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/raid1/www/Hosts/bankrupt/TCR_Public/100902.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 2, 2010, Vol. 14, No. 243 Headlines 2001 PROPERTIES: Case Summary & 20 Largest Unsecured Creditors AIMS WORLDWIDE: Posts $2.36-Mil. Net Profit in 1st Half of 2010 AMBAC FINANCIAL: Investors Seek to End Fraudulent Asset Move AMBASSADORS INTERNATIONAL: Nasdaq Grants Continued Listing Request AMERICAN CASINO: Moody's Gives Negative Outlook, Keeps B3 Ratings AMERICAN INT'L: Taiwan Rejects Nan Shan Sale to HK Consortium BEACHES HOSPITALITY: Voluntary Chapter 11 Case Summary BERNARD MADOFF: Trustee Settles Dispute Over Feeder Fund Cash BIOLASE TECHNOLOGY: Board Chair to Serve as Interim CEO BONANZA OIL: Posts $682,200 Loss in Q2; Says Bankruptcy Possible CAPCO GROUP: IRS Files $432,724 Claim for Unpaid Biz. Taxes CASPIAN SERVICES: Has Until Sept. 13 to Submit Restructuring Plan CAPMARK FINANCIAL: Proposes to Restructure LIHTC Transactions CAPMARK FINANCIAL: Sec. 341 Meeting in Protech's Case on Sept. 15 CAPMARK FINANCIAL: Wants Plan Filing Exclusivity Until Dec. 31 CHEMTURA CORP: Forms Korean JV With UP Chemical CLARKSON INVESTMENT: Voluntary Chapter 11 Case Summary COLONIAL BANCGROUP: Court Rejects FDIC's $900 Million Claim COLOWYO COAL: Moody's Downgrades Ratings on Senior Bonds to 'B1' CONTINENTAL AIRLINES: DOT Issues Route Transfer Exemption CONTINENTAL AIRLINES: DOJ Review Done; Merger Expected Oct. 1 COVENANT INVESTMENTS: Case Summary & Creditors List CROSSTOWN STOR-N-MORE: Sec. 341(a) Meeting Scheduled for Sept. 23 CROSSTOWN STOR-N-MORE: Taps Morse & Gomez as Bankruptcy Counsel CUSTOM CABLE: Disputes Shareholders' Conspiracy Claim DOCTORS HOSPITAL: 7th Cir. Questions Solvency & Remoteness FAFF INC: Case Summary & 10 Largest Unsecured Creditors FENWICK AUTOMOTIVE: Obtains $1.9MM Investment From Motorcar Parts FIBREK INC: S&P Affirms 'B-' Long-Term Corporate Credit Rating FRASER PAPERS: PBGC Assumes Underfunded Pension Plan GARLOCK SEALING: Plan Filing Exclusivity Extended Until April 1 GARLOCK SEALING: Time to Remove Civil Actions Extended to March 31 GARLOCK SEALING: Wins January 3 Extension for Lease Decisions GATEHOUSE MEDIA: Moody's Upgrades Default Rating to 'Caa3' GENERAL GROWTH: Proposes Brookfield Management Pact GENERAL GROWTH: Spinco Registers Common Stock GENERAL GROWTH: To Present Plan for Confirmation on Oct. 21 GENERAL MOTORS: Old GM Files Joint Chapter 11 Plan GEOKINETICS HOLDINGS: Moody's Cuts Corp. Family Rating to 'B3' GEORGE HOUSER: Case Summary & 10 Largest Unsecured Creditors GREAT ATLANTIC: Mulls Sale of Food Emporium Stores to Raise Cash HSH DELAWARE: Sept. 17 Deadline to File Proofs of Claim INN OF THE MOUNTAIN: Posts $243,900 Net Loss in June 30 Quarter INNOVATIVE COMPANIES: Plan Confirmation Hearing Set for Sept. 28 J2H2, L.L.C.: Voluntary Chapter 11 Case Summary JAMES MCGOEY: Case Summary & 8 Largest Unsecured Creditors JAPAN AIRLINES: No Objections to Restructuring Plan in Japan JAPAN AIRLINES: Sells 90% Stake in JAL Sky Kansai Subsidiary JAPAN AIRLINES: Sells 79.6% Stake in Hotel Unit to Okura JOHN WOOD: Case Summary & 12 Largest Unsecured Creditors KAYE SANDFORD: Case Summary & 13 Largest Unsecured Creditors KENNETH ANDERSON: Files Schedules of Assets & Liabilities KENNETH ANDERSON: Secured Creditors Want Ch. 11 Case Dismissed KEVIN CALLAHAN: Case Summary & 20 Largest Unsecured Creditors KOKOPELLI STORAGE: Case Summary & 10 Largest Unsecured Creditors L-1 IDENTITY: S&P Retains CreditWatch Developing on 'B+' Rating LARRY HEINRICH: Voluntary Chapter 11 Case Summary LEHMAN BROTHERS: Fogarazzo, et al., Want to Pursue Securities Suit LEHMAN BROTHERS: LBI Trustee Wants Underwriting Fees Status Upheld LEHMAN BROTHERS: Wins OK of Transfer Agreement With Citibank LEHMAN BROTHERS: Wins OK to Acquire Loans Through LBREP JV LOGAN'S ROADHOUSE: Moody's Reviews 'B2' Corporate Family Rating LOGAN'S ROADHOUSE: S&P Affirms 'B-' Corporate Credit Rating MARIAN FORTIER: Case Summary & 7 Largest Unsecured Creditors MAULDING DEVELOPMENT: Voluntary Chapter 11 Case Summary METROFINANCIERA SAPI: Chapter 15 Case Summary MICHAEL LABADIE: Case Summary & 20 Largest Unsecured Creditors MIG INC: Plan Confirmation Hearing Scheduled for September 28 MORAN LAKE: Case Summary & 10 Largest Unsecured Creditors NFLUX LLC: Voluntary Chapter 11 Case Summary NORTEL NETWORKS: Creditors Committee Down to Three Members NORTEL NETWORKS: Has Settlement With Verizon NORTEL NETWORKS: Wins Ok for RLKS as Wind-Down Consultant PACIFIC ENERGY: Plan Confirmation Hearing Set for October 12 PARK GROVE: Case Summary & 20 Largest Unsecured Creditors PETTIT ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors PROFESSIONAL VETERINARY: Files Schedules of Assets & Liabilities PROFESSIONAL VETERINARY: Section 341(a) Meeting Set for Sept. 21 PROFESSIONAL VETERINARY: Creditors Panel Taps Smith as Counsel PROFESSIONAL VETERINARY: Gets OK to Hire McGrath as Bankr. Counsel PROFESSIONAL VETERINARY: US Trustee Forms Creditors Committee PS INVESTMENT: Voluntary Chapter 11 Case Summary REAL MEX: Moody's Retains 'Caa2' Corporate Family Rating REFCO INC: Cantor Wants Rule 2004 Exam on Refco & Capstone REFCO INC: LLC Trustee Reaches Settlement With Former Customers ROBERT SPEHAR: Case Summary & 20 Largest Unsecured Creditors ROSEMONT TWO: Case Summary & 20 Largest Unsecured Creditors ROTHSTEIN ROSENFELDT: Judge Directs Founder to Repay $363MM SPA CHAKRA: Halts Operations; Files for Chapter 7 SUNCAL COS: Judge Declines to Lift Lehman Automatic Stay TACO DEL MAR: Says Purchaser's Bid Within Range of Assets' Value TELETOUCH COMMS: May 31 Balance Sheet Upside-Down by $8.64 Million THINKFILM LLC: Creditors Seek Summary Judgment TRIBUNE COMPANY: Mediator to Assist in Plan Negotiations UAL CORP: DOT Issues Route Transfer Exemption UAL CORP: DOJ Review Completed; Merger to be Completed Oct. 1 US FIDELIS: Missouri Seeks Chapter 11 Trustee VALENCE TECHNOLOGY: Berg & Berg Buys 7.2 Million Shares VAREL FUNDING: S&P Gives Negative Outlook; Keeps 'CCC+' Rating VERTIS HOLDINGS: Extends Exchange Offers Until Sept. 30 WASHINGTON MUTUAL: Examiner Taps Cole Schotz as Counsel WESTERN UTAH: Pure Nickel Says Lawsuit Without Merit WINALTA INC: Gets Fourth Extension of CCAA Stay Until Sept. 7 WORLDCOM INC: Judge Weighs IP Claims Against Verizon WORLDWIDE DIRECT: Court OKs Trustee's Motion for Summary Judgment * Bank Closings Emphasize Need for Private Sources of Capital * Institutions on FDIC's "Problem List" Rose to 829 * SEC Issues Report Cautioning Credit Rating Agencies * DLA Piper's M. Williams Joins Sheppard Mullin * SmithAmundsen Greatly Expands Financial Services Practice * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 2001 PROPERTIES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 2001 Properties, LLC 5700 State Line Mission Hills, KS 66208 Bankruptcy Case No.: 10-32331 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Guy B. Humphries, Esq. 1801 Broadway, Suite 1100 Denver, CO 80202 Tel: (303) 832-0029 Fax: (303) 382-4165 E-mail: guyhumphries@msn.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Steve Lewerenz, co-manager. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Schneider & Prolo Trust Trade Debt $14,000,000 1100 Park Place, Suite 100 San Mateo, CA 94403 Poss Architecture Trade Debt $587,000 605 Main Street Aspen, CO 81611 Marcia Wadell Bank Loan $578,000 Trustee of WNB Trust 2305 Forest View Avenue Hillsborough, CA 94010 Town of Gypsum Trade Debt $465,000 50 Lundgren Boulevard Gypsum, CO 81637 Robert & Sharon Egan Trade Debt $445,000 0731 Bull Run Eagle, CO 81631 Boundaries Unlimited, Inc. Trade Debt $306,000 923 Cooper Avenue Glenwood Springs, CO 81601 Ewing Trucking & Construction Trade Debt $205,000 Jerome E. Murphy, PC Trade Debt $200,000 Landform Development, Inc. Trade Debt $177,602 Cook & Solis Construction Trade Debt $145,000 DHM Design Trade Debt $86,678 Nexgen Constructors, Inc. Trade Debt $85,000 Price Waterhouse Coopers Trade Debt $75,000 Brownstein Hyatt & Farber Trade Debt $35,180 Resource Engineering, Inc. Trade Debt $31,475 Pinnacle Design Company Trade Debt $30,000 Kurtis & Dawn Greenman Trade Debt $27,250 Miller Rosenbluth, LLC Trade Debt $25,000 Golf Course Design, Inc. Trade Debt $25,000 Horan & Barker Trade Debt $14,000 AIMS WORLDWIDE: Posts $2.36-Mil. Net Profit in 1st Half of 2010 --------------------------------------------------------------- Aims Worldwide Inc. filed its quarterly report on Form 10-Q, reporting net profit of $2,363,719 on $3,825,831 of revenues for the six months ended June 30, 2010, compared with a net loss of $943,528 on $2,304,523 revenues for the same period a year ago. The Company's balance sheet at June 30, 2010, showed $3,147,608 in total assets, $4,763,922 in total liabilities, and a $1,380,581 stockholders' deficit. As reported in the Troubled Company Reporter on April 21, 2010, Turner, Jones & Associates, PLLC, in Vienna, Va., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses since its inception and has a net working capital deficiency at December 31, 2009. The Company acknowledged in the Form 10-Q, "We do not have any long-term capital commitments. However, because of our M&A engagement with investment banker Maxim Group, LLC, we anticipate that Maxim will assist us in financing our acquisition strategy, leading to the development of a long-term capital program. We believe that our immediate needs can be met with a combination of cash on hand and through ongoing operations. We realize that we will require additional capital to fully implement our business plan and anticipate achievement with Maxim or through other investment banking efforts being explored by the Company. We are currently negotiating to acquire more companies that fit into our marketing and digital platform. We will have to raise additional capital during the coming year for acquisition costs, growth capital, and other expenses. We will also have ongoing legal and auditing expenses as well as office and lease expenses. If we cannot generate sufficient capital through ongoing operations and these capital raising programs, we will likely sell common stock, seek advances from officers or explore other debt financing strategies." A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6a97 About AIMS Worldwide Based in Fairfax, Virginia, AIMS Worldwide Inc. (OTC BB: AMWW) -- http://www.aimsworldwide.com/-- is a vertically integrated marketing communications consultancy providing organizations with its AIMSolutions branded focused marketing solutions. AMBAC FINANCIAL: Investors Seek to End Fraudulent Asset Move ------------------------------------------------------------ American Bankruptcy Institute reports that investors who own debt insured by Ambac Financial Group Inc.'s operating unit have asked for permission to try to bar the parent, which has warned it may seek bankruptcy protection, from removing assets from the unit at their expense. About Ambac Financial Headquartered in New York, Ambac Financial Group, Inc., through its subsidiaries, provided financial guarantees and financial services to clients in both the public and private sectors around the world. KPMG LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 financial results. The independent auditors noted of the significant deterioration of Ambac's guaranteed portfolio coupled with the inability to write new financial guarantees has adversely impacted the business, results of operations and financial condition of the Company's operating subsidiary. KPMG also noted of the Company's limited liquidity. Ambac Financial noted in its Form 10-Q for the quarter ended June 30, 2010 that its liquidity and solvency are largely dependent on dividends principal financial guarantee operating subsidiary, Ambac Assurance Corporation, and on the value of the subsidiary. Ambac Financial said that Ambac Assurance is "highly unlikely" to be able to make dividend payments to Ambac for the foreseeable future. Ambac Financial said it is currently pursuing raising additional capital and is also pursuing a restructuring of its outstanding debt through a prepackaged bankruptcy proceeding. The Company's balance sheet at June 30, 2010, showed $30.05 billion in total assets, $31.47 billion in total liabilities, and $1.42 billion in stockholders' deficit. Ambac once boasted top triple-A credit ratings. In November 2009, Ambac warned it could have problems paying off debt that comes due in 2011. Before the financial crisis, Ambac was the second- biggest bond insurer behind MBIA Inc. AMBASSADORS INTERNATIONAL: Nasdaq Grants Continued Listing Request ------------------------------------------------------------------ Ambassadors International, Inc. has been notified by the Nasdaq Stock Market that the Nasdaq Hearings Panel has granted the Company's request for continued listing of its Common Stock on the Nasdaq Stock Market. The Panel's decision is subject to the Company's Common Stock evidencing a closing bid price of $1.00 per share or more, as required by Nasdaq rules, for a minimum of ten consecutive trading days on or before September 10, 2010. The Panel also approved the Company's request to have trading in its Common Stock transferred from the Nasdaq Global Market to the Nasdaq Capital Market. The Company has submitted a formal application for the transfer of its listing to the Nasdaq Capital Market and, subject to approval by the Nasdaq Listing Qualifications Department, the transfer is expected to become effective on or about September 17, 2010. As previously announced, in May and August 2010, the Company received formal delisting determination letters from the Nasdaq Listing Qualifications staff regarding the Company's non- compliance with two continued listing requirements of the Nasdaq Global Market: the $1.00 minimum bid price requirement and the $10.0 million minimum stockholders' equity requirement. In July 2010, the Panel granted the Company's request for an extension of time through September 10, 2010 for the Company to regain compliance with the $1.00 minimum bid price requirement. In order to regain compliance with this minimum bid price requirement, the Company effected a 1-for-8 reverse split of its Common Stock, which took effect at 11:59 p.m. on August 23, 2010. Because of the Company's non-compliance with the $10.0 million minimum stockholders' equity requirement of the Nasdaq Global Market, based upon its June 30, 2010 financial statements, the Company recently requested the Panel's permission to submit an application to transfer the listing of its Common Stock to the Nasdaq Capital Market, where the Company would be in compliance with that market's $2.5 million minimum stockholders' equity requirement for continued listing. The Panel approved this transfer request, subject to the following conditions: (1) on or before September 10, 2010, the Company must have evidenced a closing bid price of $1.00 or more for a minimum of ten prior consecutive trading days, and (2) on or before September 17, 2010, the Company must have its application for transfer to the Nasdaq Capital Market approved by the Nasdaq Listing Qualifications Department. In order to fully comply with the terms of the Panel's decision, the Company must also be able to demonstrate compliance with all other requirements for continued listing on the Nasdaq Capital Market. The Nasdaq Capital Market is one of the three markets for Nasdaq- listed stocks and operates in the same manner as the Nasdaq Global Market. Companies listed on the Nasdaq Capital Market must meet certain financial requirements and adhere to Nasdaq's corporate governance standards. Upon the transfer of the Company's Common Stock to the Nasdaq Capital Market, the Company's trading symbol will continue to be "AMIED" through September 20, 2010 and "AMIE" thereafter. Trading in the Company's Common Stock will be unaffected by the transfer to the Nasdaq Capital Market. Assuming approval of the Company's transfer application, the Company expects to be in compliance with all applicable financial requirements for continued listing on the Nasdaq Capital Market as of September 17, 2010, the anticipated date of transfer, including the $2.5 million stockholders' equity requirement. However, if the Company were to fail in the future to comply with the $2.5 million minimum stockholders' equity requirement of the Nasdaq Capital Market or any other requirements for continued listing on the Nasdaq Capital Market, the Company's Common Stock could become subject to potential delisting. About Ambassadors International, Inc. Ambassadors International, Inc. -- http://www.ambassadors.com/-- is primarily a cruise company. The Company operates Windstar Cruises, an international, luxury cruise line. The Company is transitioning its headquarters from Newport Beach, California to Seattle, Washington. AMERICAN CASINO: Moody's Gives Negative Outlook, Keeps B3 Ratings ----------------------------------------------------------------- Moody's Investors Service changed the rating outlook for American Casino & Entertainment Properties, LLC, to negative from stable. The company's B3 Corporate Family Rating, B3 Probability of Default Rating, B3 senior secured note rating, and SGL2 Speculative Grade Liquidity rating were affirmed. The change in rating outlook reflects worse than expected operating results through the second quarter of 2010 that has caused credit metrics to deteriorate. Additionally, the operating environment on the Las Vegas Strip and in the Las Vegas locals market remains under pressure due to capacity additions and lower spending on gaming by consumers. Thus, there is a higher probability that ACEP could have difficulty keeping leverage and interest coverage at levels appropriate for its current rating. Rating Rationale ACEP's B3 Corporate Family Rating reflects the company's small size, its high leverage, and weak interest coverage, It also reflects the company's revenue concentration in the depressed gaming markets in and around Las Vegas and capacity expansion on the Las Vegas Strip that has depressed room rates and hampered operators' ability to increase rates. Positive rating considerations include the company's good liquidity and Moody's expectation that ACEP can generate sufficient earnings to support interest and maintenance capital spending. ACEP's ratings could be downgraded if debt (net of cash balances in excess of $20 million) to EBITDA is sustained above 6.0 times, if cash balances decline materially, if liquidity deteriorates, or if EBITDA-capex to interest drops below 1.0 times. Alternatively, while not expected in the near term, ratings could be upgraded if the company can improve and sustain gross debt/EBITDA below 3.5 times and EBIT/interest expense around 1.5 times. Ratings affirmed and assessments updated: * Corporate Family Rating at B3 * Probability of Default Rating at B3 * $375 million 11% secured notes at B3 (LGD 3, 47%) from B3 (LGD 4, 50%) * Speculative Grade Liquidity Rating at SGL2 American Casino & Entertainment Properties, LLC owns and operated three gaming properties in Las Vegas, NV and one property in Laughlin, NV. Trailing twelve month revenue as of June 30, 2010, was approximately $343 million. AMERICAN INT'L: Taiwan Rejects Nan Shan Sale to HK Consortium ------------------------------------------------------------- Ting-I Tsai and Aries Poon, writing for The Wall Street Journal, report that Taiwan government officials rejected the planned $2.15 billion sale of American International Group Inc.'s Taiwanese life-insurance unit to a Hong Kong consortium, delivering another blow to AIG's efforts to raise money through the disposal of its Asian assets. Taiwan's Financial Supervisory Commission said Tuesday that it decided to reject the deal because it had doubts about China Strategic Holdings Ltd.'s financial strength and commitment to Nan Shan Life Insurance Co., which controls more than a 30% share of Taiwan's life-insurance market. According to the Journal, the consortium set up by China Strategic and Primus Financial Holdings Ltd. can file an appeal within 30 days. The report also says Taiwan's insurance regulator said it hoped AIG could continue to operate the insurance unit in Taiwan. But if not, the regulator hoped AIG could find a buyer that "fits everybody's interests," said Thomas Huang, director of the FSC's Insurance Bureau. The Troubled Company Reporter, citing Dow Jones Newswires, reported August 26, 2010, that AIG said it is committed to selling its stake in Nan Shan to the China Strategic consortium, and it won't entertain any other offers. According to Dow Jones, AIG explicitly said for the first time that it "has no intention of selling its stake to any other party, and for example, will not entertain an offer from Chinatrust." Dow Jones said Chinatrust Financial Holding Co., the parent company of Taiwan's largest credit-card issuer, restated last month its interest in buying AIG's stake in Nan Shan. AIG said it is confident the deal with the China Strategic consortium would be approved by Taiwan's regulator. Dow Jones said China Strategic has denied links to China, and AIG has said it received "legally binding representations" from the consortium that no Chinese money is being used to fund the deal. The consortium and AIG recently extended the deal's deadline to Oct. 12. About AIG American International Group, Inc. -- http://www.aig.com/-- is an insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage- backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG has been working to protect and enhance the value of its key businesses, execute an orderly asset disposition plan, and position itself for the future. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. BEACHES HOSPITALITY: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Beaches Hospitality, LLC dba Hampton Inn & Suites 13733 Beach Boulevard Jacksonville, FL 32225 Bankruptcy Case No.: 10-21049 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Kirit Patidar, manager. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- East Beaches Hospitality, LLC 10-21051 8/31/10 BERNARD MADOFF: Trustee Settles Dispute Over Feeder Fund Cash ------------------------------------------------------------- Bankruptcy Law360 reports that Irving H. Picard, the trustee charged with recovering money for victims of Bernard Madoff's Ponzi scheme, has settled a dispute with liquidators in the Cayman Islands over $5 million held by Primeo Fund, one of the scheme's alleged feeder funds. Mr. Picard is asking Judge Burton R. Lifland to approve the settlement. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of August 13, 2010, a total of US$5,578,441,409 in claims by investors has been allowed, with US$715,602,064 to be paid by the SIPC. Investors are expected to receive additional distributions from money recovered by Mr. Picard. Mr. Picard has recovered a number of assets and in liquidated some of those assets for the benefit of customers, totaling US$1,183,779,811 as of November 2009. BIOLASE TECHNOLOGY: Board Chair to Serve as Interim CEO ------------------------------------------------------- The board of directors of Biolase Technology Inc. appointed On Aug. 27, 2010, Federico Pignatelli as interim chief executive officer of the Company. Mr. Pignatelli will receive $1.00 as consideration for his services as interim CFO. Mr. Pignatelli is currently the chairman of the board of Biolase. Mr. Pignatelli served as Biolase president from January 2008 until June 2010. From November 2007 to January 2008, Mr. Pignatelli served as interim CEO. He has served as a director since 1991. He is the founder, and has served as president, of Art & Fashion Group since 1992. Art & Fashion Group is a holding company of an array of businesses providing services to the advertising industry, including the world's largest complex of digital and film still photography studios for production and post- production. Previously, Mr. Pignatelli was a managing director at Gruntal & Company, an investment banking and brokerage firm, and was a managing director of Ladenburg, Thalmann & Co., another investment banking and brokerage firm. Forbearance Agreement On August 16, Biolase and certain of its subsidiaries, as guarantors under a Loan and Security Agreement, dated May 27, 2010, by and among the Company, MidCap Financial LLC, and Silicon Valley Bank, entered into a forbearance agreement on August 16, 2010. The Lenders agreed to, among other things, forbear from taking any action to enforce certain of their rights or remedies under the Loan Agreement with respect to the Company's non-compliance with a minimum EBITDA financial covenant. The Forbearance Agreement is effective until the earliest of (a) August 31, 2010, and (b) the occurrence of certain other events as described in the Forbearance Agreement. The Forbearance Agreement contains covenants by the Company regarding, among other things, supplemental financial reporting, cooperation with the Lenders, and additional disclosures and notices. NASDAQ Delisting As reported by the Troubled Company Reporter, on August 18, Biolase received a staff deficiency letter from The NASDAQ Stock Market indicating that based on the Company's stockholders' equity as reported in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, the Company does not comply with the minimum stockholders' equity requirement of $2.5 million for continued listing on The NASDAQ Capital Market as set forth in NASDAQ Listing Rule 5550(b)(1). As of June 30, 2010, the Company's stockholders' equity was approximately negative $1.3 million. The Company is permitted to submit a detailed plan of compliance by October 4, 2010, advising NASDAQ of the action the Company has taken, or plans to take, that would bring it into compliance with Listing Rule 5550(b)(1). Alternatively, the Company could demonstrate compliance if it satisfied the market value of listed securities or net income from continuing operations listing requirements, which stand as alternatives to the minimum stockholders' equity listing requirement. About BIOLASE Technology Irvine, California-based BIOLASE Technology, Inc. (NASDAQ:BLTI) -- http://www.biolase.com/-- the world's leading dental laser company, develops, manufactures and markets Waterlase technology and lasers and related products that advance the practice of dentistry and medicine. The Company's products incorporate patented and patent pending technologies designed to provide clinically superior performance with reduced pain, faster and biological recovery times. BIOLASE's principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications. Other products under development address ophthalmology, pain management and other medical and consumer markets. As of June 30, 2010, the Company had total assets of $20.279 million, total liabilities of $21.582 million, and a stockholders' deficit of $1.303 million. * * * BDO Seidman, LLP, in Costa Mesa, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has had declining revenues, has limited financial resources at December 31, 2009, and is substantially dependent upon its primary distributor for future purchases of the Company's products. BONANZA OIL: Posts $682,200 Loss in Q2; Says Bankruptcy Possible ---------------------------------------------------------------- Bonanza Oil and Gas, Inc., filed its quarterly report on Form 10- Q, reporting a net loss of $682,174 on $68,565 of revenues for the three months ended June 30, 2010, compared with a net loss of $682,096 on $73,340 of revenues for the same period a year ago. The Company's balance sheet at June 30, 2010, showed $1,332,123 in total assets, $2,388,585 in total current liabilities, and a stockholders' deficit of $1,056,462. The Company received an audit report for the year ended December 31, 2009, from its independent registered public accounting firm containing an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Weaver and Tidwell, L.L.P., in Houston, Texas, noted that the Company has incurred losses since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfill its exploration activities. According to the Form 10-Q, the Company has incurred significant losses and had negative cash flow from operations since inception, and has an accumulated deficit of $23,757,430 at June 30, 2010. The Company says in the event it is unable to continue as a going concern, it may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6a95 Bonanza Oil & Gas, Inc., is an independent energy company engaged primarily in the acquisition, development, production and the sale of crude oil, natural gas and natural gas liquids. The Company's production activities are located in the United States of America. The principal executive offices of the Company are located in Houston, Texas. CAPCO GROUP: IRS Files $432,724 Claim for Unpaid Biz. Taxes ----------------------------------------------------------- Alex Ben Block, writing for The Hollywood Reporter, said last week the Internal Revenue Service has filed a claim for $432,724 in unpaid business taxes against CapCo Group LLC, one of David Bergstein's five companies that creditors are trying to force into bankruptcy. The claim was filed in U.S. Bankruptcy Court in Los Angeles, where the involuntary case is pending. The Hollywood Reporter said court-appointed interim trustee Ronald Durkin has said in previous court-mandated reports that Mr. Bergstein has not paid all payroll or other business taxes on his companies for the past couple of years -- or personal income taxes for three years. The report notes the IRS claim is likely to take precedence over unpaid debts held by more than 30 other creditors. About CapCo et al. CapCo Group LLC and four other companies controlled by David Bergstein are part of a network of entities that distribute and finance films. Among the approximately 1,300 films they have the rights to are "Boondock Saints" and "The Wedding Planner." Several creditors filed for involuntary Chapter 11 against the companies on March 17, 2010 -- CT-1 Holdings LLC (Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr. C.D. Calif. Case No. 10-19929); Capitol Films Development LLC (Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D. Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif. Case No. 10- 19912). Judge Barry Russell presides over the cases. The Petitioners are represented by David L. Neale, Esq., at Levene Neale Bender Rankin & Brill LLP. CASPIAN SERVICES: Has Until Sept. 13 to Submit Restructuring Plan ----------------------------------------------------------------- Caspian Services, Inc., entered into respective Facility agreements with Altima Central Asia (Master) Fund Ltd., on June 20, 2008, and Great Circle Energy Services, L.L.C., on September 3, 2008. Pursuant to the Facility agreements, Altima and Great Circle each loaned the Company $15,000,000. At June 30, 2010, the outstanding loan balance and accrued interest of the Altima loan and the Great Circle loan were $19,154,000 and $18,622,000z Each Facility agreement contains certain financial covenants. The violation of these financial covenants can constitute an event of default under each Facility agreement. Pursuant to the terms of the Facility agreements, upon the occurrence of an event of default the lender has certain remedies available to it, including the acceleration of the loan balance, which would allow the lender to call the loan immediately due and payable or payable on demand. At the end of July 2010, the Company received written notice from Altima that it believed the Company was in violation of at least two of the financial covenants of the Altima Facility agreement. The Company has also been verbally notified by Great Circle that it believes the Company is in violation of some of the financial covenants of the Great Circle Facility agreement. On August 23, 2010 the Company entered into Conditional Forbearance Agreements with each of Altima and Great Circle. Pursuant to the Forbearance Agreements, Altima and Great Circle have individually agreed to conditionally forbear exercising any remedies available to them under the Facility agreements until the earliest of: -- the occurrence or existence of any event of default not covered in the Forbearance Agreement; -- Altima or Great Circle determines that negotiations for agreeing on the terms of a longer-term conditional forbearance or comprehensive restructuring plan are not being carried out in good faith by the Company which includes providing to Altima and Great Circle: (i) by September 13, 2010 a comprehensive strategic restructuring plan; and (ii) by September 20, 2010, conducting a meeting to review the strategic restructuring plan with Altima, Great Circle or its advisor and the European Bank for Reconstruction and Development; -- the date on which any other lender or creditor of the Company declares a default under its lending or credit agreement and declares such debt obligation of the Company immediately due and payable; -- the date on which the Company, or any of it subsidiaries, without the prior written consent of Altima and Great Circle: (i) agrees to sell, transfer or dispose of any material asset (excluding receivables); (ii) agrees to sell, transfer or dispose of receivables with a face value in excess of $100,000; or (iii) incurs, any capital expenditures in excess of $100,000; -- the Company takes any action whatsoever which adversely impacts or is intended to adversely impact the Company, or any of its subsidiaries; and -- September 22, 2010 The Strategic Restructuring Plan includes for the Borrower monthly financial reports, including actual and projected profit and loss, balance sheet and cash flow, for 36 months together with details of a proposed debt restructuring which includes immediate repayment of all accrued interest and a plan to repay the balance of the Loan over the projected period. The Company has covenanted to immediately notify Altima and Great Circle of the occurrence of any of event that would violate the conditions. The Forbearance Agreements do not waive the existing events of default. From and after the termination or expiration of the Forbearance Agreements, and without notice, Altima or Great Circle may, at any time, exercise any remedies available to them as they deem appropriate. About Caspian Services Caspian Services, Inc.'s business consists of three major business segments: (1) Vessel Operations -- consist of chartering a fleet of shallow draft offshore support vessels to customers performing oil and gas exploration activities in the Kazakhstan Sector of the North Caspian Sea; (2) Geophysical services -- consist of providing seismic data acquisition services to oil and gas companies operating both onshore in Kazakhstan and offshore in the Kazakhstan sector of the North Caspian Sea and the adjacent transition zone; and (3) Marine Base Services -- consists of operating marine base located at the Port of Bautino on the North Caspian Sea and an operating water desalinization and bottling plant selling potable water. CAPMARK FINANCIAL: Proposes to Restructure LIHTC Transactions ------------------------------------------------------------- Capmark Financial Group Inc. and its debtor affiliates ask the U.S. Bankruptcy Court to authorize: (a) the restructuring of low-income housing tax credit transactions between certain of the Debtors and Merrill Lynch Capital Services, Inc. and its affiliate, Merrill Lynch, Pierce, Fenner & Smith Incorporated; (b) the transfer of substantially all of the Debtors' rights and assets in the LIHTC transactions with Merrill Lynch, free and clear of liens, claims and encumbrances other than the Merrill Lynch Liens, to Tax Credit Holdings I, LLC, a newly formed nondebtor special purpose subsidiary of the Debtors into a restructuring; and (c) the entry by certain of the Debtors into a restructuring and settlement agreement and other related transaction documents with Merrill Lynch to effectuate the terms of the restructuring, settlement, and the release of all claims Merrill Lynch has asserted or could assert against the Debtors relating to the LIHTC transactions. Purpose and Nature of the LIHTC Transactions Before the Petition Date, several of the Debtors and their nondebtor affiliates were involved in a business commonly known as "LIHTC syndication." This involved financing and aggregating equity investments in affordable housing properties for sale to institutional third party investors through structured fund transactions. The LIHTC Transactions were effectuated pursuant to the LIHTC investment and tax credit program created under the federal Tax Reform Act of 1986, enacted to incentivize the investment of private equity in the development of affordable housing properties. The LIHCT Transactions with Merrill Lynch are an integrated set for highly complex agreements and structured transactions. Under these transactions, certain of the Debtors and their affiliates sponsored LIHTC investment limited liability company funds in which equity interests were sold to the Investors. The parties structured the LIHTC Transactions intending for the Investors to earn a guaranteed after tax rate of return on their capital investments in Funds in which the Debtors aggregated and syndicated the equity ownership of LIHTC Properties. The Rate of Return was to be earned through tax credits and other tax benefits generated by the Investors' equity ownership in LIHTC Properties over a minimum duration of 15 years. In the Merrill Lynch LIHTC Transactions, MLCS executed investor return floor agreements for the benefit of the Investors, which obligated MLCS to pay a minimum guaranteed Rate of Return to Investors. In each of the LIHTC Transactions, MLCS undertook a payment obligation to the Funds in the form of a separate ISDA Master Agreement, referred to as an "Investor Return Floor Agreement." Pursuant to the IRF, MLCS agreed to pay any deficit of the expected Rate of Return to the applicable Fund in the event the Managing Member failed to make mandatory loans. In exchange for incurring its payment obligation under each IRFA, MLCS received a one-time fixed fee, which was paid by the applicable Fund. Capmark Capital, in turn, agreed to pay MLCS any amount MLCS was obligated to pay to the Funds under the IRFAs. To document Capmark Capital's payment obligation, Capmark Capital and MLCS entered into a "back to back" ISDA Master Agreement, dated as of December 29, 2004, with separate confirmations for the various funds. Under the Back-to-Back Agreement, the applicable Funds paid a one-time fixed amount to Capmark Capital and Capmark Capital agreed to pay MLCS for any amounts paid by or on behalf of MLCS pursuant to the IRFAs. The Debtors relate that, as of the Petition Date, Capmark Capital's payment obligations under the Back-to-Back Agreement were secured by approximately $30.7 million in collateral, comprised of a nominal amount of cash and primarily of highly liquid money-market instruments, in which Capmark Capital granted a security interest in favor of MLCS. Prepetition Actions Two days after the Petition Date, MLCS notified Capmark Capital that its commencement of a bankruptcy case constituted an event of default under the Back-to-Back Agreement and purported to establish October 30, 2009, as an early termination date under the Back-to-Back Agreement. On November 18, 2009, MLCS delivered a "Close Out Notice" to the Debtors, which stated that the amount payable to MLCS by Capmark Capital under the Back-to-Back Agreement was approximately $91.8 million plus MLCS' attorneys' fees. The Debtors subsequently notified MLCS that they dispute MLCS's Loss Calculation and reserved all rights with respect to MLCS's actions, and have since been negotiating with MLCS in an attempt to resolve the dispute and MLCS's claims. MLCS filed on March 31, 2010, a motion seeking (i) a declaration that the Back-to-Back Agreement is safe harbor "swap agreement" entitling it to terminate the agreement as of October 30, 2009, and foreclose on the BTB Collateral Lien without seeking relief from the automatic stay or, alternatively (ii) relief from automatic stay "for cause" under Section 362(d)(1) of the Bankruptcy Code to permit MLCS to foreclose on the BTB Collateral Lien. In the Stay Relief Motion, MLCS alleged that it is entitled to a payment of the identical amount claimed under its proof of claim relating to the Back-to-Back Agreement, approximately $91.8 million. The Debtors filed an objection to the Stay Relief Motion arguing that the Back-to-Back Agreement does not constitute a "swap agreement" under the Bankruptcy Code, is not protected by the "safe harbor" provisions of the Bankruptcy Code, and, therefore, MLCS is not entitled to terminate the agreement without first obtaining relief from the automatic stay. Settlement Discussions The parties continued negotiation of a consensual resolution of all rights and obligations of the parties relating to the Merrill Lynch LIHTC Transactions. The parties agreed to adjourn the commencement of any hearing and defer any consideration on the merits of the Stay Relief Motion to a later date. The parties signed a nonbinding term sheet on July 19, 2010, which sets forth the general terms for restructuring the LIHTC Transactions and settling all of Merrill Lynch's claims against the Debtors. On August 25, 2010, the parties reduced the Term Sheet to the binding RSA, which, along with all related transactions and other Transaction Documents, comprise the Settlement. Major Terms of the RSA Among the salient terms of the RSA and other Transaction Documents are: (a) NewCo Formation and Ownership. Debtors Capmark Capital and Capmark Affordable Equity Inc. will form a new nondebtor subsidiary, NewCo, and will collectively own 100% of the membership equity interest in and management rights of NewCo, subject to MLCS's consent rights. (b) Assets Transferred to NewCo. The Assignors will transfer certain assets to NewCo in exchange for the equity in NewCo and the release of Merrill Lynch's claims against the Debtors. (c) No New Investment. Other than the transfer of assets, no Debtor will be required to contribute new capital or make any other investment in NewCo. (d) NewCo Swap. NewCo will enter into a new back-to-back swap agreement with MLCS, substantially similar to the Back-to- Back Agreement between Capmark Capital and MLCS, except the Aggregate Monetary Required Collateral Amounts will be tied to a "Monetary Liability Exposure" of 100% instead of 125% and certain provisions relating to the BTB Collateral will be revised. (e) Termination Agreement and Liability Releases. Capmark Capital and Merrill Lynch will enter into a termination and release agreement to formally terminate the Back-to- Back Agreement and settle certain other claim issues relating to a Roaring Fork Trust. The Debtors relate that the Settlement embodied in the RSA and other Transaction Documents represents a global resolution of all issues between them and Merrill Lynch relating to the LIHTC Transactions, which the Debtors believe is a significant and positive outcome for the estates. The Debtors maintain that the settlement of the claims avoids uncertain and unnecessary litigation risk, and instead provides for a resolution consistent with their approach to controlling any potential liability. According to the Debtors, the Settlement provides for the release of the claims against the estate under the Back-to-Back Agreement, which immediately relieves the estates and their creditors of approximately $61 million in unsecured deficiency claims. Moreover, the Debtors tell the Court that the restructuring of the Roaring Fork Trust avoids an unnecessarily hastened sale of the Bonds at depressed values that would eviscerate the estates' interest and potential values in the structure. A full-text copy of the RSA, together with other related documents, is available for free at: http://bankrupt.com/misc/Capmark_MerrillRSA.pdf About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684). Capmark had total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Protech Holdings C, LLC, an affiliate of Capmark, filed for Chapter 11 on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). The Debtor estimated assets and debts in excess of $1 billion as of the filing date. Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Since filing in Chapter 11, Capmark completed three sales to generate more than $1 billion cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Sec. 341 Meeting in Protech's Case on Sept. 15 ----------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Debtor Protech Holdings C, LLC, will be held on September 15, 2010, at 2:00 p.m., at Room 2112 of the J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, in Wilmington, Delaware. The Debtor's representative is required to appear at the meeting of creditors for the purpose of being examined under oath. Attendance by creditors at the meeting is welcomed, but not required. At the meeting, the creditors may examine the Debtor's representative and transact other business as may properly come before the meeting. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684). Capmark had total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Protech Holdings C, LLC, an affiliate of Capmark, filed for Chapter 11 on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). The Debtor estimated assets and debts in excess of $1 billion as of the filing date. Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Since filing in Chapter 11, Capmark completed three sales to generate more than $1 billion cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Wants Plan Filing Exclusivity Until Dec. 31 -------------------------------------------------------------- Capmark Financial Group Inc. and its debtor affiliates ask Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware to further extend the period within which they have the exclusive right to file a Chapter 11 plan through December 31, 2010, and the exclusive right to solicit acceptances of that Plan through March 1, 2011. The Debtors assert that "cause" exists to warrant further extension of their Exclusive Periods. According to the Debtors, their Chapter 11 cases are extremely large and complex, as evidenced by the Schedules of Assets and Liabilities, Statements of Financial Affairs, and pleadings filed by them and the intertwined corporate structure and business operations of 45 Debtors. The Debtors maintain that they entered Chapter 11 with approximately $10 billion in debt, and over a thousand creditors. During the period since the Debtors' first request for an extension of the Exclusive Periods, the Debtors have made substantial progress in addressing and resolving the difficult issues in their bankruptcy cases, says Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. Additionally, he notes, the Debtors consummated several complex, value-generating transactions, transactions that would be challenging to consummate within the same time period even outside of Chapter 11. Mr. Madron tells the Court that these substantial efforts and accomplishments include: * The sale of substantially all the assets in the Debtors' real estate equity investments advisory group business. * The sale of their equity and other assets in Mexican real estate joint ventures. * The sale of a high-profile real estate loan secured by the Washington D.C. Georgetown Park shopping mall and office complex, and settlement of related litigation disputes. * The sale of their equity interest in a registered broker-dealer subsidiary, Capmark Securities Inc. * The negotiations with the Official Committee of Unsecured Creditors, an ad hoc committee of unsecured bank debtholders, an ad hoc committee of secured lenders, the agents for the secured and unsecured bank debtholders, and certain secured lenders regarding plan scenarios, potential avoidance actions, and claims resolution, including the resolution of secured claims. * Negotiations with the lenders under the $400 million Japanese bank facility. * Discussions with the Committee, the Ad Hoc Secured Committee, and other secured and unsecured creditors and their advisors regarding the factual bases and legal theories on which an avoidance action against secured claimholders might be premised. * Retention of Duff & Phelps, LLC as valuation experts to provide an analysis of the Debtors' solvency as well as the value of the collateral belonging to the secured lenders under the Secured Credit Facility. * The conduct of comprehensive negotiations with key creditor constituencies in the low-income housing tax credit and new markets tax credit business platforms in an effort to resolve hundreds of millions of dollars in contingent claims through complex structured settlements, restructurings, and other transactions. * The review of the more than 1,500 claims filed, preparing omnibus claims objections, and addressing the validity of other claims. * The study of numerous plan structures to determine an optimal structure to maximize recoveries for all parties-in- interest. Mr. Madron asserts that a major obstacle to the Debtors' efforts emerged when the Committee filed a motion for leave, standing, and authority to prosecute various claims and causes of action on behalf of the Debtors' estates against Citicorp North America Inc., Citibank N.A., and the lenders under the Secured Credit Facility. Mr. Madron relates that the Debtors were able to negotiate a settlement with a large majority of the Secured Lenders that is beneficial to their estates. Accordingly, Mr. Madron notes, the Debtors intend to file a motion seeking Court approval of a settlement with the Ad Hoc Secured Committee and certain Secured Lenders, which resolves the uncertainty regarding the allowability of the bulk of the Secured Claim under the Secured Credit Facility, in exchange for a 9% reduction in the principal amount of those claims as of the Petition Date, which reduction totals approximately $100 million. Furthermore, Mr. Madron says, the Debtors have paid, and will continue to pay, their postpetition debts as they come due. He adds that the Debtors have sufficient liquidity to carry on the normal course of their business. Mr. Madron clarifies that the Debtors are not seeking an extension of their Exclusive Periods to delay creditors or force them to accede to their demands. "In light of the relatively short duration of these Chapter 11 cases, the challenges faced by them and the progress made to date, the Debtors submit a further extension of the Exclusive Periods is warranted," Mr. Madron asserts. Mr. Madron maintains that termination of the Exclusive Periods at this critical juncture could derail the Debtors' efforts toward a viable Chapter 11 plan and encourage protracted, unnecessary litigation, the filing of multiple plans, and a contentious confirmation process, resulting in increased administrative expenses and, consequently, diminishing returns to all creditors. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark had total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Protech Holdings C, LLC, an affiliate of Capmark, filed for Chapter 11 on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). The Debtor estimated assets and debts in excess of $1 billion as of the filing date. Since filing in Chapter 11, Capmark completed three sales to generate more than $1 billion cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Forms Korean JV With UP Chemical ----------------------------------------------- Chemtura Corporation and UP Chemical Co., Ltd., signed a Memorandum of Understanding (MOU) defining the terms of a joint venture company to be formed which will manufacture and sell high- purity metal organic precursors for the rapidly growing market for metal organic precursors for High Brightness LED applications, with particular focus on the South Korean market and the broader Asia-Pacific region. The joint venture will leverage Chemtura's capability and technology related to metal organic precursors for polymerization and other specialty applications, together with its backward integration for trimethylaluminum (TMA), a key material used in the manufacture of high-purity metal organic precursors for use in the production process for High Brightness LED chips. The joint venture will combine Chemtura's expertise with UP Chemical's capability and experience in supplying high-purity metal organic precursors for chemical vapor deposition tools installed at semiconductor device manufacturers in South Korea and the Asia Pacific region. The joint venture expects to begin supply of high-purity metal organic precursors to the High Brightness LED market by December 2010, and expects to have fully integrated manufacturing capability for trimethylgallium and trimethylaluminum established in Korea in late 2011. "With the formation of this joint venture, Chemtura and UP Chemical will be uniquely positioned to meet the growing demand for metal organic precursors for the High Brightness LED market. By establishing fully integrated manufacturing and distribution capability in Asia, we are addressing the expectations of customers in the region who demand local manufacturing for improved responsiveness and assurance of supply," said Craig Rogerson, Chemtura chairman, president and chief executive officer. "Further, this joint venture advances Chemtura's current strategy for growth in the Asia Pacific region. We are excited to have UP Chemical as a partner, and look forward to years of success in our joint venture." "UP Chemical can seize a great opportunity through the partnership with Chemtura at a time when LED backlighting for LCD TVs has grown explosively and highly efficient LED lighting will replace traditional lighting in the coming years," said Dr. Hyun Koock Shin, UP Chemical chief executive officer. "The joint venture will manufacture and deliver necessary metal organic precursors to make this lighting revolution happen for a more energy-efficient, greener world." Chemtura Corporation and its subsidiaries, with 2009 sales of $2.3 billion, together are a global manufacturer and marketer of specialty chemicals, agrochemicals and pool, spa and home care products, including 50 years of production excellence with Chemtura Organometallics GmbH. Additional information concerning Chemtura is available at http://www.chemtura.com/ UP Chemical Co., Ltd., is the first developer and successful supplier of atomic layer deposition precursors for DRAM chip manufacturing. It specializes in the research, development, production, high-purity refinement and sale of metal organic precursors, as well as other thin film deposition materials. Additional information concerning UP Chemical is available at www.upchem.co.kr About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CLARKSON INVESTMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Clarkson Investment, LLC 1705 32nd Street Evans, CO 80620-3421 Bankruptcy Case No.: 10-32394 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Philipp C. Theune, Esq. 1763 Franklin Street Denver, CO 80218-1124 Tel: (303) 832-1150 Fax: (303) 845-6934 E-mail: ptheune@ptr-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by David G. Clarkson, managing member. Debtor-affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- David G. Clarkson 09-13890 03/11/09 COLONIAL BANCGROUP: Court Rejects FDIC's $900 Million Claim ----------------------------------------------------------- Patrick Fitzgerald, writing for The Wall Street Journal, reports that Judge Dwight H. Williams Jr. of the U.S. Bankruptcy Court in Montgomery, Ala., on Tuesday rejected the Federal Deposit Insurance Corp.'s claim that it is owed more than $900 million from Colonial BancGroup Inc., the former parent of Colonial Bank, which was seized by banking regulators last year. The Journal notes the FDIC had argued that the bank's former parent owed it $909 million, an amount equal to the gap between how much capital its banking subsidiary was required to have and what it actually had on hand when it was seized by regulators in August 2009. The FDIC said Colonial's holding company in recent years made numerous commitments to regulators to shore up the bank's capital. According the report, the judge held that the "unambiguous language" of agreements between the parent and federal and state bank regulators indicates the holding company "did not make a commitment to maintain the capital of Colonial Bank." Judge Williams also ruled that, even had Colonial made such a commitment, it wouldn't apply under bankruptcy law because it couldn't be "assumed and cured" since the bank was no longer in business. "The court's denial of a priority claim asserted by the FDIC in an amount just under $1 billion" along with its rejection of the FDIC's bid "to convert the Chapter 11 case to Chapter 7 is quite a significant ruling for bank-holding-company bankruptcy cases throughout the country," said Colonial BancGroup's attorney C. Edward Dobbs, Esq., at Atlanta's Parker, Hudson, Rainer & Dobbs, according to the Journal. The report says the FDIC declined to comment on whether it would appeal the ruling. "We are currently analyzing the opinion to determine next steps," said Andrew Gray, a spokesman for the agency. About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) was holding company to Colonial Bank, N.A, its banking subsidiary. Colonial bank -- http://www.colonialbank.com/ -- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection on August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, assist the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. COLOWYO COAL: Moody's Downgrades Ratings on Senior Bonds to 'B1' ---------------------------------------------------------------- Moody's Investors Service downgraded the rating of Colowyo Coal Funding Corp (CC Funding) to B1 from Ba3. The rating outlook is stable. Ratings Rationale Downgrades: Issuer: Colowyo Coal Funding Corp. -- Senior Secured Regular Bond/Debenture, Downgraded to B1 from Ba3 Outlook Actions: Issuer: Colowyo Coal Funding Corp. -- Outlook, Changed To Stable From Negative The rating action reflects Colowyo's large asset impairment charge in 2009 and Rio Tinto's intent on closing Colowyo in 2018 after expiration of the long-term contracts. Colowyo Coal supplies its coal to the Craig Station under long-term agreements and cash flow under the offtake agreements service the bonds issued by CC Funding. Moody's views the large impairment charge and Rio Tinto's intention to close the mine in 2018 as representing Colowyo's fundamentally weak position and Colowyo's lack of strategic fit within Rio Tinto especially since Rio Tinto has divested or spun off through an initial public offering its other US coal assets. Ultimately, Moody's views these factors as negatively affecting Rio Tinto's economic incentives to support Colowyo Coal though Moody's expects Rio Tinto to continue to meet its contractual obligations. If Rio Tinto does not meet its contractual obligations, CC Funding's ratings are likely to be multiple notches lower. The rating action also incorporates Moody's views that continued draws on the debt service reserve are likely through bond maturity and commensurate with the historical average draw rate of around $900 thousand per year since September 2003. Moody's notes that there has not been a draw on the debt service reserve since the major draws on the debt service reserve in 2008. The B1 rating is supported by a debt service reserve equal to approximately 10 months of debt service, offtake agreement with Craig Station's owners and Rio Tinto's contractual obligations including the requirement that CC Funding has 1 times forecasted debt service coverage ratio. The rating also considers Moody's expectation that any draws on the debt service reserve is unlikely to be replenished and the existence of broad force majeure provisions under the offtake agreements. The stable outlook reflects Moody's expectation that Rio Tinto will meet its contractual obligations to Colowyo, that continued draws on the debt service reserve commensurate with the historical average are likely, and that CC Funding will incur actual debt service coverage ratios marginally below 1 times. The rating could be negatively affected if Colowyo incurs major operating problems, if Colowyo incurs above average draws on its debt service reserve or if Rio Tinto does not meet its contractual obligations. The rating could be positively affected if CC Funding is able to sustain debt service coverage well above one times, replenish its debt service reserve and Colowyo is able to improve its fundamental economic position. Colowyo Coal's rating were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of the issuer's core industry and the issuer's ratings are believed to be comparable to those of other issuers of similar credit risk. CONTINENTAL AIRLINES: DOT Issues Route Transfer Exemption --------------------------------------------------------- United Air Lines and Continental Airlines completed one of the final steps in the regulatory process for the proposed merger. The U.S. Department of Transportation on Monday issued a route transfer exemption for United Airlines, Continental and Continental Micronesia. Under the law and DOT policy, when two air carriers holding international route authority come under common ownership and control, prior approval is required by DOT. "We appreciate the thorough review by both the Department of Transportation and the Department of Justice, and look forward to the shareholder vote on September 17," said UAL CEO Glenn Tilton. Some information DOT requires for a final determination, such as the composition of the Board of Directors of the new, combined company, will not be available until the merger closes. Therefore, United and Continental requested the exemption that DOT granted Monday. This allows for the merger to close while the carriers continue to provide updated information. Final approval for transfer of international certificates and all other economic authority is expected in the months ahead. On August 27, 2010, the Antitrust Division of the United States Department of Justice completed their review and determined that they have no objections to the carriers' merger. As part of the review, United and Continental have agreed to the transfer of slots and related assets to Southwest Airlines, including 18 pairs of takeoff and landing slots at Newark. "As you know, we vigorously compete with Southwest throughout our network. Since the slot pair transfer is expected to have minimal impact on our combined route network, we are not changing the previously announced synergy estimates," Mr. Tilton said last week. United and Continental will ask shareholders to approve the merger at separate meetings scheduled for September 17. About Continental Airlines Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,700 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance. Continental has total assets of $13.60 billion against total debts of $12.87 billion as of June 30, 2010. In May 2010, Continental announced an agreement to merge with UAL Corp. The merger has not yet been completed. In August 2010, Moody's Investors Service affirmed its 'B2' corporate family, with negative outlook, for Continental Airlines. Moody's said the affirmation, among other things, signifies the potential for it to maintain the B2 rating if the proposed merger with UAL (B3 corporate family from Moody's, on review for upgrade) is completed under terms that enable the combined entity to achieve the potential revenue and cost synergies that have been identified. However, the outlook remains negative because of the industry's weak track record in successfully executing large business combinations. Continental caries a 'B' corporate rating, on watch negative, from Standard & Poor's. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'B3' corporate family and probability of default ratings from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. At June 30, 2010, UAL had $20.134 billion in total assets against total current liabilities of $8.573 billion, long-term debt of $6.281 billion, long-term obligations under capital leases of $1.01 billion, other liabilities and deferred credits of $7.022 billion, and a stockholders' deficit of $2.756 billion. CONTINENTAL AIRLINES: DOJ Review Done; Merger Expected Oct. 1 ------------------------------------------------------------- United Airlines and Continental Airlines said they have been notified by the Antitrust Division of the United States Department of Justice of the termination of its Hart-Scott-Rodino Act review and the closing of its investigation of the airlines' pending merger. "We are pleased to have achieved this critical milestone and look forward to our respective stockholders' votes next month, following which we expect to be on track to close our merger by October 1st," said Glenn Tilton, UAL Corporation chairman, president and CEO. "The combination of United and Continental will create a world class airline, which will deliver an industry leading network for our customers and the communities we serve, career opportunities for our people, and value and return for our stockholders." "The completion of DOJ's review is an important step on our journey of creating the world's leading airline, benefiting our customers, co-workers, communities and stockholders," said Jeff Smisek, Continental's chairman, president and CEO. "The DOJ's decision permits us to clear one of the last regulatory hurdles to closing our merger." Continental and United also would like to acknowledge the efforts of the United States Department of Transportation and the Federal Aviation Administration as the companies work through the merger process. In addition, Continental and United remain engaged in discussions with the state attorneys general who are reviewing the merger, and hope to conclude those discussions expeditiously with a positive outcome. Continental and United announced an all-stock merger of equals on May 3, 2010, and currently expect the transaction to close by Oct. 1, 2010, subject to stockholder approvals and customary closing conditions. Both companies have scheduled special stockholder meetings on Sept. 17, 2010, for approval of the merger. United and Continental received clearance from the European Commission on the airlines' proposed merger in July, which noted its investigation found the transaction would not raise competitive concerns in Europe or on trans-Atlantic routes. About Continental Airlines Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,700 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance. Continental has total assets of $13.60 billion against total debts of $12.87 billion as of June 30, 2010. In May 2010, Continental announced an agreement to merge with UAL Corp. The merger has not yet been completed. In August 2010, Moody's Investors Service affirmed its 'B2' corporate family, with negative outlook, for Continental Airlines. Moody's said the affirmation, among other things, signifies the potential for it to maintain the B2 rating if the proposed merger with UAL (B3 corporate family from Moody's, on review for upgrade) is completed under terms that enable the combined entity to achieve the potential revenue and cost synergies that have been identified. However, the outlook remains negative because of the industry's weak track record in successfully executing large business combinations. Continental caries a 'B' corporate rating, on watch negative, from Standard & Poor's. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'B3' corporate family and probability of default ratings from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. At June 30, 2010, UAL had $20.134 billion in total assets against total current liabilities of $8.573 billion, long-term debt of $6.281 billion, long-term obligations under capital leases of $1.01 billion, other liabilities and deferred credits of $7.022 billion, and a stockholders' deficit of $2.756 billion. COVENANT INVESTMENTS: Case Summary & Creditors List --------------------------------------------------- Debtor: Covenant Investments Inc. P.O. Box 11428 Bozeman, MT 59719 Bankruptcy Case No.: 10-62105 Chapter 11 Petition Date: August 30, 2010 Court: U.S. Bankruptcy Court District of Montana (Butte) Judge: Ralph B. Kirscher Debtor's Counsel: James A. Patten, Esq. The Fratt Building, Suite 300 2817 2nd Avenue N. Billings, MT 59101 Tel: (406) 252-8500 Fax: (406) 294-9500 E-mail: japatten@ppbglaw.com Scheduled Assets: $6,059,042 Estimated Debts: $18,304,947 A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mtb10-62105.pdf The petition was signed by Dewin Madill, president. CROSSTOWN STOR-N-MORE: Sec. 341(a) Meeting Scheduled for Sept. 23 ----------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Crosstown Stor-N-More Self Storage, LLC's creditors on September 23, 2010, at 2:30 p.m. The meeting will be held at Room 100-B, 501 East Polk Street, (Timberlake Annex), Tampa, FL 33602. