to engage in discussions with Thales in an effort to reach a consensual resolution. On May 23, 2012, Thales commenced an action in the District Court for the Southern District of New York by filing a petition to affirm the Award. Globalstar is currently in negotiations with Thales in an effort to reach an amicable resolution of their disputes. In the event the parties fail to reach such an agreement, the Company currently intends to move to vacate the Award. On the same date that Thales commenced the New York Proceeding, Thales sent a notice to the agent under Globalstar's secured bank facility, pursuant to a direct agreement among Thales, Globalstar, and the Agent, dated June 5, 2009, notifying the Agent, among other things, of the Award, that it deems the failure to pay the Award a default under the Construction Agreement, and that it is reserving all of its rights under the Direct Agreement and the Construction Agreement, including the right to suspend performance under the Direct Agreement, if the Company's default is not cured within 30 days of receipt of the Notice. If the parties are not able to reach a mutually agreeable resolution, if the Award is confirmed, final, and non-appealable and thereafter remains unpaid without resolution, or if Thales terminates the Construction Agreement, Globalstar said it may be required to consider strategic alternatives, including, without limitation, seeking protection under Chapter 11 of the U.S. Bankruptcy Code. Covington, Louisiana-based Globalstar provides mobile satellite voice and data services. Globalstar offers these services
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to commercial and recreational users in more than 120 countries around the world. The Company's products include mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. (B) Capitol Bancorp. Capitol Bancorp Limited has commenced a voluntary restructuring plan is designed to facilitate Capitol's objective of converting existing debt to equity. The initiative includes the opportunity to preserve Capitol's substantial deferred tax assets, which can benefit all shareholders going forward. Existing debt holders are being asked to exchange their debt securities for both preferred and common stock of the company. Capitol expects this solicitation effort to be concluded by the end of July. The Exchange Offer commenced June 22 and will be open until July 27. Simultaneously, Capitol is soliciting votes from all debt and equity holders for a Standby Plan that will be commenced in the event that the Exchange Offer is not successful or Capitol believes the transactions contemplated by the Standby Plan are in the best interests of all stakeholders. The Standby Plan contemplates the conversion of all current trust preferred security holders, unsecured senior note holders, current preferred equity shareholders and current common equity shareholders into new classes of common stock which will retain approximately 53% of the voting control and value of the restructured company. Capitol will also seek to identify external capital sources sufficient to restore all affiliate institutions to well-capitalized
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status in exchange for approximately 47% of the restructured company. Succinctly, the financial restructuring plan is being pursued on two simultaneous tracks: * An out-of-court restructuring and capital raise consisting of an exchange of its outstanding trust preferred securities, unsecured capital notes and Series A preferred stock with the simultaneous infusion of new equity from outside investors. * Alternatively, an in-court financial restructuring and simultaneous capital raise from outside investors, referred to in applicable documents as the "Standby Plan." Capitol Bancorp Limited is a national community banking company, with a network of bank operations in 16 states. Founded in 1988, Capitol Bancorp Limited has executive offices in Lansing, Michigan and Phoenix, Arizona. The Company's balance sheet at March 31, 2012, showed $2.05 billion in total assets against $2.17 billion in total liabilities. * * *

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
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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 won another round in the first week of July in the $8.6 billion battle with JP Morgan Chase Bank, as a bankruptcy judge refused to dismiss objections by Lehman against JPMorgan's claim. In a 15-page opinion dated July 3, Bankruptcy Judge James Peck explained why he won't strike some of the objections Lehman raised to the JPMorgan claim. The bankruptcy judge denied JPMorgan's attempt to strike two parts of Lehman's objection, saying it would be "premature" to throw out those objections. Judge Peck said the dispute was "within the context of an ongoing larger multi-layered litigation concerning the net amounts that may ultimately be payable by these parties to one another." In its lawsuit, Lehman accused New York-based JPMorgan of helping to cause its 2008 collapse by demanding $8.6 billion in collateral as backing for loans. JPMorgan, saying it lent Lehman $70 billion around the time of its 2008 collapsed, sued back -alleging it was deceived into making the loans. In April, Judge Peck told Lehman it cannot sue JPMorgan over transactions governed by so-called safe harbor law, devised
