beard corporate restructuring review for december 2012

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Beard Group Corporate Restructuring ReviewFor December 2012

Presented byBeard Group, Inc.

P.O. Box 4250Frederick, MD 21705-4250

Voice: (240) 629-3300Fax: (240) 629-3360

E-mail: [email protected]

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

____________________________________________________

Welcome to the Beard Group Corporate RestructuringReview for December 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 discussfive topics:

first, last month's largest chapter 11 filings and otherstatistics;

second, large chapter 11 filings TCR editors anticipatein the near-term;

third, a quick review of the major pending disputes inchapter 11 cases that we monitor day-by-day;
mailto:[email protected]://bankrupt.com/restructuringreview/mailto:[email protected]://bankrupt.com/restructuringreview/


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fourth, reminders about debtors whose emergence fromchapter 11 has been delayed; and

fifth, information you're unlikely to find elsewhere about

new publicly traded securities being issued bychapter 11 debtors.

December 2012 Mega Cases

Now, let's review the largest chapter 11 cases in December

2012.

Danilo Muoz reports that large Chapter 11 filings continueto decrease since 2010. In December 2012, there were fourbankruptcies involving companies with more than $100 million inassets. While this is a slight increase from the three mega filingsin November, the figure is way down compared to October, whensix such hundred-million dollar cases were commenced.

For the first 12 months of 2012, there were a total of 64mega filings with assets in excess of $100 million, compared to 82during the same period in 2011 and 106 in 2010.

Of the December filings, Edison Mission Energy reportedmore than $1 billion in assets. Specifically, Edison MissionEnergy listed total assets of $5.13 billion and $5.09 billion in totalliabilities in its Chapter 11 petition. For fiscal year 2012, a total of

12 companies sought Chapter 11 with excess of $1 billion inassets; five of those filed in May.

Edison Mission Energy or E-M-E is a holding companywhose subsidiaries and affiliates are engaged in the business ofdeveloping, acquiring, owning or leasing, operating and selling_____________________________________________________________________________

Beard Group Corporate Restructuring Review for December 2012 -- page 2


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energy and capacity from independent power production facilities.EME also engages in hedging and energy trading activities inpower markets through its subsidiary Edison Mission Marketing &Trading, Inc.

EME was formed in 1986 and is an indirect subsidiary ofEdison International. Edison International also owns SouthernCalifornia Edison Company, one of the largest electric utilities inthe United States.

EME and its affiliates sought Chapter 11 protection on Dec.17, 2012, with the Bankruptcy Court for the Northern District of

Illinois [case number 12-49219]. EME reached an agreementwith the holders of a majority of EME's $3.7 billion of outstandingpublic debt and its parent company, Edison International EIX, that,pursuant to a plan of reorganization and pending court approval,would transition Edison International's equity interest to EME'screditors, retire existing public debt and enhance EME's access toliquidity.

The second largest Chapter 11 filing was LCI HoldingCompany Inc. The company, which does business as LifeCareHospitals, disclosed assets of $422 million and liabilities totaling$575.9 million as of Sept. 30, 2012.

LifeCare and its affiliates have agreed to sell their assets totheir existing lenders in exchange for debt, absent higher andbetter offers in an auction. The secured lenders have also agreedto provide financing for the Chapter 11 effort.

LifeCare operates eight "hospital within hospital" facilitiesand 19 freestanding facilities in 10 states. The hospitals haveabout 1,400 beds at facilities in Louisiana, Texas, Pennsylvania,Ohio and Nevada. LifeCare is controlled by Carlyle Group, which

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holds 93.4 percent of the stock following a $570 million acquisitionin August 2005.

LifeCare and its affiliates sought Chapter 11 protection on

Dec. 11, 2012, with the Bankruptcy Court for the District ofDelaware [case number 12-13319].