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Bradenton, Florida-based Crosstown Stor-N-More Self Storage, LLC, filed for Chapter 11 protection on August 20, 2010 (Bankr. M.D. Fla. Case No. 10-20055). Alberto F. Gomez, Jr., Esq., at Morse & Gomez, PA, assists the Debtor in its restructuring effort. The Debtor estimated assets at $10 million to $50 million and debts at $1 million to $10 million in its Chapter 11 petition. CROSSTOWN STOR-N-MORE: Taps Morse & Gomez as Bankruptcy Counsel --------------------------------------------------------------- Crosstown Stor-N-More Self Storage, LLC, asks for authorization from the U.S. Bankruptcy Court for the Middle District of Florida to employ Morse & Gomez, P.A., as bankruptcy counsel. M&G will, among other things: a. take necessary steps to investigate and pursue avoidance actions, if any; b. prepare motions, notices, pleadings, petitions, answers, orders, reports and other legal papers required in the Debtor's Chapter 11 case; c. assist the Debtor in taking legally appropriate steps to effectuate the continued operations of the Debtor; and d. perform other legal services for the Debtor which may be necessary herein. M&G received a prepetition retainer of $30,000 paid by the Debtor. Of the total amount received, $7,683.58 is related to representation of the Debtor relating to potential work-out settlement efforts. The amount of $22,316.42 is the prepetition bankruptcy retainer. In addition, the Debtor will pay a reasonable attorneys' fee which will be subject to approval by the Court. Alberto F. Gomez, Jr., Esq., at M&G, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Bradenton, Florida-based Crosstown Stor-N-More Self Storage, LLC's business consists of a self storage facility, an executive office center and a car wash in Tampa, Florida. Crosstown Stor-N-More filed for Chapter 11 protection on August 20, 2010 (Bankr. M.D. Fla. Case No. 10-20055). The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million as of the Petition Date. CUSTOM CABLE: Disputes Shareholders' Conspiracy Claim ----------------------------------------------------- Dow Jones' DBR Small Cap reports that Custom Cable Industries Inc. is fighting claims by its parent's shareholders that the company's bankruptcy is part of an "elaborate conspiracy" by ComVest Capital LLC to take control of the company. The Company said that it filed for bankruptcy earlier this year because it was in "financial distress." By the end of 2009, the Company had lost a contract with a key customer and was struggling to operate profitably amid a major economic recession. According to DBR, the Company said in court papers Monday that its revenues and operating income fell, making it unable to service its debt. Custom Cable ended up defaulting on its loan with ComVest. As a result, the firm filed a foreclosure proceeding. Founded in 1980, Custom Cable Industries, Inc. -- http://www.customcable.com/-- manufactures and installs audio, video and fiber-optic cables. Custom Cable filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-18478) on July 30, 2010. Michael P. Horan, Esq., and Stephanie C. Lieb, Esq., at Trenam Kemker Scharf Barkin Frye, serve as the Debtor's bankruptcy counsel. The Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in debts. DOCTORS HOSPITAL: 7th Cir. Questions Solvency & Remoteness ---------------------------------------------------------- Addressing an issue of apparent first impression for the federal appellate courts, WestLaw reports that the Seventh Circuit has held that a bank, as the trustee for a securitized investment pool, was an "initial transferee" of lease payments made by the Chapter 11 debtor-hospital, for the purposes of 11 U.S.C.A. Sec. 550(a). Although the bank had duties to the trust's beneficiaries, that is, investors, concerning the application of funds, the bank was the legal owner of the trust's assets and, as such, remained the appropriate subject of a preference-avoidance action. The Court of Appeals noted that "lots" of decisions hold that an entity that receives funds for use in paying down a loan, or passing money to investors in a pool, is an "initial transferee" even though the recipient is obliged by contract to apply the funds according to a formula. Paloian v. LaSalle Bank, N.A., --- F.3d ----, 2010 WL 3363596 (7th Cir.). This decisions affirms findings and conclusions in the lower courts, 406 B.R. 299 (N.D. Ill.) (Pallmeyer, J.), 373 B.R. 53 and 360 B.R. 787 (Bankr. N.D. Ill.) (Schmetterer, J.), about LaSalle being the initial transferee. The Seventh Circuit says that if Doctors Hospital was solvent at the time of the transfer, Trustee Paloian's recovery of the payments will be a problem. Accordingly, the appellate panel tells the bankruptcy court to examine solvency. The appellate panel also tells the bankruptcy court that it needs to examine the remoteness and separateness of the securitization facility. "There is scarcely any evidence in this record that MMA Funding even existed, except as a name that [some] lawyers put in some documents," the Seventh Circuit says. Doctors Hospital of Hyde Park, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 00-11520) on April 17, 2000. On April 15, 2002, Doctors Hospital filed a 28-count complaint (Bankr. N.D. Ill. Adv. Pro. No. 02-00363) against a number of individuals and entities. Counts VIII, IX, and X of the complaint assert claims against LaSalle Bank National Association, f/k/a LaSalle National Bank, as trustee for certain asset certificateholders of Asset Securitization Corporation Commercial Mortgage Pass-Through Certificates, Series 1997, D5. On April 22, 2004, Gus A. Paloian, Esq., at Seyfarth Shaw LLP in Chicago, was appointed the Chapter 11 trustee for Doctors Hospital. In its claims against the Bank, Doctors Hospital sought: (A) to void as fraudulent transfers a guaranty and related security agreements that Doctors Hospital made in connection with a loan from the Bank's predecessor, Nomura Asset Capital Corporation, to Doctors Hospital's landlord; and (B) to void a lease held by the Bank as Nomura's assignee or to recover as fraudulent transfers payments of rent that Doctors Hospital had made to the Bank in excess of the property's fair market rental value. Following a bench trial, the Bankruptcy Court, 360 B.R. 787, entered a judgment in favor of the Chapter 11 trustee, and the parties moved to alter or amend the judgment. The Honorable Jack B. Schmetterer, 373 B.R. 53, denied those motions, and both parties appealed. In the District Court, the Honorable Rebecca R. Pallmeyer affirmed Judge Schmetterer's decisions, holding that: (1) the bankruptcy court did not clearly err in determining that the trust for holders of asset securitization corporation commercial mortgage pass-through certificates was the initial transferee of lease payments, for purpose of determining the trust's liability upon avoidance of payments as constructively fraudulent; (2) the bankruptcy court did not clearly err in determining that an affiliated corporation identified as the borrower on a prepetition loan collateralized by the debtor's receivables functioned as a special purpose entity; (3) an affiliated corporation was not an alter ego or instrumentality of the debtor; (4) the bankruptcy court did not clearly err in determining that, following a restructuring of cash flow whereby proceeds of a loan to the special purpose corporation were no longer available to the debtor until after some funds were deducted from a cash collateral account into which they were deposited and used by the trust to make rental payments on the debtor's lease, these rental payments no longer involved any "interest of the debtor in property"; (5) the bankruptcy court did not clearly err in adopting opinions of the Chapter 11 debtor's experts and in concluding, for fraudulent transfer avoidance purposes, that the debtor was insolvent on and after date indicated by the experts; (6) the debtor's challenged prepetition payments were "rent," which the debtor could avoid as constructively fraudulent transfers to extent that they exceeded fair rental value of leased property; and (7) federal common law, rather than Illinois law, governs any award of prejudgment interest in any strong-arm proceeding to avoid transfers as constructively fraudulent under Illinois law; and (8) the bankruptcy court did not abuse its discretion in awarding prejudgment interest from the date of the transfers, rather than from date of filing of the debtor's avoidance complaint. Gus A. Paloian, Esq., the Chapter 11 Trustee of Doctors Hospital of Hyde Park, Inc., is represented by: Jeffrey L. Gansberg, Esq. John W. Costello, Esq. John E. Frey, Esq. Scott A. Semenek, Esq. Peter N. Moore, Esq. WILDMAN, HARROLD, ALLEN & DIXON, LLP 225 West Wacker Drive, Suite 3000 Chicago, IL 60606 Tel: (312) 201-2000 and LaSalle National Bank and other Defendants are represented by: Adam P. Silverman, Esq. Howard L. Adelman, Esq. ADELMAN, GETTLEMAN, MERENS, BERISH & CARTER, LTD. 53 West Jackson Boulevard, Suite 1050 Chicago, IL 60604-3701 Tel: (312) 435-1050 - and - James M. Witz, Esq. Freeborn & Peters LLP 311 South Wacker Drive, Suite 3000 Chicago, IL 60606 Tel: (312) 360-6000 - and - Michael N. Ripani, Esq. Chuhak & Tecson PC 30 South Wacker Drive, Suite 2600 Chicago, IL 60606-7512 Tel: (312) 444-9300 - and - Robert D. Nachman, Esq. Dykema Gossett PLLC 10 South Wacker Drive, Suite 2300 Chicago, IL 60606 Tel: (312) 876-1700 - and - Jane B. McCullough, Esq. Kimberly M. Deshano, Esq. Nancy A. Peterman, Esq. Greenberg Traurig, LLP 77 West Wacker Drive, Suite 3100 Chicago, IL 60601 Tel: (312) 456-8400 - and - David T.B. Audley, Esq. Michael T. Benz, Esq. Richard A. Wohlleber, Esq. Chapman & Cutler 111 West Monroe Street Chicago, IL 60603-4080 Tel: (312) 845-3000 - and - Michael D. Warner, Esq. Warner, Stevens & Doby LLP 301 Commerce St. Fort Worth, TX 76102 Tel: (817) 810-5250 FAFF INC: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------- Debtor: FAFF, Inc. dba Downey Valero dba Downey Valero Pro Hand Car Wash 10030 Lakewood Boulevard Downey, CA 90240 Bankruptcy Case No.: 10-46757 Chapter 11 Petition Date: August 30, 2010 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Raymond H. Aver, Esq. LAW OFFICES OF RAYMOND H AVER APC 12424 Wilshire Blvd., Suite 720 Los Angeles, CA 90025 Tel: (310) 571-3511 Fax: (310) 571-3512 E-mail: ray@averlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-46757.pdf The petition was signed by Zineb Lahlou, president and secretary. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- AR Properties Unlimited, LLC 10-42423 08/03/10 FENWICK AUTOMOTIVE: Obtains $1.9MM Investment From Motorcar Parts ----------------------------------------------------------------- Motorcar Parts of America, Inc. has made a US$1,894,034 -- C$2.0 million -- strategic investment in Fenwick Automotive Products Limited structured as a secured loan with an option to acquire substantial ownership of the company. The loan was made pursuant to a debenture executed by Fenwick in favor of Motorcar Parts, dated August 24, 2010. The Loan will mature on the later of (i) October 21, 2010 and (ii) July 31, 2012 -- provided that the indebtedness subject to the agreement among Fenwick, Royal Bank of Canada and certain other parties, dated July 6, 2010, as amended from time to time, is fully renewed or replaced prior to the expiration of the deadline in the agreement. The Loan will accrue interest at a rate equal to the prime rate as announced by the Wall Street Journal from time to time plus 8.75% per annum -- which as of August 24, 2010 was equal to 12% -- such interest is payable in cash quarterly in arrears beginning on September 30, 2010. Upon the occurrence of an event of default, Motorcar Parts may declare all amounts due under the Debenture immediately due and payable. The Loan is secured by a blanket lien on all of Fenwick's assets. FAPL Holdings, Inc., Fenwick's parent company, and each of Fenwick's subsidiaries also granted Motorcar Parts a blanket lien on all of their assets. Motorcar Parts of America, Inc. -- http://www.motorcarparts.com/- - is a remanufacturer of alternators and starters for imported and domestic passenger vehicles, light trucks and heavy duty applications. Its products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada. The company's facilities are located in California, Tennessee, Mexico, Malaysia and Singapore. About Fenwick Automotive Based in Toronto, Canada, Fenwick Automotive Products Limited -- http://www.fencoparts.com/-- is a manufacturer and distributor of new and remanufactured aftermarket auto parts -- including steering components (pumps, gears and racks), brake calipers, master cylinders, hub assembly and bearings, clutches and clutch hydraulics, constant velocity drive shafts, water pumps, control arms and loaded struts for the full range of passenger and truck vehicles in use in the markets it serves. Its products are sold through all major distribution channels of the automotive aftermarket throughout the United States, Canada and Mexico. The company's facilities are located in Pennsylvania, New Hampshire, Toronto and Mexico. Fenwick is a party to a forbearance agreement dated as of July 6, 2010, with Royal Bank of Canada, as amended by the forbearance amending agreement dated August 23, 2010. FIBREK INC: S&P Affirms 'B-' Long-Term Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B-' long- term corporate credit rating on Longueuil, Que.-based Fibrek Inc. The outlook is positive. At the same time, S&P withdrew the rating on Fibrek on the company's request. FRASER PAPERS: PBGC Assumes Underfunded Pension Plan ---------------------------------------------------- The Pension Benefit Guaranty Corporation has assumed responsibility for the pension plan covering over 2,300 former employees and retirees of bankrupt Fraser Papers Limited, Madawaska, Me., a wholly owned U.S. subsidiary of Toronto-based Fraser Papers Inc., also in bankruptcy. The U.S. unit operated pulp and paper mills in Maine and New Hampshire. The PBGC stepped in because the underfunded pension plan would have been abandoned after FPI, in liquidation, sold substantially all operating assets to a group of creditors. The transaction did not include the pension plan. Retirees under the plan will continue to receive their monthly benefit payments without interruption, and other workers will receive their pensions when they are eligible to retire. The plan was frozen for salaried employees as of Oct. 31, 2009, and for bargaining unit employees as of Apr. 28, 2010. The Pension Plan for the Eligible Employees of Fraser Papers Limited is 44% funded, with about $83 million in assets and $187 million in benefit liabilities, according to PBGC estimates. The agency expects to cover about $99 million of the $104 million shortfall, and will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which terminated as of Apr. 28, 2010. The PBGC became trustee of the plan on Aug. 31, 2010. Within the next several weeks, the PBGC will send trusteeship notification letters to all plan participants. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2010 is $54,000 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. Workers and retirees with questions may consult the PBGC Web site, http://www.pbgc.gov/or call toll-free at 1-800-400-7242. TTY/TDD users should call the federal relay service toll-free at 1-800- 877-8339 and ask for 800-400-7242. Retirees of Fraser Papers Limited who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at http://www.pbgc.gov/workers-retirees/benefits- information/content/page13692.html Assumption of the plan's unfunded liabilities will increase the PBGC's claims by $98.6 million and was not previously included in the agency's fiscal year 2009 financial statements. The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. About Fraser Papers Fraser Papers -- http://www.fraserpapers.com/-- is an integrated specialty paper company that produces a broad range of specialty packaging and printing papers. The Company has operations in New Brunswick, Maine, New Hampshire and Quebec. On June 18, 2009, citing continued operating losses, weak markets for pulp and lumber, impending debt repayments and significant pension funding obligations, the Company and its subsidiaries filed for protection under the Companies Creditors Arrangement Act (Ont. Super. Ct. J. Ct. File No. CV-09-8241-00CL) in Toronto and Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-12123). Fraser is represented by Michael Barrack, Esq., Robert I. Thornton, Esq., and D.J. Miller, Esq., at ThorntonGroutFinnigan LLP, in Toronto, and Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Del. Fraser has said it is developing a restructuring plan to present to its creditors by Oct. 16, 2009, with the objective of emerging with a sustainable and profitable specialty papers business. In July 2010, Fraser Papers disclosed that the Ontario Superior Court of Justice has granted a further extension of the initial Order under which Fraser Papers, together with its subsidiaries, was granted creditor protection under the Companies' Creditors Arrangement Act. This extension is through October 29, 2010 and was supported by PricewaterhouseCoopers Inc., the Court appointed Monitor of the Company's CCAA process. GARLOCK SEALING: Plan Filing Exclusivity Extended Until April 1 --------------------------------------------------------------- Garlock Sealing Technologies LLC and its debtor affiliates received an April 1, 2011, extension of their exclusive period to file a Chapter 11 plan. They also received a May 31, 2011, extension of the period to solicit acceptances of the plan. Ashley K. Neal, Esq., at Rayburn Cooper & Durham, P.A., in Charlotte, North Carolina, tells the Court that the Debtors have made significant progress in resolving issues facing their estates. Specifically: (1) Since the Petition Date, the Debtors have focused on ensuring an orderly transition into Chapter 11, which has included, among others, obtaining debtor-in-possession financing, completion of the requisite schedules of assets and liabilities and statements of financial affairs, and communication with parties-in-interest, including the Official Committee of Asbestos Personal Injury Claimants. (2) The Debtors have been diligent in discharging their duties as debtors-in-possession and are making progress toward a consensual Chapter 11 plan. During the initial period of the Chapter 11 cases, the Debtors have focused on maintaining profitable business operations as they made the transition into Chapter 11 and laying the groundwork to achieve the principal purpose of the Chapter 11 cases -- a permanent resolution of mass asbestos litigation plaguing an otherwise healthy company. In the two months since the Petition Date, the Debtors have made good progress toward this central goal. (3) After the Petition Date, the Debtors moved quickly to maximize the prospect for a consensual plan by initiating a dialogue with key representatives of holders of asbestos claims. On June 10, 2010, the Debtors hosted a conference in New York attended by law firms representing the majority of individuals who have asserted pending asbestos cancer claims against the Debtors. Most of the law firms that the Court subsequently appointed to the Official Committee of Asbestos Personal Injury Claimants were present, as well as Caplin & Drysdale, Chartered, which is the Asbestos Claimant Committee's counsel. The content of the parties' discussions is subject to settlement negotiations privilege. The purpose and effect of the conference, however, was to open a pathway toward an expeditious consensual plan of reorganization. (4) The Debtors also have moved to define the pathway for resolution of their asbestos litigation through litigation, if necessary. They have secured the appointment of professionals that will represent and advise them, whether through settlement or litigation, toward defining the Debtors' responsibility for asbestos claims and developing a mechanism for payment of any valid claims or settled claims. To protect the reorganization process and preserve the Debtors' shared insurance with Coltec Industries Inc., which represents one of Garlock's most significant assets, the Debtors moved for and obtained a preliminary injunction enjoining asbestos- related actions against Coltec and other affiliates. The Debtors will file a motion for entry of case management order to (1) establish a bar date for asbestos claims; (2) approve claim forms; (3) approve a notice program; and (4) estimate the Debtors' liability for asbestos claims. Implementing a case management order will establish a schedule to resolve common issues related to asbestos claims and ultimately, to estimate the Debtors' liability for asbestos claims, Ms. Neal explains. Until entry of the case management order, however, there is no timetable for the asbestos claims resolution process, she points out. Similarly, until the Debtors' responsibility for Asbestos Claims is defined through claims resolution and estimation processes, it will not be possible for holders of asbestos claims to vote on any Chapter 11 plan or for the Court and parties to meaningfully evaluate confirmation of any Chapter 11 plan proposed by the Debtors, she says. According to Ms. Neal, the Debtors will propose a Chapter 11 plan whereby Garlock will create a post-confirmation trust to process and resolve all legitimate asbestos claims. Garlock will fund that trust with assets equal in value to an amount estimated by the Court necessary to pay claims in full, she notes. In conjunction with the plan, Garlock will seek issuance of a channeling injunction by the district court: (a) channeling all asbestos claims to the post-confirmation trust for claims resolution and remedies; and (b) enjoining all asbestos claimants from pursuing remedies from Garlock, its affiliates, and other protected persons, she elaborates. This process will fully, fairly, and finally resolve Garlock's responsibility for asbestos claims, she adds. Ms. Neal further asserts that the Debtors' Chapter 11 cases are not only large, but also complex. This complexity is primarily a function of the more than 100,000 claims pending against the Debtors as of the Petition Date, she emphasizes. The Debtors also believe that the proposed extension is relatively brief and will not harm creditors. In fact, the extension would allow additional time for the Debtors to negotiate with the Asbestos Claimants Committee to formulate a plan that is acceptable to all parties-in-interest, she assures the Court. In light of the complexity of the Debtors' Chapter 11 cases and the issues that must be resolved before a plan can be proposed, it is unlikely that any other party-in-interest is in a position to propose a plan prior to April 1, 2011, she stresses. At best, the Debtors want to submit a proposed plan as soon as possible in order to expedite emergence from Chapter 11, she tells the Court. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Time to Remove Civil Actions Extended to March 31 ------------------------------------------------------------------ Garlock Sealing Technologies LLC and its debtor affiliates received from Judge George R. Hodges of the U.S. Bankruptcy Court for the Western District of Northern Carolina an extension of the time within which they may file notices of removal of civil actions and proceedings to March 31, 2011. Section 1452 of Judiciary Procedures Code provides in pertinent part that a party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce that governmental unit's police or regulatory power, to the district court if the district court has jurisdiction of the claim or cause of action. Rule 9027 of the Federal Rules of Bankruptcy Procedure provides that if the claim or cause of action in a civil action is pending when a case under the Bankruptcy Code is commenced, a notice of removal may be filed only within the longest of (A) 90 days after the order for relief in the case under the Bankruptcy Code, (B) 30 days after entry of an order terminating a stay, if the claim or cause of action in a civil action has been stayed under Section 362 of the Bankruptcy Code, or (C) 30 days after a trustee qualifies in a Chapter 11 reorganization case but not later than 180 days after the order for relief. Rule 9006 of the Federal Rules of Bankruptcy Procedure permits the Court to enlarge the period to remove actions provided by Rule 9027. As of the Petition Date, Garlock had about 100,000 asbestos claims pending against it. The Debtors are also involved in other civil trial matters and appeals. For this reason, the Debtors seek an extension of the Removal Period to avoid multiple filings seeking extensions of the deadline with respect to suits where the stay is lifted at a later date, and to ensure that if a deadline is set by operation of Rule 9027, that deadline be extended automatically by operation of the prayed-for order until no earlier than the proposed March 31, 2011 deadline. Jonathan C. Krisko, Esq., at Robinson Bradshaw & Hinson, P.A., in Charlotte, North Carolina -- jkrisko@rbh.com -- tells the Court that at this time, the Debtors have not had an adequate opportunity to determine whether to remove any prepetition actions, which may be subject to removal. For one, he says, the number of Prepetition Actions that may be subject to removal are so numerous that they do not permit individual evaluation at this time concerning whether removal would be beneficial to the Debtors and their estates. He further contends that many Prepetition Actions are correlated with claims that will be the subject of claims proceedings and common issue litigation. Given the process of claims and claims evaluation, objection, and litigation, it would be premature to conclusively identify any specific Prepetition Actions that should be removed, he says. Until the Debtors are able to make an informed decision regarding the advisability of removing any or all of the Prepetition Actions, the Debtors believe that the most prudent and efficient course of action is to extend the removal period until March 31, 2011, Mr. Krisko maintains. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Wins January 3 Extension for Lease Decisions ------------------------------------------------------------- Pursuant to Section 365(d)(4) of the Bankruptcy Code, Garlock Sealing Technologies LLC and its debtor affiliates received from Judge George R. Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina an extension of the period within which they may assume or reject unexpired leases, through and including January 3, 2011. According to Section 365(d)(4)(A), unless a debtor assumes or rejects an unexpired non-residential real property lease on or before the earlier of (a) the date that is 120 days after entry of the order for relief and (b) the date of the entry of an order confirming a plan, that lease is deemed rejected under the Bankruptcy Code. However, the Court may, for cause shown, extend the deadline for a period of 90 days. The Debtors' deadline to assume or reject unexpired non- residential real property leases is October 3, 2010. The Debtors are party to several non-residential real property leases, including: * A lease agreement between Garlock and Carson Portwall, LP; * Lease and leaseback agreements between Garlock and Wayne County Industrial Development Agency; * A lease for office building 215 Industrial Rd. between Garlock and Morgan Building & Spas, Inc.; * A five-year lease agreement with the option to purchase between Garlock and Jeff Cahoon; and * A lease for office headquarters between Garrison Litigation Management Group, Ltd., and 120 East Avenue, LLC. Ashley K. Neal, Esq., at Rayburn Cooper & Durham, P.A., in Charlotte, North Carolina, tells the Court that the Debtors will not be unable to make a decision regarding the disposition of certain of the Leases before October 3, 2010. The Debtors have been focused on early case issues like obtaining debtor-in- possession financing, completing their schedules of assets and liabilities and statements of financial affairs and communicating with parties-in-interest, including the Official Committee of Asbestos Personal Injury Claimants and the Official Committee of Unsecured Creditors, she relates. Consequently, the Debtors have not conducted a complete analysis of the Leases and believe that additional time and analysis is needed before they can determine whether certain of the Leases should be assumed or rejected, Ms. Neal points out. She also assures the Court that none of the lessors to the Leases will suffer unfair prejudice if the Lease Disposition Deadline is extended, as proposed. For these reasons, the Debtors believe that their need to further analyze the Leases constitute "cause" as set forth in Section 365(d)(4), she maintains. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GATEHOUSE MEDIA: Moody's Upgrades Default Rating to 'Caa3' ---------------------------------------------------------- Moody's Investors Service upgraded GateHouse Media Operating, Inc.'s Probability of Default Rating to Caa3 and affirmed the Corporate Family rating of Ca, reflecting Moody's view that with no financial maintenance covenants unless there are revolver advances, which are not possible given the company's current leverage, the company is not likely to default on its $1.2 billion term loan facilities in the next 12 months; however, Moody's still anticipate default and significant restructuring over the intermediate-term horizon. Ratings on individual instruments remain unchanged. As the CFR already reflects a likely restructuring, and the PDR considers Moody's view that default is not imminent, the outlook was changed to stable. Details of the rating actions are: Rating upgraded: * Probability of Default rating -- to Caa3 from Ca Unchanged Ratings (LGD's were updated to reflect current debt structure): * Senior secured revolving credit facility -- Ca, LGD4, 65% from LGD4, 57% * Senior secured term loan B -- Ca, LGD4, 65% from LGD4, 57% * Senior secured term loan C -- Ca, LGD4, 65% from LGD4, 57% * Senior secured delayed draw term loan -- Ca, LGD4, 65% from LGD4, 57% * Corporate Family rating -- Ca Outlook Revision: * The rating outlook has been revised to stable from negative. Ratings Rationale GateHouse's Ca Corporate Family Rating reflects Moody's view that the company faces poor recovery prospects for debt holders in an event of default scenario which is exacerbated by continued soft demand for print advertising. Moody's considers the company's very highly-leveraged capital structure to be unsustainable. Compounding a soft advertising environment and high leverage is a constrained liquidity profile making the prospect of an intermediate term balance sheet restructuring increasingly likely. "The Caa3 Probability of Default Rating acknowledges that with no financial maintenance covenants in the bank term loans (unless there are revolver advances which is currently not the case), Moody's do not anticipate the company defaulting on its $1.2 billion term loan facilities in the next 12 months; however, Moody's still believe that it is likely to default over the intermediate horizon," stated Carl Salas, Vice President at Moody's Investors Service. Recent declines in GateHouse's sales and EBITDA have pushed the company's debt-to-EBITDA leverage above an 11 times multiple for the LTM ended June 30, 2010 (including Moody's standard adjustments). Moody's expect the company will be able to reduce its leverage only modestly over the near term. Moody's recognizes the success of GateHouse's initiatives to cut costs with full year benefits to be realized in 2010. For the 12 months ending June 30, 2010, EBITDA margins of approximately 18.3% in 2009 (including Moody's standard adjustments) are up from 16.8% from the 12 months ending December 2009. Nonetheless, Moody's consider that management may conclude that more fundamental measures, including a distressed exchange or pre-packaged bankruptcy filing, may represent the optimal solution to provide longer term liquidity relief while addressing the company's untenable capital structure. If this does not occur, given the high debt load, it is unlikely that the company will possess the ability to refinance its debt at maturity in 2014. GateHouse's sources of liquidity consist of cash on hand ($28 million as of June 30, 2010) plus cash generated from operations. Given that revolver advances require pro forma compliance with a 6.5x total leverage ratio test (as defined), the company is not able to request advances under its $20 million revolving credit facility. Therefore, the company relies on balance sheet cash and internally generated cash flow to meet near-term funding needs. There is no scheduled amortization under the term loans; however, the company is subject to a 50% excess cash flow recapture provision and paid $2.5 million in March 2010 based on excess cash flow for FY2009. The next recapture payment would be in March 2011. In August 2008, the company issued $11.5 million of 10% preferred stock purchased entirely by FIF III Liberty Holdings LLC, an affiliate of Fortress. Over the next five years, Fortress is able to put the preferred shares and dividends (approximately $2.3 million) to GateHouse. If Fortress decides to put the shares to the company, liquidity would be reduced by at least $13.8 million. Under an amendment to its credit agreement, Gatehouse is able to apply cash in excess of $20 million towards non-pro rata term loan repurchases through a modified Dutch auction through December 2011. Moody's would view purchases under this arrangement as a distressed exchange. The stable outlook reflects Moody's view that, despite single digit declines in revenue growth, GateHouse should be able to generate sufficient EBITDA to fund working capital, interest expense and capital spending over the next 12-18 months thereby avoiding payment default. A rating upgrade is unlikely in the intermediate-term given the projected very high leverage absent a restructuring or robust economic expansion which would materially grow revenues and profits. Ratings could be downgraded if the company announces plans to effect debt reduction through a distressed exchange or a similar capital restructuring with debt holders receiving less than par value. A downgrade would also be likely if EBITDA or liquidity deteriorated to the point that the company could no longer fund its operating needs or debt service. The last rating action occurred on September 17, 2009, when Moody's downgraded GateHouse Media Operating, Inc.'s Corporate Family rating to Ca from Caa1 and its Probability of Default rating to Ca from Caa2, GateHouse's Corporate Family rating to Caa1. With its headquarters in Fairport, New York, GateHouse Media Operating, Inc., is one of the largest publishers of locally based print and online media (newspaper and related publications) as measured by the number of daily publications. Fortress Investment Group LLC and its affiliates beneficially own approximately 39.6% of outstanding common stock and 10.5% of the outstanding credit