beard group corporate restructuring review for january 2012

Beard Group Corporate Restructuring ReviewFor January 2012

Presented byBeard Group, Inc.

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

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

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Welcome to the Beard Group Corporate Restructuring Review for January 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.

January 2012 Mega Cases

Now, let's review the largest chapter 11 cases in 2012.

Danilo Muñoz reports that nine companies filed for Chapter 11 protection in January 2012 with assets in excess of $100 million. This reversed the downward trend in December 2011, in which only five bankruptcy mega cases were filed. During the same month last year, January 2011, there were six companies that filed for Chapter 11 with assets in excess of $100 million.

The average number of mega cases in 2011 is about 7 per month, compared to about 9 per month in 2010.

The largest Chapter 11 filing for January 2012 was filed by Hostess Brands, Inc., which disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Hostess sought Chapter 11 bankruptcy protection on Jan. 11 with the Bankruptcy Court for the Southern District of New York [Case Nos. 12-22051 through 12-22056] before Judge Robert Drain.

Founded in 1930, Irving, Texas-based Hostess Brands is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states.

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

The Chapter 11 filing was made about two years after its predecessor, Interstate Bakeries Corp. and affiliates, emerged from bankruptcy. The new owners of Hostess have pursued Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. Hostess' biggest unsecured creditor is the Bakery & Confectionary Union & Industry International Pension Fund, which it owes roughly $944.2 million.

The second largest Chapter 11 filing was by Sunnyvale, California-based Trident Microsystems, Inc., a developer of integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set-top boxes.

Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd., sought Chapter 11 protection on Jan. 4 with the Bankruptcy Court in Delaware [Lead Case No. 12-10069] before

Judge Christopher Sontchi. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011.

The third-largest filer was Coach America Holdings Inc., which filed to reorganize under Chapter 11 with the Bankruptcy Court in Delaware [Lead Case No. 12-10010] on Jan. 3. Coach America disclosed $274 million in assets and $402 million in liabilities as of Nov. 30, 2011.

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Coach America is the largest tour and charter bus operator and the second largest motorcoach service provider in the U.S. Coach America operates the second largest fleet in the U.S. with over 3,000 vehicles, including over 1,600 motorcoaches, primarily under the Coach America, American Coach Lines and Gray Line brands.

Coach America and its subsidiaries commenced a voluntary Chapter 11 reorganization to ensure its long-term competitiveness and continue providing service to its customers. According to a statement, the bankruptcy filing was made with a focus on reducing Company debt, and advancing the best interests of the Company and its stakeholders.

Meanwhile, the owner of parcels of land identified as Rancho Las Flores in Hesperia, California, filed a Chapter 11 petition on Jan. 19 with the Bankruptcy Court for the Central District of California [Case No. 12-10764]. The corporate entity, Rancho Las Flores LLC, disclosed $168.3 million in assets and liabilities of $58.1 million in documents attached to the petition. The company said the Rancho Las Flores is valued at $166.3 million.

Another large Chapter 11 filing was by Jazarco International LLC, aka Jazarco International Trust. The Apache Junction, Arizona-based company filed for Chapter 11 bankruptcy with the Bankruptcy Court for the District of Arizona [Case No. 12-00161] on Jan. 5 before Judge James M. Marlar. In its petition, Jazarco estimated $500 million to $1 billion in assets and $1 million to $10 million in debts.

Four other companies filed for Chapter 11 protection listing estimated assets and debts of $100 to $500 million. They are Buffets Inc., International Media Group Inc., JESCO Construction Corp., and Vegas Inc.

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Buffets Inc. is the largest steak-buffet

restaurant company in the U.S. operating 494 restaurants in 38 states. Buffets and all of its subsidiaries filed Chapter 11 petitions on Jan. 18, 2012, with the Bankruptcy Court for the District of Delaware [Lead Case No. 12-10237], after reaching a restructuring support agreement with 83% of its lenders. Together with its petition, Buffets also filed a pre-negotiated joint plan of reorganization and explanatory disclosure statement. Pursuant to the plan, Buffets will eliminate virtually all of its roughly $245 million of outstanding debt. Buffets is also seeking to reject leases for 83 underperforming restaurants. Buffets hopes to emerge from Chapter 11 within six months of the petition date.