The third largest Chapter 11 filing was by THQ Inc., aworldwide developer and publisher of interactive entertainmentsoftware, which listed $204.8 million in total assets and $248.1million in total liabilities. THQ develops its products for all populargame systems, personal computers, wireless devices and the

Internet. Headquartered in Los Angeles County, California, THQsells product through its network of offices located throughoutNorth America and Europe.

THQ Inc. and its affiliates sought Chapter 11 protection onDec. 19, 2012, also with the Delaware Bankruptcy Court [leadcase number 12-13398].

THQ has a deal to sell its video-game development businessto Clearlake Capital Group LP for about $60 million, absent higherand better offers at an auction proposed for January 2013.Clearlake and existing lender Wells Fargo Capital Finance LLCare providing $10 million of DIP financing.

Hospital operator Interfaith Medical Center Inc. filed forChapter 11 bankruptcy on Dec. 2, 2012, disclosing total assets of$142.4 million and liabilities of $341 million. Interfaith operates a

287-bed hospital on Atlantic Avenue in Bedford-Stuyvesant andan ambulatory care network of eight clinics in central Brooklyn, inCrown Heights and Bedford-Stuyvesant.

Interfaith Medical Center filed for Chapter 11 protection onDec. 2, 2012, with the U.S. Bankruptcy Court for the Eastern_____________________________________________________________________________



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District of New York in Brooklyn [case number 12-48226, beforeJudge Jerome Feller].

Interfaith officials said they

had no choice but to file forChapter 11 bankruptcyreorganization, given thehospital's precarious financialsituation. But they said thehospital had a better chance ofsurviving in the long term if thestate would guarantee it about

$20 million in what is known asdebtor-in-possession financingto underwrite its operating costsduring the reorganization.

Edison Mission Energy's case was pre-negotiated. For fiscalyear 2012, 14 of the 64 mega cases involved prepackaged or pre-negotiated Chapter 11 filing, or about 22% of the mega cases.

For 2011, 13 of the 83 mega cases involved a prepackagedChapter 11 plan as of the Petition Date -- or about 16% of thelarge Chapter 11 filings. For fiscal year 2010, a total of 35prepacks/pre-arranged cases were filed out of the 106 bankruptcymega cases -- or about one in every three filings in 2010.

For the first 11 months of 2012, the manufacturing industrycontinues to lead mega filings with 10, followed by information

industry with 8 and finance industry with 7 mega filings.

For the first 12 months of 2012, the Bankruptcy Court for theSouthern District of New York was the most favored venue formega filers with 21, wresting away the lead from the BankruptcyCourt for the District of Delaware with 19 mega filings._____________________________________________________________________________


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In 2011, the Delaware Bankruptcy Court was the mostfavored of bankruptcy mega cases with 38 filings, or 46% of themega cases, followed by the Southern District of New York with

16 filings, or 19% of the mega cases, and by the Northern Districtof Texas with 4 filings, or 5% of the mega cases. The rest of thebankruptcy mega cases are spread evenly throughout the variousbankruptcy courts.

Lehman Brothers Holding Corp. remains the biggestcorporate bust in history. Lehman, which filed in 2008, had $639billion 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 MFGlobal Holdings Ltd. and its affiliates. As of Sept. 30, 2011, MFGlobal had $41.05 billion in total assets and $39.68 billion in totalliabilities.

For 2012, the largest Chapter 11 filing was by Residential

Capital LLC, which disclosed $15.68 billion in assets and $15.28billion in liabilities as of March 31, 2012.

The law firm of Young Conaway Stargatt & Taylor LLP isinvolved in five of the hundred-million dollar Chapter 11 cases for2012. This is tops among law firms. DLA Piper LLP is second,with three. Fifteen other law firms serve as counsel or co-counselin two mega filings cases for 2012.

Young Conaway represents Journal Register Company,Southern Air Holdings, Contract Research Solutions, ArcticGlacier and Buffets Inc. DLA Piper represents StarlightInvestments, Reddy Ice and Trident Microsystems.