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to protect banks dealing with weak companies. By doing so, the judge took away Lehman's easy way of getting money from JPMorgan or canceling its claims. Lehman has twice asked Judge Peck to reconsider. In February, JPMorgan it would give Lehman almost $700 million to settle part of the lawsuit, though it continues to fight for most of its claims. In a separate $3 billion lawsuit, New York District Judge Katherine Forrest on June 5 ruled largely in favor of Barclays in the UK bank's long standing dispute with James Giddens, the liquidation trustee of Lehman Brothers Inc.'s broker unit, relating to Barclays' 2008 purchase of the broker business in September 2008 after Lehman collapsed. Judge Forrest held that Barclays is entitled to most of the $2.05 billion in margin assets, overturning Bankruptcy Judge James Peck's ruling that ruled that the trustee was entitled to the money. The district judge, however, rejected Barclays' claim to $769 million in Lehman Brothers' customer reserve accounts and $507 million that is considered part of Lehman's required Reserve Bank Account. Judge Forrest also ruled that about $2 billion in "clearance box" accounts at the Depository Trust & Clearing Corp. will also stay with Barclays, affirming Judge Peck's decision. In a 59-page decision, Judge Forrest said the bankruptcy judge erred in superimposing "terms of ambiguity" on the final sale document called a clarification letter, which outlined the terms of the Lehman broker business sale to Barclays. "The bankruptcy court fully understood the letter's terms -- it just did not like them," said Judge Forrest.
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Mr. Giddens wasted no time and on June 7, two days after the Forrest ruling was handed down, took an appeal of Judge Forrest's order -- which the order that upset the trustee's $1.5 billion victory in the bankruptcy court over Barclays. The trustee said he needs the money to pay hedge funds and other customers. Elliot Management Corp., on June 30, demanded that Mr. Giddens make an initial $3.2 billion payment to creditors. On July 6, Barclays filed a cross-appeal of the same June 5 district court ruling. Barclays contends that the district judge erred by not awarding it an additional $1.3 billion. The UK bank, as of the June 5 ruling, has won as much as $5 billion but now wants all of the remaining $1.3 billion in assets in dispute. (B) Tribune Co As Tribune Co. closes in on the confirmation of its Chapter 11 plan, news reports note that attention has been turned to the major litigation over the failed leveraged buyout of the media company that drove it into bankruptcy more than three years. In 2007, Chicago-based investor Sam Zell bought out the media company for $8.2 billion, turning the company private. In December 2008, faced with about $13 billion in debt related to the LBO, Tribune filed for bankruptcy in Delaware. A bankruptcy investigation turned up evidence the LBO was tainted with fraud, setting the stage for creditor lawsuits. The litigation could be worth hundreds of millions of dollars for Tribune creditors. The current Tribune plan focuses on settling legal clams against lenders in the LBO. The plan would leave Tribune in the hands in an ownership group led by JPMorgan Chase; distressed
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debt specialist Angelo, Gordon & Co and hedge fund Oaktree Capital Management. The plan would also allow creditors to pursue claims against shareholders who benefited from the buyout. Aurelius Capital Management, LP and other creditors, who will be left with less than full payment under Tribune's plan, are counting on a big payoff from the lawsuits against large shareholder McCormick Foundation, other shareholders, Tribune leaders and former leaders, and professionals who advised on the LBO deal. These creditors are thus trying to convince Tribune to leave them with enough cash to pursue the litigation. On June 8, JPMorgan, on behalf of senior lenders, agreed to hike up the budget for the litigation trust under the current Plan version. Officials who will advise it will be paid $60,000 a year, instead of the $25,000 in the original plan. Tribune has also agreed to get the litigation trust started with a $20 million loan. In return, Tribune's unpaid creditors agreed to drop protests over an estimated $72.3 million worth of legal fees and expenses that the company will be covering for attorneys for senior lenders, lenders on a bridge loan, and members of the official unsecured creditors committee. Judge Kevin Carey said he might issue a written decision on the Tribune plan in early July. (C) Tronox Inc. Robert J. Rock of AlixPartners LLP told a New York bankruptcy court in June that Tronox Inc., was insolvent following its 2005 initial public offering.