facility as of June 30, 2010. The company recorded sales of approximately $573 million for the twelve month period ended June 30, 2010. GateHouse publishes 87 daily newspapers, 261 weekly newspapers, 105 shoppers, and seven yellow page directories in addition to operating over 270 locally focused websites. GENERAL GROWTH: Proposes Brookfield Management Pact --------------------------------------------------- General Growth Properties, Inc., and its debtor affiliates seek the Court's permission to enter into a management services agreement with Brookfield Advisors LP, an affiliate of Brookfield Asset Management, Inc. In conjunction with the filing of its Third Amended Joint Plan of Reorganization and related Disclosure Statement, GGP is focusing its efforts on creating a framework to ensure the success of its business after consummation of the Plan, Sylvia A. Mayer, Esq., at Weil, Gotshal & Manges LLP, in New York, tells the Court. A significant portion of those efforts will be devoted to the formation and initial operation of Spinco, Inc., a new public company that will be spun off from GGP upon its emergence pursuant to the 3rd Amended Plan and Investment Agreements, she notes. Spinco requires, among other things, an appropriately qualified management team to guide Spinco through its initial formation and implementation, and to position Spinco to capitalize on its long- term business and operational strategies, Ms. Mayer points out. Against this backdrop, GGP decided to engage another entity to provide a complete management team to direct Spinco on an interim basis. Specifically, GGP selected Brookfield Advisors as the best qualified and incentivized team to manage Spinco on an interim basis. The Management Services Agreement provides that Brookfield Advisors will manage the initial operations of Spinco and guide Spinco through the necessary processes that accompany the creation and development of a new public company. Under the agreement, Brookfield Advisors will: (a) provide services as are reasonably necessary to accomplish the spinoff; (b) provide overall strategic advice in relation to the business, including oversight of detailed asset plans for each of Spinco's material assets; (c) make recommendations for the development of projects, establishment of joint ventures, sales, or other similar transactions and overseeing the execution of those transactions; (d) oversee the preparation and implementation of an annual business plan, including an annual capital expenditure plan and overseeing the preparation and implementation of other strategic or long term plans as required for Spinco; (e) make recommendations concerning current and future financing requirements of Spinco and overseeing financing; (f) make recommendations concerning potential acquisitions or corporate transactions and overseeing the execution of those transactions; (g) make available qualified individuals to act as senior executives of Spinco; (h) oversee corporate functions, including accounting and management reporting, information systems, tax preparation and other corporate functions, to be provided on a transitional basis by certain subsidiaries of GGP following the Spinoff, and developing and overseeing implementation of a long term plan for those functions following termination of the Management Services Agreement; (i) advise and assist Spinco to establish, maintain and implement appropriate policies and procedures designed to ensure compliance with: -- the requirements of securities and other laws, including the Sarbanes-Oxley Act, or any permits and other obligations imposed by any governmental authority affecting Spinco; -- the annual business plan; and -- any other obligations by which Spinco is bound; (j) advise and assist with regard to the community and investor relations of Spinco; and (k) advise and assist with respect to the listing of Spinco's common stock on a national securities exchange. Brookfield Advisors will make available qualified persons to serve in Spinco's interim management, namely: * Chief Executive Officer: David Arthur * Chief Financial Officer: Rael Diamond * Chief Operating Officer: Steven Ganeless * Chief Development Officer: Ashley Lawrence * Executive Vice President - Master Planned Communities: David Harvie * General Counsel: Karen Ayre GGP believes that a strong interim management team will provide Spinco with the essential tools to successfully navigate its initial operations while developing and implementing a long-term business plan and establishing long-term management arrangements, Ms. Mayer asserts. Brookfield and its affiliates have extensive experience in real estate development, including the master planned community business, which will comprise a significant portion of Spinco's real estate assets, she stresses. More importantly, Brookfield and its affiliates have a dedicated interest in forging Spinco into a long-term successful company, given that REP Investments LLC, an affiliate of Brookfield, is a significant investor and a sponsor of GGP's Plan, she points out. To ensure that the requisite steps to create Spinco as a viable public entity and to prepare for a successful launch of Spinco as a separate company pursuant to the Spinoff, are completed in a timely manner, GGP further asks the Court to waive the requirements of 6004(h) of the Federal Rules of Bankruptcy Procedure and direct that any order granting the relief requested be effective immediately. A full-text copy of the Management Services Agreement is available for free at http://bankrupt.com/misc/ggp_BrookfieldMgtPact.pdf The Court will consider the Debtors' request on September 23, 2010. Objections are due September 17. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Spinco Registers Common Stock --------------------------------------------- General Growth Properties, Inc.'s subsidiary, Spinco, Inc., filed on August 24, 2010, a registration statement on Form 10 with the U.S. Securities and Exchange Commission to register its common stock under Section 12 (b) of the Securities and Exchange Act of 1934. As contemplated by GGP's Third Amended Joint Plan of Reorganization, Spinco is the newly-formed public real estate company that will specialize in the development of master planned communities and other strategic real estate development opportunities. Pursuant to the 3rd Amended Plan, about 32.5 million shares of common stock of Spinco will be distributed to the common and preferred unit holders of GGP Limited Partnership, which includes GGP, and then GGP will distribute its portion of shares pro rata to holders of GGP common stock and REP Investments LLC, Fairholme Capital Management and Pershing Square Capital under the Investment Agreements will purchase $250 million shares of Spinco common stock at $47.619048 per share, GGP President and Chief Operating Officer Thomas Nolan, Jr., relates. On the Effective Date, there will be about 37.75 million shares of Spinco outstanding common stock, as well as warrants to purchase up to 8,000,000 shares of Spinco common stock and 507,307 shares of Spinco common stock issuable upon the exercise of the Spinco options, Mr. Nolan relates. Of the 37.75 million shares of Spinco common stock, an unknown aggregate of shares will be freely tradable without restriction in the public market unless the shares are held by "affiliates," as that term is defined in Rule 144(a)(1) under the Securities Act of 1933, he says. The remaining shares outstanding will be "restricted securities" under the Securities Act of 1933 and may be sold in the public market upon the expiration of the holding periods under Rule 144, subject to the volume, manner of sale and other limitations of Rule 144, as applicable, he adds. The share price for Spinco common stock has been adjusted from the originally contemplated per share purchase price to net the fees associated with the eliminated Spinco rights offering and to reflect a reduction in the number of shares of Spinco common stock that will be issued for the same aggregate consideration on the effective date of the 3rd Amended Plan, Mr. Nolan explains. More importantly, substantially all of Spinco's common stock will be distributed to the holders of GGP's common stock and GGP will not retain any ownership of Spinco, he points out. Mr. Nolan adds that Spinco issued 1,000 shares to GGPLP, its parent company on July 1, 2010. Spinco intends to file an application to list its common stock on the New York Stock Exchange. A full-text copy of the Form 10 is available for free at http://ResearchArchives.com/t/s?6a55 About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: To Present Plan for Confirmation on Oct. 21 ----------------------------------------------------------- Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York entered on August 27, 2010, a formal order approving the Disclosure Statement explaining the Third Amended Joint Plan of Reorganization filed by General Growth Properties, Inc., and 125 of its debtor affiliates. Judge Gropper found that the Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. A full-text copy of the August 27 Disclosure Order is available for free at http://bankrupt.com/misc/ggp_Aug27DSOrder.pdf Contemporaneous with the approval of the Disclosure Statement, the Plan Debtors filed a Third Amended Plan to incorporate certain modifications and dates governing the Plan's confirmation. The 3rd Amended Plan provides that before the confirmation date, the Plan Debtors and Eurohypo AG, New York Branch, as agent under the 2006 Bank Loan Credit Agreement, will stipulate that: (i) the Allowed 2006 Bank Loan Revolver Claims and Allowed 2006 Bank Loan Term Claims will each be calculated at an amount equal to (a) principal plus (b) accrued interest at the non-default rate based on the dates the 2006 Bank Loan converted from LIBOR based to prime based rates, plus (c) compound interest calculated at the non-default rate; and (ii) the per diem increases to each of these amounts if the Effective Date occurs after September 30, 2010. The Plan Debtors estimate the Allowed 2006 Bank Loan Revolver Claims to be $620,104,091, and the Allowed 2006 Bank Loan Term Claims to be $2,091,057,035. If the parties are not able to finalize those estimated figures and stipulate to the uncontested components of the claims, those amounts will be determined by the Court at the confirmation hearing. If all disputes between the parties have not previously been resolved, the Plan Debtors will file with the Court pleadings for a determination of the amounts, if any, that may additionally be owing under the 2006 Bank Loan on account of default rate interest, additional compound interest calculated at the default rate and any additional amounts based on conversion dates of the 2006 Bank Loan from LIBOR to the prime based rate, Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, tells the Court. Subject to specific disputes over the applicable rate conversion date, a base rate of PRIME (3.25%) should be used to calculate accrued interest in connection with the 2006 Bank Loan Claims, because, pursuant to the 2006 Bank Loan Credit Agreement, the LIBOR based loans automatically converted to loans accruing at the prime rate as a result of prepetition payment defaults, Ms. Goldstein points out. Thus, estimate of accrued interest is $130,476,306 as of September 30, 2010, she adds. Ms. Goldstein reminds the Court that the 2006 Lenders contend that they are entitled to (i) default rate interest totaling $79,807,566, and (ii) compound interest of $3,266,019, as of September 30, 2010. While the Plan Debtors do not dispute that the Allowed Claim of the 2006 Lenders includes compound interest, they are still reviewing the appropriate calculations, she explains. In addition, the 2006 Lenders have advised that the certain fees are associated with the 2006 Bank Loan Claims: (a) $437,500 in agency fees, (b) $2,870,833 in facility fees, and (c) $15,500,000 in professional fees with all figures estimated and as of September 30, 2010, she discloses. For the avoidance of doubt, the Distribution Record Date will not apply to the Note Claims or the 2006 Bank Loan Claims, she notes. Pursuant to the 3rd Amended Plan, the aggregate distribution to holders of Allowed Hughes Heirs Obligations will equal the value of the Hughes Heirs Obligations as determined by the Court. To the extent that a note will be issued to satisfy the Hughes Heirs Obligations, the terms of the Hughes Heirs Note, which will be issued by Spinco, have not yet been determined and will be subject to negotiation between the Plan Debtors and representatives of the Hughes Heirs, Ms. Goldstein explains. An agreed-upon form of note, or, if no agreement is reached, a form proposed by the Plan Debtors, will be included in the Plan Supplement, she says. Any dispute about the actual value of the distribution on the Hughes Heirs Obligations will be heard at the Confirmation Hearing, she adds. According to the representatives of the Hughes Heirs, the Hughes Heirs Obligations are debts and that the Hughes Heirs thus should be treated under the Plan as holders of Claims. The Plan Debtors' position is that the Hughes Heirs Obligations are contingent equity interests and the 3rd Amended Plan treats the Hughes Heirs Obligations as Interests, Ms. Goldstein asserts. The Court has not yet decided this dispute. If the Court concludes that the Hughes Heirs Obligations are Claims, the Plan provides an alternate treatment, she notes. Specifically, holders of Allowed Hughes Heirs Obligations will receive whatever treatment is necessary to render them unimpaired. As to other modifications to claim classes, the DIP Loan Claims will be allowed in the modified total amount of $401,833,333 as of September 30, 2010. The Plan Debtors will also pay the reasonable and documented fees and expenses incurred by the Replacement DIP Lender and Replacement DIP Agent and Arranger that are contemplated to be paid by the Plan Debtors pursuant to the Replacement DIP Credit Agreement, if applicable. Class 4.5 Rouse 3.625% Note Claims will be allowed in the modified total amount of $425,067,000. Class 4.11 TRUPS Claims will be cured and reinstated by payment in cash in the modified total amount of $7,180,581. The Official Committee of Unsecured Creditors and certain holders of Rouse Notes previously assert that the option of REP Investments LLC, Fairholme Capital Management and Pershing Square Capital to tender Allowed Claims to offset their cash obligations under the Investment Agreements results in intra-class discrimination prohibited by Section 1123(a)(4) of the Bankruptcy Code. However, the Plan Debtors dispute this assertion. If the Court concludes the tender of Allowed Claims to satisfy the Investors' obligations violates Section 1123(a)(4), and if no other resolution is achieved, the Plan Debtors believe the Plan still is confirmable due to the inclusion of alternate treatment under Section 1124 for the affected classes. In other modifications, the deadline to file objections by the holder of an Allowed Claim to the cure, including the amounts proposed to be paid of claims or interests is on October 7, 2010. Full-text versions of the 3rd Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/ggp_Aug273rdAmDS.pdf http://bankrupt.com/misc/ggp_Aug273rdAmPlan.pdf Blacklined versions of the 3rd Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/ggp_Aug273rdAmPlan_blacklined.pdf http://bankrupt.com/misc/ggp_Aug273rdAmDS_blacklined.pdf Judge Gropper also formally approved the procedures with respect to solicitation, voting and tabulation of votes on the Third Amended Joint Plan of Reorganization. The dates related to the solicitation, voting and confirmation procedures with respect to the 3rd Amended Plan are: Voting Record Date August 19, 2010 Solicitation Deadline September 3, 2010, seven days after the date of entry of the Disclosure Statement order Voting and Elections Deadline October 7, 2010 Confirmation Objection Deadline October 7, 2010 Applicable Rate Notice Deadline October 7, 2010 Voting Certification Deadline October 14, 2010 Confirmation Reply Deadline October 19, 2010 The record date for purposes of determining holders of interests entitled to vote on the 3rd Amended Plan is August 19, 2010. The Plan Debtors will complete by no later than September 3, 2010, the distribution by first class mail of the Solicitation Packages to all known holders of Interests in Classes 4.17 and 4.23. Judge Gropper approved the forms of ballots as appropriate for the holders of each Class of Interests entitled under the 3rd Amended Plan to vote on the 3rd Amended Plan. Ballots need not be provided to the holders of Claims against or Interests in Classes 4.1 through 4.15 and Classes 4.18 through 4.22 because they are unimpaired and are conclusively presumed to accept the 3rd Amended Plan. Ballots also need not be provided to the holders of Claims in Class 4.16, because although impaired, they are deemed to have consented to the 3rd Amended Plan in accordance with the Modified Loan Documents executed in connection with the Confirmed Plans of Reorganization. The election forms also, among other things, are tailored for each Class entitled to elect between certain alternate treatments as set forth in the 3rd Amended Plan, Judge Gropper said. The procedures for providing notice of non-voting status to holders of Claims against and Interests in Classes 4.1 through 4.16 and 4.18 through 4.22 with respect to the Plan Debtors are adequate and sufficient, Judge Gropper added. To be counted as a vote on the 3rd Amended Plan, each Ballot and Election Form should be received on or before October 7, 2010. The Plan Debtors' Confirmation Hearing will be held at 10:00 a.m. on October 21, 2010. Any objections to the Plan must be received no later than October 7, 2010. Replies, or an omnibus reply, to any Confirmation Objections will be filed no later than October 19, 2010. The Plan Debtors will file and serve a Plan Supplement no later than seven days before the Voting and Elections Deadline. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Old GM Files Joint Chapter 11 Plan -------------------------------------------------- Motors Liquidation Company, formerly General Motors Corporation; MLC of Harlem, Inc.; MLCS, LLC; MLCS Distribution Corporation; Remediation and Liability Management Company, Inc.; and Environmental Corporate Remediation Company, Inc., delivered to Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York their Joint Chapter 11 Plan of Reorganization and a Disclosure Statement explaining the Plan. The Plan, filed August 31, provides a framework for the environmental remediation of the remaining "Old GM" properties and the distribution of "New GM" stock and warrants to unsecured creditors. "The focus of our small, lean team at MLC has been to work closely with federal and local governments, regulatory bodies, local communities and creditors to develop a plan that comprises environmental remediation, asset liquidation and claims resolution, all on a very large scale, and to do so in very short period of time," said Al Koch, chief executive officer of MLC. "We not only have been successful in doing that, but we have also developed unique processes and approaches that could serve as templates for other big bankruptcies in the future. In both regards, what has been accomplished here is historic." If the Plan is confirmed, substantially all of the Debtors' assets and liabilities will be transferred to four trusts: (1) the Environmental Remediation Trust, or "ERT," that provides funds for the continuing environmental remediation of the Debtors' remaining properties; (2) the General Unsecured Creditors Trust, that will be responsible for resolving the outstanding claims of the Debtors' unsecured creditors and distributing the General Motors Company common stock and warrants owned by MLC to those unsecured creditors whose claims are allowed; (3) the Asbestos Trust that will handle both present and future asbestos-related claims against the Debtors; and (4) the Avoidance Action Trust that will deal with certain litigation-related claims of the Debtors. MLC presently owns 10% of General Motors' common stock, plus warrants that are exercisable for a further 15% of General Motors' common stock on a fully diluted basis. MLC will be issued up to an additional 2% of General Motors' common stock if the final estimated aggregate amount of the Debtors' unsecured claims exceeds certain thresholds. Environmental Remediation Trust Mr. Koch described the ERT as one of the most significant aspects of the Plan. If the Plan is confirmed, the ERT will make $536 million available to handle environmental-remediation activities at the Debtors' remaining properties. "A significant number of these properties are old industrial sites that have a need for substantial environmental remediation," said Ted Stenger, executive vice president of MLC. "It is nearly impossible to redevelop such properties for productive, job- creating purposes unless environmental remediation is complete or the buyer can be assured the funding and procedures exist to do the remediation. The Plan establishes a framework that will provide this assurance." The ERT's assets will consist of cash, the Debtors' remaining unsold real properties, and the equipment that is located at those properties. The ERT, according to Mr. Stenger, differs from the structure that has been used in some other large environmental bankruptcies in that it provides an overall "national" remediation solution backed up by significant funds, while also providing a strong voice to the states involved in the process. If the Plan is confirmed, MLC anticipates that within a few years most of the real properties transferred to the ERT will be sold to third parties or otherwise prepared for redevelopment. In this regard, the Debtors have already received a number of expressions of interest regarding properties and are presently in negotiations to sell 17 properties, in addition to those already sold. MLC anticipates that the majority of the environmental remediation contemplated in the ERT should be completed or well underway within five years, and that the ERT will have adequate funding to complete further remediation activities like periodic site testing and maintenance for up to 100 years. Additional Highlights Under the Plan Additional key highlights of the Debtors' chapter 11 case to date include: -- Management of more than 70,000 claims, totaling more than $275 billion, with more than $150 billion in claims already eliminated or resolved. -- Management of more than 900,000 contracts covering more than 65,000 business partners. -- Announced asset-sales activities that include the sale of the Debtors' Wilmington (Del.) Assembly to Fisker Automotive Inc. (for the production of hybrid electric cars); the sale of Pontiac (Mich.) Centerpoint to Raleigh Studios Inc. (for the creation of a movie studio); and an agreement, subject to certain conditions, to sell Strasbourg (France) Powertrain to General Motors (which is expected to save 1,200 jobs). -- The establishment of a Web portal to facilitate communication with interested parties, which has had almost 32 million hits to date. Debtors Target Emergence at 1st Quarter of 2011 The Debtors are presently targeting the first quarter of 2011 for the confirmation of the Plan and expect that the majority of the Debtors' unsecured claims will be resolved within the first two years after the Plan is confirmed. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At March 31, 2010, GM had US$136.021 billion in total assets, total liabilities of US$105.970 billion and preferred stock of US$6.998 billion, and non-controlling interests of US$814 million, resulting in total equity of US$23.053 billion. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GEOKINETICS HOLDINGS: Moody's Cuts Corp. Family Rating to 'B3' -------------------------------------------------------------- Moody's Investors Service downgraded Geokinetics Holdings, Inc.'s Corporate Family Rating to B3 from B2 and its $300 million senior secured notes to B3 from B2. The CFR and notes rating have been placed under review for possible further downgrade. Moody's also assigned a SGL-4 Speculative Grade Liquidity rating. Ratings Rationale "The downgrade to B3 is driven by Geokinetics' higher than expected revenues volatility in international markets and consequently weaker leverage metrics," commented Pete Speer, Moody's Vice-President. "The review of the ratings for further downgrade highlights the company's potential covenant violations at the end of the third quarter and tight liquidity." Geokinetics' earnings and cash flows in the first half of 2010 have fallen well below management's forecasts when Moody's assigned the ratings in December 2009. While the company's acquisition of the onshore business of Petroleum Geo-Services ASA (PGS) has yielded additional revenues in North America, revenues from international markets have declined 39% compared to the first six months of 2009. The company has reported sequential increases in backlog that point to increasing revenues in the second half of this year and in early 2011. However, even if the earnings improvement is achieved Moody's believe the company's leverage metrics will only improve to levels consistent with a B3 CFR. The SGL-4 rating reflects the likelihood that the company will not comply with its debt covenants at September 30, 2010, and will require a waiver from its banks. Effective June 30, 2010, Geokinetics and its banks agreed to amend its revolving credit facility, modifying the covenants as of June 30 and September 30, 2010, and reducing the facility size to $40 million from $50 million. The company now expects to not comply with the amended September 30 debt covenants and is currently in discussions to amend the facility again or obtain a waiver. Geokinetics reported $41 million of cash and $9 million of borrowings on its revolving credit facility at June 30, 2010. While the company expects to have higher earnings in the second half of this year, it also plans to make significant capital expenditures and multi-client investments over that period. In order for Geokinetics to fund these investments and manage its working capital requirements, Moody's believe that the company needs continued access to its revolver to maintain adequate liquidity. The ratings review will focus on Geokinetics' progress in obtaining the necessary amendment or waiver and the company's third quarter trends in earnings and backlog. Downgrades: Issuer: Geokinetics Holdings, Inc. * Probability of Default Rating, Downgraded to B3 from B2 * Corporate Family Rating, Downgraded to B3 from B2 * Senior Secured Regular Bond/Debenture, Downgraded to B3 from B2 Assignments: Issuer: Geokinetics Holdings, Inc. * Speculative Grade Liquidity Rating, Assigned SGL-4 Outlook Actions: Issuer: Geokinetics Holdings, Inc. * Outlook, Changed To Rating Under Review From Stable Geokinetics Holdings, Inc., is headquartered in Houston, Texas, and is a wholly owned subsidiary of Geokinetics Inc. The company is a global provider of seismic data acquisition and seismic data processing and interpretation services. GEORGE HOUSER: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: George Dalyn Houser 139 Moran Lake Rd. Rome, GA 30161 Bankruptcy Case No.: 10-43407 Chapter 11 Petition Date: August 31, 2010 Court: United States Bankruptcy Court Northern District of Georgia (Rome) Judge: Mary Grace Diehl Debtor's Counsel: George D. Houser, Esq. 550 Hammond Drive, NE Sandy Springs, GA 30328 Tel: (404) 228-3148 Fax: (404) 228-3188 E-mail: ghouser@forumgroup.org Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 Debtor's List of 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tower Financial Loan $600,000 Services, Inc. c/o Keith J. Hoffman 1000 Parkwood Circle, Suite 530 Atlanta, GA 30339 Medical Arts Judgment $500,000 c/o Lisa K. Rose Esq. McCalla Raymer, LLC 6 Concourse Parkway Suite 3200 Atlanta, GA 30328 Retirement Care Judgment $400,000 Associates, LLC Sun Healthcare Group, Inc. 101 Sun Ave. Northeast Albuquerque, NM 87109-4373 Holland & Knight Legal Fees $90,000 Sysco Foodservices, Inc. Judgment $72,000 Frankel and Associates, Judgment $50,000 LLP Georgia Department of Taxes $50,000 Loretta Terhune Estate Judgment $50,000 Revenue The Kydd Group, Ltd. Loan $27,000 Richard S. Rose, CPA Accounting Fees $8,000 GREAT ATLANTIC: Mulls Sale of Food Emporium Stores to Raise Cash ---------------------------------------------------------------- Dow Jones Newswires' Anjali Cordeiro and Paul Ziobro report that Great Atlantic & Pacific Tea Co., operator of the struggling A&P supermarket chain, is considering selling its Food Emporium stores as part of a boarder effort to rid itself of some assets and boost its liquidity, according to people familiar with the matter. The report notes the supermarket operator has publicly said it will consider the sale of "non-core assets" as it looks to improve its liquidity after absorbing some big losses in recent months. Food Emporium is the company's gourmet supermarket banner and one of the more attractive chains it owns. According to Dow Jones, Great Atlantic couldn't immediately be reached for comment. The company operates a little more than 400 stores under several brands including A&P, Waldbaum's, Pathmark, Food Emporium and Food Basics. As reported by the Troubled Company Reporter on August 20, 2010, the Company said it will close 25 stores in five states as it begins the implementation and execution phase of its comprehensive turnaround. The store closures are expected to be completed in the Company's fiscal third quarter, which ends December 2010. According to Dow Jones, one private equity investor said that in recent weeks, investment bank Peter J. Solomon has made an effort to gauge potential buyer interest in the Food Emporium chain for A&P, although it wasn't immediately clear which other banks may be involved. Analysts estimate Food Emporium could fetch more than $200 million in a sale. According to Dow Jones, industry analysts say some private equity firms that could be possible bidders are Angelo, Gordon & Co., which owns Kings Super Markets Inc., and Sterling Investment Partners, owners of the Fairway Market grocery chain. Representatives of Angelo, Gordon and Sterling Investment had no comment. About A&P Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP), founded in 1859, is one of the nation's first supermarket chains. The Company operates 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a- Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. The Company's balance sheet at June 19, 2010, showed $2.6 billion in total assets, $897.0 million in total current liabilities, $2.3 billion in total non-current liabilities, $135.0 million series A redeemable preferred stock, and $659.0 million in stockholders' deficit. Great Atlantic carries 'Caa3' probability of default and corporate family ratings from Moody's Investors Service and a 'CCC' corporate credit rating from Standard & Poor's. At the end of July 2010, when Moody's downgraded the SGL rating to SGL-4 (reflecting weak liquidity), Moody's said, "A&P does have sufficient liquidity to meet immediate operating needs, but liquidity is strained over the next four quarters as a result of the company's debt maturity in June 2011." S&P, in July 2010, when it lowered the corporate rating to 'CCC' from 'CCC+', said it "expects weak trends to continue and the company to be significantly cash flow negative." HSH DELAWARE: Sept. 17 Deadline to File Proofs of Claim ------------------------------------------------------- A notice published in The Wall Street Journal this week directs creditors holding claims against HSH Delaware GP LLC and its debtor-affiliates that arose on or before Aug. 27, 2010 [sic.] to file their proofs of claim by Sept. 17, 2010, with the Bankruptcy Clerk in Wilmington, Del. HSH Delaware and its debtor-affiliates sought chapter 11 protection on Jan. 21, 2010; the Aug. 27 date may be a typographical error. About HSH Delaware HSH Delaware GP LLC is based in Wilmington, Del. Nine HSH partnerships were created in 2006 to buy a 26% stake in HSH Nordbank AG, the world's largest shipping financier, from WestLB AG for about EUR1.25 billion ($1.76 billion). The partnerships received unsecured term and revolving loans of EUR375 million from ABN AMRO bank to fund the purchase of HSH Nordbank shares. As reported by the Troubled Company Reporter on September 9, 2009, creditors with claims aggregating $27.8 million petitioned (Bankr. D. Del. Case No. 09-13145) to send affiliate HSH Delaware LP into Chapter 7 liquidation. Commerzbank AG, Lloyds TSB Bank Plc, ABN Amro Bank NV, Calyon, Royal Bank of Scotland Plc and Landsbanki Islands HF filed the involuntary Chapter 7 petition. HSH Delaware filed for Chapter 11 bankruptcy protection on (Bankr. D. Del. Case No. 10-10187) January 21, 2010. The Company estimated its assets and debts at $100 million to $500 million at the time of the filing. HSH Delaware's affiliates -- HSH Delaware L.P.; HSH Luxembourg S.a.r.l.; HSH Luxembourg Coinvest S.a.r.l.; HSH Delaware GP LLC; HSH Alberta I L.P.; HSH Alberta II L.P.; HSH Alberta V L.P.; HSH Coinvest (Alberta) L.P.; JCF HSH (DE) GP LP; HSH Delaware L.P.; HSH Luxembourg S.a.r.l.; and HSH Luxembourg Coinvest S.a.r.l. -- filed separate Chapter 11 petitions. John Henry Knight, Esq.; Lee E. Kaufman, Esq.; Mark D. Collins, Esq.; and Robert J. Stearn Jr., Esq., at Richards, Layton & Finger, P.A., in Wilington, Del., assist the Debtors in their restructuring effort. The Debtors' Canadian Counsel is McCarthy Tetrault LLP. The Debtors' Chief Restructuring Officer is H. Ronald Weissman. INN OF THE MOUNTAIN: Posts $243,900 Net Loss in June 30 Quarter --------------------------------------------------------------- Inn of the Mountain Gods Resort and Casino filed its quarterly report on Form 10-Q, reporting a net loss of $243,862 on $26,566,284 of revenue for the three months ended June 30, 2010, compared with a net loss of $3,169,361 on $26,725,902 of revenue for the same period a year ago. The Company's balance sheet at June 30, 2010, showed $199,626,334 in total assets, $234,953,388 in total liabilities, and a stockholders' deficit of $35,327,054. BDO Seidman, LLP, in Los Angeles, California, in August 2009, after auditing the Company's fiscal 2009 results, said that the Company has suffered recurring losses, negative cash flows, has negative working capital, accumulated deficits, and negative equity which raise substantial doubt about its ability to continue as a going concern. The Company said in its Form 10-Q that it has incurred significant losses and did not generate sufficient cash to make the interest payments on its 12% senior Notes due 2010 since November 15, 2008. This non-payment of interest constitutes an event of default under the Indenture governing the Notes. The Company is currently in discussions with certain of its debtholders regarding these issues. As of June 30, 2010, the Company had negative working capital of approximately $240.1 million and a total deficit of approximately $56.1 million. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?6a96 About IMG Resort and Casino Headquartered in Mescalero, New Mexico, Inn of the Mountain Gods Resort and Casino and subsidiaries ("IMG Resort and Casino") is an unincorporated business enterprise of the Mescalero Apache Tribe. The Company was established April 30, 2003, and manages and owns all resort, hotel and gaming enterprises of the Tribe including the Inn of the Mountain Gods Resort and Casino (the "Resort"), a gaming, hotel and resort complex opened on March 15, 2005, and its wholly-owned subsidiaries. The Resort, which opened for commercial business on March 15, 2005, is located on tribal land in Mescalero, New Mexico. INNOVATIVE COMPANIES: Plan Confirmation Hearing Set for Sept. 28 ---------------------------------------------------------------- The Hon. Dorothy T. Eisenberg of the U.S. Bankruptcy Court for the Eastern District of New York will convene a hearing on September 28, 2010, at 11:00 a.m., to consider confirmation of the Plan of Reorganization proposed by The Innovative Companies LLC, now known as OLD TIC LLC, and its affiliates. The Court also fixed September 13 at 12:00 p.m. as the deadline for filing ant objections to the Plan, and written ballots accepting or rejecting the Plan. As reported in the Troubled Company Reporter on August 12, the Plan contemplates utilizing cash on hand well as the proceeds of the various sales and other liquidations. The Debtors will within seven business days of the effective date effectuate these transfers in order to provide for implementation and consummation of the Plan: a) fund the initial payment of $375,000 pursuant to the Unsecured Creditor Distribution Agreement into the Unsecured Creditor Distribution Account to provide for the Distributions to the Unsecured Creditors; b) fund a payment in the amount of $190,000 representing the Plan Administrator Initial Account Funding into the Plan Administrator Operating Fund; c) transfer an amount into the Plan Administrator Reserve Account equal to the (i) sum of estimated Allowed Administrative Expense Claims; (ii) $250,000 to fund the Priority Claim Reserve to address the estimated Allowed Priority Claims; (iii) well as any payments that may become due from the Office of the United States Trustee; and (iv) an amount sufficient to cover any Secured Equipment Finance Claims which have not yet been Allowed; d) transfer any amounts to be paid to Allowed Secured Equipment Finance Claims pursuant to Article V of the Plan; and e) remit all remaining funds to Woodside on account of its Secured Claim. After the foregoing transfers have been effectuated, the Plan Administrator, on behalf of the liquidating estates, will make payments due Claimants. Holders of claims against, and interests in, OTIC will be treated as follows: Class 1. Secured Claims - on the effective date, each holder of the allowed claim will be paid until the time as claims is paid in full. Class 2. Holders of Citibank Claim will receive no distribution. Class 3. Holders of secured equipment finance claims will either have all legal and equitable rights left unaltered or will retain the collateral securing the claim. Class 4. Holders of priority claims will receive cash equal to the amount of the allowed claim. The estimated percentage recovery for this class is 100%. Class 5. General unsecured creditors will share the cash deposited into the unsecured creditor distribution account, including a distribution soon as practicable after the effective date. The estimated percentage recovery for this class is 3%. Class 6. No property will be distributed to or retained by the holders of allowed equity interests on account of the interests. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/InnovativeCompanies_DS.pdf About The Innovative Companies LLC Headquartered in Hauppauge, New York, The Innovative Companies LLC and its affiliates filed for Chapter 11 protection on April 17, 2009 (Bankr. E.D.N.Y. Lead Case No. 09-72669). Leslie A. Berkoff, Esq., at Moritt Hock Hamroff Horowitz LLP, represents the Debtors in their restructuring efforts. David M. Banker, Esq., at Lowenstein Sandler PC, serves as counsel to the Official Committee of Unsecured Creditors. In its petition, the Company estimated between $10 million and $50 million each in assets and debts. J2H2, L.L.C.: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: J2H2, L.L.C. 8135 E. Indian Bend Road, #101 Scottsdale, AZ 85250 Bankruptcy Case No.: 10-27818 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: John J. Hebert, Esq. POLSINELLI SHUGHART, P.C. 3636 N. Central Avenue, Suite 1200 Phoenix, AZ 85012 Tel: (602) 650-2011 Fax: (602) 391-2546 E-mail: jhebert@polsinelli.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John Bentley, president. JAMES MCGOEY: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: James E. McGoey 1500 Park Avenue, Unit 211 Emeryville, CA 94608 Bankruptcy Case No.: 10-70004 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: Marc Voisenat, Esq. 1330 Broadway, #734 Oakland, CA 94612 Tel: (510) 272-9710 E-mail: voisenat@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Debtor's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-70004.pdf JAPAN AIRLINES: No Objections to Restructuring Plan in Japan ------------------------------------------------------------ Eiji Katayama, as foreign representative to Japan Airlines Corporation, Japan Airlines International Co., Ltd., and JAL Capital Co., Ltd., filed a status report to update Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York of the Debtors' pending reorganization cases. The Foreign Representative relates that since January 19, 2010, he has progressed toward development of a comprehensive restructuring plan to reorganize the Debtors' balance sheets and operations. In addition, and in furtherance of the Debtors' restructuring efforts, the Foreign Representative, with the approval of the Tokyo District Court, established March 19, 2010, as the bar date for submission of claims against the Debtors. The Foreign Representative was then required to admit or object to those claims by May 28, 2010, and was entitled to an initial investigation period regarding those claims running from May 31 through and including June 14. On May 25, 2010, the Debtors announced that they anticipated submitting their restructuring plan to the Tokyo District Court and the Debtors' creditors by August 31. Although Japan's Corporate Reorganization Act permits corporate debtors as much as one year to submit a restructuring plan, the Debtors originally intended to file their restructuring plan by the end of June 2010. The brief postponement until August 31 of submission of the plan will enable the Debtors to more fully meet their restructuring goals and return their businesses to profitability, the Foreign Representative said. Indeed, he noted, on June 5, 2010, the Debtors announced that their consolidated financial forecast for the fiscal year ending March 2011 anticipated a net operating profit of JPY22 billion, or US$251 million, a dramatic turnaround from the Debtors' challenging financial position at the commencement of the Japan Proceeding. From an operational perspective, the Debtors have undertaken other critical restructuring activities subsequent to the Petition Date, the Foreign Representative said. On April 28, 2010, the Debtors announced they would discontinue 45 unprofitable routes starting September 30, 2010, to better streamline their operations. Moreover, the Debtors have offered certain employees an early retirement option, which approximately 3,500 employees accepted, reducing the Debtors' future labor liabilities. Finally, the Debtors have made strides to dispose of certain non-core assets, including their wholly owned hotel operating unit, which operates 58 hotels in Japan. The Debtors believe that these and other restructuring actions have and will continue to ensure the ultimate success of their reorganization in the Japan Proceeding, enabling the Debtors to emerge from bankruptcy as stronger, healthier companies. The Foreign Representative also related that the Debtors have received no opposition from creditors to the restructuring process. Indeed, though creditors are permitted by Japanese law to propose plans of reorganization, no creditors have taken that step. The Foreign Representative, however, said one shareholder has submitted an unsolicited plan of reorganization but there is great uncertainty as to whether the plan complies with applicable law. Settlement of Antitrust Litigations JALI and various other international airlines have been named as defendants in a number of class action lawsuits involving allegations of antitrust violations regarding air cargo transportation and, separately, trans-pacific air passenger transportation. Plaintiffs in both sets of lawsuits allege price fixing and other violations of Sherman Act Section 1, Section 1 of Title 15 of the U.S. Code, and seek treble damages, attorneys' fees, and costs of suit under Clayton Act Section 16, Section 26 of Title 15 of the U.S. Code. The United States Judicial Panel on Multidistrict Litigation consolidated and transferred the air cargo lawsuits to the United States District Court for the Eastern District of New York (MDL No. 177) and the trans-pacific air passenger lawsuits to the Northern District of California (MDL No. 1913). Proceedings in both the Cargo Litigation and the Passenger Litigation are still in relatively early stages, the Foreign Representative said. In the Cargo Litigation, after the filing of a First Consolidated Amended Complaint on February 8, 2007, all defendants, including JALI, moved to dismiss the complaint on various grounds. On August 21, 2009, the MDL Court adopted a magistrate judge's recommendations, among others, to dismiss certain claims based on violations of competition laws of the European Union and all claims by indirect purchasers, but permitted claims under U.S. law by direct purchasers based on transportation to, from, or within the United States, wherever purchased, to proceed. The indirect purchasers have appealed the final dismissal of their claims. Answers to the complaint were filed on October 30, 2009, and discovery has commenced. In the Passenger Litigation, plaintiffs filed a Consolidated Class Action Complaint on August 6, 2009. On September 22, 2009, the MDL Court granted JALI an extension of time until March 15, 2010, for JALI to respond. On November 24, 2009, all defendants other than JALI filed motions to dismiss claims against them on various grounds. The MDL Court has not yet ruled on those motions. Discovery has commenced. After commencement of the Japan Proceeding, JALI reached separate agreements in principle with the plaintiffs in the Cargo and Passenger Litigations to settle claims against JALI in those matters, the Foreign Representative told the Bankruptcy Court. On July 1, 2010, the Tokyo District Court authorized JALI to settle the Cargo and Passenger Litigations. JALI executed separate settlement agreements with the plaintiffs in the Passenger Litigation dated as of July 6 and in the Cargo Litigation dated as of July 8. The Cargo Settlement resolves all claims against JALI by direct purchasers of air cargo transportation to, from, or in the United States during the period January 1, 2000, through September 11, 2006. The main terms of the Cargo Settlement are: * Plaintiffs agree to release JALI from all antitrust claims relating to direct purchases of air freight transportation services during the period of the case; * JALI agrees to pay $12 million into an escrow account, for subsequent distribution to qualified class members. All attorneys' fees, litigation costs, and costs of notifying class members and distributing funds to them must come from this "all-in" payment; and * JALI agrees to cooperate with plaintiffs by providing certain documents and information. On July 20, 2010, Plaintiffs filed a Motion for Preliminary Approval of the Cargo Settlement. JALI has transferred the agreed $12 million by wire to the designated escrow account. The Passenger Settlement resolves all claims against JALI by purchasers of transpacific passenger transportation services occurring between January 1, 2000, and February 1, 2010. The main terms of the passenger settlement are: * Plaintiffs agree to release JALI from all antitrust claims relating to purchases of transpacific passenger transportation services (excluding certain flights to or from Korea) during the period of the case; * JALI agrees to pay $10 million into an escrow account, for subsequent distribution to qualified class members, unless certain currently pending motions to dismiss are granted. If the motions are granted, then JAL will owe nothing. All attorneys' fees, litigation costs, and costs of notifying class members and distributing funds to them must come from any "all-in" payment; and * JALI agrees to cooperate with plaintiffs by providing certain documents, as well as certain readily available electronic data, help securing testimony from certain employees, and up to a certain number of hours of time with JAL's attorneys to provide an overview of information available. On July 21, 2010, Plaintiff and JALI jointly filed a Joint Notice of Settlement of the Passenger Settlement. The agreement is contained in that filing. As required by Rule 23(e) of the Federal Rule of Civil Procedure, both the Cargo and the Passenger Settlement are subject to, and the releases conditioned upon, approval of the settlements after notice to and an opportunity for class members to opt out of the settlements. Furthermore, as required by the Class Action Fairness Act of 2005, JALI will, at the appropriate time, provide notice of the settlement to the Attorney General of the United States, as well as the primary state regulatory or licensing authority (or state attorney general, if no primary state regulatory or licensing authority exists) for each state in which a class member resides. As set forth in the Court's Recognition Order, the Tokyo District Court's July 1, 2010, approval of the Passenger Settlement and the Cargo Settlement is given automatic recognition in the United States upon approval of those settlements by the Tokyo District Court, without the need for further petition to the Court. Accordingly, the Foreign Representatives said the Debtors are not seeking approval of either settlement from the Bankruptcy Court, but have submitted the Status Report in the interest of keeping the Court apprised of certain important events with regard to the Debtors' restructuring efforts. The Foreign Representative stated that it believes the settlements will prove beneficial to the Debtors' restructuring process in the Japan Proceeding. Importantly, the settlement will enable the Debtors and the Foreign Representative to devote their undivided attention to development of a debt restructuring plan that they ultimately intend to submit for approval to the Debtors' creditors and the Tokyo District Court. Moreover, monetization of an otherwise uncertain liability helps to ensure finality as the Debtors and the Foreign Representative continue the process of resolving claims asserted against the estates. In short, the Tokyo District Court's authorization of these settlements benefits the estate and creditors and aids the Debtors in their further restructuring efforts, the Foreign Representative said. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19, 2010, in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company estimated debts at $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Sells 90% Stake in JAL Sky Kansai Subsidiary ------------------------------------------------------------ The JAL Group said in a public statement dated August 11 that Japan Airlines Corporation's subsidiary, Japan Airlines International Co., Ltd., will sell 90.0% of its stake in JAL Sky Kansai Co., Ltd., while another Group subsidiary JAL Ground Service Co., Ltd., will sell 90.0% of its stake in both JAL Ground Service Kansai Co., Ltd, and JAL Ground Support Kansai Co., Ltd., to Konoike Transport Co., Ltd. by way of a stock transfer agreement. According to the company statement, the JAL Group is striving to achieve a swift and fundamental reform of the company in a short period of time with the support of the Enterprise Turnaround Initiative Corporation of Japan to maintain at the highest level possible, the corporate value of the airline. As part of those endeavors, JALI and JGS started to examine the options of stock transfers of JKIX, JGSK and JGSX. During this process, the three companies received high appraisal for their corporate value and future growth potential from Konoike Transport, an Osaka-based company specializing in outsourcing and logistical support services. Consequently, JALI, JGS and Konoike Transport entered into a stock transfer agreement whereby Konoike Transport will acquire a percentage of stakes in JKIX, JGSK and JGSX. Of the 1,000 stocks owned by Japan Airlines International in JAL Sky Kansai Co., Ltd., 900 stocks will be transferred to Konoike Transport. Of the 2,400 stocks owned by JAL Ground Service in JAL Ground Support Kansai Co., Ltd., and 28,000 stocks in JAL Ground Service Kansai Co., Ltd., 2,160 and 25,200 of stocks from the respective subsidiaries will be transferred to Konoike Transport. JAL Group intends to conclude the transfer negotiations by the end of September. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19, 2010, in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company estimated debts at $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Sells 79.6% Stake in Hotel Unit to Okura -------------------------------------------------------- Japan Airlines Corp. sold a 79.6% stake in its hotel business subsidiary to Hotel Okura Co. The move, according to Dow Jones, is in line with the air carrier's restructuring to focus on its airline business. JAL holds a 90.7% stake in JAL Hotels Co. through its wholly owned subsidiary Japan Airlines International Co. JAL will retain its remaining 11.1% stake in JAL Hotels, which operates 40 hotels in Japan and 18 hotels overseas, Dow Jones said. The share transfer is slated to be finalized by the end of September. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19, 2010, in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company estimated debts at $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JOHN WOOD: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------- Joint Debtors: John N. Wood 2430 Cliff Road Upland, CA 91784 Holly N. Wood 2408 Linda Lane Upland, CA 91784-1168 Bankruptcy Case No.: 10-37821 Chapter 11 Petition Date: August 30, 2010 Court: United States Bankruptcy Court Central District Of California (Riverside) Judge: Meredith A. Jury Debtor's Counsel: Stephen R. Wade, Esq. THE LAW OFFICES OF STEPHEN R. WADE 400 N Mountain Ave., Suite 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 E-mail: dp@srwadelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Joint Debtors' 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-37821.pdf KAYE SANDFORD: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Kaye Elizabeth Sandford 40 Camino Vista Clara Galisteo, NM 87540-9743 Bankruptcy Case No.: 10-14424 Chapter 11 Petition Date: August 30, 2010 Court: U.S. Bankruptcy Court District of New Mexico (Albuquerque) Debtor's Counsel: Edward Alexander Mazel, Esq. ARLAND & ASSOCIATES, LLC 201 3rd Street NW, Suite 505 Albuquerque, NM 87102-3331 Tel: (505) 338-4057 Fax: (505) 338-4061 E-mail: emazel@thearlandlawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nmb10-14424.pdf KENNETH ANDERSON: Files Schedules of Assets & Liabilities --------------------------------------------------------- Kenneth Roderick Anderson has filed with the U.S. Bankruptcy Court for the Eastern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $35,825,000 B. Personal Property $522,305 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $5,792,985 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $186,078 ----------- ----------- TOTAL $36,347,305 $5,979,064 Hurricane, Utah-based Kenneth Roderick Anderson -- dba Pah Tempe Hot Springs Resort,Zion VRC Zip Tour LLC, The Roderick Family Trust, and Kolob Mountain Ranch Resort -- filed for Chapter 11 protection on August 18, 2010 (Bankr. D. Utah Case No. 10-41789). The case was subsequently transferred to California (Bankr. C.D. Calif. Case No. 10-31252). Helga A. White, Esq., who has an office in Auburn, California, assists the Debtor in his restructuring effort. According to his schedules, the Debtor disclosed $36,297,305 in total assets and $5,979,063 in total liabilities as of the petition date. KENNETH ANDERSON: Secured Creditors Want Ch. 11 Case Dismissed -------------------------------------------------------------- Secured creditors Dwendon M. Lee and Annette A. Lee -- Trustees of The Lee Family Trust -- and John J. Lowney and Beatrice M. Lowney, trustees of The Lowney Family Trust, ask the U.S. Bankruptcy Court for the Eastern District of California to dismiss Kenneth Roderick Anderson's Chapter 11 case. The secured creditors claim that the Debtor filed his petition for relief in an improper district, because the Debtor doesn't reside in the Eastern District of California. "The only colorable basis for venue in the Eastern District of California is the Debtor's contentions that the Debtor's principal assets are located in the Eastern District of California." The schedules filed by the Debtor with the Court show that the Debtor's principal assets are located in Utah and that his principal source of income is his place of business in Utah. The secured creditors say that the case should be transferred to the U.S. Bankruptcy Court for the District of Utah. According to the secured creditors, the Debtor resides in Utah, the majority of his creditors are located in Utah, and the majority of the Debtor's real property assets are located in Utah. The Debtor objects to the dismissal of his case, saying that he filed for Chapter 11 protection in the Eastern District of California because he owns real property, worth approximately $2,800,000 in Placer County, his attorney is located in Placer County, his long-time accountant John Roux is located in Sacramento County and his adult son David Anderson, who helps the Debtor in the management of the business, lives in San Francisco, California. The Debtor explains that he was unable to hire any Chapter 11 bankruptcy attorney in Utah because the attorneys he contacted in Utah wanted a minimum up front retainer of $30,000, an amount that Mr. Anderson couldn't and can't raise at this time. The secured creditors are represented by Kronick, Moskovitz, Tiedemann & Grirard. Hurricane, Utah-based Kenneth Roderick Anderson -- dba Pah Tempe Hot Springs Resort,Zion VRC Zip Tour LLC, The Roderick Family Trust, and Kolob Mountain Ranch Resort -- filed for Chapter 11 protection on August 18, 2010 (Bankr. D. Utah Case No. 10-41789). The case was subsequently transferred to California (Bankr. C.D. Calif. Case No. 10-31252). Helga A. White, Esq., who has an office in Auburn, California, assists the Debtor in his restructuring effort. According to his schedules, the Debtor disclosed $36,297,305 in total assets and $5,979,063 in total liabilities as of the petition date. KEVIN CALLAHAN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Kevin L. Callahan Joan E. Callahan 12164 N. 120th Way Scottsdale, AZ 85259 Bankruptcy Case No.: 10-27772 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Debtors' Counsel: Carolyn R. Tatkin, Esq. THE FRUTKIN LAW FIRM PLC Two Renaissance Square 40 N. Central Avenue, Suite 1400 Phoenix, AZ 85004 Tel: (480) 295-3470 Fax: (480) 295-3479 E-mail: tatkin@frutkinlaw.com Scheduled Assets: $870,896 Scheduled Debts: $1,467,884 A list of the Joint Debtors'20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb10-27772.pdf KOKOPELLI STORAGE: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Kokopelli Storage, LLC 4035 N. Bank Street Kingman, AZ 86401 Bankruptcy Case No.: 10-27617 Chapter 11 Petition Date: August 30, 2010 Court: United States Bankruptcy Court District of Arizona (Yuma) Judge: Randolph J. Haines Debtor's Counsel: James M. McGuire, Esq. MCGUIRE GARNER, PLLC 320 N. Leroux, Suite A Flagstaff, AZ 86001 Tel: (928) 779-1173 Fax: (928) 779-1175 E-mail: jmcguire@mcguiregardner.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb10-27617.pdf The petition was signed by William Robertson and James Robertson, members. L-1 IDENTITY: S&P Retains CreditWatch Developing on 'B+' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Stamford, Conn.-based L-1 Identity Solutions Inc., including the 'B+' corporate credit rating, remain on CreditWatch with developing implications, where they were initially placed June 23, 2010. Developing implications indicate that S&P could either raise, lower, or affirm the ratings. L-1 continues to evaluate strategic alternatives, which may include a sale of all or part of the company's operations. The company had obtained relief under its covenants through Aug. 31, 2010, while contemplating a suitable transaction. The company announced that it has further amended its credit agreement such that if it enters into a definitive agreement to sell the company prior to Sept. 30, 2010, the amended covenant ratios will remain in place through March 31, 2011. If a definitive agreement is not executed prior to Sept. 30, 2010, covenant ratios would revert to pre-amendment levels. Under that scenario, S&P expects the company to refinance or further amend its covenants, as the pre- amended covenant schedule is restrictive. In resolving the CreditWatch listing, S&P will monitor the progress of L-1's entering into a definitive agreement or the execution of a refinancing. Should the company sign an agreement to be acquired prior to Sept. 30, 2010, S&P will evaluate the creditworthiness of the buyer and their intent with respect to L- 1's debt. If, as the Sept. 30 deadline approaches, there is no announcement on the resolution of a strategic alternative, if a pre-refinancing is not underway, or if the company does not report that EBITDA has improved beyond current levels such that a covenant breach would not be imminent if the credit agreement reverts to pre-amendment levels, S&P would consider a downgrade, likely by as much as two notches. LARRY HEINRICH: Voluntary Chapter 11 Case Summary ------------------------------------------------- Joint Debtors: Larry Heinrich dba Shape Shop Custom Quality Ice Larry's Lot Allison Heinrich 1909 Taylor Road White Hall, AR 71602 Bankruptcy Case No.: 10-16295 Chapter 11 Petition Date: August 30, 2010 Court: United States Bankruptcy Court Eastern District of Arkansas (Pine Bluff) Debtors' Counsel: Basil V. Hicks, Jr., Es. P.O. Box 5670 N. Little Rock, AR 72119-5670 Tel: (501) 301-7700 Fax: (501) 301-7999 E-mail: basil.hicks@comcast.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Joint Debtors did not file a list of their largest unsecured creditors together with their petition. LEHMAN BROTHERS: Fogarazzo, et al., Want to Pursue Securities Suit ------------------------------------------------------------------ Lawrence Fogarazzo, Carolyn Fogarazzo, Steven L. Hopkins and Don Engel are lead plaintiffs in a securities fraud action lawsuit before the U.S. District Court for the Southern District of New York, alleging that Lehman Brothers Holding Inc., Goldman Sachs & Co. and Morgan Stanley & Co., Inc.: (i) misrepresented their true investment options regarding RSL Communications, Inc.; and (ii) failed to disclose their quid pro quo schemes whereby they prepared their investment analyst reports to obtain investment banking business from companies being analyzed by the equity research division in order to receive tens of millions of dollars of investment banking proceeds from various offerings and transactions conducted on behalf of RSL. As a result, LBHI, et al., are subject to potentially sizable damages for their violations of the federal securities laws, Curtis V. Trinko, Esq., at Law Offices of Curtis V. Trinko, LLP, in New York -- ctrinko@trinko.com -- contends. He contends that Section 524(e) of the Bankruptcy Court permits a creditor to seek recovery from any other entity which may be liable on behalf of the Debtor. By this motion, the Lead Plaintiffs ask the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to allow them to proceed against any and all insurance policies of the Debtors for damages arising from the Securities Action. Pursuant to a Primary Combined Financial Institutions Comprehensive Crime and Professional Indemnity Policy issued by Lloyd's of London, underwriters will pay on behalf of Lehman a loss incurred as a result of any claim made against Lehman for a wrongful act, Mr. Trinko asserts. As alleged in their complaint, as amended, the Lead Plaintiffs believe that Lehman is legally liable, committed wrongful acts as defined in the Insurance Policy. He insists that the U.S. District Court found that the Amended Complaint sufficiently alleged that the Defendants had perpetrated a fraudulent scheme and otherwise misrepresented the nature of their equity analyst reports on RSL during a class period from April 30, 1999 to December 29, 2000. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Trustee Wants Underwriting Fees Status Upheld ------------------------------------------------------------------ James W. Giddens, as trustee for the liquidation of the business of Lehman Brothers Inc. under the Securities Investor Protection Act of 1970, asks the Court to upload his determination of certain claims for underwriting fees filed by Wachovia Capital Markets, LLC, Wells Fargo Securities, LLC, and Banc of America Securities LLC. Wachovia Capital, Wells Fargo and Banc of America assert that LBI owes it money corresponding to various types of fees and commissions due under "Master Agreements Among Underwriters." Accordingly, in January 2009, the Underwriting Claimants filed these claims that arose from fees related to syndicated offering under the MAAU: Wachovia Capital $4,229,184 Wells Fargo $5,007,917 Banc of America $8,798,509 The SIPA Trustee subsequently issued, also in 2009, a determination denying customer status of the Underwriting Claims under SIPA and reclassifying the Claims as general creditor claims in unspecified amounts. The Underwriting Fee Claimants consequently objected to the SIPA Trustee's determinations of the Underwriting Fee Claims. David W. Wiltenburg, Esq., at Hughes Hubbard & Reed LLP, in New York, asserts that the SIPA Trustee's determinations of the Underwriting Fee Claims should be confirmed because the Underwriting Fee Claimants are not customers under SIPA. Instead, he notes, these sophisticated parties entered into arm's-length business relationships with LBI, forming underwriting "syndicates" for the purpose of distributing newly issued securities to their respective customers, with rights and duties regarding fees and similar payments to Syndicate Members carefully defined by contract, he says. This contractual relationship between LBI and members of underwriting syndicates is far from the customer relationship contemplated by SIPA, which depends on entrustment of property to a broker-dealer's "securities account" for purposes of securities Investment, Mr. Wiltenburg points out. By contrast, he cites, the Underwriting Fee Claimants maintained no "securities accounts" with LBI -- as the SIPA definition of 'customer' requires -- but are merely seeking to recover on LBI's unsecured obligations to pay fees. Equally misguided is the assertion of one claimant that a "constructive trust" may be imposed to elevate its unsecured fee claim into a claim for specific property, Mr. Wiltenburg contends. In fact, he elaborates, the governing contract effectively disclaims any trust relationship or any structure where specific funds could be traced by providing that LBI was free to commingle any fees or other amounts due to the Underwriting Fee Claimants with the its "general funds," and thus had no obligation to segregate, set aside or hold funds in trust. The SIPA Trustee also asks the Court to expunged the objections asserted by the Underwriting Fee Claimants. SIPC Supports Request The Securities Investor Protection Corporation agrees with the SIPA Trustee's determinations, and believes that the objections of the Underwriting Fee Claimants should be overruled. Representing the SIPC, Josephine Wang, Esq., in Washington, D.C., asserts that underwriting fees do not form the basis of a protected "customer" claim. The Underwriting Fee Claimants are not public customers of LBI who are claiming securities or cash as investors or traders, she asserts. She adds that securities regulations treat underwriting fees as non-customer obligations. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins OK of Transfer Agreement With Citibank ------------------------------------------------------------ Lehman Brothers Holdings Inc. and the SIPA trustee of Lehman Brothers Inc. received court approval to approve a transfer agreement with Citibank N.A. The agreement authorizes the transfer of the residual interests of LBHI, LBI and another subsidiary, Lehman Pass Through Securities Inc., in real estate mortgage investment conduits. The Lehman units currently hold about 1,600 residual interests in REMICs. Under the deal, LBHI agreed to pay $24 million to Citibank in exchange for the bank's acquisition of the residual interests. As the new owner of the assets, Citibank will assume the obligation to pay the taxes on those assets accruing on or after March 31, 2010, the effective date for the agreement. A copy of the Transfer Agreement is available without charge at http://bankrupt.com/misc/LBHI_CitiTransferAgreement.pdf Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, says the acquisition by Citibank of those assets will relieve the Lehman units of $119 million to $283 million in income tax, which the companies are expected to incur within four years. In connection with the deal, LBHI and the trustee also ask for court approval to enter into an inter-estate agreement, dated July 27, 2010, under which they agreed to a mechanism for sharing responsibility between the company and LBI for the $24 million payment. About 70% of the $24 million will be allocated to LBI with the remaining 30% divided between LBHI and LPTSI. A copy of the Inter-Estate Agreement is available without charge at http://bankrupt.com/misc/LBHI_CitiInterEstateAgreement.