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Anticipated Large Chapter 11 Filings

Now, let's turn to the topic of large chapter 11 filings TroubledCompany Reporter editors anticipate in the near-term.

Carlo Fernandez identified four companies that may be closeto filing for bankruptcy: Geokinetics, LodgeNet Interactive, DexOne, and Merrill Corp.

(A) Geokinetics

Geokinetics Inc. didn't make a $14.6 million interest paymentdue Dec. 15 on senior secured notes and is in discussions withcreditors on a restructuring to be carried out through a Chapter 11filing.

The geophysical service company said talks are aboutconverting the notes to stock while swapping existing preferredstock for cash or out-of-the-money warrants.

Houston-based Geokinetics acknowledged that therestructuring is "likely" to be carried out in bankruptcy court.

Geokinetics had assets of $410 million and liabilities of $580

million at June 30.

Standard & Poor's Ratings Services cut the company'scorporate credit rating to 'D' following the missed payment.

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(B) Lodgenet Interactive

LodgeNet Interactive Company missed a $10 millionpayment on a term loan due Dec. 31 and a week later reached a

deal where Colony Capital LLC would take over control via aChapter 11 process.

Colony and other investors will invest $60 million of newcapital in the provider of Internet and cable TV provider to morethan 1.9 million hotel rooms worldwide.

LodgeNet is currently soliciting votes on a pre-packaged

plan of reorganization. Holders of trade and other generalunsecured claims will receive full payment in cash. Holders ofcommon shares and series B preferred stock won't receiveanything and will have their interests cancelled.

The agreement was signed early January and requiredLodgeNet to seek bankruptcy within 40 days.

LodgeNet expects confirmation of the prepackaged plan justwithin 45 days after the Chapter 11 filing.

Sioux Falls, South Dakota-based LodgeNet had $292 millionin assets and $449 million in liabilities as of Sept. 30, 2012.

Miller Buckfire & Co. LLC, a wholly-owned subsidiary ofStifel Financial Corp., FTI Consulting, Inc. and MoorgateSecurities LLC serve as financial advisors to LodgeNet. Weil,

Gotshal & Manges LLP act as restructuring legal counsel andLeonard, Street and Deinard acted as corporate legal counsel tothe Company.

Guggenheim Securities, LLC served as financial advisor toColony Capital, and Liner Grode Stein Yankelevitz Sunshine_____________________________________________________________________________



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Regenstreif & Taylor LLP and Sullivan & Cromwell LLP providedlegal counsel.

Akin Gump Strauss Hauer & Feld LLP and CDG Group, LLC

act as advisors to the agent for the lenders.

(C) Dex One

Dex One Corp. and SuperMedia Inc. in August 2011announced an agreement to combine in a stock-for-stock mergerof equals.

The parties expected the parties to complete the merger bythe fourth quarter of 2012, but the plan to form a new company, tobe named Dex Media, has not been completed. The transactionrequired credit agreement amendments with both companies'lenders.

In December, the merging parties reached an agreement

with a steering committee representing senior lenders on arevised set of amendments. But unanimous consent has not yetbeen received.

Dex One and SuperMedia did say that in the event thecompanies obtain sufficient, but not unanimous, support from theremaining lenders, either or both companies may seek to finalizecredit agreement amendments and complete the merger bymeans of a pre-packaged bankruptcy.

The merging parties also said they will also seek approvalfrom their respective shareholders for the proposed merger andthe pre-packaged bankruptcy plan, if the pre-packaged planbecomes necessary to secure the credit agreement amendments.

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On December 20, Dex One received signature pages to asupport agreement from sufficient lenders such that more thanhalf in number (but not all) of the holders, and more than two-thirds in amount, of the debt issued under each of the Dex One

credit facilities have become parties to the support agreement.

As a result, the number of lenders (and amount of debt)contractually obligated to vote in favor of certain voluntary pre-packaged plans under Chapter 11 of the U.S. bankruptcy codethat would effect the contemplated merger exceeds the thresholdsrequired for approval of such pre-packaged plans by suchcreditors under applicable bankruptcy law.