Buffets previously filed for bankruptcy in 2008 and emerged in April 2009. Higher gasoline and energy costs, along with a decline in guest count, have hampered the Debtors' ability to service their long-term debt and caused a liquidity strain, forcing the Company to return to Chapter 11 bankruptcy.

International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, Calif.; KUAN-LP (Channel 48) Poway, Calif.; and KIKU-TV (Channel 19) Honolulu, Hawaii.

International Media Group and six affiliates filed Chapter 11 petitions with the Bankruptcy Court for the District of Delaware [Lead Case No. 12-10140] on Jan. 9 with the intent to sell their business as a going concern. NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. Unless outbid at the auction, the prepetition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume

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certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March.

Headquartered in Wiggins, Mississippi, Jesco Construction Corp., is a general contractor that specializes in disaster response and was part of the Hurricane Katrina cleanup. It filed for Chapter 11 bankruptcy with the Bankruptcy Court for the Southern District of Mississippi [Case No. 12-50014] on Jan. 5, 2012. Judge Katharine M. Samson presides over the case.

Detroit-based Vegas Inc., also known as Vegas Liquor, filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the Eastern District of Michigan [Case No. 12-40572] on Jan. 11, 2012, before Judge Steven W. Rhodes.

In addition to the Chapter 11 mega filings, Catalyst Paper Holdings Inc., sought Chapter 15 creditor protection with the Bankruptcy Court for the District of Delaware [Case No. 12-10219] on Jan. 17, 2012. The Company's balance sheet at Sept. 30, 2011, showed C$1.45 billion in total assets, C$1.31 billion in total liabilities, and C$135.60 million in shareholders' equity.

Buffets Inc.'s bankruptcy is the lone prepackaged mega-case this year. For 2011, 13 of the 83 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.

Two of the nine bankruptcy mega cases for January 2012 were engaged in manufacturing. The rest were engaged in construction, real estate, information, transportation, food services and other industries.

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For 2011, the manufacturing industry has the most Chapter 11 mega cases with 14, followed by the accommodation & food services industry with 12, finance & insurance with 9, information with 8, and retail trade and real estate with 7 each. The rest were dispersed throughout different industries.

In January 2012, four of the nine mega cases, or 44%, were filed in Delaware. The rest were distributed in the Southern District of New York, Arizona, Central District of California, Southern District of Mississippi, and the Eastern District of Michigan. However, the largest Chapter 11 filing -- Hostess Brands -- was filed with the Bankruptcy Court for the Southern District of New York.

For 2011, the Delaware Bankruptcy Court was favored by the bankruptcy mega cases with 38 filings made there, or 46% of the mega cases, followed by the Southern District of New York with 16 mega case filings, or 19%, and by the Northern District of Texas with 4 filings, or 5% of the mega cases.

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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.

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 four companies that may be close to filing for bankruptcy. These are: Residential Capital, Pinnacle Airlines, Wastequip Inc., and Sears Holdings.

(A) Residential Capital

A group of bond investors in Residential Capital Corp. have organized in case the mortgage lender's parent puts ResCap into bankruptcy protection. The Star Tribune reports that the investor group, which says it represents holders of more than $800 million of ResCap secured bonds, issued on Jan. 9, 2012, a statement saying that it has hired global law firm White & Case.

ResCap is a major mortgage lender that operates under the name GMAC Mortgage. It's owned by Ally Financial, a Detroit-based bank holding company partly owned by the U.S. government. Warren Buffett's Berkshire Hathaway Inc. is a major ResCap investor._____________________________________________________________________________


There have been several press reports indicating that Ally is considering pushing ResCap into Chapter 11 bankruptcy protection.

"A forced ResCap filing would be a big mistake and create significant litigation against Ally," says Gerard Uzzi, Esq., of White & Case as saying.

ResCap could end up in bankruptcy when and if Ally Financial stops funding.

Ally Financial said Feb. 1 it has concluded that it will record a charge of approximately $270 million in the fourth quarter of 2011. ResCap is required to maintain consolidated tangible net worth of at least $250 million at the end of each month under the terms of certain of its credit facilities. As a result of this charge, ResCap's tangible net worth was temporarily reduced to below $250 million as of Dec. 31, 2011. This was, however, immediately remedied by Ally through a capital contribution of approximately $196.5 million, which was provided through forgiveness of intercompany debt and results in pro-forma tangible net worth at ResCap of $300 million. Notwithstanding the immediate cure, the temporary reduction in tangible net worth resulted in a covenant breach in certain of ResCap's credit facilities. As a result, ResCap is currently seeking waivers from applicable lenders, which it expects to receive.

