Вы находитесь на странице: 1из 75

David Neier (DN 5391)

Carey D. Schreiber (CS 3896)


WINSTON & STRAWN LLP
200 Park Avenue
New York, New York 10166
Telephone: (212) 294-6700
Facsimile: (212) 294-4700

and

Mark K. Thomas (pro hac vice pending)


Daniel McGuire (pro hac vice pending)
Mindy D. Cohn (pro hac vice pending)
WINSTON & STRAWN LLP
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: (312) 558-5600
Facsimile: (312) 558-5700

Proposed Counsel to the Debtors and Debtors in


Possession

UNITED STATES BANKRUPTCY COURT


SOUTHERN DISTRICT OF NEW YORK

)
In re: ) Chapter 11
)
Ziff Davis Media Inc., et al.,1 )
) Case No. 08-__________(___)
Debtors. ) Jointly Administered
)

MOTION OF THE DEBTORS FOR AN ORDER AUTHORIZING THE DEBTORS


TO REJECT A CERTAIN UNEXPIRED LEASE OF NONRESIDENTIAL
REAL PROPERTY EFFECTIVE AS OF THE PETITION DATE

The above-captioned debtors (collectively, the “Debtors”) hereby move the Court,

pursuant to this motion (this “Motion”), for the entry of an order, substantially in the form

attached hereto as Exhibit A, authorizing the Debtors to reject a certain unexpired lease of

1 The Debtors in these cases include: Ziff Davis Media Inc.; Ziff Davis Development Inc.; Ziff Davis Holdings Inc.; Ziff Davis Intermediate
Holdings Inc.; Ziff Davis Internet Inc.; Ziff Davis Publishing Inc.; and Ziff Davis Publishing Holdings Inc.

CHI:2041833.8
nonresidential real property effective as of the Petition Date (as defined herein). In support of

this Motion, the Debtors respectfully state as follows:

Jurisdiction

1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).

2. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

3. The statutory bases for the relief requested herein are sections 105(a) and 365(a)

of the Bankruptcy Code, 11 U.S.C. §§ 101–1532 (the “Bankruptcy Code”), Rules 6006 and 9019

of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rule 6006–1 of the

Local Rules for the United States Bankruptcy Court for the Southern District of New York

(the “Local Bankruptcy Rules”).

Background

4. On the date hereof (the “Petition Date”), each of the Debtors filed a voluntary

petition for relief with the Court under chapter 11 of the Bankruptcy Code. The Debtors are

operating their businesses and managing their property as debtors in possession pursuant to

sections 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment of a trustee

or examiner has been made in these chapter 11 cases. No official committees have been

appointed or designated.

5. The Debtors’ corporate and capital structures are not complicated. Debtor Ziff

Davis Media Inc. (“Ziff Davis Media”) is the principal operating company among a group of

affiliated companies that includes each of the Debtors and foreign non-Debtor affiliates

(collectively, the “Company”). Ziff Davis Media owns the Company’s principal assets and is

obligor with respect to the Company’s principal liabilities. Ziff Davis Media is the issuer of the

following notes: (a) $205 million of senior secured floating rate notes due 2012 (the “Senior

CHI:2041833.8
Secured Floating Rate Notes”); (b) $20.6 million of additional secured notes due 2012 (together

with the Senior Secured Floating Rate Notes, the “Senior Secured Notes”); (c) $152.5 million of

senior subordinated compounding notes due 2009; and (d) $12.3 million of 12% senior

subordinated notes due 2010. The Senior Secured Notes are secured by substantially all of the

Debtors’ assets. The other Debtors (other than Ziff Davis Intermediate Holdings, Inc.)

guaranteed all of the note obligations.

6. As set forth in the First Day Affidavit,2 the Debtors and their non-debtor affiliates

are an integrated media company serving the technology and videogame markets. The Debtors

provide comprehensive labs-based review, purchasing recommendations, and analysis of certain

technology and videogame products to over 26 million individuals each month through their

portfolio of 16 websites, three (3) award-winning magazines, and direct marketing services.