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The expert's testimony was offered in the lawsuit Tronox commenced against its former parent, Kerr-McGee Corp., and Anadarko Petroleum Corp. over legacy environmental liabilities Tronox says sent it into bankruptcy. The trial on the case kicked off in mid-May 2012 in bankruptcy court. The judge is reportedly trying the case without a jury. Mr. Rock also said Kerr-McGee employed flawed practices for setting reserves for possible liabilities, which caused understatements in Tronox's environmental and tort practices. The lawsuit alleges that when Kerr-McGee spun off its chemical business and paint pigment plant into Tronox in 2006, the parent imposed on Tronox 70 years of 'legacy liabilities,' that include environmental remediation and retiree litigations. The more profitable oil and gas assets of the parent were acquired by Anadarko three months after the spin-off was completed for nearly $17 billion. The U.S. government seems to agree with Tronox, saying the deal was a "two-step fraudulent scheme" in order to transfer assets to Anadarko where they would be out of reach of future creditors of the defunct chemical firm. Lawyers for the U.S. government estimate the value of the assets transferred at nearly $15 billion, plus an additional $10 billion for interest and appreciation. Tronox has said its former in-house counsel, Roger Addison, knew of the fraud that led to the bankruptcy filing. Anadarko has denied the allegations, arguing that the separation of the chemical business from the oil and gas assets was done to maximize shareholder value. Reports note the Tronox lawsuit has lopped $2 billion off the market capitalization of Anadarko.
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In the week before the trial began, Bankruptcy Judge Allan Grouper ruled that Anadarko is not a proper defendant in the lawsuit because it maintained Kerr-McGee is an isolated business unit. Now, Tronox and the U.S. government are only going after Kerr-McGee and related business, which are nonetheless owned by Anadarko, for recovery in connection with the spin-off and liabilities. The litigation trust pursuing the case on behalf of Tronox is represented by Kirkland & Ellis LLP. The defendants are represented by Weil Gotshal & Manges LLP, Bingham McCutchen LLP and Klee Tuchin Bogdanoff & Stern LLP. (D) TOUSA Inc. Former secured lenders to an affiliate of TOUSA Inc., are asking the U.S. Court of Appeals for the Eleventh Circuit to hold an en banc hearing on their request for reconsideration of a May 2012 decision by the appellate court, which held that the banks received fraudulent transfers exceeding $400 million. On May 15, 2012, a three-judge panel of the Eleventh Circuit overturned a district court decision, which forcefully quashed a bankruptcy court ruling to avoid, as a fraudulent transfer, a $400 million settlement and loan repayment by the parent company to a group of lenders referred to as the Transeastern lenders. The TOUSA parent's settlement and loan repayment was funded with the proceeds of new loans which were secured by guarantees and liens granted by subsidiaries who were not liable for the original loan. In the request for rehearing, the lenders claim that the bankruptcy judge wasn't entitled to make a final ruling on a
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fraudulent transfer claim in view of a decision one year ago by the U.S. Supreme Court called Stern v. Marshall. The lenders argue that the district court wasn't obliged to give any deference to the bankruptcy judge's opinion. The lenders also seek rehearing on a second ground -- focusing on the fact that they didn't receive liens that were the fraudulently transferred property but that they received cash from TOUSA to pay off existing loans the homebuilder company paid. Delayed Exits From Chapter 11 Julie Anne Lopez-Toledo reports about two Chapter 11 debtors whose emergence from Chapter 11 has been delayed: Tribune Co. and WR Grace. (A) Tribune Co. Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware indicated that he may issue a ruling on confirmation of the Company’s Fourth Amended Joint Plan of Reorganization by July. Judge Carey said he will either approve the Plan or provide Tribune and its creditors a roadmap on how to fix it so it can be confirmed. According to the Chicago Tribune, the disputes on the Plan have come down to five "relatively small" issues that need to be resolved, including the language on payment of professional fees and technical issues on the litigation trust. The report said the litigation trust is a vital issue for junior creditors because it preserves claims against parties related to Sam Zell's 2007