(B) Pinnacle Airlines

Pinnacle Airlines Corp. in January sent a letter to employees regarding its proposed restructuring program that began December.

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Pinnacle Airlines said it has presented a comprehensive turnaround plan to its Board of Directors. "From a liquidity perspective, we have been in active discussions with potential lenders and investors. From a cost perspective, our plan encompasses integration and synergy savings, partner contract changes and labor savings," Pinnacle said.

"The Board agreed with management's recommendations and proposed next steps. We have since met regularly and repeatedly with our airline partners, union leadership, potential investors and other parties. Our message has been very clear: we cannot continue to operate

businesses that are losing money. We do not have the cash to sustain it.

Pinnacle said it hopes to reach agreement with all of the necessary parties on the changes it needs to implement to ensure the Company's continued viability. The Company said it is possible it may ultimately undergo a court-supervised Chapter 11 process which many other airlines have used successfully in recent years.

Pinnacle Airlines Corp. [NASDAQ: PNCL -- http://www.pncl.com/ -- ] a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc.

Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. _____________________________________________________________________________


http://www.pncl.com/

Pinnacle Airlines reported $8.81 million on $938.05 million of total operating revenue for the nine months ended Sept. 30, 2011, compared with net income of $17.02 million on $729.13 million of total operating revenue for the same period a year ago.

The Company's balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets and $1.42 billion in total liabilities.

(C) Wastequip Inc.

Wastequip Inc. has secured an agreement with its senior lenders under which the lenders agreed to refrain from exercising any of their rights until March 6, giving the company more time to rework its balance sheet.

Wastequip is the largest manufacturer of waste handling and recycling equipment used to collect, process, and transport solid and liquid waste in North America. Revenues for the 12 months ending July 2, 2011, were roughly $335 million.

Wastequip failed to make an Oct. 17, 2011 mezzanine interest payment within the 30-day grace period, as provided by the original mezzanine credit agreement. Wastequip may default on other mezzanine interest payments over the next year, Moody's said in November 2011.

Moody's in November downgraded Wastequip's corporate family ratings to 'Ca' due to Wastequip's high leverage (over 15x on an adjusted basis) and upcoming debt maturities, including its $50 million senior secured revolver set to mature in February 2012 (roughly $49 million outstanding, including letters of credit) and its $330 million term loan maturing a year later.

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(D) Sears Holdings

Reports indicate that several lenders who finance small suppliers to retailers Sears and Kmart say they are pushing for more timely financial information and faster payment terms as they grow worried about the struggling retailer's future.

Report says Sears has been in talks with merchandise financiers to reassure them about the retailer's desire to meet its obligations and that it has adequate cash to operate the business. Sears was said to have talked with a number of its larger factors about a new financial approach after talking first with CIT Group Inc., a factor that pulled its funding amid uncertainties about Sears's financial condition. CIT was said to have reinstated its financing agreement.

Factors are financing firms that buy receivables from suppliers and collect the money from retailers once the goods are sold.

Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Illinois-based Sears Holdings Corp. to 'CCC+' from 'B'. S&P projects that Sears' EBITDA will be negative in 2012. S&P expects that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses.

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* * *

In addition to the challenged companies mentioned in Mr. Fernandez's report, the Troubled Company Reporter provides on-going reporting about more than 3,000 companies experiencing financial distress or restructuring their balance sheets in a judicial proceeding. Stay tuned to learn more about obtaining a trial subscription to the TCR at no cost or obligation.

Major Pending Disputes In Chapter 11 Cases

Next, we'll quickly review major pending disputes in two large chapter 11 cases that Troubled Company Reporter editors monitor day-by-day.

(A) Lehman Brothers

Ivy Magdadaro reports three major disputes in the bankruptcy case of Lehman Brothers: (1) the dispute with London-based Barclays Plc over the sale of Lehman broker unit; (2) the dispute with New York-based JP Morgan Chase over the bank's role in Lehman's 2008 collapse; and (3) the recent dispute with Bank of America Corp. and Barclays over an alleged breach of contract related to the Archstone deal.