The two companies said Dec. 21 that the board of directorsof either company has not yet approved a Chapter 11 filing.

In the meantime, the two companies intend to (i) continue toseek joinders for the support agreement, (ii) continue to seekconsents to certain amendments to the credit facilities, and (iii)solicit approval of the a potential prepackaged plan. Dex One

expects these solicitations to commence in the first quarter.

Houlihan Lokey is acting as financial advisor to Dex One,and Kirkland & Ellis LLP is acting as its legal counsel. MorganStanley & Co. LLC and Chilmark Partners are acting as financialadvisors to SuperMedia, and Fulbright & Jaworski L.L.P andCleary Gottlieb Steen & Hamilton LLP are acting as its legalcounsel.

The combined company estimates it will realize $150 millionto $175 million of annual run rate cost synergies by 2015 due toscale efficiencies;

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(D) Merrill Corp

Merrill Corp., a provider of document, data management andlitigation support services for the legal and financial services

industries, failed to pay a $33 million revolving credit and a $374million first-lien term loan when they matured on Dec. 22.

"We believe the company is engaged in negotiations with itslenders to restructure its current debt maturities," said Standard &Poor's Ratings Services, which lowered its corporate credit ratingon Merrill to 'D'.

* * *

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 experiencingfinancial distress or restructuring their balance sheets in a judicial

proceeding. Stay tuned to learn more about obtaining a trialsubscription to the TCR at no cost or obligation.

Major Pending Disputes In Chapter 11 Cases

Next, we'll quickly review major pending disputes in largechapter 11 cases that Troubled Company Reporter editorsmonitor day-by-day.

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(A) Lehman Brothers

Ivy Magdadaro updates on one of the disputes involvingLehman Brothers.

In December 2012, Lehman got approval from thebankruptcy court in Manhattan of a deal with Citigroup that wouldsettle a dispute over $1 billion in collateral.

The deal requires Citigroup to pay $360 million to theLehman brokerage and forgo its claim to $75million. It also callsfor the dismissal of a lawsuit James Giddens, the trustee

appointed to liquidate the brokerage, filed against Citigroup inearly 2011.

The Lehman brokerage unit made a deposit of more than $1billion in its last week of operations in exchange for the servicesprovided by Citigroup. Mr. Giddens sued Citigroup in 2011 torecover the deposit, which he said should be a part of an assetpool to be distributed among creditors.

The case is Lehman Brothers Inc. v. Citibank, N.A., CitigroupInc., Citigroup Global Markets, Inc., Citibank Japan Ltd., CitibankEurope PLC, Citibank International PLC, Citigroup Pty Limited,Banco de Chile, Banco Nacional de Mexico SA, Citibank del PeruSA, Bank Handlowy, ZAO KB Citibank, Citibank AS, CitibankMaghreb and Citibank Affiliates 1-5 (Adv. Proc. No. 11-01681).

In other news, Barclays Plc recently filed a 90-page brief

urging the U.S. Court of Appeals for the Second Circuit to upholda June 2012 ruling by U.S. District Judge Katherine B. Forrestwho concluded that the bankruptcy judge was wrong in requiringBarclays to pay $1.5 billion to the Lehman Brothers Inc. trustee.

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Mr. Gidden, the Lehman trustee, previously said in his briefthat the Second Circuit appeals court in Manhattan shouldreinstate a ruling from the bankruptcy judge giving him $1.5billion. The London-based bank believes it is entitled to keep the

$1.5 billion and recover even more from the Lehman trustee.

The appeal revolves around a clarification letter that wasn'teven written when the bankruptcy judge approved sale ofLehman's North American brokerage business to Barclays inSeptember 2008. Barclays says it paid $50 billion for the Lehmanbrokerage "amidst a worldwide financial crisis." Mr. Giddensargued that due process was violated because the parties

changed material terms of the sale without bankruptcy courtapproval. Barclays noted in its brief in early January 2013 how theclarification letter was treated by the parties as part of theagreement for a full year afterwards.