7. The Debtors historically managed their business through three (3) segments: the

PCMag Network; the Enterprise Group; and the 1UP Network. In July 2007, the Debtors sold

the Enterprise Group to Enterprise Media Group, Inc., an unrelated party formed by Insight

Venture Partners, for an aggregate cash purchase price of approximately $150 million.3 The

Debtors continue to provide technology and videogame product review services through the

PCMag Network and 1UP Network. As of December 31, 2007, the Debtors had approximately

266 employees. Additionally, as of December 31, 2007, the Debtors' books reflected debt

obligations of approximately $500 million and assets (including goodwill) of approximately

$313 million.

2 The facts and circumstances supporting this Motion are set forth in the Affidavit of Mark D. Moyer, Chief Restructuring Officer of Ziff
Davis Media Inc. in Support of First Day Motions (the "First Day Affidavit"), filed contemporaneously herewith.

3 The net sale proceeds in the amount of approximately $118.7 million (net of fees and expenses) are currently being held in a segregated
account.

CHI:2041833.8
8. The publishing business of ZD Inc., the Debtors' predecessor, reached its apex in

both size and profitability during the Internet-based business boom of the late 1990s. During this

period, those publishing assets generated average annual revenues of approximately $500 million

and cash earnings margins in excess of twenty percent.

9. Beginning in 2000, the factors that had caused the growth of Internet-based

businesses during the late 1990s deteriorated. Such deteriorating conditions negatively impacted

the Debtors’ business. As conditions for Internet-based businesses worsened, certain technology

firms were not able to remain in business and liquidated. The liquidation of these technology

firms reduced the number of actual and potential companies whose products were or could be

advertised in the Debtors’ magazines and eliminated the market for certain of the Debtors'

magazines. As a result, the Debtors experienced declining advertising revenues and were forced

to discontinue publishing a number of magazines. The Debtors' print advertising revenues

decreased from $215 million in 2001 to $40 million in 2007.

10. In addition, during this period, the Debtors suffered decreasing revenues from

subscriptions to their print magazines. As the Internet became a more widely utilized

information medium, many of the Debtors’ print magazine subscribers began to move away from

print, and towards Internet, publications to obtain their technology and videogame purchasing

information. The Debtors’ highly leveraged capital structure prevented them from developing

sufficient Internet publications in a timely manner to satisfy their subscribers’ demands.

11. As a result of declining advertising and subscription revenues, the Debtors

experienced a decline in total annual revenues from approximately $300 million in 2001 to

approximately $76 million in 2007. The cumulative effect is that the Debtors are unable to

CHI:2041833.8
generate sufficient cash flow to fund their substantial existing debt obligations and, therefore,

need to restructure their balance sheet.

12. As a critical first step in their restructuring efforts, the Debtors reached an

agreement with an ad hoc group of holders of more than eighty percent (80%) in principal

amount of the Senior Secured Floating Rate Notes on the terms of a plan of reorganization that

would substantially reduce the Debtors’ funded indebtedness. That agreement is embodied in a

Restructuring, Settlement and Plan Support Agreement (the "Restructuring Agreement") and will

be set forth in a chapter 11 plan of reorganization that the Debtors intend to file in the very near

future.

13. Specifically, the Restructuring Agreement provides that, in exchange for the full

amount outstanding under the $225,000,000 in principal amount of Senior Secured Notes, the

holders thereof will receive (a) the balance of certain net proceeds due to the Debtors from the

Company's 2007 sale of its Enterprise Group (the "Enterprise Sale"), (b) a new $50,000,000

senior secured note, which may, under certain circumstances, be increased to $55,000,000, and

(c) 88.8% of the new common equity of the reorganized Debtors upon emergence from chapter

11 (subject to dilution). The Restructuring Agreement also provides that the holders of the

Senior Secured Notes will allow the Debtors to retain sufficient cash proceeds from the

Enterprise Sale to fund operations during these chapter 11 cases as well as to fund the

Company's business plan and operations after emergence from chapter 11. The Debtors filed

these proceedings in order to effectuate the terms of the restructuring contemplated by the

Restructuring Agreement.

The Lease

14. On July 29, 1998, ZD Inc. entered into a lease attached hereto as Exhibit B

(the “Lease”) with CEP Investors VI, L.P. (the “Lessor”) for certain commercial office space

CHI:2041833.8
located at 800 Jorie Boulevard, Oak Brook, Illinois 60523 (the “Premises”). In 2000, the

Debtors assumed the Lease from ZD Inc., thereby becoming tenants under the Lease. The

Debtors conducted certain of their advertising, sales, editorial writing, product testing, and

subscription management operations on the Premises. By its terms, the Lease expires on

December 31, 2008.