Judge James Peck has granted Lehman authority to exercise its right of first offer to buy the stake of Bank of America and Barclays in apartment owner, Archstone. Lehman closed on the purchase of a $1.325 billion stake in Archstone on Jan. 20, raising its total stake in the apartment company to 73.5%.

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In December 2011, Lehman sued Bank of America and Barclays for breach of contract after the banks agreed to sell their 26.5% stake in Archstone to Sam Zell's Equity Residential. Judge Peck directed both camps to resolve their dispute. The bid to block the Equity Residential deal was then rejected in January after the bankruptcy court was not convinced that Lehman would face irreparable harm if the sale pushed through.

Archstone has ownership interests in numerous apartment developments in the U.S. and Germany. Lehman bought Archstone in 2007 in a $22 billion buyout through debt and equity financing from Bank of America and Barclays, which later became part owners when the buyout was restructured.

Meanwhile, Lehman's battle with Barclays related to the 2008 sale of its brokerage unit continues. The parties are expected to appear before Judge Richard J. Howell of the U.S. District Court for the Southern District of New York in February to defend their stands on certain appeals. Barclays and the Lehman broker unit trustee, James Giddens, are appealing Judge Peck's ruling that gave Barclays “only a conditional right” to $769 million in a reserve account, unless Mr. Giddens had enough to pay customers. Barclays is also appealing a February 2011 bankruptcy court ruling to return $2 billion in margin assets to Lehman. Judge Peck has also ordered Mr. Giddens to give Barclays at least $1.1 billion in clearance assets.

The third dispute involves Lehman and JPMorgan, one of its largest creditors. Lehman sued JPMorgan in May 2010 for allegedly siphoning $8.6 billion of assets in the days leading to the Lehman bankruptcy. JPMorgan countersued, accusing Lehman of owing $25 billion in claims it might never repay. Then, in October 2011, Lehman accused JPMorgan of mishandling the sale of more than $27 billion worth of securities before its collapse. Hoping to reduce or avoid the $6.3 billion claim from _____________________________________________________________________________


JPMorgan, Lehman said traders at its former bank made improper profits on the sales by selling securities to themselves at low prices and reselling to third parties at higher prices.

The $8.6 billion dispute continues as U.S. District Judge Richard Sullivan has deferred from making a decision on whether the lawsuit belongs in the district court, saying the federal bankruptcy judge must first rule on JPMorgan's bid to dismiss the case. No ruling has been entered on the matter as of press time.

(B) Tribune

In Tribune Co., the major dispute relates to the leverage buyout of the company in 2007. Creditors want to recover on alleged fraudulent conveyance claims. Lawsuits filed in 2010 relating to the matter though have been stayed while Tribune works at getting its bankruptcy plan confirmed. Two competing plans were submitted to the Court last year, one from Tribune and another from bondholders led by Aurelius Capital. Both plans were rejected. Tribune has filed an amended plan.

On Jan. 24, Judge Carey established a schedule for the resolution of the allocation disputes and confirmation of Tribune's Third Amended Joint Reorganization Plan.

* All initial requests for written discovery with respect to the Allocation Disputes were to be served by Jan. 20.

* All discovery on the Allocation Disputes should be completed by Feb. 17.

* March 5 will be the hearing on the Allocation Disputes.

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The Court is also scheduling the confirmation hearing to take place on May 16.

Eligible creditors will have until April 30 to submit their votes, and interested parties will also have until April 30 to file plan objections.

The Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P.; Angelo, Gordon & Co., L.P.; and JPMorgan Chase Bank, N.A. are plan proponents of the Tribune Plan.

Tribune had $13 billion in debt and $7.6 billion in assets when it filed for bankruptcy protection in 2008.

Delayed Exits From Chapter 11

Julie Anne Lopez-Toledo reports about four Chapter 11 debtors whose emergence from Chapter 11 has been delayed: Washington Mutual, Lehman Brothers, Tribune Co. and WR Grace.

(A) Washington Mutual

In Washington Mutual Inc.'s chapter 11 case, the company announced on January 13 the approval of its disclosure statement filed in connection with its proposed Seventh Amended Joint Plan of Reorganization.

Approval of the Disclosure Statement allows Washington Mutual to solicit approval of the Plan from its creditors and equity holders._____________________________________________________________________________


The company noted that the Plan contemplates distribution of more than $7 billion to parties-in-interest of the Debtors' estates. Washington Mutual believes that the value of its estate and recoveries for its creditors and equity holders will be maximized by the implementation of the Plan.

