/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110215.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 15, 2011, Vol. 15, No. 45 Headlines ACCENTIA BIOPHARMACEUTICALS: Posts $7.5-Mil. Net Loss in Q1 ACTIVECARE INC: Posts $1.7 Million Net Loss in Fiscal Q1 ADVANCED DISINFECTION: Files for Chapter 7 Liquidation ADVANTA CORP: Court Confirms Chapter 11 Plan AEOLUS PHARMACEUTICALS: Preferred Stock Hiked to 1.6MM Shares AGRISOLAR SOLUTIONS: Posts $6,500 Net Loss in Dec. 31 Quarter AKSM HOLDINGS: Judge Approves Sale to ViWinTech & Brown AMERICAL APPAREL: 2009 Financials Now Labeled as 'Unaudited' AMERICAN APPAREL: John Luttrell Does Not Own Any Securities AMERICAN CAMSHAFT: $3.12MM Payments to Gerdau Not Preferential ANCHOR BANCORP: Incurs $12.18 Million Net Loss in Dec. 31 Qtr. ARCHIBALD ONTARIO: Case Summary & 9 Largest Unsecured Creditors ARYX THERAPEUTICS: K. Leonard Resigns From Board of Directors ASARCO LLC: Case vs. Barclays Transferred to Judge Hanen ASARCO LLC: Court OKs Marten Law Group's $1.7 Mil. Fees ASHLEY SMITH: Case Summary & 9 Largest Unsecured Creditors AUBURN EXPRESS: Case Summary & Largest Unsecured Creditor AW FINANCIAL: Case Summary & 3 Largest Unsecured Creditors BAKERS FOOTWEAR: Sales Hike to $58.2MM in 13 Weeks Ended Jan. 29 BAL BAY: Case Summary & 2 Largest Unsecured Creditors BEAVERDAM LAND: Case Summary & 5 Largest Unsecured Creditors BF BOLTHOUSE: Moody's Gives Negative Outlook on 7x Leverage BION ENVIRONMENTAL: Posts $3.1 Million Net Loss in Dec. 31 Quarter BIOVEST INTERNATIONAL: Incurs $11.7MM Loss in Dec. 31 Quarter BLOCKBUSTER INC: Diamondback Equity Stake Down to 0% BLOCKBUSTER INC: Goldman Sachs Units Report 0.1% Equity Stake BLOCKBUSTER INC: M.A.M., et al., Report 5.77% Equity Stake BLOCKBUSTER INC: U.S. Trustee Closes Sec. 341 Meeting BORCHERT LLC: Case Summary & 19 Largest Unsecured Creditors BROWN MEDIA: BizWest Acquires Three Business Newspapers BRUNSCHWIG & FILS: Kravet-Led Auction on March 7 CALIFORNIA COASTAL: To Present Plan for Confirmation Tomorrow CALIFORNIA COASTAL: Gets Court's Permission to Sell Homes CANO PETROLEUM: Trapeze Group's Equity Stake Down to 1.1% CASCADE BANCORP: Green Equity Discloses 24.4% Equity Stake CASCADE BANCORP: Two Directors Do Not Own Any Securities CASCADE BANCORP: Wilbur Ross Has 24.4% Equity Stake CASTLE HORIZON: Court Denies First Citizens' Bid to Dismiss Case CC MEDIA: Incurs $62.67 Million Net Loss in Fourth Quarter CEDAR FAIR: Moody's Assigns 'Ba2' Rating to $1.18 Bil. Loan CENTRAL PACIFIC FINANCIAL: Posts $251 Million Net Loss in 2010 CHARLES LETT: Impaireds Can Appeal Without Objecting to Plan CHEMTURA CORP: Judge Approves Mediation Over Pool Filter Claims CHRISTENSEN REALTY: Files Amended Plan of Reorganization CJH PETS: Case Summary & 14 Largest Unsecured Creditors CLAIRE'S STORES: Bank Debt Trades at 2% Off in Secondary Market CLEAR CHANNEL: Bank Debt Trades at 8% Off in Secondary Market CLEAR CHANNEL: Intends to Amend Senior Credit Facilities CLEAR CHANNEL: To Offer $750MM Priority Guarantee Notes Due 2021 CLEAR CHANNEL: Moody's Assigns 'Caa2' Corporate Family Rating CLEAR CHANNEL OUTDOOR: Incurs $87.52 Million Net Loss in 2010 CLEARWIRE CORP: F. Ianna Won't Seek Re-Election as Board Member CLEARWIRE CORP: Stockholders Approve Amendments to Equity Plan CLEARWIRE CORP: To Swap Employee Stock Options With New RSUs CLOVERLEAF ENTERPRISES: Wins Formal Approval to Sell to Penn CMB III: Files Proposed Plan of Reorganization COMPOSITE TECHNOLOGY: Posts $3.2MM Net Loss in December 31 Quarter CONGRESS SAND: Files Proposed Plan of Reorganization CRC HEALTH: Moody's Puts 'B1' Rating on Senior Secured Bank Loan CREDIT-BASED ASSET: Files Liquidating Chapter 11 Plan CRYOPORT INC: Closes First Round of Private Placement for $4.4MM CRYSTALLEX INT'L: Mine Contract in Venezuela Terminated DEEL LLC: Plan Outline Hearing Scheduled for March 21 DELPHI CORP: Investigators Probe GM Funding of New Pensions DELTA AIR: Pays $313 Million in Profit Sharing to Employees DENNY HECKER: Sentenced to 10 Years, Fined $31 Million DENNY'S CORPORATION: Keeley Asset Discloses 9.0% Equity Stake DIAMOND RANCH: Reports $20,500 Net Income in Dec. 31 Quarter DIPAK DESAI: Nevada Mutual Renews Motion for Ch. 7 Liquidation DIPAK DESAI: Terms of Creditors Committee's Proposed Plan DONALD LINDSEY: Case Summary & 20 Largest Unsecured Creditors DOWLING COLLEGE: S&P Downgrades Long-Term Debt Rating to 'BB' DS WATERS: Placed by S&P on Watch Negative due to Refinancing Risk ENERGY XXI: Fitch Assigns 'B/RR4' Rating to $250 Mil. Notes ENERGY XXI: Moody's Assigns 'Caa1' Rating to $250 Mil. Notes ENERGY XXI: S&P Assigns 'B' Senior Rating to $250 Mil. Notes ESCALON MEDICAL: Posts $1.0 Million Loss in Dec. 31 Quarter FIRST FOLIAGE: Sells Assets to Costa Farms for $22 Million FIRSTFED FINANCIAL: Plan Set for March 29 Confirmation FORD MOTOR: Note Redemption Won't Affect Moody's 'Ba2' Rating FORUM HEALTH: Debtor & Committee Have Competing Ch. 11 Plans FREESCALE SEMICONDUCTOR: To Raise Up to $1.15 Billion in IPO G-I HOLDINGS: Asbestos Property Damage Claim Was Time-Barred GENERAL MOTORS: Investigators Probe Funding of New Delphi Pensions GENERAL MOTORS: Treasury Could Exit From New GM Next Year GREENBRIER COS: Keeley Discloses 8.9% Equity Stake GREENSHIFT CORP: CEO Hopeful to Make Additional Progress in 2011 GUITAR CENTER: Bank Debt Trades at 2% Off in Secondary Market GUNNALLEN FINANCIAL: M.D. Fla. Rejects Non-Debtor Releases HAWKER BEECHCRAFT: Bank Debt Trades at 10% Off in Secondary Market HARD ROCK HOTEL: NRFC Agrees to Forbear Until Feb. 28 HERCULES OFFSHORE: Debt Trades at 1.5% Off in Secondary Market HOMER CITY: Fitch Downgrades Ratings on $830 Mil. Bonds to 'BB' HUNTINGTON INGALLS: Moody's Keeps 'Ba2' Corp. Family Rating IA GLOBAL: RXR Cross Border Discloses 5.0% Equity Stake IMAGEWARE SYSTEMS: Bruce Toll Discloses 27.39% Equity Stake INDEPENDENCE TAX: Dec. 31 Balance Sheet Upside-Down by $5.1-Mil. INDEPENDENCE TAX II: Dec. 31 Balance Sheet Upside-Down by $44.9MM INDEPENDENCE TAX III: Dec. 31 Balance Sheet Upside-Down by $27.9MM INDEPENDENCE TAX IV: Dec. 31 Balance Sheet Upside-Down by $14.1MM INDYMAC BANCORP: SEC Charges Former Executives With Fraud INTERDENT INC: S&P Withdraws 'CCC' Corporate Credit Rating INTERNATIONAL RECTIFIER: Fitch Affirms 'BB' Issuer Default Rating INTELSAT SA: 2010 Capital Expenditures Total $932 Million INTERTAPE POLYMER: Rutabaga Capital Discloses 3.86% Equity Stake IRVING TANNING: Tasman Closes Purchase After Residents' Nod JAMES HOWARD WINSLOW: Court Denies Bid for Chapter 11 Trustee JAVO BEVERAGE: Plan Outline Hearing Set for March 16 JETBLUE AIRWAYS: Amends 2009 10-K for Trueblue Adjustments JETBLUE AIRWAYS: Amends 2010 Q1 Report for TrueBlue Adjustment JETBLUE AIRWAYS: Amends 2010 Q2 Report for TrueBlue Adjustment JETBLUE AIRWAYS: Amends 2010 Q3 Report for TrueBlue Adjustment J.F.S. INTERNATIONAL: Case Summary & Creditors List K-V PHARMA: Filing of 10-Q for Dec. 31 Quarter Delayed KNOLOGY INC: Proposed Refinancing Won't Affect Moody's 'B1' Rating KOALTY TIME: Case Summary & 20 Largest Unsecured Creditors KOBRA PETROLEUM: Case Summary & 8 Largest Unsecured Creditors KRATOS DEFENSE: Herley Deal Won't Affect Moody's 'B3' Rating L. FITZGERALD LESTER: Voluntary Chapter 11 Case Summary LAS VEGAS SANDS: Moody's Upgrades Corporate Family Rating to 'Ba3' LDK SOLAR: Offering RMB-Denominated US$-Settled Notes LE-NATURE'S INC: Former CEO Accused of Selling Ill-Gotten Jewels LEVEL GLOBAL: Insider Trading Probe Prompts Wind Down LIBBEY INC: BlackRock Holds 7.47% Equity Stake LIONCREST TOWERS: Files Plan; Wells Fargo to Be Paid Over 5 Years LODGENET INTERACTIVE: BlackRock Discloses 6.19% Equity Stake LONESOME PINE: Seeks Monetary Damages from Beuna Vista et al. LSM HOTEL: Court Declines to Halt Toreador State Court Litigation MARGAUX ORO: Asks Court's Nod to Use Wells Fargo's Cash Collateral MARKWEST ENERGY: Fitch Assigns 'BB' Rating to $300 Mil. Notes MESA AIR: Court OKs Settlement of GE Electric Aircraft Claims MESA AIR: Reaches Settlement With Fokker Services MESA AIR: Resolves Dispute With AAR Corp. on Cure Amounts MIRANT CORP: Dist. Ct. Says Ga. Law Applies to Commerzbank Suit MOMENTIVE PERFORMANCE: S&P Assigns 'B' Rating to $1 Bil. Loans MONEY TREE: Posts $4.1 Million Net Loss in Dec. 25 Quarter MONEYGRAM INT'L: BlackRock Discloses 5.76% Equity Stake MORGANS HOTEL: Two Mezzanine Units Reach Forbearance Agreement MPG TRUST: BlackRock Discloses 6.56% Equity Stake NAVISTAR INT'L: BlackRock Discloses 7.97% Equity Stake NORTEL NETWORKS: Ericsson Offers EU Remedies on $65MM Nortel Deal NPS PHARMACEUTICALS: BlackRock Discloses 7.46% Equity Stake OCTOBER TRUST: Case Summary & 2 Largest Unsecured Creditors ONE SMART: Case Summary & 20 Largest Unsecured Creditors ORGANICA BIOTECH: Three Firms Under Chapter 11 ORLEANS HOMEBUILDERS: Emerges From Ch 11 With $160MM in Financing OTC HOLDINGS: Oriental Trading Emerges from Chapter 11 PACIFIC CAPITAL: Moody's Upgrades Long-Term Issuer Rating to 'B2' PASTEURIZED EGGS: Inventor & Asset Buyer Debate Patent Claims PHYSICIAN ONCOLOGY: Moody's Assigns 'B2' Corporate Family Rating PLAYBOY ENTERPRISES: Moody's Assigns 'B2' Rating to $195 Mil. Loan PLY GEM HOLDINGS: Expects $215MM to 222MM in Sales for Q4 POINT BLANK: Automatic Stay Applies to Qui Tam Action POINT BLANK: Slows Disclosure, Seeks More Exclusivity PRECISION ENGINEERED: Moody's Puts 'B1' Rating on $190 Mil. Notes PRIME GROUP: Sells Biz to Five Mile; Inks Debt Refinancing Deal PRIMUS TELECOMMUNICATIONS: Moody's Raises Corp. Family Rating PROVIDENT FUNDING: S&P Assigns 'B' Rating to $200 Mil. Notes QA3 FINANCIAL: Case Summary & 20 Largest Unsecured Creditors QUEENS BALLPARK: Moody's Affirms 'Ba1' Rating, Gives Neg. Outlook QUEPASA CORP: Files Copy of Securities Purchase Agreement QUEPASA CORP: Incurs $6.65 Million Net Loss in Fiscal 2010 QUEPASA CORP: John Abbott Discloses 15.3% Equity Stake QUEPASA CORP: Michael Matte Discloses 11.3% Equity Stake RACE POINT: S&P Assigns 'BB' Rating to $275 Mil. Senior Loan RADIO ONE: Moody's Corrects Press Release on Credit Loan Ratings RANCHER ENERGY: Form 10-Q Filing for Dec. 31 Quarter Delayed RCLC INC: Hearing on Plan Outline Set for March 10 REGAL ENTERTAINMENT: Fitch Puts 'B-/RR6' Rating on $100 Mil. Notes REGAL ENTERTAINMENT: Moody's Puts 'B3' Rating on $100 Mil. Notes REGAL ENTERTAINMENT: S&P Assigns 'BB-' Rating to New Loan RLAND PROPERTIES: Sent 15 Shopping Centers to Chapter 11 RUGGED BEAR: Hires K&L Gates as Counsel Despite Conflict RUGGED BEAR: Hires Gordon Brothers for Store Closures SABERTOOTH LLC: Bankr. Ct. Can't Review Confessed Judgment SANFORD ASSOCIATES: Case Summary & 5 Largest Unsecured Creditors SEAHAWK DRILLING: Asks for Court's Nod to Obtain DIP Financing SEAHAWK DRILLING: Taps Fulbright & Jaworski as Gen. Bankr. Counsel SEAHAWK DRILLING: Wants to Sell Substantially All of Assets SECUREALERT INC: Inks GPS Monitoring Contract in Mexico SHALAN ENTERPRISES: Can Sell Las Vegas Property for $290,000 SMITHFIELD FOODS: Moody's Upgrades Corporate Family Rating to 'B1' SOLAR ENERTECH: Reports $5 Million Net Income in Dec. 31 Quarter SOUTH EDGE: Appeals Chapter 11 Ruling and Trustee Appointment SPICEWOOD DEVELOPMENT: Essentially No Equity Left in Ch. 11 Estate SPITZER INDUSTRIES: Moody's Assigns 'B2' Corporate Family Rating SPITZER INDUSTRIES: S&P Assigns 'B' Corporate Credit Rating SUNCAL COS: Seeks to Halt Exit Plans for Projects Backed by Lehman SYNTERRA 3020: Can Use Inland Mortgage's Cash Until February 28 TANGLEWOOD FARMS: Court Denies Bid for Chapter 11 Trustee TAYLOR BEAN: Troutman Seeks to Nix Ex-Chairman's Info Demand TAYLOR BEAN: Again Selling Georgia Office Building TBS INTERNATIONAL: Joseph Royce Discloses 36.7% Equity Stake TC GLOBAL: December 26 Balance Sheet Upside-Down by $6.8 Million TEAM FINANCE: Moody's Upgrades Corporate Family Rating to 'Ba3' TOUSA INC: District Judge Voids Fraudulent Transfer Judgement TRIBUNE CO: Bank Debt Trades at 26% Off in Secondary Market TRIBUNE CO: Court Junks Aurelius, et al., Pleas for Documents TRIBUNE CO: New York Tax Dept. Objects to Competing Plans TRIBUNE CO: Parties File Plan & LBO-Related Discovery Requests TRICO MARINE: Receives Court Nod of Noteholders Settlement TRONOX INC: Emerges From Chapter 11 TWO DETROIT: Case Summary & 20 Largest Unsecured Creditors ULTIMATE ACQUISITION: Employee Files Class Action Over Firings ULTIMATE ACQUISITION: Wins Court's OK to Liquidate 46 Stores UNION CARBIDE: Moody's Raises Rating on 6.79% Bonds From 'Ba2' WALLACE TERRACE: Voluntary Chapter 11 Case Summary WASHINGTON MUTUAL: Disclosure Hearing Set for March 21 WASHINGTON MUTUAL: Files Motion to Return Rights Offering Payments WASHINGTON MUTUAL: Insurer Seeks Quick Win in $4.5M Coverage Row WATERFORD GAMING: Supplemental Bonds Won't Affect Moody's Rating WORD WORLD: Voluntary Chapter 11 Case Summary W.R. GRACE: BNSF Seeks Reconsideration of Deal Objection Denial W.R. GRACE: Wins Nod to Amend 2010 L/C Facility Agreement W.R. GRACE: Wins Nod to Extend Credit Agreement With ART YRC WORLDWIDE: Fitch Affirms 'CC' Issuer Default Rating * Great American Group Introduces Quarterly Auctions * Large Companies With Insolvent Balance Sheets ********* ACCENTIA BIOPHARMACEUTICALS: Posts $7.5-Mil. Net Loss in Q1 ----------------------------------------------------------- Accentia BioPharmaceuticals Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $7.5 million on $2.1 million of sales for the three months ended December 31, 2010, compared with a net loss of $3.6 million on $3.7 million of sales for the same period of 2009. The Company's balance sheet at December 31, 2010, showed $9.2 million in total assets, $101.7 million in total liabilities, and a stockholders' deficit of $92.5 million. At December 31, 2010, the Company had an accumulated deficit of approximately $327.3 million and a working capital deficit of approximately $38.0 million. Cash and cash equivalents at December 31, 2010, was $3.8 million of which $3.5 million was attributable to Biovest. The Company's independent registered public accounting firm's report included a "going concern" uncertainty on the financial statements for the year ended September 30, 2010, citing significant losses and working capital deficits at that date. "Our ability to continue present operations and to continue our product development efforts are dependent upon our ability to successfully execute the obligations under our Plan and to obtain significant external funding, which raises substantial doubt about our ability to continue as a going concern," the Company said in the filing. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?732a About Accentia BioPharmaceuticals Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (OTC QB: ABPI) -- http://www.accentia.net/-- is a biotechnology company that is developing Revimmune(TM) as a comprehensive system of care for the treatment of autoimmune diseases. Additionally, through the Company's, majority-owned subsidiary, Biovest International, Inc., the Company is developing BiovaxID(R) as a therapeutic cancer vaccine for treatment of follicular non- Hodgkin's lymphoma ("FL") and mantle cell lymphoma ("MCL"). Through the Company's wholly-owned subsidiary, Analytica International, Inc. ("Analytica"), they conduct a health economics research and consulting business which Analytica markets to the pharmaceutical and biotechnology industries, using Analytica's operating cash flow to support the Company's corporate administration and product development activities. On November 10, 2008, Accentia BioPharmaceuticals, along with its subsidiaries filed for Chapter 11 protection (Bankr. M.D. Fla. Lead Case No. 08-17795). The Company emerged from Chapter 11 protection, and the Plan of Reorganization became effective, on November 17, 2010. ACTIVECARE INC: Posts $1.7 Million Net Loss in Fiscal Q1 -------------------------------------------------------- ActiveCare, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.69 million on $174,000 of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $1.26 million on $113,000 of revenues for the same period of 2009. The Company's balance sheet at December 31, 2010, showed $1.76 million in total assets, $1.21 million in total liabilities, and stockholders' equity of $544,000. As reported in the Troubled Company Reporter on Dec. 8, 2010, Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, expressed substantial doubt about ActiveCare's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has incurred recurring operating losses and has an accumulated deficit. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7329 About ActiveCare Inc. West Valley City, Utah-based ActiveCare, Inc. -- http://www.activecare.com/-- is organized into two business segments based primarily on the nature of the Company's products. The Stains and Reagents segment is engaged in the business of manufacturing and marketing medical diagnostic stains, solutions and related equipment to hospitals and medical testing labs. The Care Services segment is engaged in the business of developing, distributing and marketing mobile health monitoring and concierge services to distributors and customers. ADVANCED DISINFECTION: Files for Chapter 7 Liquidation ------------------------------------------------------ Ben Sutherly, staff writer at the Dayton Daily News, reports that Advanced Disinfection Technologies LLC has filed a Chapter 7 bankruptcy petition, estimating assets under $50,000 and liabilities between $1 million and $10 million. According to employee Vivien Carmichael, the Company is "winding down" operations. She said the Company has been dealing with a patent infringement lawsuit. Advanced Disinfection, doing business as ADTec, develops, patents and brings to market innovative disinfection products. The Company started operations in 2008. ADVANTA CORP: Court Confirms Chapter 11 Plan -------------------------------------------- Advanta Corp. obtained an order from Bankruptcy Judge Kevin Carey confirming its Chapter 11 plan. The Plan was unanimously approved by seven of the 11 creditor classes. The official committee of unsecured creditors asked creditors to vote in favor of the Plan. Under the Plan, holders of $140.6 million in unsecured notes could be paid in full. General unsecured creditors, with as much as $180.6 million in claims, could recover up to 71.3%. The Plan creates six trusts that will liquidate and distribute to creditors and equity holders most of the Debtors' assets. A seventh trust will hold stock of Advanta, which will continue to own the stock of its Debtor-subsidiary, ASC, and a non-Debtor subsidiary, ABHC, along with some cash and a certain portion of Advanta's portfolio of business credit card receivables. The bankruptcy judge in Delaware signed the confirmation order on Feb. 11. About Advanta Corp. Advanta Corp. -- http://www.advanta.com/-- issues business purpose credit cards to small businesses and business professionals in the United States. Advanta primarily funds and operates its business credit card business through Advanta Bank Corp., which offers a range of deposit products that are insured by the Federal Deposit Insurance Corporation. In June 2009, the FDIC placed significant restrictions on the activities and operations of Advanta Bank, as the Bank's capital ratios were below required regulatory levels. On November 8, 2009, Advanta Corp. filed for Chapter 11 (Bankr. D. Del. Case No. 09-13931). Attorneys at Weil, Gotshal & Manges LLP, and Richards, Layton & Finger, P.A., serve as the Debtor's bankruptcy counsel. Alvarez & Marsal is the financial advisor. The Garden City Group, Inc., is the claims agent. The filing did not include Advanta Bank. The petition said that Advanta Corp.'s assets totaled $363,000,000 while debts totaled $331,000,000 as of September 30, 2009. AEOLUS PHARMACEUTICALS: Preferred Stock Hiked to 1.6MM Shares ------------------------------------------------------------- Effective February 7, 2011, Aeolus Pharmaceuticals, Inc,. amended its certificate of incorporation pursuant to a certificate of amendment to increase the number of authorized shares of preferred stock designated as "Series B Convertible Preferred Stock" from 600,000 shares to 1,600,000 shares. A full-text copy of the Certificate of Amendment is available for free at http://ResearchArchives.com/t/s?7325 Aeolus Pharmaceuticals Aeolus Pharmaceuticals, Inc. (OTC Bulletin Board: AOLS) -- http://www.aeoluspharma.com/-- is a Southern California-based biopharmaceutical company. The Company is developing a new class of broad spectrum catalytic antioxidant compounds based on technology discovered at Duke University and National Jewish Health. Its lead compound, AEOL 10150, is entering human clinical trials in oncology, where it will be used in combination with radiation therapy. The Company's balance sheet at September 30, 2010, showed $2.4 million in total assets, $29.1 million in total liabilities, and a stockholders' deficit of $26.7 million. Haskell & White LLP, in Irvine, California, 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, negative cash flows from operations and management believes the Company does not currently possess sufficient working capital to fund its operations past the second quarter of fiscal 2012. AGRISOLAR SOLUTIONS: Posts $6,500 Net Loss in Dec. 31 Quarter ------------------------------------------------------------- Agrisolar Solutions, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $6,500 on $1.79 million of revenue for the third quarter ended Dec. 31, 2010, compared with a net loss of $817,700 on $1.05 million of revenue for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $10.26 million in total assets, $5.79 million in total liabilities, and stockholders' equity of $4.47 million. As reported in the Troubled Company Reporter on July 20, 2010, ZYCPA Company Limited, in Hong Kong, China, expressed substantial doubt about Agrisolar Solutions' ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has incurred continuous losses. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7333 About AgriSolar Solutions Denver, Colo.-based AgriSolar Solutions, Inc. (OTC BB: AGSO) is principally engaged in the design, manufacture, distribution and sales of solar energy saving, insect killer and plastic products in the People's Republic of China and overseas. The Company was incorporated in the State of Colorado on March 13, 2006, under the name V2K International, Inc. On January 8, 2010, the Company changed its company name from "V2K International, Inc." to its current name. AKSM HOLDINGS: Judge Approves Sale to ViWinTech & Brown ------------------------------------------------------- American Bankruptcy Institute reports that a Kentucky judge has approved the sale of AKSM Holdings Inc. to stalking-horse bidders ViWinTech Window & Door Inc. and Brown Real Estate Holdings Inc. About AKSM Holdings AKSM Holdings, Inc. manufactures vinyl windows and patio doors. The company was founded in 1952 and is based in Paducah, Kentucky. AKSM Holdings filed for Chapter 11 protection (Bankr. D. Western Kentucky Case No. 09-51148) on October 1, 2009. The Debtor estimated assets and liabilities between $1 million and $10 million. Mark C. Whitlow, Esq., at Whitlow, Roberts, Houston & Straub, PLLC, in Paducah, Kentucky, serves as the Debtor's bankruptcy counsel. AMERICAL APPAREL: 2009 Financials Now Labeled as 'Unaudited' ------------------------------------------------------------ American Apparel, Inc., disclosed in the December that its audit committee received notice from Deloitte & Touche LLP stating that Deloitte had concluded that Deloitte's report on the Company's previously issued consolidated financial statements as of and for the year ended December 31, 2009, including Deloitte's report on internal control over financial reporting at December 31, 2009, including in the Original Filing, should not be relied upon or associated with the 2009 financials. Accordingly, the Company filed Amendment No. 4 on Form 10-K/A for the purpose of removing the Deloitte Reports and labeling the 2009 financials as "unaudited." As a result, the consolidated financial statements for the year ended December 31, 2009 included in this Amendment No. 4 are unaudited. The Company plans to file another amendment to the Annual Report for the year ended December 31, 2009, once a new report on internal control over financial reporting at December 31, 2009 and a new audit report on the 2009 financials are available from the Company's current auditors, for the purpose of filing those reports and, at such time, the notation that the 2009 financials are "unaudited" would be removed. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 30, 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. The Company's balance sheet at September 30, 2010, showed $322.7 million in total assets, $231.3 million in total liabilities, and stockholders' equity of $91.4 million. American Apparel disclosed in its quarterly report on Form 10-Q for the third quarter of 2010 that based upon results of operations for the nine months ended September 30, 2010, and through the issuance of the financial statements and projected for the remainder of 2010, the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months, and that it is probable that beginning January 31, 2011, the Company will not be in compliance with the minimum Consolidated EBITDA covenant under the $80,000,000 term loan with Lion Capital LLP. "Noncompliance with covenants under the Lion Credit Agreement would constitute an event of default under the BofA Credit Agreement, which, if not waived, could block the Company from making borrowings under the BofA Credit Agreement," the Company said in the filing. "These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern." AMERICAN APPAREL: John Luttrell Does Not Own Any Securities ----------------------------------------------------------- In a Form 3 filing with the U.S. Securities and Exchange Commission on February 7, 2011, John J. Luttrell, EVP, chief financial officer at American Apparel, Inc., disclosed that he does not own any securities of the Company. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 30, 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. The Company's balance sheet at September 30, 2010, showed $322.7 million in total assets, $231.3 million in total liabilities, and stockholders' equity of $91.4 million. American Apparel disclosed in its quarterly report on Form 10-Q for the third quarter of 2010 that based upon results of operations for the nine months ended September 30, 2010, and through the issuance of the financial statements and projected for the remainder of 2010, the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months, and that it is probable that beginning January 31, 2011, the Company will not be in compliance with the minimum Consolidated EBITDA covenant under the $80,000,000 term loan with Lion Capital LLP. "Noncompliance with covenants under the Lion Credit Agreement would constitute an event of default under the BofA Credit Agreement, which, if not waived, could block the Company from making borrowings under the BofA Credit Agreement," the Company said in the filing. "These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern." AMERICAN CAMSHAFT: $3.12MM Payments to Gerdau Not Preferential -------------------------------------------------------------- Bankruptcy Judge Phillip J. Shefferly granted the defendant's request for summary judgment in the lawsuit, Basil T. Simon, Trustee, v. Gerdau MacSteel, Inc., Adv. Pro. No. 08-05578 (Bankr. E.D. Mich.). Basil T. Simon, the chapter 7 trustee to American Camshaft Specialties, Inc., sued Gerdau on Nov. 30, 2008, alleging it received payments from the Debtor in the 90 days before the Debtor's bankruptcy case in the aggregate amount of $3,126,022. The Chapter 7 trustee sought to avoid those transfers as preferential pursuant to 11 U.S.C. Sec. 547(b). The Debtor's business involved the design, production and sale of steel and iron camshafts for original equipment manufacturers in the automotive industry. For over 20 years, the Debtor purchased special bar quality steel from Gerdau. The defendant asserts that the transfers are not avoidable because of the ordinary course of business defense under Sec. 547(c)(2); and the transfers are not avoidable because of the subsequent new value defense under Sec. 547(c)(4). The defendant filed two motions for summary judgment. Judge Shefferly granted the defendant's motion for summary judgment under Sec. 547(c)(2). Because the Court grants that motion, the Court deemed it unnecessary to reach the other motion. The Court held that there are no genuine issues of material fact regarding whether the payments challenged by the Chapter 7 Trustee were made according to ordinary business terms. A copy of Judge Shefferly's February 9, 2011 opinion is available at http://is.gd/toWYHqfrom Leagle.com. About American Camshaft Specialties American Camshaft Specialties, Inc., and three U.S. affiliates filed for chapter 11 protection on Dec. 9, 2006 (Bankr. E.D. Mich. Case No. 06-58298). Christopher A. Grosman, Esq., and Robert A. Weisberg, Esq., at Carson Fischer, P.L.C., represent the Debtors. Lawyers at Schafer and Weiner PLLC represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors they estimated assets and debts between $10 million and $50 million. After substantially all of the Debtors' tangible assets were sold in Sec. 363 sales, the Bankruptcy Court converted all four Chapter 11 cases to Chapter 7 liquidation proceedings on October 9, 2007, when the Debtors failed to file a Chapter 11 plan by the deadline first set and then extended by the Court. Basil Simon was appointed Trustee in each of the four Chapter 7 cases. The Chapter 7 Trustee is represented by Joseph K. Grekin, Esq., and Tracey L. Porter, Esq., at Schafer and Weiner PLLC in Bloomfield Hills, Michigan. ANCHOR BANCORP: Incurs $12.18 Million Net Loss in Dec. 31 Qtr. -------------------------------------------------------------- On February 7, 2011, Anchor Bancorp Wisconsin Inc. filed its quarterly report on Form 10-Q for the quarterly period ended December 31, 2010. The Company reported a net loss of $12.18 million on $41.15 million of total interest income for the three months ended December 31, 2010, compared with a net loss of $10.20 million on $53.55 million of total interest income for the same period during the prior year. The Company's balance sheet at December 31, 2010 showed $3.58 billion in total assets, $3.59 billion in total liabilities and a $9.52 million a stockholders' deficit. As reported in the Troubled Company Reporter on July 5, 2010, McGladrey & Pullen, LLP, in Madison, Wisconsin, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that at March 31, 2010, all of the subsidiary bank AnchorBank, fsb's regulatory capital amounts and ratios are below the required levels and the bank is considered "undercapitalized" under the regulatory framework for prompt corrective action. The subsidiary bank has also suffered recurring losses from operations. Failure to meet the capital requirements exposes the Company's to regulatory sanctions that may include restrictions on operations and growth, mandatory asset dispositions, and seizure of the subsidiary bank. In the latest Form 10-Q, Anchor Bancorp said that along with its bank, it continues to diligently work with their financial and professional advisors in seeking qualified sources of outside capital, and in achieving compliance with the requirements of the orders. Anchor Bancorp and the Bank continue to consult with the OTS and FDIC on a regular basis concerning the Corporation's and Bank's proposals to obtain outside capital and to develop action plans that will be acceptable to federal regulatory authorities, but there can be no assurance that these actions will be successful, or that even if one or more of the Corporation's and Bank's proposals are accepted by the Federal regulators, that these proposals will be successfully implemented. "While the Corporation's management continues to exert maximum effort to attract new capital, significant operating losses in fiscal 2008, 2009 and 2010, significant levels of criticized assets and low levels of capital raise substantial doubt as to the Corporation's ability to continue as a going concern. If the Corporation and Bank are unable to achieve compliance with the requirements of the Orders, or implement an acceptable capital restoration plan, and if the Corporation and Bank cannot otherwise comply with those commitments and regulations, the OTS or FDIC could force a sale, liquidation or federal conservatorship or receivership of the Bank," Anchor Bancorp said in the Form 10-Q. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?7310 About Anchor Bancorp Headquartered in Madison, Wisconsin, Anchor Bancorp Wisconsin Inc. (NASDAQ: ABCW) is a registered savings and loan holding company incorporated under the laws of the State of Wisconsin. The Company is engaged in the savings and loan business through its wholly owned banking subsidiary, AnchorBank, fsb. AnchorBank, fsb was organized in 1919 as a Wisconsin chartered savings institution and converted to a federally chartered savings institution in July 2000. AnchorBank, fsb is the third largest depository institution headquartered in the state of Wisconsin and its largest thrift in terms of assets. ARCHIBALD ONTARIO: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Archibald Ontario, LLC 1550 Tiburon Boulevard, #B-1 Tiburon, CA 94920 Bankruptcy Case No.: 11-10457 Chapter 11 Petition Date: February 10, 2011 Court: U.S. Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Alfred Dovbish, Esq. LAW OFFICE OF ALFRED DOVBISH 1550-G Tiburon Boulevard, #216 Tuburon, CA 94920 Tel: (415) 924-0808 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb11-10457.pdf The petition was signed by Siavash Barmand, managing member. ARYX THERAPEUTICS: K. Leonard Resigns From Board of Directors ------------------------------------------------------------- On February 1, 2011, Keith Leonard resigned as a member of ARYx Therapeutics, Inc.'s board of directors, including as member of the audit committee of the Board and nominating and corporate governance committee of the Board. Mr. Leonard's resignation was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices, or regarding the general direction of the Company. About ARYx Therapeutics Fremont, Calif.-based ARYx Therapeutics, Inc. (NASDAQ: ARYX) -- http://www.aryx.com/-- is a biopharmaceutical company. ARYx currently has four products in clinical development: a prokinetic agent for the treatment of various gastrointestinal disorders, naronapride (ATI-7505); an oral anticoagulant agent for patients at risk for the formation of dangerous blood clots, tecarfarin (ATI-5923); an oral anti-arrhythmic agent for the treatment of atrial fibrillation, budiodarone (ATI-2042); and, an agent for the treatment of schizophrenia and other psychiatric disorders, ATI- 9242. The Company's balance sheet as of September 30, 2010, showed $6.0 million in total assets, $13.7 million in total liabilities, and a stockholders' deficit of $7.7 million. As reported in the Troubled Company Reporter on April 9, 2010, Ernst & Young LLP, in Palo Alto, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following review of the Company's 2009 results, citing the Company's recurring losses from operations and stockholders' deficit. ASARCO LLC: Case vs. Barclays Transferred to Judge Hanen -------------------------------------------------------- Appellants Reorganized ASARCO LLC, Asarco Incorporated and Americas Mining Corporation, and Cross-Appellant Barclays Capital Inc. jointly filed a request to transfer, consolidate and set briefing schedule for their appeals. The separately filed appeals involve the parties' challenges to the memorandum opinion and order on Barclays' fee application and fee enhancement motion entered by the U.S. Bankruptcy Court for the Southern District of Texas on December 2, 2010. As per the agreement between judges of the U.S. District Court for the Southern District of Texas, the ASARCO Appeal was transferred to District Judge Andrew S. Hanen. The Barclays Appeal was assigned to District Judge Janis Graham Jack, but has not yet been transferred. By this motion, the parties jointly ask the District Court to transfer the Barclays Appeal to the jurisdiction of Judge Hanen and that the appeals be consolidated for briefing and disposition. The parties believe that transfer and consolidation of the two appeals is appropriate, would assist the District Court in efficiently resolving the case, and is consistent with Judge Hanen's decision to handle the appellate matters arising from the ASARCO bankruptcy. A single coordinated briefing schedule would allow for the efficient disposition of the matter, the parties contend. On the contrary, if left unconsolidated under the current schedule, a total of six briefs would be filed, which filings would be overlapping and potentially voluminous, the parties assert. The parties believe that a single briefing schedule that allows them to fully brief their respective issues is the most efficient way to assist the District Court in its disposition of the appeals. The parties also ask the District Court to extend previously set dates and instead, set these briefing schedules to allow them to discuss whether they can settle their disputes without the need for further litigation and expense: -- ASARCO's appellant's brief due on March 1, 2011; -- Barclays' combined cross-appellant's/appellee's brief due on April 1, 2011; -- ASARCO's combined cross-appellee's/appellant's reply brief due April 22, 2011; and -- Barclays' cross-appellant's reply brief due on May 13, 2011. Judge Hanen granted the joint request, and approved the parties' proposed briefing schedules. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Court OKs Marten Law Group's $1.7 Mil. Fees ------------------------------------------------------- Judge Schmidt awarded Marten Law Group PLLC's fees and expenses, aggregating $1,705,714 for its services as special counsel to ASARCO LLC for the period from April 1, 2007, through February 5, 2010. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASHLEY SMITH: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Ashley Smith Properties, LLC 4131 Ogeechee Road, Suite 131 Savannah, GA 31405 Bankruptcy Case No.: 11-40292 Chapter 11 Petition Date: February 10, 2011 Court: U.S. Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: Charles Vincent Loncon, Esq. BRANNEN SEARCY & SMITH 22 East 34th Street Savannah, GA 31401 Tel: (912) 234-8875 Fax: (912) 232-1792 E-mail: cloncon@brannenlaw.com Scheduled Assets: $1,916,058 Scheduled Debts: $1,328,207 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/gasb11-40292.pdf The petition was signed by Charles H. Smith, member. AUBURN EXPRESS: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: Auburn Express Storage, LLC P.O. Box 73639 Puyallup, WA 98373-0639 Bankruptcy Case No.: 11-41011 Chapter 11 Petition Date: February 11, 2011 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch Debtor's Counsel: Christopher E. Allen, Esq. MORTON MCGOLDRICK PS 820 A St., Ste 600 P.O. Box 1533 Tacoma, WA 98401 Tel: (253) 627-8131 E-mail: ceallen@bvmm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Timberland Bank Bank Loan $4,000,000 7805 South Hosmer Tacoma, WA 98408 The petition was signed by Fred Crase, manager. AW FINANCIAL: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: AW Financial & Investment Inc. 10501 Valley Boulevard, #1888 El Monte, CA 91731 Bankruptcy Case No.: 11-15930 Chapter 11 Petition Date: February 11, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Vincent P. Zurzolo Debtor's Counsel: Alexander Yoo In Kim, Esq. PACIFIC ACCESS GROUP, LLC 3600 Wilshire Boulevard, Suite 1408 Los Angeles, CA 90010 Scheduled Assets: $1,100,000 Scheduled Debts: $3,083,847 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-15930.pdf The petition was signed by Bin Ling Lei, assistant secretary. BAKERS FOOTWEAR: Sales Hike to $58.2MM in 13 Weeks Ended Jan. 29 ---------------------------------------------------------------- Bakers Footwear Group, Inc., reported net sales for the fourth quarter and full year of fiscal 2010. For January, the four-week period ended Jan. 29, 2011, net sales were $11.5 million, a decrease of 3.2% from $11.9 million for the four-weeks ended January 30, 2010. Comparable store sales for the four-week January 2011 period decreased 1.3%, compared to an increase of 0.8% for the four-week period ended Jan. 30, 2010. For the thirteen-weeks ended Jan. 29, 2011, the Company's fourth fiscal quarter, net sales increased 1.0% to $58.2 million, from $57.6 million for the thirteen-weeks ended Jan. 30, 2010. Comparable store sales for the fourth quarter of fiscal 2010 increased 2.6%, compared to a comparable store sales increase of 3.9% for the fourth quarter of fiscal 2009. For the fifty-two weeks ended Jan. 29, 2011, the Company's fiscal year 2010, net sales were $185.6 million compared to $185.4 million last year. Comparable store sales for fiscal year 2010 increased 1.7%, compared to a comparable store sales increase of 1.3% for fiscal year 2009. Peter Edison, chairman and chief executive officer of Bakers Footwear Group commented, "We are pleased to report increased comparable store sales for the fourth quarter and fiscal year continuing our positive momentum from 2009. Fiscal year 2010 is our third consecutive year of positive comparable store sales. Our fourth quarter sales were driven by our initiatives in new and exclusive brands, as well as our continued ability to capitalize on the trends in fashion footwear. We expect our favorable sales performance to continue as we begin fiscal 2011 and are particularly encouraged by the excitement in our current and upcoming spring offerings." Based on the Company's business plan, the Company believes it has adequate liquidity to fund anticipated working capital requirements and expects to be in compliance with its financial covenants through the next twelve months. About Bakers Footwear St. Louis, Mo.-based Bakers Footwear Group, Inc. (OTC Bulletin Board: BKRS.OB) is a national, mall-based, specialty retailer of footwear and accessories for young women. The Company's merchandise includes private label and national brand dress, casual and sport shoes, boots, sandals and accessories. As of Oct. 30, 2010, the Company operated 236 stores, including 220 Bakers stores and 16 Wild Pair stores located in 35 states. The Company's balance sheet at October 30, 2010, showed $51.17 million in total assets, $62.42 million in total liabilities, and a stockholders' deficit of $11.25 million. As reported in the Troubled Company Reporter on May 4, 2010, Ernst & Young LLP, in St. Louis, Mo., expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended January 30, 2010. The independent auditors noted that the Company has incurred substantial losses from operations in recent years and has a significant working capital deficiency. Bakers Footwear reported a net loss of $9.1 million on $185.4 million of revenue for the fiscal year ended January 30, 2010, compared with a net loss of $15.0 million on $183.7 million of revenue for the year ended January 31, 2009. BAL BAY: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------- Debtor: Bal Bay Associates, Inc. 1900 Sunset Harbour Drive, Suite 200 Miami Beach, FL 33139 Bankruptcy Case No.: 11-13641 Chapter 11 Petition Date: February 11, 2011 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Scott Alan Orth, Esq. LAW OFFICES OF SCOTT ALAN ORTH, P.A. 3880 Sheridan Street Hollywood, FL 33021 Tel: (305) 757-3300 Fax: (305) 757-0071 E-mail: orthlaw@bellsouth.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 two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb11-13641.pdf The petition was signed by John R. Olsen, director. Affiliate that previously filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Bal Bay Properties, Inc. 11-10374 01/07/11 BEAVERDAM LAND: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Beaverdam Land Development Company, LLC 16401 International Street Doswell, VA 23047 Bankruptcy Case No.: 11-30883 Chapter 11 Petition Date: February 11, 2011 Court: United States Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: Roy M. Terry, Jr., Esq. DURRETTECRUMP PLC 1111 East Main Street, 16th Floor Richmond, VA 23219 Tel: (804) 775-6948 E-mail: rterry@durrettecrump.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 five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb11-30883.pdf The petition was signed by Donald L. Hall, managing member. BF BOLTHOUSE: Moody's Gives Negative Outlook on 7x Leverage ----------------------------------------------------------- Moody's changed the outlook for Bolthouse to negative from stable. The company's B2 corporate family rating and other ratings remain unchanged. The change to a negative outlook reflects the company leverage increase over the past several quarters and concerns around its very tight cushion under the first lien leverage covenant, said Linda Montag, Moody's Senior Vice president. Based on Moody's standard adjustments, Moody's estimate that leverage at the end of December will be close to 7 times, well above the 6 times level that Moody's have said would lead to downward rating pressure. While Moody's expect improvement in leverage as the year progresses, Moody's believe that it will be some time before the company can reach the leverage levels Moody's had originally expected. Leverage as calculated for the bank covenant had a single digit cushion versus the covenant at the end of the last quarter ended September 2010 and Moody's do not expect a much better cushion by the end of December. The company's B2 corporate family rating is supported by its leading market position within its core carrot business and its healthy beverage segment as well as the relatively stable nature of the company's earnings with less volatility than for other natural product processors. These attributes are offset by the speculative grade elements in the company's profile, primarily its modest scale relative to much larger and diverse natural products and packaged goods companies, concentration of its vertically integrated raw material sources, still fairly narrow product focus. Leverage has trended higher than Moody's originally expected at the time of the last refinancing despite debt pay-down as EBITDA softened, and the negative outlook reflects this increase in leverage and concerns about tight covenant cushion versus the 1st lien leverage covenant. Bolthouse's outlook could be brought back to stable if the company's EBITDA grows or debt is reduced such that leverage is reduced below 6 times (using Moody's adjustments) and the covenant cushion is expected to be ample, consistently above 15-20% over the medium term. Ratings could experience downward pressure if the company fails to improve the covenant cushion, if Bolthouse is unable to sustain its leading market position in its product segments, if the company pursues aggressive shareholder enhancement initiatives that erode credit metrics, or if debt to EBITDA remains above 6 times (using Moody's adjustments). The last rating action took place in January 2010 when Moody's assigned a B1 rating to Wm. Bolthouse Farms, Inc.'s senior secured revolving credit and first lien term loan, a rating of Caa1 to its second lien term loan and affirmed its B2 CFR in advance of the refinancing of the senior credit facilities and Holdco PIK Perpetual Preferred Stock. BF Bolthouse Holdco, LLC through its operating subsidiaries including Wm. Bolthouse Farms, Inc., is a grower, processor and distributor of peeled and cut carrots and carrot products, and a producer of fruit and vegetable based beverages and salad dressings. Bolthouse also has a cold storage freight forwarding warehouse business located in Chicago, which allows retailers to pick up Bolthouse products and other produce which have been shipped by rail from Bakersfield. Revenues for the twelve months ended September 30, 2010, were approximately $605 million. Bolthouse is headquartered in Bakersfield, California. BION ENVIRONMENTAL: Posts $3.1 Million Net Loss in Dec. 31 Quarter ------------------------------------------------------------------ Bion Environmental Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.1 million on $0 revenue for the three months ended December 31, 2010, compared with a net loss of $641,599 on $0 revenue for the same period a year ago. The Company's balance sheet at December 31, 2010, showed $3.5 million in total assets, $2.9 million in total liabilities, $2.5 million in Series B Redeemable Convertible Preferred stock, and a stockholders' deficit of $1.9 million. As reported in the Troubled Company Reporter on September 27, 2010, GHP Horwath, P.C., in Denver, Colo., expressed substantial doubt about Bion Environmental Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted that the Company has not generated revenue and has suffered recurring losses from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7336 About Bion Environmental Crestone, Colo.-based Bion Environmental Technologies, Inc. (OTC BB: BNET) -- http://biontech.com/-- has provided environmental treatment solutions to the agriculture and livestock industry since 1990. Bion's patented next-generation technology provides a unique comprehensive treatment of livestock waste that achieves substantial reductions in nitrogen and phosphorus, ammonia, greenhouse and other gases, as well as pathogens, hormones, herbicides and pesticides. BIOVEST INTERNATIONAL: Incurs $11.7MM Loss in Dec. 31 Quarter ------------------------------------------------------------- Biovest International, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $11.7 million on $836,000 of revenue for the three months ended December 31, 2010, compared with net income of $4.9 million on $1.4 million of revenue for the same period of the prior fiscal year. The Company recorded an operating loss of $5.3 million for the three months ended December 31, 2010, compared with operating income of $134,000 during the same period of the previous fiscal year. General and administrative expenses increased from $495,000 to $5.3 million when compared to the same quarter of the previous fiscal year. On Nov. 17, 2010, a number of incentive stock options previously issued to the Company's employees and directors became vested, resulting in a non-cash charge of approximately $4.5 million to general and administrative expense for the three months ending December 31, 2010. The Company's balance sheet December 31, 2010, showed $8.2 million in total assets, $42.0 million in total liabilities, and a stockholders' deficit of $33.8 million. As reported in the Troubled Company Reporter on December 20, 2010, Cherry, Bekaert & Holland, L.L.P., in Tampa, Fla., expressed substantial doubt about Biovest International's ability to continue as a going concern, following the Company's results for the fiscal year ended September 30, 2010. The independent auditors noted that the Company incurred cumulative net losses since inception of roughly $149 million and cash used in operating activities of roughly $2.7 million during the two years ended September 30, 2010, and had a working capital deficiency of roughly $79.6 million at September 30, 2010. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7335 About Biovest International Biovest International, Inc. -- http://www.biovest.com/-- is developing BiovaxID(R) as a personalized therapeutic cancer vaccine for the treatment of non-Hodgkin's lymphoma, specifically follicular lymphoma ("FL"), mantle cell lymphoma ("MCL") and potentially other B-cell blood cancers, in collaboration with the National Cancer Institute. Both FL and MCL are generally considered to be incurable with currently approved therapies. These generally fatal diseases arise from the lymphoid tissue and are characterized by an uncontrolled proliferation and spread throughout the body of mature B-cells, which are a type of white blood cell. Three clinical trials conducted under the Company's Investigational New Drug Application ("IND") have studied BiovaxID in non-Hodgkin's lymphoma. These studies include a Phase 2 clinical trial and a Phase 3 clinical trial in patients with FL, as well as, a Phase 2 clinical trial in MCL patients. Biovest believes that these clinical trials have demonstrated that BiovaxID, which is personalized and autologous (derived from a patient's own tumor cells), has an excellent safety profile and is effective in the treatment of these life-threatening diseases. Headquartered in Tampa, Florida with its bio-manufacturing facility based in Minneapolis, Minnesota, Biovest is publicly- traded on the OTCQB(m) Market with the stock-ticker symbol "BVTI". As of January 31, 2011, Biovest is a 65% owned subsidiary of Accentia Biopharmaceuticals, Inc. (OTCQB: ABPI), a biotechnology company that is developing Revimmune(TM) as a comprehensive system of care for the treatment of autoimmune diseases. Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID, Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11 bankruptcy protection on November 10, 2008 (Bankr. M.D. Fla. Case No. 08-17796). As reported in the Troubled Company Reporter on November 19, 2010, Biovest emerged from Chapter 11 protection, and its reorganization plan became effective, on November 17, 2010. BLOCKBUSTER INC: Diamondback Equity Stake Down to 0% ---------------------------------------------------- In a Schedule 13G/A filed with the U.S. Securities and Exchange Commission on February 10, 2011, Diamondback Master Fund, Ltd., Diamondback Capital Management, LLC, and DBCM Partners, LLC, disclosed that each of them beneficially owns no shares of Blockbuster Inc.'s common stock. John Hagarty, chief operating officer of Diamondback Master, revealed that as of December 31, 2010, and as of February 10, 2011, (i) Diamondback Master did not and does not beneficially own any shares of the company's Common Stock, and (ii) each of Diamondback Capital and DBCM Partners may not be deemed to have beneficially owned or beneficially own any shares of Common Stock beneficially owned by Diamondback Master. Diamondback Capital is the investment manager of Diamondback Master, while DBCM Partners is the managing member of Diamondback Capital. Lawrence Sapanski and Richard H. Schimel serve as managing members of DBCM Partners. The disclosure should not be construed in and of itself as an admission by any Reporting Person or the Diamondback Principals as to beneficial ownership of the shares of Common Stock owned by another Reporting Person, Mr. Hagarty noted. Each of Diamondback Capital, DBCM Partners and the Diamondback Principals disclaims beneficial ownership of the shares of Common Stock owned by Diamondback Master. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Goldman Sachs Units Report 0.1% Equity Stake ------------------------------------------------------------- In a Schedule 13G/A filed with the U.S. Securities and Exchange Commission on February 11, 2011, The Goldman Sachs Group, Inc., and Goldman, Sachs & Co. disclosed that each of them beneficially owns 109,391 shares of Blockbuster Inc.'s Class A common stock, which represents 0.1% of Blockbuster's total outstanding shares. Blockbuster had 147,370,491 shares of Class A common stock outstanding as of November 5, 2010. Goldman Sachs Group and Goldman Sachs have shared voting power on 109,391 shares, and shared power to dispose of 109,391 shares of Blockbuster's Class A common stock. In accordance with the Securities and Exchange Commission Release No. 34-39538 (January 12, 1998), the filing reflects the securities beneficially owned by certain operating units of The Goldman Sachs Group, Inc., and its subsidiaries and affiliates, says Jeremy Kahn, the company's attorney-in-fact. He notes that the filing does not reflect securities, if any, beneficially owned by any operating units of Goldman Sachs Group, whose ownership of securities is disaggregated from that of the Goldman Sachs Reporting Units in accordance with the Release. The Goldman Sachs Reporting Units disclaim beneficial ownership of the securities beneficially owned by (i) any client accounts with respect to which the Goldman Sachs Reporting Units or their employees have voting or investment discretion, or both and (ii) certain investment entities of which the Goldman Sachs Reporting Units act as the general partner, managing general partner or other manager, to the extent interests in those entities are held by persons other than the Goldman Sachs Reporting Units. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: M.A.M., et al., Report 5.77% Equity Stake ---------------------------------------------------------- In a Schedule 13G/A filed with the U.S. Securities and Exchange Commission, M.A.M. Investments Ltd., Marathon Asset Management (Services) Ltd., Marathon Asset Management LLP, William James Arah, Jeremy John Hosking and Neil Mark Ostrer disclosed that each of them beneficially owns 4,156,977 shares of Blockbuster Inc.'s common stock, which represents 5.77% of Blockbuster's total outstanding shares. M.A.M., et al., have shared voting power on 3,565,205 shares, and shared power to dispose of 4,156,977 shares of Blockbuster's Class B common stock. The Schedule 13G assumes Blockbuster has issued and outstanding 72,000,000 shares. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: U.S. Trustee Closes Sec. 341 Meeting ----------------------------------------------------- Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, notifies the Court and parties-in-interest that the Office of the United States Trustee for Region 2 has closed the meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code. Hence, the Section 341 Meeting, which was scheduled to be held February 14, 2011, was cancelled. The first Section 341 Meeting in the Debtors' bankruptcy cases was held on November 1, 2010, and was subsequently continued to various dates. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. In its latest monthly operating report filed with the Bankruptcy Court, Blockbuster disclosed $1.066 billion in assets, $422.2 million in liabilities not subject to compromise and $1.165 billion in liabilities subject to compromise, and a deficit of $533.8 million as of Nov. 28, 2010. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BORCHERT LLC: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Borchert, LLC dba Borchert Concrete Pumping LLC dba Borchert Concrete Pumping 738 Old Lytton Springs Road Lockhart, TX 78644 Bankruptcy Case No.: 11-10318 Chapter 11 Petition Date: February 10, 2011 Court: United States Bankruptcy Court Western District of Texas (Austin) Judge: Craig A. Gargotta Debtor's Counsel: B. Weldon Ponder, Jr., Esq. Building 3, Suite 200 4601 Spicewood Springs Rd. Austin, TX 78759-7841 Tel: (512) 342-8222 Fax: (512) 342-8444 E-mail: welpon@austin.rr.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 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txwb11-10318.pdf The petition was signed by Louis Borchert, managing member. BROWN MEDIA: BizWest Acquires Three Business Newspapers ------------------------------------------------------- The Denver Business Journal reports that a newly formed company, BizWest Media LLC, has purchased a trio of business newspapers -- Boulder County Business Report, the Northern Colorado Business Report and the Wyoming Business Report -- in Colorado and Wyoming for undisclosed terms. According to the report, BizWest was formed by Jeff Nuttall, publisher of the Northern Colorado Business Report, and Christopher Wood, publisher of the Northern Colorado Business Report. BizWest is co-headquartered in Fort Collins and Boulder. The purchase of the newspapers closed Feb. 11, 2011, according to the Business Journal. The Business Journal relates that BizWest purchased the newspapers from Ohio Community Media LLC, which was formed to operate the assets of Brown Publishing Co. and Brown Media Holdings Co. The Brown companies filed for Chapter 11 bankruptcy protection in May 2010. Brown Media Holdings in 2008 purchased the Boulder County Business Report, which in turn was the majority owner of the Northern Colorado Business Report. About Brown Media Brown Media owns business publications in Ohio, Utah, Texas, South Carolina, New York, and Iowa. Brown publishes 15 daily, 32 weekly, 11 business and 41 free publications. There are also 51 websites. Seventy-eight of the publications are in Ohio. Brown publishes Dan's Papers, the weekly newspaper with the largest circulation in the area of eastern Long Island, New York, known as the Hamptons. Brown also publishes the Montauk Pioneer, which it calls the official newspaper of Montauk, New York. Affiliates that filed Chapter 11 petitions also include Troy Daily News Inc., Boulder Business Information LLC, Utah Business Publishers LLC, Texas Business News LLC, Texas Community Newspapers Inc., Dan's Papers, Inc., and Upstate Business News LLC. Closely held Brown Media, based in Cincinnati, listed assets of $94 million against debt totaling $104.6 million. First-lien lenders are owed $70.2 million on a revolving credit and term loan. Court papers say the book value of the lenders' collateral is $94.9 million. Second-lien lenders are owed $24.3 million. BRUNSCHWIG & FILS: Kravet-Led Auction on March 7 ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Brunschwig & Fils Inc. will auction its business on March 7. Bids are due initially by March 3. The hearing for approval of the sale will be March 9. The opening bid of $6.5 million will come from competitor Kravet Inc., which is also providing financing for the Chapter 11 exercise. Kravet will pay the cost of curing contract defaults. Home Furnishings Business reports that a number of investors expressed interest in acquiring Brunschwig & Fils at an auction on March 7, 2011. The auction will be held at the offices of Halperin Battaglia & Raicht in New York. About Brunschwig & Fils Brunschwig & Fils was founded over 110 years ago as a tapestry weaving mill in Aubusson and Bohain, France. Brunschwig & Fils designs and distributes traditional and contemporary decorative fabrics, wall coverings, trimmings, upholstered furniture, lamps, tables, mirrors and accessories. All design is performed in-house at the Studio in the Decoration & Design Building, in New York, and they work with 150 mills around the world. The company is headquartered in White Plains, New York, with 21 national and international showrooms. Additionally, there are agents and distributors in 24 countries. Brunschwig & Fils filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-22036) in White Plains, New York on Jan. 12, 2011. Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP, in New York, represents the Debtor in its chapter 11 effort. The Debtor estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. CALIFORNIA COASTAL: To Present Plan for Confirmation Tomorrow ------------------------------------------------------------- California Coastal Communities, Inc., is presenting its Plan of Reorganization by the U.S. Bankruptcy Court for the Central District of California at hearing tomorrow, Feb. 16, 2011, at 11:00 a.m. The Debtors previously obtained approval of the disclosure statement with respect to their Seventh Amended Joint Plan of Reorganization. California Coastal has support of the Plan from over 80% of its senior secured lenders. That Plan deleverages the Company by converting $56 million of the senior term loan into equity and provides no recovery for current equity holders. A full-text copy of the disclosure statement explaining the Plan is available for free at http://bankrupt.com/misc/CALIFORNIACOASTAL_amendedDS.pdf Chief Executive Officer Raymond J. Pacini commented, "With the support of our lenders, we are on track to exit bankruptcy by the end of February." About California Coastal Irvine, California-based California Coastal Communities, Inc. (OTC QB: CALCQ) -- http://www.californiacoastalcommunities.com/-- is a residential land development and homebuilding company with properties owned or controlled primarily in Orange County, California, and also in Lancaster in Los Angeles county. The Company's primary asset is a 356-home luxury coastal community known as Brightwater in Huntington Beach, California. California Coastal Communities, Inc. and certain of its direct and indirect wholly-owned subsidiaries filed for Chapter 11 bankruptcy protection on October 27, 2009 (Bankr. C.D. Calif. Case No. 09-21712). Joshua M. Mester, Esq., in Los Angeles, California, serves as counsel to the Debtors. The Company's financial advisor is Imperial Capital, LLC. California Coastal estimated $100 million to $500 million in assets and debts in its Chapter 11 petition. CALIFORNIA COASTAL: Gets Court's Permission to Sell Homes --------------------------------------------------------- California Coastal Communities, Inc., at al., obtained authorization from the U.S. Bankruptcy Court for the Central District of California to sell homes free and clear of all liens, claims, encumbrances and other interests, including valid tax, judgment, construction, materialmen's, mechanics' or any other liens and liens arising under the Debtors' prepetition secured financing facilities and the DIP credit agreement and related documents. The Court also authorized the Debtors to establish procedures for the resolution and payment of prepetition claims of certain third parties who may be entitled under applicable state law to assert and perfect operational liens against the property being transferred. The Debtors estimate that the operational lien claims do not exceed $2 million. The sale of any home will be for a price that is not less than the price identified for the home. The Debtors are authorized and directed to hold the proceeds of all home sales with respect to the sale of Homes closing on or before the termination date. The operational lien claims secured by valid and enforceable operational liens will be deemed secured claims against the Debtors to the extent of the proceeds from the sales of homes closing by the termination date. No operational lien claimant will have any claim against the Debtors' escrow agents, title insurance agents or underwriters or the purchaser of the homes with respect to any asserted operational lien or other claim or interest relating to the homes. The Debtors will maintain a detailed list of all payments to operational lien claimants and will provide updated copies of the list to counsel to the agents and any committee appointed in these cases on the last day of each week in which the Debtors make any payment to an operational lien claimant. Any operational lien claimant who believes it has a valid operational lien against a particular home sold by the Debtors on or before the termination date and who has not been paid by the Debtors may send to the Debtors a written demand for payment. About California Coastal Irvine, California-based California Coastal Communities, Inc. (OTC QB: CALCQ) -- http://www.californiacoastalcommunities.com/-- is a residential land development and homebuilding company with properties owned or controlled primarily in Orange County, California, and also in Lancaster in Los Angeles county. The Company's primary asset is a 356-home luxury coastal community known as Brightwater in Huntington Beach, California. California Coastal Communities, Inc. and certain of its direct and indirect wholly-owned subsidiaries filed for Chapter 11 bankruptcy protection on October 27, 2009 (Bankr. C.D. Calif. Case No. 09-21712). Joshua M. Mester, Esq., in Los Angeles, California, serves as counsel to the Debtors. The Company's financial advisor is Imperial Capital, LLC. California Coastal estimated $100 million to $500 million in assets and debts in its Chapter 11 petition. CANO PETROLEUM: Trapeze Group's Equity Stake Down to 1.1% --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, each of 1346049 Ontario Limited, Trapeze Asset Management Inc., Trapeze Capital Corp. and Randall Abramson disclosed beneficial ownership of 510,957 shares of common stock of Cano Petroleum Inc. representing 1.1% of the shares outstanding. The number of shares outstanding of the Company's common stock, par value $.0001 per share, as of Nov. 15, 2010, was 45,447,082 shares. About Cano Petroleum Cano Petroleum, Inc., is an independent Texas-based energy producer with properties in the mid-continent region of the United States. Cano's primary focus is on increasing domestic production from proven fields using enhanced recovery methods. Cano trades on the NYSE Amex Stock Exchange under the ticker symbol CFW. The Company's balance sheet at Sept. 30, 2010, showed $258.64 million in total assets, $127.59 million in total liabilities, and stockholders' equity of $131.05 million. As reported by the Troubled Company Reporter on September 28, 2010, the Company said if it is unable to successfully execute one of its strategic alternatives, restructure its existing indebtedness, obtain further waivers or forbearance from its existing lenders or otherwise raise significant additional capital, it is unlikely that it will be able to meet its obligations as they become due and to continue as a going concern. As a result, the Company will likely file for bankruptcy or seek similar protection. Moreover, it is possible that the Company's creditors may seek to initiate involuntary bankruptcy proceedings against it or against one or more of its subsidiaries, which would force it to make a defensive voluntary filing of its own. CASCADE BANCORP: Green Equity Discloses 24.4% Equity Stake ---------------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission on February 7, 2011, Green Equity Investors V, L.P. disclosed that it beneficially owns an aggregate of 11,468,750 shares of common stock of Cascade Bancorp representing 24.4% of the shares outstanding. As of November 1, 2010, there were 28,538,399 shares of no par value Common Stock outstanding of the Company. The shares were acquired by Green Equity Investors V, L.P. from the Company on January 28, 2011 pursuant to a securities purchase agreement entered into November 16, 2010. GEI V is the direct owner of 8,822,279 shares of Common Stock of the Company. Green Equity Investors Side V, L.P. is the direct owner of 2,646,471 shares of Common Stock of the Company. GEI Capital V, LLC is the general partner of GEI V and GEI Side V. Green V Holdings, LLC is a limited partner of GEI V. Leonard Green & Partners, L.P. is the management company of GEI V and GEI Side V and an affiliate of GEIC and Holdings. LGP Management, Inc. is the general partner of LGP. GEI Side V, as an affiliated entity of GEI V, LGP, as the management company of GEI V and GEI Side V, LGPM, as the general partner of LGP, GEIC, as the general partner of GEI V and GEI Side V, and Holdings, as the limited partner of GEI V directly or indirectly through one or more intermediaries, may be deemed for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, to be the indirect beneficial owners of the Shares owned by GEI V or GEI Side V and, therefore, a "ten percent holder" hereunder. About Cascade Bancorp Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its wholly-owned subsidiary, Bank of the Cascades, offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho. Cascade Bancorp has no significant assets or operations other than the Bank. The Company's balance sheet at Sept. 30, 2010, showed $1.83 billion in total assets, $1.82 billion in total liabilities, and stockholders' equity of $8.85 million. Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank of The Cascades. The rating company says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests it uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." As of March 31, 2010, the bank's balance sheet showed $2.088 billion in assets. CASCADE BANCORP: Two Directors Do Not Own Any Securities -------------------------------------------------------- In separate Form 3 filings with the U.S. Securities and Exchange Commission on February 7, 2011, Michael Connolly and James B. Lockhart III, directors at Cascade Bancorp., disclosed that they do not own any securities of the Company. About Cascade Bancorp Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its wholly-owned subsidiary, Bank of the Cascades, offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho. Cascade Bancorp has no significant assets or operations other than the Bank. The Company's balance sheet at Sept. 30, 2010, showed $1.83 billion in total assets, $1.82 billion in total liabilities, and stockholders' equity of $8.85 million. Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank of The Cascades. The rating company says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests it uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." As of March 31, 2010, the bank's balance sheet showed $2.088 billion in assets. CASCADE BANCORP: Wilbur Ross Has 24.4% Equity Stake --------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission on February 7, 2011, WLR CB AcquisitionCo LLC disclosed that it beneficially owns 11,468,750 shares of common stock of Cascade Bancorp representing 24.4% of the shares outstanding. As of November 1, 2010, there were 28,538,399 shares of no par value Common Stock outstanding of the Company. The shares of common stock are held directly by WLR CB AcquisitionCo LLC. Wilbur L. Ross, Jr. is the managing member of El Vedado, LLC, the general partner of WL Ross Group, L.P., which in turn is the managing member of WLR Recovery Associates IV LLC. WLR Recovery Associates IV LLC is the general partner of WLR Recovery Fund IV, L.P., which is the sole manager of WLR CB AcquisitionCo LLC, and WL Ross & Co. LLC is the investment manager of WL Ross Group, L.P. Accordingly, WLR Recovery Fund IV, L.P., WLR Recovery Associates IV LLC, WL Ross Group, L.P., El Vedado, LLC, Wilbur L. Ross, Jr. and WL Ross & Co. LLC may be deemed to share voting and dispositive power over the Common Stock held by WLR CB AcquisitionCo LLC. About Cascade Bancorp Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its wholly-owned subsidiary, Bank of the Cascades, offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho. Cascade Bancorp has no significant assets or operations other than the Bank. The Company's balance sheet at Sept. 30, 2010, showed $1.83 billion in total assets, $1.82 billion in total liabilities, and stockholders' equity of $8.85 million. Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank of The Cascades. The rating company says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests it uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." As of March 31, 2010, the bank's balance sheet showed $2.088 billion in assets. CASTLE HORIZON: Court Denies First Citizens' Bid to Dismiss Case ---------------------------------------------------------------- Bankruptcy Judge Stephani W. Humrickhouse denied First Citizens Bank & Trust Company, Inc.'s motion to dismiss Castle Horizon Real Estate, LLC's bankruptcy case, or for in rem relief from the automatic stay. The Debtor objected to the request. The Bankruptcy Administrator supports First Citizens' motion. Judge Humrickhouse held that the evidence at this juncture does not support a finding of either objective futility or subjective bad faith. The Debtor has a right to proceed to confirmation, where the confirmation standards of 11 U.S.C. Sec. 1129 will be applied. The motion to dismiss is denied. The motion for in rem relief from the stay is denied in light of the Debtor's showing of a reasonable possibility of reorganization within a reasonable time. However, continuation of the stay will be conditioned upon adequate protection payments to First Citizens: 1. The payment of $6,000 by February 15, 2011; and 2. The payment of $6,000 by March 15, 2011, and every month thereafter on the 15th of the month, until the confirmation hearing; If any such adequate protection payment is not made by the deadlines, and such failure continues for a period of five days or more past the date on which the payment was due, the stay will automatically be lifted without further hearing. First Citizens has filed a motion to designate Castle Horizon as a "small business debtor" and that matter was continued to a date to be later set by the court, pending a ruling on the Motion to Dismiss. Judge Humrickhouse directed the clerk to re-calendar First Citizens' motion to designate the Debtor as a small business debtor and will also set the confirmation hearing date. A copy of the Court's February 9, 2011 Order is available at http://is.gd/8qKlTrfrom Leagle.com. About Castle Horizon Castle Horizon Real Estate, LLC, is a North Carolina limited liability company which owns a 133.8 acre tract located at 171 Country Lane, Magnolia, Duplin County, North Carolina. The tract, Castle Horizon's only asset, was formerly operated as a golf course. Castle Horizon filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 10-08485) on October 15, 2010. George M. Oliver, Esq. -- efile@oliverandfriesen.com -- at Oliver & Friesen, PLLC, serves as the Debtor's counsel. In its petition, the Debtor scheduled assets of $2,026,266 and debts of $1,631,698. The Debtor has designated the case as a single asset real estate case as defined in 11 U.S.C. Sec. 101 (51B). Castle Horizon filed a previous Chapter 11 case on July 20, 2009, which was dismissed by Judge J. Rich Leonard on September 10, 2010. Judge Leonard's dismissal was based on the Debtor's failure to file a disclosure statement and plan within the 300-day window imposed on "small business debtors" pursuant to 11 U.S.C. Sec. 1121(e) of the Bankruptcy Code. CC MEDIA: Incurs $62.67 Million Net Loss in Fourth Quarter ---------------------------------------------------------- CC Media Holdings, Inc., reported a net loss of $62.67 million on $1.63 billion of revenue for the three months ended Dec. 31, 2010, compared with net income of $147.39 million on $1.51 billion of revenue for the same period a year ago. The Company also reported a net loss of $479.09 million on $5.87 billion of revenue for the year ended Dec. 31, 2010, compared with a net loss of $4.03 billion on $5.55 billion of revenue during the prior year. The Company's balance sheet at December 31, 2010 showed $17.48 billion in total assets, $1.25 billion in current liabilities, $20.61 billion in long-term liabilities and $7.20 billion in shareholders' deficit. "We executed our strategic plan and returned our operations to growth in 2010," said Mark Mays, President and CEO of CC Media Holdings. "We drove considerable improvement in the operating fundamentals of both our radio and outdoor platforms as we benefitted from a recovering global economy, increasing revenues and improving margins. This all led to healthy growth in our cash flows for 2010." "Our global asset base remains well positioned to benefit from the ongoing advertising market recovery," Mays continued. "In the year ahead, we remain focused on driving innovation across our operations, increasing market share and maintaining a disciplined approach to cost-management. Given the trends we are seeing across our business and the operating leverage in our model, we are optimistic that we can generate improved results in the year ahead." About CC Media and Clear Channel Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel (OTCBB:CCMO) is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. * * * CC Media Holdings carries 'CCC+' issuer credit ratings from Standard & Poor's. Clear Channel Carries a 'Caa2' corporate family rating from Moody's Investors Service and an issuer default rating of 'CCC' from Fitch Ratings. Fitch said in November 2010, that its ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable interest burden that pressures free cash flow generation; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CEDAR FAIR: Moody's Assigns 'Ba2' Rating to $1.18 Bil. Loan ----------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Cedar Fair, L.P.'s proposed $1.18 billion senior secured term loan B in conjunction with a re-pricing and maturity extension of the facility. Cedar Fair is also amending its credit facility to increase unit holder distribution flexibility and Moody's expects the company will increase the distribution during 2011. Moody's considers a higher distribution to be credit negative, but the move was expected in the rating and Cedar Fair's debt and leverage are still projected to decline over the next few years. As a result, Cedar Fair's Ba3 Corporate Family Rating, Ba3 Probability of Default Rating and stable rating outlook are not affected. Assignments: * Issuer: Cedar Fair, L.P. -- Senior Secured $1.18 billion Term Loan B, Assigned a Ba2, LGD3 - 37% Ratings Rationale The proposed refinancing favorably reduces cash interest expense and extends the maturity of the term loan by approximately one year to December 2017 from December 2016. The term loan balance will be $23 million higher than the existing term loan to cover transaction fees and expenses including a 1% call premium on the existing term loan. Moody's estimates the proposed reduction in the term loan spread and Libor floor will reduce cash interest expense by approximately $10 million annually after factoring in the increase in the term loan balance. Moody's anticipates Cedar Fair will utilize cash flow for reinvestment, to pay distributions, and to reduce debt. The July 2015 maturity and the pricing on the revolver are not changing. The Ba2 rating on the existing December 2016 term loan will be withdrawn when the transaction closes. The amendment increases 2011 distribution capacity to $60 million from the previous maximum of $40 million, of which $20 million was payable only if the secured leverage ratio was 3.0x or lower. The 4.5x leverage ratio required to pay distributions in 2012 and beyond is not changing. However, a loosening of the excess cash flow sweep will have the effect of increasing distribution flexibility starting in 2012. Moody's expects in the rating that Cedar Fair will raise the distribution to $1 per unit in 2010 and approximately $1.25 in 2012. Debt-to-EBITDA leverage (4.5x projected for FY 2010 incorporating Moody's standard adjustments) is expected to decline to a low 4x range by 2012 based largely on debt reduction as EBITDA generation is expected to be relatively stable. Cedar Fair's Ba3 CFR reflects the good operating cash flow and strong EBITDA margins generated from the portfolio of regional amusement parks, high leverage, and exposure to discretionary consumer spending. Operations and the substantial attendance (22.8 million in 2010) are supported by an experienced management team, consumer entertainment from the rides and attractions, and high entry barriers. Sizable reinvestment is necessary to maintain a competitive service offering as attendance is exposed to competition from a wide variety of other leisure and entertainment activities as well as cyclical discretionary consumer spending. Debt-to-EBITDA leverage is high, but projected to decline to a low 4x range over the next few years. Distributions to unit holders under the MLP structure consume cash flow, but Moody's believes management is balancing its focus on lowering debt-to-EBITDA leverage to its 4x target (excluding Moody's standard adjustments) and increasing the distribution. The stable rating outlook reflects Moody's views that Cedar Fair will maintain a good liquidity position and continue to generate meaningful cash flow. Moody's expects the annual distribution to increase to $1.25 by 2012 with some debt reduction helping to lower debt-to-EBITDA leverage to a low 4x range over the next two years. Weak operating performance, acquisitions, or unit holder distributions or repurchases leading to a decline in CFO less capex-to-debt to a level sustained below 6% or EBITDA less CapEx to interest sustained below 1.75x could result in a downgrade. A deterioration in liquidity due to increasing revolver usage (above seasonal drawdowns) or failure to maintain sufficient EBITDA cushion under its financial covenants could also result in a downgrade. The MLP structure and likelihood that management will direct cash to unit holders over time constrains the ratings. Material voluntary debt reduction such that debt-to-EBITDA is sustained significantly below 4.0x, EBITDA less capex-to-interest is sustained above 3.0x, and CFO less CapEx-to-debt is sustained above 9% could result in an upgrade. Performance ahead of plan by itself will not likely warrant positive rating movement given expectations that a majority of excess cash flow after capital expenditures and required debt service would benefit unit holders through increased distributions, rather than creditors. The last rating action was on May 20, 2010, when Moody's changed Cedar Fair's rating outlook to stable from negative, upgraded the speculative-grade liquidity rating to SGL-2 from SGL-3, and assigned a Ba2 senior secured credit facility rating, and B2 senior unsecured note rating in conjunction with a proposed refinancing of the capital structure. Moody's commented on July 15, 2010 that Cedar Fair's revised financing structure did not affect the company's ratings and indicated on October 15, 2010 and January 12, 2011 that a proposal and unit holder vote on an amendment to the company's partnership agreement to prioritize distributions over debt reduction (the proposal was not approved) did not affect Cedar Fair's ratings. Cedar Fair's ratings 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 Cedar Fair's core industry and Cedar Fair's ratings are believed to be comparable to those of other issuers of similar credit risk. Cedar Fair, headquartered in Sandusky, Ohio, is a publicly traded Delaware master limited partnership formed in 1987 that owns and operates 11 amusement parks, seven water parks (six outdoor and one indoor) and hotels in North America. Properties are located in the U.S. and Canada and include Cedar Point (OH), King's Island (OH), Knott's Berry Farm (CA), and Canada's Wonderland (Toronto). In June 2006, Cedar Fair, L.P. completed the acquisition of Paramount Parks, Inc. from a subsidiary of CBS Corporation for a purchase price of $1.24 billion. Cedar Fair's revenue for the LTM ended 9/26/2010 was approximately $953 million. CENTRAL PACIFIC FINANCIAL: Posts $251 Million Net Loss in 2010 -------------------------------------------------------------- Central Pacific Financial Corp. and its subsidiaries filed on Feb. 9, 2011, their annual report on Form 10-K for the fiscal year ended Dec. 31, 2010. KPMG LLP, in Honolulu, Hawaii, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company entered into a consent order dated December 8, 2009, with its primary banking regulators that among other things restricts certain operations and requires the Company to increase its leverage and total risk-based capital ratios to at least 10% and 12%, respectively, by March 31, 2010, and maintain such levels thereafter. The Company, according to the Form 10-K, currently is not in full compliance with the capital ratio requirements as well as other requirements of the consent order. The Company and its subsidiaries reported a net loss of $251.0 million on $118.7 million of net interest income for 2010, compared with a net loss of $313.7 million on $174.5 million of net interest income for 2009. The Company and its subsidiaries' consolidated balance sheet at Dec. 31, 2010, showed $3.938 billion in total assets, $3.862 billion in total liabilities, and total equity of $76.0 million. Total equity was $346.0 million at Dec. 31, 2009. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?7326 About Central Pacific Financial Based in Honolulu, Hawaii, Central Pacific Financial Corp. (NYSE: CPF) -- http://www.centralpacificbank.com/-- is the parent company of Central Pacific Bank, a full-service commercial bank with 34 bank branches and 120 ATMs located throughout the State of Hawaii. The bank also has an office in California. The bank is not a member of the Federal Reserve System. CHARLES LETT: Impaireds Can Appeal Without Objecting to Plan ------------------------------------------------------------ The Court of Appeals for the Eleventh Circuit held that the application of the absolute priority rule in a Chapter 11 cram down proceeding sufficiently places the matter before the bankruptcy court so as to preserve the issue for appeal. An impaired creditor in a dissenting class need not formally object on such ground in the bankruptcy court in order to appeal an improperly confirmed cram down plan. The Eleventh Circuit thus sent back an appeal from the order affirming confirmation of Charles L. Lett, Sr.'s bankruptcy plan to the district court for further review. The State of Alabama, by and through the Alabama Department of Economic and Community Affairs, challenges the bankruptcy court's confirmation of Mr. Lett's plan. ADECA, an impaired creditor in a dissenting class, argues that the plan approved by the bankruptcy court does not comply with the cram down provisions set forth in 11 U.S.C. Sec. 1129, specifically the absolute priority rule. While ADECA raised this issue before the district court, it did not do so before the bankruptcy court. The bankruptcy court approved the plan in 2008. On appeal, the district court concluded that ADECA's appeal was not moot but nonetheless barred by the civil plain error rule. The district court did not address the merits of ADECA's absolute priority rule argument. Rather, the district court found that ADECA had not preserved the issue for review because it did not raise the issue in the bankruptcy court. In applying the civil plain error rule, the district court explicitly found that no miscarriage of justice would result from its declining to hear such arguments. The Eleventh Circuit disagreed. Circuit Judge Gerald Bard Tjoflat, who penned the opinion, said while a creditor that fails to appear may waive many arguments, "such a creditor should presume that the bankruptcy court will complete its statutorily mandated duties -- and, relatedly, for the appellate courts to hear challenges when the court errs as a matter of law concerning the absolute priority rule." Judge Tjoflat said allowing for such appellate review in this narrow scenario promotes fairness in contentious cram down proceedings without unduly limiting the logical thrust of the civil plain error rule. "Our ruling today should not lead to a proliferation of appellate litigation or transfer the bulk of bankruptcy litigation to the district courts," Judge Tjoflat cautioned. "Rather, we fully trust the bankruptcy courts to exercise skillfully their duties and the district courts to dispatch frivolous appeals, particularly given the somewhat mechanical operation of the absolute priority rule. If anything, our holding today should rededicate bankruptcy courts to the faithful execution of their statutory duties and ensure that contentious cram down proceedings occur as envisioned by Congress. ADECA's two main points of contention are: The Plan calls for the payment of general unsecured claims six months after confirmation, while it schedules payments to ADECA's claims to begin many years after confirmation; and the Plan calls for immediate revesting of all property of the estate in the Debtor upon confirmation. According to the Eleventh Circuit, ADECA has the right to have these complaints adjudicated on the merits. The appellate case is Alabama Department of Economic & Community Affairs, Plaintiff-Appellant, v. Ball Healthcare-Dallas, LLC, Regions Bank, Intervenor-Plaintiffs-Appellees, v. Charles L. Lett, Sr., Defendant-Appellee, No. 09-11697 (11th Cir.). The three-man panel consists of Circuit Judges Tjoflat, Edward Earl Carnes and Emmett Ripley Cox. A copy of the Eleventh Circuit's February 10, 2011 decision is available at http://is.gd/5WiEMZfrom Leagle.com. Based in Selma, Alabama, Charles L. Lett, dba The Lighthouse of Dallas County, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D. Ala. Case No. 04-11805) on March 25, 2004. Collins Pettaway, Jr., Esq., at Chestnut, Sanders, Sanders, Pettaway, Campbell & Albright, L.L.C., served as the Debtor's bankruptcy counsel. In his petition, the Debtor listed total assets of $3,737,301 and total debts of $4,762,486. CHEMTURA CORP: Judge Approves Mediation Over Pool Filter Claims --------------------------------------------------------------- Bankruptcy Law360 reports that Judge Robert E. Gerber has granted Chemtura Corp.'s request for mediation with its insurers and parties that have personal injury and indemnity claims against the chemical company related to a lawsuit over defective pool filters. 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). The Debtors disclosed total assets of $3.06 billion and total debts of $1.02 billion as of the Chapter 11 filing. Chemtura successfully completed its financial restructuring and emerged from protection under Chapter 11 in November 2010. In connection with the emergence, reorganized Chemtura is now listed on the New York Stock Exchange under the ticker "CHMT". M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, served as bankruptcy counsel for the Debtors. Wolfblock LLP was the Debtors' special counsel. The Debtors' auditors and accountant were KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors were Joele Frank, Wilkinson Brimmer Katcher; their business advisors were Alvarez & Marsal LLC and Ray Dombrowski served as their chief restructuring officer; and their claims and noticing agent was Kurtzman Carson Consultants LLC. The Official Committee of Equity Security Holders tapped Jay Goffman, Esq., and David Turetsky, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York, as counsel. the Official Committee of Unsecured Creditors retained Daniel H. Golden, Esq., Philip C. Dublin, Esq., and Meredith A. Lahaie, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. CHRISTENSEN REALTY: Files Amended Plan of Reorganization -------------------------------------------------------- Christensen Realty Investment, LLC, has filed a Plan of Reorganization and disclosure statement with the U.S. Bankruptcy Court for the District of Idaho. The Debtor filed a Plan that proposes to pay creditors of the Debtor from cash flow from operations, future income from the use of its garage and office space and the leasing and renting of the same, and sale of parking permits for the facility; by surrendering the company and its assets to the two secured creditors, BPG LLC and McAlvain Construction, Inc.; or sale of the property involved. An amendment to the Plan provides that McAlvain will be fully paid on its entire claim as of confirmation of the Plan and the consummation of the sale. To the best of the Debtor's knowledge, there are no unsecured claims. A copy of the Plan, as amended, is available for free at: http://bankrupt.com/misc/ChristensenRealty_AmendedPlan.pdf Treatment of Claims Under the Plan, each holder of an administrative expense claim allowed will be paid in full on the effective date of this Plan in cash, or upon other terms as may be agreed upon by the holder of the claim and the Debtor. Each holder of a priority tax claim will be paid. All fees required to be paid will accrue and be timely paid until the case is closed, dismissed, or converted to another chapter of the U.S. Bankruptcy Code. Any U.S. Trustee Fees owed on or before the effective date of this Plan will be paid on the effective date. With respect to classified claims: Classification Treatment -------------- --------- Class 1 - Priority Claims -- Impaired; Debtor is not aware of any claimant. Any entity claiming a priority claim must file a proof of claim accordingly. Any allowed priority claim will be paid the full amount of the claim plus interest at 6% per annum, over 50 months from the Effective Date. Class 2-A: Ada County -- Impaired; the property taxes for Treasurer the Debtor's parking garage and office space were paid for the first half of the taxes due. Taxes thereafter will be paid by the 2-C Creditor or other entity as may manage the property. Class 2-B: Secured Claim of -- Impaired; the creditor will BPG LLC continue to receive its regular monthly payment of $52,689 from the Debtor until confirmation, and thereafter from McAlvain Construction unless BPG and McAlvain agree to a different term. BPG's lien rights are not altered as far as priority, but any "due on sale" clause will be deemed extinguished to the extent specified in O'Boskey v. First Federal Savings, 106 Idaho 339; later case at 112 Idaho 1002. The deed to McAlvain will not be entitled to be used as a right to assert any "due on sale" clause. Any arrearage in payments prepetition will be added to the end of the regularly scheduled contract period and paid thereon by the entity then owning the property. In the alternative, Debtor will proceed to consummate the sale as per the attached offer from Jeffrey Stoddard and assigns, paying the proceeds thereof to Classes 2-B and 2-C as their interests may appear. Class 2-C: Secured Claim of -- Upon the Effective Date, Debtor McAlvain Construction will deliver to McAlvain the entirety of the net proceeds of the sale evidenced by the attached offer from Jeffrey Stoddard and assigns Finally, to fully satisfy McAlvain, the principal of the Debtor and affiliates will deliver the following to McAlvain by adequate documentation: 1. Unit R-4 (#203) Tenth and Main Condominiums owned by Christensen Realty Investment II LLC (Gem Noble) - free and clear of all liens, claims and interests. The property in question is listed at $290,000 and has an Expected Sales Price of $270,000; Net Value $250,000 after closing costs and commissions. 2. Note owned by Christensen Realty Investment II LLC (Gem Noble) from Atypical Ventures (Asiago's Restaurant) and Jason Driver personally secured by a second deed of trust on Unit G-5 (1002 W Main Street) Tenth and Main Condominiums (Gem Noble): Face Amount $110,000; Current Balance of the note is $108,186.46; Interest accrues at 6.0% with monthly payments of $1,000. There is a balloon payment due September 15, 2017. 3. Balance of $963,796.61 in cash, including proceeds from the sale of the parking garage to Stoddard. As a result, the McAlvain claim will be paid in full, and all obligors to McAlvain will be discharged. In the alternative, this creditor will receive a Warranty Deed, subject to current liens and encumbrances, for the parking structure and appurtenances owned by Debtor and a bill of sale for all other assets of the Debtor. McAlvain will also succeed to all rights of management of the property and will be entitled to receive all revenue from the ownership. Class 3: General Unsecured -- Impaired; Debtor knows of no Creditors creditors. Any entity claiming the status must file a proof of claim accordingly. Unsecured claims will receive a pro-rata share of $10,000, payable upon the Effective Date. Class 4: Equity Security -- Impaired; all current equity Holders of the Debtor interests will be cancelled upon the Effective Date. This includes all membership interest of Gary Christensen or affiliates. After confirmation, the Stoddard sale will be consummated. However, should the sale not close, then McAlvain will receive a deed to the property as set forth herein, subject to the lien of Class 2-B. The Debtor will file Articles of Dissolution with the Idaho Secretary of State and file a final tax return. Any distribution of accrued income will be paid to the creditors under the Plan, and the balance to the two secured claimants in order of their priority. About Christensen Realty Boise, Idaho-based Christensen Realty & Investment, LLC, dba 9th & Bannock Garage, filed for Chapter 11 protection on August 10, 2010 (Bankr. D. Idaho Case No. 10-02537). D. Blair Clark, Esq., at the Law Offices of D. Blair Clark PLLC, represents the Debtor. The Debtor disclosed $10,626,402 in assets and $8,352,772 in liabilities as of the Chapter 11 filing. CJH PETS: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------- Debtor: CJH Pets, Inc. dba Petland of Sarasota Petzone 5380 Fruitville Road Sarasota, FL 34232 Bankruptcy Case No.: 11-02442 Chapter 11 Petition Date: February 11, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Christopher C. Todd, Esq. MCINTYRE, PANZARELLA, THANASIDES, ET AL 400 N. Ashley Drive, Suite 1500 Tampa, FL 33602 Tel: (813) 899-6059 Fax: (813) 899-6069 E-mail: chris@mcintyrefirm.com Scheduled Assets: $395,648 Scheduled Debts: $1,628,210 A list of the Company's 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb11-02442.pdf The petition was signed by John R. Harper, Jr., president. CLAIRE'S STORES: Bank Debt Trades at 2% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Claire's Stores, Inc., is a borrower traded in the secondary market at 97.75 cents- on-the-dollar during the week ended Friday, February 11, 2011, an increase of 1.42 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on May 29, 2014, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of January 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. The Company's balance sheet at Oct. 30, 2010, showed $2.79 billion in total assets, $218.86 million in total current liabilities, $2.62 billion in long-term debt, and a stockholders' deficit of $47.89 million. Claire's Stores carries 'Caa2' corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service, and 'B-' issuer credit ratings, with 'stable' outlook, from Standard & Poor's. Moody's Investors Service in December 2010 upgraded Claire's Stores' ratings, including its Corporate Family Rating and Probability of Default Rating, to Caa2 from Caa3. The upgrade reflects a decrease in Claire's probability of default given that the company can now fully cover its interest expense. This is due to earnings improvement from solid comparable store sales growth, improved merchandise margins, and continued expense discipline. Claire's Caa2 Probability of Default Rating reflects Moody's view that although Claire's credit metrics have improved, they remain very weak as a result of its heavy debt load. For the twelve months ending October 30, 2010, Claire's debt to EBITDA was very high at 9.3 times. CLEAR CHANNEL: Bank Debt Trades at 8% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 91.59 cents-on-the-dollar during the week ended Friday, February 11, 2011, an increase of 1.70 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on January 30, 2016, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About CC Media and Clear Channel Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel (OTCBB:CCMO) is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. CC Media's balance sheet at Dec. 31, 2010 showed $17.48 billion in total assets, $1.25 billion in current liabilities, $20.61 billion in long-term liabilities and $7.20 billion in shareholders' deficit. * * * CC Media Holdings carries 'CCC+' issuer credit ratings from Standard & Poor's. Clear Channel Carries a 'Caa2' corporate family rating from Moody's Investors Service and an issuer default rating of 'CCC' from Fitch Ratings. Fitch said in November 2010, that its ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable interest burden that pressures free cash flow generation; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CLEAR CHANNEL: Intends to Amend Senior Credit Facilities -------------------------------------------------------- Clear Channel Communications, Inc., intends to pursue amendments to its senior secured credit facilities and its receivables based credit facility that would, among other things, permit CCU to request future extensions of the maturities of its senior secured credit facilities, provide CCU with greater flexibility in the use of its accordion provisions, provide CCU with greater flexibility to incur new debt, provided that such new debt is used to pay down senior secured credit facility indebtedness, and provide greater flexibility for CCU's indirect subsidiary, Clear Channel Outdoor Holdings, Inc., and its subsidiaries to incur new debt. The effectiveness of the Amendments is conditioned, among other things, upon the repayment of $500 million of indebtedness under CCU's senior secured credit facilities, which CCU intends to finance through the issuance of new notes in a concurrent private placement. The Amendments require the consent of a majority of the outstanding commitments under both of these facilities, which CCU has already obtained through private negotiations with a number of its lenders. About CC Media and Clear Channel Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel (OTCBB:CCMO) is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. CC Media's balance sheet at Dec. 31, 2010 showed $17.48 billion in total assets, $1.25 billion in current liabilities, $20.61 billion in long-term liabilities and $7.20 billion in shareholders' deficit. * * * CC Media Holdings carries 'CCC+' issuer credit ratings from Standard & Poor's. Clear Channel Carries a 'Caa2' corporate family rating from Moody's Investors Service and an issuer default rating of 'CCC' from Fitch Ratings. Fitch said in November 2010, that its ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable interest burden that pressures free cash flow generation; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CLEAR CHANNEL: To Offer $750MM Priority Guarantee Notes Due 2021 ---------------------------------------------------------------- Clear Channel Communications, Inc., intends to offer, subject to market and customary conditions, $750 million in aggregate principal amount of priority guarantee notes due 2021 in a private offering that is exempt from registration under the Securities Act of 1933, as amended. The Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior basis by CCU's parent, Clear Channel Capital I, Inc., and all of CCU's existing and future domestic wholly-owned restricted subsidiaries. The Notes and the related guarantees will be secured by (1) a lien on (a) the capital stock of CCU and (b) certain property and related assets that do not constitute "principal property", in each case equal in priority to the liens securing the obligations under CCU's senior secured credit facilities and (2) a lien on the accounts receivable and related assets securing CCU's receivables based credit facility junior in priority to the lien securing CCU's obligations thereunder. CCU intends to use the proceeds of this offering together with cash on hand to repay $500 million of the indebtedness outstanding under its senior secured credit facilities, to repay at maturity $250 million in aggregate principal amount of its 6.25% Senior Notes due 2011, to pay fees and expenses incurred in connection with concurrent amendments to its senior secured credit facilities and its receivables based credit facility, the receipt of which is a condition to completion of the offering, and to pay fees and expenses in connection with the offering. The Notes and related guarantees will be offered only to "qualified institutional buyers" in reliance on the exemption from registration pursuant to Rule 144A under the Securities Act and to persons outside of the United States in compliance with Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws. About CC Media and Clear Channel Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. Clear Channel (OTCBB:CCMO) is the operating subsidiary of San Antonio, Texas-based CC Media Holdings, Inc. CC Media's balance sheet at Dec. 31, 2010 showed $17.48 billion in total assets, $1.25 billion in current liabilities, $20.61 billion in long-term liabilities and $7.20 billion in shareholders' deficit. * * * CC Media Holdings carries 'CCC+' issuer credit ratings from Standard & Poor's. Clear Channel Carries a 'Caa2' corporate family rating from Moody's Investors Service and an issuer default rating of 'CCC' from Fitch Ratings. Fitch said in November 2010, that its ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable interest burden that pressures free cash flow generation; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CLEAR CHANNEL: Moody's Assigns 'Caa2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned Clear Channel Communications, Inc.'s (Caa2 Corporate family Rating) proposed $750 million Senior Secured Priority Guarantee Notes due 2021 a Caa1 (LGD 2, 20%) rating. Proceeds of the financing will be used to fund approximately $250 million of the company's 6.25% (Pre-LBO) Senior Notes due this year and the remaining $500 million will be used to repay a small portion of the company's revolver and term loans maturing in 2014 and 2016. In addition to the note issuance, Clear Channel also amended its senior secured cash flow and ABL credit facilities to allow for future amend-and-extend transactions, incurrence of additional high yield bonds (used for the purpose of reducing the outstanding balances of the term loan and revolver), and greater timing flexibility under their bank debt accordion feature. All of the company's credit ratings remain unchanged and the company's rating outlook is stable. A summary of the rating actions: Issuer: Clear Channel Communications, Inc. * New $750 million Senior Secured Priority Guarantee Notes due 2021, Assigned Caa1 (LGD-2, 20%) Ratings Rationale The company's Caa2 Corporate Family Rating reflects the unsustainable nature of Clear Channel's capital structure given its high debt-to-EBITDA leverage (approximately 13x gross leverage and 11.9x net leverage at December 30, 2010 excluding Moody's standard adjustments) and very large maturities in 2014 and 2016. Moody's anticipates that cash-on-hand and free cash flow generation will not be adequate to fund the approximate $5 billion of debt maturing through fiscal 2014. Also incorporated in the rating is Moody's expectation that Clear Channel's leverage metric will remain high relative to the underlying value of the company's radio broadcast and outdoor advertising assets over the coming 12 to 24 months. Notwithstanding the company's weak balance sheet which greatly influences the company's credit ratings, Clear Channel possesses significant scale, geographic diversity and leading market positions in most of the 150 markets in which the company operates. Also, Clear Channel is presently benefiting from a healthy rebound in the economy as evidenced by improving operating performance, modest (but positive) free cash flow generation in 2010, and potential for enhanced liquidity and flexibility afforded to the company through the recently proposed credit facility amendments. Moody's notes, however, that the company faces higher interest costs from any refinancing or extensions of debt maturities which could materially cannibalize free cash flow. The stable outlook reflects Moody's expectation that Clear Channel will remain liquid over the next 18 to 24 months as significant cost reductions and revenue growth and refinancing and amendment activity (over the last 12 to 18 months) allow the company to remain well in compliance with its financial maintenance covenants, providing the company with additional liquidity and potential flexibility to help address intermediate-term maturities. Given the high leverage and limited free cash flow to reduce debt, Moody's would consider an upgrade of Clear Channel's ratings if the company were to sustain an improved level of operating performance resulting in meaningful revenue, EBITDA and free cash flow growth, resulting in material debt reduction and/or maturity extensions on a significant portion of outstanding debt (10% - 20%) well beyond the current note issue. The rating could be lowered further if it appears that the economy will contract again or financial market liquidity materially tightens in the coming years, default or debt restructuring looks imminent due to inability to extend or refinance material amounts of the company's debt, or if revenue and EBITDA growth were to subside (or reverse), which would point to lower valuation of the company relative to Moody's forecast at the expected time of restructuring. Clear Channel Communications, Inc. with its headquarters in San Antonio, Texas, is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and for advertisers. The company's businesses include radio broadcasting and outdoor displays (via the company's 89% ownership of Clear Channel Outdoor Holdings Inc. Clear Channel's consolidated revenue for YE 2010 was approximately $5.9 billion. CLEAR CHANNEL OUTDOOR: Incurs $87.52 Million Net Loss in 2010 ------------------------------------------------------------- Clear Channel Outdoor Holdings, Inc., reported net income of $4.28 million on $792.73 million of revenue for the three months ended December 31, 2010, compared with a net loss of $56.84 million on $763.07 million of revenue during the same period a year ago. The Company also reported a net loss of $87.52 million on $2.80 billion of revenue for the year ended December 31, 2010, compared with a net loss of $868.19 million on $2.70 billion of revenue a year ago. The Company's balance sheet at December 31, 2010 showed $7.09 billion in total assets, $743.70 million in current liabilities, $2.56 billion in long-term debt and $2.71 billion in shareholders' equity. Mark Mays, CEO of Clear Channel Outdoor, commented: "The global business environment improved as the year progressed, with many of our markets seeing increased demand from advertisers. We witnessed strength across our U.S. operations, especially our digital boards, while our international business benefitted from a rebound in street furniture across a number of our markets. As a result, our margins continued to strengthen, reflecting the benefits of our cost-restructuring program and more efficient organization. Looking ahead, we remain focused on further improving our value proposition to our advertising partners, including expanding our digital footprint and audience measurement tools, while carefully managing our costs. As our markets continue to recover, we are well positioned to generate returns for the benefit of our shareholders." About Clear Channel Outdoor Clear Channel Outdoor (NYSE: CCO), headquartered in San Antonio, Texas, is in the outdoor advertising industry, providing clients with advertising opportunities through billboards, street furniture displays, transit displays, and other out-of-home advertising displays. CLEARWIRE CORP: F. Ianna Won't Seek Re-Election as Board Member --------------------------------------------------------------- On February 1, 2011, Frank Ianna informed Clearwire Corporation of his decision to not stand for re-election to the Company's Board of Directors at the Company's next annual meeting of stockholders. Mr. Ianna is also a director of Sprint Nextel Corporation and was originally nominated to his position on the Board by Sprint, pursuant to the Equityholders' Agreement dated November 28, 2008 by and among the Company, Sprint, Intel Corporation, Google Inc., Comcast Corporation, Time Warner Cable Inc., Bright House Networks LLC, and Eagle River Holdings, LLC. The Company was informed by Sprint that Mr. Ianna's decision to not stand for reelection was made out of an abundance of caution to address questions raised by new developments in antitrust law that may affect how the Clayton Act would apply. Under the terms of the Equityholders' Agreement, Sprint has the right to nominate an additional director to replace Mr. Ianna when he departs the Board. Sprint has informed the Company that it intends to nominate a replacement for the Board position prior to the Company's annual meeting. About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G mobile broadband network serves 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company's balance sheet at Sept. 30, 2010, showed $10.52 billion in total assets, $3.90 billion in total liabilities, and stockholders' equity of $6.62 billion. The Company disclosed in its Form 10-Q for the third quarter ended September 30, 2010, that its expected continued losses from operations and the uncertainty about its ability to obtain sufficient additional capital raise substantial doubt about the Company's ability to continue as a going concern. "Without additional financing sources, we forecast that our cash and short-term investments would be depleted as early as the middle of 2011. Thus, we will be required to raise additional capital in the near-term in order to continue operations. * * * As reported by the Troubled Company Reporter on November 11, 2010, Standard & Poor's Ratings Services lowered its corporate credit rating, and all other ratings, on Kirkland, Wash.-based wireless carrier Clearwire Corp. to 'CCC' from 'B-'. At the same time, S&P revised the CreditWatch listing on the company from negative to developing. S&P had initially placed the ratings on CreditWatch with negative implications on Oct. 6, 2010, based on S&P's view that Clearwire faced significant near-term liquidity risks. The downgrade follows the company's recent disclosure with the Securities and Exchange Commission regarding the uncertainty about its ability to obtain additional capital and continue as a going concern. In Clearwire's 2010 third-quarter earnings report and conference call, the company indicated that it expected to run out cash by mid-2011, which is consistent with S&P's earlier comments. Cash totaled around $1.4 billion as of Sept. 30, 2010. CLEARWIRE CORP: Stockholders Approve Amendments to Equity Plan -------------------------------------------------------------- On Feb. 2, 2011, Clearwire Corporation stockholders took action by written consent to approve amendments to the Company's equity compensation plans to permit an option exchange. As of the record date of the Written Consent, the Company had 244,028,133 shares of Class A Common Stock outstanding and entitled to vote and 743,481,026 shares of Class B Common Stock outstanding and entitled to vote. Each share of Class A Common Stock and each share of Class B Common Stock is entitled to one vote, and the holders of Class A Common Stock and Class B Common Stock vote together as a single class. The Written Consent was executed by the holders of 534,452,860 shares of Class B Common Stock, representing a majority of the combined voting power of the Company's outstanding Class A Common Stock and Class B Common Stock, which is sufficient to approve the actions contemplated by the Written Consent. In connection with the Written Consent, the Company will file an Information Statement with the Securities and Exchange Commission pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including Regulation 14C, and will provide the Information Statement to all stockholders who did not execute the written consent. The Company intends to file the Information Statement as soon as certain information required to be included the Information Statement is available, which is expected to be in late March 2011, although this date is subject to change. About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G mobile broadband network serves 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company's balance sheet at Sept. 30, 2010, showed $10.52 billion in total assets, $3.90 billion in total liabilities, and stockholders' equity of $6.62 billion. The Company disclosed in its Form 10-Q for the third quarter ended September 30, 2010, that its expected continued losses from operations and the uncertainty about its ability to obtain sufficient additional capital raise substantial doubt about the Company's ability to continue as a going concern. "Without additional financing sources, we forecast that our cash and short-term investments would be depleted as early as the middle of 2011. Thus, we will be required to raise additional capital in the near-term in order to continue operations. * * * As reported by the Troubled Company Reporter on November 11, 2010, Standard & Poor's Ratings Services lowered its corporate credit rating, and all other ratings, on Kirkland, Wash.-based wireless carrier Clearwire Corp. to 'CCC' from 'B-'. At the same time, S&P revised the CreditWatch listing on the company from negative to developing. S&P had initially placed the ratings on CreditWatch with negative implications on Oct. 6, 2010, based on S&P's view that Clearwire faced significant near-term liquidity risks. The downgrade follows the company's recent disclosure with the Securities and Exchange Commission regarding the uncertainty about its ability to obtain additional capital and continue as a going concern. In Clearwire's 2010 third-quarter earnings report and conference call, the company indicated that it expected to run out cash by mid-2011, which is consistent with S&P's earlier comments. Cash totaled around $1.4 billion as of Sept. 30, 2010. CLEARWIRE CORP: To Swap Employee Stock Options With New RSUs ------------------------------------------------------------ On Feb. 7, 2011, Clearwire Corporation announced to its employees that it intends to offer a voluntary one-time exchange of certain underwater employee stock options for new restricted stock units to give eligible employees an opportunity to exchange certain underwater stock options for new restricted stock units. The number of new RSUs will be determined using exchange ratios designed to result in the new RSUs having a fair value for accounting purposes comparable to the stock options that are exchanged. The proposed Option for RSU Exchange Program is intended to enhance the Company's retention efforts and give many of its employees the opportunity to exchange certain options and realign portions of their equity compensation with current market conditions. At the same time, the program is designed to be a value-for-value exchange that is expense-neutral, which means the Company can restore the original intent of the stock options without incurring unnecessary accounting charges. The proposed Option for RSU Exchange Program, which would apply to about 550 Company employees, has been approved by the Board of Directors and the Compensation Committee of the Board, subject to the final approval of the Company's Chief Executive Officer, and stockholders representing a majority of the combined voting power of our outstanding shares have approved amendments to the Company's existing equity plans to permit an exchange offer. The program is not open to Board members, the Chief Executive Officer of the Company, or employees who are no longer actively working at the Company. About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G mobile broadband network serves 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company's balance sheet at Sept. 30, 2010, showed $10.52 billion in total assets, $3.90 billion in total liabilities, and stockholders' equity of $6.62 billion. The Company disclosed in its Form 10-Q for the third quarter ended September 30, 2010, that its expected continued losses from operations and the uncertainty about its ability to obtain sufficient additional capital raise substantial doubt about the Company's ability to continue as a going concern. "Without additional financing sources, we forecast that our cash and short-term investments would be depleted as early as the middle of 2011. Thus, we will be required to raise additional capital in the near-term in order to continue operations. * * * As reported by the Troubled Company Reporter on November 11, 2010, Standard & Poor's Ratings Services lowered its corporate credit rating, and all other ratings, on Kirkland, Wash.-based wireless carrier Clearwire Corp. to 'CCC' from 'B-'. At the same time, S&P revised the CreditWatch listing on the company from negative to developing. S&P had initially placed the ratings on CreditWatch with negative implications on Oct. 6, 2010, based on S&P's view that Clearwire faced significant near-term liquidity risks. The downgrade follows the company's recent disclosure with the Securities and Exchange Commission regarding the uncertainty about its ability to obtain additional capital and continue as a going concern. In Clearwire's 2010 third-quarter earnings report and conference call, the company indicated that it expected to run out cash by mid-2011, which is consistent with S&P's earlier comments. Cash totaled around $1.4 billion as of Sept. 30, 2010. CLOVERLEAF ENTERPRISES: Wins Formal Approval to Sell to Penn ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Penn National Gaming Inc. was given a nod by the bankruptcy judge when he signed an order on Feb. 11 formally approving the sale of Cloverleaf Enterprises Inc. to Penn National for $11 million cash. Mr. Rochelle relates that U.S. Bankruptcy Judge Paul Mannes signed the sale-approval order even though a rehearing motion was outstanding where a disappointed bidder from the auction was offering what could have been $18 million. The new offer came from Landow Partners LLC and Chesapeake Racing LLC. As reported in the Feb. 4, 2011 edition of the Troubled Company Reporter, the bankruptcy judge approved the sale of Rosecroft Raceway to casino operator Penn National Gaming for $11 million in cash over the objection of a group led by former state Democratic Party Chairman Nathan Landow. At an auction the week before, Penn emerged as the winning bidder with its $10.25 million hearing. However, the final price rose after Mr. Landow's group came up with a last minute bid for the harness track. The TCR reported yesterday that according to The Gazette, Landow Partners is seeking permission to submit a new $12 million cash offer for Rosecroft Raceway. According to The Gazette, Landow Partners also asked the judge to reconsider its earlier bid of $11 million, plus $6 million in conditional payments greater than the Penn National bid, if the court doesn't approve its new bid. About Cloverleaf Enterprises Cloverleaf Enterprises Inc. -- http://www.rosecroft.com/-- owned the Rosecroft Raceway, a harness track in Fort Washington, Maryland. The Company filed for Chapter 11 protection (Bankr. D. Md. Case No. 09-20056) on June 3, 2009, represented by Nelson C. Cohen, Esq., at Zuckerman Spaeder LLP in Washington, D.C. The Company estimated $10 million to $50 million in assets and $1 million to $10 million in debts in its Chapter 11 petition. In April 2010, Judge Paul Mannes denied a motion to sell the assets, saying the sale "primarily benefits" the track's sole shareholder. The Company's operations were halted in June 2010. In November 2010, the U.S. Trustee named James J. Murphy to serve as Cloverleaf's Chapter 11 trustee. CMB III: Files Proposed Plan of Reorganization ---------------------------------------------- C.M.B. III, L.L.C., has filed a Plan of Reorganization and disclosure statement with the U.S. Bankruptcy Court for the District of Arizona. The Plan will be funded by a combination of the Debtor's cash on hand as of the Effective Date, the equity contribution, and cash that is collected or generated by the Reorganized Debtor after the Effective Date. Distributions to be made by the Reorganized Debtor under the Plan ordinarily will be made by check drawn on a domestic bank. The Plan provides that on the Effective Date the equity interests in the Debtor will be sold to existing members, or another party. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/CMBIII_DS.pdf Treatment of Claims Under the Plan, each administrative claim other than fee claims accrued on or before, but unpaid as of, the Effective Date will be paid in full in cash. Allowed professional fee claims will be paid by the Reorganized Debtor from Cash from operations or through application of any retainer held by the professional person. Each holder of an allowed priority tax claim will be paid the full amount of its allowed priority tax claim on the Effective Date. With respect to classified claims: Classification Treatment -------------- --------- Class 1. Priority Claims -- unimpaired; holders will be entitled to receive cash in an amount sufficient to render the allowed priority claim in full settlement, release and discharge of the claim Class 2. Union Secured Claim -- impaired; the Reorganized Debtor will execute and deliver to Union the Union Note and the other Amended Union Loan Documents. The Union Note will be in a principal amount equal to $9.70 million or other amount as may be established as the Union Secured Claim. Interest will accrue on the principal balance of the Union Note at the Union Interest Rate from the Effective Date until the principal balance is paid in full. The Reorganized Debtor will make payments to Union in accordance with the terms of the Plan and Union's Secured Claim will be paid in full on or before the 11th anniversary of the Effective Date. The Union Note will be secured by a first priority trust deed lien on Parcels 7A, 7B, and rents associated therewith. In each case the claims are subject and subordinate only to claims of governmental units for ad valorem property taxes and similar impositions, if any, that are secured by liens on the property and that have priority over the liens of Union. Class 3. Harvey Secured Claim -- impaired; Harvey will retain its first priority trust deed lien on Parcel 7C. Class 4. Property Tax Lien -- unimpaired; the Reorganized Claims Debtor will pay to each holder of the claim, in cash on the Effective Date from the appropriate Segregated DIP Account. Real Property Tax claims on real property to be transferred by CMB to one or more of its lenders will attach to the property to be transferred and be paid on the ultimate disposition of that property. Class 5. Unsecured Claims -- holders will receive a Other Than Union Deficiency distribution of 80% of its claim Claim on the Effective Date. Class 6. Union Deficiency -- impaired; Union will receive a Claim distribution of $1 million on the Effective Date in satisfaction of the Union Deficiency Claim. Class 7. Existing Interests -- impaired; CMB II will purchase the equity interests in the Reorganized Debtor, by the contribution of cash to the Reorganized Debtor, on the Effective Date, of not less than $4.50 million. The New Value will be used to: (a) pay the amount necessary to pay all Class 1 and Class 4 Allowed Priority Claims; (b) establish the reserve account to fund, among other things, (1) tenant improvements, (2) broker's commissions, and (3) other necessary and appropriate capital expenses of the Real Property to ensure that the value of the properties is maintained; and (c) pay 80% of Class 5 Unsecured Claims, and $1 million to Class 6. If the Court determines that, under the circumstances, the New Value to be contributed by CMB II is insufficient, or that other parties-in-interest should be allowed to bid for the equity interests in the Reorganized Debtor, then other interested parties may bid for the equity interests in the Reorganized Debtor. About C.M.B. III Phoenix, Arizona-based C.M.B. III, L.L.C., owns a mixed-use commercial complex located at 13450-13610 N. Black Canyon Freeway, Phoenix, Arizona. It filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-30496) on September 23, 2010. Richard M. Lorenzen, Esq., Perkins Coie Brown & Bain P.A., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million as of the Chapter 11 filing. COMPOSITE TECHNOLOGY: Posts $3.2MM Net Loss in December 31 Quarter ------------------------------------------------------------------ Composite Technology Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $3.2 million on $5.2 million of revenue for the three months ended December 31, 2010, compared with a net loss of $7.7 million on $2.7 million of revenue for the same period in 2009. The Company's balance sheet at December 31, 2010, showed $27.5 million in total assets, $55.2 million in total liabilities, and a stockholders' deficit of $27.7 million. As reported in the Troubled Company Reporter on December 20, 2010, SingerLewak LLP, in Irvine, Calif., expressed substantial doubt about Composite Technology's ability to continue as a going concern, following the Company's results for the fiscal year ended September 30, 2010. The independent auditors noted that the Company has suffered recurring losses from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7320 About Composite Technology Irvine, Calif.-based Composite Technology Corporation (OTC BB: CPTC) -- http://www.compositetechcorp.com/-- develops, produces, markets and sells innovative energy efficient and renewable energy products for the electrical utility industry. The Company was incorporated in Florida on February 26, 1980, as El Dorado Gold & Exploration, Inc., and reincorporated in Nevada on June 27, 2001, and renamed Composite Technology Corporation. CONGRESS SAND: Files Proposed Plan of Reorganization ---------------------------------------------------- Congress Sand & Gravel, LLC, and Congress Materials, LLC, have filed a Plan of Reorganization and disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York. The hearing to consider the approval of the disclosure statement will be held on March 2, 2011, at 9:30 a.m. February 28, 2011, is fixed as the last day for filing of objections to the disclosure statement. Under the Plan, the Reorganized Debtors intend to fund Distributions from cash on hand, additional equity from JK Air/Chiron Equities as needed, and ongoing operations. Congress Sand's President and CEO will be Jay H. Krasoff. The Board of Directors will be Jay Krasoff and Kyle Tauch. The Reorganized Debtors will continue the businesses of each of the Debtors, which, when coupled with cash on hand, is expected to generate sufficient revenue to meet operating costs and fund the distributions contemplated by the Plan. Unless otherwise provided in the Plan, on the Effective Date, all existing liens by the holders of allowed secured tax claims on the Debtors' property will retain the same validity, priority and extent that existed on the Petition Date. All other liens and encumbrances will be deemed automatically canceled, terminated and of no further force or effect without further act or action under any applicable agreement, law, regulation, order, or rule. As of the Effective Date, all property of the estates will vest in the Reorganized Debtors free and clear of all claims, liens, encumbrances and other interests of Creditors and holders of interests except those recognized by the Plan or court order. From and after the Effective Date, the Reorganized Debtors may use, acquire, and dispose of Property and settle and compromise claims or interests without supervision by the Court, free of any restrictions of the U.S. Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and the confirmation order. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/CongressSand_DS.pd Treatment of Claims Classification Treatment -------------- --------- Unclassified - Allowed -- unimpaired; not entitled to Administrative Expense Claims vote; holders will be paid in full, in cash; Unclassified: Allowed Priority -- unimpaired; not entitled to Tax Claims vote; holders will be paid in full, in cash, or in monthly cash payments commencing 60 days after the effective date, within five years from the Petition Date; Class 1: Presidential Claim -- will be paid in full; Class 2: Equity Bank -- impaired; entitled to vote; Class 3: Continental Bank -- impaired, entitled to vote; will retain its security interest until its claim is paid in full; claimant will be paid based upon monthly payments of principal and interest based upon: a) an interest rate of 6.5% simple interest, b) an amortization and term of 6 years, and c) a principal balance based upon the allowed secured claim of Continental. The final payment will be made 60 days after the Effective Date. The Deficiency Claim of Continental Bank will be treated as a Class 16 Claim. Class 4: Bank of the Ozarks -- impaired; entitled to vote; holder will retain its security interest until its claim is paid in full. The claimant in this class will be paid based upon monthly payments of principal and interest based upon: a) An interest rate of 6.5% simple interest, b) An amortization and term of 4 years, and c) A principal balance based upon the allowed secured claim of Ozarks. The first payment will be made 60 days after the Effective Date. The Deficiency Claim of Bank of the Ozarks will be treated as a Class 16 Claim. Class 5: Chiron Equipment -- impaired, entitled to vote; is Claim paid in full. The claimant in this class will be paid based upon monthly payments of principal and interest based upon: a) an interest rate of 6.5% simple interest, b) an amortization and term of 4 years, and c) a principal balance based upon the allowed secured claim of Chiron Equities. The first payment will be 60 days after the Effective Date. The Deficiency Claim of Chiron Equipment Claim will be waived. Class 6: Deere Congress -- impaired, entitled to vote; holder will retain its security interest its claim is paid in full. The claimant in this class will be paid based upon monthly payments of principal and interest based upon: a) an interest rate of 6.5% simple interest; b) an amortization and term of 6 years, and c) a principal balance based upon the allowed secured claim of Deere Congress. The first payment will be made 60 days after the Effective Date. The Deficiency Claim of Deere Congress will be treated as a Class 16 Claim. Class 7: John Deere Credit -- impaired, entitled to vote; holder will retain its security interest until its claim is paid in full. The claimant in this class will be paid based upon monthly payments of principal and interest based upon: a) an interest rate of 6.5% simple interest, b) an amortization and term of 6 years, and c) a principal balance based upon the allowed secured claim of Deere. The first payment will be made 60 days after the Effective Date. The Deficiency Claim of John Deere Credit will be treated as a Class 16 claim Class 8: U.S. Bank -- unimpaired, not entitled to vote; holder will be paid in accordance with the current Loan Agreement. Any existing monetary default will be cured and paid on the Effective Date of the Plan of Reorganization. Class 9: Patriot Bank -- impaired, entitled to vote; holder will retain its security interest until its claim is paid in full. The claimant in this class will be paid based upon monthly payments of principal and interest based upon: a) an interest rate of 6.5% simple interest, b) an amortization of 6 years, and c) a principal balance based upon the allowed secured claim of Patriot. The first payment will be made 60 days after the Effective Date. The Deficiency Claim of Patriot will be a Class 16 Claim. Class 10: Danny Rice -- impaired; entitled to vote; holder will retain its security interest until the claim is paid in full. The claimant in this class will be paid based upon monthly payments of principal and interest based upon: a) an interest rate of 5.0% simple interest, b) an amortization and term of 15 years, and c) a principal balance based upon the allowed secured claim of Danny Rice. The first payment will be made 60 days after the Effective Date. The Deficiency Claim of Danny Rice will be a Class 16 Claim. Class 11: City of Garland -- unimpaired; not entitled to vote; holder will be paid in accordance with the current Loan Agreement. Any existing monetary default will be cured and paid on the Effective Date of the Plan of Reorganization. Class 12: Ford Motor Credit -- impaired, entitled to vote; holder will retain its security interest until its claim is paid in full. The claimant in this class will be paid based upon monthly payments of principal and interest based upon: a) an interest rate of 6.5% simple interest, b) an amortization and term of 6 years, and c) a principal balance based upon the allowed secured claim of Ford Motor Credit. The first payment will be made 60 days after the Effective Date. The Deficiency Claim of Ford Motor Credit will be a Class 16 Claim. Class 13: Chrysler Finance -- unimpaired; not entitled to vote; holder will be paid in full on the Effective Date. Class 14: Oppenheimer, Blend, -- impaired, entitled to vote; Harrison & Tate and Green holder will be paid in twelve Aggregates US Trustee fees equal installments with no interest. The first installment will be paid 30 days after the Effective Date. Class 15: General Unsecured -- impaired; entitled to vote; Creditors - Small Claims under holders will be paid in two $5,000 or creditors who reduce equal installments. The first their claims to $5,000 installment will be paid 180 days after the Effective Date with the second installment paid 180 days thereafter. Class 16: General Unsecured -- impaired, entitled to vote; Creditors holders will share pro-rata in the Unsecured Creditor Amount. Each Class 16 creditor will receive its prorate share of the quarterly payments based upon: a) a principal amount equal to the Unsecured Creditor Amount, b) an interest rate of 7%, and c) a term of five years. The first payment will be made 90 days after the Effective Date. Class 17: Unsecured Insider -- impaired, entitled to vote; Claims holders will receive 100% of the Interests in the Reorganized Debtors. Class 18: Membership Interests -- impaired, entitled to vote; All equity interests of Congress Sand & Gravel, LLC, and Congress Materials, LLC, will be canceled, and the current owner of interests will receive nothing. On the Effective Date of the Plan, Chiron Equities and affiliates will convert all of its Class 17 Claims into the equity interests in the Debtors into New Equity. Inasmuch as Class 18 will receive no distributions under the Plan, the holders of Class 18 Interests are deemed to have rejected the Plan. About Congress Sand Bridgeport, Texas-based Congress Materials, LLC -- dba Green Aggregates and Union Materials, LP -- filed for Chapter 11 bankruptcy protection on October 28, 2010 (Bankr. N.D. Tex. Case No. 10-37526). It estimated its assets and debts at $10 million to $50 million. Kerens, Texas-based Congress Sand filed for Chapter 11 bankruptcy protection on October 28, 2010 (Bankr. N.D. Tex. Case No. 10- 37522). It estimated its assets and debts at $1 million to $10 million. Congress Materials' bankruptcy case is jointly administered with Congress Sand & Gravel, LLC. Congress Sand is the lead case. Douglas S. Draper, Esq., at Heller Draper Hayden Patrick & Horn, LLC, assists Congress Sand and Congress Materials in their restructuring efforts. Affiliate Green Aggregates, Inc. (Bankr. N.D. Tex. Case No. 07- 53439) filed a separate Chapter 11 petition on December 31, 2007. CRC HEALTH: Moody's Puts 'B1' Rating on Senior Secured Bank Loan ---------------------------------------------------------------- Moody's rated CRC Health Corporation's amended and extended senior secured bank credit facilities at B1 and affirmed CRC's remaining credit facility outstanding at B1. The company's senior subordinated notes and corporate family and probability of default ratings are affirmed with a stable outlook. In January 2011, CRC Health amended its senior secured bank facilities to extend the maturities on $63 million of the $100 million revolving credit facility from February 2012 to August 2015. In addition, about $309 million of the company's $398 million term loan B was also extended, from February 2013 to November 2015. The company also received an extension on about $136 million of $157 million PIK Loan's (not rated) at CRC Health Care Group Inc. from May 2013 to November 2016 and deferred $65 million of a $75 million AHYDO payment due May 2012 to November 2015. Included in the amended agreement, CRC's remaining total leverage and interest coverage covenant adjustments were eliminated and will remain at 6.75x and 2.0x, respectively. These instrument ratings and LGD assessments have been affected: CRC Health Corp. Rating assigned: * $63 million senior secured revolving credit facility due 2015 at B1 (LGD2, 26%) * $309 million senior secured term loan due 2015 at B1 (LGD2, 26%) Ratings Affirmed/LGD assessments revised: * Corporate Family Rating, B3 * Probability of Default Rating, B3 * $37 million senior secured revolving credit facility due 2012, B1 (LGD2, 26%) from (LGD2, 27%) * $89 million senior secured term loan due 2013, B1 (LGD2, 26%) from (LGD2, 27%) * $176 million senior subordinated notes due 2016, Caa1 (LGD5, 75%) from Caa1 (LGD5, 77%) * Speculative Grade Liquidity Rating, SGL-3 Ratings Rationale CRC's B3 Corporate Family Rating reflects the expectation that the company will continue to operate with very high leverage and modest interest expense coverage as operating pressures in the healthy living division have impeded improvements in credit metrics. While Moody's acknowledges the progress the company has made in reducing costs through its restructuring efforts, the operating difficulty has reduced CRC's revenue base and delayed anticipated improvements in the credit profile of the company. The stable outlook reflects Moody's expectation that the company will continue to benefit in the near term from the reduction of its cost base but could face continued pressure in growing the top line until broader economic conditions improve. The outlook also incorporates Moody's expectation that CRC could have difficulty improving credit metrics in the near term as EBITDA has remained relatively flat and free cash flow benefited from a reduction in capital spending. If the company experiences further operational pressures resulting in additional declines in revenue and EBITDA or higher leverage, the ratings could be downgraded. Moody's will be looking for a return to positive growth in revenue and EBITDA and a reduction in leverage before changing the outlook to positive or upgrading the ratings. CRC Health Corporation is a wholly owned subsidiary of CRC Health Group, Inc. Headquartered in Cupertino, California, CRC's recovery division provides treatment services to patients suffering from chronic addiction diseases and related behavioral disorders. The company also, through its healthy living division, provides therapeutic educational programs for adolescents and treatment services for eating disorders and obesity. CRC Health is owned by private equity sponsor Bain Capital Partners, LLC. CRC recognized revenue of approximately $443 million for the Twelve Months Ended Sept. 30, 2010. CREDIT-BASED ASSET: Files Liquidating Chapter 11 Plan ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Credit-Based Asset Servicing & Securitization LLC filed a liquidating Chapter 11 plan and accompanying disclosure statement. The plan is intended to carry out an agreement made before the bankruptcy filing in November with secured lenders allowing C-Bass to use $8.2 million to operate in Chapter 11 and distribute to lower ranking creditors, Mr. Rochelle relates. Mr. Rochelle notes that the disclosure statement has blanks where creditors in all classes later will be told the percentage distribution to expect. According to Mr. Rochelle, although the disclosure statement says the senior secured lenders have claims of $198.5 million, a total isn't given for unsecured creditors' claims. To receive a distribution under the plan, unsecured creditors must waive claims against the lenders and others. About Credit-Based Asset Servicing Credit-Based Asset Servicing and Securitization LLC is a subprime mortgage investor based in New York City. C-Bass is a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and seven affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-16040) on Nov. 12, 2010. C-Bass disclosed $23.7 million in assets and $2.16 billion in liabilities in its Schedules of Assets and Liabilities. The Debtors' liabilities include $195.8 million of secured debt. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, Esq., at Hunton & Williams LLP, represent the Debtors. Donlin, Recano & Company is the claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in C-BASS' chapter 11 cases and that committee is represented by Mark T. Power, Esq., and Jeffrey Zawadzki, Esq., at Hahn & Hessen LLP in New York. The affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CRYOPORT INC: Closes First Round of Private Placement for $4.4MM ---------------------------------------------------------------- CryoPort, Inc., has closed the first round of a private placement with various accredited investors for $4.4 million. The Company obtained agreements to purchase 6,335,318 units at $0.70 per share; each unit consists of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $0.77 per share, pursuant to a Securities Purchase Agreement. The offering is expected to remain open for approximately two weeks from the closing of the first round. The Company intends to use the proceeds of the private placement for working capital purposes. Emergent Financial Group, Inc. served as the Company's placement agent for the transaction. About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. At September 30, 2010, the Company had total assets of $5.37 million, total liabilities of $5.53 million, and a stockholders' deficit of $153,700. KMJ Corbin & Company LLP expressed substantial doubt about CryoPort's ability to continue as a going concern, following the Company's 2009 results. The firm noted that the Company has incurred recurring losses and negative cash flows from operations since inception. CRYSTALLEX INT'L: Mine Contract in Venezuela Terminated ------------------------------------------------------- Crystallex International Corporation announced that it has received a letter from the Corporacion Venezolana de Guayana that states that the Company's Mine Operating Contract for the Las Cristinas Project in Bolivar State, Venezuela, has been "unilaterally terminated" by the CVG. The letter also enclosed a copy of a resolution passed by the CVG on Feb. 3, 2011, which states that the MOC is unilaterally terminated. The resolution cites, as the basis for the termination of the MOC, Crystallex's lack of activity to progress the Las Cristinas Project for more than one year and "... for reasons of opportunity and convenience". Crystallex has fully complied with all its obligations under the MOC and has advanced Las Cristinas to a "shovel ready" state while awaiting the issuance of the Authorization to Affect Natural Resources from the Ministry of Environment and Natural Resources. In June, 2007, the CVG confirmed that the approval of the Crystallex Las Cristinas Environmental Impact Study, the posting of the construction guarantee bond and the payment of the environmental disturbance taxes represented the final and conclusive step in the procedure for the issuance of the Permit required to construct the Las Cristinas Project. Notwithstanding Crystallex's fulfillment of the conditions to receive the Permit, MinAmb denied the request for the Permit in April 2008. Despite the Company's compliance with the MOC requirements and the CVG's confirmation in August 2010 that the MOC was in full force and effect, to date the Permit to allow project construction to commence has not been issued. Crystallex is reviewing its position in light of this correspondence and is considering all steps necessary to protect its investment on behalf of all its stakeholders including the filing of the International Arbitration claim outlined in a Notification of Dispute served by the Company on the Venezuelan Government in November 2008. About Crystallex International Based in Toronto, Canada, Crystallex International Corporation (TSX: KRY) (NYSE Amex: KRY) -- http://www.crystallex.com/-- is a Canadian-based company, which has been granted the Mine Operating Contract to develop and operate the Las Cristinas gold properties located in Bolivar State, Venezuela. The Company's balance sheet at Sept. 30, 2010, showed US$63.62 million in total assets, US$108.10 million in total liabilities, and a stockholders' deficit of US$44.48 million. "As at September 30, 2010, the Company had working capital of US$12.50 million, including cash of $21.47 million. Management estimates that these funds will be sufficient to meet the Company's obligations and budgeted expenditures for the foreseeable future, but will not be sufficient to repay the $100.00 million notes payable due on December 23, 2011." DEEL LLC: Plan Outline Hearing Scheduled for March 21 ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on March 21, 2011, at 10:00 a.m. (prevailing Eastern Time), to consider adequacy of disclosure statement explaining the proposed Plan of Liquidation of the Deel LLC, formerly known as Magic Brands LLC. Objections, if any, are due 4:00 p.m. on March 14. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. As reported in the Jan. 21, 2011 edition of the Troubled Company Reporter, all secured claims and financing for the Chapter 11 case were paid in full from the sale of most of the Debtors' assets to Luby's Inc. Magic Brands had sold its Fuddruckers stores and franchise business to restaurant operator Luby's Inc. for $63.5 million. The Plan says unsecured creditors will be paid after creditors with higher priorities are fully paid. The Disclosure Statement only says unsecured creditors would have a meaningful recovery. There are blanks in the disclosure statement in connection with the expected recovery of unsecured creditors and other creditors. Subordinated creditors are to receive nothing unless unsecured creditors are paid in full. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/DEELLLC_BlaclinedDS.pdf About Magic Brands Magic Brands, LLC, is the parent of the Fuddruckers and Koo Koo Roo restaurant brands. Fuddruckers -- http://www.fuddruckers.com/ -- was founded in 1980 in San Antonio, Texas, with the goal of serving hamburgers that are cooked to order and made with fresh ingredients. Magic Brands, based in Austin, Texas, purchased the chain in 1998 and has sought to broaden its appeal by expanding its menu. Magic Brands, LLC, and its operating units filed for Chapter 11 on April 21, 2010 (Bankr. D. Del. Lead Case No. 10-11310). Magic Brands disclosed $13,670,488 in assets and $38,624,147 in liabilities as of the Petition Date. Affiliate Fuddruckers, Inc., also disclosed $54,550,236 in assets and $50,349,268 in liabilities as of the Chapter 11 filing. FocalPoint Securities, LLC serves as investment banker to Magic Brands and Goulston & Storrs serves as lead bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. Klehr Harrison Harvey Branzburg LLP, and Kelly Drye & Warren LLP represent The Official Committee of Unsecured Creditors. FTI Consulting, Inc., serves as the Committee's financial advisor. DELPHI CORP: Investigators Probe GM Funding of New Pensions ----------------------------------------------------------- Federal auditors said they are looking at whether the U.S. Government pressured General Motors Corp. to provide additional funding for Delphi Corp.'s pension plan for hourly workers, Neil Roland of Automotive News reported. The information is disclosed in Neil Barofsky, the special inspector general for the Troubled Asset Relief Program's quarterly report filed with the U.S. Congress, Automotive News stated. The TARP's audit is focused on GM's decision after it filed for bankruptcy to provide benefits for Delphi's hourly workers without doing the same for salaried retirees. The audit comes as U.S. Representative Christopher Lee and other lawmakers wrote to the U.S. Department of the Treasury regarding the unfair treatment of Delphi salaried retirees who saw their pension benefits cut by as much as 70%, Automotive News said. Mr. Barofsky also stated in his report that he is looking into the Treasury's role in GM's acquisition of GM Financial Company, Inc., formerly AmeriCredit, Automotive News mentioned. GM Financial may ultimately compete against Ally Financial Inc., another recipient of federal bailout funds in 2008, according to the Congressional Oversight Panel, Automotive News noted. The panel headed by former U.S. Senator Ted Kauffman noted that Ally might have more trouble repaying taxpayers as a result of GM's acquisition of AmeriCredit. The panel said the Treasury declined to block GM's purchase, Automotive News added. Mr. Barofsky is also conducting an investigation on possible illegal conduct made by GM and Chrysler in their dealer reductions, but he did not indicate when his audits will be completed, Automotive News relayed. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- was a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on January 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On October 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will remain responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) 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. Garden City Group is the claims and notice agent of the Debtors. 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) DELTA AIR: Pays $313 Million in Profit Sharing to Employees ------------------------------------------------------------ Delta Air Lines issued the following memo from CEO Richard Anderson to its more than 80,000 employees worldwide. To: Delta Colleagues Worldwide From: Richard Anderson Subject: Sharing our success every step of the way Congratulations and thank you! Delta is paying out $313 million in profit sharing - a direct result of your hard work and dedication that enabled Delta to record a $1.4 billion profit for 2010. We continue to deliver on our commitment to share Delta's successes with those who make it possible. Profit sharing is not a one-time payout. Instead, it is part of your total compensation that includes a competitive package of pay, benefits and work rules along with additional opportunities to earn more when the company performs well. This year's profit sharing continues the momentum that we've gained during the last four years, enabling continued investments in our people: Coming out of bankruptcy in 2007, Delta employees received $1 billion in incentives and improved compensation and benefit programs. For our strong financial performance in 2007, employees earned $158 million in profit sharing. As a testament to the airline we would build together, Delta employees were granted 15% equity in the combined company following the close of the merger in 2008, valued at approximately $900 million at the time of distribution. For solid operational performance in 2009, Delta people earned approximately $66 million through monthly operational performance bonuses. For three consecutive years, Delta increased base pay for frontline people, making good on a pre-merger promise to bring Delta base pay rates to industry-standard by the end of 2010. And, as a direct reflection of your hard work and our merger's success, we are sharing the largest profit sharing payout in our airline's history. During the toughest of economic times this industry has faced, we kept our deals. When other major airlines were announcing involuntary furloughs, outsourcing and hiring freezes -- Delta kept its commitment to no frontline involuntary furloughs as a result of the merger; we were bringing Reservations jobs back to the U.S.; we were insourcing in TechOps, Cargo and Airport Customer Service; and, in the last year alone, we added more than 4,000 new frontline jobs. In 2010, we completed virtually all our merger integration, expanded our global network, strengthened our industry-leading joint venture and alliance relationships, and began a massive investment in our product and the technology that supports the way we do business every day. Our progress has been remarkable. I hope you'll all take some time to celebrate with one another. We're proud of what you've achieved. And, in addition to celebrations your leaders are hosting today across the system, full-page advertisements in USA Today, the Minneapolis Star Tribune, the Detroit Free Press and the Atlanta Journal- Constitution newspapers salute you, the best employees in the world. It's a good time to be at Delta Air Lines. Our plan is working and while we have a great deal of work ahead of us, our opportunities are tremendous. With the dedication and determination of Delta people, I have no doubt we'll successfully face the challenges of 2011. Thank you for all you do for Delta every day. About Delta Air Lines Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. The Company's route network is centered on the hub system it operate at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo- Narita. The hub operations include flights, which gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The network is supported by a fleet of aircraft, which is varied in terms of size and capabilities. On December 31, 2009, the Company's wholly owned subsidiary Northwest Airlines, Inc., merged with and into Delta. The wholly owned subsidiary of the Company is Northwest Airlines Corporation. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Stable/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. DENNY HECKER: Sentenced to 10 Years, Fined $31 Million ------------------------------------------------------ Bankruptcy Law360 reports that Judge Joan Ericksen of the U.S. District Court for the District of Minnesota on Friday sentenced Dennis Hecker, a former automotive bigwig, to 10 years in prison and ordered him to pay $31 million in restitution for defrauding Chrysler Financial Services LLC and other lenders and concealing his assets during bankruptcy. Dow Jones' DBR Small Cap says the 10 years for Mr. Hecker is the maximum sentence on the counts of bankruptcy fraud and conspiracy to which the former Minnesota auto mogul last year pleaded guilty. About Denny Hecker Dennis E. Hecker owned and operated dozens of auto dealerships, car rental franchises, and other businesses until 2009. He filed a voluntary chapter 7 petition (Bankr. D. Minn. Case No. 09-50779) on June 4, 2009, after his auto empire collapsed into bankruptcy. Chrysler Financial filed a dischargeability action (Bankr. D. Minn. Adv. Pro. No. 09-5019) on July 8, 2009. Chrysler Financial alleged that $83 million of $350 million owed is nondischargeable under 11 U.S.C. Sec. 523(a) because Mr. Hecker allegedly obtained it through the use of false pretenses, false representations, fraud, defalcation, and embezzlement. The Honorable Robert J. Kressel granted Chrysler Financial's motion for sanctions and ordered $83 million of the judgment against Mr. Hecker, together with accrued interest, not dischargeable in the Chapter 7 bankruptcy case. Mr. Hecker has pleaded guilty to two fraud charges: concealing assets from the bankruptcy court and lying to get multimillion- dollar loans for his dealerships and leasing operation. Mr. Hecker was formerly represented by William Skolnick, Esq., as counsel. He is now represented by Barbara May, Esq. Randall Seaver serves as Chapter 7 trustee in the case. DENNY'S CORPORATION: Keeley Asset Discloses 9.0% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, Keeley Asset Management Corp. disclosed that it beneficially owns 8,947,700 shares of common stock of Denny's Corporation representing 9.0% of the shares outstanding. Keeley Small Cap Value Fund owns 6,060,000 shares or 6.1% equity stake while John L. Keeley, Jr. owns 400,000 shares or 0.4% equity stake. As of October 28, 2010, 99,697,084 shares of the Company's common stock, par value $.01 per share, were outstanding. About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- Denny's is one of America's largest full-service family restaurant chains, consisting of 1,348 franchised and licensed units and 232 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. The Company's balance sheet at Sept. 29, 2010, showed $312.67 million in total assets, $415.10 million in total liabilities, and a stockholders' deficit of $102.42 million. Denny's carries 'B2' corporate family and probability of default ratings from Moody's Investors Service and a 'B+' corporate credit rating from Standard & Poor's. DIAMOND RANCH: Reports $20,500 Net Income in Dec. 31 Quarter ------------------------------------------------------------ Diamond Ranch Foods, Ltd., filed its quarterly report on Form 10-Q, reporting net income of $20,506 on $1.8 million of revenues for the three months ended December 31, 2010, compared with a net loss of $181,333 on $2.1 million of revenues for the same period of 2009. At December 31, 2010, the Company's balance sheet showed $1.2 million in total assets, $6.0 million in total liabilities, and a stockholders' deficit of $4.8 million. As reported in the Troubled Company Reporter on July 19, 2010, Gruber & Company LLC, in Lake Saint Louis, Missouri, expressed substantial doubt about Diamond Ranch Foods's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has suffered recurring losses from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7322 About Diamond Ranch Diamond Ranch Foods, Ltd. (OTC BB: DRFO) -- http://www.diamondranchfoods.com/-- is a meat processing and distribution company now located in the Hunts Point Coop Market, Bronx, New York. The Company's operations consist of packing, processing, labeling, and distributing products to a customer base, including, but not limited to, in-home food service businesses, retailers, hotels, restaurants, and institutions, deli and catering operators, and industry suppliers. DIPAK DESAI: Nevada Mutual Renews Motion for Ch. 7 Liquidation -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada will convene a hearing on March 22, 2011, at 9:30 a.m., to consider Nevada Mutual Insurance Company's request to convert the Chapter 11 cases of Dipak Desai, et al., to one under Chapter 7 of the Bankruptcy Code, or, in the alternative, to appoint a Chapter 11 trustee. The Troubled Company Reporter on Dec. 28, 2010, reported the Bankruptcy Court's entry of an order denying Nevada Mutual's previous request for an appointment of a Chapter 11 trustee, or alternatively, dismissal of the Chapter 11 case or conversion of the case to Chapter 7. Nevada Mutual this month renewed its motion and asserts that the case has no "prospect of any reorganization". It points out that: * The Debtor has failed to file any plan or disclosure statement or participate in the reorganization process in any meaningful way. * While the Official Committee of Unsecured Creditors has filed a plan, the plan has failed to move the case toward confirmation; the plan is not accompanied by a required disclosure statement; and the plan contains no provision for a means to effectuate or to pay required administrative expenses -- except through continued litigation. Nevada Mutual also notes that based on the expert report of the Debtor, the total known value of certain estate assets is approximately $945,000 -- $17 million less than the value listed those same assets in Desai's schedules and statements filed in February 2010. Further, Nevada Mutual points out, the professional fees incurred by the estate to fund Desai's professionals, including his criminal counsel, amount to over $2.4 million to date and are rapidly depleting the few remaining assets of the estate. Nevada Mutual Insurance Company is represented by: Cecilia Lee, Esq. CECILIA LEE, LTD. 510 West Plumb Lane, Suite A Reno, NV 89509 Tel: (775) 324-1011 Fax: (775) 324-6616 About Dipak Desai Las Vegas, Nevada-based Dipak Desai, aka Dipak Desai, M.D., Chartered, filed for Chapter 11 bankruptcy protection on February 26, 2010 (Bankr. D. Nev. Case No. 10-13050). Bruce Thomas Beesley, Esq., at Lewis And Roca LLP, and Michael F. Lynch, Esq., who has an office in Las Vegas, Nevada, represents the Debtor in its restructuring effort. The Company disclosed $22,324,179 in assets and $1,892,555 in liabilities as of the Petition Date. The Debtor's case is jointly administered with Endoscopy Center of Southern Nevada, LLC, Gastroenterology Center of Nevada, LLP and Desert Shadow Endoscopy Center, LLC, and Hari Om. Brown Rudnick LLP serves as the Committee's counsel, and Kolesar & Leatham, CHTD., serves as the Committee's local counsel DIPAK DESAI: Terms of Creditors Committee's Proposed Plan --------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Dipak Desai, et al., submitted to the U.S. Bankruptcy Court for the District of Nevada a proposed Chapter 11 Plan and an explanatory Disclosure Statement for the Debtors. The plan proponent will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan contemplates the substantive consolidation of the Debtors. The Plan also contemplates that the claims for liability to the extent of the Debtors' Policy coverage are fully preserved and are not released pursuant to the Plan unless certain settlements are reached between holders of the claims, the Plan Proponents or Plan Trustee and Nevada Mutual Insurance Company with respect to the claims. Under the Plan, holders of secured claims will (i) have its claim reinstated; or (ii) receive cash in an amount equal to the allowed claim, including any interest; or (iii) receive the collateral securing its allowed claim. Holders of general unsecured claims will receive cash in the amount of the allowed claim by the Plan trustee from funds in the Creditors' Trust, provided that there are sufficient funds. Holders of equity interests won't receive any distributions. A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/DipakDesai_CommitteePlan.pdf The Committee Sara L. Kistler, Acting U.S. Trustee for Region 17, appointed these persons to the Creditors Committee on June 4, 2010: 1. David R. Seidlitz 2. Antoinette Carpenter 3. Tiny Marie Gold 4. John Summers 5. Salvatore Leggio 6. Nell McDowell 7. Phyllis Satterthwaite The Committee is represented by: David J. Molton, Esq. Howard S. Steel, Esq. BROWN RUDNICK LLP Seven Times Square New York, NY 10036 Telephone: (212) 209-4800 Facsimile: (212) 209-4801 E-mail: dmolton@brownrudnick.com hsteel@brownrudnick.com - and - Nile Leatham, ESQ. Natalie M. Cox, ESQ. BART K. LARSEN, ESQ. KOLESAR & LEATHAM, CHTD. 3320 W. Sahara Avenue, Suite 380 Las Vegas, Nevada 89102 Telephone: (702) 362-7800 Facsimile: (702) 362-9472 E-mail: blarsen@klnevada.com The Debtors' Non-Filing of Plan In August 2010, Dipak Desai notified the Court that no plan of reorganization has been filed due to unresolved matters with several hepatitis plaintiffs. The Debtor explained that it is premature to file a plan of reorganization until it is certain that the case will not be dismissed on the credit counseling technicality. According to the Debtor's case docket, on February 11, 2011, Nevada Mutual Insurance Company asked the Court to convert the case to on under Chapter 7 of the Bankruptcy Code, or, in the alternative, to appoint a chapter 11 trustee. About Dipak Desai Las Vegas, Nevada-based Dipak Desai, aka Dipak Desai, M.D., Chartered, filed for Chapter 11 bankruptcy protection on February 26, 2010 (Bankr. D. Nev. Case No. 10-13050). Bruce Thomas Beesley, Esq., at Lewis And Roca LLP, and Michael F. Lynch, Esq., who has an office in Las Vegas, Nevada, represents the Debtor in its restructuring effort. The Company disclosed $22,324,179 in assets and $1,892,555 in liabilities as of the Petition Date. The Debtor's case is jointly administered with Endoscopy Center of Southern Nevada, LLC, Gastroenterology Center of Nevada, LLP and Desert Shadow Endoscopy Center, LLC, and Hari Om. DONALD LINDSEY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Donald Lindsey Ware, Jr. dba WareHouses c/o The Inkspot, Inc. 545 South Limestone Street Lexington, KY 40508 Lorea T. Ware 1200 Todds Station Road Lexington, KY 40509 Bankruptcy Case No.: 11-50378 Chapter 11 Petition Date: February 10, 2011 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Debtor's Counsel: Laura Day DelCotto, Esq. DELCOTTO LAW GROUP PLLC 200 North Upper St Lexington, KY 40507 Tel: (859) 231-5800 Fax: (859) 281-1179 E-mail: ldelcotto@dlgfirm.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' 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kyeb11-50378.pdf The petition was signed by the Joint Debtors. DOWLING COLLEGE: S&P Downgrades Long-Term Debt Rating to 'BB' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating to 'BB' from 'BB+' on debt issued for Dowling College, N.Y, based on its view of the college's recent reliance on significant investment draws and uniquely large unrestricted giving to support operations, declines in enrollment, and management turnover in key positions. The debt is a general obligation of the college. The 'BB' rating reflects Standard & Poor's view of the college's historically negative, although improving financial performance; low levels of financial resources; and heavy budget reliance on tuition and other student-generated revenues. Other rating considerations include what Standard & Poor's considers a very small endowment compared with a high level of outstanding debt; recent management turnover in key positions; a moderately high maximum annual debt service burden; and decreased enrollment at the undergraduate and graduate levels. Despite the negative credit factors, Dowling managed to maintain a relatively low tuition discount rate of 21% in fiscal 2010. In addition, nominal debt service is relatively stable through fiscal 2016. "The stable outlook reflects S&P's expectation that, over the next 24 months, demand and enrollment levels will likely stabilize, the college will likely produce breakeven operating performance, and that financial resources will likely grow," said Standard & Poor's credit analyst Nick Waugh. "We also expect Dowling to complete its installation of a new management team and the issuance of any additional debt to be commensurate with an increase in financial resources," said Mr. Waugh. At this time, Standard & Poor's does not expect to raise the rating during the outlook period given the low level of financial resources relative to debt. Standard & Poor's could consider a lower rating if Dowling experiences deteriorating demand and shrinking enrollment, negative operating results, reduced financial resources, or the violation of financial covenants during the outlook period. Founded in 1955, as part of Adelphi College's outreach to Suffolk County, N.Y., Dowling College became the first four-year, degree- granting liberal arts institution in the county. The college purchased the former W.K. Vanderbilt estate in Oakdale in 1962. In 1968, the college severed its ties with Adelphi and was renamed after its chief benefactor, Robert Dowling, a noted city planner and aviator. DS WATERS: Placed by S&P on Watch Negative due to Refinancing Risk ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it placed its ratings on Atlanta-based DS Waters of America Inc., including the 'B' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement means that S&P could either lower or affirm the ratings upon completion of S&P's review. For analytical purposes, S&P views DS Waters and its holding companies, DSW Group Inc. (Group; not rated) and DSW Holdings (Holdings; not rated), as one economic entity. "The CreditWatch listing reflects S&P's belief that DS Waters' operating performance has continued to weaken, which has resulted in weaker credit measures," said Standard & Poor's credit analyst Jean Stout. S&P believes that DS Waters will be challenged to improve its operating results amid continued weak economic conditions, as well as expected higher commodity costs. "It is also S&P's opinion that the company faces significant refinancing risk over the next 12 to 18 months at both the operating company and parent holding company levels," added Ms. Stout. The company's revolving credit facilities mature in October 2011; Holdings' $300 million term loan matures in March 2012; Group's $225 million payment-in-kind note matures in April 2012, followed by the maturity of DS Waters' term loan in October 2012. At present, the company has not presented a viable refinancing plan for any of these maturities. Because of significant refinancing risk during the next 12 to 18 months that surpasses the company's currently available liquidity (including about $100 million of cash and ample covenant cushion). Standard & Poor's will seek to resolve the CreditWatch listing within 60-90 days. To resolve the CreditWatch listing, S&P will meet with management to evaluate the potential to not only improve the company's operating performance amid lingering weak macroeconomic environment and volatile commodity costs, but also its ability to develop and implement a viable refinancing plan in the near-term that will provide the company with sustainable adequate liquidity. ENERGY XXI: Fitch Assigns 'B/RR4' Rating to $250 Mil. Notes ----------------------------------------------------------- Fitch Ratings has assigned a 'B/RR4' rating to Energy XXI Gulf Coast (Delaware) proposed issuance of $250 million in senior unsecured private placement notes due 2019. The notes will be guaranteed by the parent company (Energy XXI Bermuda), as well as existing and future material subsidiaries, and rank pari passu with existing unsecured indebtedness. Proceeds will be used to refinance the company's 10% 2013 notes, which had a balance outstanding of $228.9 million at Feb. 9, 2011. Fitch would note that failure to refinance the 10% notes by the first quarter of 2013 would have caused the maturity date of the company's $925 million senior secured revolver to spring forward to March 2013 from 2014. Fitch currently rates Energy XXI: Energy XXI (Bermuda) -- Issuer Default Rating 'B'; -- Convertible perpetual preferred 'CCC/RR6'. Energy XXI Gulf Coast (Delaware) -- IDR 'B'; -- Senior secured first lien revolver 'BB/RR1'; -- Senior unsecured notes 'B/RR4'. The Rating Outlook is Stable. All debt, including the proposed $250 million notes, is issued at the Energy XXI Gulf Coast subsidiary level with the exception of the convertible perpetual preferreds, which are issued by Energy XXI (Bermuda). Ratings Rationale: Energy XXI Oil Corporation's ratings are supported by the company's high exposure to liquids; reasonable operational metrics; willingness to issue equity and equity-equivalent instruments to fund growth; operator status on a majority of properties; recent trend of debt reductions (prior to the Exxon property acquisition); and the short-term cash flow protections of its hedging position. Ratings issues for bondholders include the company's high leverage; small size and lack of basin diversification; vulnerability to hurricane risks; higher risk ultra-deep shelf exploration program; ongoing acquisition risk; and liquidity risk. Exxon Property Acquisition: In December, Energy XXI closed on its $1.012 billion acquisition of GoM properties from ExxonMobil, which added 49.5 million barrels of oil equivalent of 1p reserves, and approximately 19,000 boepd of production to its core shallow water program. Of the acquired reserves, 61% are oil and 68% proved developed. As these are similar to Energy XXI's current portfolio, the acquisition should not meaningfully dilute Energy XXI's liquids-heavy profile and the higher cash generation associated with that profile. The proximity of the acquired fields to existing Energy XXI properties and the lack of need for major infrastructure tie-ins also means the acquired properties are candidates for meaningful G&A synergies. In addition, the acquisition provides modest portfolio diversification, with 50% of expected pro forma output coming from the company's top four fields versus top two fields previously. Near term free cash flow generation at Energy XXI is expected to remain constrained until production from the company's ultra-deep shelf wells begins to ramp up. Energy XXI has among the highest oil exposure among peers, with approximately two-thirds of reserves and production comprised of liquids (pre- acquisition). Of this, a minimal amount is comprised of lower-priced natural gas liquids. Given the wide disparity between oil and natural gas pricing (btu equivalence of 6.0 times versus recent price equivalence in excess of 20x), Energy XXI's high exposure has enhanced near-term cash generation. To support its drilling budget, the company maintains an active hedging program and added approximately 10,000 boepd of liquids hedges to lock in a portion of the acquisition economics. A smaller amount of hedges remain on the natural gas side following recent hedge monetizations. Given the relative weakness of the gas forward curve, Fitch anticipates Energy XXI's gas hedge position will remain relatively small over the next few quarters; however, oil hedging opportunities remain robust. Energy XXI's operational metrics are respectable. As calculated by Fitch, for fiscal year 2010 (June 30) which excludes the Exxon acquisition, the company had one- and three-year FD&A costs of $14.35/boe and $18.35/boe. The company's all-in one-year Reserve Replacement Ratio was 383%, while its organic RRR was 82%. In addition to the large future reserves adds expected from the Exxon acquisition, Fitch expects that organic RRR will begin to rise in 2011 and beyond as the company begins to book reserves from its ultra-deep shelf discoveries. Energy XXI's recent financial performance has been good. At Dec. 31, 2010, the company generated quarterly EBITDA of $107.5 million, versus $66.3 million for the year ago-quarter (the latest quarter includes just 14 days of contribution from the acquired Exxon properties). Production volumes in January 2011 averaged approximately 43,300 boepd, reflecting the full impact of the Exxon acquisition, but offset modestly by weather-related stoppages and third party pipeline outages. At Dec. 31, 2010, Energy XXI's cash and equivalents were approximately $40 million, and total debt was approximately $1.31 billion. Headroom on all financial covenants was adequate. Near term maturities are limited, with the next major issuance due the 2013 10% notes, which are expected to be retired from proceeds from the current issuance. Fitch anticipates that the company's FCF generation will remain constrained until production from the ultra-deep shelf begins to ramp up. Catalysts for an upgrade to the rating include a sustained reduction in debt/boe metrics and accompanying shift in managerial philosophy on use of the balance sheet. Catalysts for a downgrade include a major hurricane or other operational problem leading to extensive downtime; a sustained collapse in oil prices; or unfavorable regulatory changes in the GoM which negatively impact operations (inability to obtain drilling permits, much higher bonding or insurance requirements, etc). Energy XXI is a small independent E&P producer with operations located in the offshore US Gulf of Mexico and onshore GoM. The parent company, Energy XXI (Bermuda), was incorporated in Bermuda in 2005 as an E&P acquisition vehicle. The company's main business subsidiary is Energy XXI Gulf Coast, which is a Delaware Corp. On a pro forma basis following the announced Exxon property acquisition, the company's total reserves were 125.1 million boe, proved and probable reserves of 158.1 million boe, and pro forma production of 45,000 boepd. ENERGY XXI: Moody's Assigns 'Caa1' Rating to $250 Mil. Notes ------------------------------------------------------------ Moody's Investors Service assigned a Caa1 rating to Energy XXI Gulf Coast, Inc.'s proposed offering of $250 million senior notes due 2019. The proceeds of this offering will be used to fund the repurchase or redemption of $228.9 million principal amount of 10% senior notes due 2013 and to repay revolver borrowings. The outlook is stable. Ratings Rationale Energy XXI's B3 Corporate Family Rating reflects its proved reserve and production volumes that are larger than many B3 rated peers and its relatively high revenues and cash margins due to approximately 69% of its production being oil. This rating also incorporates the company's high debt levels and operating cost structure. Energy XXI has substantial geographic and field level concentration in the U.S. Gulf of Mexico, which generally entails short reserve lives, weather risks and additional regulatory and cost uncertainties stemming from the fallout of the Macondo well blowout and oil spill. The stable outlook is based on Moody's expectation of continued supportive oil prices and the company meeting its forecasts for production growth, free cash flow and debt reduction to improve its leverage metrics in 2011. Pro forma for the GOM properties acquisition from Exxon Mobil Corporation in December 2010, debt/average daily production and debt/proved developed reserves were around $31,000/boepd and $16/boe. If leverage metrics don't improve from pro forma levels that would pressure the ratings. Declines in sequential quarterly production volumes and/or significant negative free cash flow could be early signs that the GOM properties acquisition is not meeting expectations and could result in a negative outlook or ratings downgrade. A positive rating action is not likely in the near to medium term given the company's high leverage and the ongoing event risk from its acquisition oriented growth strategy and aggressive financial policies. The Caa1 senior notes rating reflects both the overall probability of default of Energy XXI, to which Moody's assigns a PDR of B3, and a loss given default of LGD5 (71%). The company has a $700 million borrowing base on its $925 million senior secured revolving credit facility. The senior notes are unsecured and therefore are subordinate to the senior secured credit facility's potential priority claim to the company's assets. This results in the senior notes being notched one rating beneath the B3 CFR under Moody's Loss Given Default Methodology. Energy XXI Gulf Coast, Inc., is a wholly owned subsidiary of Energy XXI (Bermuda) Limited, a publicly traded independent exploration and production company based in Houston, TX. ENERGY XXI: S&P Assigns 'B' Senior Rating to $250 Mil. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its 'B' senior unsecured rating and '3' recovery rating to Energy XXI Gulf Coast Inc.'s proposed $250 million senior notes due 2019. The ratings indicate S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default. Energy XXI Gulf Coast expects to use proceeds to repurchase its outstanding $229 million 10% senior notes due 2013. Energy XXI Gulf Coast is a subsidiary of Energy XXI (Bermuda) Ltd. (B/Stable/--). The ratings on Energy XXI (Bermuda) reflect its modest reserve size, a focus on the challenging Gulf of Mexico region that requires high reinvestment to maintain production and reserve levels, an elevated cost structure, and uncertainty about potential delays in permitting processes in the Gulf of Mexico. Standard & Poor's will publish an updated recovery report on Energy XXI shortly. Ratings List Energy XXI (Bermuda) Ltd. Corporate credit rating B/Stable/-- New Ratings Energy XXI Gulf Coast Inc. $250 million senior notes due 2019 B Recovery rating 3 ESCALON MEDICAL: Posts $1.0 Million Loss in Dec. 31 Quarter ----------------------------------------------------------- Escalon Medical Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $1.05 million on $7.60 million of revenue for the three months ended December 31, 2010, compared with a net loss of $1.05 million on $7.99 million of revenue for the same period of the prior fiscal year. The Company's balance sheet as of December 31, 2010, showed $20.44 million in total assets, $10.18 million in total liabilities, and stockholders' equity of $10.26 million. As reported in the Troubled Company Reporter on October 15, 2010, Mayer Hoffman McCann P.C., in Plymouth Meeting, Pa., expressed substantial doubt about Escalon Medical's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted of the ongoing debt payments on the debt related to the Biocode Hycel acquisition and continued losses from operations and negative cash flows from operating activities. A full-text copy of the Form 10-Q is available for free at http://researcharchives.com/t/s?7337 About Escalon Medical Wayne, Pa.-based Escalon Medical Corp. (Nasdaq: ESMC) -- http://www.escalonmed.com/-- operates in the healthcare market specializing in the development, manufacture, marketing and distribution of medical devices and pharmaceuticals in the areas of ophthalmology, diabetes, hematology and vascular access. FIRST FOLIAGE: Sells Assets to Costa Farms for $22 Million ---------------------------------------------------------- American Bankruptcy Institute reports that First Foliage LC has sold its assets to Costa Farms LLC for roughly $22 million. As reported in the Troubled Company Reporter last month, the Court approved procedures set BFN Growers, LLC, or its designee, as the stalking horse bidder -- with an offer $13.5 million offer less of adjustments -- at the Feb. 7 auction. United Growers, LLC, was originally the buyer selected by the Debtor to star the auction, but the creditors committee claimed that BFN provided a higher offer. About First Foliage, L.C. Homestead, Florida-based First Foliage, L.C., filed for Chapter 11 bankruptcy protection on June 23, 2010 (Bankr. S.D. Fla. Case No. 10-27532). Attorneys at Infante, Zumpano, Hudson & Miloch, LLC, represent the Debtor. Berger Singerman, P.A., serves as counsel to the Official Committee of Unsecured Creditors. The Company estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities in its Chapter 11 petition. FIRSTFED FINANCIAL: Plan Set for March 29 Confirmation ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that FirstFed Financial Corp. scheduled a confirmation hearing for March 29 after obtaining approval of the explanatory disclosure statement. According to the Disclosure Statement, the Plan provides for the disposition of all the assets of the Debtor's estate though the establishment of a liquidating trust. The remaining assets, to the extent not converted to cash or other proceeds as of the effective date, will be sold or otherwise disposed of by the liquidating trustee after the effective date, with all net cash proceeds to be distributed to holders of allowed claims. Unsecured creditors with about $160 million in claims are expected to have a 1.3% recovery, without regard for whatever might be collected from tax refunds or lawsuits. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FirstFedFinancial_DS105.pdf The Debtor's counsel can be reached at: Jon L.R. Dalberg, Esq. Rodger M. Landau, Esq. LANDAU GOTTFRIED & BERGER LLP 1801 Century Park East, Suite 1460 Los Angeles, CA 90067 Tel: (310) 557-0050 Fax: (310) 557-0056 E-mail: jdalberg@lgbfirm.com rlandau@lgbfirm.com About FirstFed Financial Irvine, Calif.