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins OK to Acquire Loans Through LBREP JV ---------------------------------------------------------- Lehman Brothers Holdings Inc. sought and obtained a court ruling authorizing an affiliate to purchase loans through a joint venture with Luxembourg-based LBREP III Europe S.a.r.l. SICAR. The loans comprise the senior debt in a residential project known as "Sun and Moon," in which LBREP and LBHI own stake. The project consists of 634 residential units located in Marseille, France. The buyout is part of a deal that LBHI hammered out with LBREP to get additional funding for the Sun and Moon project. The deal calls for the acquisition of the loans by Lehman Commercial Paper Inc. from Lehman Brothers Bankhaus AG, which will then be assigned to the joint venture to be owned 37.5% by LCPI and 62.5% by LBREP. The additional funding for the residential project will be in the form of debt from LCPI and equity investment from LBHI and LBREP. As much as EUR102.4 million is still needed to complete the project, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in Houston, Texas, tells the Court. Mr. Perez says the buyout would allow LCPI and LBHI to increase their investments in the Sun and Moon project while also sharing with LBREP in providing additional funding for the project. "If LCPI purchased the [loans] alone, it would not have the benefit of the additional funding from LBREP, and the Sun and Moon project would not receive sufficient [funding] to meet its current business plan," Mr. Perez says in court papers. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LOGAN'S ROADHOUSE: Moody's Reviews 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service placed the all ratings of Logan's Roadhouse Inc., including its B2 corporate family rating and Ba3 senior secured bank debt rating, under review for possible downgrade. The review follows the company's announcement on August 30, 2010, that it has entered into a definitive merger agreement to be acquired by an affiliate of Kelso & Company from its current owners -- a consortium of private equity sponsors. In Moody's opinion, the proposed transaction could result in increased financial leverage. The review will focus on both the amount and terms of the debt employed in NewCo's capital structure, and the financial and execution risks associated with completing the acquisition. Additionally, the review will incorporate Moody's view of post-transaction business risks, notably integration, governance and fiscal policies, as well as the expected liquidity profile of NewCo. These ratings were placed under review for possible downgrade: * Corporate Family rating at B2 * Probability of Default rating at B2 * $30 million revolver maturing in 2011 at Ba3 * $138 million (approximately $133.2 million outstanding) term loan B maturing in 2012 at Ba3 The terms of the transaction were not disclosed and completion of the transaction is subject to regulatory approval and customary closing conditions. In the event that the merger results in the retirement of Logan's legacy debt, Moody's will likely confirm and withdraw the affected ratings. The last rating action was on March 25, 2010, when Moody's affirmed all ratings and revised outlook to stable from negative. Logan's Roadhouse, Inc., headquartered in Nashville, Tennessee, operates 188 and franchises 26 traditional American roadhouse- style steakhouses in 23 states across the country. Company-owned units are largely concentrated in the south and southeastern United States with franchise locations in California and the Carolinas. LOGAN'S ROADHOUSE: S&P Affirms 'B-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed all existing ratings on Logan's Roadhouse Inc., including its 'B-' corporate credit rating, following the company's announcement that it reached a definitive agreement to be acquired by an affiliate of Kelso & Company. Concurrently S&P removed all ratings from CreditWatch Positive where they were placed on June 7, 2010, following the company's filing for a $200 million initial public offering (IPO) of its common stock. The outlook is stable. "The ratings action follows Logan's announcement that it agreed to be acquired by private equity firm Kelso & Company," said Standard & Poor's credit analyst Mariola Borysiak. The company previously planned an IPO. Although the buyout transaction may result in weaker credit metrics, S&P believes that Logan's liquidity position will remain adequate. Logan's operating performance continued to stabilize during its third quarter ended May 2, 2010. Guest traffic and same store sales turned positive, and for the 17th consecutive quarter Logan's outpaced the casual dining industry average as measured by Knapp-Track. S&P believes that Logan's disciplined spending and focus on cost cutting, coupled with lower commodity prices, led to a 250 basis points margin expansion from the same period a year ago. Although the proposed transaction may result in weaker credit metrics, S&P expects Logan's to maintain adequate liquidity position. S&P will review the ratings and outlook and reassess Logan's business profile and its financial policy going forward once S&P meets with the company's management. A downgrade or outlook revision to negative could be considered if the proposed transaction results in much higher leverage that jeopardizes Logan's adequate liquidity. An upgrade is not likely given S&P's expectation for higher debt levels resulting from the buyout by Kelso. MARIAN FORTIER: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Marian L. Fortier 19965 Ingomar Street Winnetka, CA 91306 Bankruptcy Case No.: 10-20971 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: James Studer, Esq. 1420 Los Angeles Avenue, Suite 203 Simi Valley, CA 93065 Tel: (805) 582-9191 Fax: (805) 830-0446 E-mail: jamesstuderesq@aol.com Scheduled Assets: $1,751,251 Scheduled Debts: $2,359,378 A list of the Debtor's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-20971.pdf MAULDING DEVELOPMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Maulding Development, LLC 2005 Appleton Drive Springfield, IL 62711 Tel: (217) 787-9226 Bankruptcy Case No.: 10-72715 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court Central District of Illinois (Springfield) Judge: Mary P. Gorman Debtor's Counsel: James R. Enlow, Esq. 2050 W. Iles Avenue, Suite G-1 Springfield, IL 62704 Tel: (217) 679-0683 Fax: (217) 726-8861 E-mail: jre@enlowlaw.net Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by David Maulding, managing member. METROFINANCIERA SAPI: Chapter 15 Case Summary --------------------------------------------- Chapter 15 Petitioner: Jose Angel Amaro, as foreign representative Chapter 15 Debtor: Metrofinanciera, S.A.P.I de C.V., S.F.O.M., E.N.R. Padre Mier, 444 Pte Zona Centro C.P. 640000 Monterey, N.L. Mexico Chapter 15 Case No.: 10-20666 Type of Business: The Debtor is a subprime and construction lender based in Mexico. Chapter 15 Petition Date: August 30, 2010 Court: U.S. Bankruptcy Court Southern District of Texas (Corpus Christi) Judge: Richard S. Schmidt Petitioner's Counsel: Alan S. Gover, Esq. WHITE & CASE LLP 1155 Avenue of the Americas New York, NY 10036 Tel: (212) 819-8200 Estimated Assets: $500,000,001 to $1,000,000,000 Estimated Debts: $500,000,001 to $1,000,000,000 The Company did not file a list of creditors together with its petition. MICHAEL LABADIE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Joint Debtors: Michael Labadie Mary Michelle Morelli Labadie aka Michele Labadie 590 West Main, #130 Santa Paula, CA 93060 Bankruptcy Case No.: 10-14486 Chapter 11 Petition Date: August 30, 2010 Court: U.S. Bankruptcy Court Central District of California (Santa Barbara) Debtors' Counsel: Philip D. Dapeer, Esq. PHILIP DAOEER, A LAW CORPORATION 2625 Townsgate Road, Suite 330 Westlake Village, CA 91361 Tel: (323) 954-9144 Fax: (323) 954-0457 E-mail: PhilipDapeer@AOL.com Scheduled Assets: $3,454,385 Scheduled Debts: $1,193,071 A list of the Joint Debtors' 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nmb10-14424.pdf MIG INC: Plan Confirmation Hearing Scheduled for September 28 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on September 28, 2010 at 2:00 p.m., Eastern Time, to consider the confirmation of MIG, Inc., fka Metromedia International Group, Inc.'s Plan of Reorganization. Any objections, and written ballots accepting or rejecting the Plan are due on September 23 at 5:00 p.m. Ballots must be received by the Debtors' voting agent: Attn: MIG Bankruptcy Administration c/o THE GARDEN CITY GROUP, INC. 5151 Blazer Parkway, Suite A Dublin, OH 43017 Tel: (800) 327-3664 The material terms of the Plan include: -- The Debtor will be reorganized pursuant to the Plan, converted into a Delaware limited liability company and continue in operation. -- Allowed Other Class 1 Priority Claims will be paid in full in cash on the Distribution Date, unless otherwise agreed to by the Debtors and the holders of the claims. -- Holders of Allowed Class 2 Secured Workers' Compensation Obligations Claims will continue to receive cash payments in the ordinary course. -- Each holder of an Allowed Class 3 General Unsecured Claim will be paid in cash on the Distribution Date, 100% of the Allowed amount of its Class 3 Claim plus interest from the Petition Date to the Effective Date, in full, final and complete satisfaction, settlement, release, and discharge of the Allowed Class 3 Claim. -- Each holder of an Allowed Class 5 Claim will be entitled to receive, in full, final and complete satisfaction, settlement, release, and discharge of the Allowed Class 5 Claim, their Pro Rata share of: (i) the New MIG Notes, (ii) the New Warrants; (iii) Beneficial Interests in the Class 5 Trust; (iv) the Excess Cash less Withheld Excess Cash; and (v) any Withheld Excess Cash. A full-text copy of the Second Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/Metromediainternational_2ndAmendedDS.pdf About MIG Inc. Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM, MTRMP) -- http://www.metromedia-group.com/-- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The Company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. MIG, Inc., fka Metromedia International Group, Inc., filed for Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del. Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig LLP, assists the Company in its restructuring efforts. Debevoise & Plimpton LLP is the Company's special corporate counsel, while Potter Anderson & Corroon LLP is the Company's special litigation counsel. The official committee of unsecured creditors of MIG, Inc., has retained Baker & McKenzie LLP as its bankruptcy counsel, nunc pro tunc to June 30, 2009. In its petition, the Company estimated US$100 million to US$500 million in assets and US$100 million to US$500 million in debts. In its formal schedules, the Company said it had assets of $54,820,681 against debts of $210,183,657. MORAN LAKE: Case Summary & 10 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Moran Lake Convalescent Center, LLC 139 Moran Lake Road Rome, GA 30161 Bankruptcy Case No.: 10-43405 Chapter 11 Petition Date: August 31, 2010 Court: United States Bankruptcy Court Northern District of Georgia (Rome) Judge: Mary Grace Diehl Debtor's Counsel: George D. Houser, Esq. 550 Hammond Drive, NE Sandy Springs, GA 30328 Tel: (404) 228-3148 Fax: (404) 228-3188 E-mail: ghouser@forumgroup.org Scheduled Assets: $12,000,000 Scheduled Debts: $6,000,000 The petition was signed by George D. Houser, president of The Guild, Inc., Debtor's manager. Debtor's List of 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tower Financial Loan $600,000 Services, Inc. c/o Keith J. Hoffman 1000 Parkwood Circle, Suite 530 Atlanta, GA 30339 Medical Arts Judgment $500,000 c/o Lisa K. Rose Esq. McCalla Raymer, LLC 6 Concourse Parkway Suite 3200 Atlanta, GA 30328 Retirement Care Judgment $400,000 Associates, LLC Sun Healthcare Group, Inc. 101 Sun Ave. Northeast Albuquerque, NM 87109-4373 Holland & Knight Legal Fees $90,000 Sysco Foodservices, Inc. Judgment $72,000 Frankel and Associates, Judgment $50,000 LLP Georgia Department of Taxes $50,000 Loretta Terhune Estate Judgment $50,000 Revenue The Kydd Group, Ltd. Loan $27,000 Richard S. Rose, CPA Accounting Fees $8,000 NFLUX LLC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: NFLUX, LLC 2589 E 24th Street #4 Yuma, AZ 85365 Bankruptcy Case No.: 10-27643 Chapter 11 Petition Date: August 30, 2010 Court: United States Bankruptcy Court District of Arizona (Yuma) Judge: Eileen W. Hollowell Debtor's Counsel: Robert M. Cook, Esq. LAW OFFICES OF ROBERT M. COOK PLLC 219 W. Second St. Yuma, AZ 85364 Tel: (928) 782-7771 Fax: (928) 782-7778 E-mail: robertmcook@yahoo.com Scheduled Assets: $6,286,394 Scheduled Debts: $4,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Todd Burch, member. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Cactus West Developers, LLC 10-17298 06/02/10 NORTEL NETWORKS: Creditors Committee Down to Three Members ---------------------------------------------------------- Roberta DeAngelis, the Acting United States Trustee for Region 3, informed the Bankruptcy Court that Arivana Inc. and Flextronics Corporation resigned as members of the Official Committee of Unsecured Creditors in the bankruptcy cases of Nortel Networks Inc. and its debtor affiliates. The three remaining members of the Creditors' Committee are: (1) The Bank of New York Mellon Attn: Martin Feig, V.P. 101 Barcley Street-8 West New York, NY 10286 Phone: 212-815-5383 Fax: 732-667-4756 (2) Pension Benefit Guaranty Corporation Attn: Jennifer Messina 1200 K Street, N.W. Washington, DC 20005 Phone: 202-326-4000 ex 3209 Fax: 202-842-2643 (3) Law Debenture Trust Company of New York Attn: Robert Bice II 400 Madison Ave., 4th Floor New York, NY 10017 Phone: 212-750-6474 About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Has Settlement With Verizon -------------------------------------------- Nortel Networks Inc. entered into a stipulation in a bid to settle the motions it filed against Verizon Communications Inc. and its affiliates. NNI earlier filed a motion for an investigation of the Verizon entities to determine the basis for their $11.2 million claim. The Debtor also filed another motion to enforce the automatic stay after the Verizon entities withheld the payment of over $10.3 million to it in light of the parties' dispute over the validity of the $11.2 million claim. The stipulation, which the Court approved on August 24, 2010, requires the Verizon entities to continue their payment to NNI. It also prohibits the Verizon entities from withholding payment on any additional invoices issued by NNI unless they are granted relief from the automatic stay by the Court. Any Verizon entity that claims to have a right of setoff or recoupment is required to file a motion for determination of whether it is entitled to assert that right. In case the Court issues an order in favor of a Verizon entity, NNI or any of its affiliated debtors is required to earmark up to $15 million to make the necessary payment, pursuant to the stipulation. NNI has agreed to withdraw its motions in light of the Court- approved stipulation. A full-text copy of the NNI-Verizon stipulation is available for free at http://bankrupt.com/misc/Nortel_StipulationVerizon.pdf About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Wins Ok for RLKS as Wind-Down Consultant --------------------------------------------------------- Nortel Networks Inc. and its affiliated debtors sought and obtained approval to employ RLKS Executive Solutions LLC as their consultant effective July 9, 2010. As consultant, RLKS will assist the Debtors in the wind down and liquidation of their businesses and estates, which include the maintenance and management of the Debtors' records. The firm will take direction from and report directly to John Ray, NNI's principal officer. The principals of RLKS are experienced and knowledgeable regarding the handling of records during bankruptcy proceedings, says the Debtors' lawyer, Alissa Gazze, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware. The Debtors relate that they are highly confident in RLKS' ability to effectively and efficiently assist them in the tasks at hand. For the contemplated service, the Debtors propose to pay RLKS a $15,000 retainer, in the aggregate, and $450 per hour for services to be rendered by its chief executive Richard Lydecker Jr. and Kathryn Schultea. The firm will also be reimbursed for necessary and actual expenses. Mr. Lydecker submitted an affidavit to the Court, affirming that his firm does not hold nor represent interest adverse to the Debtors. He assures the Court that RLKS is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) PACIFIC ENERGY: Plan Confirmation Hearing Set for October 12 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on October 12, 2010, at 1:00 p.m. (prevailing Eastern time), to consider the confirmation of Pacific Energy Resources Ltd.'s Plan of Liquidation. Any objections to the Plan, and ballots accepting or rejecting the Plan are due on September 29: Ballots must be received before the voting deadline at: Pacific Energy Resources Ltd. c/o Omni Management Group, LLC 16161 Ventura Blvd., Suite C Encino, CA 91436 The solicitation agent must file with the Bankruptcy Court, no later than October 5, an affidavit regarding the results of the tabulation of the ballots received on the Plan. As reported in the Troubled Company Reporter on July 27, 2010, the Debtor filed a proposed liquidation plan with the support of its official committee of unsecured creditors. About Pacific Energy Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engaged in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). The Debtor estimated between $100 million and $500 million in assets and debts in its Chapter 11 petition. Attorneys at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtors. The Debtors also tapped Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. PARK GROVE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Park Grove Pet Hospital, P.A. 7663 79th Street South Cottage Grove, MN 55016 Bankruptcy Case No.: 10-36330 Chapter 11 Petition Date: August 30, 2010 Court: U.S. Bankruptcy Court District of Minnesota (St Paul) Judge: Dennis D. O'Brien Debtor's Counsel: Steven B. Nosek, Esq. 2855 Anthony Lane S, Suite 201 St. Anthony, MN 55418 Tel: (612) 335-9171 Fax: (612) 789-2109 E-mail: snosek@visi.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mnb10-36330.pdf The petition was signed by Daniel G. Cederstrom, president. PETTIT ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Pettit Enterprises LLC 0704 Canyon Creek Drive Glenwood Springs, CO 81601 Bankruptcy Case No.: 10-32289 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Douglas C. Pearce II, Esq. 950 Spruce Street, Suite 1C Louisville, CO 80027 Tel: (303) 661-9292 Fax: (303) 661-9555 E-mail: doug@crlpc.com Scheduled Assets: $1,003,129 Scheduled Debts: $1,953,961 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cob10-32289.pdf The petition was signed by John M. Pettit. Manager. Debtor-affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Rocky Mountain JMP, Inc. 10-17633 04/03/10 PROFESSIONAL VETERINARY: Files Schedules of Assets & Liabilities ---------------------------------------------------------------- Professional Veterinary Products, Ltd., has filed with the U.S. Bankruptcy Court for the District of Nebraska its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $7,561,390 B. Personal Property $35,215,608 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $6,884,413 E. Creditors Holding Unsecured Priority Claims $374,030 F. Creditors Holding Unsecured Non-priority Claims $27,228,112 ----------- ----------- TOTAL $42,776,998 $34,486,554 Omaha, Nebraska-based Professional Veterinary Products, Ltd., filed for Chapter 11 protection on August 20, 2010 (Bankr. D. Neb. Case No. 10-82436). James J. Niemeier, Esq., Michael T. Eversden, Esq., Robert J. Bothe, Esq., and Robert P. Diederich, Esq., at McGrath, North, Mullin & Kratz, P.C., assist the Debtor in its restructuring effort. The Debtor estimated assets and debts at $50 million to $100 million in its Chapter 11 petition. PROFESSIONAL VETERINARY: Section 341(a) Meeting Set for Sept. 21 ---------------------------------------------------------------- The U.S. Trustee for Region 13 will convene a meeting of Professional Veterinary Products, Ltd.'s creditors on September 21, 2010, at 10:00 a.m. The meeting will be held at Roman L. Hruska Courthouse, 111 South 18th Plaza, US Trustee Meeting Room, Omaha, NE 68102. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Omaha, Nebraska-based Professional Veterinary Products, Ltd., filed for Chapter 11 protection on August 20, 2010 (Bankr. D. Neb. Case No. 10-82436). James J. Niemeier, Esq., Michael T. Eversden, Esq., Robert J. Bothe, Esq., and Robert P. Diederich, Esq., at McGrath, North, Mullin & Kratz, P.C., assist the Debtor in its restructuring effort. The Debtor estimated assets and debts at $50 million to $100 million in its Chapter 11 petition. PROFESSIONAL VETERINARY: Creditors Panel Taps Smith as Counsel -------------------------------------------------------------- The Committee of Unsecured Creditors of the estate of Professional Veterinary Products, Ltd., et al., asks for authorization from the U.S. Bankruptcy Court for the District of Nebraska to employ the Law Firm of Smith, Gardner, Slusky, Lazer, Pohren & Rogers, LLP, as counsel. Smith Gardner will, among other things: a. provide representation in connection with any adversary proceedings filed in the Court by various creditors and adversary proceedings required to be filed for the protection and preservation of property of the estate; b. assist the Committee in its investigation of the conduct, activities, claims, liabilities and assets of the Debtor; c. prepare applications, motions, answers, responses, orders, reports, adversary proceedings, objections, comments and other legal papers in the proceeding and related Chapter 11 matters; and d. perform any and all other legal services which may be necessary or otherwise deemed appropriate in the interest of the Committee in accordance with the authority and rights of the Committee. Smith Gardner will charge the Committee these hourly rates: Clay Rogers $250 Christopher Curzon $250 Associates $160 Paralegals $100 Christopher D. Curzon, Esq., a partner in Smith Gardner, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Omaha, Nebraska-based Professional Veterinary Products, Ltd., filed for Chapter 11 protection on August 20, 2010 (Bankr. D. Neb. Case No. 10-82436). James J. Niemeier, Esq., Michael T. Eversden, Esq., Robert J. Bothe, Esq., and Robert P. Diederich, Esq., at McGrath, North, Mullin & Kratz, P.C., assist the Debtor in its restructuring effort. The Debtor estimated its assets at $50 million to $100 million and debts at $50 million to $100 million. PROFESSIONAL VETERINARY: Gets OK to Hire McGrath as Bankr. Counsel ------------------------------------------------------------------ Professional Veterinary Products, Ltd., et al., sought and obtained authorization from the U.S. Bankruptcy Court for the District of Nebraska to employ McGrath North Mullin & Kratz, PC LLO, as bankruptcy counsel. McGrath North will, among other things: a) take necessary actions to protect and preserve the Debtors' estates during the pendency of their Chapter 11 case, including the prosecution of actions by the Debtors, the defense of actions commenced against the Debtors, negotiations concerning litigation in which the Debtors are involved and objecting to claims against the estate; b) prepare motions, applications, answers, orders, reports and papers in connection in administration of their Chapter 11 case; c) counsel the Debtors with regard to their rights and obligations as debtors-in-possession; and d) perform other necessary legal services including without limitation those on behalf of the Debtors related to the auction of its assets or any similar sale. McGrath will be paid $200 to $330 per hour for it services. Robert J. Bothe, Esq., a shareholder in McGrath North, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Omaha, Nebraska-based Professional Veterinary Products, Ltd., filed for Chapter 11 protection on August 20, 2010 (Bankr. D. Neb. Case No. 10-82436). The Debtor estimated its assets at $50 million to $100 million and debts at $50 million to $100 million. PROFESSIONAL VETERINARY: US Trustee Forms Creditors Committee ------------------------------------------------------------- Nancy J. Gargula, the U.S. Trustee for Region 13, appoints seven members to the Official Committee of Unsecured Creditors in Professional Veterinary, Products, Ltd.'s Chapter 11 cases. The Committee members include: 1) Pfizer Inc. Attn: Michael Gipson, Director, Financial Services Global Financial Solutions 6730 Lenox Center Ct. Memphis, TN 38115 Phone: (901) 215-1570 Cell: (901) 335-9427 Fax: (901) 433-7880 E-mail: Michael.Gipson@pfizer.com 2) Lionel Reilly, DVM 20620 Corral Road Elkhorn, NE 68022 Cell: (402) 670-3893 Home: (402) 289-3502 Cell: (402) 670-3893 E-mail: lionel.reillydvm@gmail.com 3) Boehringer Ingelheim Vetmedica Attn: Stephanie Sulzen 2621 North Belt Highway St. Joseph, MO 64506-4902 Phone: (816) 387-4885 Cell: (816) 344-9038 E-mail: Stephanie.Sulzen@boehringer-ingelheim.com 4) Intervet/SP Animal Health Attn: Michael J. Marino 1011 Morris Avenue Union, NJ 07083 Phone: (908) 820-6389 E-mail: michael.marino@spcorp.com 5) Novartis Animal Health US, Inc. Attn: Nancy White, Credit Manager 3200 Northline Avenue, Suite 300 Greensboro, NC 27408 Phone: (336) 387-1089 Cell: (336) 545-5595 Fax: (336) 387-1409 E-mail: nancy-1.white@novartis.com 6) AgriLaboratories, Ltd. Attn: Helen Taylor, CPA, Chief Financial Officer P.O. Box 3103 St. Joseph, MO 64503 Phone: (816) 271-5741 Cell: (816) 387-1222 E-mail: htaylor@agrilabs.com 7) Bayer Corporation Attn: Deborah Blevins, Director AH Credit Services P.O. Box 390 Shawnee Mission, KS 66201 Phone: (913) 268-1760 Cell: (816) 547-3314 Fax: (913) 962-5120 E-mail: deborah.blevins.b@bayer.com Omaha, Nebraska-based Professional Veterinary Products, Ltd., filed for Chapter 11 protection on August 20, 2010 (Bankr. D. Neb. Case No. 10-82436). James J. Niemeier, Esq., Michael T. Eversden, Esq., Robert J. Bothe, Esq., and Robert P. Diederich, Esq., at McGrath, North, Mullin & Kratz, P.C., assist the Debtor in its restructuring effort. The Debtor estimated its assets at $50 million to $100 million and debts at $50 million to $100 million. PS INVESTMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: PS Investment Property Holdings LLC c/o Mariscal Weeks Mcintyre and Friedlander Statutory Agent 2901 N. Central Avenue, #200 Phoenix, AZ 85012 Bankruptcy Case No.: 10-27692 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: James M. Marlar Debtor's Counsel: Todd B. Tuggle, Esq. JENNINGS, STROUSS & SALMON, P.L.C. One East Washington Street, Suite 1900 Phoenix, AZ 85004-2554 Tel: (602) 262-5834 Fax: (602) 262-5911 E-mail: ttuggle@jsslaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 Debtor-affiliates that filed separate Chapter 11 petitions: Debtor Case No. Petition Date ------ -------- ------------- Bullhead 125 Holdings Ltd. Partnership 10-27694 8/31/10 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 Pinnacle & Pima LLC 10-27695 8/31/10 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 Village at Pinnacle Peak LLC 10-27697 8/31/10 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 The Debtors did not file a list of creditors together with their petitions. The petitions were signed by Michael E. Pfau, authorized representative. REAL MEX: Moody's Retains 'Caa2' Corporate Family Rating -------------------------------------------------------- Moody's Investors Service affirmed Real Mex Restaurant Inc.'s Speculative Grade Liquidity rating at SGL-3. Real Mex's long term ratings, including its Caa2 Corporate Family Rating, and stable outlook are unaffected by the announcement. Real Mex's SGL-3 incorporates Moody's view that the company's overall liquidity profile for the next twelve months will likely be adequate. Moody's anticipate Real Mex's free cash flow to be slightly positive despite the low EBITDA level. In addition, the $15 million revolving credit facility (due July 2012) remained undrawn as of June 27, 2010 and should provide future liquidity needs if there is any seasonal cash flow shortfall. Moody's also expects modest cushion under the bank financial covenants but cautions that the cushion could become tight should the operating performance deteriorate, particularly under the minimum EBITDA requirement of $32 million covenant which is also contained in the bond indenture for the 14% senior secured notes due 2013. Real Mex's Caa2 CFR continues to reflect the challenges Real Mex will face to reverse its revenue decline primarily driven by the ongoing, albeit somewhat decelerated, negative same store sales trend, in a very difficult operating environment for casual dining concepts. The rating also incorporates the company's high financial leverage, poor interest coverage and weak free cash flow generation. The company's ratings are: * Corporate Family Rating -- Caa2 * Probability of Default Rating -- Caa2 * $130 million 2nd lien senior secured notes due 2013 -- B3 (LGD2, 24%) * Speculative Grade Liquidity rating -- SGL-3 * Rating outlook -- Stable The last rating action on Real Mex occurred on July 13, 2009, when the SGL rating was raised to SGL-3 from SGL-4. Real Mex Restaurants, Inc., headquartered in Cypress, California, is a leading Mexican-themed restaurant chain operator that owns, operates and franchises casual dining restaurants primarily under the El Torito, Chevys Fresh Mex and Acapulco Mexican Restaurant concepts. Total revenues for twelve months ended June 27, 2010, were approximately $486 million. REFCO INC: Cantor Wants Rule 2004 Exam on Refco & Capstone ---------------------------------------------------------- Cantor Fitzgerald Securities, along with certain of its affiliated Entities, entered into a series of agreements with Debtor Refco Group, LLC, and non-debtor Refco Securities in March 2004. Under the Agreements, Cantor provided to Refco Group and Refco Securities certain services with respect to various financial transactions. Representing Cantor, Francis X Riley, III, Esq., at Saul Ewing LLP, in Princeton, New Jersey, specified that pursuant to that certain U.S. Dollar Fixed Income Transaction Fee Agreement dated April 1, 2004, as amended, Cantor provided to Refco Group and Refco Securities essential financial services with respect to electronic trading and purchase or sale transactions for certain notes, bonds, and treasury swaps. Refco Group and Refco Securities are jointly and severally obligated to pay Cantor fees under the Transaction Fee Agreement. However, Refco Securities and Refco Group failed to make the required payments under the Transaction Fee Agreement, according to Mr. Riley. Cantor filed in June 2006, a Statement of Claim before the National Association of Securities Dealers, Inc., alleging Refco Securities' failure to pay Cantor the fees due under the Transaction Fee Agreement. The NASD later became the Financial Industry Regulatory Authority. Cantor also filed a general unsecured claim for $11,193,466 against Refco Group with respect to the Transaction Fee Agreement, Mr. Riley confirmed. After a hearing before a panel of three neutral arbitrators, Cantor and Refco Securities were served by FINRA with the decision or "award" of the arbitrators. The Award essentially stated that the Arbitrators determined that: (1) Refco Securities is liable for, and will pay to Claimant, compensatory damages totaling $11,193,466 plus interest at the rate of 9% per annum from the date of the issuance of the award until the day of payment of the award; (2) Refco Securities' counterclaim is denied in its entirety; and (3) Any and all relief not specifically addressed by the Arbitrators is denied. Cantor filed in April 2010, a petition to confirm the Award in the Supreme Court of the state of New York, County of New York. Refco Securities concurrently filed a petition to vacate the Award. The plan administrators of Refco, Inc., and its debtor-affiliates also sought an extension of the deadline to object to, among other things, the Cantor Claims through and including December 7, 2010. Cantor opposed the extension request. "The issues between Cantor and Refco Securities with respect to the Award have been fully briefed and oral argument regarding Cantor's Petition to Confirm and Refco Securities' Petition to Vacate took place before Justice Barbara Jaffe in New York State Court on June 8, 2010. The New York State Court will issue its ruling in due course," Mr. Riley informed Judge Drain. Moreover, Mr. Riley said, "the Award has not been satisfied, and no payment has been made to Cantor on account of [that] Award. Cantor has received no distribution on account of Cantor's claim against Refco Group." Against this backdrop, Cantor asked Judge Drain to compel representatives of Refco Securities and Capstone Advisory Group, LLC, to: (a) attend an examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure following services of a proposed subpoena duces tecum; and (b) produce certain documents identified in the Subpoena Duces Tecum prior to the Examination. The Rule 2004 Examination and Document Productions "should provide information relevant to Refco Securities' ability to satisfy the award and, by extension, relate to the administration of the Debtors' estates," Mr. Riley insisted. Objections "To the extent that Cantor is entitled to any . . . information, the Rule 2004 Motion could have gotten Cantor the information it seeks with a few interrogatories. Instead, Cantor seeks massive document discovery, followed by depositions," the Plan Administrator of Refco Capital Markets, Ltd., complained. Representing the Plan Administrator, Daniel N. Zinman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, argued that the imposition of the Rule 2004 Motion -- while Refco Securities is weighing whether to appeal Justice Jaffe's order -- suggests that the Rule 2004 Motion is designed not to obtain information but simply to apply pressure on Refco Securities to give up any appeal. "[This form of] harassment is not the purpose Rule 2004 is meant to accomplish," Mr. Zinman noted. The Plan Administrator also submitted a separate letter to the Court seeking to postpone the hearing to consider Cantor's Rule 2004 Motion to September 15, 2010. In response, Mr. Riley, on behalf of Cantor, said that "there is no need to delay the Hearing." Arthur H. Ruegger, Esq., at Sonnenschein Nath & Rosenthal LLP, in New York, special litigation counsel to Refco Inc. and Refco Group Ltd., asked Judge Drain to hold an informal status conference in connection with Cantor's Rule 2004 Motion "to update the Court regarding the status of production of information related to Cantor Index Holdings, L.P." Cantor Index is a partnership engaged in financial and gaming businesses that is 90% owned by affiliates of Cantor. Subsequently, for undisclosed reasons, Cantor withdrew, without prejudice, its Rule 2004 Motion. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: LLC Trustee Reaches Settlement With Former Customers --------------------------------------------------------------- Albert Togut, solely in his capacity as Chapter 7 Trustee for the estate of Refco, LLC, asks Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement and release that he reached with these former customers: * Risk Management International * Scott Mikros * Charles F. Murphy III * Margaret B. Sparks * Dennis Bordyn * Martha Jencks * Howard Allard * Joseph Owczarek * Isabella Khorolinsky * Gregory Khorolinsky * Lorraine Allard * Pratima Shah * Mayur Shah * ANA Trading Corp. * Avante Service & Sales * Clarence Peterson * Michael Page * Margaret Mikros * Victor Dwojacki * Greory Lochow * Robert Johnston * Carol Nehls * Janice Wood * Julie Vevers * David J. Flood * Francis Ritchie * Peter Shapiro * R. Thomas Loftin * C. Scott Vinson * William Peterson * Krishnaiah Revulurli * Tony Orsini Vincent E. Lazar, Esq., at Jenner & Block LLP, in Chicago, Illinois, relates, on behalf of the Chapter 7 Trustee, that Refco LLC commenced in October 2002, a proceeding against certain of the Former Customers before the Circuit Court of Cook County, captioned Refco, LLC v. Risk Management Int'l, et al. Under the proceedings, Refco LLC sought to recover certain unpaid debit balances from the Former Customers and others in connection with their commodity trading accounts carried on the books of the Company. Defendant Scott Mikros and certain other parties filed arbitration proceedings in January 2003, entitled Risk Management International, Ltd. et al. v. Refco, Inc., et al., before the National Futures Association asserting certain claims against Refco LLC and Stephen Paoletti relating to their commodity trading accounts. Upon the Chapter 7 Petition Date, the Litigation and the Arbitration Proceedings were stayed. Judge Drain modified the automatic stay under Section 362(a) of the Bankruptcy Code in May 2006, with respect to Litigation for the limited purpose of allowing the liquidation of the claims asserted in the Litigation or the Arbitration Proceedings. Stephen Paoletti thereafter filed a civil complaint against the Former Customers before the Circuit Court of Cook County, County Departments, Chancery Division entitled Paoletti v. Risk Management Int'l, et al., Case No. 07-CH-21406, seeking declaratory judgment and other relief from the Circuit Court. Certain of the Former Customers have filed in Refco LLC's Chapter 7 case, Claim Nos. 351, 352, 353, 354, 355, 356, 357, 358, 359, 360, 361, 363, 364, 365, 366, 367, 368, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 379 and 380. The Former Customers' Claims exceed $1.6 million in the aggregate. To resolve the claims dispute, the Chapter 7 Trustee and the Former Customers agreed to enter into a settlement agreement pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, which provides for these terms: (a) The Chapter 7 Trustee will withdraw and dismiss with prejudice all claims asserted against the Former Customers in the Litigation and in the Arbitration Proceedings, and the Former Customers will withdraw and dismiss with prejudice all Claims asserted against the Trustee in the Litigation, the Arbitration Proceeding, and the Chapter 7 Debtor's Chapter 7 case, as well as all claims asserted in the Chancery Proceeding. (b) In satisfaction of all of the Former Customers' Claims, the Trustee will pay $175,000 as settlement payment to the Former Customers. (c) With the exception of any claim to enforce the settlement payment or any other provision of the Settlement Agreement, the Chapter 7 Trustee and the Former Customers will exchange mutual releases. (d) Except for the Settlement Payment, the Former Customers consent to the disallowance of their Claims. Although Refco LLC has asserted claims against the Former Customers, the Former Customers have also asserted claims against Refco LLC. Continued litigation of the dispute, including the costs and expenses associated with continued litigation, could result in an outcome less favorable than the $175,000 Settlement Payment, Mr. Lazar notes. Moreover, he adds, the litigation necessary to resolve the claims asserted by the Trustee and the Former Customers would require additional attorney time and could involve extensive and expensive discovery and preparation. On the other hand, the Settlement Agreement will avoid unnecessary delay and uncertainty caused by continuing the litigation, Mr. Lazar avers. Against this backdrop, the Chapter 7 Trustee asks the Court to approve his Settlement Agreement with the Former Customers. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ROBERT SPEHAR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Robert Gerard Spehar aka Gerry Spehar Susan Miller Spehar 1625 Grandview Avenue Glendale, CA 91201 Bankruptcy Case No.: 10-47181 Chapter 11 Petition Date: August 31, 2010 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Alan M. Ahart Debtors' Counsel: Jerome S. Cohen, Esq. 3731 Wilshire Boulevard, Suite 514 Los Angeles, CA 90010 Tel: (213) 388-8188 Fax: (213) 388-6188 E-mail: jsc@jscbklaw.com Scheduled Assets: $1,014,952 Scheduled Debts: $3,014,132 A list of the Joint Debtors' 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-47181.pdf ROSEMONT TWO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Rosemont Two, LLC 1341 H Street, N.E. Washington, DC 20002-4406 Bankruptcy Case No.: 10-00852 Chapter 11 Petition Date: August 30, 2010 Court: U.S. Bankruptcy Court District of Columbia (Washington, D.C.) Judge: S. Martin Teel, Jr. Debtor's Counsel: David E. Lynn, Esq. 15245 Shady Grove Road, Suite 465 N Rockville, MD 20850 Tel: (301) 255-0100 Fax: (301) 255-0101 E-mail: davidlynn@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/dcb10-00852.pdf The petition was signed by Gail Montplaisir, member. ROTHSTEIN ROSENFELDT: Judge Directs Founder to Repay $363MM ----------------------------------------------------------- Jay Weaver, writing for The Miami Herald, reports that U.S. District Judge James Cohn on Monday ordered Scott Rothstein to repay $363 million to some 320 victims of his investment racket. The Herald says Judge Cohn allowed preferential treatment for about 40 clients of Mr. Rothstein's former law firm who received legal services. He noted they were different from the mostly wealthy investors, and should collect the actual money they had left in the Rothstein Rosenfeldt Adler bank accounts -- about $1.5 million. The Herald relates that federal prosecutors cautioned the judge that while they have seized about $60 million worth of Mr. Rothstein's assets, including property, cars, jewelry and cash, there won't be much bounty to distribute to all his victims. After liquidation, there might be an estimated $25 million to $30 million to redistribute to former clients, investors and other creditors. Assistant U.S. Attorney Lawrence LaVecchio told Judge Cohn that he wished the government had enough money to repay all of Mr. Rothstein's victims in full, but "practical realities" intervened. The Herald also reports that in a separate federal bankruptcy proceeding, the trustee discovered that South Florida auto dealer Edward Morse and wife Carol, major investors with Mr. Rothstein, received payments from him totaling $87 million before his investment scam unraveled last October. Those payments substantially exceeded their losses to Mr. Rothstein. The Herald says the Morse family has agreed to pay $30 million to the law firm's bankruptcy estate. The report also relates the bankruptcy trustee, advised by lawyers with the Fort Lauderdale firm Berger Singerman, has aggressively pursued substantial claims against the Morses, other investors, Mr. Rothstein's former law partners and the firm's banks, Toronto Dominion and Gibraltar. The trustee argues that legally, those entities should pony up because, for the most part, they benefited financially from Mr. Rothstein's scheme even if they had no knowledge of his wrongdoing. Attorney John Genovese, special counsel to the trustee, said the bankruptcy lawyers are working to recover more than $100 million they claim is owed to investors. The report says a looming issue for the bankruptcy judge is a bill for more than $7 million in fees and costs submitted so far by court-appointed lawyers and accountants working on the Rothstein case. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA, has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non-existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. SPA CHAKRA: Halts Operations; Files for Chapter 7 ------------------------------------------------- Adrianne Pasquarelli, writing for Crain's New York Business, reports that Palo Alto, Calif.-based Spa Chakra has filed for Chapter 7 bankruptcy protection. The company also filed a WARN notice with the New York state Department of Labor on Tuesday, reporting the layoff of 66 employees in the city. The report says Spa Chakra's location at 663 Fifth Ave., in New York, has already been closed and has a voicemail phone message in place states "As of Friday, Aug. 20, 2010, all Spa Chakra-operated U.S. spa locations will cease operations." The report notes Spa Chakra also operated outposts in Chicago, Indianapolis and Marina del Rey, Calif. A recording at the Guerlian Spa in the Waldorf said the site has been temporarily closed, and that the spa is "making every effort to reopen." Crain's says Spa Chakra listed assets of nearly $283,000 and liabilities of nearly 18 times that amount -- just over $5 million in its bankruptcy petition. The company also named more than 100 creditors. Crain's relates that a group of three vendors, including N.J.- based GVK Limited Partners, Conn.-based JJB Public Relations and Manhattan-based Zinna Floral Design, filed a petition in December to push Spa Chakra into Chapter 7 bankruptcy. The vendors claimed they were owed more than $1.3 million for services rendered. Shortly after the filing, the then-Australia-based Spa Chakra network filed for Chapter 11 bankruptcy protection, Crain's continues. Hercules Technology Growth Capital, a Palo Alto provider of debt and equity growth capital, then bought the spas. SUNCAL COS: Judge Declines to Lift Lehman Automatic Stay -------------------------------------------------------- Bankruptcy Law360 reports that SunCal has failed to convince a district court to untie its hands when it comes to $1.5 billion in loans held by Lehman Brothers Holdings Inc., which is also bankrupt. Law360 says Judge Richard J. Holwell of the U.S. District Court for the Southern District of New York on Friday declined to lift the automatic stay in the Lehman bankruptcy. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Some of SunCal's communities include Amerige Heights in Fullerton, Lincoln Crossing near Sacramento and Terra Lago and Fairway Canyon near Palm Springs. SunCal Companies recently added an active-adult, commercial, homebuilding, multifamily and urban divisions; and expanded to Florida, Texas and Washington, D.C. Irvine, California-based Palmdale Hills Property, LLC, develops real estate property. It filed for Chapter 11 protection on Nov. 6, 2008 (Bankr. C. D. Calif. Case No. 08-17206). Affiliates who also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. TACO DEL MAR: Says Purchaser's Bid Within Range of Assets' Value ---------------------------------------------------------------- Taco Del Mar Franchising Corp. and its affiliate, Conrad & Barry Investments Inc., have won bankruptcy court approval to conduct an auction for substantially all of TDM's assets on September 30 at 1:00 p.m. at the offices of Karr Tuttle Campbell, 1201 Third Avenue, Suite 2900, Seattle, Washington. The Official Committee of Unsecured Creditors filed a motion for reconsideration of the order approving the bidding procedures. The Debtor counters that the sale should go forward, noting that:: -- although the Court failed to allow the breakup fee and overbid amount proposed, it was clear that the Court considered the evidence and arguments of counsel for the Committee, Banner Bank, TDM, and of the stalking horse bidder, Taco Del Mar Acquisition, Inc.; -- the evidence presented shows that the Debtor's marketing efforts were substantial and more than enough to support the Court's ruling denying the Committee's application to employ investment bankers for less than 2 months work then, now less than 1 month's work; and -- while the Committee's financial analyst is concerned that the current sales price may result in no return to unsecured creditors, he has also stated that the Debtor's assets are valued in a range between $1,800,000 and $2,500,000. The stalking horse' bid of $1,950,000 is clearly in that range. About Taco Del Mar Franchising Founded in Seattle, Washington, in 1992 by brothers James and John Schmidt, Taco Del Mar is a quick-service casual restaurant chain inspired by southern Baja, Mexico, and coastal beach shacks known for serving some of the tastiest burritos and tacos. Today, Taco Del Mar operates in more than 225 locations throughout the U.S., Canada and Guam. Taco Del Mar Franchising Corp. and its affiliate, Conrad & Barry Investments Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No. 10-10528) on January 22, 2010. George S. Treperinas, Esq. at Karr Tuttle Campbell represents the Debtor in its restructuring effort. The Official Unsecured Creditors' Committee is represented by Geoffrey Groshong, Esq. at Miller Nash LLP. The Company estimated assets at $10 million to $50 million and liabilities at $50 million to $100 million. TELETOUCH COMMS: May 31 Balance Sheet Upside-Down by $8.64 Million ------------------------------------------------------------------ Teletouch Communications Inc. filed its annual report on Form 10-K, reporting $21.68 million in total assets, $30.33 million in total liabilities, and $8.64 million in stockholders' deficit at May 31, 2010. The Company reported net income of $1.60 million on $51.96 million of total operating revenues for the fiscal year ended May 31, 2010, compared with a net loss of $1.92 million on $45.86 million of total operating revenues for fiscal 2009. A full-text copy of the annual report on Form 10-K is available for free at http://ResearchArchives.com/t/s?6a98 Teletouch Communications, Inc., offers a comprehensive suite of wireless telecommunications solutions, including cellular, two-way radio, GPS-telemetry and wireless messaging. Teletouch is an authorized provider of AT&T (NYSE: T) products and services (voice, data and entertainment) to consumers, businesses and government agencies, as well as an operator of its own two-way radio network in Texas. Recently, Teletouch entered into national agency and distribution agreements with Sprint (NYSE: S) and Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular network services. Teletouch operates a chain of 26 retail and agent stores under the "Teletouch" and "Hawk Electronics" brands, in conjunction with its direct sales force, customer care (call) centers and various retail eCommerce Web sites including: http://www.hawkelectronics.com/and http://www.hawkexpress.com/ Through its wholly-owned subsidiary, Progressive Concepts, Inc., Teletouch operates a national distribution business, PCI Wholesale, primarily serving large cellular carrier agents and rural carriers, as well as auto dealers and smaller consumer electronics retailers, with product sales and support available through http://www.pciwholesale.com/and http://www.pcidropship.com/among other B2B oriented Web sites. THINKFILM LLC: Creditors Seek Summary Judgment ---------------------------------------------- Alex Ben Block, writing for The Hollywood Reporter, said eight creditors last week filed a motion for a summary judgment in the involuntary bankruptcy case of ThinkFilm LLC, which would mean immediately forcing that entity into bankruptcy. The creditors say it is clear that owner David Bergstein and his companies have "engaged in a concerted effort to resist all discovery efforts." The creditors said that ThinkFilm assets have been moved to avoid seizure, the company is not staying current on its debts as required by law, and that it is being driven into true insolvency. The report says the creditors asked for an expedited decision, but Judge Barry Russell ruled against them last week, saying they will have to wait for legal opposition to be filed. The next planned court date is set for Oct. 6. The report also notes that Judge Russell is also expected to rule at the Oct. 6 hearing on Mr. Bergstein's request to force one of the creditors, Aramid, to put up a $25 million bond. At previous hearings, the judge indicated he was unlikely to force Aramid to put up a bond in case it loses. The Hollywood Reporter also relates that Judge Russell last week ruled that Mr. Bergstein's main holding company, Pangea Media Group, must turn over computer servers containing images of documents and business records to Mr. Durkin. The judge ordered the trustee be allowed to finally look at the info, which Bergstein has resisted for the past several months. Pangea was to turn over the servers by the end of business Wednesday and will have two weeks to provide a log of information they seek to have excluded from examination. New Lawyer The Hollywood Reporter further stated that Joseph Eisenberg, Esq., of Jeffer Mangels Butler & Marmaro, has taken over from David Weinstein, Esq., of Richardson & Patel, as main lawyer for the five "alleged debtor" companies. In an interview, Mr. Eisenberg said that the court-ordered examinations by Mr. Durkin of Mr. Bergstein and his sometime business partner, construction exec Ronald Tutor, have not been completed. About CapCo et al. CapCo Group LLC and four other companies controlled by David Bergstein are part of a wider network of entities that distribute and finance films. Among the approximately 1,300 films they have the rights to are "Boondock Saints" and "The Wedding Planner." Several creditors filed for involuntary Chapter 11 against the companies on March 17, 2010 -- CT-1 Holdings LLC (Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr. C.D. Calif. Case No. 10-19929); Capitol Films Development LLC (Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D. Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif. Case No. 10- 19912). Judge Barry Russell presides over the cases. The Petitioners are represented by David L. Neale, Esq., at Levene Neale Bender Rankin & Brill LLP. TRIBUNE COMPANY: Mediator to Assist in Plan Negotiations -------------------------------------------------------- Tribune Company welcomed the appointment of a mediator who will assist negotiations with various creditor constituencies as the company's Chapter 11 process moves forward. "We're pleased that the court has appointed a mediator--this is a clear sign that reaching consensus is a valuable part of this process," said Randy Michaels, Tribune's chief executive officer. The U.S. Bankruptcy Court for the District of Delaware today appointed federal judge Kevin Gross as mediator. Gross is currently a U.S. Bankruptcy judge for the District of Delaware in Wilmington, DE. "We welcome Judge Gross' participation in the process and we look forward to his wisdom and guidance as we move forward," said Michaels. In addition, Tribune's Board of Directors has named a special committee to oversee the company's Chapter 11 process. The committee is composed of four independent directors: Mark Shapiro (Chairman), Jeffrey Berg, Maggie Wilderotter and Frank Wood. About Tribune Co Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. And Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UAL CORP: DOT Issues Route Transfer Exemption --------------------------------------------- United Air Lines and Continental Airlines completed one of the final steps in the regulatory process for the proposed merger. The U.S. Department of Transportation on Monday issued a route transfer exemption for United Airlines, Continental and Continental Micronesia. Under the law and DOT policy, when two air carriers holding international route authority come under common ownership and control, prior approval is required by DOT. "We appreciate the thorough review by both the Department of Transportation and the Department of Justice, and look forward to the shareholder vote on September 17," said UAL CEO Glenn Tilton. Some information DOT requires for a final determination, such as the composition of the Board of Directors of the new, combined company, will not be available until the merger closes. Therefore, United and Continental requested the exemption that DOT granted Monday. This allows for the merger to close while the carriers continue to provide updated information. Final approval for transfer of international certificates and all other economic authority is expected in the months ahead. On August 27, 2010, the Antitrust Division of the United States Department of Justice completed their review and determined that they have no objections to the carriers' merger. As part of the review, United and Continental have agreed to the transfer of slots and related assets to Southwest Airlines, including 18 pairs of takeoff and landing slots at Newark. "As you know, we vigorously compete with Southwest throughout our network. Since the slot pair transfer is expected to have minimal impact on our combined route network, we are not changing the previously announced synergy estimates," Mr. Tilton said last week. United and Continental will ask shareholders to approve the merger at separate meetings scheduled for September 17. About Continental Airlines Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,700 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance. Continental has total assets of $13.60 billion against total debts of $12.87 billion as of June 30, 2010. In May 2010, Continental announced an agreement to merge with UAL Corp. The merger has not yet been completed. In August 2010, Moody's Investors Service affirmed its 'B2' corporate family, with negative outlook, for Continental Airlines. Moody's said the affirmation, among other things, signifies the potential for it to maintain the B2 rating if the proposed merger with UAL (B3 corporate family from Moody's, on review for upgrade) is completed under terms that enable the combined entity to achieve the potential revenue and cost synergies that have been identified. However, the outlook remains negative because of the industry's weak track record in successfully executing large business combinations. Continental caries a 'B' corporate rating, on watch negative, from Standard & Poor's. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'B3' corporate family and probability of default ratings from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. At June 30, 2010, UAL had $20.134 billion in total assets against total current liabilities of $8.573 billion, long-term debt of $6.281 billion, long-term obligations under capital leases of $1.01 billion, other liabilities and deferred credits of $7.022 billion, and a stockholders' deficit of $2.756 billion. UAL CORP: DOJ Review Completed; Merger to be Completed Oct. 1 ------------------------------------------------------------- United Airlines and Continental Airlines said they have been notified by the Antitrust Division of the United States Department of Justice of the termination of its Hart-Scott-Rodino Act review and the closing of its investigation of the airlines' pending merger. "We are pleased to have achieved this critical milestone and look forward to our respective stockholders' votes next month, following which we expect to be on track to close our merger by October 1st," said Glenn Tilton, UAL Corporation chairman, president and CEO. "The combination of United and Continental will create a world class airline, which will deliver an industry leading network for our customers and the communities we serve, career opportunities for our people, and value and return for our stockholders." "The completion of DOJ's review is an important step on our journey of creating the world's leading airline, benefiting our customers, co-workers, communities and stockholders," said Jeff Smisek, Continental's chairman, president and CEO. "The DOJ's decision permits us to clear one of the last regulatory hurdles to closing our merger." Continental and United also would like to acknowledge the efforts of the United States Department of Transportation and the Federal Aviation Administration as the companies work through the merger process. In addition, Continental and United remain engaged in discussions with the state attorneys general who are reviewing the merger, and hope to conclude those discussions expeditiously with a positive outcome. Continental and United announced an all-stock merger of equals on May 3, 2010, and currently expect the transaction to close by Oct. 1, 2010, subject to stockholder approvals and customary closing conditions. Both companies have scheduled special stockholder meetings on Sept. 17, 2010, for approval of the merger. United and Continental received clearance from the European Commission on the airlines' proposed merger in July, which noted its investigation found the transaction would not raise competitive concerns in Europe or on trans-Atlantic routes. About Continental Airlines Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,700 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance. Continental has total assets of $13.60 billion against total debts of $12.87 billion as of June 30, 2010. In May 2010, Continental announced an agreement to merge with UAL Corp. The merger has not yet been completed. In August 2010, Moody's Investors Service affirmed its 'B2' corporate family, with negative outlook, for Continental Airlines. Moody's said the affirmation, among other things, signifies the potential for it to maintain the B2 rating if the proposed merger with UAL (B3 corporate family from Moody's, on review for upgrade) is completed under terms that enable the combined entity to achieve the potential revenue and cost synergies that have been identified. However, the outlook remains negative because of the industry's weak track record in successfully executing large business combinations. Continental caries a 'B' corporate rating, on watch negative, from Standard & Poor's. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'B3' corporate family and probability of default ratings from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. At June 30, 2010, UAL had $20.134 billion in total assets against total current liabilities of $8.573 billion, long-term debt of $6.281 billion, long-term obligations under capital leases of $1.01 billion, other liabilities and deferred credits of $7.022 billion, and a stockholders' deficit of $2.756 billion. US FIDELIS: Missouri Seeks Chapter 11 Trustee --------------------------------------------- American Bankruptcy Institute reports that the state of Missouri wants US Fidelis Inc. to be run by a chapter 11 trustee, claiming that the seller of extended automotive service contracts was grossly mismanaged prior to filing for bankruptcy in March. Wentzville, Missouri-based US Fidelis, Inc., is a marketer of vehicle service contracts developed by independent and unrelated companies. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. E.D. Mo. Case No. 10-41902). Robert E. Eggmann, Esq., at Lathrop & Gage, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $74,386,836, and total debts of $25,770,655. VALENCE TECHNOLOGY: Berg & Berg Buys 7.2 Million Shares ------------------------------------------------------- Berg & Berg Enterprises LLC purchased on Aug. 26, 2010, 7,247,882 shares of Valence Technology Inc. common stock at a price per share of $0.76, the closing bid price of the Company's common stock on the purchase date. The aggregate purchase price for the shares was $5,508,390. Payment of the purchase price consisted of $3,000,000.00 in cash and surrender of the promissory note issued on July 23, 2010, to Berg and Berg, under which $2,500,000.00 in principal and $8,390 in accrued interest was outstanding. On July 27, 2010, the Company's Board of Directors authorized the Company to engage in financing transactions -- including either loans or the sale of shares -- with Berg & Berg, Carl E. Berg, or their affiliates from time to time in an aggregate amount of up to $10,000,000, if, and when needed by the Company, and as may be mutually agreed. The managing member of Berg & Berg is Carl E. Berg, who is the Chairman of the Company's Board of Directors and the principal stockholder of the Company. A full-text copy of the letter of agreement is available for free at http://ResearchArchives.com/t/s?6a99 About Valence Technology Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. The Company's balance sheet at June 30, 2010, showed $22.75 million in total assets, $94.51 million in total liabilities, and a stockholders' deficit of $80.37 million. PMB Helin Donovan LLP expressed substantial doubt about Valence Technology Inc.'s ability as a going concern following the Company's fiscal 2010 results. The Company has incurred operating losses each year since its inception in 1989 and had an accumulated deficit of $581 million as of March 31, 2010. For the fiscal years ended March 31, 2010, 2009, and 2008 the Company sustained net losses available to common stockholders of $23.2 million, $21.4 million, and $19.6 million, respectively. VAREL FUNDING: S&P Gives Negative Outlook; Keeps 'CCC+' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Varel Funding Corp. to negative from developing and affirmed the 'CCC+' corporate credit rating. Additionally, S&P lowered the issue- level rating on Varel's senior secured debt to 'CCC+' (the same as the corporate credit rating on the company) from 'B-' and revised to the recovery rating on this debt to '3' (indicating S&P's expectation for meaningful [50%-70%] recovery) from '2'. "The outlook revision reflects S&P's view that Varel's recent improvement in financial performance is not sustainable because S&P expects that low natural gas prices will lead to a decline in drilling activity in 2011 and thus, weak operating results," said Standard & Poor's credit analyst Kenneth Cox. In addition, the improvement in the company's operating results was weaker than S&P had expected and its liquidity has not improved to levels that are meaningful enough to provide a cushion for an industry downturn. As a drill bit manufacturer, Varel's operations are closely tied to the rig count, and any decline in the level of drilling activity would put additional pressure on the company's thin liquidity. The ratings on Varel Funding Corp., a special-purpose entity formed solely to enter into a credit agreement and sale-leaseback agreement with Varel Holdings Inc., reflect Varel's stained liquidity, small market position in drill bit manufacturing, highly leveraged capital structure, and cyclical end markets. Standard & Poor's Ratings Services' ratings on Varel also reflect the company's geographically diverse revenue base, and low capital-spending requirements. Varel manufactures drill bits for the oil and gas and mining industries. The company is organized into three segments: polycrystalline diamond compact drill bits (47% of revenue), roller cone drill bits (29% of revenue), and drill bits used in mining and industrial activities (23% of revenue). Historically, Varel has derived its revenue base largely from roller cone drill bit sales within the U.S. However, in the past few years, management has increased revenue and market share through expansion into PDC drill bits and international markets. Varel's limited liquidity is problematic, and the potential for a difficult operating environment in 2011 could further hamper the company's ability to improve its cash flow. S&P could take a negative ratings action if the company does not generate sufficient cash flow to cover its fixed charges or liquidity deteriorates beyond current levels. Currently, the potential for positive ratings actions is unlikely. VERTIS HOLDINGS: Extends Exchange Offers Until Sept. 30 ------------------------------------------------------- Vertis Holdings, Inc., on Wednesday announced several important updates regarding its previously announced comprehensive refinancing of substantially all of its principal operating subsidiary Vertis, Inc.'s outstanding secured and unsecured indebtedness. The purpose of the Refinancing Transactions is to reduce overall debt and interest costs which would improve Vertis' financial condition. In an effort to achieve the goals of the Refinancing Transactions, Holdings announced its intention to seek to enter into a new $500.0 million first lien term loan with a syndicate of lenders and that it continues to seek to enter into a new $190.0 million revolving credit facility, thereby updating certain previously disclosed components of the Refinancing Transactions. Holdings also announced that it is pursuing certain amendments to the terms and conditions of Vertis' previously commenced (i) private exchange offer, tender offer and consent solicitation relating to its 13-1/2% Senior Pay-in-Kind Notes due 2014, and (ii) private exchange offer and consent solicitation relating to its 18-1/2% Senior Secured Second Lien Notes due 2012. These amendments include changing the consideration offered to holders of Notes. The consideration offered to holders of Senior Notes may be changed to solely consist of common stock of Holdings, such that if 100% of the Senior Notes are tendered, holders would own approximately 33% of Holdings common stock following the Refinancing Transactions. The consideration offered to holders of Existing Second Lien Notes may be changed to a combination of new senior secured notes of Vertis and common stock of Holdings, such