The Bankruptcy Court has set February 9, 2012, as the deadline for any eligible stakeholders to vote on the Plan; February 28, 2012 as the deadline for holders of preferred and common equity interests to submit certain elections with respect to the Plan; and February 29, 2012 as the deadline for holders of Dime Warrants to submit certain elections with respect to the Plan.

A hearing to confirm the Plan is scheduled to commence February 16, 2012.

Washington Mutual noted that it is seeking confirmation as soon as practicable in order to expedite the distribution of funds to stakeholders and hopes to emerge from chapter 11 by the end of February.

Washington Mutual's plan is based on a series of settlements among creditors, Washington Mutual, the Federal Deposit Insurance Corp. and JPMorgan Chase & Co., which bought Washington Mutual's banking unit for $1.9 billion in 2008.

Washington Mutual recently won approval to settle a dispute with investors who hold warrants related to a lawsuit against the U.S. government.

Investors who hold so-called litigation tracking warrants will be given almost 9% of the common stock of the only part of Washington Mutual that may survive the bankruptcy under the _____________________________________________________________________________


reorganization proposal -- a reinsurance company. The investors also would receive as much as $19 million from two potential pools of cash set up to pay different classes of creditors.

The warrants are tied to a successful lawsuit Washington Mutual inherited when it took over Dime Bancorp in 2002. Washington Mutual won the lawsuit, which related to the savings and loan crisis of the 1980s, against the U.S. government. A judge in the lawsuit awarded damages of at least $350 million.

Warrant holders claimed at least 85% of any award in the case was theirs. Judge Walrath ruled the holders were only entitled to common stock worth 85% of the eventual judgment, not any cash. Because Washington Mutual filed bankruptcy, the common stock may never be worth as much as the eventual cash award.

The warrant holders dropped their appeal of Judge Walrath’s ruling as part of the settlement.

Washington Mutual's attorney, Brian Rosen said, "The settlement ends an appeal related to the lawsuit and will free $337 million that had been held in reserve."

Mr. Rosen said the dispute had threatened to delay payments related to the company’s reorganization plan.

“Sometimes it’s better to settle than to fight,” Arthur Steinberg, Esq., an attorney for the warrant holders, said in court.

The Seattle-based company filed for bankruptcy on Sept. 26, 2008, the day after its banking unit was taken over by regulators and sold to JPMorgan.

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(B) Lehman Brothers

Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York granted a motion by Lehman Brothers Holdings Inc. to exercise its right of first offer to buy the stake of Bank of America Corp. and Barclays Plc in apartment owner, Archstone.

Lehman filed the motion after the banks struck a deal to sell 26.5% of Archstone to Sam Zell's Equity Residential and granted the latter an option to buy the second half of their stake in the apartment owner for $1.33 billion.

Lehman has the right of first offer to purchase the banks' stake pursuant to the terms of their agreement reached in December 2010. Lehman, which owns 47% of Archstone, had been hoping to buy the rest from the banks for $2.65 billion.

Lehman's bid to block Equity Residential from buying part of Archstone was rejected after it failed to convince the bankruptcy court that it would face irreparable harm if the sale pushed through.

Lehman, however, can match Equity Residential's offer, which would trigger an option allowing the latter to then buy the other half of the banks' stake. Lehman can match that offer also but would have to put up enough money to overcome a likely price increase.

Lehman was planning to use $1.33 billion in cash to buy the Archstone stake.

However, a move by Lehman to exercise its option will not necessarily resolve the battle since under Equity Residential's _____________________________________________________________________________


deal with the banks, it also has a right to buy their other 26.5% stake. If it does, Lehman can and is prepared to match that offer although it is not clear what price Equity Residential would offer for the other 26.5% stake.

Lehman is considering raising the money by bringing in an investor. It has been in talks with pension funds, including Canada's Caisse de depot et placement du Quebec and the Canadian Pension Plan Investment Board.

Archstone owns nearly 60,000 apartments in the U.S. and 14,000 in Germany. Lehman bought Archstone in 2007 in a $22 billion buyout through debt and equity financing from Bank of America and Barclays, which later became part owners when the buyout was restructured.

Lehman's investment in Archstone is reportedly worth between $16 billion and $17 billion, including $11 billion in debt.