The Lehman trustee will file another brief. The date for oralargument in the circuit court is yet to be fixed.

The Barclay appeal in the court of appeals is Giddens v.Barclays Capital Inc. (In re Lehman Brothers Holdings Inc.), 12-2328, U.S. Second Circuit Court of Appeals (Manhattan). TheBarclay appeal in district court was Barclays Capital Inc. v.Giddens (In re Lehman Brothers Inc.), 11-6052, U.S. DistrictCourt, Southern District New York.

(B) Tribune

Former employees and shareholders of Tribune Co. willremain involved in litigation with creditors in the coming yearseven as the media company emerged from Chapter 11 protectionon Dec. 31.

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The reorganized company will have a new board of directorsand new ownership that includes senior creditors Oaktree CapitalManagement, Angelo, Gordon and Co., and JP Morgan Chaseand Co. It has acquired a $1.4 billion exit credit facility.

Founded in 1847, Tribune Co publishes most of the best-known newspapers in the U.S., like the Los Angeles Times, TheBaltimore Sun and the Chicago Tribune. The company sought forbankrupty protection in 2008, less than a year after billionairedeveloper Sam Zell led an $8 billion leveraged buyout that left thecompany with $13 billion in debt.

Those involved in the 2008 LBO, including former Tribuneexecutives/directors/officers, are among the creditors' targets inprevious lawsuits. Other rank-and-file employees who gotcompensation related to the LBO are also targets for the litigation.These LBO-litigation could pick up now that Tribune Co. hasexited bankruptcy protection.

(C) Tronox

Closing arguments were held on Dec. 12 in a billion-dollarlawsuit of Tronox Inc. creditors against former Tronox parent,Kerr-McGee Corp., now a unit of Anadarko Petroleum Corp.

The plaintiffs are seeking $14 billion in damages. Tronoxclaims that the environmental liabilities Kerr-McGee left it whenthe company was spun off drove it into bankruptcy.

The trial in the lawsuit started in May later and ended inNovember. Judge Allan Gropper is expected to issue a ruling onthe matter in the coming weeks.

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Back in May 2009 when the lawsuit was filed, Tronoxcreditors alleged that Tronox was spun off from the parentcompany to shed off billion dollar environmental and retireeliabilities, resulting in Tronox to end up with unprofitable assets.

The U.S. government has since sided with Tronox's allegations.In May last year, charges have been dismissed as to AnadarkoPetroleum.

The lawsuit is Tronox Inc. v. Anadarko Petroleum Corp. (In reTronox Inc.), 09-1198 (S.D.N.Y.).

Delayed Exits From Chapter 11

After four years in bankruptcy, Tribune Co., finally exitedChapter 11 protection on Dec. 31, 2012, Julie Anne Lopez-Toledoreports.

The reorganization allowed a group of banks and hedge

funds, including Oaktree Capital Management and JPMorganChase & Co., to take over the media company, which filed forbankruptcy protection on December 8, 2008.

According to Tribune CEO Eddy Hartenstein, "Tribuneemerges from the bankruptcy process as a multi-media companywith a great mix of profitable assets, strong brands in majormarkets and a much-improved capital structure."

As part of its Chapter 11 exit, Tribune will receive a new $1.1billion loan to fund certain required payments under therestructuring plan, and a new $300 million credit facility forongoing operations, according to the company.

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Tribune will issue about 100 million shares of new stock toformer creditors, and new warrants to purchase shares of newstock.

"In accordance with our restructuring plan, Tribune'ssubsidiary creditors and vendors are receiving payment in full --100% recovery of what they are owed," Mr. Hartenstein said.

Tribune also announced its new board of directors thatincludes Mr. Hartenstein and Peter Liguori, former executive ofNews Corp. and Discovery Communications, who is expected tobe named CEO.

