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February 10, 2010
Arena Media Files for Chapter
11 to Sell Its Assets
Arena Media Networks LLC (AMN) filed for chapter 11 on
Monday in an attempt to divest its assets before losing the ability to
sell advertising at several professional sports venues, the Deal
Pipeline reported yesterday. AMN has agreed to sell its assets to
Access 360 Media Inc. as part of the chapter 11 filing it submitted with
the U.S. Bankruptcy Court for the Southern District of New York in
Manhattan. Under the proposed deal, AMN will transfer a majority of its
assets to New Arena LLC, an entity created by Access 360 Media. In
return, the new entity will assume all of AMN's executory contracts and
various liabilities and Access 360 Media will provide the company with
an $800,000 debtor-in-possession loan. AMN didn't list an exact
figure for Access 360 Media's bid, only noting that it will pay off the
DIP, assume certain liabilities and provide an unspecified amount of
cash to help wind down the estate and give a 'minimal distribution' to
remaining creditors.
href='http://pipeline.thedeal.com/tdd/ViewArticle.dl?id=10005387911'>Read
more. (Subscription required.)
Penton Media to Cut Debt
under Pre-packaged Chapter 11
Penton Media Inc. said yesterday that it would file a
pre-packaged chapter 11 to cut its debt by $270 million, Reuters
reported yesterday. The publisher of trade magazines and
industry-specific Web sites said that it would submit the filing in the
next few days. The company expects that it will finalize the capital
restructuring and emerge from chapter 11 within 30 to 45 days. Penton
also said that there will be no changes to its management or change in
control of the company and that it intends to operate its business as
usual throughout the restructuring. The restructuring agreement also
provides for an extension of the maturity on the company's senior
secured credit facility through 2014, according to Penton.
href='http://www.reuters.com/article/idUSSGE6180JK20100209'>Read
more.
Report: Global Default Rate
Falls in January
Moody's Investors Service reported yesterday that the
global junk bond default rate fell to 12.5 percent in January from a
revised 13 percent in December and will likely tumble to 3 percent
within a year, Reuters reported yesterday. Just eight of Moody's-rated
issuers defaulted in January, down from 24 a year earlier. Seven of last
month's defaults were from North American borrowers and one from Asia.
The U.S. junk bond default rate fell to 13.6 percent in January from a
revised 13.9 percent in December, while Europe's rate fell to 9.6
percent from a revised 10.3 percent, Moody's said. Moody's is
forecasting that the U.S. rate will fall to 3.4 percent a year from now,
while Europe's rate will likely decline to 2.5 percent.
href='http://www.reuters.com/article/idUSN0925001720100209'>Read
more.
Fed to Reveal Its Strategy
for Raising Interest Rates
Ben S. Bernanke, having survived a surprising
challenge to his second term as Federal Reserve chairman, now faces the
delicate task of beginning to pull the central bank out of its
extraordinary effort to prop up the economy, the New York Times
reported today. The main question is when and how the Fed should start
raising short-term interest rates, which have been at a record low for
more than a year. Related is the issue of how to manage, and eventually
shrink, the record $2.2 trillion balance sheet that the Fed amassed as
it pumped vast sums of money into the economy, starting in 2008. The Fed
today will release a statement outlining Mr. Bernanke
lang='EN'>’s views on moving away from its
exceptionally easy monetary policy. As a policy tool, Bernanke is
expected to consider a little-known mechanism
lang='EN'>— referred to as the interest
rate on excess reserves —
lang='RU'>that gives the Fed leverage over $1.1 trillion in bank
deposits. Most of those deposits were created as the Fed gobbled up
mortgage-backed securities and Treasury notes and bonds during the
financial crisis. The banks in turn parked the funds at the Fed as
reserves. In the months and years ahead, the Fed wants to make sure that
banks do not reduce their reserves too quickly, because it could create
inflationary pressures as banks step up their lending.
href='http://www.nytimes.com/2010/02/10/business/economy/10fed.html?ref=business&pagewanted=print'>Read
more.