Lehman obtained confirmation of its proposed Chapter 11 plan on December 6. Lehman was hoping for its confirmed Chapter 11 plan to be effective by the end of January.

Lehman filed for bankruptcy protection on September 15, 2008.

(C) Tribune

Tribune's Chief Restructuring Officer Don Liebentritt said in his memo to employees in January that it is possible the media company could emerge late in the third quarter of 2012.

The CRO made the statement in the wake of a January 11 status hearing whereby Judge Kevin Carey affirmed that he will _____________________________________________________________________________


consider confirmation of Tribune's Third Amended Joint Plan of Reorganization in May.

Mr. Liebentritt also said in the memo the Company intends to seek necessary Federal Communications Commission approval as "quickly as possible" after confirmation of the Plan.

During the Jan. 11 plan status hearing, Judge Carey asked rival groups in Tribune's Chapter 11 case to work out final scheduling details regarding confirmation of the Plan filed by Tribune and its debtor affiliates; the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P.; Angelo, Gordon & Co., L.P.; and JPMorgan Chase Bank, N.A.

Judge Carey said Tribune should face its final court fight over its bankruptcy-exit plan in May this year.

Tribune said it will still face a "significant time lag" between confirmation hearing in May and the ultimate effectiveness of the Third Amended Plan as a result of the required waivers and approvals from the Federal Communications Commission, according to papers filed with the Court before the status hearing.

At the status hearing, the Court considered the proposed schedules filed by the DCL Plan Proponents and Aurelius Capital Management, LP for resolution of the remaining allocation disputes and confirmation of the Third Amended DCL Plan.

Following discussion of the proposals, the Court established dates for the Allocation Disputes, Supplemental Disclosure Document and confirmation hearings and directed the parties to confer regarding the establishment of a scheduling order.

Judge Carey signed an Agreed Scheduling Order on Jan. 24, 2012._____________________________________________________________________________


A status conference relating to the Allocation Dispute Hearing will be held on February 28, 2012 or as soon as the Court's schedule will permit to plan for the Allocation Disputes Hearing and to resolve any open issues.

Parties have until April 30, 2012 to vote on the Plan and the Court will hold a confirmation hearing on May 16.

Tribune Co., which owns the Chicago Tribune, Los Angeles Times, WGN Ch. 9 and many other media properties, has been in bankruptcy since Dec. 8, 2008.

(D) W.R. Grace

Judge Ronald Buckwalter of the U.S. District Court for the District of Delaware affirmed in its entirety the order confirming W.R. Grace & Co. and its debtor-affiliates' Plan of Reorganization. All plan objections were denied.

"There comes a time when finality of litigation is needed. Having already been pending for twelve years, the time for finality has arrived in this case. Allowing otherwise would have detrimental effects for both Grace and its creditors, most especially the significant number of claimants suffering from deadly pleural disease," Judge Buckwalter said in his Memorandum Opinion dated Jan. 30.

Judge Judith Fitzgerald confirmed Grace's Plan a year ago. The Plan is co-proposed by the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Plan was among many exit plans filed by Grace and other parties in the bankruptcy case. The confirmed _____________________________________________________________________________


Plan was filed in September 2008 and underwent several amendments.

"This is another necessary step in emerging from Chapter 11," said Fred Festa, Chairman and CEO. "Two Federal courts have now ruled that our Joint Plan is fair to all parties."

"I am optimistic that the legal process related to our Joint Plan is coming to an end and we can emerge in the near future," said Mr. Festa. "It is time to put the Joint Plan into effect so that money can begin to flow to claimants who have been waiting for more than a decade to be compensated, and Grace can move forward as well. I look forward to Grace emerging from Chapter 11 as a vibrant, growing company with a great future."

The timing of Grace's emergence from bankruptcy depends on a number of factors, including whether there are further appeals to the Joint Plan, whether Grace may emerge with those appeals outstanding, and whether conditions to payments from third parties can be satisfied or waived.

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.

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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 January 2012. These are: Trailer Bridge, Lee Enterprises, Buffet Restaurants and Ener1.

(A) Trailer Bridge

Trailer Bridge filed for Chapter 11 protection mid-January. Trailer Bridge said its majority bondholders have agreed on a restructuring plan that could allow the U.S.-Puerto Rico carrier to emerge from bankruptcy by the end of March.