Besides Messrs. Hartenstein and Liguori, new directorsinclude Peter Murphy, Ross Levinsohn, Bruce Karsh, Ken Liangand Craig Jacobson.

Tribune said the new board planned to hold its first meeting"in the next several weeks." Mr. Hartenstein will remain CEO untilthe new board names a new management team.

Earlier, Tribune, which owns 23 television stations and eightdaily newspapers including Los Angeles Times and ChicagoTribune, has reportedly approached bankers about selling itspapers.

Veteran newspaper analyst John Morton, President ofMorton Research, estimated the Los Angeles Times could fetch$130 million at an auction while the Chicago Tribune could garner

$86 million in a sale.

Alan Mutter, a former newspaper editor who is now a mediaconsultant, said Tribune is likely to divest some or all publishingproperties, either individually or as a group.

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Tribune is expected to focus on building its TV operations.Horizon Media analyst Brad Adgate said WGN America, which isowned by Tribune, could expand its base by 20 million to 25million homes if it adds original programming to its lineup.

Tribune's TV operations are estimated to account for $2.85billion of its $7 billion valuation while its publishing assets areestimated to represent $623 million, according to a report byLazard, the company's financial adviser.

Other strategic assets, including the jobs websiteCareerBuilder and cable channel Food Network, were found to be

worth $2.26 billion.

In November 2012, Tribune received regulatory approvalfrom the Federal Communications Commission to transfer itsbroadcast licenses to its new owners. The FCC approved thelicense transfers and granted waivers so the company could keepnewspapers and nearby television stations in five markets.

The approval is one of the two steps Tribune needed toemerge from bankruptcy protection. In July, the companyobtained an order from the U.S. Bankruptcy Court for the Districtof Delaware, which confirmed the restructuring plan.

* * *

The Troubled Company Reporter provides detailed reporting

about every chapter 11 filing nationwide. Stay tuned to learn moreabout obtaining a trial subscription to the TCR at no cost orobligation.

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New Publicly Traded Securities

Psyche Maricon Castillon reports of six companies whoissued or will issue shares of new common stock upon

emergence pursuant to the plans of reorganization they filed intheir Chapter 11 cases in December 2012. These are: AhernRentals, Hawker Beechcraft, Homer City Funding, Global AviationHoldings, NewPage, and Ampal-American Israel.

(A) Ahern Rentals

Ahern Rentals filed with the U.S. Bankruptcy Court aChapter 11 Plan of Reorganization and related DisclosureStatement, which provide payment in full of each holder of an

Allowed Administrative Claim and an Allowed Priority Tax Claim.

The Bankruptcy Court overseeing Ahern Rental's case,however, terminated the debtor's exclusivity periods, allowingother parties, including creditors, to submit a reorganization plan

for the company after the judge determined that he saw noprogress in resolving flashpoints between the company and itscreditors. Creditors have consistently stressed the need forCompany CEO Don Ahern to at least surrender a substantialportion of his 97% ownership as part of a repayment package.

The Plan offers Term Lenders 20% on what the Debtorpreviously and reportedly has acknowledged as oversecuredTerm Loan Claims.The Plan offers the Second Lien

Noteholders(1) a $0.50 cash out offer or (2) an $18.5 million notebearing interest at 6% due in 7 years, and an unsecureddeficiency claim of $249.2 million. The deficiency claiminexplicably is classified separately from other general unsecuredcreditors and is offered a 7-year "plan payment obligation"accruing interest at 2%, with no cash payments for 5years, and_____________________________________________________________________________



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then cash interest payments for only 2 years. In contrast, thegeneral unsecured claims are offered a two-year payout withoutinterest and a waiver of avoidance actions if the Plan is accepted,or an amortizing five-year note at 2% interest if the Plan is not

accepted. As to interest rates, the Plan offers Senior SecuredNotes 4.25%, Junior Secured Notes 6%,0 while the most riskyunsecured claims are offered only 2%. Equity, however, ridesthrough unscathed and retains its full interests.