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leveraged buy-out of Tribune, which the junior creditors say left the company insolvent. Judge Carey scheduled a telephonic hearing for June 11 to confirm resolution or address any unresolved issues stated on the record during the Confirmation Hearing, according to a notice filed with the Court. The bankruptcy judge said he would convene a status conference on his decision in early July, if necessary. Judge Carey held hearings to confirm the Plan on June 7 and 8. The main contention in Tribune's bankruptcy case is the settlement of certain causes of action arising from the 2007 leveraged buy-out of Tribune, contemplated by the Chapter 11 Plan filed by Tribune; the Official Committee of Unsecured Creditors; Oaktree Capital Management, L.P.; Angelo, Gordon & Co., L.P.; and JPMorgan Chase Bank, N.A. In contrast, the rival group of Aurelius Capital, WTC, and Senior Indenture Trustees Deutsche Bank Trust Company Americas and Law Debenture Trust Company of New York seek to retain those causes of action and pursue them vigorously per their competing Chapter 11 Plan. A multidistrict litigation is currently before a New York federal court to recover billions of dollars from entities who participated in the buy-out. On Oct. 31 2011, Judge Carey issued an opinion denying confirmation of the competing Chapter 11 Plans. Nevertheless, the bankruptcy judge opined that Tribune's Plan better paves the way towards the Debtors' goal to reorganize by resolving significant claims. The bankruptcy judge also held that the DCL Plan Settlement treats creditors fairly.
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Tribune amended the DCL Plan several times to incorporate the Bankruptcy Court's previous rulings, including the ruling on allocation disputes under the DCL Plan. Aurelius and several parties renewed their objections to the current DCL Plan, focusing on its technical aspects, including the structure of the litigation trust and payment of professional fees. The Plan contemplates the turnover of ownership to holders of the company's loan, a group that includes DCL Plan Proponents JPMorgan Chase & Co. and Oaktree Capital Management LP and Angelo, Gordon & Co., according to Reuters. They will appoint the company's seven-member board. Tribune needs to obtain Federal Communications Commission's approval to transfer its broadcasting businesses before it can emerge from bankruptcy. Tribune Chief Reorganization Officer Don Liebentritt said he is hopeful that a July decision on the Plan would not delay Tribune's application with the FCC. The FCC cannot rule on Tribune's request without a confirmation order, but the company is working on it. Mr. Liebentritt has considered the FCC approval a "wild card," in an effort to exit bankruptcy smoothly, saying it is uncertain whether organizations that objected to Tribune's previous licensing applications will object this time. In a Bloomberg interview, Mr. Liebentritt said if Tribune obtains approval of the Plan by July, it will emerge from bankruptcy by August or at the end of the year latest, depending on the outcome of the FCC application.

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At the June 8 hearing, Aurelius and its group made it clear that they plan to appeal Judge Carey's decision and vigorously pursue the preserved claims. As of February 16, 2012, Tribune has a distributable value of $7.372 billion. Tribune filed for Chapter 11 in December 2008. (B) W.R. Grace After being in bankruptcy for 11 years, W.R. Grace’s Chapter 11 case may finally come to an end in the coming days. Judge Ronald L. Buckwalter of the U.S. District Court for the District of Delaware issued on June 11, 2012, an amended memorandum opinion and order overruling all objections and confirming W.R. Grace and its debtor affiliates' Joint Plan of Reorganization in its entirety. The Appellants had until July 11 to file any considerations, at which point W.R. Grace will have an additional 30 days to respond. Then the Third Circuit Court of Appeals will make its decision. Grace may actually be able to exit bankruptcy even before all they are all settled, depending on the details of the appeals. But first, the courts must receive all appeals. Grace won bankruptcy court approval of the Plan on January 31, 2011. The District Court affirmed the Plan about a year later, on January 30, 201.