The company said Seacor Holdings and Whipporwill Associates, which represent more than 90% of Trailer Bridge’s 9.25% senior secured notes, agreed to finance a plan that will issue new debt and give existing bondholders 91% of company stock.

Under the plan submitted to U.S. Bankruptcy Court in Jacksonville, Florida, bondholders would receive a pro rata share of a newly issued $65 million debt instrument in addition to shares in the restructured company.

Seacor would become Trailer Bridge’s largest shareholder. Seacor owns and operates marine and industrial assets primarily serving the oil and gas, industrial aviation and marine transportation industries.

Seacor “intends to use its extensive maritime transportation experience to assist the company in implementing its strategy to

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return it to sustainable and profitable operations,” Trailer Bridge said in an announcement.

If the reorganization plan wins bankruptcy court approval, secured creditors and contract parties will receive full payment on their pre-filing claims and unsecured creditors will receive their pro rata distribution from the newly issued exit financing.

Current stockholders could receive a share of 9% of the reorganized company’s stock or a cash payment of 15 cents a share.

(B) Lee Enterprises

Lee Enterprises Inc., the owner of the St. Louis Post- Dispatch and 47 other daily newspapers, won court approval of a prepackaged reorganization plan 42 days after it filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware.

Affected creditors had voted in advance. The plan is intended to pay all creditors in full. In total, the plan deals with $1 billion of debt that otherwise would have matured in April.

The plan modifies and extends maturity of the remaining $127.6 million in 9.05% first-lien notes due April 2012, known as the Pulitzer notes. The plan raises the interest rate initially to 10.55%, increasing annually thereafter.

When the bankruptcy was filed, $548.2 million was owing on the term loan and $307.6 million on the revolving credit. The plan gives the lenders 15% of the stock plus a $689.5 million term loan, a $40 million revolving credit not expected to be drawn initially, and a $175 million term loan.

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Unsecured creditors will be paid in full, and shareholders will retain their stock. There is $10.6 million in trade debt, a court filing showed.

Based in Davenport, Iowa, Lee acquired Pulitzer Inc. in 2005 to gain control of the Post-Dispatch. In addition to 48 daily newspapers, Lee has 300 weekly publications and interests in four other dailies. Operations are in 23 states.

(C) Buffet Restaurants

Buffet Restaurants Holdings and 15 affiliated debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware.

The Company reached a restructuring agreement with senior lenders holding 83% of its senior debt. The deal will recapitalize the Company while eliminating virtually all of its roughly $245 million of outstanding debt. The recapitalization will provide the Company with resources to invest in its proven re-concepting program, as well as other restaurant and profitability improvement initiatives.

Along with its Chapter 11 petition, the Company filed a Joint Prepackaged Plan of Reorganization and related Disclosure Statement, which have been pre-negotiated with, and enjoys the full support of, the majority of the senior lenders.

As part of the restructuring plan, the Company expects to promptly close 81 underperforming restaurants, representing roughly 16% of its nearly 500 restaurants nationally. The Company has negotiated a $50 million debtor-in-possession loan from its existing lender base, which in addition to cash on hand and ongoing cash flow from operations, is expected to provide _____________________________________________________________________________


ample liquidity to meet normal operating costs during the restructuring process. The Company emerged from a previous bankruptcy in April 2009.

(D) Ener1

Ener1 filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York. The Company, which is a holding company for entities engaged in the research, development and production of rechargeable batteries and battery packs, is represented by Michael J. Venditto, Esq., of Reed Smith.

Concurrent with its petition, the Company filed with the Court a Joint Prepackaged Plan of Reorganization and related Disclosure Statement. The Company explains that its plan has been unanimously accepted by all impaired creditors.

The keystone of the Plan is the infusion of up to $81 million of new capital, which will reorganize the existing capital structure and support the continued operation of Ener1's subsidiaries. Aside from the restructured long-term debt held by the parties that have voted to accept the Plan, the claims of general unsecured creditors are unimpaired and will be paid by Ener1 in full pursuant to the Plan. All of Ener1's existing common stock will be cancelled and new equity will be issued to the provider of the postpetition and exit funding and to the long-term debt holders.

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That ends the Beard Group Corporate Restructuring Review for January 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-com-slash-free-trial.

Tune in to our next monthly Restructuring Review on March 16th. Thank you for listening.

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beard group corporate restructuring review for january 2012

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