15. In 2002, in an effort to reduce their costs and increase earnings, the Debtors

restructured and consolidated certain of their operations. In connection with such consolidation,

the Debtors moved all the operations conducted on the Premises to the Debtors’ San Francisco

office. As a result, the Debtors have vacated and no longer maintain any assets on the Premises.

16. In connection with exiting the Premises, the Debtors commenced negotiations

with the Lessor with respect to termination of the Debtors’ obligations under the Lease. Such

negotiations have proven unsuccessful. As a result, the Debtors arguably continue to maintain

obligations under the Lease, including monthly rental payment obligations of approximately

$50,000.

17. The Debtors believe that as they no longer utilize the Premises in connection with

their operations, the Lease provides no benefit to the Debtors and constitutes a drain on the

Debtors’ estates. Accordingly, the Debtors submit that rejection of the Lease as of the Petition

Date is in the best interest of the Debtors, their estates, and their creditors.

Relief Requested

18. By this Motion, the Debtors seek authority to reject the Lease effective as of the

Petition Date.

CHI:2041833.8
Basis for Relief

A. Rejection of the Lease Reflects the Debtors’ Sound Business Judgment.

19. Section 365(a) of the Bankruptcy Code provides that a debtor in possession

“subject to the court’s approval, may … reject any executory contract or unexpired lease of the

debtor.” 11 U.S.C. § 365(a). Section 365(a) “allows a [debtor] to relieve the bankruptcy estate

of burdensome agreements which have not been completely performed.” Stewart Title Guar. Co.

v. Old Republic Nat’l Title Ins. Co., 83 F.3d 735, 741 (5th Cir. 1996) (quoting In re Murexco

Petroleum, Inc., 15 F.3d 60, 62 (5th Cir. 1994)).

20. The Debtors’ rejection of an executory contract or unexpired lease is governed by

the “business judgment” standard. See In re Enron Corp., No. 01–16034, 2006 WL 898033,

at *4 (Bankr. S.D.N.Y. Mar. 24, 2006) (“In determining whether to approve a [debtor’s] decision

to reject such lease or contract, a court applies the ‘business judgment’ test which is met if the

rejection is beneficial to the estate.”); In re Ames Dep’t Stores, Inc., 306 B.R. 43, 51 (Bankr.

S.D.N.Y. 2004); see also In re Orion Pictures Corp., 4 F.3d 1095, 1098–99 (2d Cir. 1993).

21. Rejection should be approved under section 365(a) where a debtor has determined

in its business judgment that rejection of a lease is in the best interest of its creditors and parties

in interest. See In re Bradlees Stores, Inc., 194 B.R. 555, 558 n.1 (Bankr. S.D.N.Y. 1996),

appeal dismissed, 210 B.R. 506 (S.D.N.Y. 1997); In re Summit Land Co., 13 B.R. 310, 315

(Bankr. D. Utah 1981) (“[C]ourt approval [of rejection] under Section 365(a), if required, except

in extraordinary situations, should be granted as a matter of course.”). Thus, rejection of the

Lease is appropriate if, in the Debtors’ business judgment, rejection would benefit their estates.

See Orion Pictures, 4 F.3d at 1099; In re Stable Mews Assocs., Inc., 41 B.R. 594, 596 (Bankr.

S.D.N.Y. 1984) (holding that the business judgment test requires only that a debtor demonstrate

that rejection of a lease will benefit the estate).

CHI:2041833.8
22. The Debtors’ decision to reject the Lease is clearly an exercise of their business

judgment. The Lease is not a source of potential value for the Debtors’ estates, creditors, or

interest holders. The Debtors have not conducted any operations at the Premises in more than

five years and have no intention to do so in the future. Moreover, rejection of the Lease will

provide the Debtors with approximately $600,000 in annual cost-savings. Accordingly, the

Debtors have determined that the Lease constitutes an unnecessary drain on the Debtors’

resources and, therefore, rejection of the Lease reflects the Debtors’ exercise of sound business

judgment.