that if 100% of the Existing Second Lien Notes are tendered, holders would own $200 million of new senior secured notes and approximately 65% of Holdings common stock. Vertis continues to evaluate these changes and there can be no assurance that Vertis will adopt these amendments or that Vertis will not make other changes to the Refinancing Transactions. Holdings also announced that it will subsequently make available certain important supplemental materials regarding the Offers. The supplemental materials will contain important updates regarding any changes to the consideration offered to Holders, any expiration of the Withdrawal Period, any changes to the New Expiration Time and other information regarding Vertis and the Offers. Holders are advised to carefully review the supplemental materials when available. As a result, Holdings announced the extension of the expiration dates of the Offers from 5:00 p.m., New York City time, on August 31, 2010, to 5:00 p.m., New York City time, on September 30, 2010. Effective immediately, holders who have tendered their Notes pursuant to the Offers are being given the opportunity to withdraw their tendered Notes and revoke their consents until further notice. Holders who validly withdraw their Notes and revoke their consents will not receive the consideration for their Notes in the applicable Offers unless such Notes are validly re-tendered in the applicable Offers at or prior to the New Expiration Time. As of 5:00 p.m., New York City time, on August 31, 2010, approximately $187.6 million aggregate principal amount -- or approximately 77.5% -- of the Senior Notes were validly tendered in the Senior Notes Offer and the related consents thereby delivered, and not validly withdrawn. In addition, as of 5:00 p.m., New York City time, on August 31, 2010, approximately $350.8 million aggregate principal amount (or approximately 92.2%) of the Existing Second Lien Notes -- not including Existing Second Lien Notes held by Avenue Capital -- were validly tendered in the Second Lien Notes Exchange Offer and the related consents thereby delivered, and not validly withdrawn. About Vertis Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. -- http://www.vertisinc.com/-- provides targeted print advertising and direct marketing solutions to America's retail and consumer services companies. Vertis Holdings' Vertis Inc. and its subsidiaries disclosed that as of June 30, 2010, it had $1,467,320,000 in total assets, including $257,193,000 in cash and cash equivalents; and $1,493,277,000 in total liabilities, including $265,734,000 in total current liabilities, and a stockholders' deficit of $25,957,000. The company and its six affiliates previously filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del. Case No. 08-11460). In August 2008, it emerged from bankruptcy, after completing a merger with ACG Holdings. * * * As reported by the Troubled Company Reporter on April 27, 2010, Moody's Investors Service assigned Vertis, Inc., a Caa1 Corporate Family Rating, Caa1 Probability of Default Rating and SGL-3 Speculative Grade Liquidity rating. Moody's said Vertis' Caa1 CFR reflects the company's high leverage, thin coverage of total interest costs, and long-term price and volume pressure on the print-based advertising and direct marketing products and services that comprise the majority of the company's revenue. Moody's noted Vertis' proposed refinancing transactions would be a second restructuring closely on the heels of Vertis' 2008 bankruptcy reorganization. WASHINGTON MUTUAL: Examiner Taps Cole Schotz as Counsel ------------------------------------------------------- Joshua R. Hochberg, the examiner appointed in the Chapter 11 cases of Washington Mutual Inc. and WMI Investment Corp., sought and obtained the Court's authority to employ Cole, Schotz, Meisel, Forman & Leonard, P.A., as his Delaware counsel, effective as of July 26, 2010. The Examiner has selected Cole Schotz to serve as his Delaware counsel in the Debtors' Chapter 11 cases because professionals at the firm possess extensive knowledge and considerable experience in the fields of bankruptcy, insolvency, debtors' and creditors' rights, litigation and business reorganizations under Chapter 11 of the Bankruptcy Code. As Delaware counsel, Cole Schotz will assist the Examiner in faithfully executing his duties, pursuant to Section 11 06(a) of the Bankruptcy Code, to render these types of services, among others, as directed by the Examiner: (a) Taking all necessary actions to assist and advise the Examiner with respect to the discharge of his duties and responsibilities under the Examiner Order and the Bankruptcy Code in the Chapter 11 cases; (b) Assisting the Examiner in preparing pleadings and applications as may be necessary in the discharge of the Examiner's duties; (c) Representing the Examiner at all hearings and other proceedings before the Court and any appellate courts; and advocating and protecting the interests of the Examiner before the courts and the United States Trustee; (d) Representing the Examiner in any dealings he may have with various governmental and regulatory authorities; (e) Representing the Examiner in any dealings he may have with the Debtors, the Official Committees, general creditors or any third party concerning matters related to the Debtors' estates; (f) Assisting the Examiner in preparing his work plan and budget; (g) Assisting the Examiner in retaining and directing the work of forensic accountants and investigative personnel; (h) Assisting with interviews and examinations in connection with the Investigation; (i) Assisting the Examiner in preparing his report; and (j) Performing all other necessary legal services and providing all other necessary legal advice to the Examiner in connection with the Chapter 11 Cases including assisting the Examiner in undertaking additional tasks that the Court may direct. Cole Schotz will work with any other professionals engaged by the Examiner to avoid duplication of effort and to move the investigation forward as quickly, harmoniously and efficiently as possible, according to Mr. Hochberg. Cole Schotz's professionals will be paid based on these hourly rates for the contemplated services: Professionals Rates ------------- ----- Members $380 - $725 Associates $240 - $415 Paralegals $145 - $230 J. Kate Stickles, Esq., a member at Cole Schotz, assures the Court that her firm is a "disinterested person", as that term is defined in Section 101 (14) of the Bankruptcy Code. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500,000,000 to $1,000,000,000 with zero debts. Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with responsibility for the litigation. Brian Rosen, Esq., at Weil, Gotshal & Manges LLP served as legal counsel to WMI with responsibility for the Chapter 11 case. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WESTERN UTAH: Pure Nickel Says Lawsuit Without Merit ---------------------------------------------------- Pure Nickel Inc. disclosed that Western Utah Copper Company filed an action in bankruptcy court in Utah, U.S., against Nevada Star Resource Corp and Pure Nickel. This action is essentially identical to an amendment to WUCC's counterclaims that WUCC previously proposed to make to the existing counterclaims that it previously filed in response to our June 2009 action. "In the past we have commented in our annual and quarterly statements, specifically our Management Discussion and Analysis, that we believe WUCC's existing counterclaims in that action are without merit. We continue to believe the counterclaims and the August 27 action are without merit. We do not anticipate the need to make provision for this matter." Pure Nickel is a mineral exploration company with a diverse collection of mineral exploration projects in North America. About Western Utah Western Utah Copper Company operates copper mines. The Company is based in Milford, Utah. Western Utah Copper Company operates as a subsidiary of Copper King Mining Corp. On May 18, 2010, Western Utah Copper Company filed a voluntary petition for reorganization under Chapter 11 in Reno, Nevada (Bankr. D. Nev. Case No. 10-51913). WINALTA INC: Gets Fourth Extension of CCAA Stay Until Sept. 7 ------------------------------------------------------------- Winalta Inc. disclosed that the Court of Queen's Bench of Alberta, Judicial Centre of Edmonton has granted an extension, until September 7, 2010, of the initial Order granted on April 26, 2010 pursuant to which Winalta was granted creditor protection under the Companies' Creditors Arrangement Act. The extension was supported by Deloitte & Touche, Inc., the Court-appointed Monitor of Winalta's CCAA process and was not objected to by counsel to Winalta's secured creditor, HSBC Bank of Canada. Winalta Inc. is an integrated company with three main operating divisions, Homes, Industrial, and Manufacturing. The Homes Division sells CSA approved homes via retail centers, communities and supply arrangements. The Oilfield Division leases portable industrial accommodations and catering services to the energy sector. The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. About Winalta Inc Winalta Inc. is an integrated company with three main operating divisions, Homes, Industrial, and Manufacturing. The Homes Division sells CSA approved homes via retail centers, communities and supply arrangements. The Oilfield Division leases portable industrial accommodations and catering services to the energy sector. WORLDCOM INC: Judge Weighs IP Claims Against Verizon ---------------------------------------------------- The judge who oversaw the bankruptcy of WorldCom Inc. is weighing whether to kill off tens of millions of dollars of patent infringement claims brought against an affiliate of WorldCom successor Verizon Business Global LLC, Bankruptcy Law360 reports. Eon Corp. IP Holdings LLC argued before U.S. Bankruptcy Court for the Southern District of New York Judge Arthur J. Gonzalez on Tuesday against Verizon's efforts to enforce a confirmation, according to Law360. WorldCom, Inc., a Clinton, MS-based global communications company, filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, WorldCom listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and on Apr. 20, 2004, the Company formally emerged from U.S. Chapter 11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon Communications, Inc. MCI is now known as Verizon Business, a unit of Verizon Communications. WORLDWIDE DIRECT: Court OKs Trustee's Motion for Summary Judgment ----------------------------------------------------------------- Goldin Associates, L.L.C., as the Liquidating Trustee of Worldwide Direct Liquidation Trust, filed with the United States Bankruptcy Court for the District of Delaware a motion for summary judgment on the complaint filed against it by Robert H. Lorsch, Richard M. Teich, and Ahmed O. Alfi. After considering the arguments of both parties, the Court granted the Liquidating Trustee's Motion. The complaint seeks declaratory relief to determine Robert H. Lorsch, Richard M. Teich, and Ahmed O. Alfi's interests in the Worldwide Direct Liquidation Trust, which they believe is a trust created by a settlement agreement resolving a number securities class action lawsuits to which they are included as defendants. On April 1, 2010, the Liquidating Trustee filed a motion for summary judgment contending that, as a matter of law, no trust was created by the Settlement Agreement and the D&O Plaintiffs have no valid claims under the plain language of the Settlement Agreement. A copy of the court's memorandum opinion is available at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100827685 * Bank Closings Emphasize Need for Private Sources of Capital ------------------------------------------------------------- The recent surge in bank failures is worsening the nation's liquidity crisis and may trigger more bankruptcies for commercial real estate owners in need of financing, according to Andy Bogdanoff, chairman of Remington Capital. "With $1.2 trillion in commercial real estate debt scheduled to mature over the next few years and most U.S. banks unable or unwilling to extend new credit, the need for large amounts of private commercial capital has never been greater," Bogdanoff said. Remington is an international commercial real estate investment banking company, specializing in providing access to a global network of commercial capital sources, including hundreds of active private lenders and investors. Since 1993, Remington has arranged more than $5 billion in financing across the capital stack for all types of commercial property. "There have been about 250 bank failures involving hundreds of billions of dollars in assets since the start of the financial crisis in 2007," Bogdanoff said. "And with hundreds of additional bank failures expected over the next few years, many commercial real estate owners may be unable to finance or refinance properties through traditional banking sources. "Alternatively, there are billions of dollars in private capital available waiting on the sidelines from lenders and investors ready to step in to finance, refinance or recapitalize all types of commercial property having intrinsic value," Bogdanoff said. "Over the years, Remington has built solid relationships with hundreds of these capital sources, including private equity funds, institutional and individual investors, certain corporations and many others. "This available pool of alternative capital represents a unique opportunity for the commercial real estate community to step outside its normal comfort zone and explore new avenues of commercial financing in these challenging times." * Institutions on FDIC's "Problem List" Rose to 829 --------------------------------------------------- The Federal Deposit Insurance Corporation said the number of institutions on its "Problem List" rose from 775 to 829. However, the total assets of "problem" institutions declined from $431 billion to $403 billion. Also, while the number of "problem" institutions is the highest since March 31, 1993, when there were 928, it is the smallest net increase since the first quarter of 2009. The FDIC said 45 insured institutions failed during the second quarter. On Tuesday, the FDIC said commercial banks and savings institutions insured by the agency reported an aggregate profit of $21.6 billion in the second quarter of 2010, a $26 billion improvement from the $4.4 billion net loss the industry posted in the second quarter of 2009. This is the highest quarterly earnings total since the third quarter of 2007. Despite the improvement, earnings remain below historical norms. On the positive side, one in five institutions reported a net loss for the quarter, compared to 29% a year earlier. And, the average return on assets, a basic yardstick of profitability, rose to 0.65%, from negative 0.13% a year ago. "This is the best quarterly profit for the banking sector in almost three years," said FDIC Chairman Sheila C. Bair. "Nearly two out of every three banks are reporting better year-over-year earnings. As long as economic conditions remain supportive, most institutions should maintain profitability and increase their capacity to lend." She added, "Without question, the industry still faces challenges. Earnings remain low by historical standards, and the numbers of unprofitable institutions, problem banks and failures remain high. But the banking sector is gaining strength. Earnings have grown, and most asset quality indicators are moving in the right direction." The primary factor contributing to the year-over-year improvement in quarterly earnings was a reduction in provisions for loan losses. While quarterly provisions remained high, at $40.3 billion, they were $27.1 billion (40.2%) lower than a year earlier. Net interest income was $8.5 billion (8.6%) higher than a year ago, and noninterest expenses were $1.5 billion (1.5%) lower. The FDIC noted signs of improvement in asset-quality trends as the amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) fell for the first time since the first quarter of 2006. Insured banks and thrifts charged off $49 billion in uncollectible loans during the quarter, down $214 million (0.4%) from a year earlier. This is the first time since the fourth quarter of 2006 that net charge-offs posted a year- over-year decline. Total loans and leases declined by $107.5 billion (1.4%) during the quarter. Total assets fell by $136.2 billion (1.0%). The FDIC also said loan-loss reserves declined for the first time since the fourth quarter of 2006. Although almost two out of every three banks (62.1%) increased their loan-loss reserves in the quarter, the industry's total reserves declined by $11.8 billion (4.5%), as a number of large banks reduced their loan-loss provisions. The industry's ratio of reserves to total loans and leases fell from 3.50% to 3.40% during the quarter, but this is still the second-highest ratio in the 63 years for which data are available. "Particularly given economic uncertainties, we believe all banks should continue to exercise caution and maintain strong reserves," Chairman Bair said. The industry's "coverage ratio" of reserves to noncurrent loans improved for a second consecutive quarter, from 64.9% to 65.1%, as the decline in noncurrent loans outpaced the reduction in loss reserves. The Deposit Insurance Fund balance improved for the second quarter in a row. The DIF balance -- the net worth of the fund -- improved from negative $20.7 billion to negative $15.2 billion during the second quarter. The improvement stemmed primarily from assessment revenues and from a reduction in the contingent loss reserve, which covers the costs of expected failures. The reserve declined from $40.7 billion to $27.5 billion during the quarter. The FDIC's liquid resources -- cash and marketable securities -- remained strong. Liquid resources stood at $44 billion at the end of the second quarter, a decline from $63 billion at the end of the first quarter. The decline in cash balances reflects previously anticipated outlays, primarily related to three bank failures in Puerto Rico on April 30th. "As we expected," Chairman Bair said, "demands on cash have increased this year. But our projections indicate that our current resources are more than enough to resolve anticipated failures." Total insured deposits declined by 0.7% ($39 billion) during the quarter. Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,830 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars -- insured financial institutions fund its operations. * SEC Issues Report Cautioning Credit Rating Agencies ----------------------------------------------------- The Securities and Exchange Commission on Tuesday issued a report cautioning credit rating agencies about deceptive ratings conduct and the importance of sufficient internal controls over the policies, procedures, and methodologies the firms use to determine credit ratings. The SEC's Report of Investigation stems from an Enforcement Division inquiry into whether Moody's Investors Service, Inc. -- the credit rating business segment of Moody's Corporation -- violated the registration provisions or the antifraud provisions of the federal securities laws. The Report says that because of uncertainty regarding a jurisdictional nexus between the United States and the relevant ratings conduct, the Commission declined to pursue a fraud enforcement action in this matter. The Report notes that the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act provided expressly that federal district courts have jurisdiction over SEC enforcement actions alleging violations of the antifraud provisions of the securities laws when conduct includes significant steps, or a foreseeable substantial effect, within the United States. The Report also notes that the Dodd- Frank Act amended the securities laws to require nationally recognized statistical rating organizations (NRSROs) to "establish, maintain, enforce, and document an effective internal control structure governing the implementation of and adherence to policies, procedures, and methodologies for determining credit ratings." "Investors rely upon statements that NRSROs make in their applications and reports submitted to the Commission, particularly those that describe how the NRSRO determines credit ratings," said Robert Khuzami, Director of the SEC's Division of Enforcement. "It is crucial that NRSROs take steps to assure themselves of the accuracy of those statements and that they have in place sufficient internal controls over the procedures they use to determine credit ratings." According to the Report, an MIS analyst discovered in early 2007 that a computer coding error had upwardly impacted by 1.5 to 3.5 notches the model output used to determine MIS credit ratings for certain constant proportion debt obligation notes. Nevertheless, shortly thereafter during a meeting in Europe, an MIS rating committee voted against taking responsive rating action, in part because of concerns that doing so would negatively impact MIS's business reputation. MIS applied in June 2007 to be registered with the Commission as an NRSRO. The Report notes that the European rating committee's self-serving consideration of non-credit related factors in support of the decision to maintain the credit ratings constituted conduct that was contrary to the MIS procedures used to determine credit ratings as described in the MIS application to the SEC. In the Report of Investigation, the Commission makes clear that credit rating agencies registered with the SEC must implement and follow appropriate internal controls and procedures governing their determination of credit ratings, and must also take reasonable steps to ensure the accuracy of statements in applications or reports submitted to the SEC. The Report cautions NRSROs that, when appropriate, the Commission will pursue antifraud enforcement actions against deceptive ratings conduct, including actions pursuant to the Dodd-Frank Act provisions regarding conduct that physically occurs outside the United States but involves significant steps or foreseeable effects within the U.S. Under Section 21(a) of the Securities Exchange Act of 1934, the Commission may investigate violations of the federal securities laws and at its discretion "publish information concerning any such violations." David Frohlich, Margaret Cain, Roger Paszamant, and Dean Conway conducted the SEC's investigation. The Commission acknowledges the assistance and cooperation of foreign regulatory authorities in Europe in this investigation. * DLA Piper's M. Williams Joins Sheppard Mullin ----------------------------------------------- Michele E. Williams has joined the Washington, D.C. and New York offices of Sheppard, Mullin, Richter & Hampton LLP as a partner in the firm's Real Estate and Finance & Bankruptcy practice groups. Williams most recently practiced at DLA Piper in Washington, D.C. and New York. "We are very excited to welcome Michele. She is an impressive attorney who establishes the firm's real estate transactional presence on the East Coast, which has been a strategic goal of the firm, coupled with corporate finance capabilities," said Guy N. Halgren, chairman of Sheppard Mullin. Commented Williams, "Sheppard Mullin offers an excellent platform to continue to grow my practice, as well as an amazing firmwide collegial culture. I am impressed by the firm's real estate and finance groups, and look forward to expanding those practices on the East Coast. I'm also delighted to be reunited with friends and former colleagues John Chierichella, Anne Perry and Jonathan Aronie in D.C." "Michele will be a great asset to the D.C. and New York offices," commented Ed Schiff, managing partner of Sheppard Mullin's Washington, D.C. office. "She brings an incredible combination of industry expertise and adds a new real estate transaction and finance practice to our East Coast offices, which compliments our well-established banking, corporate and commercial litigation practices." Williams focuses her practice in real estate, project and corporate finance both in the U.S. and internationally. She represents U.S. real estate funds in connection with their fund formation, funding, and investment activities. Williams also represents U.S. real estate investors in the acquisition, financing, and leasing of commercial properties domestically and abroad. Throughout her career, Williams has been responsible for the structuring, negotiation and execution of highly structured corporate financings involving public and private debt and equity offerings, minority equity investments, private equity investments, partnerships and joint ventures. She has also represented multinational corporations, financial institutions, institutional investors and private investors in merger and acquisition financings, leveraged recapitalizations, mezzanine financings and senior bank financings. Before beginning her legal career, Williams was a banker with Irving Trust Company, New York; Riggs National Bank, where she was an assistant vice president in the commercial banking group; and Bank of America, where she was a vice president in the corporate group. Williams received a J.D., cum laude, from Georgetown University Law Center and a B.S.F.S., magna cum laude, from Georgetown University. Sheppard Mullin has 40 attorneys based in its Washington, D.C. office and 35 attorneys based in New York. The firm's Real Estate practice group includes close to 70 attorneys firmwide and the its Finance practice includes 60 attorneys. About Sheppard, Mullin, Richter & Hampton LLP Sheppard Mullin -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with 550 attorneys in 11 offices located in the United States and Asia. Since 1927, companies have turned to Sheppard Mullin to handle corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients include more than half of the Fortune 100. * SmithAmundsen Greatly Expands Financial Services Practice ----------------------------------------------------------- SmithAmundsen LLC disclosed the expansion of financial services offered to clients with the addition of two new partners and one associate. Patrick M. Jones and Karen A. White have joined SmithAmundsen's Chicago office as partners, and Sandra A. Franco has joined the firm's Chicago office as an associate. "We have looked for ways to expand the scope of financial services we offer clients by looking for the right opportunities to add expertise and depth to the firm," said Glen Amundsen, Chairman and CEO of SmithAmundsen. "Our announcement today is one more step towards furthering the strategic objective of helping serve our business clients." Mr. Jones has extensive experience in corporate restructuring, creditors' rights, and insolvency-related commercial litigation. He regularly represents debtors, secured lenders, creditors' committees, and individual creditors in chapter 11 bankruptcy cases. In addition, Mr. Jones counsels clients on fiduciary duties in the zone of insolvency and lender protections in single-asset real estate restructurings. Prior to joining SmithAmundsen, Mr. Jones was a partner with Locke Lord Bissell & Liddell LLP where he acted as national bankruptcy counsel for Farmers Insurance Group. Mr. Jones received a B.A. in Psychology from the University of Oklahoma and a J.D., Order of the Coif, from DePaul University College of Law. Ms. White focuses her practice in creditors' rights in the area of commercial litigation, banking, bankruptcy, and real estate law. With this focus, Ms. White represents financial institutions and businesses and has extensive experience in secured transactions, collections, bankruptcy, commercial foreclosures, negotiating and drafting contracts (including promissory notes, mortgages, security agreements, purchase, and sale and workout agreements), real estate transactions, enforcing leasehold rights in personal and real property and forming and maintaining the legal existence of corporations, limited liability companies, and other legal entities. Prior to joining SmithAmundsen, Ms. White was a co- founder and shareholder of Burke & White, PC. She earned her B.A. from Saint Mary's College of Notre Dame and her J.D. from IIT/Chicago-Kent College of Law. Also joining our financial services practice groups, Ms. Franco focuses her practice in commercial litigation, banking law, and real estate law. Prior to joining SmithAmundsen, she was a legal intern at LR Development Company, LLC, where she was primarily responsible for drafting and reviewing new construction contracts. Ms. Franco received a B.A. from the University of Illinois and her J.D. from The John Marshall Law School. SmithAmundsen LLC -- http://www.salawus.com/-- has grown to more than 120 attorneys with offices in Chicago, Rockford, St. Charles, and Woodstock, Illinois and Milwaukee, Wisconsin. The firm's attorneys share a proficiency in a broad range of practice areas. As one of Chicago's premier firms, SmithAmundsen's success is built upon a foundation of integrity, professionalism, and a commitment to exceeding client expectations. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Darin Frank Eardly Estate Bankr. C.D. Calif. Case No. 10-36888 Chapter 11 petition filed August 23, 2010 Filed pro se In Re EAS Electric Bankr. C.D. Calif. Case No. 10-36855 Chapter 11 petition filed August 23, 2010 See http://bankrupt.com/misc/cacb10-36855.pdf In Re The Golden Fork, Inc. dba The Foster House Bankr. N.D. Ga. Case No. 10-23728 Chapter 11 petition filed August 23, 2010 See http://bankrupt.com/misc/ganb10-23728.pdf In Re Midwest Tank, Inc. Bankr. S.D. Ind. Case No. 10-12678 Chapter 11 petition filed August 23, 2010 See http://bankrupt.com/misc/insb10-12678.pdf In Re Guardian Angels Care Services, Inc. Bankr. W.D. La. Case No. 10-81294 Chapter 11 petition filed August 23, 2010 See http://bankrupt.com/misc/lawb10-81294.pdf In Re Hami Corporation Bankr. E.D. Mich. Case No. 10-66322 Chapter 11 petition filed August 23, 2010 See http://bankrupt.com/misc/mieb10-66322.pdf In Re L & C Lath & Plastering, Inc. Bankr. D. Nev. Case No. 10-25898 Chapter 11 petition filed August 23, 2010 See http://bankrupt.com/misc/nvb10-25898.pdf In Re John H. Friedmann Superior Homes, LLC Bankr. M.D. Tenn. Case No. 10-08901 Chapter 11 petition filed August 23, 2010 See http://bankrupt.com/misc/tnmb10-08901.pdf In Re Audio Praxis Ent Inc/Phase aka Phase Four Studios/Phase Bankr. D. Ariz. Case No. 10-27232 Chapter 11 petition filed August 26, 2010 Filed pro se In Re HQ7 Incorporated Bankr. C.D. Calif. Case No. 10-37339 Chapter 11 petition filed August 26, 2010 See http://bankrupt.com/misc/cacb10-37339.pdf In Re Team Sports Supply, Inc. Bankr. M.D. Ga. No. 10-41068 Chapter 11 petition filed August 26, 2010 See http://bankrupt.com/misc/gamb10-41068.pdf In Re Park Avenue Property Ltd. Bankr. D. Md. Case No. 10-29676 Chapter 11 petition filed August 26, 2010 See http://bankrupt.com/misc/mdb10-29676.pdf In Re Metrowest Properties Realty Trust Bankr. D. Mass. Case No. 10-44260 Chapter 11 petition filed August 26, 2010 Filed pro se In Re 2970 San Lorenzo LLC Bankr. D. Nev. No. 10-26201 Chapter 11 petition filed August 26, 2010 See http://bankrupt.com/misc/nvb10-26201.pdf In Re ADJ Coffee Shop Inc. Bankr. E.D.N.Y. Case No. 10-48090 Chapter 11 petition filed August 26, 2010 See http://bankrupt.com/misc/nyeb10-48090.pdf In Re Marcias Bakery Inc. Bankr. D. P.R. Case No. 10-07783 Chapter 11 petition filed August 26, 2010 See http://bankrupt.com/misc/prb10-07783.pdf In Re South Sound Grill Inc. dba Cattins Family Dining Bankr. W.D. Wash. Case No. 10-47007 Chapter 11 petition filed August 26, 2010 Filed pro se In Re Ted Alan Thomas Bankr. W.D. Wash. Case No. 10-20116 Chapter 11 petition filed August 26, 2010 See http://bankrupt.com/misc/wawb10-20116.pdf In Re Dental Elegance, Inc. Bankr. D. Ariz. Case No. 10-27412 Chapter 11 petition filed August 27, 2010 See http://bankrupt.com/misc/azb10-27412.pdf In Re TMO II, Inc. dba The Hog Pit Smokehouse Bar & Grill dba Taco Bron Bankr. D. Ariz. Case No. 10-27445 Chapter 11 petition filed August 27, 2010 See http://bankrupt.com/misc/azb10-27445.pdf In Re Alan Grubb Bankr. N.D. Calif. Case No. 10-58924 Chapter 11 petition filed August 27, 2010 Filed pro se In Re PBJCT Irrevocable Trust Bankr. N.D. Calif. Case No. 10-49865 Chapter 11 petition filed August 27, 2010 Filed pro se In Re Quality Tire Center, U. S. 19, Inc. Bankr. M.D. Fla. Case No. 10-20658 Chapter 11 petition filed August 27, 2010 See http://bankrupt.com/misc/flmb10-20658.pdf In Re Richard L. Kofsky Bankr. D. N.J. Case No. 10-36469 Chapter 11 petition filed August 27, 2010 Filed pro se In Re J. Mance, Inc. Bankr. E.D. Pa. Case No. 10-17254 Chapter 11 petition filed August 27, 2010 See http://bankrupt.com/misc/paeb10-17254.pdf In Re Configuration, Inc. Bankr. D. Md. Case No. 10-29813 Chapter 11 petition filed August 29, 2010 See http://bankrupt.com/misc/mdb10-29813.pdf In Re Burk Plaza B, LLC Bankr. D. Ariz. Case No. 10-27513 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/azb10-27513.pdf In Re Town Lake Development Partners, LLC Bankr. D. Ariz. Case No. 10-27600 Chapter 11 petition filed August 30, 2010 filed pro se In Re St. Louis Envelope Company Bankr. E.D. Mo. Case No. 10-49837 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/moeb10-49837.pdf In Re Patricia Savage Osborne aka Patricia Savage aka Patricia Osborne George Richard Osborne Bankr. S.D.N.Y. Case No. 10-37606 Chapter 11 petition filed August 30, 2010 filed pro se In Re TMI Wrecking, Inc. Bankr. S.D.N.Y. Case No. 10-23797 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/nysb10-23797.pdf In Re Edward J. Wachowski dba Elite Sportswear Products, Inc. Bankr. E.D. Pa. Case No. 10-17313 Chapter 11 petition filed August 30, 2010 filed pro se In Re Patricia Pepe fdba Allegheny Psychological Services Bankr. W.D. Pa. Case No. 10-26119 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/pawb10-26119.pdf In Re For a Reason Enterprises, Inc. aka Logan Raye Spa and Salon Bankr. D. S.C. Case No. 10-06220 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/scb10-06220.pdf In Re A. D. Vallett & Co., LLC Bankr. M.D. Tenn. Case No. 10-09225 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/tnmb10-09225.pdf In Re A.D. Vallett Collateral Fund II LLC Bankr. M.D. Tenn. Case No. 10-09227 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/tnmb10-09227.pdf In Re A.D. Vallett Income and Opportunity Fund I LLC Bankr. M.D. Tenn. Case No. 10-09228 Chapter 11 petition filed August 30, 2010 See http://bankrupt.com/misc/tnmb10-09228.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2010. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***