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Numerous parties-in-interest filed motions to reconsider, alter and clarify the Affirmation Order. Various appeals have also been filed. The parties seeking clarification or amendment to the Order include Sealed Air Corporation, Cryovac, Inc., and Fresenius Medical Care Holdings, Inc.; the Libby Claimants; and Garlock Sealing Technologies, LLC. Judge Buckwalter's Amended Memorandum Opinion and Order includes additional language clarifying that all injunctions and releases in the Joint Plan, and not merely the injunction under Section 524(g) of the Bankruptcy Code are approved, issued and affirmed. Grace filed for Chapter 11 reorganization in 2001 to protect itself from more than 100,000 personal injury claims. * * *

The Troubled Company Reporter provides detailed reporting about every chapter 11 filing nationwide. Stay tuned to learn more about obtaining a trial subscription to the TCR at no cost or obligation. New Publicly Traded Securities Psyche Maricon Castillon reports about four companies that issued or will issue shares of new common stock upon emergence pursuant to the plans of reorganization they filed in their Chapter 11 cases in June 2012. These are: Delta Petroleum, Indianapolis Downs, Houghton Mifflin, and Reddy Ice. (A) Delta Petroleum
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Delta Petroleum filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Reorganization and Disclosure Statement that 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 Laramie 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, drawn from a senior secured term loan credit facility obtained by the Plan Sponsor on behalf of the Joint Venture Company. Proceeds of the JV Company Credit Facility will be applied to pay the administrative expenses of the Debtors' estates, including the debtor-in-possession financing facility. The Plan further provides that the Holders of General Unsecured Claims and Noteholder Claims will receive their Pro Rata shares of an aggregate of 100% of Reorganized Delta's New Common Stock in full satisfaction of their Claims, although Holders of General Unsecured Claims may elect instead to receive Cash equal to 15% of the Allowed amount of such Claim on the Effective Date. (B) Indianapolis Downs Indianapolis Downs filed with the U.S. Bankruptcy Court a First Amended Joint Plan of Reorganization and related Disclosure Statement. The Recapitalization set forth in the Plan will result in each Holder of a Class 3 Claim receiving its Pro Rata Share of (i) all of the New Second Lien Term Loan, or in the
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alternative, all of the proceeds from the Alternative Second Lien Financing, (ii) 95% of the New Unsecured PIK Term Loan issued and outstanding on the Effective Date and (iii) 95% of the New Series A Warrants issued and outstanding on the Effective Date. Each Holder of a Class 4 Claim will receive (i) 5% of the New Unsecured PIK Term Loan issued and outstanding on the Effective Date, (ii) 5% of the New Series A Warrants issued and outstanding on the Effective Date and (iii) 100% of the New Series B Warrants issued and outstanding on the Effective Date. All of the DIP Claims, Administrative Claims, and Priority Tax Claims will be paid in full as provided in the Plan. The Plan also provides that Other Priority Claims and Other Secured Claims will be Unimpaired. Holders of General Unsecured Claims and Holders of Interests will receive no Distribution under the Plan. (C) Houghton Mifflin The U.S. Bankruptcy Court approved the Disclosure Statement and concurrently confirmed the Chapter 11 Plan of Reorganization of Houghton Mifflin Harcourt Publishing. The Plan subsequently became effective and the Company emerged from Chapter 11 protection. Under the Plan, senior creditors will receive 100% of the new common equity, subject to dilution from the management incentive plan and the new warrants, plus $30.3 million in cash. All of the Debtors' existing debt balances will be eliminated. Existing common equity holders will receive 7-year warrants for 5% of the new common stock, with an enterprise value strike price of $3.1 billion.

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This book publisher filed for Chapter 11 protection on May 21, 2012, listing $2.7 billion in total pre-petition assets. (D) Reddy Ice Reddy Ice Holdings' Plan of Reorganization is now effective, and the Company has emerged from Chapter 11 protection. The Company is now majority-owned by affiliates of Centerbridge Partners. Through the Plan, (i) the Debtors' financial debt will be reduced by approximately $145 million, (ii) the Debtors' cash interest expense will be reduced by approximately $20 million annually and (iii) the Debtors will receive new equity capital infusions totaling approximately $25.5 million, including a $7.975 million preferred stock investment by Centerbridge Capital Partners II, or one or more of its parallel funds and a $17.5 million preferred stock rights offering to holders of the Debtors' prepetition second lien secured notes backstopped by Centerbridge. The packaged ice manufacturer and distributor filed for Chapter 11 protection on April 12, 2012, listing $434 million in total prepetition assets. * * *

That ends the Beard Group Corporate Restructuring Review for June 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.
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Tune in to our next monthly Restructuring Review on August 16th. Thank you for listening.

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