B. The Court Should Deem Rejection of the Lease Effective as of the Petition Date.

23. The Debtors also respectfully submit that it is appropriate for the Court to order

that the Petition Date is the effective date of rejection of the Lease.

24. Although section 365 of the Bankruptcy Code does not specifically address

whether the Court may order rejection to be effective retroactively, courts in this district and

other districts have held that bankruptcy courts may, in their discretion, authorize rejection

retroactive to a date prior to entry of the authorizing order. See, e.g., BP Energy Co. v.

Bethlehem Steel Corp., No. 02–6419, 2002 WL 31548723, at *3 (S.D.N.Y. Nov. 15, 2002)

(affirming bankruptcy court’s approval of retroactive rejection); In re Jamesway Corp., 179 B.R.

33, 36–37 (S.D.N.Y. 1995) (stating that section 365 does not include “restrictions as to the

manner in which the court can approve rejection”); see also In re At Home Corp., 392 F.3d 1064,

1065–66 (9th Cir. 2004) (affirming bankruptcy court’s approval of retroactive rejection), cert.

denied sub nom., Pac. Shores Dev., LLC v. At Home Corp., 546 U.S. 814 (2005); In re CCI

Wireless, LLC, 297 B.R. 133, 140 (D. Colo. 2003) (holding that “because section 365 does not,

as a matter of law, prohibit selection of a retroactive date for rejection, the bankruptcy court has

CHI:2041833.8
authority under section 365(d)(3) to set the effective date of rejection at least as early as the

filing of the motion to reject.”); In re Thinking Machs. Corp., 67 F.3d 1021, 1028 (1st. Cir. 1995)

(“[B]ankruptcy courts may enter retroactive orders of approval, and should do so when the

balance of equities preponderates in favor of such remediation.”).

25. The balance of equities favors the relief requested herein. Without a retroactive

date of rejection, the Debtors will be forced to incur unnecessary administrative expenses for the

Lease – an obligation that provides no corresponding benefit to the Debtors’ estates. See

11 U.S.C. § 365(d)(3). The Lessor, on the other hand, will be able to mitigate any damages it

may suffer as a consequence of this rejection. The Lessor will be relieved of its own obligations

under the Lease, and will be able to relet the premises to a different tenant.

26. The Lessor will not be unduly prejudiced if the rejection is deemed effective as of

the Petition Date. The Lessor received a copy of this Motion and the notice of hearing served in

conjunction with the Debtors' first day motions. Contingent upon entry of the attached proposed

order (the "Order"), the Debtors will serve notice of entry of the Order on the Lessor, in

substantially the form attached hereto as Exhibit C together with a copy of the Order. The

Debtors propose that the Lessor will have fifteen days from the date of entry of the Order (the

"Objection Period") within which to file an objection. If an Objection is filed, the Debtors will

schedule it to be heard at the next regularly scheduled omnibus hearing. The Debtors request

that if the Lessor does not file a timely objection within the Objection Period, the Order will

become a final order without the need for further order of the Court.

27. Accordingly, the Lessor will have sufficient notice and an opportunity for a

hearing.

CHI:2041833.8
28. Courts in this and other districts have authorized similar relief. See e.g., In re

Calpine Corp., Case No. 05–60200 (Bankr. S.D.N.Y. Dec. 21, 2005) (authorizing rejection of

nonresidential real property leases effective as of petition date); In re Tower Auto., Inc., Case

No. 05–10578 (Bankr. S.D.N.Y. Feb. 3, 2005) (same); In re Cornerstone Propane, L.P., Case No.

04–13856 (Bankr. S.D.N.Y. June 10, 2004) (same); In re Spiegel, Inc., Case No. 03–11540

(Bankr. S.D.N.Y. Mar. 18, 2007); see also In re Movie Gallery, Inc., Case No. 07–33849 (Bankr.

E.D. Va. Oct. 17, 2007); In re Kmart Corp., Case No. 02–02474 (Bankr. N.D. Ill. Jan. 25, 2002);

In re US Airways Group, Inc., Case No. 02–83984 (Bankr. E.D. Va. Aug. 12, 2002).

29. The Debtors respectfully submit that it is fair and equitable for the Court to find

that the Lease is rejected as of the Petition Date..

