Note 7 - Liabilities Subject to Compromise

9 Months Ended

Sep. 30, 2014

Liabilities Subject to Compromise [Abstract]

Liabilities Subject To Compromise [Text Block]

Note 7. Liabilities Subject to Compromise

As a result of the filing of the Prepackaged Case on August 6, 2014, the payment of pre-petition indebtedness is subject to compromise or other treatment under a plan of reorganization. Generally, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are stayed. Although payment of pre-petition claims generally is not permitted, the Court granted the Company authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Company’s businesses and assets.  Among other things, the Court authorized the Company to pay certain pre-petition claims relating to employee wages and benefits, customers, vendors, and suppliers in the ordinary course of business.

The Company has been paying and intends to continue to pay undisputed post-petition claims in the ordinary course of business. With respect to pre-petition claims, the Company has notified all known claimants of the deadline to file a proof of claim with the Court. The Company’s Liabilities subject to compromise represent the Company’s current estimate of claims expected to be allowed by the Court.

Pre-petition liabilities that are subject to compromise are required to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. The amounts currently classified as “Liabilities subject to compromise” may be subject to future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, or other events. Management expects that certain amounts currently classified as “Liabilities subject to compromise” may in fact be paid in the ordinary course as they come due. Any resulting changes in classification will be reflected in subsequent financial statements.

As of September 30, 2014, based on the Company’s current estimate of claims expected to be allowed by the Court, Liabilities subject to compromise consist of the following:

	September 30, 2014
Term Loan	$	1,129,478,741
Payment-in-kind loans		62,423,569
Interest payable		15,102,925
Total	$	1,207,005,235