(B) Hawker Beechcraft

The U.S. Bankruptcy Court approved Hawker BeechcraftAcquisition Company's Disclosure Statement relating to itsAmended Joint Chapter 11 Plan of Reorganization and scheduleda January 31, 2013 confirmation hearing.

According to the Disclosure Statement, the Plan does notcontemplate the substantive consolidation of the Debtors' estates.Instead, the Plan, although proposed jointly, constitutes a

separate plan for each of the 18 Debtors in these Chapter 11Cases. Holders of Allowed Claims or Interests against each of theDebtors will receive the same recovery provided to other Holdersof Allowed Claims or Interests in the applicable Class and will beentitled to their share of assets available for distribution to suchClass. The feasibility of the Plan is premised upon, among otherthings, HBI's ability to achieve the goals of its long-rangebusiness plan, make the distributions contemplated under thePlan, and pay certain continuing obligations in the ordinary course

of Reorganized HBI's business.

Specifically, the plan offers 81.9% of new stock in return for$921 million of the $1.83 billion owing on the senior credit.Unsecured creditors are to receive the remaining 18.9% of thenew stock. Taking into account the distribution from their_____________________________________________________________________________



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unsecured deficiency claims, holders ofthe senior credit willreceive 86% of the new stock. The senior credit holders areprojected to have a 43.1% recovery from the plan, according tothe disclosure statement.

General unsecured creditors' recovery is a projected 5.7% to6.3%. The recovery by holders of $510 million in senior notes ispredicted to be 9.2% to 10%. The recovery by senior noteholdersis larger because they benefit from the subordination of $308million in subordinated notes. The subordinated noteholdersreceive nothing.

The aircraft manufacturer's emergence from bankruptcy willbe financed with a $530 million credit, consisting of a $330 millionterm loan and a $200 million revolving credit.

Total debt for borrowed money is $2.55 billion. Other claimsinclude pensions underfunded by $493 million.

The plan is supported by the official creditors' committee and

backed by a"substantial majority" of holders of the senior creditand a majority of holders of senior notes.

(C) Homer City Funding

The U.S. Bankruptcy Court approved Homer City Funding'sDisclosure Statement and confirmed its Plan of Reorganization.

The Plan transfers ownership to an entity controlled byGECC and MetLife. The new owner will issue new bonds inexchange for the existing bonds. The new bonds will be in aprincipal amount equal to the outstanding principal and unpaidinterest on the old bonds at the non-default rate. The new bondshave the same interest rates. Interest on the new bonds can be_____________________________________________________________________________



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paid by issuing more bonds through April 2014. The new bondshave the same maturities.

The limited liability company, which was formed as a special

purpose entity to issue existing bonds, filed for Chapter 11protection on November 6, 2012, listing $1.2 billion in assets.

(D) Global Aviation Holdings

The U.S. Bankruptcy Court confirmed Global AviationHoldings' First Amended Joint Plan of Reorganization and

simultaneously approved the global settlement between theDebtors, the ad hoc group of senior secured noteholders, thesecond lenders, the creditors' committee, the InternationalBrotherhood of Teamsters, the Air Line Pilots Association and theTransport Workers' Union.

The Company, which operates charter flights for the UnitedStates military through Air Mobility Command, filed for bankruptcy

on February 5, 2012, listing $690 million in total pre-petitionassets.

The Debtor negotiated the plan with senior lenders wheresecured noteholders owed $111.4 million were to receive 75%ownership of the reorganized company. Unsecured creditors andsecond-lien noteholders originally were to receive nothing.

Pursuant to a court-approved settlement:

* Second-lien creditors will receive stock appreciation rightswhere they will receive the value of 3% of the stock if thecompany is sold within five years. They will also receive warrantsto purchase 21% of the stock at exercise prices based on

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enterprise values ranging from $238.5 million to $363 million.Finally, second-lien creditors will split up $40,000.