Memorandum of Law

30. This Motion includes citations to the applicable authorities and a discussion of

their application to this Motion. Accordingly, the Debtors respectfully submit that such citations

and discussion satisfy the requirement that the Debtors submit a separate memorandum of law in

support of this Motion pursuant to Local Bankruptcy Rule 9013–1.

Notice

31. The Debtors have provided notice of this Motion to: (a) the Lessor, (b) the Office

of the United States Trustee for the Southern District of New York; (c) the entities listed on the

Consolidated List of Creditors Holding the 30 Largest Unsecured Claims filed pursuant to

Bankruptcy Rule 1007(d); (d) counsel to the ad hoc committee of certain holders of the Debtors’

senior secured floating rate notes; (e) counsel to the ad hoc committee of certain holders of the

Debtors’ senior subordinated compounding notes; (f) the Internal Revenue Service; (g) the

Securities and Exchange Commission; and (h) the banks that process disbursements in the

10

CHI:2041833.8
Debtors’ cash management system. In light of the nature of the relief requested, the Debtors

respectfully submit that no further notice is necessary.

WHEREFORE, for the reasons set forth herein and in the First Day Affidavit, the

Debtors respectfully request that the Court enter an order, substantially in the form attached

hereto as Exhibit A, (a) authorizing the Debtors to reject a certain unexpired lease of

nonresidential real property effective as of the Petition Date, and (b) granting such other and

further relief as is just and proper.

Dated: March 5, 2008 /s/ Carey D. Schreiber


New York, New York David Neier (DN 5391)
Carey D. Schreiber (CS 3896)
WINSTON & STRAWN LLP
200 Park Avenue
New York, New York 10166
Telephone: (212) 294-6700
Facsimile: (212) 294-4700

and

Mark K. Thomas (pro hac vice pending)


Daniel McGuire (pro hac vice pending)
Mindy D. Cohn (pro hac vice pending)
WINSTON & STRAWN LLP
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: (312) 558-5600
Facsimile: (312) 558-5700

Proposed Counsel to the Debtors and Debtors


in Possession

11

CHI:2041833.8
EXHIBIT A

CHI:2041833.8
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

)
In re: ) Chapter 11
)
Ziff Davis Media Inc., et al.,1 )
) Case No. 08-__________(___)
Debtors. ) Jointly Administered
)

ORDER AUTHORIZING THE DEBTORS TO REJECT A CERTAIN UNEXPIRED


LEASE OF NONRESIDENTIAL REAL PROPERTY EFFECTIVE
AS OF THE PETITION DATE

Upon the motion (the “Motion”)2 of the above-captioned debtors (collectively, the

“Debtors”) for the entry of an order authorizing the Debtors to reject a certain unexpired lease of

nonresidential real property effective as of the Petition Date and the First Day Affidavit; the

Lessor having received adequate notice of the Motion; it appearing that the relief requested is in

the best interests of the Debtors’ estates, their creditors, and other parties in interest; the Court

having jurisdiction to consider the Motion and the relief requested therein pursuant to

28 U.S.C. §§ 157 and 1334; consideration of the Motion and the relief requested therein being a

core proceeding pursuant to 28 U.S.C. § 157(b); venue being proper before this Court pursuant to

28 U.S.C. §§ 1408 and 1409; and after due deliberation and sufficient cause appearing therefor,

it is hereby ORDERED that

1. The Motion is granted as set forth herein.

2. The Lease attached as Exhibit B to the Motion is hereby rejected effective as of

the Petition Date.

1 The Debtors in these cases include: Ziff Davis Media Inc.; Ziff Davis Development Inc.; Ziff Davis Holdings Inc.; Ziff Davis Intermediate
Holdings Inc.; Ziff Davis Internet Inc.; Ziff Davis Publishing Inc.; and Ziff Davis Publishing Holdings Inc.

2 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Motion.

CHI:2041833.8
3. The entry of this Order is conditional as set forth in this paragraph. Within one

business day of the date of entry of this Order, the Debtors shall serve the Notice and a copy of

the Order via overnight mail and facsimile transmission to the Lessor. The Lessor shall have

fifteen days from the date of entry of this Order (the “Objection Period”) to file an objection (the

"Objection") to the relief granted herein. The Objection must be in writing, filed with the Clerk

of the Court, served upon the Debtors' counsel on or before the expiration of the Objection

Period and state with particularity the basis for the Objection. The Objection, if any, will be

scheduled to be heard at the next regularly scheduled omnibus hearing. If no timely Objection is

filed (or such Objection is filed and subsequently resolved or withdrawn) this Order shall

become final at the conclusion of the Objection Period without further order of the Court.