Former Owners Balk at Lake Las Vegas
Bankruptcy-Exit Plan
Struggling Nevada resort development Lake Las Vegas is facing a
number of objections to its plan to exit bankruptcy under the control of
Texas investment firm Highland Capital Management, Dow Jones Daily
Bankruptcy Review reported today. Among those taking issue with the
massive resort and housing community's bid to exit bankruptcy is one of
the project's former owners, developer Ron Boeddeker of Los Angles-based
Transcontinental Corp. In court papers filed on Monday, lawyers for
Transcontinental blasted the plan as 'not confirmable,' claiming that
the bankruptcy case was being run for the benefit of the project's
lenders, including Credit Suisse Group and Highland. A key element of
Lake Las Vegas's bankruptcy plan is an agreement between lenders led by
Credit Suisse and the project's unsecured creditors to divvy up the
proceeds of any lawsuits against former owners Boeddeker and brothers
Sid and Lee Bass, of the wealthy Texas Bass family.
Refrigerant Exchange files for Chapter
11
Refrigerant recycling and reclamation company Refrigerant Exchange
Corp. has sought chapter 11 protection to shield its assets from
foreclosure efforts and plans to fund its estate with use of cash
collateral, the Deal Pipeline reported yesterday. The Irwindale,
Calif.-based company will seek interim cash collateral approval from
Bankruptcy Judge Richard M. Neiter on March 3. Refrigerant
Exchange collects and processes refrigerants to meet the U.S.
Environmental Protection Agency's targets for the reduction of
hydrochlorofluorocarbons (HCFCs). More recently, the company had moved
toward the mass accumulation of HCFCs so that it could take advantage of
anticipated price increases resulting from EPA restrictions that took
effect this year, according to court documents. Despite its bright
prospects, the company said that it was unable to either service or
refinance a portion of its debt obligations to its primary lender,
Pacific Mercantile Bank. When it eventually filed for chapter 11 on Jan.
29 to avoid foreclosure, it owed the bank $1.54 million.
href='http://pipeline.thedeal.com/tdd/ViewArticle.dl?id=10005387731'>Read
more. (Subscription required.)
Visteon, Creditors Extend
Talks over Plan to Exit Chapter 11
Visteon Corp. has pushed off until March a preliminary hearing on its
chapter 11 exit plan, buying time for potential financing sources to
conduct due diligence on the troubled maker of auto parts, Dow Jones
Daily Bankruptcy Review reported today. Unsecured creditors who
will be wiped out if the company's current chapter 11 plan goes through
have been trying to line up new money for another exit scheme for
Visteon. Term lenders who are owed $1.5 billion, a group that would get
Visteon under the existing chapter 11 plan, have cast doubt on whether
the company can find 'plan sponsors,' or investors willing to put up
enough money to float an alternative chapter 11 plan. In a pact approved
on Monday by a bankruptcy court, the company and its creditors
agreed to postpone consideration of Visteon's chapter 11 plan until
March 16.
Studio Tied to Saints
Dispute Ordered to be Liquidated
Bankruptcy Judge Elizabeth Magner yesterday
ordered into liquidation a defunct Louisiana movie studio tied to a $1.7
million dispute with New Orleans Saints players and coaches, the
Associated Press reported yesterday. Judge Magner issued the order after
being told talks with potential buyers of Louisiana Film Studios LLC had
not produced results and that the studio had ceased operations. In doing
so, Magner opened the way for a court-appointed trustee to track down
assets that could be used to at least partially pay the studio's
creditors, including Saints head coach Sean Payton and Drew Brees, the
most valuable player in Sunday's Super Bowl. Brees, Payton, former star
Archie Manning and a dozen other current and former Saints paid for what
they thought would be state movie industry tax credits. State officials
said that the studio never applied for the credits, which were supposed
to pay $1.33 for each dollar invested, and the money has not been
returned to the investors. The tax credit program is designed to
encourage development of the movie industry in Louisiana.
href='http://www.washingtonpost.com/wp-dyn/content/article/2010/02/09/AR2010020902902_pf.html'>Read
more.
Two Firms Settle Pension
'Pay-to-Play' Probe
Markstone Capital Group LLC will return $18 million
and Wetherly Capital Group LLC and its broker-dealer DAV/Wetherly
Financial will return $1 million to the New York state public pension
fund as part of an agreement in a 'pay-to-play' investigation, the
Wall Street Journal reported today. Both firms will adopt New
York Attorney General Andrew Cuomo's public pension fund 'code of
conduct,' and California-based Wetherly agreed to exit from the
placement agent business. The code includes a ban on the use of
placement agents—
lang='RU'>financial middlemen—
lang='RU'>and lobbyists, and places restrictions on campaign
contributions to officials who can influence investment
decisions.
href='http://online.wsj.com/article/SB10001424052748703615904575053774008787964.html?mod=WSJ_business_IndustryNews_DLW'>Read
more. (Subscription required.)
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