* Unsecured creditors will divide $210,000 in cash.

* The estimated recovery by senior secured lenders isreduced to 75% from 78%. In addition to stock, senior securedcreditors will receive a new $40 million, five-year second-lien notebearing interest at 3% payable with more notes. The seniorcreditors will also receive whatever is left after a new $95 millionfirst-lien loan pays off about $91 million in financing for thereorganization.

* Incentive stock awards to company managers are reducedfrom10% of the stock to 6%.

(E) NewPage

NewPage received confirmation of its Fourth Amended Joint

Chapter 11 Plan and subsequently emerged from bankruptcy. Inconjunction with the Plan, NewPage closed on its exit financing,consisting of a $500 million term loan facility led by GoldmanSachs Lending Partners LLC and a $350 million revolving creditfacility led by J.P. Morgan Securities LLC.

The Chapter 11 Plan consists of 12 separate chapter 11Plans -- one Plan for each of the Debtors that will emerge as areorganized entity.

Under the Plan, first-lien creditors are in line for 56.6%recovery by receiving all the new stock in exchange for debtunder the confirmed plan. Second-lien noteholders and someunsecured creditors will recover on a pro rata basis from $30

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million in cash and the first $50 million collected by a litigationtrust.

Holders of $1.06 billion in second-lien debt are projected to

recover 5.9%. Depending on which election some creditorsmake, the recovery by holders of $29.3 million in unsecuredclaims is5.3%. Trade suppliers with $21.4 million in claims whoagree to provide credit in the future will receive 15% on theirclaims over two years. Holders of $207.9 million in seniorsubordinated debt are projected for a 0.2% recovery. After theinitial $50 million from the trust, additional distributions will beshared by the first- and second-lien noteholders and some

unsecured creditors.

NewPage will fund the litigation trust with $40 million in cashand specified lawsuit recoveries. NewPage is to loan the trust $5million to pay administrative expenses. The official creditors'committee supported the plan.

(F) Ampal-American Israel

Ampal-American Israel's official committee of unsecuredcreditors filed with the U.S. Bankruptcy Court a Chapter 11 Planand Disclosure Statement.

Pursuant to the Plan, distributions to holders of AllowedGeneral Unsecured Claims against the Debtor's Estate insatisfaction of each such holder's Claim will be the Pro Rata

share (after payment in Cash out of funds held in the Series BDeposit Account and the Series C Deposit Account) of either (i)100% of the Preferred Stock of the Reorganized Debtor or (ii) theCash Payment if the Equity Buyout Option is exercised. The fundsheld in the Series B Deposit Account and the Series C Deposit

Account, respectively, will be distributed Pro Rata to the holders_____________________________________________________________________________



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of the Series B and Series C Debentures, respectively. The Plandoes not provide for any distribution to Intercompany Claims,however, the Reorganized Debtor will have the right to adjust,reinstate, cancel, extinguish, or pay such claims.

Specifically, the Plan proposes to pay unsecured creditorsby giving them all of the new preferred stock with a total statedvalue equal to all unsecured claims. The stock will pay 5%dividends. Shareholders will retain existing common stock.Within 90 days of emergence from bankruptcy, creditors will havethe option of requiring the company to purchase the preferredstock for 75% of face value. If the so-called put is elected up until

the first anniversary of plan approval, the repurchase price is 65%of stated value. The company will have the right to buy thepreferred stock at the same prices.

* * *

That ends the Beard Group Corporate Restructuring Review

for December 2012, brought to you by the editors of the TroubledCompany Reporter and Troubled Company Prospector. If you'dlike to receive the Troubled Company Reporter for 30-days at nocost -- and with no strings attached -- call Nina Novak at (240)629-3300 or visit bankrupt-dot-com-slash-free-trial and we'll addyou 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 monthly Restructuring Review onFebruary 16th. Thank you for listening.

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beard corporate restructuring review for december 2012

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