4. The modification or vacation of this Order shall not impair any action taken in

reliance on the Order and prior to its modification or vacation.

5. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order.

6. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry.

7. All time periods set forth in this Order shall be calculated in accordance with

Bankruptcy Rule 9006(a).

8. The requirement set forth in Local Bankruptcy Rule 9013–1(b) that any motion or

other request for relief be accompanied by a memorandum of law is hereby deemed satisfied by

the contents of the Motion or otherwise waived.

CHI:2041833.8
9. The Court retains jurisdiction with respect to all matters arising from or related to

the implementation of this Order.

Date: ______________, 2008


New York, New York United States Bankruptcy Judge

CHI:2041833.8
EXHIBIT B

CHI:2041833.8
EXHIBIT C

CHI:2041833.8
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

)
In re: ) Chapter 11
)
Ziff Davis Media Inc., et al.,1 )
) Case No. 08-__________(___)
Debtors. ) Jointly Administered
)

NOTICE OF ORDER AUTHORIZING THE DEBTORS TO REJECT THE LEASE


WITH RESPECT TO THE PROPERTY LOCATED AT 810 JORIE BOULEVARD
EFFECTIVE AS OF THE PETITION DATE

PLEASE TAKE NOTICE THAT, on March 5, 2008 (the “Petition Date”), the above-
captioned debtors (collectively, the “Debtors”) each filed voluntary petitions commencing cases
under chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”), in
the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”).

PLEASE TAKE FURTHER NOTICE THAT, on the Petition Date, the Debtors filed
the Motion of the Debtors for an Order Authorizing the Debtors to Reject a Certain Unexpired
Lease of Nonresidential Real Property Effective as of the Petition Date [Docket No. __] (the
“Motion”). On [March __, 2008], the Bankruptcy Court entered the Order Authorizing the
Debtors to Reject a Certain Unexpired Lease of Nonresidential Real Property Effective as of the
Petition Date [Docket No. __] (the “Order”). A copy of the Order is attached hereto.

PLEASE TAKE FURTHER NOTICE THAT objections or responses to the relief


requested in the Motion, if any, must be made in writing and filed with the Bankruptcy Court and
served on the Debtors' counsel Winston & Strawn LLP, 35 West Wacker Drive, Chicago, Illinois
60601 (Attn: Mark K. Thomas and Daniel J. McGuire) so as to be actually received by counsel
on or before [March __, 2008, at 4:00 p.m.], prevailing Eastern time. In addition, such
objections or responses, if any, must state with particularity the basis for such objection or
response. If an objection or response is filed, the matter will be scheduled to be heard at the next
regularly scheduled omnibus hearing.

1 The Debtors in these cases include: Ziff Davis Media Inc.; Ziff Davis Development Inc.; Ziff Davis Holdings Inc.; Ziff Davis Intermediate
Holdings Inc.; Ziff Davis Internet Inc.; Ziff Davis Publishing Inc.; and Ziff Davis Publishing Holdings Inc.

CHI:2041833.8
PLEASE TAKE FURTHER NOTICE THAT if no objection to the Motion is timely
filed, served and received in accordance with the Order and as described generally in this
notice, the Bankruptcy Court may grant the relief requested in the Motion on a final basis
without further notice or hearing.

Dated: [March __, 2008]


New York, New York David Neier (DN 5391)
Carey D. Schreiber (CS 3896)
WINSTON & STRAWN LLP
200 Park Avenue
New York, New York 10166
Telephone: (212) 294-6700
Facsimile: (212) 294-4700

and

Mark K. Thomas (pro hac vice pending)


Daniel McGuire (pro hac vice pending)
Mindy D. Cohn (pro hac vice pending)
WINSTON & STRAWN LLP
35 West Wacker Drive
Chicago, Illinois 60601
Telephone: (312) 558-5600
Facsimile: (312) 558-5700

Proposed Counsel to the Debtors and Debtors


in Possession

CHI:2041833.8