-based FirstFed Financial Corp. is the bank holding company for First Federal Bank of California and its subsidiaries. The Bank was closed by federal regulators on December 18, 2009. FirstFed Financial Corp. filed for Chapter 11 protection on Jan. 6, 2010 (Bankr. C.D. Calif. Case No. 10-10150). Jon L. Dalberg, Esq., at Landau Gottfried & Berger LLP, represents the Debtor in its restructuring efforts. Garden City Group is the claims and notice agent. The Debtor disclosed assets at $1 million and $10 million, and debts at $100 million and $500 million. FORD MOTOR: Note Redemption Won't Affect Moody's 'Ba2' Rating ------------------------------------------------------------- Moody's Investors Service said that the Ba2 Corporate Family Rating, SGL-2 Speculative Grade Liquidity rating and positive outlook of Ford Motor Company remain unchanged following the company's announcement that it will redeem $3 billion in trust preferred securities for cash on March 15, 2011. This transaction is consistent with Ford's stated objective of deleveraging its balance sheet while maintaining sound liquidity. The pending $3 billion redemption follows the $14.5 billion in debt reductions achieved during 2010, and will result in pro forma adjusted debt of $33 billion (reflecting Moody's standard adjustments for operating leases and underfunded pension liabilities). Moody's estimates the annualized interest savings of these debt repayments approximate $1.2 billion. The $3 billion redemption would reduce Ford's 2010 year-end cash position to $17.5 billion. This cash position, when combined with approximately $7 billion available under committed credit facilities, will provide Ford with total liquidity of approximately $25 billion. Ford's major liquidity requirement is the approximately $7 billion to $8 billion that Moody's estimate it will need to fund intra- month working capital requirements. Debt maturities are relatively modest at approximately $2 billion during the coming twelve months. Following the redemption, Ford's liquidity sources of $25 billion would exceed these requirements by approximately $15 billion, a sizable margin. Ford must also contend with the potentially sizable cash burn and the resulting liquidity requirement that might arise in the event of a prolonged strike in connection with the September expiration of its UAW contract. Ford's total liquidity sources of $25 billion should provide ample coverage of all requirements - - including those that might result from a strike. Nevertheless, the critical nature of the upcoming negotiations and the uncertainty surrounding the resolution constrain the company's Speculative Grade Liquidity rating at SGL-2. The Ba2 CFR and positive outlook continue to reflect Moody's expectation that Ford's credit metrics will improve during 2011, and could support an upgrade during the next 12 to 18 months. The most significant challenge facing the company is the need to negotiate a new UAW contract. A successful resolution of the contract negotiations and a preservation of Ford's sizable liquidity position could support an upgrade of its long term and Speculative Grade Liquidity ratings. The last rating action for Ford was a change in outlook to positive on January 28, 2011. FORUM HEALTH: Debtor & Committee Have Competing Ch. 11 Plans ------------------------------------------------------------ Forum Health and its affiliated debtors filed on Friday a proposed Chapter 11 plan of liquidation and an explanatory disclosure statement. The Debtor is facing a competing Chapter 11 plan from the unsecured creditors committee, which filed a plan earlier this month. In August 2010, following a bankruptcy auction, a substantial portion of Debtors' assets -- Forum's healthcare services network consisting of three hospital campuses -- were sold to Youngstown Ohio Hospital Company, LLC, an affiliate of CHS Community Health Systems, Inc., for of $69,800,000. The sale closed on October 1, 2010. The proceeds of the sale of the Debtors' key assets were paid to holders of prepetition secured bonds owed a total $194 million. Certain assets were excluded from the sale, including but not limited to cash, insurance proceeds, causes of action and amounts due to a debtor from intercompany transactions. The Debtors' Plan generally provides for the liquidation of the Debtors' remaining assets and distribution of proceeds to creditors in accordance with the Bankruptcy Code. Any remaining unpaid secured claims will be paid in full under the Debtors' Plan. According to the Disclosure Statement, the allowed claims of general unsecured creditors will not be paid in full under the Plan due to insufficient funds from liquidation of the Debtors' assets. Holders of unsecured creditor claims aggregating $152,000,000 to $167,000,000 are expected to recover 4.88% to 5.36%. Most of the Pension Benefit Guaranty Corp.'s $140,000,000 claim -- on account of unfunded contributions for a pension plan for 7,132 former employees of Forum Health -- is treated as an unsecured claim. Holders of equity interests won't receive any distributions. The Debtors have ceased operations as a healthcare provider and the Debtors continue to wind down their affairs. A copy of the disclosure statement explaining the Debtors Plan is available for free at: http://bankrupt.com/misc/ForumHealth_PlanOutline.pdf Committee Plan Since November 2010, the Debtors engaged in negotiations with the Official Committee of Unsecured Creditors regarding a joint Chapter 11 plan. During the course of those discussions, however, the Committee raised an objection to the Debtors' proposal to (i) exclude two affiliates -- Western Reserve Health Foundation and Trumbull Memorial Hospital Foundation -- Foundations from a joint plan and (ii) seek dismissal of the Foundations' cases. The Committee rejected the Debtors' suggestion and, instead, filed its own plan and disclosure statement. The Committee Plan estimates that unsecured creditors will recover 15% to 17% of their claims. A copy of the disclosure statement explaining the Committee Plan is available for free at: http://bankrupt.com/misc/ForumHealth_Committee_DS.pdf The objection deadline for the Creditors' Committee disclosure statement is March 8, 2011, and the hearing is March 15, 2011. As a result of the Committee's plan filing, the Debtors completed its own Chapter 11 plan and filed it in time so that the Court can address the two plans and the motions to dismiss together at the hearing on March 15, 2011, or such other time as the Court deems appropriate. The Committee Plan contemplates substantive consolidation of the all the Debtor entities. The Debtors do not believe that substantive consolidation as proposed in the Committee Plan is appropriate. The Debtors' attorneys may be contacted at: Shawn M. Riley, Esq. Sean D. Malloy, Esq. Matthew A. Salerno, Esq. Melissa S. Giberson, Esq. McDONALD HOPKINS LLC 600 Superior Avenue, East, Suite 2100 Cleveland, OH 44114-2653 Telephone: (216) 348-5400 Facsimile: (216) 348-5474 E-mail: sriley@mcdonaldhopkins.com smalloy@mcdonaldhopkins.com msalerno@mcdonaldhopkins.com mgiberson@mcdonaldhopkins.com - and - Michael A. Gallo, Esq. NADLER NADLER & BURDMAN CO., L.P.A. 20 West Federal Street, Suite 60 Youngstown, OH 44503-1423 Telephone: (330) 744-0247 Facsimile: (330) 744-8690 E-mail: gallo@nnblaw.com About Forum Health Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). In its petition, Forum Health estimated $100 million to $500 million in assets and debts. McDonald Hopkins LLC and Nadler, Nadler and Burdman Co., L.P.A., serve as the Debtors' chapter 11 co-counsel. Huron Consulting Services LLC is the Debtors' Chief Restructuring Officer and Financial Support Personnel. Houlihan Lokey Howard and Zukin Capital, Inc. are the Debtors' investment bankers. Ernst & Young LLP is the Debtors' independent auditor. Baker and Hostetler and Thompson Hine LLP serve as special counsel. Squire, Sanders & Dempsey LLP serve as the bond counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. Alston & Bird LLP serves as counsel to the Official Committee of Unsecured Creditors. Grant Thornton LLP is the financial advisor to the Creditors Committee. FREESCALE SEMICONDUCTOR: To Raise Up to $1.15 Billion in IPO ------------------------------------------------------------ Michael J. de la Merced, writing for The New York Times' DealBook, reports that Freescale Semiconductor filed to go public on Friday, seeking to raise money to pay down its debt load. According to the report, Freescale said it intends to use proceeds from the stock sale to repay debt. According to the DealBook, the filing with the Securities and Exchange Commission did not disclose a fundraising target, giving only a $1.15 billion provisional goal as a way to calculate registration fees. The DealBook relates it isn't clear whether Freescale's private equity owners, including the Blackstone Group, TPG Capital, the Carlyle Group and Permira Advisers, will sell shares in the offering. The DealBook notes Freescale has labored under a significant debt burden gained as part of its $17.6 billion takeover. The report relates Citigroup and Deutsche Bank are leading the offering, with Barclays Capital, Credit Suisse and JPMorgan Chase also working as underwriters. Freescale reported net sales for the fourth quarter of 2010 of $1.18 billion, compared to $1.15 billion in the third quarter of 2010, and $951 million in the fourth quarter last year. Net sales for calendar year 2010 were $4.46 billion, compared to $3.51 billion in calendar year 2009. Freescale reported a net loss of $102 million for the three months ended December 31, 2010, from a net loss of $156 million for the three months ended October 31, 2010, and a net loss of $114 million for the December 31, 2009 quarter. Freescale posted a net loss of $1.053 billion for the full year 2010 from net income of $748 million for the entire 2009. At December 31, 2010, Freescale had total assets of $4.269 billion; total current liabilities of $1.019 billion, long-term debt of $7.582 billion, and other liabilities of $602 million; and stockholders' deficit of $4.934 billion. About Freescale Semiconductor Austin-Texas based Freescale Semiconductor Holdings I, Ltd. -- http://www.freescale.com/-- is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial and networking markets. The privately held company has design, research and development, manufacturing or sales operations around the world. Freescale Semiconductor carries a 'CCC' issuer default rating from Fitch Ratings. Freescale carries a B-/Stable/-- corporate credit rating from Standard & Poor's. G-I HOLDINGS: Asbestos Property Damage Claim Was Time-Barred ------------------------------------------------------------ WestLaw reports that an asbestos-related property damage claim filed by a housing authority in the Chapter 11 case of a successor-in-interest to a manufacturer of housing products that contained asbestos, to the extent that it constituted a tort-based claim for the costs of removing asbestos products from its buildings, was not a claim for any injury caused by the latent effects of exposure to asbestos and was a claim for a condition of which the housing authority was or should have been aware before New York's "discovery" rule for toxic tort claims went into effect. Thus, the claim was subject to a three-year statute of limitations which began to run immediately on installation of the asbestos products in the housing authority's buildings. Thus, the housing authority's claim, to the extent sounding in tort, had to be disallowed as unenforceable under New York law on limitations grounds. In re G-I Holdings, Inc., --- B.R. ----, 2010 WL 5690394 (Bankr. D. N.J.) (Gambardell! a, J.). The Honorable Rosemary Gambardella entered her order disallowing the New York City Housing Authority's $500 million proof of claim on Dec. 14, 2010. Based in Wayne, New Jersey, G-I Holdings, Inc., is a holding company that indirectly owns Building Materials Corporation of America, a manufacturer of premium residential and commercial roofing products. The Company filed for bankruptcy after already spending $1.5 billion paying asbestos claims from the 1967 acquisition of Ruberoid Co. G-I Holdings, Inc., fka GAF Corporation, filed a chapter 11 petition (Bankr. D. N.J. Case No. 01-30135) on Jan. 5, 2001, and continued to operate its business as a debtor-in-possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. ACI, Inc., a subsidiary of G-I Holdings, filed a voluntary chapter 11 petition (Bankr. D. N.J. Case No. 01-38790) on Aug. 3, 2001. On Oct. 10, 2001, the Bankruptcy Court entered an Order directing the joint administration of the G-I Holdings and ACI bankruptcy cases. Martin J. Bienenstock, Esq., Irena Goldstein, Esq., and Timothy Q. Karcher, Esq., at Dewey & Leboeuf LLP, represent the Debtors as counsel. Dennis J. O'Grady, Esq., and Mark E. Hall, Esq., at Riker, Danzig, Scherer, Hyland, represent the Debtors as co-counsel. An Official Committee of Unsecured Creditors was appointed on Jan. 18, 2001, by the United States Trustee pursuant to Section 1102(a) of the Bankruptcy Code to represent those individuals who allegedly suffered injuries related to asbestos exposure from products manufactured by the predecessors of G-I Holdings. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. On Oct. 10, 2001, the Bankruptcy Court appointed C. Judson Hamlin as the Legal Representative, a fiduciary to represent the interests of persons who hold present and future asbestos-related claims against G-I. Keating, Muething & Klekamp, P.L.L., is the principal counsel to the Legal Representative of Present and Future Asbestos-Related Demands. G-I Holdings is the successor-in-interest to GAF Corporation, an entity named in approximately 500,000 asbestos-related lawsuits. See G-I Holdings, Inc. v. Those Parties Listed On Exhibit A (In re G-I Holdings, Inc.), 313 B.R. 612, 621 (Bankr. D. N.J. 2004). The Committee submitted that, as successor-in-interest to GAF, G-I Holdings remained liable for approximately 150,000 asbestos- related lawsuits filed, but unresolved, as of the Petition Date and for unknown numbers of asbestos-related claims that would be filed in the future. Id. In early 1994, GAF Building Materials Corporation, an indirect subsidiary of GAF, formed a new corporation as a wholly-owned subsidiary known as Building Materials Corporation of America ("BMCA"). Id. Pursuant to that transaction, BMCA received substantially all of the assets of GAF's roofing products business and expressly assumed $204 million of asbestos-related liability, with G-I indemnifying BMCA against any additional such liability. Id. BMCA, also an indirect subsidiary of G-I Holdings, is the primary operating subsidiary and principal asset of G-I Holdings. Id. In early 2007, the Debtors, the Committee and the Legal Representative commenced mediation under the auspices of former United States District Judge Nicholas H. Politan in an effort to resolve the asbestos-related lawsuits. Subsequently, the Parties outlined the principal terms of a global settlement and endeavored to complete a final global settlement with comprehensive documentation in the form of a proposed Chapter 11 plan and its ancillary documents. To preserve the status quo, the Parties mutually agreed to request a stay of all litigation which would be covered under the final global settlement from this Court and other courts of competent jurisdiction. Although lengthy and initially unsuccessful, the negotiations continued until the parties reached a settlement culminating in an agreement in early August 2008. On Aug. 21, 2008, the Parties filed the Joint Plan of Reorganization of G-I Holdings Inc. and ACI Inc. Pursuant to Chapter 11 of the Bankruptcy Code that implemented the Global Settlement of all asbestos-related lawsuits naming G-I Holdings and any other related entities as defendant(s). The Joint Plan of Reorganization provided for the creation of an asbestos trust pursuant to Section 524(g) of the Bankruptcy Code, to which all asbestos-related lawsuits against the Debtors now and in the future would be channeled. Pursuant to the Global Settlement, the Asbestos Trust would assume the Debtors' liability for asbestos- related lawsuits, in exchange for cash on the effective date of the Joint Plan of Reorganization in an amount not to exceed $215 million, and a note in the amount of $560 million issued by the reorganized Debtors and secured by a letter of credit. See Doc. 8190, Joint Plan of Reorganization Sec. 4.4. GENERAL MOTORS: Investigators Probe Funding of New Delphi Pensions ------------------------------------------------------------------ Federal auditors said they are looking at whether the U.S. Government pressured General Motors Corp. to provide additional funding for Delphi Corp.'s pension plan for hourly workers, Neil Roland of Automotive News reported. The information is disclosed in Neil Barofsky, the special inspector general for the Troubled Asset Relief Program's quarterly report filed with the U.S. Congress, Automotive News stated. The TARP's audit is focused on GM's decision after it filed for bankruptcy to provide benefits for Delphi's hourly workers without doing the same for salaried retirees. The audit comes as U.S. Representative Christopher Lee and other lawmakers wrote to the U.S. Department of the Treasury regarding the unfair treatment of Delphi salaried retirees who saw their pension benefits cut by as much as 70%, Automotive News said. Mr. Barofsky also stated in his report that he is looking into the Treasury's role in GM's acquisition of GM Financial Company, Inc., formerly AmeriCredit, Automotive News mentioned. GM Financial may ultimately compete against Ally Financial Inc., another recipient of federal bailout funds in 2008, according to the Congressional Oversight Panel, Automotive News noted. The panel headed by former U.S. Senator Ted Kauffman noted that Ally might have more trouble repaying taxpayers as a result of GM's acquisition of AmeriCredit. The panel said the Treasury declined to block GM's purchase, Automotive News added. Mr. Barofsky is also conducting an investigation on possible illegal conduct made by GM and Chrysler in their dealer reductions, but he did not indicate when his audits will be completed, Automotive News relayed. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- was a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on January 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On October 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will remain responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) 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. Garden City Group is the claims and notice agent of the Debtors. 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) GENERAL MOTORS: Treasury Could Exit From New GM Next Year --------------------------------------------------------- The U.S. Department of the Treasury could sell its remaining stake in General Motors Co. within next year, a U.S. Government official disclosed, Sharon Terlep of The Wall Street Journal reported. The official cited the sale of the Treasury's GM stake within the next 12 months as "realistic," subject to GM's and the overall financial markets' performance, Ms. Terlep relayed. The Journal commented that GM is eager to cut ties with the Government, whose ownership on the automaker has limited its ability to pay executives under the terms of the bailout. GM Chief Executive Daniel Akerson said this limitation has hurt the company's ability to attract and retain executives, The Journal stated. GM has asked the Government for more flexibility on how it pays its executives, including the ability to pay more top managers a larger amount of cash, a person familiar with the matter disclosed to The Journal. The person said the Obama administration has not yet decided on GM's request. 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. Garden City Group is the claims and notice agent of the Debtors. 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) GREENBRIER COS: Keeley Discloses 8.9% Equity Stake -------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, Keeley Asset Management Corp. disclosed that it beneficially owns 2,216,650 shares of common stock of The Greenbrier Companies, Inc. representing 8.9% of the shares outstanding. The number of shares of the Company's common stock, without par value, outstanding on January 6, 2011 was 24,880,820 shares. Keeley Small Cap Value Fund owns 1,937,500 shares or 7.8% equity stake while John L. Keeley, Jr. owns 75,000 shares or 0.3% equity stake. About Greenbrier Cos. Based in Lake Oswego, Oregon, The Greenbrier Companies Inc. operates in three primary business segments: manufacturing, refurbishment and parts, and leasing and services. The manufacturing segment, operating from four facilities in the United States, Mexico and Poland, produces double-stack intermodal railcars, conventional railcars, tank cars and marine vessels. The refurbishment & parts segment performs railcar repair, refurbishment and maintenance activities in the United States and Mexico. The leasing & services segment owns roughly 8,000 railcars and provides management services for roughly 225,000 railcars. The Company's balance sheet as of Nov. 30, 2010, showed $1.1 billion in total assets, $812.7 million in total assets and $296.5 million in total equity. * * * Greenbrier carries a 'Caa1' corporate family rating from Moody's Investors Service and a Speculative Grade Liquidity Rating of SGL-3. In August 2010, Moody's said Greenbrier's rating outlook is negative in consideration of the continued sluggish demand for new railcars and the company's need to address certain refinancing needs. Greenbrier carries 'B-' issuer credit ratings from Standard & Poor's Ratings Services. S&P said in May 2010 that the ratings on Greenbrier reflect the company's fair business risk profile stemming from the cyclicality of the freight car manufacturing industry; the dramatic decline in demand for new railcars as a result of slower economic growth and weaker carloadings; and limited customer diversity. The Company, accordnig to S&P, also has a highly leveraged financial risk profile, marked by increased debt balances as a result of acquisitions completed in recent years. GREENSHIFT CORP: CEO Hopeful to Make Additional Progress in 2011 ---------------------------------------------------------------- On February 7, 2011, Kevin Kreisler, chief executive officer of GreenShift Corporation, sent a letter, saying that the Company "has accomplished much during 2010," but the "the Company's market value is suppressed well below where it should be." This situation, according to Mr. Kreisler, can only be corrected with solid execution -- staying focused, earning business, increasing sales, running a profitable company and reducing the Company's debt until there is zero dilutive impact on the Company's shareholders. "Returning to positive cash flow allows us to dramatically reduce stock issuances associated with working capital financing moving forward," Mr. Kreisler said. "We are confident that we can improve upon the successes achieved last year on this front, and we are currently evaluating additional opportunities to do so." A full-text copy of the letter is available for free at: http://ResearchArchives.com/t/s?731f About Greenshift Corporation Headquartered in New York, GreenShift Corporation develops and commercializes clean technologies designed to integrate into and leverage established production and distribution infrastructure to address the financial and environmental needs of its clients by decreasing raw material needs, facilitating co-product reuse, and reducing waste and emissions. Rosenberg Rich Baker Berman & Company expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficiency as of December 31, 2009. The Company's balance sheet at Sept. 30, 2010, showed $16.97 million in total assets, $86.35 million in total liabilities, and a stockholders' deficit of $69.38 million. Stockholders' deficit was $66.53 million at June 30, 2010. GUITAR CENTER: Bank Debt Trades at 2% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Guitar Center, Inc., is a borrower traded in the secondary market at 97.63 cents- on-the-dollar during the week ended Friday, February 11, 2011, an increase of 1.46 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on October 9, 2014, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Guitar Center Guitar Center, Inc., headquartered in Westlake Village, Calif., is the largest musical instrument retailer with 312 stores and a direct response segment, which operates its websites. It operates three distinct musical retail business - Guitar Center (about 70% of revenue), Music & Arts (about 7% of revenue), and Musician's Friend (its direct response subsidiary with 24% of revenue). Total revenue is about $2 billion. Guitar Center carries 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. In December 2009, Moody's said, "The Caa1 Corporate Family Rating reflects Guitar Center's very weak credit metrics, particularly its interest coverage, as a result of its very high level of debt." GUNNALLEN FINANCIAL: M.D. Fla. Rejects Non-Debtor Releases ---------------------------------------------------------- WestLaw reports that a proposed settlement between a liquidating trustee appointed under a bankrupt security dealer's confirmed Chapter 11 plan and the dealer's liability insurer, pursuant to which the insurer agreed to pay the remaining policy proceeds into the court for distribution to securities claimants and general unsecured creditors, but only if a bar order were entered to preclude securities claimants from pursuing claims against the dealer's employees, as additional insureds under the policy, could not be approved. The bar order, which required securities claimants to accept payments of roughly 22 cents on the dollar from the insurance proceeds while giving up their right to sue non-debtor parties who were contributing nothing to the settlement, was not fair and equitable to the parties whose claims would be enjoined. In re Gunnallen Financial, Inc., --- B.R. ---- , 2011 WL 379778 (Bankr. M.D. Fla.) (Williamson, J.). The Honorable Michael G. Williamson's Findings of Fact and Conclusions of Law dated Feb. 4, 2011, are available at http://is.gd/xZWiQ7from Leagle.com. Tampa, Florida-based brokerage firm GunnAllen Financial, Inc., filed for Chapter 11 bankruptcy protection on April 26, 2010 (Bankr. M.D. Fla. Case No. 10-09635). Becky Ferrell-Anton, Esq., and Harley E. Riedel, Esq., at Stichter Reidel Blain & Prosser PA, assist the Company in its restructuring effort. GunnAllen estimated less than $50 million in assets and debts in its petition. The Company closed in March 2010 when it could not raise enough capital to appease regulators. On Oct. 18, 2010, the Bankruptcy Court entered an order confirming, as modified, the Debtor's liquidating plan. The plan appointed Soneet Kapila as Liquidating Agent to administer the Debtor's remaining assets, including any of the Debtor's rights under insurance policies. HAWKER BEECHCRAFT: Bank Debt Trades at 10% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft Acquisition Company, LLC, is a borrower traded in the secondary market at 89.72 cents-on-the-dollar during the week ended Friday, February 11, 2011, an increase of 0.88 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, is a leading manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft Acquisition Company LLC reported net sales for the three months ended September 30, 2010, of $594.7 million, a decrease of $163.0 million compared to the third quarter of 2009. During the three months ended September 30, 2010, the Company recorded an operating loss of $81.4 million, compared to an operating loss of $721.1 million during the comparable period in 2009. The improved operating loss versus the prior period was primarily due to charges of $581.5 million related to asset impairments recorded during the three months ended September 27, 2009. The Company's balance sheet at June 27, 2010, showed $3.420 billion in total assets, $3.408 billion in total liabilities, and stockholders' equity of $11.6 million. Hawker Beechcraft reported a net loss of $56.8 million on $639.3 million of total sales for the three months ended June 27, 2010, compared with net income of $172.2 million on $816.3 million of sales for the three months ended June 28, 2009. Hawker Beechcraft carries 'Caa2' corporate family and probability of default ratings from Moody's Investors Service. HARD ROCK HOTEL: NRFC Agrees to Forbear Until Feb. 28 ----------------------------------------------------- NRFC HRH Holdings LLC previously notified Hard Rock Hotel Holdings, LLC's, subsidiaries, HRHH Gaming Junior Mezz, LLC and HRHH JV Junior Mezz, LLC, that NRFC intended to auction to the public the collateral pledged in connection with Hard Rock's second mezzanine loan agreement. On February 6, 2011, certain subsidiaries of the Company, the Second Mezzanine Lender, Vegas HR Private Limited, Brookfield Financial, LLC - Series B, the members of the Company and certain other related parties entered into a Standstill and Forbearance Agreement. Pursuant to the Standstill and Forbearance Agreement, among other things, until February 28, 2011, the Mortgage Lender, First Mezzanine Lender and the Second Mezzanine Lender agreed not to take any action or assert any right or remedy arising with respect to any of the applicable loan documents against the Subsidiary Borrowers or the collateral pledged under such loan documents. The Mortgage Lender's agreement to standstill is subject to certain conditions. Additionally, pursuant to the Standstill and Forbearance Agreement, the Second Mezzanine Lender agreed to withdraw the Foreclosure Notice, and the parties agreed to jointly request that the Supreme Court of the State of New York, New York County, stay all action on the pending motions that had been filed by various parties to enjoin such foreclosure proceedings. The parties to the Standstill and Forbearance Agreement are engaged in continuing discussions regarding resolution of the Subsidiary Borrowers' obligations under the loan documents and disposition of the related collateral. The Hard Rock Hotel In connection with Hard Rock Hotel Holdings LLC's acquisition of the Hard Rock in 2007, certain subsidiaries of the joint venture entered into a debt financing comprised of a senior mortgage loan and three mezzanine loans, which provided for a $760.0 million acquisition loan that was used to fund the acquisition, of which $110.0 million was subsequently repaid according to the terms of the loan, and a construction loan of up to $620.0 million, which was fully drawn and remains outstanding as of September 30, 2010, for the expansion project at the Hard Rock. According to Morgans Hotel's Form 10-Q for the quarter ended Sept. 30, 2010, "Due to the downturn in the Las Vegas economy and Hard Rock's high degree of leverage and seasonality, Hard Rock's operating cash flows have not been sufficient to cover debt service under the Hard Rock Credit Facility for the nine month period ended September 30, 2010 and there were months when the joint venture was forced to use funds from the reserves it had established under the Hard Rock Credit Facility to meet its liquidity needs." "The joint venture anticipates that it will not be able to fully fund both its operating expenses and its debt service on the Hard Rock Credit Facility, solely from its revenues until the economic conditions affecting Las Vegas have improved from their current conditions. The joint venture is reviewing its options to identify the best possible resolution to its liquidity position, including pursuing discussions with the joint venture's lenders." NorthStar Realty Finance Corp., is a participant lender in the Hard Rock Credit Facility. About Hard Rock Hotel Holdings Hard Rock Hotel Holdings, LLC, is a joint venture formed in January 2007 to acquire the Hard Rock Hotel & Casino in Las Vegas. In February 2007, Hard Rock Hotel, funded one-third, or approximately $57.5 million, by the Morgans Hotel, and two-thirds, or approximately $115.0 million, by DLJ Merchant Banking Partners, completed the acquisition of Hard Rock Hotel & Casino in Las Vegas. Hard Rock Hotel had assets of $1.29 billion, liabilities of $1.43 billion and members' deficit of $143.3 million as of Sept. 30, 2010. Net loss was $80.0 million on $179.3 million of net revenue for nine months ended Sept. 30, 2010, compared with a net loss of $70.1 million on $126.06 million of net revenue for nine months ended Sept. 30, 2009. About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company's balance sheet at Sept. 30, 2010, showed $759.10 million in total assets, $801.22 million in total liabilities, and a stockholders' deficit of $42.12 million. HERCULES OFFSHORE: Debt Trades at 1.5% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Hercules Offshore Inc. is a borrower traded in the secondary market at 98.52 cents- on-the-dollar during the week ended Friday, February 11, 2011, an increase of 0.98 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 650 basis points above LIBOR to borrow under the facility. The bank loan matures on July 11, 2013, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Troubled Company Reporter said on November 17, 2010, Moody's Investors Service downgraded the Corporate Family Rating of Hercules Offshore Inc. and the Probability of Default Rating to Caa1 from B2. Moody's also downgraded Hercules' 10.5% senior secured notes due 2017, its senior secured revolving credit facility due 2012, and its senior secured term loan B due 2013, all to Caa1 with LGD3, 45%. The outlook remains negative. "The inability of Hercules to generate meaningful free cash flow despite limited reinvestment in its aging fleet of rigs is cause for concern," commented Stuart Miller, Moody's Senior Analyst. "Without a significant de-leveraging of its balance sheet, Hercules is following a path that could lead to financial hardship at the first sign of a market softening." Hercules' Caa1 CFR rating reflects its highly leveraged balance sheet and limited ability to generate free cash flow. The Caa1 rating on the senior secured notes reflects their pari passu secured position in Hercules' capital structure relative to the senior secured credit facilities. HOMER CITY: Fitch Downgrades Ratings on $830 Mil. Bonds to 'BB' --------------------------------------------------------------- Fitch Ratings has downgraded Homer City Funding, LLC's $830 million senior pass-through bonds to 'BB' from 'BBB-'. In addition, Fitch has also placed the bonds on Rating Negative Watch. The downgrade to 'BB' from 'BBB-' reflects the concern of rising coal costs as the main component of operating expenses for the Homer City plant as coal contracts expire. The project is exposed to merchant risks as energy is sold directly into the PJM and NYISO markets using coal purchased through short-term contracts (1-3 years) or on the spot market. Though the coal contracts provide some protection from price fluctuations, NAPP coal prices (directly related to the price of coal to Homer City) are not expected to decrease in the mid to long term, indicating that the higher price structure now for 2010-2012 may continue on an ongoing basis, reducing margins and decreasing cash flow from the project. Favorably, Fitch also notes that the project has the operational flexibility to utilize lower cost coal sources which could help lower its cost structure. Lower clearing prices in the merchant market have caused an increase in merchant risk while energy demand has remained low due to a sluggish economy. Low gas prices are projected to continue in the short- to mid-term indicating that gas-fired generation may continue to be dispatched ahead of coal plants in certain markets for some time. Historical annual senior rent service coverage ratio has been strong with coverage above 2.0 times through 2009 which can be attributed to high-priced energy hedges. With consideration to the fact that these hedges are set to expire in 2010, a revised Fitch Rating Case utilizes projected merchant energy, capacity and coal prices based on a low gas price scenario. The result is a volatile SRCR that ranges from sub 1.0x to above 2.0x through the term of the bonds. This degree of potential deterioration in SRCR supports a downgrade into the 'BB' category. This scenario represents what Fitch believes is a likely cost structure for the project going forward given the recent performance of similar merchant plants. Negative pressure still exists on dark spreads in the mid term. On Feb. 10, 2011, the plant experienced an accidental steam release rupture that injured some workers and forced the 620-MW unit 1 out of service. This outage is likely to cause a significant loss in generation hours for 2011, further impacting SRCR. The Negative Watch reflects the uncertainty related to this incident and will result in a review of the credit in six months in order assess the impact and the possible role that business interruption insurance may play in regard to the steam release. EME Homer City Generation L.P. leases and operates a single facility with three coal-fired electric generating units in western Pennsylvania with an aggregate capacity of 1,884 MW. HCG is an indirect, wholly owned subsidiary of Edison Mission Energy (IDR rated 'B', Outlook Negative by Fitch). EME is a wholly owned subsidiary of Mission Energy Holding Company and is an indirect wholly owned subsidiary of Edison International. In May 1999, EME refinanced $830 million of acquisition debt secured by the facility. In 2001, General Electric Capital Corp. purchased the facility for cash and assumed the rated debt as part of a sale- leaseback transaction with HCG. The debt was exchanged for the pass-through bonds, which were assumed by a special purpose vehicle, Homer City Funding LLC, indirectly owned by GECC. HCF bondholders rely solely on rent payments received from HCG. HUNTINGTON INGALLS: Moody's Keeps 'Ba2' Corp. Family Rating ----------------------------------------------------------- Moody's Investors Service said the ratings assigned to Huntington Ingalls Industries, Inc. (Ba2 CFR, Baa3 senior secured bank facility, Ba3 senior unsecured notes) are currently unaffected by disclosure of a False Claims Act complaint against Northrop Grumman Corporation's shipbuilding business, which is being spun off to form Huntington Ingalls. The development is potentially negative, however the spin off has not yet occurred and the company has not yet issued any debt securities. Huntington Ingalls Industries, Inc., after it is spun off of Northrop Grumman Corporation, will be an independent company. Huntington Ingalls provides full service design, engineering, construction, and lifecycle support of major surface ship programs for the U.S. Navy. Moody's estimate revenues in 2010 were approximately $6.5 billion. IA GLOBAL: RXR Cross Border Discloses 5.0% Equity Stake ------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission on February 7, 2011, RXR Cross Border Investment Un disclosed that it beneficially owns 559,192 shares of common stock of IA Global, Inc. representing 5.00% of the shares outstanding. As of November 19, 2010 there were issued and outstanding 7,621,029 shares of the Company's common stock. About IA Global San Francisco, Calif.-based IA Global, Inc. (OTCQB: IAGI.OB) -- http://www.iaglobalinc.com/-- is a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions. The Company is utilizing its current partnerships to acquire growth businesses in target sectors and markets at discounted prices. The Company is actively engaging in discussions with businesses that would benefit from our business acumen and marketing expertise, knowledge of Asian Markets, and technology infrastructure. The Company's balance sheet at Sept. 30, 2010, showed $4.65 million in total assets, $3.30 million in total current liabilities, $2.79 million in long-term debt, and a stockholders' deficit of $1.45 million. As reported in the Troubled Company Reporter on July 20, 2010, Sherb & Co., LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has incurred significant operating losses, and has a working capital deficit as of March 31, 2010. IMAGEWARE SYSTEMS: Bruce Toll Discloses 27.39% Equity Stake ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission on February 7, 2011, Bruce Toll disclosed that he beneficially owns 8,394,295 shares of common stock of ImageWare Systems, Inc., representing 27.39% of the shares outstanding. The number of shares of Common Stock of the Company, with $0.01 par value, outstanding on May 19, 2010 was 23,238,777. BET Funding LLC owns 6,400,000 shares or 20.88% equity stake while BRU Holding Co., LLC owns 583,000 shares or 1.90% equity stake. About ImageWare Systems Headquartered in San Diego, California, ImageWare Systems, Inc. is a leader in the emerging market for software-based identity management solutions, providing biometric, secure credential, law enforcement and enterprise authorization. Its "flagship" product is the IWS Biometric Engine. Scalable for small city business or worldwide deployment, the Company's biometric engine is a multi- biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. Its law enforcement products provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software. * * * ImageWare Systems has not timely filed its financial reports with the Securities and Exchange Commission. The latest balance sheet, which is as of June 30, 2009, showed total assets of $5,400,000, total liabilities of $8,149,000, and a shareholders' deficit of $2,749,000. According to the Company's Form 10-Q, there is substantial doubt about the Company's ability to continue as a going concern. The Company cited continuing losses, negative working capital and negative cash flows from operations. INDEPENDENCE TAX: Dec. 31 Balance Sheet Upside-Down by $5.1-Mil. ---------------------------------------------------------------- Independence Tax Credit Plus L.P. filed its quarterly report on Form 10-Q, reporting net income of $15.6 million on $634 of total revenues for the three months ended December 31, 2010, compared with net income of $46,996 on $2,409 of total revenues for the same period a year ago. The Partnership's balance sheet at December 31, 2010, showed $4.0 million in total assets, $9.1 million in total liabilities, and a partners' deficit of $5.1 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://researcharchives.com/t/s?7323 About Independence Tax Based in New York, Independence Tax Credit Plus L.P. is a limited partnership which was formed under the laws of the State of Delaware on November 7, 1990. The general partner of the partnership is Related Independence Associates L.P., a Delaware limited partnership. The general partner of the General Partner is Related Independence Associates Inc., a Delaware corporation. The ultimate parent of the General Partner is Centerline Holding Company. The partnership was formed to invest as a limited partner in other partnerships that own apartment complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, some of which may also be eligible for the historic rehabilitation tax credit. The partnership's investment in each local partnership represents from 98% to 98.99% of the partnership's interests in the local partnership. The partnership originally held ownership interests in twenty-eight local partnerships. The partnership does not intend to acquire additional properties. The Partnership is currently in the process of disposing of all of its investments. It is anticipated that the completion of this process will take less than one year. * * * As reported in the Troubled Company Reporter on June 29, 2010, Trien Rosenberg Weinberg Ciullo & Fazzari LLP, in New York, noted that the Company's consolidated financial statements for the fiscal year ended March 31, 2010, include the financial statements of three subsidiary partnerships with significant uncertainties. The financial statements of these subsidiary partnerships were prepared assuming that they will continue as going concerns. These three subsidiary partnerships' net losses aggregated $10,504,227 (2009 Fiscal Year) and $551,341 (2008 Fiscal Year) and their assets aggregated $6,189,416 and $23,400,218 at March 31, 2010, and 2009, respectively. INDEPENDENCE TAX II: Dec. 31 Balance Sheet Upside-Down by $44.9MM ----------------------------------------------------------------- Independence Tax Credit Plus L.P. II filed its quarterly report on Form 10-Q, reporting a net loss of $691,597 on $1.9 million of total revenues for the fiscal third quarter ended December 31, 2010, compared with a net loss of $816,575 on $2.0 million of total revenues for the same period a year earlier. Independence Tax II's balance sheet at December 31, 2010, showed $32.9 million in total assets, $77.8 million in total liabilities, and a partners' deficit of $44.9 million. A full-text copy of the Partnership's Form 10-Q is available for free at http://researcharchives.com/t/s?7324 About Independence Tax Credit Plus L.P. II Based in New York, Independence Tax Credit Plus L.P. II was organized on Feb. 11, 1992, and commenced its public offering on Jan. 19, 1993. The general partner of the Partnership is Related Independence Associates L.P., a Delaware limited partnership. The general partner of Related Independence Associates L.P. is Related Independence Associates Inc., a Delaware Corporation. The ultimate parent of Related Independence Associates L.P. is Centerline Holding Company. The Partnership's business is primarily to invest in other partnerships owning leveraged apartment complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, some of which may also be eligible for the historic rehabilitation tax credit. The Partnership is in the process of developing a plan to dispose of all of its investments. * * * As reported in the Troubled Company Reporter on July 5, 2011, Trien Rosenberg Weinberg Ciullo & Fazzari LLP, in New York, noted that the Partnership's consolidated financial statements for the fiscal year ended March 31, 2010, include the financial statements of two subsidiary partnerships with significant uncertainties. The financial statements of these subsidiary partnerships were prepared assuming that they will continue as going concerns. These subsidiary partnership's net losses aggregated $466,043 (2009 Fiscal year) and $841,207 (2008 Fiscal year), and their assets aggregated $464,755 and $4,748,430 at March 31, 2010, and 2009, respectively. INDEPENDENCE TAX III: Dec. 31 Balance Sheet Upside-Down by $27.9MM ------------------------------------------------------------------ Independence Tax Credit Plus L.P. III filed its quarterly report on Form 10-Q, reporting net income of $4.5 million on $1.5 million of total revenues for the three months ended December 31, 2010, compared with a net loss of $836,051 on $1.5 million of revenue for the same period of 2009. The Partnership's balance sheet at December 31, 2010, showed $21.6 million in total assets, $49.5 million in total liabilities, and a partners' deficit of $27.9 million. A full-text copy of the Form 10-Q, is available for free at: http://researcharchives.com/t/s?7327 About Independence Tax III Independence Tax Credit Plus L.P. III is a limited partnership which was formed under the laws of the State of Delaware on December 23, 1993. The Partnership invests in limited partnerships that own apartment complexes. Related Independence Associates III L.P. serves as the general partner of Independence Tax Credit Plus L.P. III. The Partnership is based in New York City. The Partnership originally invested all of its net proceeds in twenty Local Partnerships of which approximately $120,000 remains to be paid to the Local Partnerships (including approximately $115,000 being held in escrow). The Partnership is in the process of developing a plan to dispose of all of its investments. It is anticipated that the process will continue to take a number of years. * * * As reported in the Troubled Company Reporter on June 29, 2010, Trien Rosenberg Weinberg Ciullo & Fazzari LLP, in New York, noted that the Partnership's consolidated financial statements for the fiscal year ended March 31, 2010, include the financial statements of two subsidiary partnerships with significant uncertainties. The financial statements of these subsidiary partnerships were prepared assuming that they will continue as going concerns. These two subsidiary partnerships' net losses aggregated $4,959,477 (2009 Fiscal Year) and their assets aggregated $1,938,832 at March 31, 2010. INDEPENDENCE TAX IV: Dec. 31 Balance Sheet Upside-Down by $14.1MM ----------------------------------------------------------------- Independence Tax Credit Plus L.P. IV filed its quarterly report on Form 10-Q, reporting a net loss of $319,682 on $1.2 million of revenues for the three months ended December 31, 2010, compared with a net loss of $552,563 on $1.1 million of revenues for the same period of the prior fiscal year. The Partnership's balance sheet at December 31, 2010, showed $23.2 million in total assets, $37.3 million in total liabilities, and a partners' deficit of $14.1 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7338 About Independence Tax IV Headquartered in New York, Independence Tax Credit Plus L.P. IV Independence Tax Credit Plus L.P. IV is a limited partnership which was formed under the laws of the State of Delaware on February 22, 1995. The general partner of the Partnership is Related Independence L.L.C., a Delaware limited liability company. Centerline Holding Company is the ultimate parent of Centerline Affordable Housing Advisors LLC, the managing member of Related Independence L.L.C. The Partnership's initial business was to invest in other partnerships owning leveraged apartment complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, some of which may also be eligible for the historic rehabilitation tax credit. The Partnership is currently invested in twelve local partnerships. The Partnership is currently in the process of developing a plan to dispose of all its investments. It is anticipated that this process will continue to take a number of years. INDYMAC BANCORP: SEC Charges Former Executives With Fraud --------------------------------------------------------- The Securities and Exchange Commission on Friday charged three former senior executives at IndyMac Bancorp with securities fraud for misleading investors about the mortgage lender's deteriorating financial condition. The SEC alleges that former CEO Michael W. Perry and former CFOs A. Scott Keys and S. Blair Abernathy participated in the filing of false and misleading disclosures about the financial stability of IndyMac and its main subsidiary, IndyMac Bank F.S.B. The three executives regularly received internal reports about IndyMac's deteriorating capital and liquidity positions in 2007 and 2008, but failed to ensure adequate disclosure of that information to investors as IndyMac sold millions of dollars in new stock. IndyMac Bank was a federally-chartered thrift institution regulated by the Office of Thrift Supervision (OTS) and headquartered in Pasadena, Calif. The OTS closed the bank on July 11, 2008, and placed it under Federal Deposit Insurance Corporation receivership. IndyMac filed for bankruptcy protection later that month. "These corporate executives made false and misleading disclosures about IndyMac at a time when the company's financial condition was rapidly deteriorating. Truthful and accurate disclosure to investors is particularly critical during a time of crisis, and the federal securities laws do not become optional when the news is negative," said Lorin L. Reisner, Deputy Director of the SEC's Division of Enforcement. According to the SEC's complaints filed in U.S. District Court for the Central District of California, Perry and Keys defrauded new and existing IndyMac shareholders by making false and misleading statements about IndyMac's financial condition in its 2007 annual report and in offering materials for the company's sale of $100 million in new stock to investors. In early February 2008, IndyMac projected that it would return to profitability and continue to pay preferred dividends in 2008 without having to raise new capital. In late February 2008, Perry and Keys knew that contrary to the rosy projections released just two weeks earlier, IndyMac had begun raising new capital to protect IndyMac's capital and liquidity positions. Specifically, Perry and Keys regularly received information that IndyMac's financial condition was rapidly deteriorating and authorized new stock sales as a result. Yet they fraudulently failed to fully disclose IndyMac's precarious financial condition in the 2007 annual report and the offering documents for the new stock sales. The SEC further alleges that Perry knew that rating downgrades in April 2008 on bonds held by IndyMac Bank had exacerbated its capital and liquidity positions to the extent that IndyMac had no choice but to suspend future preferred dividend payments by no later than May 2, 2008. This material information was not disclosed in IndyMac's ongoing stock offerings. Perry also failed to disclose in various SEC filings or a May 2008 earnings conference call that IndyMac would not have been "well- capitalized" at the end of its first quarter without departing from its traditional method for risk-weighting subprime assets and backdating an $18 million capital contribution. According to the SEC's complaint, Abernathy replaced Keys as IndyMac's CFO in April 2008. He similarly made false and misleading statements in the offering documents used in selling new IndyMac stock to investors despite regularly receiving internal reports about IndyMac's deteriorating capital and liquidity positions. The SEC also alleges that in summer 2007 while serving as IndyMac's executive vice president in charge of specialty lending, Abernathy made false and misleading statements about the quality of the loans in six IndyMac offerings of residential mortgage- backed securities (RMBS) totaling $2.5 billion. Abernathy received internal reports each month revealing that 12 to 18 percent of IndyMac's loans contained misrepresentations regarding important loan and borrower characteristics. However, the RMBS offering documents stated that nothing had come to IndyMac's attention that any loan included in the offering contained a misrepresentation. The SEC alleges that Abernathy failed to ensure that the quality of IndyMac's loans was accurately disclosed and failed to disclose that information had come to IndyMac's attention about loans containing misrepresentations. Abernathy agreed to settle the SEC's charges without admitting or denying the allegations. He consented to the entry of an order that permanently restrains and enjoins him from violating Section 17(a)(2) and 17(a)(3) of the Securities Act and requires him to pay a $100,000 penalty, $25,000 in disgorgement, and prejudgment interest of $1,592.26. Abernathy also consented to the issuance of an administrative order pursuant to Rule 102(e) of the SEC's Rules of Practice, suspending him from appearing or practicing before the SEC as an accountant. He has the right to apply for reinstatement after two years. The SEC's complaint charges Perry and Keys with knowingly violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and aiding and abetting IndyMac's violations of its periodic reporting requirements under Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Perry also is charged with aiding and abetting IndyMac's reporting violations under Exchange Act Rules 13a-11 and 13a-13. The SEC's complaint against Perry and Keys seeks permanent injunctive relief, an officer and director bar, disgorgement of ill-gotten gains with prejudgment interest, and a financial penalty. The SEC acknowledges the assistance of the FDIC in this investigation. A copy of the SEC's lawsuit against Mr. Abernathy is available at http://is.gd/NYQz5e Susan Beck, writing for The Am Law Litigation Daily, reports that D. Jean Veta, Esq., a partner at Covington & Burling, who represents former CEO Perry, called the SEC's complaint "completely meritless." She According to Am Law, Ms. Veta said, "The complaint also makes no sense. At the same time that the SEC claims Mr. Perry intentionally failed to disclose certain obscure details to investors, Mr. Perry was investing millions of dollars of his own money in IndyMac stock. He believed in IndyMac and did not sell a single share of IndyMac stock since 2005." Ms. Veta may be reached at: D. Jean Veta, Esq. COVINGTON & BURLING LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004-2401 Tel: 202-662-5294 E-mail: jveta@cov.com Am Law reports that Gregory Bruch, Esq., a Willkie Farr & Gallagher partner who is representing former CFO Keys, said the charges are "extremely weak." He points out that his client's alleged wrongdoing covers just an eight-week period from March to April 2008. "The SEC said there were rosy projections. They were not rosy. They were fairly candid and dark." Mr. Bruch also adds that his client didn't profit from the alleged misdeeds. "He was paid a salary and got no bonus and didn't sell his options." Mr. Bruch may be reached at: Gregory S. Bruch, Esq. WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, D.C. 20006-1238, U.S.A. Tel: 202-303-1205 Fax: 202-303-2205 E-mail: gbruch@willkie.com The report says Mr. Abernathy is represented by: Robert Fairbank, Esq. FAIRBANK & VINCENT 444 South Flower Street, Suite 3860 Los Angeles, CA 90071 Tel: (213) 891-9015 Fax: (213) 891-9011 E-mail: rfairbank@fairbankvincent.com Mr. Fairbank declined to comment. About Indymac Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- was the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. All non-brokered insured deposit accounts and substantially all of the assets of the bank were transferred to IndyMac Federal Bank, F.S.B., Pasadena, CA, a newly chartered full-service FDIC-insured institution. On March 19, IndyMac Federal Bank was sold to OneWest Bank, F.S.B., Pasadena, California. OneWest Bank, FSB is a newly formed federal savings bank organized by IMB HoldCo LLC. Indymac Bancorp filed for Chapter 7 bankruptcy protection on July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752). Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. INTERDENT INC: S&P Withdraws 'CCC' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its ratings, including the 'CCC' corporate credit rating, on Inglewood, Calif.-based InterDent Inc. and InterDent Service Corp.'s senior secured second-lien notes, that are guaranteed by its parent InterDent Inc., at the company's request. INTERNATIONAL RECTIFIER: Fitch Affirms 'BB' Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed International Rectifier Corp.'s Issuer Default Rating at 'BB'. The company currently has no outstanding public debt or bank credit facility. The Rating Outlook is Stable. The rating and outlook continue to be supported by IR's: i) technology leadership and resultant leading share in certain power management markets; ii) addressable market growth driven by secular trends of increased electronics content and demand for energy efficiency that Fitch believes will modestly reduce demand cyclicality; iii) meaningful customer and geographic diversication, including a strong presence in China and other faster growth regions; and iv) cost reduction roadmap that should lower fixed costs and, therefore, operating leverage. Ratings concerns continue to center on the company's: i) volatile historical free cash flow; ii) small revenue base; iii) substantial structural investments in research and development (R&D) and capital spending; and iv) sole focus on the fragmented power management market, which includes several participants with greater scale and financial flexibility. Fitch believes positive rating actions could result over the intermediate term from higher and more consistent annual free cash flow, likely from continued solid organic revenue growth and structurally lower investment requirements, which Fitch believes could be achieved through increased outsourcing. Negative rating actions result from: -- Lower than industry top-line growth rates, suggesting a weakening of the company's technology leadership position. -- Consistently negative free cash flow likely driven by sustained profitability erosion or meaningfully higher investment levels to counter competitive pressures. Fitch expects robust revenue growth in excess of 25% for IR's current fiscal year ending June 30, 2011 due to a sharper than expected recovery in most of the company's end markets. While consumer and communications end markets are pressured, demand within automotive, appliances, industrial, and aviation end markets is anticipated to remain strong over at least the next few quarters. In conjunction with IR's cost reduction roadmap, primarily lower headcount, Fitch expects revenues and profitability metrics to remain near pre-recession peak levels through at least the near term. For the latest 12 months ended Dec. 26, 2010, Fitch estimates operating profit margins slightly exceeded 12% but should approach 14% for fiscal 2011 (June 30), primarily driven by higher utilization rates and a richer sales mix. Given the company's size disadvantage compared to several leading power management participants, Fitch believes IR's investments in R&D and capital spending are essentially fixed and should remain in excess of 20% of sales. Over the longer term, increased adoption of the company's next generation gallium nitride technology platforms, eventual consolidation of certain high-cost production facilities, and full implementation of an enterprise resource planning system should position IR to more consistently achieve target operating results. Despite the current positive operating momentum, Fitch believes fiscal 2011 free cash flow will be approximately $50 million, as record funds from operations will be partially offset by higher inventory investment and capital spending. Given the company's comparatively small revenue base, Fitch believes IR has limited leverage with its foundry partners. As a result, IR built excess inventory of certain products during the fourth calendar quarter of 2010 in anticipation of strong demand that could require foundry partners to begin allocating tight supply during the second half of calendar year 2011. In conjunction with already robust revenue growth, this drove meaningful cash usage for inventory that should be reduced as the company ships orders over the next few quarters. Fitch also believes capital spending will return to more normalized levels (approximately 12% of revenues) after three consecutive years of maintenance level investment (low- to mid-single digits). Aside from installing next generation production equipment and selectively adding capacity, capital spending over the next couple of years will include funding for the company's implementation of the aforementioned ERP system. As of Dec. 31, 2010, Fitch believes IR's liquidity was sufficient and supported by nearly $600 million of cash, cash equivalents and short-term investments. IR has no revolving credit facility. Fitch expects annual free cash flow to range from slightly negative to modestly positive over the intermediate term, driven by the company's small revenue base and relatively inflexible investment requirements. The company has no public debt and Fitch has no expectations for near-term debt issuance. Nonetheless, Fitch believes IR can issue debt in line with historical amounts of approximately $500 million-$750 million, equating to total leverage (total debt to operating EBITDA) of 3 times-4x, without negatively affecting the IDR or outlook. INTELSAT SA: 2010 Capital Expenditures Total $932 Million --------------------------------------------------------- On February 7, 2011, Intelsat S.A. announced actual capital expenditures for the year ended December 31, 2010 and the annual capital expenditure guidance for the three fiscal years beginning January 1, 2011, and ending December 31, 2013. The Company's capital expenditures information and guidance includes capitalized interest, but excludes capital expenditures associated with the Intelsat New Dawn satellite expected to be launched by the Company's New Dawn joint venture in 2011. Capital expenditures for 2010 totaled $932 million. The Company expects its 2011 total capital expenditures to range from $725 million to $800 million, reflecting the fact that a portion of the capital expenditures that was previously expected to be incurred in 2011 was accelerated into 2010, and another portion also previously expected to be incurred in 2011 is now expected to be incurred in 2012. Capital expenditures for fiscal 2012 are expected to range from $575 million to $650 million, and in 2013 are expected to range from $175 million to $250 million. The Company has eight satellites in development, including Intelsat New Dawn, that are expected to be launched during the Guidance Period. In addition to these announced programs, the Company expects to procure one additional replacement satellite during the Guidance Period. By the conclusion of the Guidance Period, the Company expects its total station-kept transponder count to increase modestly from current levels. About Intelsat Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite communications services worldwide through a global communications network of 54 satellites in orbit as of December 31, 2009, and ground facilities related to the satellite operations and control, and teleport services. It had $2.5 billion in revenue in 2009. Intelsat S.A. had $17.56 billion in assets, $18.15 billion in debts, noncontrolling interest of $1.90 million, and a shareholders' deficit of $597.06 million as of Sept. 30, 2010. Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings from Standard & Poor's. It has 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. Washington D.C.-based Intelsat Corporation, formerly known as PanAmSat Corporation, is a fully integrated subsidiary of Intelsat S.A., its indirect parent. Intelsat Corp. had $7.70 billion in assets against $4.86 billion in debts as of Dec. 31, 2010. INTERTAPE POLYMER: Rutabaga Capital Discloses 3.86% Equity Stake ---------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, Rutabaga Capital Management disclosed that it beneficially owns 2,275,210 shares of common stock of Intertape Polymer Group Inc. representing 3.86% of the shares outstanding. As of December 31, 2008, there were 58,951,050 common shares outstanding. About Intertape Polymer Group Intertape Polymer Group Inc. (TSX:ITP) (NYSE:ITP) develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the Company employs approximately 2,100 employees with operations in 17 locations, including 13 manufacturing facilities in North America and one in Europe. The Company's balance sheet at June 30, 2010, showed $552.1 million in total assets, $325.8 million in total liabilities, and $226.2 million in stockholders' equity. * * * In August 2010, Moody's Investors Service revised the rating outlook on Intertape Polymer Group Inc. to negative from stable and affirmed the B2 Corporate Family Rating. Moody's also affirmed the SGL-3 speculative grade liquidity rating and instrument ratings. Moody's said the B2 Corporate Family Rating reflects Intertape's narrow operating margins, lack of pricing power, largely commoditized product line and reliance on cyclical end markets, such as industrial, building and construction segments. Intertape is operating in a fragmented and highly competitive industry. The presence of large competitors with significant financial resources restricts Intertape's ability to recover raw material increases from customers and constrains the rating. In July 2010, Standard & Poor's Ratings Services revised its outlook on Intertape Polymer Group to positive from negative and affirmed its ratings, including its 'CCC+' corporate credit rating, on the Company and its subsidiary IntertapePolymer U.S. Inc. "The outlook revision reflects some improvement in the company's liquidity position and S&P's expectation that the improvement to the financial profile will continue into the next several quarters," said Standard & Poor's credit analyst Paul Kurias. IRVING TANNING: Tasman Closes Purchase After Residents' Nod ----------------------------------------------------------- David Robinson, staff writer at the Morning Sentinel, reports that the sale of Hartland's largest employer, Prime Tanning, cleared its final hurdle when residents voted 196-15 to approve a deal with Tasman Industries about operation and cost-sharing of the community's wastewater treatment facility. Approval of the deal resulted in the closing of Tasman's $6.5 million, court-approved purchase of the leather-making business, according to the report. Tasman officials said Tasman is purchasing the equipment at the facility, and leasing the real estate from former owners who have gone through the bankruptcy process; but the state controls the leasing arrangement because of its involvement in the bankruptcy. About Irving Tanning Irving Tanning Company, also known as IT Acquisition Corporation and Prime Tanning-Hartland, is a producer and seller of leather for shoes and handbags from Hartland, Maine. It had about 180 employees in Hartland, Maine, Irving Tanning filed for bankruptcy protection on Nov. 16, 2010. It was the third time the tannery had filed for bankruptcy in the last decade. Irving Tanning Company (Bankr. D. Maine Case No. 10-11757), Prime Tanning Co., Inc. (Case No. 10-11758), Prime Tanning Corp. (Case No. 10-11759) filed separate chapter 11 petitions. Irving Tanning estimated assets of $1 million to $10 million and debts of $10 million to $50 million. Another affiliate Prime Tanning Company Inc. filed for Chapter 11 bankruptcy protection on Dec. 30, 2011 (Bankr. D. Maine Lead Case No. 10-11949). JAMES HOWARD WINSLOW: Court Denies Bid for Chapter 11 Trustee ------------------------------------------------------------- Bankruptcy Judge J. Rich Leonard denied the Bankruptcy Administrator's emergency motion to appoint a Chapter 11 trustee in the bankruptcy cases of Tanglewood Farms, Inc., of Elizabeth City, and James Howard Winslow and Billie Reid Winslow. On November 5, 2010, Adams, Martin & Associates P.A. was appointed to serve as examiner to investigate allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, and irregularity in the management of the Debtors' affairs. The examiner's report was filed on December 5, 2010. The examiner's report made several findings. Mr. Winslow acknowledged that he had sold grain that he did not own, and informed the examiner that he opened a bank account in the name of Belvidere Farmers Exchange. Mr. Winslow explained that he ran Tanglewood sales through the Belvidere account so that he could access the proceeds from grain sales. The examiner was unable to obtain complete records on all the entities including Belvidere and thus recommended further investigation. However, the implication of the report was that Mr. Winslow had diverted Tanglewood grain proceeds away from Meherrin Agricultural and Chemical Company, the lien creditor entitled to them. Testimony at the hearing revealed that the grain storage facility owned by Tanglewood stored Mr. Winslow's grain as well as that of other farmers. Tanglewood would sell the commingled grain. The proceeds of all grain sales would go into Tanglewood's account. Historically, Tanglewood had kept the proceeds of the other farmers until they requested them. Mr. Winslow testified he would use those proceeds to fund his operations or pay other farmers as they demanded payment. Tanglewood and Mr. Winslow typically had enough cash on hand to repay the farmers' proceeds with interest until operations began to suffer in 2008 after a severe drought. In recent years, Meherrin financed both entities' operations in exchange for a first priority lien on their crops. In the year preceding the bankruptcy filings, all of the proceeds from Tanglewood's sales were being paid by the purchasers to Meherrin, including the proceeds collected from the sale of other farmers' grain. The debtors became unable to fund ongoing operations or pay the other farmers their proceeds because of the turn over of all crop proceeds to Meherrin, per their lien. In an attempt to protect the farmers whose grain he sold and free up operating capital, Mr. Winslow sold grain in the name of Belvidere and deposited the proceeds into the Belvidere account. Since filing chapter 11, the Belvidere account has been closed and no similar activity has occurred. Critically, there is no evidence that grain in which Meherrin had a legitimate lien was sold in this fashion. In fact, Merherrin, the Debtors' largest secured creditor, opposes the motion for appointment of a trustee. The court appointed a chief restructuring officer, Doug Gurkins, on August 30, 2010. Under his guidance the farming operation has been successful. In his February 10, 2011 Order, Judge Leonard held that the Bankruptcy Administrator has not overcome the high standard associated with the appointment of a chapter 11 trustee. The appointment of a trustee in a Chapter 11 case is an extraordinary remedy, and there is a strong presumption in favor of allowing the Debtor to remain in possession. Judge Leonard held that the proceeds of Meherrin's collateral were never diverted. Meherrin was continually paid from the sale of Mr. Winslow's grain by Tanglewood. Although the Belvidere account was a ruse, the court does not perceive any actual harm caused any creditor by it. Thus it does not rise to the level of gross mismanagement or fraud. Under the current management, the farming operation of the debtors was a success in 2010. If a trustee were appointed and looked at the projections, the court suspects that he or she would largely ratify the decisions already made by the debtors and the Chief Restructuring Officer. Additionally, the broad powers given to the Chief Restructuring Officer in the Winslow case insure that current operations are in compliance with chapter 11. Bankruptcy courts are generally reluctant to displace the management and control of the debtors' business unless extraordinary circumstances warrant it. There is no justification for disrupting the Debtors' business. Appointment of a Chapter 11 trustee will only result in unnecessary expense and costs to the detriment of the Debtors' remaining creditors. The Court anticipates that the examiner's report will be completed, and than any confirmed plan will authorize a plan trustee to investigate and bring any appropriate avoidance actions. About Tanglewood Farms, and James Howard and Billie Reid Winslow Based in Elizabeth City, North Carolina, Tanglewood Farms, Inc. of Elizabeth City filed for Chapter 11 bankruptcy protection on August 20, 2010 (Bankr. E.D.N.C. Case No.10-06719). Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represents the Debtor. The Debtor estimated assets between $1 million and $10 million, and debts between $10 million and $50 million. James Howard Winslow and Billie Reid Winslow filed for Chapter 11 (Bankr. E.D.N.C. Case No. 10-06745) on August 23, 2010. JAVO BEVERAGE: Plan Outline Hearing Set for March 16 ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on March 16, 2011, at 10:00 a.m. (Eastern Time), to consider adequacy of the Disclosure Statement explaining Javo Beverage Company, Inc.'s Plan of Reorganization. Objections, if any, are due March 9, 2011, at 4:00 p.m. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Debtor will, as a Reorganized Debtor, continue to operate its business, sell its assets, and incur liabilities free of any restrictions. The Plan provides for (i) the emergence of the Debtor from Chapter 11 bankruptcy as a Reorganized Debtor and the re-vesting of the Debtor's assets in the Reorganized Debtor free and clear of any liens, encumbrances o other interests; (ii) the resolution of all outstanding claims against and interests in the Debtor, and (iii) the recapitalization of the Debtor's capital structure which will provide the working capital the Debtor needs to continue to serve it customers. Under the Plan, in full satisfaction of the claims of certain creditor classes, the new stock of Javo will be distributed as follows: * Holders of DIP financing claims aggregating $3.05 million will receive 27.9% of the new stock. * Holders of 5.84 million in senior notes will receive 53.3% of the stock of the reorganized Debtor. * Holders of $23.7 million in subordinated notes will receive 18.8% of the new stock. Based on the distributions, holders of secured claims, and general unsecured claims and the senior notes are receiving 100 cents on the dollar. Holders of subordinated note claims are estimated to recover 9.8% to 9.0%. Holders of the existing preferred stock, common stock, and warrants won't receive any distributions and their interests would be cancelled. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/JavoBeverageDS.pdf The Debtor is represented by: Debra A. Riley, Esq. Allen Matkins Leck Gamble, Esq. MALLORY & NATSIS LLP 501 West Broadway, 15th Floor San Diego, CA 92101-3541 Tel: (619) 233-1155 Fax: (619) 233-1158 Robert J. Dehney, Esq. Matthew B. Harvey, Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market Street, 18th Floor P.O. Box 1347 Wilmington, DE 19899-1347 Tel: (302) 658-9200 Fax: (302) 658-3989 About Javo Beverage Vista, California-based Javo Beverage Company, Inc., aka La Jolla Fresh Squeezed Coffee Co., Inc., manufactures coffee and tea-based dispensed beverages, drink mixes and flavor systems. It filed for Chapter 11 bankruptcy protection on January 24, 2011 (Bankr. D. Del. Case No. 11-10212). Goodwin Procter, LLP, is the Debtor's special counsel. Valcor Consulting LLC is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the Debtor's claims agent. The Debtor disclosed $14,659,681 in total assets and $26,705,755 in total debts as of the Petition Date. JETBLUE AIRWAYS: Amends 2009 10-K for Trueblue Adjustments ---------------------------------------------------------- On February 7, 2011, JetBlue Airways Corporation filed an amendment no. 1 on Form 10-K to the Annual Report for the year ended December 31, 2009 originally filed with the Securities and Exchange Commission on February 5, 2010. The Amendment is being filed to restate the Company's consolidated financial statements and other financial information to properly account for the expiration of points and awards in the Company's customer loyalty program, TrueBlue. Management determined certain financial amounts reflected needed to be restated to reflect this adjustment. In connection with the Company's fourth quarter of 2010 analysis of the winding down of the liability for TrueBlue points and awards outstanding when the Company's original TrueBlue program was replaced, management concluded in January 2011 that there was an error in accounting for certain points and awards that had expired prior to the launch of the Company's new program. As a result of this accounting error, revenue, net income, earnings per share and retained earnings were all understated in previously reported consolidated financial statements for the years ended 2007, 2008, and 2009. The impact on the Company's consolidated balance sheets was primarily an understatement to retained earnings offset by an overstatement of air traffic liability. There was no impact to previously reported total cash flows from operations, investing or financing activities. The Company's restated statement of operations for the year ended December 31, 2009 reflects net income of $61 million on $2.93 billion of revenue, as compared with net income of $58 million on $2.93 billion of revenue as originally disclosed. The Company's restated balance sheet at December 31, 2009 showed $6.55 billion in total assets, $5.00 billion in total liabilities and $1.55 billion in stockholders' equity. The Company's balance sheet at December 31, 2009, as originally reported, showed $6.55 billion in total assets, $5.01 billion in total liabilities and $1.54 billion in total stockholders' equity. A full-text copy of the Restated Annual Report is available for free at http://ResearchArchives.com/t/s?732c About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.618 billion in total assets, $1.126 billion in total current liabilities, $2.88 billion long- term debt and capital lease obligations, $531 million construction obligation, $458 million deferred taxes, and stockholders' equity of $1.623 billion, as of Sept. 30, 2010. * * * JetBlue carries 'Caa1' long term corporate family and probability of default ratings, with positive outlook, from Moody's. It has a 'B-' long term issuer default rating, with stable outlook, from Fitch. It also has a 'B-' issuer credit ratings from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. JETBLUE AIRWAYS: Amends 2010 Q1 Report for TrueBlue Adjustment -------------------------------------------------------------- JetBlue Airways Corporation filed an amendment no. 1 on Form 10-Q to its Quarterly Report for the period ended March 31, 2010 originally filed with the Securities and Exchange Commission on May 3, 2010. The Amendment is being filed to restate the Company's condensed consolidated financial statements and other financial information to properly account for the expiration of points and awards in the Company's customer loyalty program, TrueBlue. The management determined certain financial amounts reflected to its originally filed Form 10-Q needed to be restated to reflect this adjustment. In connection with the Company's fourth quarter of 2010 analysis of the winding down of the liability for TrueBlue points and awards outstanding when the Company's original TrueBlue program was replaced, management concluded in January 2011, that there was an error in accounting for certain points and awards that had previously expired. As a result of this accounting error, revenue, net income, earnings per share and retained earnings were all understated in previously reported consolidated financial statements for the years ended 2007, 2008, and 2009 as well as for the three months ended March 31, 2010. The impact on the Company's consolidated balance sheets was primarily an understatement to retained earnings offset by an overstatement of air traffic liability. There was no impact to previously reported total cash flows from operations, investing or financing activities. The Company's restated statement of operations for the quarter ended March 31, 2010 reflects a net loss of $1 million on $871 million of total operating revenue, compared with a net loss of $1 million on 870 million of total operating revenue as originally reported. The Company's restated balance sheet at March 31, 2010, showed $6.50 billion in total assets, $4.96 billion in total liabilities and $1.54 billion in total stockholders' equity. The original quarterly report showed $6.51 billion in total assets, $4.98 billion in total liabilities and $1.53 billion in total stockholders' equity. A full-text copy of the Restated Quarterly Report is available for free at http://ResearchArchives.com/t/s?732b About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.618 billion in total assets, $1.126 billion in total current liabilities, $2.88 billion long- term debt and capital lease obligations, $531 million construction obligation, $458 million deferred taxes, and stockholders' equity of $1.623 billion, as of Sept. 30, 2010. * * * JetBlue carries 'Caa1' long term corporate family and probability of default ratings, with positive outlook, from Moody's. It has a 'B-' long term issuer default rating, with stable outlook, from Fitch. It also has a 'B-' issuer credit ratings from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. JETBLUE AIRWAYS: Amends 2010 Q2 Report for TrueBlue Adjustment -------------------------------------------------------------- On February 7, 2011, JetBlue Airways Corporation filed an amendment no. 1 on Form 10-Q to the Quarterly Report for the quarter ended June 30, 2010 originally filed with the Securities and Exchange Commission on July 27, 2010. The amendment is being filed to restate the Company's condensed consolidated financial statements and other financial information to properly account for the expiration of points and awards in the Company's customer loyalty program, TrueBlue. Management determined certain financial amounts reflected to its originally filed Form 10-Q needed to be restated to reflect this adjustment. In connection with the Company's fourth quarter of 2010 analysis of the winding down of the liability for TrueBlue points and awards outstanding when the Company's original TrueBlue program was replaced, management concluded in January 2011, that there was an error in accounting for certain points and awards that had previously expired. As a result of this accounting error, revenue, net income, earnings per share and retained earnings were all understated in previously reported consolidated financial statements for the years ended 2007, 2008, and 2009 as well as for the three and six months ended June 30, 2010. The impact on the Company's consolidated balance sheets was primarily an understatement to retained earnings offset by an overstatement of air traffic liability. There was no impact to previously reported total cash flows from operations, investing or financing activities. The restated statement of operations for the three months ended June 30, 2010 reflects net income of $31 million on $940 million of total operating revenue, compared with net income of $30 million on $939 million of total operating revenue as originally reported. The Company's restated balance sheet at June 30, 2010 showed $6.58 billion in total assets, $5.02 billion in total liabilities and $1.56 billion in total stockholders' equity. The original filing showed $6.59 billion in total asserts, $5.03 billion in total liabilities and $1.56 billion in total stockholders' equity. A full-text copy of the Amended Quarterly Report is available for free at http://ResearchArchives.com/t/s?732d About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.618 billion in total assets, $1.126 billion in total current liabilities, $2.88 billion long- term debt and capital lease obligations, $531 million construction obligation, $458 million deferred taxes, and stockholders' equity of $1.623 billion, as of Sept. 30, 2010. * * * JetBlue carries 'Caa1' long term corporate family and probability of default ratings, with positive outlook, from Moody's. It has a 'B-' long term issuer default rating, with stable outlook, from Fitch. It also has a 'B-' issuer credit ratings from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. JETBLUE AIRWAYS: Amends 2010 Q3 Report for TrueBlue Adjustment -------------------------------------------------------------- On February 7, 2011, JetBlue Airways Corporation filed amendment no. 1 on Form 10-Q for the quarter ended September 30, 2010 originally filed with the Securities and Exchange Commission on October 26, 2010. The amendment is being filed to restate the Company's condensed consolidated financial statements and other financial information to properly account for the expiration of points and awards in the Company's customer loyalty program, TrueBlue. Management determined certain financial amounts reflected in its originally filed Form 10-Q needed to be restated to reflect this adjustment. In connection with the Company's fourth quarter of 2010 analysis of the winding down of the liability for TrueBlue points and awards outstanding when the Company's original TrueBlue program was replaced, management concluded in January 2011, that there was an error in accounting for certain points and awards that had previously expired. As a result of this accounting error, revenue, net income, earnings per share and retained earnings were all understated in previously reported consolidated financial statements for the years ended 2007, 2008, and 2009 as well as for the nine months ended September 30, 2010. The impact on the Company's consolidated balance sheets was primarily an understatement to retained earnings offset by an overstatement of air traffic liability. There was no impact to previously reported total cash flows from operations, investing or financing activities. The Company's restated statement of operations for the three months ended September 30, 2010 reflects a net income of $59 million on $1.03 billion of total operating revenue, same with net income of $59 million on $1.03 billion of revenue as originally reported. The Company's restated balance sheet at Septmeber 30, 2010 showed $6.61 billion in total assets, $4.98 billion in total liabilities and $1.63 billion in total stockholders' equity. As originally reported, the Company's balance sheet at September 30, 2010 showed $6.62 billion in total assets, $5.00 billion in total liabilities and $1.62 billion in total stockholders' equity. A full-text copy of the Amended Quarterly Report is available for free at http://ResearchArchives.com/t/s?732e About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.618 billion in total assets, $1.126 billion in total current liabilities, $2.88 billion long- term debt and capital lease obligations, $531 million construction obligation, $458 million deferred taxes, and stockholders' equity of $1.623 billion, as of Sept. 30, 2010. * * * JetBlue carries 'Caa1' long term corporate family and probability of default ratings, with positive outlook, from Moody's. It has a 'B-' long term issuer default rating, with stable outlook, from Fitch. It also has a 'B-' issuer credit ratings from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. J.F.S. INTERNATIONAL: Case Summary & Creditors List --------------------------------------------------- Debtor: J.F.S. International, Inc. dba Kentucky Fried Chicken (KFC) aka MJ's Cafe MDS Investments 1740 Hudson Bridge Road PMB 1206 Stockbridge, GA 30281 Bankruptcy Case No.: 11-54205 Chapter 11 Petition Date: February 11, 2011 Court: U.S. Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Rodney L. Eason, Esq. THE EASON LAW FIRM 6150 Old National Highway, Suite 200 College Park, GA 30349-4367 Tel: (770) 909-7200 Fax: (770) 909-0644 E-mail: reason@easonlawfirm.com Scheduled Assets: $2,955,556 Scheduled Debts: $3,907,301 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb11-54205.pdf The petition was signed by Milton Sanders, president. K-V PHARMA: Filing of 10-Q for Dec. 31 Quarter Delayed ------------------------------------------------------ In a regulatory filing Thursday, K-V Pharmaceutical Company discloses that its quarterly report on Form 10-Q for the three months ended December 31, 2010, could not be filed within the prescribed time period due to the time required to complete the audit of the Company's financial statements for the fiscal year ended March 31, 2010, which was filed on December 27, 2010, and the time required to complete the filing of its quarterly report on Form 10-Q for the quarters ended June 30, 2010, and September 30, 2010. The Company expects to file the Form 10-Qs for the quarters ended June 30, 2010, September 30, 2010, and December 31, 2010, by March 31, 2011. The Company anticipates that it likely will report net losses for the quarters ended June 30, 2010, September 30, 2010, and December 31, 2010. About K-V Pharmaceutical Bridgeton, Mo.-based K-V Pharmaceutical Company (NYSE: Kva/KVb) -- http://www.kvpharmaceutical.com/-- is a fully-integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded prescription pharmaceutical products. The Company markets its technology-distinguished products through Ther-Rx Corporation, its branded drug subsidiary. At March 31, 2010, the Company's balance sheet showed $358.6 million in total assets, $497.7 million in total liabilities, and a stockholders' deficit of $139.1 million. * * * As reported in the Troubled Company Reporter on January 3, 2011, BDO USA, LLP, in Chicago, expressed substantial doubt about K-V Pharmaceutical's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has suspended the shipment of all but one of the products manufactured by the Company and must comply with a consent decree with the Food and Drug Administration before approved products can be reintroduced to the market. KNOLOGY INC: Proposed Refinancing Won't Affect Moody's 'B1' Rating ------------------------------------------------------------------ Moody's Investors Service said that Knology, Inc.'s proposed refinancing (repricing and extension) of its senior secured bank credit facilities does not affect the company's ratings, including the company's B1 Corporate Family Rating, B2 Probability of Default Rating, B1 senior secured bank debt ratings and SGL-2 Speculative Grade Liquidity Rating. The rating outlook remains stable. The company is expected to realize modest reductions in cash interest expense and related improvements in free cash flow generation and overall liquidity by bringing the pricing on its recent (October 2010) refinancing in line with current market rates (and extending maturities of its term debt), albeit not by a meaningful enough amount to impact ratings. Moody's last rating action on Knology was on September 15, 2010, when the company was assigned B1 ratings for its $770 million of combined senior secured bank credit facilities that were being arranged to refinance existing debt and partially finance the planned and now completed $165 million acquisition of Sunflower Broadband. Headquartered in West Point, Georgia, Knology, Inc., is principally an "overbuild" provider of video, high speed data and voice services to approximately 232 thousand video subscribers (plus an additional 32 thousand acquired from Sunflower Broadband in early October 2010, per management) located primarily in the Southeast and portions of the Midwest. The company generated revenue of approximately $443 million (plus an estimated $50 million related to the Sunflower Broadband acquisition which will be included in Knology's reported financial statements going forward) for the twelve month period ended September 30, 2010. KOALTY TIME: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Koalty Time, Inc. dba Koalaty Time Child Development Center Koalaty Time on 128th Street Koalaty Time on 8th Street 2500 128th Street Urbandale, IA 50323 Bankruptcy Case No.: 11-00425 Chapter 11 Petition Date: February 11, 2011 Court: U.S. Bankruptcy Court Southern District of Iowa - Database (Des Moines) Judge: Lee M. Jackwig Debtor's Counsel: Jeffrey D. Goetz, Esq. BRADSHAW, FOWLER, PROCTOR & FAIRGRAVE, PC 801 Grand Avenue, Suite 3700 Des Moines, IA 50309-8004 Tel: (515) 246-5817 Fax: (515) 246-5808 E-mail: bankruptcyefile@bradshawlaw.com Scheduled Assets: $108,296 Scheduled Debts: $3,620,386 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/iasb11-00425.pdf The petition was signed by Janice Castagnoli, president. KOBRA PETROLEUM: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Kobra Petroleum I, LLC 3001 Lava Ridge Court, Suite 300 Roseville, CA 95661 Bankruptcy Case No.: 11-23348 Chapter 11 Petition Date: February 10, 2011 Court: U.S. Bankruptcy Court Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: Matthew R. Eason, Esq. EASON & TAMBORNINI 1819 K. Street, #200 Sacramento, CA 95811 Tel: (916) 438-1819 Scheduled Assets: $3,000,000 Scheduled Debts: $5,648,019 A list of the Company's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/caeb11-23348.pdf The petition was signed by Abolghassem Alizadeh, managing member. Debtor-affiliates that previously filed Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Kobra Properties 08-37271 11/25/08 Vernon Street Associates, LLC 08-37273 11/25/08 Kobra Psserve, LLC 08-37272 11/25/08 Rocky Ridge Center, LLC 08-38105 12/09/08 Douglas Pointe, LLC 09-32854 06/23/09 Sierra Valley Associates 09-40212 09/18/09 Central Valley Food Services, Inc. 09-40214 09/18/09 Kobra Associates, Inc. 09-40068 09/18/09 Food Service Management, Inc. 09-40066 09/18/09 KRATOS DEFENSE: Herley Deal Won't Affect Moody's 'B3' Rating ------------------------------------------------------------ Moody's Investors Service said Kratos Defense & Security Solutions, Inc.'s B3 corporate family rating is unaffected by the merger agreement and tender offer to acquire the stock of Herley Industries, Inc. Progress Kratos is making toward margin improvement could eventually boost internal cash flow, reduce dependence on debt for growth, and help lower leverage. Kratos Defense & Solutions, Inc., headquartered in San Diego, CA, operates in two sectors; Kratos Government Solutions (90% of 2009 revenues) and Public Safety and Security (10%). Revenues in 2009 were approximately $335 million. L. FITZGERALD LESTER: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: L. Fitzgerald Lester I II III & Associates LLC 2404 Main Street Hartford, CT 06120 Bankruptcy Case No.: 11-20325 Chapter 11 Petition Date: February 11, 2011 Court: U.S. Bankruptcy Court District of Connecticut (Hartford) Judge: Albert S. Dabrowski Debtor's Counsel: Brian D. Russell, Esq. LAW OFFICE OF BRIAN D. RUSSELL 215 Washington Street Hartford, CT 06106 Tel: (860) 246-8119 Fax: (860) 219-9584 E-mail: bruss74108@aol.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 Lebert Fizgerald Lester, II, principal. LAS VEGAS SANDS: Moody's Upgrades Corporate Family Rating to 'Ba3' ------------------------------------------------------------------ Moody's Investors Service upgraded Las Vegas Sands Corp's Corporate Family and Probability of Default ratings to Ba3 from B1. All of the company's long-term debt ratings were also raised to Ba3 from B1. The company's Speculative Grade Liquidity rating was also raised, to SGL-1 from SGL-2. The ratings outlook is stable. Ratings upgraded and LGD assessments revised: Las Vegas Sands Corp.: * Corporate Family Rating to Ba3 from B1 * Probability of Default Rating to Ba3 from B1 * 6.375% senior notes due 2015 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) Venetian Casino Resort, LLC and Las Vegas Sands, LLC (as co- issuer): * Senior secured revolver expiring 5/2012 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured revolver expiring 5/2014 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured term loan B due 5/2014 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured term loan B due 11/2016 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured delayed draw term loan 1 due 5/2014 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured delayed draw term loan 1 due 11/2016 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured delayed draw term loan 2 due 5/2013 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured delayed draw term loan 2 due 11/2015 to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) Venetian Macao Limited: * Senior secured term loans to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) * Senior secured revolver to Ba3 (LGD 4, 50%) from B1 (LGD 4, 50%) Ratings Rationale The upgrade of LVSC's Corporate Family Rating to Ba3 from B1 reflects Moody's view that LVSC has the ability and willingness to reduce debt/EBITDA at or below 4 times by the end of fiscal 2011. This is the leverage target established by Moody's that LVSC needed to demonstrate it could achieve in order to achieve a Ba3 CFR. "LVSC's very strong fourth quarter 2010 results combined with Moody's expectation that these positive trends will continue, and that the company will apply its free cash flow and significant cash balances to further reduce absolute amounts of debt outstanding, support the one-notch upgrade," stated Keith Foley, Senior Vice President at Moody's. Improved net revenue and EBITDA performance from the US and Macau, along with the continued successful ramp up of Marina Bay Sands in Singapore, led to a 60% increase in consolidated net revenue and EBITDA more than doubling for the quarter. "LVSC's consolidated Debt/EBITDA -- about 5.3 times for the latest 12-month period ended December 31 2010 -- will likely reach 4.0 times in the very near future given Moody's expectation of further revenue and earnings improvement in the U.S., Macau, and at Marina Bay Sands, the company's casino and entertainment facility located in Singapore that opened in April 2010," added Foley. Marina Bay Sands continues to exceed Moody's expectations and is on track to generate over $1 billion of EBITDA in its first full year of operations. The upgrade of LVSC's Speculative Grade Liquidity rating to SGL-1 from SGL-2 reflects Moody's expectation of further EBITDA improvement and absolute debt reduction during the next 12-18 months. The SGL-1 also reflects LVSC's considerable consolidated cash balance and revolver availability, and reflects Moody's view that the company will remain well in compliance with all of its subsidiary level financial covenants The stable rating outlook is based on Moody's current expectation that LVSC will generate between $2.6 billion and $2.8 billion of consolidated EBITDA in fiscal 2011, and will apply its free cash flow and significant cash balances to further and permanently reduce absolute amounts of debt outstanding. Moody's currently estimates that LVSC will generate between $1 billion and $1.5 billion of free cash flow in fiscal 2011 and fiscal 2012 combined. The stable rating outlook also considers that, while LVSC's significant cash resources and improved earnings prospects raise the possibility of a large cash dividend payment to existing shareholders, the company will not make any material cash dividend payments in the foreseeable future. Additionally, the stable outlook reflects Moody's view that LVSC will deliberately pace its development activity in a manner that maintains its current credit profile over the longer-term. A ratings upgrade could occur if LVSC demonstrates the ability and willingness to reduce and sustain debt/EBITDA at or below 3.5 times on a gross basis. The company would also need to adhere to a conservative long-term financial policy that is consistent with a higher rating. Ratings could be lowered if Moody's come to believe that, for any reason, LVSC will not be able to achieve and sustain consolidated debt/EBITDA at lower than 4.5 times. Las Vegas Sands Corp. owns and operates hotel and casino integrated resort facilities in Las Vegas, NV, Bethlehem, PA, Macau, China and Singapore. The company generates consolidated annual net revenue of close to $7 billion. LDK SOLAR: Offering RMB-Denominated US$-Settled Notes ----------------------------------------------------- LDK Solar Co., Ltd., announced in a press release Thursday its intention to offer, subject to market and other conditions, RMB-denominated US$-settled senior notes pursuant to Regulation S under the United States Securities Act of 1933, as amended. The Notes will be guaranteed by certain of LDK Solar's offshore subsidiaries. The interest rate, price and other terms are to be determined by negotiations between LDK Solar and the underwriters of the Notes. LDK Solar intends to use the net proceeds of the offering to repay certain of its existing indebtedness with remaining maturities of up to one year. The Company's press release is not an offer to sell or the solicitation of an offer to buy any of the Company's securities. Any offers of the above securities will be made only by means of a private offering memorandum. The Notes and the Subsidiary Guarantees have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. There will be no public offering of securities in the United States. The Company does not intend to register any of the securities in the United States. In connection with the proposed issue of senior notes, the Company will provide certain institutional investors with recent corporate information regarding its business and operations. An extract of the recent information is available for free at: http://researcharchives.com/t/s?7334 Has Significant Working Capital Deficit As of September 30, 2010, the Company had a working capital deficit of $1.275 billion and retained earnings of $112.8 million. As of September 30, 2010, the Company had cash and cash equivalents of $571.9 million, the majority of which are held by the Company's subsidiaries in China. In addition, the Company had short-term borrowings and current installments of its long-term borrowings totaling $1.207 billion as of September 30, 2010, most of which were the obligations of its subsidiaries in China. "We may be also required by the holders of our 4.75% convertible senior notes due 2013, approximately $359.8 million of which are outstanding as of the date of this extract, or the existing convertible senior notes, to repurchase all or a portion of their existing convertible senior notes on April 15, 2011, at a price equal to 100% of the principal amount of the existing convertible senior notes plus accrued and unpaid interest up to, but excluding, the repurchase date," the Company said in the Company extract. "These factors initially raise substantial doubt as to our ability to continue as a going concern." The Company has formulated a plan to address its liquidity problem. "If we do not successfully execute this plan, we may not be able to continue as a going concern." About LDK Solar LDK Solar Co., Ltd. (NYSE: LDK) -- http://www.ldksolar.com/-- is a leading vertically integrated manufacturer of photovoltaic (PV) products and a leading manufacturer of solar wafers in terms of capacity. LDK Solar manufactures polysilicon, mono and multicrystalline ingots, wafers, modules and cells. The Company also engages in project development activities in selected segments of the PV market. LDK Solar's headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. LDK Solar's office in the United States is located in Sunnyvale, California. The Company recorded net income of $147.2 million on net sales of $1.588 billion during the nine-month period ended September 30, 2010, as compared to a net loss of $210.0 million on $793.4 million during the same period in 2009. At September 30, 2010, the Company's unaudited consolidated balance sheet showed $5.070 billion in total assets, $3.996 billion in total liabilities, and stockholders' equity of $1.074 billion. LE-NATURE'S INC: Former CEO Accused of Selling Ill-Gotten Jewels ---------------------------------------------------------------- Bankruptcy Law360 reports that the embattled former CEO of Le-Nature's Inc. has been accused of auctioning off $28 million in gold and jewels purchased with money looted from his bankrupt bottling company, which allegedly defrauded investors and lenders of $806 million. Gregory Podlucky, 50, was already awaiting trial on charges that he used $800 million in loans to Le-Nature's to purchase the extravagant goods when federal prosecutors filed new charges, according to Law360. About Le-Nature's Inc. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- makes bottled waters, teas, juices and nutritional drinks. Its brands include Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. Four unsecured creditors of Le-Nature's filed an involuntary Chapter 7 petition against the company on Nov. 1, 2006 (Bankr. W.D. Pa. Case No. 06-25454). On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Judge McCullough converted Le Nature's Inc.'s case to a Chapter 11 proceeding. The Debtors' cases are jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas represent the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc Committee of Senior Subordinated Noteholders. In July 2008, the Chapter 11 plan of liquidation for Le-Nature's took effect. LEVEL GLOBAL: Insider Trading Probe Prompts Wind Down ----------------------------------------------------- Azam Ahmed, writing for The New York Times' DealBook, reports that Level Global, a hedge fund in New York that federal agents raided in late November, said in a letter to investors on Friday that it would begin winding down its roughly $4 billion firm and return their money in the coming weeks. The report notes Level Global became the latest hedge fund to become a casualty of the government's broad insider trading investigation has not been accused of any wrongdoing -- showing how even an inquiry can spook investors. Level Global was co-founded by David Ganek, who with his wife, the novelist Danielle Ganek, is a prominent figure in Manhattan social circles. Last year, a Goldman Sachs fund bought a stake in the firm. According to the report, Mr. Ganek told the investors that while no charges had been brought against the firm or any employee, the federal inquiry was central to his decision. On Nov. 22, agents from the Federal Bureau of Investigation searched the offices of Level Global, Diamondback Capital, Loch Capital and Barai Capital. Barai Capital's founder has been charged with insider trading, but the other three firms have not been accused of any wrongdoing. Level Global's decision may reflect its structure, the NY Times' DealBook relates, citing people familiar with the funds. Sources told the NY Times' DealBook that at Diamondback, which employs more than 200 people, trading is largely decentralized, in that the assets are spread across many managers who make independent investment decisions. That means top management doesn't necessarily know the details of specific trades, potentially insulating themselves from any problems. By comparison, the sources explained, Mr. Ganek and Anthony Chiasson, the other founder of Level Global, as well as other senior executives, play a much more hands-on role in the investment decisions, so they are much closer to the trading activity. As such, Level Global's top players are far more vulnerable, the sources told the NY Times' DealBook. However, the NY Times' DealBook notes Diamondback is not out of the woods. The DealBook notes a person with knowledge of Diamondback said Friday that the firm had received $722 million -- or 12.3% of its total assets -- in redemption requests, a $200 million increase from requests at the start of the month. The firm, which manages about $5.5 billion, gave no indication that it planned to wind down any funds. Investors have until Feb. 15 to submit redemption requests. And 29% of the firm's money cannot be withdrawn for several years. By contrast, according to the DealBook, the letter from Level noted that roughly 75% of the firm's capital would be available for redemption by March 31 and the full 100% by June 30. Though the firm started with a three-year lockup period for investors, it changed its policy in 2008 in response to the financial crisis, allowing investors to withdraw money each quarter. LIBBEY INC: BlackRock Holds 7.47% Equity Stake ---------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, BlackRock, Inc. disclosed that it beneficially owns 1,470,561 shares of common stock of Libbey Inc. representing 7.47% of the shares outstanding. At October 29, 2010, the Company had 19,679,232 shares of common stock outstanding. About Libbey Inc. Based in Toledo, Ohio, since 1888, Libbey, Inc., operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, China, Portugal and the Netherlands. Libbey supplies tabletop products to foodservice, retail, industrial and business-to-business customers in over 100 countries. The Company's balance sheet at Sept. 30, 2010, showed $814.78 million in total assets, $806.43 million in total liabilities, and stockholders' equity of $8.35 million. Libbey had a stockholders' deficit of $11.6 million at June 30, 2010. * * * Libbey carries 'B' issuer credit ratings, with stable outlook, from Standard & Poor's Ratings Services. On October 28, 2009, Libbey restructured a portion of its debt by exchanging the old 16% Senior Subordinated Secured Payment-in- Kind Notes due December 2011 of subsidiary Libbey Glass Inc., having an outstanding principal amount as of October 28, 2009, of $160.9 million for (i) $80.4 million principal amount of new Senior Subordinated Secured Payment-in-Kind Notes due 2021 of Libbey Glass, and (ii) 933,145 shares of common stock and warrants exercisable for 3,466,856 shares of common stock of Libbey Inc. On February 8, 2010, Libbey used the proceeds of a $400.0 million debt offering of 10.0% Senior Secured Notes due 2015 of Libbey Glass Inc., as well as cash on hand, to (i) repurchase the $306.0 million then outstanding Floating Rate Senior Secured Notes due 2011 of Libbey Glass, (ii) repay the $80.4 million New PIK Notes and (iii) pay related fees and expenses. Concurrent with the closing of the offering of the Senior Secured Notes, Libbey entered into an amended and restated $110 million Asset Based Loan facility which, among other terms, extended the maturity date to 2014. LIONCREST TOWERS: Files Plan; Wells Fargo to Be Paid Over 5 Years ----------------------------------------------------------------- Lioncrest Towers, LLC, has filed with U.S. Bankruptcy Court for the Northern District of Illinois a disclosure statement explaining its Plan of Reorganization. The Plan contemplates that the Debtor will retain all of its assets and continue to operate its business generally in the same manner it has been operating. Payments to be made under the Plan will be sourced from: (a) rental and other income generated by the Property; (b) the recoveries, if any, from any cause of action; and (c) the proceeds of the sale or refinancing of the Property. Pursuant to the Plan terms, the Wells Fargo loan will be paid monthly installments of interest at the non-default contract rate, over five years, with the unpaid balance due and payable on the fifth anniversary of the Effective Date of the Plan. The balance will be paid by either a refinancing or sale of the Debtor's property. In addition, on each anniversary of the Effective Date, the Debtor will pay Wells Fargo $300,000 to be applied to the principal balance. The Debtor estimates that the indebtedness due Wells Fargo at confirmation will be approximately $29,500,000. Unsecured creditors will be paid in full, in installments over one (1) year, with interest at 5% p.a. The current equity holder of the Debtor will not receive any distribution, but will retain his ownership interests in the Reorganized Debtor. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/LionCrestowers.DS.pdf About Lioncrest Towers, LLC Lioncrest Towers, LLC, owns and operates a residential apartment project in Richton Park, Illinois, known as Park Towers. The Property is comprised of 270 residential apartment units located in 3 buildings spread over 7.813 acres, and includes a parking garage structure. The Property's current occupancy rate is over 91%. The Debtor filed for Chapter 11 bankruptcy protection on August 17, 2010 (Bankr. N.D. Ill. Case No. 10-36805). Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd., in Chicaco, assists the Debtor in its restructuring effort. A committee of unsecured creditors has not been appointed in this case. In its schedules, the Debtor disclosed assets of $32,333,207 and liabilities of $29,958,134 as of the petition date. LODGENET INTERACTIVE: BlackRock Discloses 6.19% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, BlackRock, Inc. disclosed that it beneficially owns 1,552,246 shares of common stock of LodgeNet Interactive Corp. representing 6.19% of the shares outstanding. At November 2, 2010, there were 25,088,164 shares outstanding of the Company's common stock, $0.01 par value. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company's balance sheet at Sept. 30, 2010, showed $454.88 million in total assets, $509.32 million in total liabilities, and a stockholders' deficit of $54.44 million. * * * Lodgenet carries a 'B3' long term corporate family rating and a 'Caa1' probability of default rating, with 'stable' outlook, from Moody's. It has 'B' long term foreign and local issuer credit ratings, with 'stable' outlook, from Standard & Poor's. "In Moody's opinion, continued cautious investment from LodgeNet's hotel customers will hamper intermediate term growth in its core hospitality services business, and over the long term competing forms of entertainment will pressure this revenue stream as the company seeks to defend its relevance to both hotel operators and hotel guests. The B3 corporate family rating incorporates these weak growth prospects, mitigated somewhat by the company's moderately high financial risk profile and demonstrated capacity to generate positive free cash flow throughout challenging economic conditions, along with a measure of stability from the monthly fees it receives from hotels regardless of occupancy," Moody's said in October 2010. LONESOME PINE: Seeks Monetary Damages from Beuna Vista et al. ------------------------------------------------------------- Robert Boczkiewicz at The Mountain Mail reports that the Meadows at Buena Vista Inc. and Lonesome Pine Holdings, companies proposing The Meadows subdivision in Buena Vista, Colorado, filed a suit in the U.S. District Court in Denver against the Buena Vista town and others for damages, alleging they suffered financially because annexation of the subdivision was initially defeated by voters. According to the report, the Companies blamed the November 2008 election defeat of annexation on a newspaper column by former town mayor Cara Russell. According to the report, the lawsuit contends annexation defeat at the polls pushed them "from a period of robust economic activity" into a period of severe economic downturn. Company officials allege that the delay, until annexation was approved in April 2010, caused a decrease in value of the 274-acre subdivision. They assert delay forced them to refinance to obtain development money. The Meadows and Lonesome Pine companies seek unspecified monetary damages. The two companies are suing also Russell and Arkansas Valley Publishing Co., in addition to the town. The Mountain Mail relates Magistrate Judge Kathleen Tafoya set May 2 to conduct a settlement conference, a confidential court proceeding, to see if the town and the companies can agree on terms to settle the lawsuit. Buena Vista, according to The Mountain Mail, is counter-suing the companies for $53,004 allegedly owed for consultant fees the town incurred for review of development plans submitted by the companies. The town denies allegations by The Meadows and Lonesome Pine that it breached a pre-annexation agreement with the Companies. About Lonesome Pine Based in Buena Vista, Colorado, Lonesome Pine Holdings LLC filed for Chapter 11 bankruptcy protection on Sept. 28, 2010 (Bankr. D. Col. Case No. 10-34560). Judge Howard R. Tallman presides the case. Lee M. Kutner, Esq., represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. LSM HOTEL: Court Declines to Halt Toreador State Court Litigation ----------------------------------------------------------------- Bankruptcy Judge Peter W. Bowie denied LSM Hotel LLC's request to stay a state court litigation involving El Toreador Properties Group, L.P. Judge Bowie held that LSM Hotel has failed to demonstrate either a reasonable possibility of reorganization, or that it would suffer relative hardship, much less irreparable injury sufficient to warrant issuance of an injunction to stay state court proceedings involving non-debtor third parties. LSM Hotel filed its petition under Chapter 11 on July 26, 2010, as a "barebones" petition. On August 26, 2010 Citizens Development Corporation filed its own Chapter 11 petition. Matthew DiNofia is president of both entities. On September 16, Citizens filed a motion to substantively consolidate Citizens, LSM Hotel and other affiliated entities. On October 21, Citizens filed a motion to stay all non-bankruptcy litigation against Mr. DiNofia for a limited time period, through March 31, to permit Mr. DiNofia to focus on developing the reorganization of the entities. The motion listed a suit by German American Credit Corporation, filed July 2, 2010, and a suit filed by El Toreador Properties on April 22, 2010. Both are directly against Mr. DiNofia on various counts, including on personal guarantees of the underlying obligations. As of the date of Citizens' motion, the Superior Court in the Toreador litigation had entered a scheduling order setting deadlines: 1) first expert exchange December 2, 2010; 2) second expert exchange December 22; 3) motion and discovery cutoff February 25, 2011; 4) deadline for filing jury fees February 25; 5) trial readiness conference March 4; and 6) trial March 25, 2011. On November 18, the motion to extend the stay was denied on procedural grounds, for the central reason that it should be brought in the context of an adversary proceeding seeking relief against a third party. Then, on January 27, 2011, the Court granted Citizens' motion for substantive consolidation after multiple days of evidentiary hearing. In December, LSM Hotel commenced LSM Hotel, LLC, v. Javier Serhan, individually and in his capacity as Administrative Agent; El Toreador Properties Group, L.P., Adv. Pro. No. 10-90625 (Bankr. S.D. Calif.), asserting that the defendants' lien against the hotel should be avoided because it was the result of a fraudulent conveyance. On January 13, 2011, LSM Hotel sought to stay the Toreador state court proceedings against Mr. DiNofia, arguing that (i) there was a risk of inconsistent verdicts between the state court action on Mr. DiNofia's guarantee and a bankruptcy court decision avoiding LSM's liability on the same obligation because of the fraudulent conveyance claim; (ii) Mr. DiNofia might have a right of indemnification against LSM Hotel if he was found liable in the state court action; and (iii) allowing the state court litigation to go forward against Mr. DiNofia would draw his time and attention away from focusing on the reorganization of LSM Hotel. LSM Hotel LLC is not a party to the Superior Court proceedings. A copy of the Court's February 9, 2011 order is available at http://is.gd/jvk7u1from Leagle.com. Based in Lake San Marcos, California, LSM Hotel, LLC, filed for Chapter 11 bankruptcy (Bankr. S.D. Calif. Case No. 10-13024) on July 26, 2010. Christopher W. Olmsted, Esq., at Barker Olmsted & Barnier, APLC in San Diego, serves as the Debtor's counsel. In its petition, the Debtor estimated under $1 million in assets and between $10 million to to $50 million in debts. MARGAUX ORO: Asks Court's Nod to Use Wells Fargo's Cash Collateral ------------------------------------------------------------------ Margaux Oro Partners, LLC, asks the U.S. Bankruptcy Court for the Northern District of Texas for permission, on an interim basis, to use Wells Fargo Bank, N.A.'s alleged cash collateral to fund property maintenance costs, pay suppliers and other vendors, and meet other ongoing business obligations. Wells Fargo Bank, N.A., as successor in interest to Wachovia Community Development Enterprises V, LLC, is owed approximately $10,974,000 as of the Petition Date. In addition to the equity in the property, the Debtor seeks permission to grant Wells Fargo, as additional adequate protection, replacement liens in all of the Debtor's post-petition assets, but only to the extent of any diminution in value of Wells Fargo's cash collateral position. About Margaux Oro Dallas, Texas-based Margaux Oro Partners, LLC, owns 83,400 square foot Plaza Del Oro Shopping Center in Cockrell Hill, Dallas County, Texas. The Company filed for Chapter 11 bankruptcy protection on January 11, 2011 (Bankr. N.D. Tex. Case No. 11-30337). Vickie L. Driver, Esq., Alexandra P. Olenczuk, Esq., and Courtney J. Hull, Esq., at Coffin & Driver, PLLC, in Dallas, serves as the Debtor's bankruptcy counsel. No creditors' committee has been appointed in this case. In its schedules, the Debtor disclosed $13,171,602 in assets and $10,934,144 in liabilities as of the petition date. Donald Lewis Silverman, the sole manager of the Debtor, filed a voluntary petition for personal relief under Chapter 7 of the Bankruptcy Code (Bankr. N.D. Tex. Case no. 10-31785). Silverman received his discharge on November 12, 2010. MARKWEST ENERGY: Fitch Assigns 'BB' Rating to $300 Mil. Notes ------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to MarkWest Energy Partners, L.P.'s pending $300 million issuance of senior unsecured notes. The 6.5%, 10 1/2-year notes would rank pari passu with MarkWest's other senior unsecured debt and mature Aug. 15, 2021. The Rating Outlook is Stable. Proceeds from the issuance would be used to fund MarkWest's tender offer for and redemption of its $275 million of 8.5% senior unsecured notes due July 15, 2016. The issuance is expected to close Feb. 24, 2011. Due to the much lower interest rate on the 10 1/2-year notes, the transaction would improve MarkWest's interest coverage ratios and earnings on a pro forma basis. MarkWest also recently announced a tender offer for up to $125 million of its 8.75% senior unsecured notes due April 15, 2018, with the price determined by a modified 'Dutch Auction'. Any amount accepted by bondholders under this tender offer could result in an upsize of the 10 1/2-year notes issuance. Fitch notes that the slight improvement these tender offers would provide to MarkWest's credit quality is not sufficient to warrant any positive rating action at this time. Key rating factors include these concerns: -- A significant percentage of non-fee-based cash flows from keep-whole and percent-of-proceeds arrangements, although management has been able to reduce this amount; -- Sensitivity of fee-based revenues to the potential curtailment of drilling activities by natural gas producers, which could result in a decline in throughput volumes on MarkWest's systems; -- A proxy hedging strategy that is exposed to the periodic breakdown in the correlation between crude oil and natural gas liquids prices; -- Environmental concerns regarding hydraulic fracturing in the Marcellus Shale may affect producers that are customers of MarkWest. These concerns are mitigated by these strengths: -- An increase in fee-based revenue sources and a layered hedging strategy, which have helped decrease cash flow volatility and provide greater cash flow predictability; -- Long-term contracts with key customers; -- The company's expanding geographic footprint and scale in its core regions, including leading positions in the Marcellus and Woodford Shale plays; -- A management team that has exercised fiscal prudence in its growth strategy, using a balanced mix of debt and equity to maintain a Fitch-adjusted debt to EBITDA ratio of around 4.0x. The ratings also incorporate MarkWest's growth strategy, which is focused on the prolific natural gas play in the Marcellus Shale. MarkWest's joint venture (the Liberty JV) with an affiliate of the Energy & Minerals Group, a private equity fund focused on energy investments, has given the company exposure to the significant growth potential in the Marcellus Shale while maintaining its financial flexibility. While there are some risks to MarkWest's growth strategy, the increasing scale and scope of the company's midstream operations are expected to improve its business risk profile and revenue diversity. Liquidity is supported by MarkWest's $705 million, five-year secured revolving credit facility, which matures July 1, 2015. The facility includes an accordion feature that provides an uncommitted additional amount of up to $195 million. Fitch considers the current revolver's size and the company's financial flexibility to be adequate to meet MarkWest's liquidity needs. Fitch currently rates MarkWest: -- Long-term Issuer Default Rating 'BB'; -- Senior secured revolver 'BB+'; -- Senior unsecured debt 'BB'. MESA AIR: Court OKs Settlement of GE Electric Aircraft Claims ------------------------------------------------------------- Judge Martin Glenn approved the settlement and agreement among Mesa Air Group, Inc., and its debtor affiliates on the one hand, and these parties on the other hand, each in their capacities as Owner Participant or Owner Trustee, (i) General Electric Capital Corporation, (ii) Aircraft Services Corp., (iii) Polaris Holding Company, (iv) AFS Investments XLII LLC, (v) Wells Fargo Bank Northwest, N.A., and (vi) Wells Fargo Bank, N.A. Prepetition Leases, Agreements, and Claims Before the Petition Date, pursuant to certain aircraft leveraged leases, Debtor Mesa Airlines, Inc., leased 23 Bombardier CRJ-200LR aircraft and 12 Embraer ERJ-145LR aircraft, wherein a GE Capital affiliate is or was the owner participant. Mesa Air Group guaranteed Mesa Airlines' obligations under the Leveraged Leases. Before the Petition Date, pursuant to a single investor lease, Mesa Airlines leased one CRJ-200, as to which Polaris Leasing International is or was the owner participant. In connection with the Leveraged Leases, the Debtors and the GE Affiliates entered into certain tax indemnity agreements. Pursuant to the terms of the Tax Indemnity Agreements, the Debtors are potentially liable to the GE Affiliates for any loss or unavailability of income tax benefits arising as a result of the Debtors' acts or omissions -- TIA Claims. The Debtors and the GE Affiliates are also parties to certain participation agreements related to the Leveraged Leases. Pursuant to the general indemnity provisions of the Participating Agreements, the Debtors are potentially liable to the GE Affiliates for any and all expenses, losses and liabilities incurred by or asserted against the GE Affiliates relating to or arising out of, or which would not have occurred but for the transaction contemplated by the Participation Agreements -- General Indemnity Claims. Pursuant to the Court's February 23, 2010 Order, the Debtors rejected each of the Leveraged Leases and the Single Investor Lease. The affected parties filed certain proofs of claim in partially liquidated amounts, which set forth the basis for claims against each of Mesa Air Group and Mesa Airlines (i) for damages arising from applicable Tax Indemnity Agreement and Participation Agreement as a result of the Debtors' rejection of certain separate Leveraged Leases; (ii) for damages arising from the Debtors' rejection of the Single Investor Lease; or (iii) related to certain Tax Indemnity Agreements and Participation Agreements related to certain aircraft to be assumed by the Debtors pursuant to their Second Amended Joint Plan of Reorganization, as well as protective claims for rejection damages related to certain other leveraged lease agreements. Claimant Claim No. Amount -------- --------- ------ GE Capital 694 $68,524,551 GE Capital 695 93,233,913 ASC 696 26,340,101 Polaris 697 22,946,710 Wells Fargo 743 12,614,574 AFS 701 unliquidated Wells Fargo 744 unliquidated Wells Fargo Bank 745 unliquidated Settlement and Agreement After good-faith and arms-length negotiations, the parties have reached a settlement resolving the issues that are or may be raised with respect to the amounts of the Aircraft Claims. The salient terms of the Settlement include: (a) Claim No. 694 will be deemed amended and reduced to $11,045,391, which consists of (1) TIA Claim of $10,947,803 and (2) General Indemnity Claim of $97,588. Claim No. 694 will be an Allowed Class 3(a) General Unsecured Claim against Mesa Air Group for $11,045,391 and an Allowed Class 3(e) General Unsecured Claim against Mesa Airlines for $11,045,391. Claim No. 694 will not be subject to any further objection by any party-in-interest. (b) Claim No. 695 will be deemed amended and reduced to $9,957,914, which consists of (1) TIA Claim of $9,860,326, and (2) General Indemnity Claim of $97,588. Claim No. 695 will be an Allowed Class 3(a) General Unsecured Claim against Mesa Air Group for $9,957,914 and an Allowed Class 3(e) General Unsecured Claim against Mesa Airlines for $9,957,914. Claim No. 695 will not be subject to any further objection by any party-in-interest. (c) Claim No. 696 will be deemed amended and reduced to $3,128,365, which consists of (1) TIA Claim of $3,030,777 and (2) General Indemnity Claim of $97,588. Claim No. 696 will be an Allowed Class 3(a) General Unsecured Claim against Mesa Air Group for $3,128,365 and an Allowed Class 3(e) General Unsecured Claim against Mesa Airlines for $3,128,365. Claim No. 696 will not be subject to any further objection by any party-in-interest. (d) Claim No. 697 will be deemed amended and reduced to $3,915,762, which consists of (1) TIA Claim of $3,818,174 and (2) General Indemnity Claim of $97,588. Claim No. 697 will be an Allowed Class 3(a) General Unsecured Claim against Mesa Air Group for $3,915,762 and an Allowed Class 3(e) General Unsecured Claim against Mesa Airlines for $3,915,762. Claim No. 697 will not be subject to any further objection by any party-in-interest. (e) Claim No. 743 will be deemed amended and reduced to $12,614,574. Claim No. 743 will be an Allowed Class 3(a) General Unsecured Claim against Mesa Air Group for $12,614,574 and an Allowed Class 3(e) General Unsecured Claim against Mesa Airlines for $12,614,574. Claim No. 743 will not be subject to any further objection by any party-in-interest. (f) Upon approval of this Settlement, Claim Nos. 701, 744 and 745 will be deemed withdrawn with prejudice. (g) GE Capital, ASC, Polaris, and Wells Fargo, as applicable, agree to waive any defaults under the CRJ-700 Aircraft Leases and the CRJ-900 Aircraft Leases with respect to which AFS Investments XLIV LLC and AFS Investments XLII LLC are the owner participants, and Wells Fargo is the owner trustee arising as a result of the cross default provisions with respect to the Leveraged Leases and the Single Investor Lease. The Debtors will not be required to cure the defaults in connection with the assumption of the CRJ-700 Aircraft Leases under the Plan. (h) Notwithstanding Section 6.4.1 of the Plan, the Debtors will recognize any transfer of the Aircraft Claims made before the Effective Date, even if the transfer occurs after the Distribution Record Date. The relevant GE Affiliate, Wells Fargo or Wells Fargo Bank, as applicable, will notify the Debtors of the proposed transferee of the Aircraft Claims, and any transfer of the Aircraft Claims is subject to the restrictions set forth in the Order Establishing Notification and Hearing Procedures for Trading in Claims and Equity Securities and Section 5.9 of the Plan. (i) Each party will be responsible for the respective costs and expenses it incurred. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the Debtors. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Brett Miller, Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison & Foerster LLP, serve as counsel to the Official Committee of Unsecured Creditors. Judge Martin Glenn entered a final order confirming the Third Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and its debtor affiliates on January 20, 2011. Under the plan, the reorganized company will issue new notes, common stock and warrants to creditors. Unsecured creditors that are U.S. citizens will receive a combination of new notes and new common stock, while unsecured creditors that are Non-U.S. citizens will receive a combination of new notes and new warrants. An agreement with US Airways paved way for the filing of the plan. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000). MESA AIR: Reaches Settlement With Fokker Services ------------------------------------------------- Mesa Air Group notify the Bankruptcy Court of the proposed settlement and agreement with Fokker Services, Inc., settling and allowing Claim No. 739. Mesa Airlines, Inc., and Fokker entered into a certain Aircraft Parts Consignment Access and Component Maintenance Agreement, dated November 2008, as amended and supplemented, regarding inventory and repair services for Mesa Airlines' fleet of Bombardier DHC8-200 aircraft. Fokker filed a contingent, non-priority general unsecured proof of claim, Claim No. 739, for $4,291,154 with respect to amounts outstanding under the Parts and Services Agreement. The salient terms of the settlement include: (a) Mesa Airlines agrees to assume, pursuant to Sections 365(a) and 1123(b)(2) of the Bankruptcy Code, the Parts and Services Agreement, as modified by the terms set forth in a certain January 2011 Letter Agreement, in connection with the confirmation of the Debtors' Plan of Reorganization, and Fokker will consent to the assumption. The effectiveness of Mesa Airlines' assumption of the Parts and Services Agreement will be subject to the terms and conditions of the Plan and its Effective Date. (b) The prepetition amounts outstanding under the Parts and Services Agreement is $4,291,154. Mesa Airlines and Fokker agree to liquidate, cure, and allow Claim No. 739. Mesa Airlines will cure the $4,291,154 claim by (1) paying Fokker $100,000 in cash -- Cure Claim; (2) providing Fokker with an allowed non- priority general unsecured claim of $4,191,154 against Mesa Airlines, which claim will be classified as Class 3(e) under the Plan -- General Unsecured Claim; and (3) Mesa Airlines will convey to Fokker certain surplus inventory owned by Mesa Airlines having a book value of $500,000 -- Surplus Inventory. Fokker acknowledges and agrees that the consideration identified herein will cure any and all defaults under the Parts and Services Agreement and satisfy the requirements under Section 365(b)(1) of the Bankruptcy Code. The agreed upon Cure Claim, General Unsecured Claim, the Surplus Inventory, and treatment therefore will be identified in the Plan Supplement. (c) Within 14 days after execution of the Settlement Agreement, Fokker will amend Claim No. 739 to reflect the terms of the General Unsecured Claim by reducing the amount to reflect $4,191,154. (d) Mesa Airlines' payment of the Cure Claim, General Unsecured Claim, and Surplus Inventory will be in full and final satisfaction of Claim No. 739 and the claim amendment. The parties also agree that each is responsible for its own attorney fees, costs, and expenses with respect to the Settlement Agreement and the claims and defenses. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the Debtors. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Brett Miller, Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison & Foerster LLP, serve as counsel to the Official Committee of Unsecured Creditors. Judge Martin Glenn entered a final order confirming the Third Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and its debtor affiliates on January 20, 2011. Under the plan, the reorganized company will issue new notes, common stock and warrants to creditors. Unsecured creditors that are U.S. citizens will receive a combination of new notes and new common stock, while unsecured creditors that are Non-U.S. citizens will receive a combination of new notes and new warrants. An agreement with US Airways paved way for the filing of the plan. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000). MESA AIR: Resolves Dispute With AAR Corp. on Cure Amounts --------------------------------------------------------- The Bankruptcy Court has approved the stipulation between Mesa Air Group and AAR Corp. resolving, among other things, certain cure amounts and assumption obligations. AAR timely filed proofs of claim, as amended or supplemented, under Section 503(b)(9) of the Bankruptcy Code against the Debtors. On November 23, 2010, the Debtors filed their Second Amended Joint Plan of Reorganization. They filed the Plan Supplement to their Second Amended Plan on December 28, 2010, which included a list of executory contracts with AAR that may be assumed under and pursuant to the Plan. The Debtors and AAR have negotiated in good faith and at arms' length concerning the (i) cure amounts and other assumption obligations to be paid or incurred in connection with the Debtors' assumption of certain executory contracts with AAR, as amended; and (ii) the extent, validity, and priority of the AAR Claims and rejection damages claims of AAR. The salient terms of the stipulation include: (a) The Reorganized Debtors will assume nine contracts. (b) Five contracts will be rejected under and pursuant to the Plan and will be deemed terminated by agreement of the parties. To the extent AAR is holding or is in possession of any property of the Debtors pursuant to or in connection with the Rejected Contracts, the property will be deemed abandoned to and owned by AAR. A schedule of the Assumed Contracts and the Rejected Contracts is available for free at: http://bankrupt.com/misc/Mesa_AARstipAssuRejCont012411.pdf (c) The Debtors will pay AAR $1,356,400, of which $300,400 will be paid in cash to AAR on the Effective Date, with the balance to be paid in cash to AAR in 12 equal monthly installments of $88,000, payable on the first business day of each month commencing on August 1, 2011. Failure by the Reorganized Debtors to timely pay these amounts will constitute a breach of the Assumed Contracts. (d) AAR will be deemed to hold an allowed general unsecured claim represented by Claim No. 1414 against Mesa Airlines, Inc. on account of damages arising from the rejection of the Rejected Contracts in Class 3(e) of the Plan in the aggregate amount of $26,121,900. All other proofs of claim of AAR Services, Inc., Aircraft Component Services, AAR Parts Trading, Inc., and Allen Asset Management -- including Claim Nos. 1113, 1114, 1115, 1116, 1117, 1118, 1119, 1120, and 1415 -- will be disallowed and expunged. (e) All accrued but unpaid amounts due to AAR by the Debtors or the Reorganized Debtors on account of goods delivered or services rendered by AAR after the Petition Date will be timely paid by the Reorganized Debtors in the ordinary course of business in accordance with the terms of the Assumed Contracts. With respect to the matters addressed herein, the terms of this stipulation and order supersede all prior oral and written agreements and communications between the parties. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the Debtors. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Brett Miller, Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison & Foerster LLP, serve as counsel to the Official Committee of Unsecured Creditors. Judge Martin Glenn entered a final order confirming the Third Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and its debtor affiliates on January 20, 2011. Under the plan, the reorganized company will issue new notes, common stock and warrants to creditors. Unsecured creditors that are U.S. citizens will receive a combination of new notes and new common stock, while unsecured creditors that are Non-U.S. citizens will receive a combination of new notes and new warrants. An agreement with US Airways paved way for the filing of the plan. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000). MIRANT CORP: Dist. Ct. Says Ga. Law Applies to Commerzbank Suit --------------------------------------------------------------- Under Texas law, WestLaw reports, Georgia law would be applied in determining whether a Chapter 11 debtor's guaranty could be avoided as a fraudulent transfer. Although application of New York's fraudulent transfer law would have resulted in greater ease and simplicity, the injury flowing from the guaranty occurred in Georgia, where the debtor had its principal place of business. Similarly, the culpable conduct occurred at the company headquarters in Georgia, not in New York where the loan documents were drafted and the loan was closed. More of the debtor's creditors were located in Georgia than in New York. The parties' relationship was centered in Georgia, and they would have expected that the law of Georgia would govern any fraudulent transfer action. Application of Georgia law also best served predictability and foreseeability. In sum, the quality of the parties' contacts strongly favored Georgia law. The fact that New York law, by best protecting creditors, best embodied the purpose behind fraudulent transfer law in bankruptcy cases was not determinative. MC Asset Recovery, LLC v. Commerzbank AG, --- B.R. ----, 2010 WL 5376177 (N.D. Tex.) (Means, J.). Because Georgia law applies, the Honorable Terry R. Means says in his Order dated Dec. 22 2010, MCAR cannot seek to avoid the pre- petition transfers it sought to. Mirant Corporation -- http://www.mirant.com/-- produces and sells electricity in the United States. Mirant owns or leases approximately 10,097 megawatts of electric generating capacity. The company operates an asset management and energy marketing organization from its headquarters in Atlanta, Georgia. Mirant Corporation filed for Chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included in the parent's bankruptcy exit plan. In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and Disclosure Statement. The Court confirmed an amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. MOMENTIVE PERFORMANCE: S&P Assigns 'B' Rating to $1 Bil. Loans -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' issue rating and '2' recovery rating to Momentive Performance Materials Inc.'s approximately $1 billion first-lien senior secured term loans, consisting of a U.S.-dollar term loan and a euro term loan due 2015. The '2' recovery rating indicates S&P's expectations of substantial recovery (70%-90%) in the event of a payment default. The 'B' issue rating is one notch above the 'B-' corporate credit rating on the company. The outlook is stable. S&P expects Momentive Performance Materials to use proceeds from the term loans to pay down existing first-lien senior secured term loans due 2013. Albany, N.Y.-based Momentive Performance Materials is a large producer of silicones (representing about 90% of sales) used in a wide variety of applications, and of quartz (about 10% of sales) used primarily in semiconductors. Silicones are used in construction, transportation, personal care, electronics, and agriculture. They are generally used as additives, providing or enhancing attributes such as resistance (to heat, ultraviolet light, or chemicals), lubrication, adhesion, or viscosity. Since Oct. 1, 2010, when controlling shareholder Apollo Global Management L.P. placed Momentive Performance Materials Inc. and Momentive Specialty Chemicals Inc. (B-/Stable/--) under a single holding company, Standard & Poor's Ratings Services assesses the two companies' credit quality in a manner that recognizes their shared parentage. Ratings List Momentive Performance Materials Inc. Corporate Credit Rating B-/Stable/-- New Rating Senior Secured (First Lien) B Recovery Rating 2 MONEY TREE: Posts $4.1 Million Net Loss in Dec. 25 Quarter ---------------------------------------------------------- The Money Tree Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $4.1 million on $1.1 of net revenues for the three months ended December 25, 2010, compared with a net loss of $3.7 million on $2.6 million of net revenues for the same period in 2009. At December 25, 2010, the Company's balance sheet showed $40.5 million in total assets, $90.5 million in total liabilities, and a stockholders' deficit of $50.0 million. As reported in the Troubled Company Reporter on December 28, 2010, Carr, Riggs & Ingram, LLC, in Tallahassee, Fla., expressed substantial doubt about The Money Tree's ability to continue as a going concern, following its results for the fiscal year ended September 25, 2010. The independent auditors noted that the Company has incurred recurring losses from operations and negative cash flows from operating activities and has a net shareholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7321 About The Money Tree Based in Bainbridge, Ga., The Money Tree Inc. -- http://themoneytreeinc.com/-- originates direct consumer loans and sales finance contracts in 91 locations throughout Georgia, Alabama, Louisiana and Florida. The Company is also engaged in sales of merchandise (principally furniture, appliances, and electronics) at certain finance company locations, and operates two used automobile dealerships in Georgia. MONEYGRAM INT'L: BlackRock Discloses 5.76% Equity Stake ------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, BlackRock, Inc. disclosed that it beneficially owns 4,801,835 shares of common stock of MoneyGram International Inc. representing 5.76% of the shares outstanding. As of November 2, 2010, 83,370,522 shares of Common Stock, $0.01 par value, were outstanding. About MoneyGram International MoneyGram International, Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a leading global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with 203,000 global money transfer agent locations in 191 countries and territories. The Company's balance sheet at December 31, 2010, showed $5.12 billion in total assets, $5.06 billion in total liabilities, $999.35 million in mezzanine equity and a $942.48 million stockholders' deficit. * * * According to the Troubled Company Reporter on July 1, 2010, Fitch Ratings has affirmed the Issuer Default Ratings for MoneyGram International Inc. and MoneyGram Payment Systems Worldwide, Inc., at 'B+'. Outlook is stable. Fitch noted that the ratings could be negatively impacted by further declines in remittance volumes driven by macro economic factors or decreases in migrant labor populations worldwide. MORGANS HOTEL: Two Mezzanine Units Reach Forbearance Agreement -------------------------------------------------------------- On Jan. 28, 2011, two subsidiaries of Hard Rock Hotel Holdings, LLC, a joint venture through which they hold a minority interest in the Hard Rock Hotel & Casino, received a notice of acceleration from NRFC HRH Holdings, LLC, pursuant to the First Amended and Restated Second Mezzanine Loan Agreement, dated as of December 24, 2009, between the Second Mezzanine Subsidiaries and the Second Mezzanine Lender, declaring all unpaid principal and accrued interest under the Second Mezzanine Loan Agreement immediately due and payable. The amount due and payable under the Second Mezzanine Loan Agreement as of January 20, 2011 was approximately $96 million. The Second Mezzanine Lender also notified the Second Mezzanine Subsidiaries that it intended to auction to the public the collateral pledged in connection with the Second Mezzanine Loan Agreement, including all membership interests in certain subsidiaries of the Hard Rock Joint Venture that indirectly own the Hard Rock Hotel & Casino and other related assets. The First Mezzanine Subsidiaries, the Second Mezzanine Subsidiaries, certain other subsidiaries of the Hard Rock Joint Venture, Vegas HR Private Limited, Brookfield Financial, LLC - Series B, the Second Mezzanine Lender, Morgans Group LLC, certain affiliates of DLJ Merchant Banking Partners, and certain other related parties have entered into a Standstill and Forbearance Agreement, dated as of February 6, 2011. Pursuant to the Standstill and Forbearance Agreement, among other things, until February 28, 2011, the Mortgage Lender, First Mezzanine Lender and the Second Mezzanine Lender agreed not to take any action or assert any right or remedy arising with respect to any of the applicable loan documents or the collateral pledged under such loan documents, including remedies with respect to our Hard Rock management agreement. The Mortgage Lender's agreement to standstill is subject to certain conditions. In addition, pursuant to the Standstill and Forbearance Agreement, the Second Mezzanine Lender agreed to withdraw its foreclosure notice, and the parties agreed to jointly request a stay of all action on the pending motions that had been filed by various parties to enjoin such foreclosure proceedings. The parties to the Standstill and Forbearance Agreement are engaged in continuing discussions regarding the obligations of the parties under the Hard Rock loan documents and disposition of the related collateral and other related agreements. Recusal of David Hamamoto David Hamamoto, the Company's Chairman of the Board, is also chairman of the board, president, chief executive officer and an equity holder of NorthStar Realty Finance Corp., which is the parent of the Second Mezzanine Lender. In light of these relationships, during the third quarter of 2010, the Company implemented special governance procedures, pursuant to which Mr. Hamamoto is recused from all board and management discussions and all board determinations regarding the outstanding Hard Rock debt. In accordance with those procedures, all Hard Rock debt related matters were and are being considered by a committee of independent directors of the Board of Directors. The Hard Rock Hotel In connection with Hard Rock Hotel Holdings LLC's acquisition of the Hard Rock in 2007, certain subsidiaries of the joint venture entered into a debt financing comprised of a senior mortgage loan and three mezzanine loans, which provided for a $760.0 million acquisition loan that was used to fund the acquisition, of which $110.0 million was subsequently repaid according to the terms of the loan, and a construction loan of up to $620.0 million, which was fully drawn and remains outstanding as of September 30, 2010, for the expansion project at the Hard Rock. According to Morgans Hotel's Form 10-Q for the quarter ended Sept. 30, 2010, "Due to the downturn in the Las Vegas economy and Hard Rock's high degree of leverage and seasonality, Hard Rock's operating cash flows have not been sufficient to cover debt service under the Hard Rock Credit Facility for the nine month period ended September 30, 2010 and there were months when the joint venture was forced to use funds from the reserves it had established under the Hard Rock Credit Facility to meet its liquidity needs." "The joint venture anticipates that it will not be able to fully fund both its operating expenses and its debt service on the Hard Rock Credit Facility, solely from its revenues until the economic conditions affecting Las Vegas have improved from their current conditions. The joint venture is reviewing its options to identify the best possible resolution to its liquidity position, including pursuing discussions with the joint venture's lenders." NorthStar Realty Finance Corp., is a participant lender in the Hard Rock Credit Facility. About Hard Rock Hotel Holdings Hard Rock Hotel Holdings, LLC, is a joint venture formed in January 2007 to acquire the Hard Rock Hotel & Casino in Las Vegas. In February 2007, Hard Rock Hotel, funded one-third, or approximately $57.5 million, by the Morgans Hotel, and two-thirds, or approximately $115.0 million, by DLJ Merchant Banking Partners, completed the acquisition of Hard Rock Hotel & Casino in Las Vegas. Hard Rock Hotel had assets of $1.29 billion, liabilities of $1.43 billion and members' deficit of $143.3 million as of Sept. 30, 2010. Net loss was $80.0 million on $179.3 million of net revenue for nine months ended Sept. 30, 2010, compared with a net loss of $70.1 million on $126.06 million of net revenue for nine months ended Sept. 30, 2009. About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company's balance sheet at Sept. 30, 2010, showed $759.10 million in total assets, $801.22 million in total liabilities, and a stockholders' deficit of $42.12 million. MPG TRUST: BlackRock Discloses 6.56% Equity Stake ------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, BlackRock, Inc. disclosed that it beneficially owns 3,154,839 shares of common stock of MPG Office Trust Inc. representing 6.56% of the shares outstanding. As of November 5, 2010, there were 48,122,290 shares of the Company outstanding. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company's balance sheet at Sept. 30, 2010, showed $3.26 billion in total assets, $4.16 billion in total liabilities, and a stockholders' deficit of $897.21 million. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. NAVISTAR INT'L: BlackRock Discloses 7.97% Equity Stake ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, BlackRock, Inc., disclosed that it beneficially owns 5,860,857 shares of common stock of Navistar International Corp representing 7.97% equity stake. As of November 30, 2010, the number of shares outstanding of the Company's common stock was 71,853,614, net of treasury shares. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Oct. 31, 2010, showed $9.73 billion in total assets, $10.65 billion in total liabilities, and a stockholders' deficit of $932.0 million. Navistar has a BB-/Stable/-- corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NORTEL NETWORKS: Ericsson Offers EU Remedies on $65MM Nortel Deal ----------------------------------------------------------------- Bankruptcy Law360 reports that Telefonaktiebolaget LM Ericsson has offered antitrust commitments to European Union regulators reviewing its $65 million bid to buy Nortel Networks Corp.'s multiservice switch business. Law360 relates that the European Commission received proposed remedies Thursday, according to the regulator's records, though further details on the offer were not revealed. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. 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. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. In March 2009, the U.S. Bankruptcy Court entered an order approving the sale of the Layer 4-7 assets to Radware Ltd. as the successful bidder at auction. In July 2009, Nortel sold its CDMA and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ). In September 2009, the Court Nortel sold its Enterprise Solutions business to Avaya Inc. In October 2009, the Court approved the sale of assets associated with Nortel's Next Generation Packet Core network components to Hitachi, Ltd. On December 2, 2009, the Court approved the sale of assets associated with Nortel's GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and Kapsch Carriercom AG. In December 2009, the Debtors sold their Metro Ethernet Networks business to Ciena Corporation. In March 2010, Nortel sold its Carrier Voice Over IP and Application Solutions business to GENBAND Inc. In September 2010, Nortel sold its Multi-Service Switch business to Ericsson. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NPS PHARMACEUTICALS: BlackRock Discloses 7.46% Equity Stake ----------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, BlackRock, Inc. disclosed that it beneficially owns 4,993,136 shares of common stock of NPS Pharmaceuticals Inc. representing 7.46% of the shares outstanding. As of October 27, 2010 there were 66,928,427 shares of the Company's common stock outstanding. About NPS Pharmaceuticals Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing new treatment options for patients with rare gastrointestinal and endocrine disorders. NPS noted in its Form 10-K for the year ended Dec. 31, 2009, it has not been profitable since its inception in 1986. As of December 31, 2009, it had an accumulated deficit of $922.7 million. "Currently, we are not a self-sustaining business and certain economic, operational and strategic factors may require us to secure additional funds." The Company though believes its existing capital resources at December 31, 2009, along with the receipt of $38.4 million from the sale of its REGPARA royalty stream, should be sufficient to fund its current and planned operations through at least January 1, 2011. The Company's balance sheet at Sept. 30, 2010, showed $228.82 million in total assets, $378.65 million in total liabilities, and a stockholders' deficit of $149.82 million. OCTOBER TRUST: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: The October Trust Dated September 5, 2000 9595 Wilshire Boulevard, Suite 510 Beverly Hills, CA 90210 Bankruptcy Case No.: 11-15974 Chapter 11 Petition Date: February 11, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Catherine Christiansen, Esq. CHRISTIANSEN LAW OFFICES 1077 Pacific Coast Highway, Suite 210 Seal Beach, CA 90740 Tel: (562) 608-8368 Fax: (562) 493-9478 E-mail: christiansenlaw@yahoo.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 two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-15974.pdf The petition was signed by Mark Anderson, trustee. ONE SMART: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: One Smart Tool, Inc. dba OST Fluid Services P.O. Box 1106 Tatum, TX 75691 Bankruptcy Case No.: 11-60129 Chapter 11 Petition Date: February 11, 2011 Court: United States Bankruptcy Court Eastern District of Texas (Tyler) Debtor's Counsel: Jason R. Searcy, Esq. SEARCY & SEARCY, P.C. P.O. Box 3929 Longview, TX 75606 Tel: (903) 757-3399 E-mail: jrspc@jrsearcylaw.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 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txeb11-60129.pdf The petition was signed by Tony Cadwell, president/owner. ORGANICA BIOTECH: Three Firms Under Chapter 11 ---------------------------------------------- Organica Biotech Inc., Pathway Holdings LLC and Techno-Org LLC separately filed for Chapter 11 reorganization. The firms, all based in Palmetto, Florida, reported combined liabilities of nearly $10.3 million but only $1.2 million in assets, McClatchy Co.'s Bradenton.com reports. According to Bradenton.com, the three related biotech firms in northern Manatee County have filed for bankruptcy reorganization, their latest move in an ongoing legal battle. The report relates that the bankruptcy was filed in order to free Pathway from having to pay debts incurred by Organica's prior owners. In turn, the former owners have won a nearly $700,000 court judgment against Pathway for the unpaid portion of the acquisition. One of the former owners also recently has asked a Pennsylvania state court to order a review of the firms' books and appoint a receiver, Bradenton adds. Organica Biotech, Inc., filed for Chapter 11 protection on Jan. 25, 2011 (Bankr. M.D. Fla. Case No. 11-01164), estimating assets of less than $50,000, and debts of $1,000,001 to $10,000,000. Pathway Holdings, LLC (Bankr. M.D. Fla. Case No. 11-01162) and Techno-Org, LLC (Case No. 11-01163) filed separate Chapter 11 petitions. David S. Jennis, Esq., at Jennis & Bowen, P.L., in Tampa, Florida, serves as counsel to the Debtors. ORLEANS HOMEBUILDERS: Emerges From Ch 11 With $160MM in Financing ----------------------------------------------------------------- Orleans Homebuilders, Inc., has completed its financial reorganization and emerged from Chapter 11 protection as a newly reorganized company. Orleans emerged with $160 million in new financing, including a $30 million revolving credit facility. Orleans, which was publicly traded for many years, will now be privately owned. All of the old shares in the company have been cancelled. As part of the new corporate structure, a new board of directors was appointed. One of the new board's first actions is expected to be the appointment of homebuilding veteran George E. Casey, Jr. as chief executive officer. Mr. Casey has served as a special assistant to the Chief Restructuring Officer of the company since November. "I am proud to take the helm of this terrific company and look forward to leading an energized team of professionals in the creation of quality homes and outstanding neighborhoods for our customers," Mr. Casey acknowledged. Mr. Casey went on to say that, "there are many people to thank when a company completes a reorganization. The truth is that Orleans would not be where it is today without our employees and trade partners who have given their all through many challenging days over the past year. They continued to build the great homes and neighborhoods that are our true passion and to satisfy our customers despite the uncertain events surrounding the company." About Orleans Homebuilders Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker & Lancaster, Masterpiece Homes, Realen Homes and Orleans -- develops, builds and markets high-quality single-family homes, townhouses and condominiums. From its headquarters in suburban Philadelphia, the Company serves a broad customer base including first-time, move-up, luxury, empty-nester and active adult homebuyers. The Company currently operates in these 11 distinct markets: Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. Orleans Homebuilders employs approximately 300 people. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. D. Del. Case No. 10-10684). Cahill Gordon & Reindell LLP is the Debtor's bankruptcy and restructuring counsel. Curtis S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, are the Debtor's Delaware and restructuring counsel. Blank Rome LLP is the Debtor's special corporate counsel. Garden City Group Inc. is the Debtor's claims and notice agent. Gerard S. Catalanello, Esq., and James J. Vincequerra, Esq., at Duane Morris LLP, in New York; Lawrence J. Kotler, at Duane Morris LLP, in Philadelphia, Pennsylvania; and Richard W. Riley, Esq., and Sommer L. Ross, Esq., at Duane Morris LLP, in Wilmington, Delaware, serve as counsel to the Official Committee of Unsecured Creditors. The Company estimated assets and debts at $100 million to $500 million as of the Petition Date. OTC HOLDINGS: Oriental Trading Emerges from Chapter 11 ------------------------------------------------------ Oriental Trading Company, Inc., on February 14 announced the completion of its reorganization efforts and successful exit from bankruptcy. The Company says emerged with a significantly improved capital structure and strong liquidity, having reduced its debt by nearly 70%. Oriental Trading won confirmation of its reorganization plan on Dec. 16, 2010. OTC was able to confirm the plan following a settlement between first- and second-lien lenders. The plan gives the new stock plus cash or a new $200 million second-lien note to senior lenders owed $403 million. Second lien lenders will receive five-year warrants for 5% of the stock based on a $422 million enterprise value. They will also receive five-year warrants for 4.5% based on a $447 million enterprise value. First-lien lenders are providing $1.1 million for unsecured creditors with $6.8 million in claims. "Today marks the beginning of a new era of growth for Oriental Trading Company. Our new capital structure provides us with a sustainable, long-term financial foundation from which we will drive the future growth of the business," said Sam Taylor, CEO of Oriental Trading, in a Feb. 14 statement. "Business performance has stabilized over the last twelve months with revenues growing, continued double-digit operating margins, and record-high customer satisfaction." Oriental Trading received court approval of its plan of reorganization and secured exit financing in less than six months. The swift emergence from bankruptcy reflects the company's strength and ensured that the restructuring process did not interfere with the smooth operation of the company's business - a priority for the organization. New ownership is comprised of a group of investors that formerly held the company's senior debt. "We appreciate the support of our customers, business partners, and lenders during the past six months as we worked through the restructuring process," Taylor said. "In particular we want to thank our dedicated and talented employees who remained focused on delivering the same exceptional customer service and quality products that our customers have come to expect from Oriental Trading Company." About OTC Holdings Corporation Omaha, Nebraska-based OTC Holdings Corporation filed for Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-12636). Affiliates OTC Investors Corporation (Bankr. D. Del. Case No. 10-12637), Oriental Trading Company, Inc. (Bankr. D. Del. Case No. 10-12638), Fun Express, Inc. (Bankr. D. Del. Case No. 10-12639), and Oriental Trading Marketing, Inc. (Bankr. D. Del. Case No. 10-12640), filed separate Chapter 11 petitions on August 25, 2010. The Debtors disclosed $463 million in assets and $757 million in liabilities as of the Chapter 11 filing. Richard Hahn, Esq., My Chi To, Esq., Jae-Sun Chung, Esq., Huyue Angela Zhang, Esq., and Jessica Katz, Esq., at Debevoise & Plimpton LLP, represent the Debtors. Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' local counsel. Jefferies & Company, Inc., is the Debtors' financial advisor. Protiviti, Inc., is the Debtors' restructuring consultant. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Official Committee of Unsecured Creditors' counsel is Ashby & Geddes, P.A. PACIFIC CAPITAL: Moody's Upgrades Long-Term Issuer Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service upgraded the long-term ratings of Pacific Capital Bancorp and Pacific Capital Bank, N.A. The holding company's long-term issuer rating was raised to B2 from C. At the bank level, the unsupported financial strength rating was changed to D- from E. The bank's long-term deposit rating was raised to Ba3 from Caa1, and long-term other senior obligations to B1 from C. The Not Prime short-term ratings of the bank were affirmed. The rating outlook is stable. This concludes the review for possible upgrade which was initiated on April 29, 2010. The upgrade follows the completion of the recapitalization of Pacific Capital by SB Acquisition Company LLC, a wholly-owned subsidiary of Ford Financial Fund, L.P., and the company's reporting of its first full quarter of results under the new structure. The upgrade reflects Pacific Capital's improved financial position following the fair valuation of the balance sheet and the injection of new capital. This improved financial position underpins Pacific Capital's leading deposit franchise in the Santa Barbara area. Continuing challenges for the company are its high concentration in commercial real estate, which equals over 3.5 times its tangible common equity, and shifting the banking franchise to a more diversified business model. The ratings also incorporate Moody's view that Pacific Capital is likely to be used as a platform for above-average growth as it seeks to re-balance its profile. The bank's regulatory agreement requires it to operate with capital cushions above "well capitalized" levels, and this provides protection against a sharp rise in leverage. On August 31, 2010, Pacific Capital Bancorp received a $500 million equity investment from SB Acquisition Company. Pacific Capital also completed several other related capital initiatives. As of December 31, 2010, Pacific Capital's Tier 1 RBC and Moody's TCE ratios were 16.1% and 13.9%, which are strong levels. In Moody's view, the capital position should provide adequate protection in the event that economic conditions worsen significantly. This is reflected in the stable rating outlook. The last rating action was on April 29, 2010, when Moody's placed the long-term ratings on review for possible upgrade. Pacific Capital Bancorp, which is headquartered in Santa Barbara, CA, had total assets of $6.1 billion as of December 31, 2010. Upgrades: Issuer: Pacific Capital Bancorp -- Issuer Rating, Upgraded to B2 from C Issuer: Pacific Capital Bank, N.A. -- Bank Financial Strength Rating, Upgraded to D- from E -- Issuer Rating, Upgraded to B1 from C -- OSO Senior Unsecured OSO Rating, Upgraded to B1 from C -- Senior Unsecured Deposit Rating, Upgraded to Ba3 from Caa1 Outlook Actions: Issuer: Pacific Capital Bancorp -- Outlook, Changed To Stable From Rating Under Review Issuer: Pacific Capital Bank, N.A. -- Outlook, Changed To Stable From Rating Under Review PASTEURIZED EGGS: Inventor & Asset Buyer Debate Patent Claims ------------------------------------------------------------- WestLaw reports that a bankruptcy court's order approving the sale of a debtor's assets, including its intellectual property, did not obligate the inventor to sue to establish his ownership of a patent. The order authorized the debtor to convey to a purchaser all the legal and equitable rights it claimed. However, the order expressly preserved the inventor's "competing ownership claims." The purchaser told the bankruptcy court that the debtor was not attempting to sell the inventor's purported ownership interest. National Pasteurized Eggs, LLC v. Davidson, --- F.Supp.2d ----, 2011 WL 128830, 2011 DNH 9 (D. N.H.) (LaPlante, J.). A copy of the Honorable Joseph N. LaPlante's Memorandum Order narrowing, but not resolving, the competing patent claims, is available at http://is.gd/nBLs3bfrom Leagle.com. Pasteurized Eggs Corporation sought chapter 11 protection (Bankr. D. N.H. Case No. 02-13086) in 2002, and sold its assets to National Pasteurized Eggs, LLC, in July 2003). After the Sec. 363 sale, the United States Patent and Trademark Office awarded L. John Davidson, the Debtor's founder, a patent on processes for pasteurizing chicken eggs, principally U.S. Patent No. 6,692,784, naming him the sole inventor. PHYSICIAN ONCOLOGY: Moody's Assigns 'B2' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned B2 corporate family rating to Physician Oncology Services, LP. Concurrently, Moody's assigned B2 ratings to the company's $221 million proposed term loan and $25 million revolving credit facility. This is the first time Moody's rates the company. The rating outlook is stable. The proposed $246 million credit facilities are used to acquire Vantage Oncology, Inc., for a total purchase price of $260 million which represents a multiple of 9.9 times for the last twelve month 9/30/2010 EBITDA. Physician Oncology Services is owned by Oak Hill Capital Partners. In conjunction with the transaction, Vantage and Oak Hill will roll over existing equity to the new entity. Most of the equity, $287 million, resides at the holding company -- Vantage Oncology Holdings, LLC -- and is in the form of preferred stock. The combined company will operate under the Vantage Oncology name. These ratings were assigned (LGD point estimates are subject to change and all ratings are subject to the execution of the transaction as currently proposed and Moody's review of final documentation): -- Corporate family rating, assigned B2; -- Probability of default rating, assigned B3; -- $25 million senior secured revolving credit facility, due 2016, assigned B2 (LGD3, 32%); -- $221 million senior secured term loan, due 2017, assigned B2 (LGD3, 32%). Ratings Rationale The B2 corporate family rating takes into consideration Vantage's high debt leverage, reliance on Medicare and government funding, acquisition oriented growth strategy, and small revenue base. Moody's currently anticipate the company's adjusted debt leverage to be above 4 times in 2011 and when including the preferred stock adjustment, debt leverage is 6 times. Given the company's acquisition oriented growth strategy, Moody's do not currently anticipate the debt leverage to decline significantly as Moody's project most of the cash flow to be used for acquisitions and/or de novo developments. In addition, Vantage derives a significant portion of its revenues from Medicare and even though the 2011 reimbursement rates for radiation oncology were overall favorable, future reimbursement environment is unpredictable. The B2 rating is also constrained by the company's pro forma small revenue size of approximately $162 million. The median revenues for the B2 ratings category are over $800 million. The B2 rating is supported by the company's good liquidity profile as Moody's expect Vantage to have good cash flow from operations over the next few years. Additionally, Vantage's adjusted cash interest coverage, as measured by EBITDA-CAPEX/Interest expense, is anticipated to remain in excess of 2.5 times over the next two years. Further, the acquisition will widen the company's geographic reach, as well as diversify payor and modality mix. Because the combined company is double the size of the two individual entities, Moody's expect the new company to have greater negotiating leverage with third party payors and suppliers as well as attract more physicians. Furthermore, the acquisition should allow the combined entity to reduce fixed costs and gain operating efficiencies. The stable rating outlook reflects the company's good liquidity position as well as expected near-term stability in reimbursement rates. The rating outlook could be changed to negative or ratings downgraded if the company's liquidity profile weakens. The ratings could be downgraded if the company experiences meaningful reduction in visits such that its EBITDA contracts and adjusted debt leverage excluding preferred stock adjustment increases to above 5.5 times on a sustained basis. The ratings could also be downgraded if the company's cash flow generation turns negative on a sustained basis. The ratings could be upgraded if the company is able to exhibit sustained improvement in its cost reduction efforts while increasing its revenue base meaningfully and its adjusted debt to EBITDA excluding preferred stock adjustment declines to below 3.5 times on a sustained basis. The ratings upgrade would also require for the reimbursement environment's outlook to remain stable. Physician Oncology Services, LP/Vantage Oncology is a provider of radiation therapy and related oncology services to cancer patients. The company is owned by Oak Hill Capital Partners. Pro forma revenues for the LTM period ended 9/30/2010 were $162 million. PLAYBOY ENTERPRISES: Moody's Assigns 'B2' Rating to $195 Mil. Loan ------------------------------------------------------------------ Moody's Investors Service assigned Playboy Enterprises, Inc., a B2 Corporate Family Rating, B2 (LGD-3, 32%) ratings to Playboy's $195 million of senior secured credit facilities, and a B3 Probability of Default Rating in connection with the proposed buyout by private equity firm Rizvi Traverse and management. The buyout will be funded with $195 million of senior secured credit facilities (consisting of a $185 million Term Loan B due 2017 and a $10 million Revolver due 2016) plus $185 million in equity contributions from Rizvi Traverse and management, including Hugh M. Hefner. The outlook is stable. A summary of the rating actions: Issuer: Playboy Enterprises, Inc. -- Corporate Family Rating, Assigned B2 -- Probability of Default Rating, Assigned B3 -- New $10 million Senior Secured Revolver due 2016, Assigned B2 (LGD-3, 32%) -- New $185 million Senior Secured Term Loan B due 2017, Assigned B2 (LGD-3, 32%) -- Outlook, Assigned Stable Ratings Rationale Playboy's B2 Corporate Family Rating reflects the company's high pro forma debt-to-EBITDA leverage ratio of approximately 5.9x by the end of 2011 (including Moody's standard adjustments), and Challenges in executing its global strategy for branding and licensing while rationalizing under performing, non-core segments. Free cash flow remains negative through the first half of 2012 as newly awarded licensing and location based entertainment revenues are realized. Playboy's ratings are supported by its recognizable global brand, growing higher margin licensing and location based entertainment businesses, in addition to Moody's expectations for improved financial performance over the next 12 to 18 months based on multi-year contracts with minimum guarantees. Moody's believes Playboy, under new ownership, will be successful over the near term in growing EBITDA by entering into new licensing and LBE arrangements which generate stable and higher margin revenue streams. Moody's also expects the company will continue to focus on cutting costs through additional overhead eliminations and outsourcing agreements while maintaining adequate liquidity. The stable outlook reflects Moody's views that Debt-to EBITDA will be sustained below 6.0x in 2011 (including Moody's standard adjustments) and below 5.0x in 2012 and that losses from publishing or other segments will be reduced from 2010 levels. The outlook also reflects expectations that the company will continue to enter into high margin licensing arrangements and that liquidity will be adequate. Ratings could be downgraded if revenue or EBITDA fall short of Moody's expectations due to the inability to grow licensing or location based entertainment businesses or if losses from publishing or other segments increase resulting in debt-to-EBITDA ratios sustained above 6.0x in 2011 or 5.0x in 2012. A decrease in licensing contracts or erosion in margins resulting in weakened liquidity or deterioration in the EBITDA cushion relative to financial covenants would create downward rating pressure. An upgrade could be considered when total debt-to-EBITDA ratios are sustained comfortably below 3.75x with free cash flow-to-debt ratios greater than 15% in combination with increasing cash balances. Playboy Enterprises, Inc., is a global media and lifestyle company founded in 1953 by Hugh M. Hefner, the creator and editor-in-chief of Playboy Magazine. The company has expanded beyond its print business to include licensing, location based entertainment, digital, and entertainment business segments. Playboy generates annual revenues of approximately $221 million (LTM through 9/30/10) across these five business segments with operations or licensing contracts in the Americas, Europe, Asia and Australia. Upon closing of the announced buyout, Playboy's controlling equity holder will be Rizvi Traverse Management (approximately 60% ownership), a Los Angeles based private equity firm, with Mr. Hefner (37%) and other executive management (3%) holding the remaining equity. PLY GEM HOLDINGS: Expects $215MM to 222MM in Sales for Q4 --------------------------------------------------------- On February 7, 2011, Ply Gem Holdings, Inc. provided guidance on its results for the fiscal fourth quarter and full year ended December 31, 2010. For its fiscal fourth quarter ending December 31, 2010, the Company anticipates that its net sales will be in the range of approximately $215.0 million to $222.0 million with full year net sales being in the range of approximately $990.4 million to $997.4 million. The Company expects that its fiscal fourth quarter operating earnings will be in the range of approximately $3.6 million to $6.6 million with full year operating earnings expected to be in the range of approximately $54.8 million to $57.8 million. The Company expects that its fiscal fourth quarter Adjusted EBITDA will be in the range of approximately $20.0 million to $23.0 million with full year Adjusted EBITDA expected to be in the range of approximately $118.6 million to $121.6 million. Gary E. Robinette, President and CEO of Ply Gem, said "Ply Gem's fourth quarter and full year sales and Adjusted EBITDA performance was respectable in light of the challenging market conditions that continued through 2010. Despite single family housing starts declining by an estimated 9.0% in the fourth quarter of 2010, as compared to 2009, Ply Gem's revenues increased by approximately 2.0% - 3.0%." Mr. Robinette continued, "Although industry conditions remain challenging, we continue to win new customers, gain market share and maintain a strong focus on expense containment. While forecasts for 2011 housing starts vary, estimates by leading industry analysts call for 2011 single family housing starts to increase by 11% - 18% from 2010 levels. Based on this expected new construction market improvement, a flat to low single-digit percentage increase in repair and remodeling expenditures, and our anticipated market share gains, we would expect our revenue growth to be roughly in-line with, or proportional to, single family starts for the full year 2011." About Ply Gem Based in Cary, North Carolina, Ply Gem Holdings Inc. is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets. The Company's balance sheet at Oct. 2, 2010, showed $978.60 million in total assets, $167.11 million in total current liabilities, $1.99 million in deferred income taxes, $59.66 million in other long-term liabilities, $903.35 million in long-term debt, and a stockholders' deficit of $153.52 million. * * * In May 2010, Standard & Poor's Ratings Services raised its (unsolicited) corporate credit rating on Ply Gem to 'B-' from 'CCC+'. "The ratings upgrade reflects our expectation that the company's credit measures are likely to improve modestly over the next several quarters to levels that we would consider more in line with the 'B-' corporate credit rating," said Standard & Poor's credit analyst Tobias Crabtree. In January 2010, Moody's Investors Service upgraded Ply Gem's Corporate Family Rating to Caa1 from Caa2 and its Probability of Default Rating to Caa1 from Caa2 and affirmed the senior secured notes due 2013 at Caa1. The upgrade of Ply Gem's corporate family rating resulted from the recent announcement that CI Capital Partners LLC, Ply Gem's indirect principal shareholder, through a series of transactions is transferring $257.3 million of 9.0% senior subordinated notes due 2012 that it owns to Ply Gem for no consideration as a capital contribution. Moody's also noted Ply Gem is also refinancing the balance of the 9.0% senior subordinated notes due 2012 with new senior subordinated notes due 2014. POINT BLANK: Automatic Stay Applies to Qui Tam Action ----------------------------------------------------- WestLaw reports that in a matter of first impression in the Fourth Circuit, a False Claims Act action conducted solely by a qui tam relator, following the government's decision not to intervene, is not an "action or proceeding by a governmental unit," within meaning of the governmental police powers exception to the bankruptcy code's automatic stay provision. Thus, a qui tam relator's FCA action against two Chapter 11 corporate debtors was subject to the automatic stay, where the government elected not to intervene. U.S. ex rel. Kolbeck v. Point Blank Solutions, Inc., - -- F.Supp.2d ----, 2011 WL 325898 (E.D. Va.) (Ellis, J.). The Honorable T.S. Ellis, III, entered his Memorandum Opinion in Civil Action No. 08-cv-01187 on Feb. 1, 2011. About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection on April 14, 2010 (Bankr. D. Del. Case No. 10-11255). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. T. Scott Avila of CRG Partners Group LLC is the restructuring officer. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. The Equity Committee has tapped Morrison Cohen LLP, and The Bayard, P.A., as counsel. Robert M. Hirsh, Esq., and Heike M. Vogel, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at Messana Rosner & Stern LLP, serve as co-counsel. The Debtor filed a chapter 11 plan and asked the Court last week to put its stamp of approval on a disclosure statement explaining that chapter 11 plan. POINT BLANK: Slows Disclosure, Seeks More Exclusivity ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Point Blank Solutions Inc. (i) adjourned the hearing on the disclosure statement explaining its Chapter 11 plan to March 3, and (ii) filed a motion for a four-month extension of its exclusive period to propose a Chapter 11 plan. Point Blank is seeking at the March 10 hearing a June 9 extension of the exclusive right to propose a Chapter 11 plan. Point Blank Plan As reported in the Jan. 18, 2011 edition of the Troubled Company Reporter, the U.S. Bankruptcy Court for the District of Delaware was scheduled to convene a hearing on February 14, 2011, to consider adequacy of the Disclosure Statement. The Plan Proponents are the Debtors, the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Interest Holders, Privet Fund Management LLC, as investment manager for Privet Opportunity Fund I, LLC and Privet Fund LP, Privet Opportunity Fund I, LLC, Prescott Group Capital Management, LLC, and Lonestar Capital Management, LLC, as investment advisor to Lonestar Partners, LP and manager of PB Funding, LLC. The Plan contemplates the reorganization and continuation of the Debtors' business through a restructuring of each Debtor's debt obligations and the generation of new capital through a Rights Offering of new common stock in the Reorganized Debtors, backstopped by the Backstop Parties. The Rights Offering, combined with the Debtors' available cash from operations going forward and exit financing, if necessary and available, will provide the funding necessary to consummate the Plan and pay remaining secured and unsecured creditors in accordance with the terms of the Plan. All of the prepetition equity Interests in Parent will be surrendered, and 100% of the equity securities interests in the Reorganized Parent will be acquired pursuant to the Rights Offering. Generally, the Plan is structured around three key components. a) The Rights Offering/Direct Subscription. In addition to cash on hand and an Exit Facility, if one is necessary and available, the Debtors intend to fund their reorganization effort-including the payment of all amounts due under the Plan-through the issuance and sale of shares of New Common Stock in Reorganized Parent in a minimum amount of $15,000,000 and (subject to certain consents and other conditions) up to a maximum of $25,000,000. The New Common Stock will be sold (i) through a Rights Offering to eligible holders of Allowed General Unsecured Claims and Allowed Old Equity Interests, backstopped by the Debtors' existing DIP Lenders, and (ii) through a direct subscription of shares to two of the existing DIP Lenders, Privet and Prescott. b) The Inter-Debtor Compromise. The Plan Proponents have identified several potential Claims, Causes of Action and other disputes that may exist between the several Debtors, including existing and potential disputes regarding (i) the value and disposition of Intercompany Claims, (ii) the valuation of the individual Debtor's Estates, (iii) the individual Debtor's respective ownership interest in certain potentially valuable lawsuits, (iv) the susceptibility of two or more of the Debtors' Estates to substantive consolidation and (v) the consideration, if any, that should be paid by Parent to retain its existing Interests in the Debtor Subsidiaries. c) The Recovery Trust. Under the Plan, holders of Allowed General Unsecured Claims, Allowed Subordinated Unsecured Claims, Allowed Class Action Claims and Allowed Old Equity Interests will be issued beneficial interests in a Recovery Trust established for the purpose of liquidating certain assets and distributing the proceeds thereof to the trust beneficiaries and making certain disbursements or distributions to Reorganized Parent. On the Effective Date, the Reorganized Debtors will fund a Recovery Trust with a cash payment of $3 million, an additional $1 million for expenses and rights to certain potentially valuable Causes of Action, the proceeds of which will be distributed to the beneficiaries of the Recovery Trust in accordance with the waterfall. The Debtors intend to pay in full administrative claims and secured claims. General unsecured claims will receive ratable proportion of distributions from the recovery trust, and rights to participate in the rights offering. Holders of subordinated unsecured claims will receive ratable proportion of distributions, if any, from the recovery trust after payment in full of the general unsecured claims. Holders of equity interests will receive ratable proportion of distributions from the recovery trust, pari passu, and rights to participate in the rights offering. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/POINTBLANK_DS.pdf About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection on April 14, 2010 (Bankr. D. Del. Case No. 10-11255). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. T. Scott Avila of CRG Partners Group LLC is the restructuring officer. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. The Equity Committee has tapped Morrison Cohen LLP, and The Bayard, P.A., as counsel. Robert M. Hirsh, Esq., and Heike M. Vogel, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at Messana Rosner & Stern LLP, serve as co-counsel. PRECISION ENGINEERED: Moody's Puts 'B1' Rating on $190 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B1 to the company's new $190 million senior secured credit facilities and a B1 CFR and B2 PDR to Precision Engineered Products LLC. The rating outlook is stable. This is the first time that Moody's has rated PEP. Precision Engineered Products LLC, is a holding company that resides above the operating companies and below Precision Engineered Products Holdings Inc., the parent company in the credit agreement and a guarantor of the rated debt. The company's credit facilities are comprised of a $30 million revolver (unfunded at close) and a $160 million term loan. The ratings on the company's credit facilities reflects their senior secured position in the company's capital structure and the minimal level of junior debt that is in a first loss position in the event of default. PEP Holdings guarantees the debt as do the company's domestic operating subsidiaries. These ratings were affected by this action: Assignments: Issuer: Precision Engineered Products, LLC -- Probability of Default Rating, Assigned B2 -- Corporate Family Rating, Assigned B1 -- $30 million Senior Secured Revolver, Assigned a B1, LGD3 - 34% -- $160 million Senior Secured Term Loan, Assigned a B1, LGD3 - 34% Ratings Rationale The ratings consider PEP's low tangible assets and high customer concentration against low leverage, broad product breadth, varied manufacturing capabilities, and good coverage for the ratings category. The facility ratings also consider the company's "all bank" capital structure and a history of acquisitions that included one large acquisition that was transforming in nature. The stable outlook reflects the belief that the company is well positioned in its rating category due to its low leverage and good coverage metrics weighed against its high customer concentration and small size. PEP operates in the Medical/Surgical, Smart Energy Management, and Transportation segments. Although these segments are seemingly unrelated, PEP has achieved competitive margins by entrenching themselves in the manufacturing of complicated, high value added products where their customers fund a material portion of the required tools and/or molds used in production while PEP maintains the manufacturing "know how." The rating could come under pressure if the company loses significant market share from a major customer or if its EBITDA margins were to deteriorate by more than five percentage points from current levels. The rating could improve if the company is able to diversify its customer concentration meaningfully from current levels while improving its EBITDA coverage and reducing its leverage. EBITDA coverage of interest of over 6 times, that is deemed sustainable, would likely result in a rating upgrade if its customer diversification improves and the company becomes meaningfully larger. Precision Engineered Products LLC, is a holding company that resides above the operating companies. Its parent company, Precision Engineered Products Holdings, Inc., is expected by Moody's to have had over $200 million in revenues in 2010. PEP is headquartered in Attleboro, MA designs and manufactures high value added specialty components for the Medical/Surgical, Smart Energy Management, and Transportation sectors. PRIME GROUP: Sells Biz to Five Mile; Inks Debt Refinancing Deal --------------------------------------------------------------- Affiliates of Five Mile Capital Partners LLC, a Connecticut-based alternative investment and asset management company, have entered into a definitive merger agreement and other agreements to acquire Prime Group Realty Trust. Five Mile will acquire the Company for $5.00 in cash per share for the Company's 9% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest. There are currently no common shares of beneficial interest of the Company outstanding. The Company's Board of Trustees has approved the merger agreement and intends to submit the merger for approval by the holders of the Series B Preferred Shares. Following completion of the transaction, which is expected to occur in the second quarter of 2011, the Company's Series B Preferred Shares will cease to be traded as an over-the-counter security. An affiliate of Five Mile and an affiliate of the Company also have entered into a joint venture agreement in connection with the ownership, management and operation of the property located at 330 N. Wabash Avenue in Chicago, Illinois. The joint venture entered into amendments to its financing documents with the existing lenders at the property providing, among other things, (i) the pay down of $20 million of principal and the additional reduction of the principal by $20 million, (ii) the extension of the maturity date to January 31, 2016, (iii) the reduction of the loan commitment to $128 million (of which $30 million remains available to be drawn for tenant improvement, building redevelopment and other costs) and (iv) providing certain additional contingent interest to the lenders not to exceed $20 million. Five Mile also agreed to provide up to $75 million of additional capital to the joint venture. Jeffrey A. Patterson, the Company's President and Chief Executive Officer, said that, "We are pleased to have entered into a merger agreement that provides a cash purchase price to the holders of our Series B Preferred Shares at a premium of approximately 10.5% over the average trading closing price from May 14, 2010 through February 14, 2011. The Series B Shares have been thinly traded and we are happy to provide a cash offer that allows all of the holders to receive this price. We look forward to closing the transaction with Five Mile." He also commented that "The joint venture with Five Mile for the 330 N. Wabash property provides the capital resources necessary to lease up the property to stabilization." The closing of the merger agreement is subject to various customary conditions, including the approval by at least 2/3 of the holders of the Series B Preferred Shares. The transaction is not subject to any financing condition. The joint venture related to the property located at 330 N. Wabash Avenue in Chicago, Illinois and the debt refinancing are not contingent on the completion of the merger. The Board will meet at a later date to set the date for the special meeting of the Company's shareholders and the record date for such meeting. The purposes of the special meeting will also include the election by the holders of the Series B Preferred Shares of two additional trustees to the Company's Board in the event the merger transaction is not approved by the requisite number of the holders of the Series B Preferred Shares. In addition, if the merger is not approved, the Board anticipates authorizing a common stock dividend to be issued to the holders of the Series B Shares on a basis of one common share for each Series B Share outstanding. After the date and record date of the special meeting is set, the Company expects to send notice of the special meeting and a proxy statement to each holder of the Series B Preferred Shares. Duff & Phelps, LLC acted as financial advisor to the Company's Board of Trustees and Winston & Strawn LLP provided legal advice to the Company. Five Mile was represented by Goodwin Procter LLP. On February 11, 2011, the Company disclosed that Prime Office Company, LLC, an affiliate of The Lightstone Group, LLC, the sole owner of all of the issued and outstanding common shares of beneficial interest of the Company and the owner of common units of Prime Group Realty, L.P., the Operating Partnership of the Company, has transferred all of its Common Shares and Common Units to the Company and the Operating Partnership, respectively, for no financial consideration. The transaction had no effect on the holders of the Company's 9% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest and they remain as the only shareholders of the Company. The Company now owns all of the Operating Partnership. Further, Messrs. David Lichtenstein, Peyton Owen, Jr. and Bruno de Vinck resigned from the Board of Trustees. The remaining Trustees, Messrs. Jeffrey A. Patterson, John M. Sabin, Shawn R. Tominus and George (Randy) R. Whittemore, will continue on the Board. The Board of Trustees is holding two of the vacant Board seats for an election to be held by the holders of the Company's Series B Preferred Shares to elect two trustees to the Board. About Five Mile Capital Partners Five Mile Capital Partners LLC -- http://www.fivemilecapital.com/ -- is a privately held alternative investment and asset management company established in 2003 and based in Stamford, Connecticut. The firm specializes in investment opportunities in real estate, debt products, structured finance, asset-based lending and financial services private equity. Five Mile Capital Partners has executed numerous transactions involving distressed and non performing first mortgage, mezzanine loans, equity and high yield structured products. Five Mile Capital Partners' principals have significant experience, knowledge and skills relevant to the financial services industry and believe the cyclical and dynamic nature of the sector continually provides a broad opportunity for investments across the capital structure. Five Mile Capital Partners currently manages roughly $2 billion of capital. About Prime Group Realty Trust Chicago, Illinois-based Prime Group Realty Trust (PINK SHEETS: PMGEP) -- http://www.pgrt.com/-- is a fully-integrated, self- administered and self-managed real estate investment trust, which owns, manages, leases, develops and redevelops office and industrial real estate, primarily in metropolitan Chicago. The Company currently owns two office properties containing an aggregate of 230,000 net rentable square feet and interests in two joint ventures that own two office properties comprised of approximately 1.24 million net rentable square feet. The Company leases and manages roughly 1.24 million square feet comprising all of its wholly-owned properties and its 330 N. Wabash Avenue joint venture property. * * * According to the Troubled Company Reporter on March 3, 2010, two of Prime Group Realty Trust's subsidiaries, each of which own separate portions of the Continental Towers Complex in Rolling Meadows, Illinois, defaulted under their first mortgage loans encumbering the Complex. Continental Towers, L.L.C., a subsidiary of the Company, is the owner of Tower I, Tower III and the Commercium at the Continental Towers Complex. The CT Property is encumbered by a first mortgage loan from CWCapital LLC in the principal amount of $73.6 million. As reported by the TCR, the Company's Board of Trustees determined not to declare a quarterly distribution on its Series B Preferred Shares for the fourth quarter of 2009, and the first and second quarters of 2010. The Company indicated that the Board is unable to determine when the Company might recommence distributions on the Series B Preferred Shares. The Company also said the Board was in the process of considering various financing and other capitalization and strategic alternatives for the Company. PRIMUS TELECOMMUNICATIONS: Moody's Raises Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service upgraded Primus Telecommunications Group, Incorporated's Corporate Family Rating to B3 from Caa1, due to the company's improved leverage metrics, free cash flow generation and Moody's views that the company will make further progress in streamlining its business segments. As part of the rating action, Moody's has assigned provisional (P)B3 (LGD4-63%) ratings to the company's proposed 9.5% senior secured notes due 2019. The new notes are offered in an exchange for the company's existing $130 million 13% senior secured notes due 2016, and $114 million 14.25% senior subordinated notes due 2013. Moody's notes that the maximum amount of new notes offered will not be sufficient to exchange all of the outstanding debt, with about $24 million of legacy debt to remain outstanding following the exchange. Moody's believes that the company will seek to exchange all of the 13% notes and leave a portion of the 14.25% senior subordinated notes outstanding, as they are redeemable at par at any time. Moody's expects Primus to redeem the remaining 14.25% notes sometime in 2011 with cash on hand. At the conclusion of the exchange offering, Moody's will assign definitive ratings to the new instruments, and the ratings under the company's existing notes that have been fully exchanged will be withdrawn. The company's Speculative Grade Liquidity Rating remains SGL-3 based on the rating agency's expectation of Primus's deemed "adequate" liquidity position over the next twelve months, and the rating outlook remains stable. * Issuer: Primus Telecommunications Group, Inc. Upgrades: -- Corporate Family Rating, Upgraded to B3 from Caa1 -- Probability of Default Rating, Upgraded to B2 from B3 Assignments: -- $240 million Senior Secured Notes Due 2019, (P) B3 (LGD4- 63%), Provisional -- Outlook is Stable Ratings Rationale Primus' B3 CFR primarily reflects the significant continuing execution risk from the company's ongoing restructuring, sustainability of the company's business model amid the significant competitive and technological challenges inherent to the telecommunications industry and the uncertainty of whether revenues from its growth services will rise faster than the revenue declines in its still significant legacy voice and long distance businesses, which have been declining materially over the past four years. Supporting the rating is the relatively moderate financial leverage Primus carries following its bankruptcy restructuring in 2009, which Moody's estimates was about 3.6 times adjusted debt/EBITDA (including Moody's standard adjustments for pensions and operating leases) at year end 2010. Moody's projects adjusted leverage to decline further to below 3.0x by the end of 2012. In addition, the proposed debt exchange will further stabilize the company's capital structure. Over the past two years, Primus has been free cash flow positive, helped by the reduced interest expense from the reduced debt and cost containment. In addition to reducing debt, Primus has been streamlining its business model by divesting lower performing segments (such as retail operations in Europe). The company is also making progress in repositioning its growth around facilities-based Voice-over- Internet-Protocol and high speed DSL offerings to small and medium sized businesses and the residential markets, primarily in Australia and Canada, along with growing sales around its fiber network in Australia. Primus' Wholesale business currently generates about 25% of its revenues, before the acquisition of Arbinet. Although wholesale is a low margin business, the increased scale should allow the company to generate incremental cash flow through anticipated cost savings of about $6 million, when fully realized While Primus' credit profile has shown improvement through these efforts, Moody's believes the company plans to increase capital expenditures to focus on the growth businesses, which may put some pressure on free cash flow. The company generates the lowest EBITDA margins among the competitive telecom carriers that Moody's rates. This necessitates that Primus be extremely vigilant in maintaining a low cost structure, which may limit the company's ability to grow if it needs to add capacity to its network or devote greater spending to marketing and promotional activity. The SGL-3 liquidity rating reflects Moody's views that pro-forma for the $240 million exchange offering, Primus will have adequate liquidity over the next four quarters characterized by good cash balances and modest free cash flow generation. Notably, the company does not have an external revolving credit facility as an additional source of cash. Over the 4-quarter horizon to December 31, 2011, Primus' main source of liquidity is expected to be cash on hand, which Moody's expects to be over $40 million at year end 2010 and operating cash flows, which pro-forma for FYE 2010 are approximately $60 million per year. Against this, Primus' main use of cash will be its likely cash burn of roughly 4% to 5% of sales, to support reinvestment in the company's growth businesses and the potential takeout of the remaining 14.25% notes. What could change the rating -- Up Upward rating pressure could build if the Company is successful in restoring its growth trajectory over its facilities-based network, such that its adjusted EBITDA margins approach 20%, adjusted Debt/EBITDA leverage is maintained below 3.0x and free cash flow approaches 10% of debt. What could change the rating -- Down Moody's will likely lower Primus's corporate family rating if the company is unable to deliver revenue and EBITDA growth or if its growth plans consume more cash resources than envisioned, its adjusted Debt/EBITDA leverage does not fall below 3.5x and free cash flow burn persists. The rating could also come under pressure if increasing competition or regulatory changes result in declines in EBITDA. Moody's most recent rating action on Primus was on December 1, 2009, when the rating agency assigned ratings to the company's 13% Canadian and US notes. Primus is a competitive telecom provider headquartered in McLean, VA. The company offers telecommunications, IP and data center services to small and medium-sized enterprises, residential customers and other telecommunications carriers and resellers in the United States, Canada, Australia, and Brazil. PROVIDENT FUNDING: S&P Assigns 'B' Rating to $200 Mil. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has assigned a 'B' rating with a recovery rating of '5' to Provident Funding Associates L.P.'s issuance of up to $200 million of senior unsecured notes. At the same time, S&P revised its recovery rating on Provident's 10.25% senior secured notes due 2017 to '1' from '3' and raised its issue-level rating on the notes to 'BB' from 'B+' in accordance with its notching criteria for a recovery rating of '1.' The revision of the recovery rating on the secured notes was driven by an increase in value of the mortgage-servicing rights securing the notes. S&P also considered the likelihood that the use of the proceeds from the planned senior notes would enable secured creditors to seize and sell Provident at a significantly higher EBITDA level than what S&P had previously assumed. Specifically, S&P revised its default scenario by assuming that the secured note holders force a sale of the company before an actual payment default occurs. S&P's analysis indicates that in default, first-lien senior secured creditors would recover principal and six months of prepetition interest at the high end of the 90% to 100% range, resulting in a '1'recovery rating and an issue rating two notches higher than the counterparty credit rating. This leaves recovery at the low end of the 10%-30% range for holders of the senior unsecured notes, resulting in a recovery rating of '5' and an issue rating of 'B' for the firm's $200 million of senior unsecured notes. Ratings List Provident Funding Associates L.P. Counterparty Credit Rating B+/Stable/-- New Rating Provident Funding Associates L.P. Senior Unsecured US$200 mil sr unsecd nts due 2019 B Recovery Rating 5 Upgraded Provident Funding Associates L.P. Senior Secured To From -- ---- Local Currency BB B+ Recovery Rating 1 3 QA3 FINANCIAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: QA3 Financial Corp. One Valmont Plaza, 4th Floor P.O. Box 542055 Omaha, NE 68154 Bankruptcy Case No.: 11-80297 Chapter 11 Petition Date: February 11, 2011 Court: United States Bankruptcy Court District of Nebraska (Omaha Office) Debtor's Counsel: Robert V. Ginn, Esq. HUSCH BLACKWELL SANDERS 1620 Dodge Street, Suite 2100 Omaha, NE 68102 Tel: (402) 964-5000 Fax: (402) 964-5050 E-mail: rvgbknotice@huschblackwell.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/neb11-80297.pdf The petition was signed by Stephen Wild, president. QUEENS BALLPARK: Moody's Affirms 'Ba1' Rating, Gives Neg. Outlook ----------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 underlying rating of the Queens Ballpark Company LLC and has changed the outlook to negative. Rating Rationale: The change in rating outlook reflects the potential for pending litigation against the owners of the New York Mets, the baseball team which plays at the Queens Ballpark, to negatively impact the quality and performance of the New York Mets Baseball team and subsequently to negatively affect attendance levels at the Ballpark. Although the litigation does not involve any claim against either the issuer of the bonds, nor the entity that leases, operates and maintains the ballpark (Queens Ballpark Company, L.L.C.), and includes only a claim against the entity that owns the team (Sterling Mets, L.P.), Moody's notes that the litigation against the ultimate owners of equity in those entities is unresolved and that the equity owners have stated that they will explore the potential sale of a minority stake in the Mets. While the ultimate outcome of the litigation and the timeframe for final resolution are unknown at the present time, the negative outlook acknowledges the close connection between the health and performance of the Mets baseball team and the long term credit quality of the stadium project. Moody's also notes that the lawsuit is in its early stages and that thus far the only occurrence has been the filing of the complaint. Queens Ballpark Company, LLC is a special purpose entity created to lease, operate, maintain and manage the construction of Citi Field, the home stadium of the Mets. The New York City Industrial Development Agency acts as a conduit issuer for both the Series 2006 Installment Purchase Bonds and the Series 2006 Lease Revenue Bonds. The last rating action on the Queens Ballpark Company bonds was in February 2010, when the underlying rating was downgraded to Ba1. The downgrade was related to the diminished credit quality of one of the Debt Service Reserve Fund surety providers as well as structural features that include the structural subordination of the Lease Revenue mortgage, the cross default provisions and the ability of the PILOT trustee to foreclose on the leasehold interest, held by the Queens Ballpark Company, LLC, potentially resulting in a pro-rata recovery in a stress situation for all bond holders. QUEPASA CORP: Files Copy of Securities Purchase Agreement --------------------------------------------------------- On January 28, 2011, Quepasa Corporation entered into a Stock Purchase Agreement with XtFt Games S/S Ltda, the owner of substantially all of the assets of TechFront Desenvolvimento de Software S/S Ltda, a Brazilian company. Under the terms of the Agreement, the Company will acquire all of the outstanding equity interests of XtFt and will pay XtFt owners $3,700,000 of the Company's common stock which will be valued at the lower of: (i) the average closing price per share for the ten trading days prior to January 28, 2011 and (ii) the closing price on the date of closing the Agreement. In addition, the Company will pay a $300,000 brokerage fee and a potential earnout fee of 250,000 shares of the Company's common stock based on XtFt achieving specific performance milestones. Further, the Company is required to provide XtFt with $1,000,000 of working capital and will provide any additional working capital the Company's management deems appropriate. The closing of the Agreement is subject to customary closing conditions and delivery of audited financial statements to the Company. In connection with the Agreement, on February 1, 2011, the Company entered into a Secured Revolving Line of Credit Agreement with TechFront and agreed to lend up to $500,000 which is part of the $1,000,000 discussed above. Advances under the Credit Agreement may be used to pay off certain loans and shall bear interest at the LIBOR rate at the time of issuance of each note. The notes and interest shall become due and payable on February 1, 2017. The Credit Agreement is secured by certain U.S. and Brazilian Trademarks of TechFront. On February 7, 2011, the Company filed with the SEC a full-text copy of the Securities Purchase Agreement, which is available for free at http://ResearchArchives.com/t/s?7330 About Quepasa Corporation West Palm Beach, Fla.-based Quepasa Corporation (OTC BB: QPSA) through its Web site http://www.Quepasa.com/operates as an online social community for young Hispanics. The Company's balance sheet at September 30, 2010, showed $3.39 million in total assets, $6.67 million in total liabilities, and a stockholders' deficit of $3.28 million. At Sept. 30, the Company had accumulated losses from inception of $164.28 million. As reported in the Troubled Company Reporter on March 9, 2010, Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted of the Company's net loss and net cash used in operating activities in 2009 of $10.58 million and $3.88 million, respectively, and a stockholders' deficit and an accumulated deficit of $3.90 million and $159.33 million, respectively, at December 31, 2009. QUEPASA CORP: Incurs $6.65 Million Net Loss in Fiscal 2010 ---------------------------------------------------------- On February 7, 2011, Quepasa Corporation filed its annual report on Form 10-K for the fiscal year ended December 31, 2010. The Company reported a consolidated net loss of $6.65 million on $6.05 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $10.58 million on $536,000 of revenue during the prior year. The Company's balance sheet at December 31, 2010 showed $16.45 million in total assets, $7.26 million in total liabilities and $9.19 million in total stockholders' equity. Salberg & Company, P.A., in Boca Raton, Florida, independent report following the 2010 results did not contain a going concern qualification for Quepasa Corp. As reported in the Troubled Company Reporter on March 9, 2010, Salberg & Company, P.A. expressed substantial doubt about the Company's ability to continue as a going concern following the 2009 results. The independent auditors noted of the Company's net loss and net cash used in operating activities in 2009 of $10.58 million and $3.88 million, respectively, and a stockholders' deficit and an accumulated deficit of $3.90 million and $159.33 million, respectively, at December 31, 2009. A full-text copy of the Annual Report is available for free at: http://ResearchArchives.com/t/s?732f About Quepasa Corporation West Palm Beach, Fla.-based Quepasa Corporation (OTC BB: QPSA) through its Web site http://www.Quepasa.com/operates as an online social community for young Hispanics. QUEPASA CORP: John Abbott Discloses 15.3% Equity Stake ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, John Abbott disclosed that he beneficially owns 2,729,898 shares of common stock of Quepasa Corporation representing 15.3% of the shares outstanding. As of February 2, 2011, there were 15,351,280 shares outstanding. About Quepasa Corporation West Palm Beach, Fla.-based Quepasa Corporation (OTC BB: QPSA) through its Web site http://www.Quepasa.com/operates as an online social community for young Hispanics. The Company's balance sheet at December 31, 2010 showed $16.45 million in total assets, $7.26 million in total liabilities and $9.19 million in total stockholders' equity. As reported in the Troubled Company Reporter on March 9, 2010, Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern following the 2009 results. The independent auditors noted of the Company's net loss and net cash used in operating activities in 2009 of $10.58 million and $3.88 million, respectively, and a stockholders' deficit and an accumulated deficit of $3.90 million and $159.33 million, respectively, at December 31, 2009. QUEPASA CORP: Michael Matte Discloses 11.3% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 7, 2011, Michael Matte disclosed that he beneficially owns 1,938,276 shares of common stock of Quepasa Corporation representing 11.3% of the shares outstanding. As of February 2, 2011, there were 15,351,280 shares outstanding. About Quepasa Corporation West Palm Beach, Fla.-based Quepasa Corporation (OTC BB: QPSA) through its Web site http://www.Quepasa.com/operates as an online social community for young Hispanics. The Company's balance sheet at December 31, 2010 showed $16.45 million in total assets, $7.26 million in total liabilities and $9.19 million in total stockholders' equity. As reported in the Troubled Company Reporter on March 9, 2010, Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern following the 2009 results. The independent auditors noted of the Company's net loss and net cash used in operating activities in 2009 of $10.58 million and $3.88 million, respectively, and a stockholders' deficit and an accumulated deficit of $3.90 million and $159.33 million, respectively, at December 31, 2009. RACE POINT: S&P Assigns 'BB' Rating to $275 Mil. Senior Loan ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' issue-level rating and '1' recovery rating to four Race Point co-borrowers' (Race Point Power II LLC, Race Point Power III LLC, Race Point Power IV LLC, and NeoElectra Lux S.ar.l.) $275 million, seven-year senior secured term loan. The 'BB' rating and '1' recovery rating indicate S&P's expectation for high (90%-100%) recovery of principal in the event of a payment default. The outlook is stable. A portfolio of seven power-generation plants throughout the U.S. and a cogeneration portfolio of 12 power plants in Spain are expected to service the term loan. The term loan will be a joint and several liability of the four co-borrowers, which are owned by three ArcLight Capital Partners funds. They will use proceeds to repay a portion of existing intermediary debt, fund a capital expenditure reserve account and an operating project-specific reserve, pay related transaction fees and expenses, and make a one-time distribution to ArcLight. Ratings List Race Point Power II LLC Race Point Power III LLC Race Point Power IV LLC NeoElectra Lux S.ar.l. $275 million senior secured term loan BB/Stable Recovery rating 1 RADIO ONE: Moody's Corrects Press Release on Credit Loan Ratings ---------------------------------------------------------------- Moody's Investors Service is clarifying a press release issued December 8, 2010, announcing rating actions for Radio One's Credit Facilities. Moody's specifies that the revolver is a combination of three tranches. Rating assigned to the revolver is: * Amended & restated $20.0 million first lien revolver due 2012 (tranche A) -- B1, LGD2, 12% * Amended & restated $5.1 million first lien revolver due 2012 (tranche B) -- B1, LGD2, 12% * Amended & restated $13.7 million first lien revolver due 2012 (tranche C) -- B1, LGD2, 12% Moody's Investors Service confirmed the Caa1 rating for Radio One, Inc.'s Corporate Family Rating and confirmed its Caa2/LD Probability of Default Rating. As outlined below, Moody's also assigned ratings to the amended/restated bank revolver facility due 2012, amended/restated term loan due 2012, and new senior subordinated notes due 2016 as part of the proposed note exchange and refinancing. These actions conclude the review that was initiated on August 18, 2010. After several months of negotiations, Radio One succeeded in coming to an agreement with its note holders and lenders and is expected to complete its proposed exchange offer by issuing new senior subordinated notes to take out its 8.875% senior subordinated notes due 2011 and 6.375% senior subordinated notes due 2013. In addition to the note exchange, the company amended and restated its revolver and term loan facilities. The LD designation is due to the limited default related to a blocked August 16, 2010 interest payment on the 6.375% senior subordinated notes as well as the pending exchange of the these notes at less than par (95%). After three business days from the note exchange being completed, the limited default "/LD" designation will be removed. Issuer: Radio One, Inc. These ratings were confirmed: * Corporate Family Rating -- confirmed Caa1 * Probability of Default Rating -- confirmed Caa2/LD (LD will be removed three business days after completion of the proposed exchange) This rating is upgraded: * $23.7 million first lien term loan (original amount of $300 million) due 2012 (tranche A) -- upgraded to B1, LGD2, 12% from B2, LGD2, 17% These ratings were assigned: * Amended & restated $38.8 million first lien revolver due 2012 (with up to $18.8 million of sub-limits) -- B1, LGD2, 12% * Amended & restated $323.0 million first lien term loan due 2012 (tranche B) -- B1, LGD2, 12% * New 12.5%/15.0% senior subordinated Notes due 2016-Caa3, LGD4, 61% These ratings will be withdrawn upon closing of the transactions: * $400 million existing senior secured revolving facility --B2, LGD2, 17%, to be withdrawn * 8.875% senior subordinated notes due 2011 -- Caa3, LGD6-96%, to be withdrawn * 6.375% senior subordinated notes due 2013 -- Caa3, LGD6-96%, to be withdrawn * New Second Lien Notes Due 2016 -- B3, LGD4, 55%, To Be Withdrawn Rating Rationale Upon closing of the pending transactions, the Caa1 corporate family rating will reflect Radio One's high pro forma debt-to- EBITDA leverage of approximately 8.0x (incorporating Moody's standard adjustments) mitigated by improved operating performance due to expected political advertising gains in 4Q10 followed by double digit EBITDA gains in 1Q11 compared to a weak 1Q10. Despite expected growth in EBITDA and improving debt-to-EBITDA leverage ratios, reported debt balances will remain flat at approximately $655 million for the next 12 months due to the anticipated funding of the TV One capital call as well as the potential accretion of the PIK portion of the new 12.5%/15% subordinated notes due 2016. Incorporated in the rating is Radio One's large market presence and niche focus targeting the African- American audience. The company's reliance on four of its sixteen markets for approximately half of its revenues and up to $29 million in potential funding requirements related to the company's ownership in TV One and Reach Media weigh on Radio One's rating. For the nine months ended September 30, 2010, the company reported revenues of $209 million in line with expectations and 2% ahead of revenues for the same nine months last year. Given the 18 month maturity of the bank credit facilities and resetting of financial maintenance covenants with a 10-15% cushion, Radio One is positioned to grow revenues and EBITDA which would facilitate refinancing of bank facilities. Moody's expect Radio One to address refinancing of debt facilities well in advance of the 2012 maturities; accordingly, ratings incorporate the likelihood that restrictions under the new bank credit agreement governing liquidity, dividends, and financial maintenance covenants will be revised. The stable outlook assumes the closing of the exchange notes and bank debt refinancing as well as Moody's expectation that the company will reduce debt-to-EBITDA ratios as economic pressures wane, operating performance improves, and 4-5% free cash flow is applied to reduce debt or enhance liquidity. The outlook also reflects the expectation that the company will maintain good liquidity and will fund the remaining $13.7 million TV One capital call in the near term with cash and a portion of the $13.7 million revolver sub-facility provided specifically for this capital call. Ratings could be upgraded if the company refinances the revolver and term loan maturing June 2012 and debt-to-EBITDA leverage ratios are sustained below 7.0x (incorporating Moody's standard adjustments) as a result of an improving economic environment and greater advertising demand in combination with free cash flow being applied to reduce debt balances. Ratings could be downgraded if revenues and EBITDA are negatively impacted by a deeper and longer downturn in advertising spending than expected resulting in debt-to-EBITDA leverage ratios greater than 9.50x. Increased debt levels due to discretionary items including, share repurchases or the funding of increasing ownership of current investments could also negatively impact ratings, particularly if these actions impair liquidity. The most recent rating action for Radio One was on September 20, 2010, when Moody's repositioned Radio One Inc.'s Probability of Default Rating to Caa2/LD, from Caa2, following expiration of the 30-day grace period under the indenture governing the company's 6.375% senior subordinated notes due 2013. The August interest payment was not made in accordance with the scheduled terms, and Moody's treats the failure to meet the original contractual terms as a limited default. Upon closing of the proposed exchange offer, the company will make the missed interest payment in addition to refinancing senior subordinated notes due 2011 and 2013 with new senior subordinated notes due 2016. Radio One Inc., headquartered in Lanham, Maryland, is an urban oriented multi-media company that operates or owns interests in broadcasting stations (53 stations in 16 markets), a cable television network, and Internet-based properties, largely targeting the African-American audience. The Chairperson and President (Chairperson's son) hold approximately 92% of the outstanding voting power of the common stock. The company reported sales of approximately $275 million through the 12 months ending September 30, 2010. RANCHER ENERGY: Form 10-Q Filing for Dec. 31 Quarter Delayed ------------------------------------------------------------ In a regulatory filing Friday, Rancher Energy Corp. disclosed that the filing of its quarterly report on Form 10-Q for the quarter ended December 31, 2010, could not be filed within the prescribed time period, as the closing of the books and the process of preparing the Company's financial statements for the quarter ended December 31, 2010, has been delayed due to the focus of the Company's resources on the bankruptcy process. The Company does not anticipate that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report. The Form 10-Q will be filed on or before the fifth calendar day following the prescribed due date. About Rancher Energy Denver, Colorado-based Rancher Energy Corp. (OTC BB: RNCHQ) -- http://www.rancherenergy.com/-- is an independent energy company that explores for and develops produces, and markets oil and gas in North America. The Company operates four fields in the Powder River Basin, Wyoming, which is located in the Rocky Mountain region of the United States. The Company was formerly known as Metalex Resources, Inc. and changed its name to Rancher Energy Corp. in 2006. Rancher Energy Corp. was incorporated in the State of Nevada on February 4, 2004. Rancher Energy filed for Chapter 11 bankruptcy protection on October 28, 2009 (Bankr. D. Colo. Case No. 09-32943). Herbert A. Delap, Esq., who has an office in Denver, Colorado, assists the Debtor in its restructuring effort. In its petition, the Company estimated assets and debts of between $10 million and $50 million each. The Company's balance sheet at September 30, 2010, showed $18.19 million in total assets, $17.00 million in total liabilities, and stockholders' equity of $1.19 million. RCLC INC: Hearing on Plan Outline Set for March 10 -------------------------------------------------- RCLC, Inc. f/k/a Ronson Corporation, et al., have filed with the U.S. Bankruptcy Court for the District of New Jersey a disclosure statement in support of their joint plan of liquidation under Chapter 11 of the Bankruptcy Code. A hearing on the adequacy of the disclosure statement will be held on March 10, 2011, at 10:00 a.m. The Plan contemplates a liquidation of the Debtors and the distribution of cash to holders of certain Claims, based upon the proceeds of the Sale Transactions (including the Restored Custodial Funds) and any proceeds of the Debtors' and estates' causes of action. The Plan seeks the substantive consolidation of all of the Debtors with respect to the treatment of all Claims and Equity Interests, except for the Other Secured Claims under Class 2, which will be deemed to apply separately with respect to the Plan proposed by each Debtor. Each holder of an Allowed Class 2 Claim will receive, on or as soon as reasonably practicable after the Effective Date of the Plan, either the collateral securing its claim or a cash distribution equal to the value of its collateral. Unsecured creditors will receive, in full and final satisfaction, settlement, release and discharge of their allowed claims, their pro rata share of the Post-Consummation Trust Assets. Distributions to unsecured creditors cannot be determined at this time. The Prepetition Credit Facility Claims have been paid in full in Cash in full and final satisfaction of those claims. Equity Interests will not receive any distribution on account of their interests in the Debtors. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/RCLC.DS.pdf About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. Trenton, New Jersey-based Ronson Aviation, Inc., now known as RA Liquidating Corp., filed for Chapter 11 protection on August 17, 2010 (Bankr. D. N.J. Case No. 10-35315). The Debtor estimated its assets at $10 million to $50 million and its debts at $1 million to $10 million. Affiliates RCLC, Inc. (Bankr. D. N.J. Case No. 10-35313), and RCPC Liquidating Corporation (Bankr. D. N.J. Case No. 10-35318) filed separate Chapter 11 petitions on August 17, 2010, each estimating their assets at $1 million to $10 million and debts at $1 million to $10 million. The cases, along with RCLC, Inc.'s, are jointly administered, with RCLC, Inc., as the lead case. Michael D. Sirota, Esq., and David M. Bass, Esq., and Felice R. Yudkin, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, N.J., represent the Debtors as counsel. Attorneys at Lowenstein Sandler, PC, represent the Creditors' Committee as counsel. The Company's foreign subsidiary, RCC, Inc., formerly known as Ronson Corporation of Canada Ltd., is not included in the filing. Upon the closing of the sale of the Company's Aviation Division on October 15, 2010, the Company ceased to have operations, other than to effectuate its wind-down and approve its liquidation plan by the Bankruptcy Court. REGAL ENTERTAINMENT: Fitch Puts 'B-/RR6' Rating on $100 Mil. Notes ------------------------------------------------------------------ Fitch Ratings has assigned a 'B-/RR6' rating to the $100 million additional issuance of Regal Entertainment Group 9.125% senior unsecured note due 2018. Proceeds of the notes are expected to be used to redeem a portion of Regal Cinemas Corporation's senior secured credit facility and for general corporate purposes. Regal Cinemas is an indirectly wholly owned subsidiary of Regal. In addition, Fitch has also taken these rating actions: Regal -- Issuer Default Rating affirmed at 'B+'; -- Senior unsecured notes affirmed at 'B-/RR6'. Regal Cinemas -- IDR affirmed at 'B+'; -- Senior secured credit facility affirmed at 'BB+/RR1'; -- Senior unsecured notes upgraded to 'BB/RR2' from 'BB-/RR3'. The Rating Outlook is Stable. The upgrade on Regal Cinemas's senior unsecured notes reflects the notes improved recovery prospects (from an expected 67% to 85% recovery), following the offering and partial redemption of the senior credit facility. Fitch's recovery analysis estimates an adjusted, distressed enterprise valuation of $1.7 billion, using a 5 times multiple and including a conservative estimate for Regal's 19.4% stake in National CineMedia LLC of approximately $200 million. Regal will issue the senior notes pursuant to the indenture dated Aug. 16, 2010, under which Regal issued $275 million and $150 million of 9.125% senior notes due 2018 on Aug. 16, 2010, and Jan. 7, 2011, respectively. The current offering will have identical terms to the prior notes. The indenture, dated Aug. 16, 2010, includes covenants related to limitation on consolidated debt (net interest coverage greater than 2x incurrence test), limitation on restricted payments (a basket that increases based on, among other factors, the excess of EBITDA over 1.7x interest expense) and limitation on liens (standard carve-outs exist in addition to an incurrence test of 2.75x net senior secured leverage). In addition, the indenture includes a change of control provision that is triggered if any person (except for the Anschutz Company and any of its affiliates) becomes the beneficial owner of 50% or more of the voting stock of Regal. Other change of control triggers include a majority change in the Board of Directors, the liquidation or dissolution of Regal, and/or if all or substantially all of Regal's and its subsidiaries' assets are sold. There are cross payment default/cross acceleration provisions (among Regal and Regal Cinemas) in regard to debt in excess of $25 million. Regal also announced its plan to amend and extend Regal Cinemas' senior secured credit facility. The term loan is due to expire in November 2016, and Regal is looking to extend this maturity to August 2017. In addition, Regal is looking to improve the pricing on the facility by 50 basis points, to 3% to 3.25% over LIBOR, depending on the consolidated leverage ratio. Fitch believes that the company will continue to focus free cash flow deployment toward build-out of theaters, acquisition of theater assets and/or for shareholder-friendly activities. However, while not anticipated, a debt-financed material acquisition or return of capital to shareholders that would raise and sustain the unadjusted gross leverage beyond 4.5x could have a negative impact on the rating. As of Dec. 31, 2010, liquidity was made up of $205 million in cash and approximately $82 million in credit facility availability (reduced by $3 million in letters of credit), under the company's $85 million revolving credit facility due May 2015. As of the end of the fourth quarter, Regal was still in the process of retiring the convertible senior notes due 2011 and as such, approximately $100 million of the $205 million on the balance sheet is expected to be deployed for this debt repayment. There are no significant maturities until 2016 (2017 if the company is successful in extending its term loan maturities). Fitch expects FCF for 2011 to be in the range of approximately $60 million-$100 million. Pro forma for the full redemption of the senior convertible notes, total debt as of Dec. 31, 2010 was approximately $2 billion, and lease-adjusted gross leverage, based on Fitch's calculations was approximately 5.2x (unadjusted gross leverage was at approximately 4.3x). Fitch expects unadjusted gross leverage to gradually decline over the next few years, but remain above 3.5x. The ratings reflect these key considerations: -- Regal's size and position as the largest domestic movie exhibitor, with 6,698 screens in 539 theaters. Fitch expects the company to continue to improve its relatively modern theater circuit in a disciplined manner. The ratings also reflect solid geographic diversity and relatively stable operating performance. -- Fitch believes movie exhibition will continue to be a key promotion window for the movie studios biggest/most profitable releases. -- In the near term, Fitch expects box office revenue for 2011 to be fueled by the premium pricing charged on 3-D films as major 3-D films continue to be released, along with the growing capacity of 3-D capable screens. However, Fitch continues to expect that the movie exhibitor industry will be challenged in growing attendance and any potential attendance declines will offset some of the growth in average ticket prices. Fitch expects that the announced 2011 films (which include several releases from Marvel and DC Comics, as well as nine sequels) will be able to draw sufficient attendance to maintain current attendance levels or at least keep declines in the 1% to 2% range. -- Fitch notes that concession revenues have remained relatively stable despite the weak economic conditions. While Fitch does not anticipate a significant decline in concession per patron, Fitch remains cautious that high margin concessions (which represent approximately 27% of Regal's total revenues and carry 86% gross margins), may be vulnerable to reduced per-guest concession spending due to cyclical factors or a re-acceleration of commodity prices. -- The ratings also incorporate the intermediate/long-term risks associated with increased competition from at-home entertainment media, limited control over revenue trends, the pressure on film distribution windows, increasing indirect competition from other distribution channels (such as DVD, VOD, and the Internet), and high operating leverage (which could make theater operators FCF negative during periods of reduced attendance). In addition, Regal and its peers rely on the quality, quantity, and timing of movie products, all factors out of management's control. REGAL ENTERTAINMENT: Moody's Puts 'B3' Rating on $100 Mil. Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Regal Entertainment Group's new $100 million add-on senior unsecured notes issue (Regal is the publicly traded parent holding company of Regal Cinemas Corporation). Since proceeds from the modest-sized new issue will be used to partially pay down the $1,088 million balance of Regal Cinema's bank credit facility (due November 2016), the transaction is neutral to Regal's consolidated credit profile and its B1 Corporate Family Rating and B1 Probability of Default Rating remain unchanged. Further, the add-on notes are rated at the same B3 level as the reference note issue. The rating outlook remains stable. The transaction continues a much needed re-balancing of Regal's consolidated credit profile that more evenly distributes debt capital among senior secured, senior unsecured and senior unsecured holdco instruments, which is a modestly positive development. The rebalancing of relative claims causes minor adjustments to applicable Loss Given Default Assessments, as outlined below. In December, Regal announced and paid a $216 million special dividend and announced an increase in its regular dividend. In light of what Moody's think are mounting pressures on the industry (theatric windows are shrinking, on-line distribution is gaining momentum, and recent revenue gains have depended mostly on ticket price increases which surely cannot continue indefinitely), Moody's interpreted this as an aggressive step. However, as last Fall's $275 million notes issue prefunded redemption of the remaining $75 million of convertible notes due March, 2011, and as Regal continues to have a relatively large cash balance ($130 million at December 30, 2010, proforma for the pending redemption), the dividend could be accommodated within the B1 rating, albeit the company had consumed some of its financial flexibility, especially in light of recent trends that show debt leverage per unit of capacity (theater, screen) increasing more than related cash flow productivity. However, as Moody's expect the company to be modestly cash flow positive, do not expect financial covenant compliance issues and given the cash balance, Regal continues to have very good liquidity that provides some off-set. In turn, should the relative leverage and cash flow productivity trends continue in opposite directions, the company's liquidity and credit profile may erode somewhat. In the interim, the rating outlook remains stable and Regal's SGL-1 Speculative Grade Liquidity Rating also remains unchanged. This summarizes the rating actions and Moody's ratings for Regal and related entities: Ratings and Outlook Actions: Issuer: Regal Entertainment Group -- Senior Unsecured add-on Senior Notes issue assigned B3 (LGD6, 91%) -- Senior Unsecured Senior Notes (Underlying issue), unchanged at B3 (with the LGD Assessment changed to LGD6, 91% from LGD6, 92%) -- Corporate Family Rating, Unchanged at B1 -- Probability of Default Rating, Unchanged at B1 -- Speculative Grade Liquidity Rating, Unchanged at SGL-1 -- Outlook, Unchanged at Stable Issuer: Regal Cinemas Corporation -- Senior Secured Bank Credit Facility, Unchanged at Ba2 (with the LGD Assessment changed to LGD2, 22% from LGD2, 24%) -- Senior Unsecured Regular Bond/Debenture, unchanged at B2 (with the LGD Assessment changed to LGD4, 68% from LGD5, 72%) -- Outlook, Unchanged at Stable Rating Rationale The company's ongoing nominal free cash flow profile, its relatively high financial leverage and a very limited ability to repay debt from internally generated cash flow are the key considerations that constrain ratings. The company's historic propensity to reward shareholders, which was very recently reinforced, also factors into the ratings assessment. This is especially relevant as business conditions, in Moody's view, deteriorate. While cinema exhibition has an historically proven business model, evolving consumer preferences and distribution technologies suggest that the business is more vulnerable to substitution than has historically been the case, and, in turn, it may be necessary in the near future to maintain a more conservative capital structure than has historically been the case at any given ratings level. Support for the ratings is provided by the company's leading stature in the cinema exhibition industry. Scale and recession-tested financial performance are positive features. So too is the company's remaining approximately 21.5 million unit position in National Cinemedia LLC (approximately 19.4%); the pre-tax realization value of approximately $345 million (assuming a per unit price of $16) provides an important buffer of just under 7% of gross fully adjusted debt. With $130 million of cash balances at December 30, 2010 (pro forma for the pending redemption), modestly positive free cash flow, no near term financial covenant pressure, and sundry assets that could be sold for cash, the company has very good liquidity. This mitigates near term default risk and supports the B1 CFR and PDR. Rating Outlook Regal's B1 CFR reflects the trade-offs between the relative stability and the small magnitude of the company's cash flow stream. With no change expected in either parameter, and with very good liquidity, the rating outlook is stable. What Could Change the Rating -- Up Given the company's ability to generate free cash flow and an historic propensity to allocate free cash flow to equity holders, a near term ratings upgrade is unlikely. However, the rating could be upgraded if the company demonstrates a clear trajectory towards maintaining Total Debt-to-EBITDA below 5x while at the same time maintaining free cash flow-to-debt in excess of 5%. What Could Change the Rating -- Down Downward pressure on the rating could occur if the company is unable to demonstrate an ability to sustain 2%-to-3% Free Cash Flow-to-Total Debt. Additionally, adverse liquidity developments, material debt-financed acquisitions or Total Debt-to-EBITDA leverage approaching 6x would also likely pressure the rating. Moody's last rating action for Regal was on January 4, 2011, when the senior unsecured debt was rated B3 and the senior secured bank debt ratings were raised to Ba2. The ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and the competitive position of the company versus others in its industry, ii) the capital structure and the financial risk of the company, iii) the projected financial and operating performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance of risk. These attributes were compared against other issuers both within and outside of Regal's core industry and the ratings are believed to be comparable to those of other issuers of similar credit risk. The principal methodology for instrument ratings was Moody's Probability of Default Ratings and Loss Given Default Assessments published in June 2009. The methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. Corporate Profile Regal Entertainment Group is the parent company of Regal Entertainment Holdings, Inc., which is the parent company of Regal Cinemas Corporation and its subsidiaries. The Company operates a theatre circuit in the United States consisting of 6,698 screens in 539 theatres in 37 states and the District of Columbia. Regal develops, acquires and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets throughout the United States. REGAL ENTERTAINMENT: S&P Assigns 'BB-' Rating to New Loan --------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to the new $1.088 billion first-lien term loan due 2017 of Knoxville, Tenn.- based motion picture exhibitor Regal Entertainment Group's operating subsidiary, Regal Cinemas Corp. S&P assigned the new first-lien term loan an issue-level rating of 'BB-' (one notch higher than S&P's 'B+' corporate credit rating on the parent holding company). S&P also assigned this debt a recovery rating of '2', indicating its expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. Proceeds of the borrowings from the new facilities will be used to refinance the existing credit facility. In addition, the company announced a $100 million add-on to its 9.125% senior notes due 2018. The upsizing to $525 million from $425 million does not affect S&P's 'B-' rating on the notes (two notches lower than the 'B+' corporate credit rating) or the recovery rating of '6', indicating its expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default. Proceeds of the add-on will be used to pay down a portion of the credit facility. The transaction is leverage- neutral. S&P estimates that lease-adjusted leverage was 6.2x as of Dec. 31, 2010. The 'B+' corporate credit rating and stable rating outlook on Regal remain unchanged. The rating reflects S&P's view that the company's aggressive financial policies will likely cause leverage to remain elevated over the intermediate term. Furthermore, Regal's revenue and EBITDA trends are highly dependent on the performance of the U.S. box office. Other rating factors include the company's participation in the mature and highly competitive U.S. movie exhibition industry, exposure to the fluctuating popularity of Hollywood films, and the long-term risk of increased competition from the proliferation of entertainment alternatives. Ratings List Regal Entertainment Group Regal Cinemas Corp. Corporate Credit Rating B+/Stable/-- New Rating Regal Cinemas Corp. $1.088B first-lien term loan due 2017 BB- Recovery Rating 2 Ratings Affirmed Regal Entertainment Group $525M 9.125% senior notes due 2018 B- Recovery Rating 6 RLAND PROPERTIES: Sent 15 Shopping Centers to Chapter 11 -------------------------------------------------------- The Star-Telegram reports that Rland Properties, a Colleyville, Texas, shopping center developer, recently filed Chapter 11 bankruptcy petitions on 15 centers in Fort Worth, Haltom City, Crowley, Hurst, Flower Mound and Colleyville, Texas. Rland lists the value of the assets between $10 million and $93.5 million and the liabilities between $5.4 million and $27.8 million, according to court filings in the Northern District of Texas in Fort Worth, the Star-Telegram said. "We've parked them for the time being in this recession," Kipp Whitman, Rland's president, was quoted as stating. Kristen MacBeth at BankruptcyHome.com reports that Rland Properties filed the Chapter 11 petitions after losing control of millions of dollars worth of property. According to BankruptcyHome.com, earlier last summer, BBVA Compass Bank foreclosed on Rland's shopping center in Fort Worth, later selling the two-year old property to another investor, the Fort Worth Star-Telegram reports. Company officials say it is the first project the company has lost to foreclosure in its 16 years of industry operation. According to the cases report for the U.S. Bankruptcy Court for the Northern District of Texas, these related cases filed for Chapter 11 protection on Jan. 31, 2011: Debtor Case No. ------ -------- Fossil Creek Group, Ltd. 11-40669 Tribble Hill, Ltd. 11-40672 Prairie Creek Group, Ltd. 11-40674 Crowley II Partners, Ltd. 11-40675 Sendera Ranch Commercial Partners, Ltd. 11-40676 114 Partners, Ltd. 11-40678 Corinth One Group, Ltd. 11-40679 Hurst Group, LLC 11-40680 Lavaca Trail, LLC 11-40683 1171 Group, LLC 11-40684 WS Commercial Partners, Ltd. 11-40685 287 Commercial Partners, Ltd. 11-40686 Gardens Commercial Partners, Ltd. 11-40687 Tower Commercial Partners, Ltd. 11-40688 Rivers Edge Partners, Ltd. 11-40689 The petitions were signed by K.A. Whitman, as president of the general partner. Fossil Creek estimated assets of up to $500,000 and debts of $50,000 to $100,000 in its Chapter 11 petition. A copy of Fossil Creek's Chapter 11 petition is available at: http://bankrupt.com/misc/txnb11-40669.pdf The Debtors are represented by: Jeff P. Prostok FORSHEY & PROSTOK, LLP 777 Main St., Suite 1290 Ft. Worth, TX 76102 Tel: (817) 877-8855 E-mail: jpp@forsheyprostok.com - and - Lynda L. Lankford FORSHEY & PROSTOK, LLP 777 Main Street, Ste. 1290 Fort Worth, TX 76102 Tel: (817) 878-2022 Fax: (817) 877-4151 E-mail: llankford@forsheyprostok.com RUGGED BEAR: Hires K&L Gates as Counsel Despite Conflict -------------------------------------------------------- Tim McLaughlin at the Boston Business Journal reports that the Rugged Bear Co. hired K&L Gates LLP as its legal counsel even though the law firm also counts TD Bank, a key creditor in the case, as a client. According to the report, the firm concedes in papers filed with the court it has ongoing loyalty to both Rugged Bear and TD Bank on unrelated matters. But at the same time K&L Gates will represent Rugged Bear in the restructuring of its debts, including loans from TD Bank. TD Bank and Rugged Bear both have waived any conflicts. "We have asked, and TD Bank has consented, in writing, to the firm's continued representation of Rugged Bear," K&L Gates partner Charles "Chuck" Dale wrote in a Jan. 25 letter filed with the court. " ... And the bank has further agreed that TD Bank will not assert ... that any ethical or other impediments exist to our representation of Rugged Bear." According to the Business Journal the firm, however, acknowledged that Rugged Bear's conflict waiver does not extend to the possibility that TD Bank might commence litigation or an adversary proceeding against Rugged Bear in its Chapter 11 reorganization case. "In the event of any such litigation, we will not, without obtaining your and TD Bank's written consent, represent either Rugged Bear or TD Bank in such litigation or adversary proceeding," Dale wrote. As part of the legal engagement, Rugged Bear has advanced $150,000 to K&L Gates. The firm's partner Charles Dale, whose hourly rate is $645 an hour, will be primary counsel. Mr. Dale will be joined by K&L lawyers Mackenzie Shea and Nicholas McGrath, whose hourly rates are $400 and $330, respectively. About The Rugged Bear Headquartered in Norwood, Massachusetts, The Rugged Bear Company is a chain of retail children's clothing stores New England, New York and New Jersey. It filed for Chapter 11 bankruptcy protection on January 25, 2011 (Bankr. D. Mass. Case No. 11- 10577). Charles A. Dale, III, Esq., at K&L GATES LLP, serves as the Debtor's bankruptcy counsel. Consensus Advisers, LLC, is the Debtor's financial advisor. The Debtor estimated its assets and debts at $10 million to $50 million. RUGGED BEAR: Hires Gordon Brothers for Store Closures ----------------------------------------------------- Jon Chesto at The Patriot Ledger reports that Boston-based Gordon Brothers was tapped to be the bidder to beat in a possible competition to handle Rugged Bear's upcoming store closures. Meanwhile, the Rugged Bear trademark and web site were lined up to be sold in an auction. The company's liquidation proposal is scheduled to be heard by a bankruptcy court judge in Springfield on Feb. 18, 2011. About The Rugged Bear Headquartered in Norwood, Massachusetts, The Rugged Bear Company is a chain of retail children's clothing stores New England, New York and New Jersey. It filed for Chapter 11 bankruptcy protection on January 25, 2011 (Bankr. D. Mass. Case No. 11- 10577). Charles A. Dale, III, Esq., at K&L GATES LLP, serves as the Debtor's bankruptcy counsel. Consensus Advisers, LLC, is the Debtor's financial advisor. The Debtor estimated its assets and debts at $10 million to $50 million. SABERTOOTH LLC: Bankr. Ct. Can't Review Confessed Judgment ---------------------------------------------------------- Pursuant to the Rooker-Feldman doctrine, WestLaw reports, a Pennsylvania bankruptcy court lacked subject matter jurisdiction over a Chapter 11 debtor's claims against the assignee of notes and a mortgage, which had obtained a prepetition confessed judgment against the debtor in state court, despite the pendency of the debtor's petition to open the confessed judgment. The fact that a direct attack on the state-court judgment in the form of the petition to open was pending when the collateral attack on the judgment was initiated in federal court did not make the collateral attack any less of a collateral attack, the court reasoned, concluding that the debtor was a state-court "loser." The debtor complained of injuries caused by the state-court judgment, as the asserted contractual breach was the assignee's act of confessing judgment when no default had arisen or, alternatively, when the contracts otherwise prohibited all collection action. Finally, the debtor was seeking a federal court's review of the merits of the state-court judgment, as it was impossible for the bankruptcy court to grant the relief sought without reviewing and negating the judgment. In re Sabertooth, LLC, --- B.R. ----, 2011 WL 221814 (Bankr. E.D. Pa.) (Frank, J.). A copy of the Honorable Eric L. Frank's Opinion dated Jan. 18, 2011, is available at http://is.gd/VjQAEhfrom Leagle.com. Single-asset real estate debtor Sabertooth, LLC, sought chapter 11 protection (Bankr. E.D. Pa. Case Nos. 09-11237) on Feb. 23, 2009. Sabertooth is related to Gold's Gym operator and Venom Inc., which sought chapter 11 protection (Bankr. E.D. Pa. Case No. 09-10445) on Jan. 22, 2009. Green Goblin, Inc., another affiliate, filed a chapter 11 petition (Bankr. E.D. Pa. Case No. 09-11239) on Feb. 23, 2009. The three cases are jointly administered, and the debtors are represented by Robert Mark Bovarnick, Esq., in Philadelphia, Pa. The Debtors estimate their assets and debts at less than $10 million. SANFORD ASSOCIATES: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Sanford Associates, LLC 5178 Donner Drive Clinton, OH 4216 Bankruptcy Case No.: 11-50445 Chapter 11 Petition Date: February 10, 2011 Court: United States Bankruptcy Court Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Michael A. Steel, Esq. GOLDMAN & ROSEN 11 S Forge St. Akron, OH 44304 Tel: (330) 376-8336 Fax: (330) 376-2522 E-mail: masteel@goldman-rosen.com Scheduled Assets: $309,600 Scheduled Debts: $1,166,492 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ohnb11-50445.pdf The petition was signed by Timothy L. Sanford, managing member. SEAHAWK DRILLING: Asks for Court's Nod to Obtain DIP Financing -------------------------------------------------------------- Seahawk Drilling, Inc., seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas to obtain postpetition secured financing from a syndicate of lenders led by D.E. Shaw Direct Capital Portfolios, L.L.C., as administrative agent. The DIP lenders have committed to provide up to $35 million. A copy of the DIP credit agreement is available for free at: http://bankrupt.com/misc/SEAHAWK__DRILLING_dipfinancingpact.pdf Berry D. Spears, Esq., at Fulbright & Jaworski L.L.P., explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The DIP credit facility will terminate on the earliest of: (i) 180 days from the Closing Date; (ii) 45 days after the commencement of the Chapter 11 Cases if a final court order in form and substance acceptable to the Agent in its discretion approving the DIP Credit Facility has not been entered to by the Court on or prior to the date; (iii) the earlier of the effective date and the date of the substantial consummation, in each case, of a plan of reorganization that has been confirmed by an order of the Court; (iv) the entry of a court order by the Court approving the sale of any collateral or any material assets of any of the Debtors without the consent of the Agent; (v) 60 days after the commencement of the Chapter 11 cases if, by that date, the Debtors have not entered into a binding Asset Purchase Agreement providing for the sale of substantially all of the assets or equity interests of the Debtors, which sale will have been approved by the Court and which will provide for the payment of cash consideration that is sufficient to pay in full all amounts due and owing under the DIP Credit Facility, including, without limitation, principal, interest, fees and other amounts then due and owing; (vi) 120 days after the commencement of the Chapter 11 cases if, by that date, the Debtors have not closed and consummated the sale of substantially all of the assets or equity interests of the Debtors, which sale will have been approved by the Court and will be satisfactory to the Agent in all respects; or (vii) the date on which the DIP Credit Facility will become due and payable upon the acceleration thereof in accordance with the terms of the DIP Documents. The DIP Credit Facility will bear interest at a floating rate per annum equal to the sum of: (i) a margin of 12%, plus (ii) the higher of (A) the LIBO Rate, and (B) 3.00%. Upon the occurrence and during the continuance of an Event of Default, all outstanding obligations will bear interest at the otherwise applicable interest rate plus 3%. There will be an Upfront Fee of 3.0% of the full $35 million committed amount of the DIP Credit Facility, due on the Closing Date. The Debtors will pay to Direct Capital a fully-earned, non- refundable $500,000 Commitment Fee as is set forth in the Commitment Letter. The Debtors have paid a cash deposit to Direct Capital for the expenses, which currently exceeds $75,000, and which xpense Deposit (a) will secure the Debtors' obligation to reimburse Direct Capital (and its affiliates and designees) for the expenses, and (b) will be applied against the expenses as they are incurred. In the event that, as a result of application, the amount of the Expense Deposit declines to $10,000, the Debtors will pay to Direct Capital in cash an amount to be added to the Deposit that will top-up the total amount of the Expense Deposit to $75,000. If the DIP Credit Facility fails to close with the DIP Lenders and the aggregate Expenses are less than the aggregate Expense Deposit (as determined by Direct Capital), then Direct Capital will pay to the Debtors (within 5 days of verbal or written notice from the Debtors) the amount by which the aggregate Expense Deposit exceeds the aggregate Expenses (as determined by Direct Capital). The Debtors will pay an Exit Fee, which will be calculated as the variable percentage of the full committed amount of the DIP Credit Facility, due upon the earlier of Maturity or any prepayment or refinancing of the DIP Credit Facility. The percentage is based on the date that the Exit Fee is due. Days From Closing Exit Fee Percentage ----------------- ------------------- 1-59 6% 60-74 5.5% 74-89 5% 90-104 4.5% 105-119 4% 120-134 3.5% 135-180 3% The DIP Credit Facility will be secured by a first priority lien and security interest in all assets, including tangible and intangible assets, working capital assets, avoidance actions (but only if the avoidance actions are approved as part of such collateral in the final court order), and stock of the Debtors. All existing secured lenders will consent to the priming of their respective liens by the liens to be granted by the Debtors in connection with the DIP Credit Facility or the Court will order such priming pursuant to the interim court order and final court order or, in the case of the pre-petition revolving credit facility, the Court authorizes payment in full of the facility and the release of all liens securing same. Accordingly, all loans, advances and other obligations, liabilities and indebtedness of the Debtors to the Agent and the DIP Lenders will be secured by valid, perfected and enforceable first priority liens and security interests in all assets of the Debtors, real and personal, now existing or hereafter arising. The DIP lien is subject to a an up to $3 million carve-out for U.S. Trustee and Clerk of Court fees, fees payable to professional employed in the Debtors' case; and fees of the committee in pursuing actions challenging the DIP Lenders' lien. The DIP Credit Facility will be prepaid by an amount equal to 100% of the net cash proceeds of all customary mandatory prepayment events, including asset sales (other than sales of assets other than the Rigs in the ordinary course of business, provided that such ordinary course sales will not exceed $100,000 in any month), tax refunds, casualty events, debt issuances and equity issuances by the Debtors. All advances under the DIP Credit Facility will be subject to a detailed rolling 13-week cash flow budget, a copy of which is available for free at: http://bankrupt.com/misc/SEAHAWK_DRILLING_dipfinancingbudget.pdf About Seahawk Drilling Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. It filed for Chapter 11 bankruptcy protection on February 11, 2011 (Bankr. S.D. Tex. Case No. 11-20089). Affiliates Seahawk Drilling LLC (Bankr. S.D. Tex. Case No. 11- 20088), Seahawk Drilling, Inc. (Bankr. S.D. Tex. Case No. 11- 20089), Seahawk Mexico Holdings LLC (Bankr. S.D. Tex. Case No. 11- 20090), Seahawk Drilling Management LLC (Bankr. S.D. Tex. Case No. 11-20091), Seahawk Offshore Management LLC (Bankr. S.D. Tex. Case No. 11-20092), Energy Supply International LLC (Bankr. S.D. Tex. Case No. 11-20093), Seahawk Global Holdings LLC (Bankr. S.D. Tex. Case No. 11-20094), and Seahawk Drilling USA LLC (Bankr. S.D. Tex. Case No. 11-20095) filed separate Chapter 11 petitions. Berry D Spears, Esq., and Johnathan Christiaan Bolton, Esq., at Fullbright & Jaworkski L.L.P., serve as the Debtors' bankruptcy counsel. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serve as the Debtors' co-counsel. Alvarez And Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons And Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors disclosed $504,897,000 in total assets and $124,474,000 in total debts as of the Petition Date. SEAHAWK DRILLING: Taps Fulbright & Jaworski as Gen. Bankr. Counsel ------------------------------------------------------------------ Seahawk Drilling, Inc., et al., ask for authorization from the U.S. Bankruptcy Court for the Southern District of Texas to employ Fulbright & Jaworski L.L.P., as general bankruptcy counsel. Fulbright & Jaworski will, among other things: (a) represent the Debtors in cash collateral and debtor-in- possession financing negotiations and litigation; (b) represent the Debtors in any asset sales and other liquidity transactions; (c) represent the Debtors concerning disposition of their executory contracts; (d) assist the Debtors in the development, negotiation, litigation and confirmation of a Chapter 11 plan of reorganization and the preparation of a disclosure statement or statements in respect thereof, concerning treatment of secured and unsecured claims including both trade debt and bank debt. Fulbright & Jaworski will be paid based on the rates of its professionals: Berry D. Spears $875 P. Kevin Trautner $650 Frank T. Garcia $780 Nina B. Skinner $500 Johnathan C. Bolton $520 Susan H. Lawhon $500 Travis A. Torrence $410 Bob B. Bruner $330 Casey Mucha $150 Berry D. Spears, a partner at Fulbright & Jaworski, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. It filed for Chapter 11 bankruptcy protection on February 11, 2011 (Bankr. S.D. Tex. Case No. 11-20089). Affiliates Seahawk Drilling LLC (Bankr. S.D. Tex. Case No. 11- 20088), Seahawk Drilling, Inc. (Bankr. S.D. Tex. Case No. 11- 20089), Seahawk Mexico Holdings LLC (Bankr. S.D. Tex. Case No. 11- 20090), Seahawk Drilling Management LLC (Bankr. S.D. Tex. Case No. 11-20091), Seahawk Offshore Management LLC (Bankr. S.D. Tex. Case No. 11-20092), Energy Supply International LLC (Bankr. S.D. Tex. Case No. 11-20093), Seahawk Global Holdings LLC (Bankr. S.D. Tex. Case No. 11-20094), and Seahawk Drilling USA LLC (Bankr. S.D. Tex. Case No. 11-20095) filed separate Chapter 11 petitions. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serve as the Debtors' co-counsel. Alvarez And Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons And Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors disclosed $504,897,000 in total assets and $124,474,000 in total debts as of the Petition Date. SEAHAWK DRILLING: Wants to Sell Substantially All of Assets ----------------------------------------------------------- Seahawk Drilling Inc., et al., ask for authorization from the U.S. Bankruptcy Court for the Southern District of Texas to sell substantially all of the Debtors' assets to Hercules Offshore, Inc., and SD Drilling LLC. In February 2011, the Board authorized the Debtors to enter into an Asset Purchase Agreement with Hercules Offshore. A copy of the agreement is available for free at: http://bankrupt.com/misc/SEAHAWK_DRILLING_apa.pdf The executed APA contemplates the acquisition by Hercules or one or more of its subsidiaries of substantially all of the assets and jackup rigs of the Debtors through a sale. The aggregate consideration for the Purchased Assets is (a) 22,321,425 shares of Hercules Common Stock plus (b) cash in an amount equal to $25,000,012. Using the closing stock price of Hercules' stock as of February 10, 2011, the Base Aggregate Consideration would be valued at approximately $105 million before any adjustments. The Base Aggregate Consideration is to be payable at closing by the Purchaser to the Debtors. Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. It filed for Chapter 11 bankruptcy protection on February 11, 2011 (Bankr. S.D. Tex. Case No. 11-20089). Affiliates Seahawk Drilling LLC (Bankr. S.D. Tex. Case No. 11- 20088), Seahawk Drilling, Inc. (Bankr. S.D. Tex. Case No. 11- 20089), Seahawk Mexico Holdings LLC (Bankr. S.D. Tex. Case No. 11- 20090), Seahawk Drilling Management LLC (Bankr. S.D. Tex. Case No. 11-20091), Seahawk Offshore Management LLC (Bankr. S.D. Tex. Case No. 11-20092), Energy Supply International LLC (Bankr. S.D. Tex. Case No. 11-20093), Seahawk Global Holdings LLC (Bankr. S.D. Tex. Case No. 11-20094), and Seahawk Drilling USA LLC (Bankr. S.D. Tex. Case No. 11-20095) filed separate Chapter 11 petitions. Berry D Spears, Esq., and Johnathan Christiaan Bolton, Esq., at Fullbright & Jaworkski L.L.P., serve as the Debtors' bankruptcy counsel. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serve as the Debtors' co-counsel. Alvarez And Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons And Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors disclosed $504,897,000 in total assets and $124,474,000 in total debts as of the Petition Date. SECUREALERT INC: Inks GPS Monitoring Contract in Mexico ------------------------------------------------------- SecureAlert Inc. has reached a historic agreement with the Federal Government of Mexico to provide Electronic Monitoring for offenders in 2011 on behalf of the Secretary of Public Security and the citizens of Mexico. With this contract award, SecureAlert, VR Global Security Consulting and International Surveillance Services Corporation have partnered to deliver a central and dynamic monitoring center capability in Mexico City that will monitor offenders 24 hours a day, 7 days a week, 365 days a year throughout Mexico, utilizing SecureAlert's real-time TrackerPALTM portfolio of GPS devices and reliable real-time monitoring technologies. "This is truly a historical day, both for the people and the Federal Government of Mexico, as well as for SecureAlert and its partners, who have all worked tirelessly for years together", said John L. Hastings III, President and Chief Operating Officer of SecureAlert, Inc. "This is a transformational public safety initiative and we are fully committed to delivering to Mexico the most highly reliable Electronic Monitoring, Offender Tracking and GPS solution available in the global marketplace today. "Recent large and significant public safety commitments and contracts in Mexico, The Bahamas, Brazil and Alaska further demonstrate how far SecureAlert, Inc. has come in listening to the global marketplace, focusing on quality and reliability, and of being attentive to the specific cultural and local needs of its government customers and the citizens they represent," concluded Hastings. About SecureAlert Headquartered in Sandy, Utah, SecureAlert, Inc. (formerly RemoteMDx, Inc.) (OTC BB: RMDX) -- http://www.securealert.com/-- and subsidiaries market and deploy offender management programs, combining patented GPS tracking technologies, fulltime 24/7/365 intervention-based monitoring capabilities and case management services. During the fiscal year ended September 30, 2010, the Company had net revenues of $12.4 million compared with net revenues of $12.6 million for the fiscal year ended September 30, 2009, a decrease of 1%. The Company's balance sheet at September 30, 2010, showed $11.19 million in total assets, $8.06 million in total liabilities and $3.13 million in total equity. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, noted that the Company has incurred losses, negative cash flows from operating activities and has an accumulated deficit. These conditions raise substantial doubt about its ability to continue as a going concern, according to the auditors. SHALAN ENTERPRISES: Can Sell Las Vegas Property for $290,000 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California has granted Shalan Enterprises, LLC, permission to sell its real property commonly known as 2777 Paradise Road, Unit 2105, in Las Vegas, Nevada, to the Robert A. Green Living Trust, for the total sum of $290,000. The holder of the first deed of trust on the Property, Bank of America, N.A., has agreed to accept less than the full amount due on the Property (approximately $223,691). About Shalan Enterprises Marina Del Rey, California-based Shalan Enterprises, LLC, a Nevada limited liability company, was formed in 1999 for the purpose of owning, operating and leasing and/or selling properties. The Company filed for Chapter 11 bankruptcy protection on November 25, 2009 (Bankr. C.D. Calif. Case No. 09-43263). The Company has assets of $12,540,000, and total debts of $7,426,313. The Debtor's case is substantively consolidated with Alan Rapoport, the manager of the Debtor. Mr. Rapoport filed for Chapter 11 on November 30, 2009 (Bankr. C.D. Calif. Case No. 09-43499). Joseph A. Eisenberg, Esq., at Jeffer Mangels Butler & Mitchell LLP, in Los Angeles, Calif., represent the Debtors as counsel. SMITHFIELD FOODS: Moody's Upgrades Corporate Family Rating to 'B1' ------------------------------------------------------------------ Moody's Investors Service upgraded Smithfield Foods Inc.'s corporate family and probability of default ratings to 'B1' from 'B2' given the company's material and permanent debt reduction following strong operating performance since the beginning of 2010 and particularly during the first two quarters of the company's fiscal 2011 due to the combination of strong pork industry fundamentals, commitment to deleveraging, and benefits from its pork restructuring initiated in February 2009. Smithfield's liquidity is expected to remain strong despite headwinds from high corn prices. Moreover, Moody's believes that as the current peak cycle performance wears off the company will continue to reflect credit metrics consistent with a B1 corporate family rating. The company has repaid a significant amount of long term debt - about $900 million during fiscal 2011, lowering debt by about 30%. The rating outlook is stable. Ratings Upgraded: Smithfield Foods, Inc. * Corporate Family Rating to B1 from B2; * Probability of Default Rating to B1 from B2; * Senior unsecured debt ratings to B3 (LGD5, 88%) from Caa1 (LGD5, 84%); and * Senior secured notes due 2014, to Ba3 (LGD3, 42%) from B1 (LGD3, 34%). Rating Affirmed: * Speculative Grade Liquidity at SGL-1 The rating outlook is stable. Ratings Rationale Smithfield's B1 corporate family rating reflects its concentration in a single protein (pork), its history of volatile financial performance, and its low operating margins given the commodity nature of the majority of its products. Lately, strong industry fundamentals driven primarily by tight hog supplies have led to better margins in hog production and record profitability in pork processing and packaged meats. A pork restructuring plan initiated in February 2009 is achieving considerable cost savings and improved overall efficiency. Exports should continue to support revenue growth and pricing. The notable increase in feed costs adds an element of uncertainty once the company's favorable hedges begin to roll off. However, the company has focused on material debt reduction which mitigates the impact of lower cash flow due to the higher input costs. Over the long term, the company will remain vulnerable to the inherent risks associated with unanticipated outbreaks of animal disease, the potential for politically motivated trade barriers and weather related challenges. Credit metrics are expected to continue to improve modestly over the near term due to debt repayment and near top of the cycle operating margins. Leverage is high at 4.1 times debt-to EBITDA as of LTM October 2010 but trending lower and interest coverage should strengthen to over 2 times EBITA-to-interest expense over the near term. Given tight supply in hogs, prices should continue to bode well for Smithfield. Profitability is likely to be pressured beyond fiscal 2011 given higher input costs and the likely increase in hog production over time. Smithfield's current liquidity is very good. What Could Change the Rating -- Down Ratings could be lowered if debt to EBITDA is likely to be sustained above 5 times debt-to-EBITDA or if EBITA- to- interest expense is likely to be sustained below 2 times. What Could Change the Rating -- Up A positive outlook would likely be supported if margins were sustained despite expected pressure due to high input costs. An upgrade would likely require leverage reflecting greater stability at lower than 3 times debt-to-EBITDA and cash flow that reflects less dependence on the commodity segment of the company's operations given its concentration in only one protein. Moody's last rating action for Smithfield was on September 14, 2010. Smithfield Foods, Inc., headquartered in Smithfield, Virginia, is the world's largest pork producer and processor. Sales for the twelve months ended October 10, 2010 were approximately $11.7 billion. SOLAR ENERTECH: Reports $5 Million Net Income in Dec. 31 Quarter ---------------------------------------------------------------- Solar Enertech Corp. filed its quarterly report on Form 10-Q, reporting net income of $5.0 million on $15.5 million of sales for the three months ended December 31, 2010, compared with a net loss of $3.9 million on $17.7 million of sales for the same period of the prior fiscal year. The Company's balance sheet at December 31, 2010, showed $26.5 million in total assets, $13.3 million in total liabilities, and stockholders' equity of $13.2 million. As reported in the Troubled Company Reporter on December 22, 2010, Ernst & Young Hua Ming, in Shanghai, the Peoples Republic of China, expressed substantial doubt about Solar Enertech's ability to continue as a going concern, following the Company's results for the fiscal year ended September 30, 2010. The independent auditors noted of the Company's recurring losses from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7332 About Solar EnerTech Mountain View, Calif.-based Solar EnerTech Corp. (OTC BB: SOEN) -- http://www.solarE-power.com/- is a photovoltaic solar energy cell manufacturing enterprise. The Company has established a sophisticated 67,107-square-foot manufacturing facility at Jinqiao Modern Technology Park in Shanghai, China. The Company currently has two 25MW solar cell production lines and a 50MW solar module production facility. Solar EnerTech has also established a Joint R&D Lab at Shanghai University to develop higher efficiency cells and to put the results of that research to use in its manufacturing processes. SOUTH EDGE: Appeals Chapter 11 Ruling and Trustee Appointment ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that South Edge LLC appealed last week's ruling by the bankruptcy judge that put it into Chapter 11 reorganization involuntarily. Mr. Rochelle adds South Edge also appealed from a second ruling ousting management and placing the reorganization in the hands of a Chapter 11 trustee. Mr. Rochelle recounts that U.S. Bankruptcy Judge Bruce A. Markell, in his opinion delivered from the bench, put South Edge into Chapter 11 because more than $320 million has been in default since 2008. He said the lenders didn't need to prove the exact amount by which their claims exceeded the value of South Edge's Inspirada project. Without deciding if there was gross mismanagement, Judge Markell appointed a trustee after finding there was a deadlock in management that prevented the filing of lawsuits against the homebuilders who are the ultimate owners of Inspirada. Mr. Rochelle notes that South Edge elected to have the appeal heard by a district judge and not by a panel of three bankruptcy judges on the Bankruptcy Appellate Panel. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank N.A. and two other lenders filed an involuntary petition on December 9, 2010, in Las Vegas against South Edge LLC (Bankr. D. Nev. Case No. 10-32968). The lenders who filed the involuntary petition are part of a group that provided a $595 million credit. New York-based JPMorgan is a lender and agent for the lenders. Other lenders filing the involuntary petition were Credit Agricole Corporate and Investment Bank and Wells Fargo Bank NA. On January 6, 2011, South Edge filed motions with the court to dismiss the involuntary bankruptcy petition by JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A. and Cr,dit Agricole Corporate and Investment Bank. The court held a trial that commenced on January 24, 2011. On February 3, 2011, the court denied South Edge's motions and entered an order for relief and for the appointment of a trustee. SPICEWOOD DEVELOPMENT: Essentially No Equity Left in Ch. 11 Estate ------------------------------------------------------------------ The Bankruptcy Administrator is appealing the bankruptcy court's order confirming Spicewood Development, LLC's Chapter 11 Plan of Reorganization and the final order denying the Bankruptcy Administrator's request to convert the case to Chapter 7. The Debtor's only asset is undeveloped real property. The Debtor has valued this asset at $337,000, based on a March 13, 2010 appraisal. An independent appraiser has valued this asset at $214,500. In a related appeal, Forrest v. Spicewood Development, LLC, Case No. 1:10cv96 (W.D.N.C.), the District Court held that claimant Samantha Forrest has an allowable claim in the Debtor's bankruptcy for $315,947.18. According to District Judge Martin Reidinger, in light of the Forrest ruling, it appears that there is essentially no equity left in the bankruptcy estate. Accordingly, Judge Reidinger directed the Bankruptcy Administrator and Spicewood to file supplemental briefs advising the District Court of their position on the issue of whether the Court's ruling in Forrest renders the Bankruptcy Administrator's appeal moot. The case is United States Bankruptcy Administrator, v. Spicewood Development, LLC, Case No. 1:10-cv-161 (W.D.N.C.). A copy of Judge Reidinger's February 8, 2011 order is available at http://is.gd/yiG6VHfrom Leagle.com. Based in Enka, North Carolina, Spicewood Development, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 09-10874) on August 11, 2009. Judge George R. Hodges presides over the case. David G. Gray, Esq. -- judyhj@bellsouth.net -- serves as the Debtor's counsel. In its petition, the Debtor listed assets of $1,192,000 and debts of $18,656. SPITZER INDUSTRIES: Moody's Assigns 'B2' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned a first time B2 Corporate Family Rating to Spitzer Industries, Inc. Moody's also assigned a B2 rating to the company's proposed $145 million credit facilities, consisting of a $25 million revolver and $120 million term loan. The rating outlook is stable. Ratings Rationale The ratings are subject to review of final documents and terms of the proposed term loan and revolver, including financial covenants, restricted payments basket terms and cash flow sweep terms. The proposed term loan will be used to refinance existing debt of approximately $44 million, fund a $72 million dividend to shareholders and pay estimated fees and expenses of $4 million. Spitzer's B2 Corporate Family Rating reflects the company's track record through the recent energy sector trough, established and numerous customer relationships, degree of variability in its cost structure and low capital spending needs. Although the majority of the proceeds from the current transaction will be used to finance a sizeable dividend payment, the potential for further distributions are expected to be restrained by the terms in the company's credit facilities, notwithstanding tax distributions. The B2 rating is restrained by the company's small size, risks inherent in its turnkey contracts, which comprise nearly all of its backlog, the need to establish a history of operating as a leveraged company in a volatile and cyclical sector, and high leverage on a small base of fixed assets. With total tangible assets of under $80 million as of December 31, 2010 (pro forma for the AIT acquisition in January) and pro forma 2010 EBITDA (as adjusted for operating leases) of approximately $35 million, Spitzer is one of the smaller rated companies in the oilfield services and energy construction peer groups. With its end market focus on the energy sector, the company remains exposed to the volatility and cyclicality inherent in the sector. Moreover, the company is fairly exposed to the onshore North American natural gas sector, which represented over 50% of its 2010 revenue. However, Moody's notes that the company is exposed to several segments within the energy sector, has well established and numerous customer relationships, has demonstrated a track record of responding to changing dynamics in the energy sector and generated relatively sound performance during the most recent cyclical trough compared to certain peers. While Spitzer's 2010 full year results reflect a recovery from the industry downturn of 2009, sequential quarterly trends in 2010 exhibit a declining trend. However, near term earnings should be supported by the company's $110 million backlog, which has experienced a sequential quarterly recovery from trough levels. Nevertheless, there remains execution risk in the backlog, as nearly all the backlog is comprised of turnkey contracts. This risk is partially offset by the small scale and short project duration of most of the contracts in the backlog, the company's good track record executing on turnkey projects to date and the familiarity with the type of projects in the backlog. Moody's estimates pro forma 2010 debt/EBITDA at 3.6x, which is reasonable for the B2 rating. However, with less than $20 million of fixed assets, long term debt to fixed assets is weak and the company needs to establish an operating history as a leveraged company operating in a cyclical sector. Moody's notes that the company's low capital spending needs and the expected cash flow sweep mechanism in the term loan should support lower long term debt balances going forward. The stable rating outlook assumes Spitzer will be able to improve sequential earnings over the course of 2011 and use free cash flow to reduce long term debt balances. Given the company's small size, a rating upgrade is not expected at this time, notwithstanding a transaction that substantial increases the company's size and scale without negatively impairing its financial leverage profile. On the other hand, the rating could face downward pressure to liquidity pressures, a material decline in the company's earnings or backlog or increased financial leverage (over 5.0x debt/EBITDA). The B2 senior secured ratings reflect both Spitzer's overall probability of default, to which Moody's assigns a Probability of Default Rating of B3, and a loss given default of LGD3 (32%). The revolving credit facility and term loan represent the predominance of the capital structure and are secured by all of the company's assets. This results in the credit facilities being rated the same as the B2 Corporate Family Rating under Moody's Loss Given Default Methodology. Spitzer Industries, Inc., is headquartered in Houston, Texas. SPITZER INDUSTRIES: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'B' corporate credit rating to Houston-based Spitzer Industries Inc. The outlook is stable. At the same time, S&P assigned a preliminary 'B' issue-level rating to Spitzer's proposed $120 million senior secured term loan due 2017. S&P also assigned a preliminary '4' recovery rating to the loan, indicating expectations of an average (30% to 50%) recovery in the event of a payment default. The company will use proceeds from the transaction to repay outstanding debt and to provide a dividend to its shareholders. "The ratings on Spitzer reflect the company's position as an operator exposed to highly cyclical end markets, its relatively small size and scale, its limited operating diversity, a concentrated customer base, the low barriers to entry in Spitzer's business space, and the company's limited liquidity," said Standard & Poor's credit analyst Patrick Y. Lee. "The ratings also reflect Spitzer's moderate leverage, a history of free cash flow generation, and minimal capital expenditure requirements." Standard & Poor's Ratings Services classifies Spitzer's business risk profile as vulnerable. The company is a fabricator of energy products and equipment for customers in end-markets such as oil and gas production, gas processing and treating, petrochemicals and refining, gas transmission, and subsea oil and gas production. To service its customers, Spitzer operates three fabrication facilities, all of which are located in the Houston area and which together employ less than 800 individuals. One waterfront facility permits the company, unlike some others, to fabricate non-truckable items that can be shipped internationally and to the Gulf of Mexico. Nonetheless, the fabrication business in which Spitzer competes is a highly fragmented segment of the oilfield services industry where barriers to entry are minimal and competitive differentiation is difficult to gauge. The stable outlook is based on Spitzer's generally decent revenue stream and margins, its relatively moderate leverage, and solid free cash flow generation. S&P considers a downgrade to be possible if, for an extended period of time, leverage was to exceed the 5x area or if liquidity materially worsens to less than $15 million. S&P could upgrade the company if the business risk profile were to improve, particularly through growth and diversification of its operations, and if credit metrics were to trend positively, including leverage under 3x on a sustained basis. SUNCAL COS: Seeks to Halt Exit Plans for Projects Backed by Lehman ------------------------------------------------------------------ American Bankruptcy Institute reports that SunCal Cos. is asking a bankruptcy judge to put the brakes on the chapter 11 exit of a handful of stalled Southern California real-estate projects while it appeals a ruling approving a deal between Lehman Brothers Holdings Inc. and the bankruptcy trustee overseeing the projects. As reported in the Troubled Company Reporter on Dec. 30, 2010, Dow Jones Newswires' Patrick Fitzgerald said that Judge Erithe A. Smith of the U.S. Bankruptcy Court in Santa Ana, Calif., approved a compromise between Lehman Brothers Holdings Inc.'s commercial-paper unit and Chapter 11 trustee Alfred H. Siegel, paving the way for the sale of a handful of stalled Southern California real-estate projects Lehman helped finance in conjunction with developer SunCal Cos. Mr. Siegel oversees the bankruptcy cases of several SunCal real- estate projects encompassing more than 5,000 acres in Southern California. According to Dow Jones, the properties at issue include McAllister Ranch, a 2,070-acre planned residential community near Bakersfield and a pair of developments -- McSweeny Farms and SummerWind Ranch -- in Riverside County. Dow Jones related that those properties, which took on more than $300 million in debt in 2006 and 2007, were valued at just $62 million, according to court papers filed earlier in last year. 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. SYNTERRA 3020: Can Use Inland Mortgage's Cash Until February 28 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania has granted Synterra 3020 Market, L.P., interim permission to use cash collateral of Inland Mortgage Capital Corporation, from January 31, 2011, to February 28, 2011, to meet ordinary cash needs as well as for other purposes as may be approved in writing by the Lender. Pending a final hearing or entry of a final order, the total amount of cash collateral authorized to be used will not exceed $220,000, the approximate amount reflected in the Budget for the time period of January 12, 2011, through February 28, 2011. As adequate protection for the diminution in the value of the Cash Collateral, Lender is granted a first priority security interest in (x) the Prepetition Collateral and all postpetition proceeds therefrom, and (y) all of the Debtor's presently owned or hereafter acquired property and assets. To the extent the adequate protection is insufficient to protect the Lender's interests as result of the Debtor's use of Cash Collateral, the Lender will have a superpriority administrative expense claim, pursuant to Section 507(b) of the Bankruptcy Code. Any objections to this interim order must be filed with the Clerk of the Bankruptcy Court and served upon counsel for the Debtor on or before February 23, 2011. Objectors must appear at the final hearing on the motion which will be held at 2:00 p.m. on the February 23, 2011. Lender is currently owed approximately $27,480,976 (inclusive of the principal balance of $25,515,255), secured by a first priority mortgage lien on the Debtor's real estate located at 3020-3052 Market Street in Philadelphia, Pa., and the rents and profits from the Property and all leases of the Property. A copy of the Budget is available for free at: http://bankrupt.com/misc/Synterra.OperatingBudget.pdf About Synterra 3020 Philadelphia-based Synterra 3020 Market, L.P., is the master lessor of certain real property located in the City of Philadelphia, 27th Ward, Commonwealth of Pennsylvania and commonly known as 3020-3052 Market Street, City of Philadelphia, Philadelphia County, Pennsylvania. Its primary tenants are the University of Pennsylvania, Level 3 Communications, LLC, Synterra, Ltd., Lincoln University, and T Mobile, AT&T. Synterra 3020 filed for Chapter 11 bankruptcy protection on January 12, 2011 (Bankr. E.D. Pa. Case No. 11-10205). Albert A. Ciardi, III, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., serve as bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. TANGLEWOOD FARMS: Court Denies Bid for Chapter 11 Trustee --------------------------------------------------------- Bankruptcy Judge J. Rich Leonard denied the Bankruptcy Administrator's emergency motion to appoint a Chapter 11 trustee in the bankruptcy cases of Tanglewood Farms, Inc., of Elizabeth City, and James Howard Winslow and Billie Reid Winslow. On November 5, 2010, Adams, Martin & Associates P.A. was appointed to serve as examiner to investigate allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, and irregularity in the management of the Debtors' affairs. The examiner's report was filed on December 5, 2010. The examiner's report made several findings. Mr. Winslow acknowledged that he had sold grain that he did not own, and informed the examiner that he opened a bank account in the name of Belvidere Farmers Exchange. Mr. Winslow explained that he ran Tanglewood sales through the Belvidere account so that he could access the proceeds from grain sales. The examiner was unable to obtain complete records on all the entities including Belvidere and thus recommended further investigation. However, the implication of the report was that Mr. Winslow had diverted Tanglewood grain proceeds away from Meherrin Agricultural and Chemical Company, the lien creditor entitled to them. Testimony at the hearing revealed that the grain storage facility owned by Tanglewood stored Mr. Winslow's grain as well as that of other farmers. Tanglewood would sell the commingled grain. The proceeds of all grain sales would go into Tanglewood's account. Historically, Tanglewood had kept the proceeds of the other farmers until they requested them. Mr. Winslow testified he would use those proceeds to fund his operations or pay other farmers as they demanded payment. Tanglewood and Mr. Winslow typically had enough cash on hand to repay the farmers' proceeds with interest until operations began to suffer in 2008 after a severe drought. In recent years, Meherrin financed both entities' operations in exchange for a first priority lien on their crops. In the year preceding the bankruptcy filings, all of the proceeds from Tanglewood's sales were being paid by the purchasers to Meherrin, including the proceeds collected from the sale of other farmers' grain. The debtors became unable to fund ongoing operations or pay the other farmers their proceeds because of the turn over of all crop proceeds to Meherrin, per their lien. In an attempt to protect the farmers whose grain he sold and free up operating capital, Mr. Winslow sold grain in the name of Belvidere and deposited the proceeds into the Belvidere account. Since filing chapter 11, the Belvidere account has been closed and no similar activity has occurred. Critically, there is no evidence that grain in which Meherrin had a legitimate lien was sold in this fashion. In fact, Merherrin, the Debtors' largest secured creditor, opposes the motion for appointment of a trustee. The court appointed a chief restructuring officer, Doug Gurkins, on August 30, 2010. Under his guidance the farming operation has been successful. In his February 10, 2011 Order, Judge Leonard held that the Bankruptcy Administrator has not overcome the high standard associated with the appointment of a chapter 11 trustee. The appointment of a trustee in a Chapter 11 case is an extraordinary remedy, and there is a strong presumption in favor of allowing the Debtor to remain in possession. Judge Leonard held that the proceeds of Meherrin's collateral were never diverted. Meherrin was continually paid from the sale of Mr. Winslow's grain by Tanglewood. Although the Belvidere account was a ruse, the court does not perceive any actual harm caused any creditor by it. Thus it does not rise to the level of gross mismanagement or fraud. Under the current management, the farming operation of the debtors was a success in 2010. If a trustee were appointed and looked at the projections, the court suspects that he or she would largely ratify the decisions already made by the debtors and the Chief Restructuring Officer. Additionally, the broad powers given to the Chief Restructuring Officer in the Winslow case insure that current operations are in compliance with chapter 11. Bankruptcy courts are generally reluctant to displace the management and control of the debtors' business unless extraordinary circumstances warrant it. There is no justification for disrupting the Debtors' business. Appointment of a Chapter 11 trustee will only result in unnecessary expense and costs to the detriment of the Debtors' remaining creditors. The Court anticipates that the examiner's report will be completed, and than any confirmed plan will authorize a plan trustee to investigate and bring any appropriate avoidance actions. About Tanglewood Farms, and James Howard and Billie Reid Winslow Based in Elizabeth City, North Carolina, Tanglewood Farms, Inc. of Elizabeth City filed for Chapter 11 bankruptcy protection on August 20, 2010 (Bankr. E.D.N.C. Case No.10-06719). Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represents the Debtor. The Debtor estimated assets between $1 million and $10 million, and debts between $10 million and $50 million. James Howard Winslow and Billie Reid Winslow filed for Chapter 11 (Bankr. E.D.N.C. Case No. 10-06745) on August 23, 2010. TAYLOR BEAN: Troutman Seeks to Nix Ex-Chairman's Info Demand ------------------------------------------------------------ Bankruptcy Law360 reports that Troutman Sanders LLP has sought to kill a subpoena sought by the ex-chairman of Taylor Bean & Whitaker Mortgage Corp. for records he claims would help him defend a $2 billion criminal fraud case, contending they are privileged. The law firm moved on behalf of itself and Taylor Bean in the U.S. District Court for the Eastern District of Virginia on Tuesday to quash Lee Bentley Farkas' request, according to Law360. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on August 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TAYLOR BEAN: Again Selling Georgia Office Building -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Taylor Bean & Whitaker Mortgage Corp. is once again planning to sell a 24,000-square-foot office building in Lawrenceville, Georgia. The Debtor scheduled a hearing on March 4 to approve a sale to another buyer. Mr. Rochelle recounts that the bankruptcy court in January approved a sale of the building for $1.35 million. During the period when the buyer could perform due diligence by inspecting the property and financial records, the buyer canceled the sale, Mr. Rochelle relates. According to Mr. Rochelle, this time around, the new buyer is offering $1.25 million, a decrease of $100,000 in the purchase price. Taylor Bean wants the property sold unless a higher offer turns up before the approval hearing. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on August 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TBS INTERNATIONAL: Joseph Royce Discloses 36.7% Equity Stake ------------------------------------------------------------ In a Schedule 13D filing with the U.S. Securities and Exchange Commission on February 7, 2011, Joseph E. Royce disclosed that he beneficially owns 9,976,588 shares of common stock of TBS International plc Class A ordinary shares representing 36.7% of the shares outstanding. Elaine M. Royce also disclosed beneficial ownership of 4,778,958 shares or 21.5% equity stake. As of November 9, 2010, the Company had outstanding 16,571,865 Class A ordinary shares, par value $0.01 per share, and 14,740,461 Class B ordinary shares, par value $0.01 per share. The Filing Persons made the purchases pursuant to an Investment Agreement entered in connection with amendments to the Company's credit facilities. In January 2011, the Company amended its credit facilities with its lenders. As a condition to the Lenders' willingness to agree to the Amendments, the Lenders required Mr. Royce to agree to provide up to $7.58 million of new equity. Consequently, on January 25, 2011, the Company executed an investment agreement with Mr. Royce for the private placement, pursuant to Section 4(2) of the Securities Act, of Series B Preference Shares of the Company. The Company may, in the ordinary course of business, issue equity securities to Mr. Royce from time to time in connection with his employment by the Company. About TBS International plc Dublin, Ireland-based TBS International plc (NASDAQ: TBSI) -- http://www.tbsship.com/-- is a fully-integrated transportation service company that provides worldwide shipping solutions to a diverse client base of industrial shippers. At September 30, 2010, TBS had total assets of US$906.794 million, total debt, including current portion, of US$328.259 million, and shareholders' equity of US$513.154 million. TBS had working capital deficit of US$297.663 million at September 30, 2010. As reported in the Troubled Company Reporter on March 19, 2010, PricewaterhouseCoopers LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company believes it will not be in compliance with the financial covenants under its credit facilities during 2010, which under the agreements would make the debt callable. "This has created uncertainty regarding the Company's ability to fulfill its financial commitments as they become due." TBS International in December 2010 disclosed that its various lender groups have agreed to extend the current forbearance period until January 31, 2011. During such period, the lender groups will continue to forbear from exercising their rights and remedies which arise from the Company's failure to make principal payments when due. The Company will not make principal payments due on its financing facilities during the extended forbearance period, but it will continue to pay interest on those facilities at the default interest rate. TC GLOBAL: December 26 Balance Sheet Upside-Down by $6.8 Million ---------------------------------------------------------------- TC Global Inc., dba Tully's Coffee, filed its quarterly report on Form 10-Q, reporting a net loss of $1.0 million on $9.6 million of net sales for the thirteen weeks ended December 26, 2010 ("Third Quarter Fiscal 2011"), compared with a net loss of $1.5 million of $10.1 million of net sales for the thirteen weeks ended December 27, 2009. Tully's 2011 fiscal year ends on April 3, 2011. The Company's balance sheet at December 26, 2010, showed $9.4 million in total assets, $16.2 million in total liabilities, and a stockholders' deficit of $6.8 million. "If sales volumes decline significantly or do not meet expectations of sustained increases during the fourth quarter of Fiscal 2011, we do not believe that we will be able to offset such negative trends through additional overhead cost reductions," the Company said in the filing. "As a result, we will not have sufficient resources to support operations or cover our working capital and capital expenditure requirements beyond this timeframe and, without additional sources of capital, by the end of the First Quarter of Fiscal 2012 there will be substantial doubt that the Company will be able to continue as a going concern." A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7328 About TC Global Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty coffee retailer and wholesaler. Through company owned, licensed and franchised specialty retail stores in Washington, Oregon, California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah, throughout Asia with Tully's Coffee International, and with its global alliance partner Tully's Coffee Japan, Tully's premium coffees are available at 545 branded retail locations globally. TC Global also has the rights to distribute Tully's coffee through all wholesale channels internationally, outside of North America, the Caribbean and Japan. TEAM FINANCE: Moody's Upgrades Corporate Family Rating to 'Ba3' --------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family and Probability of Default ratings of Team Finance LLC, a subsidiary of Team Health Holdings, Inc., to Ba3. Moody's also upgraded the ratings of the company's senior secured credit facility to Ba3 (LGD3, 47%). The rating outlook was changed to stable from positive. Concurrently, Moody's affirmed the company's Speculative Grade Liquidity Rating at SGL-1. "The upgrade of the CFR reflects the continued progress in reducing leverage through positive operating results and the reduction of outstanding debt," said Dean Diaz, a Senior Credit Officer at Moody's. In December 2010, Team Health redeemed the remaining $45.5 million of senior subordinated notes with available cash and has bolstered organic growth with acquisitions. The stable outlook incorporates Moody's expectation that the company will continue to grow revenues and earnings despite reimbursement and payor mix pressures. The outlook also anticipates that the company will remain disciplined in its acquisition strategy and its expansion into newer service areas. These ratings have been upgraded: * Corporate Family Rating, to Ba3 from B1 * Probability of Default Rating, to Ba3 from B1 * Senior secured revolving credit facility due 2012, to Ba3 (LGD3, 47%) from B1 (LGD3, 45%) * Senior secured term loan due 2012, to Ba3 (LGD3, 47%) from B1 (LGD3, 45%) These ratings have been withdrawn: * Senior subordinated notes due 2013, B3 (LGD6, 94%) The Speculative Grade Liquidity Rating was affirmed at SGL-1. Ratings Rationale Team Health's Ba3 Corporate Family Rating reflects the modest level of leverage and strong interest expense coverage realized through earnings growth and debt repayment. It also reflects the company's strong competitive position in a highly fragmented industry and stable cash flow generation. However, the rating also reflect risks around reimbursement and exposure to uninsured individuals, which Moody's believe could pressure revenue and earnings growth in the near to medium term. If the company addresses the upcoming maturity of its credit facility, continues to see growth in revenue and EBITDA from existing business, and can contiune to acquire new business without increasing leverage, there could be upward pressure on the rating. Conversely, if the company were to pursue material debt-financed acquisitions or shareholder initiatives, Moody's could change the outlook to negative or lower the rating. Further, if reimbursement or payor mix pressures are expected to materially impact operating results there could be additional downward pressure. Other negative factors that could affect the rating include an increase in the level of uncollectible accounts, an increase in medical malpractice claims in excess of amounts reserved for or the inability to retain physicians and/or hospital contracts. Moody's last rating action on Team Health was on February 2, 2010, when Moody's upgraded the Corporate Family and Probability of Default ratings to B1. Moody's also upgraded the ratings on its senior subordinated notes to B3. Team Health, a subsidiary of Team Finance, based in Knoxville, TN, is a leading provider of physician staffing and administrative services to hospitals and other healthcare providers in the US. For the year ended December 31, 2010, Team Health recognized net revenue less a provision for uncollectibles of approximately $1.5 billion. TOUSA INC: District Judge Voids Fraudulent Transfer Judgement ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the senior Transeastern lenders to Tousa Inc. won a victory on Feb. 11 when U.S. District Judge Alan S. Gold in Miami reversed the bankruptcy judge and voided a fraudulent transfer judgment where the lenders were required to post $531 million in bonds for the right to appeal. According to the report, Judge Gold said that Bankruptcy Judge John K. Olson made clearly erroneous findings of fact on top of legal errors. Although Judge Gold voided Judge Olson's ruling, he said the Transeastern lenders must keep their bonds in place if the Tousa creditors' committee appeals. Mr. Rochelle notes that Judge Gold's appeal doesn't necessarily mean a complete loss for the creditors' committee. Judge Olson also voided liens given to new lenders at the same time. The appeal regarding the new lenders is pending before District Judge Adalberto Jordan and isn't decided yet. The case, Mr. Rochelle recounts, involved allegations in a lawsuit by Tousa's creditors' committee regarding a $500 million secured loan made six months before bankruptcy. The loan was taken down so Tousa could bail out and refinance a joint venture in a home builder named Transeastern Properties Inc. The Creditors Committee, Mr. Rochelle recalls, rested its case on the theory that Tousa's operating subsidiaries made fraudulent transfers because they weren't then liable to repay the maturing Transeastern debt and received none of the benefit from the new loans that enabled the parent to avoid default. By ruling in favor of creditors in October 2009, Judge Olson not only voided the liens given by the subsidiaries to secure the new $500 million loan, he also required the Transeastern lenders to disgorge the proceeds they received from the new loan that paid off their existing loan. Judge Gold, according to Mr. Rochelle, criticized Judge Olson for his almost-verbatim adoption of the creditors' proposed findings of fact. Judge Gold said that restrictions against reversing a trial court's findings of fact are "relaxed" when the lower court adopts one party's proposed findings. Reversing Judge Olson on the facts, Judge Gold said that proceeds of the new loan weren't property of the subsidiaries. Consequently, the existing Transeastern lenders, who received proceeds from the new loans, didn't receive a transfer of the subsidiaries' property. By definition, there wasn't a fraudulent transfer as a result. Judge Gold also reversed Judge Olson's fact findings by saying that the subsidiaries received enough "indirect economic benefit" so there was "reasonably equivalent value." By receipt of equivalent value, the subsidiaries didn't make fraudulent transfers. Judge Gold said that cross-default provisions in the subsidiaries' other loans would have put them in default and sent them into bankruptcy had they not given liens on their property to secure the new loans that were taken down so the maturing Transeastern loans could be repaid. He said the new loans also gave the subsidiaries value because they were able to have continued access to a revolving credit that would have been defaulted otherwise. He said that the bailout of Transeastern gave the Tousa enterprise an additional $150 million in loan availability. The Transeastern lenders loaned $450 million in 2005. With interest, Judge Olson required them to repay $480 million, Judge Gold said. Judge Gold's ruling doesn't necessarily mean that the new lenders will have similar success. However, Judge Gold's conclusion that the subsidiaries received equivalent value may lead to another reversal if Jordan draws the same conclusion with regard to the new lenders. The new Transeastern lenders who are off the hook include Bank of America NA and Deutsche Bank Trust Co. Judge Gold's opinion assumes the Creditors Committee will appeal, according to Mr. Rochelle. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. The Official Committee of Unsecured Creditors filed a Chapter 11 plan and explanatory disclosure statement for Tousa on July 16, 2010. TRIBUNE CO: Bank Debt Trades at 26% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 73.92 cents-on-the- dollar during the week ended Friday, February 11, 2011, an increase of 0.48 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on May 17, 2014. Moody's has withdrawn its rating on the bank debt. The loan is one of the biggest gainers and losers among 176 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. 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 Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America 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. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. 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) TRIBUNE CO: Court Junks Aurelius, et al., Pleas for Documents ------------------------------------------------------------- Bankruptcy Judge Kevin Carey denied, in part, a group of noteholders led by Aurelius Capital Management, LP, from obtaining certain documents from Tribune Co. and its affiliates on the grounds that the sought documents are privileged. Previously, the group led by Aurelius, which proposed a competing plan of reorganization for the Debtors, served several requests and filed motions to compel the Debtors to produce certain documents related to talks involving settlements between the Debtors and its officers and certain parties to the 2007 leveraged buy-out of Tribune Company. Those requested documents include communications between Donald Liebentritt, Tribune's general counsel, and the members of the Tribune Board of Directors. The subject settlement, which would release JPMorgan Chase Bank, N.A., as agent for the Debtors' prepetition senior lenders and a holder of senior claims, from legal liability for its role in the leverage buyout, is one of the features of Tribune's reorganization plan opposed by noteholder Aurelius and other lower-ranking creditors, Bloomberg News noted. In a memorandum and order dated February 3, 2011, Judge Carey held that these documents and information are protected from discovery: (1) written or oral communications between a "Mediation Party" and Judge Kevin Gross, the court-appointed mediator in the Debtors' bankruptcy cases; (2) written or oral communications between or among Mediation Parties concerning the Mediation to the extent the communications were exchanged by Mediation Parties who were present at the Mediation or were participating in the Mediation off-site on any Mediation Day; (3) written or oral communications reflecting the substance of any discussion between or among Mediation Parties who were present at the Mediation or participating in the Mediation off-site on a Mediation Day, or documenting any offers or counter-offers exchanged or agreements reached on a Mediation Day; and (4) written or oral communications between Judge Gross and the Examiner or the Examiner's professionals concerning the Mediation. Judge Carey held that the DCL Plan Proponents -- the Debtors, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo, Gordon & Co., L.P., and JPMorgan Chase Bank, N.A. -- may assert a community of interest privilege for privileged communications that were shared among the community of interest parties in furtherance of their common interest beginning on October 12, 2010 for all DCL Plan Proponents, and September 27, 2010 for the Debtor/Oaktree/Angelo Gordon group. Judge Carey, however, said that Aurelius, on behalf of its managed entities; Deutsche Bank Trust Company Americas, in its capacity as Successor Indenture Trustee for certain series of Senior Notes; Law Debenture Trust Company of New York, in its capacity as Successor Indenture Trustee for certain series of Senior Notes; and Wilmington Trust Company, in its capacity as Successor Indenture Trustee for the PHONES Notes -- the "Noteholder Plan Proponents" -- may seek discovery of information for the period of time beginning December 15, 2009. In several filings with the Court and letters sent to Judge Carey, Aurelius asserted that the Debtors must produce the 79 documents, all dated between September 13, 2007, and the closing of the Step Two transaction in the leveraged buyout on December 20, 2007, on the ground that these documents fall under the crime-fraud exception to the attorney-client privilege and work product doctrine. Aurelius reiterated that the documents are relevant, contrary to the Debtors' assertion, and relate directly to the very transaction that is the subject of the settlement being adjudicated in connection with confirmation. The Debtors maintained that the communication and documents subject to Aurelius, et al.'s Motion to Compel are privileged. On the point raised by Aurelius that the crime-fraud exemption is applicable, the Debtors asserted that Aurelius has not explained by the discovery it seeks is even relevant to the matters properly at issue at the confirmation hearing. The Debtors argued that Aurelius has not shown (1) a prima facie case of crime or fraud, and (2) that the privileged communications were in furtherance of the crime or fraud. The Special Committee of the Board of Directors of Tribune Co. told the Court that it has produced more than 200 documents to Aurelius and alleged that Aurelius recreation of certain Special Committee privilege log entries is inaccurate and misleading where some portions of certain entries on the log were omitted. 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 Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America 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. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. 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) TRIBUNE CO: New York Tax Dept. Objects to Competing Plans --------------------------------------------------------- In separate papers filed with the Court, the New York State Department of Taxation and Finance opposes confirmation of these Chapter 11 Plans: * the First Amended Joint Plan of Reorganization filed by the Debtors; the Official Committee of Unsecured Creditors; Oaktree Capital Management, L.P.; Angelo, Gordon & Co., L.P., and JPMorgan Chase Bank, N.A. -- the DCL Plan; * the Amended Joint Plan of Reorganization proposed by King Street Acquisition Company, L.L.C., King Street Capital, L.P., and Marathon Asset Management, L.P. -- the Bridge Plan; and * the Joint Plan of Reorganization proposed by Aurelius Capital Management, LP, on behalf of its managed entities; Deutsche Bank Trust Company Americas, in its Capacity as successor indenture trustee for certain series of senior notes, Law Debenture Trust Company of New York, in its capacity as successor indenture trustee for certain series of senior notes and Wilmington Trust Company, in its capacity as successor indenture trustee for the Phones notes -- the Noteholder Plan. DTF asserts claims against certain of the Debtors for various assessments for corporation income taxes, sales taxes, withholding taxes and real estate transfer taxes owing by these companies to the state of New York. DTF objects to confirmation of the Plans for these reasons: (a) the exculpation provisions of the DCL Plan would preclude DTF from pursuing non-debtor individuals who are potentially liable under the New York State Tax Law for unpaid sales taxes and withholding taxes; (b) the Plans fail to include a default provision; and (c) the Plans improperly attempt to cut off DTF's rights of setoff and recoupment. Norman P. Fivel, Esq., assistant attorney general for the State of New York, in Albany, New York -- Norman.Fivel@ag.ny.gov -- elaborates that the DCL Plan fails to provide priority tax creditors with an adequate remedy in the event the Debtors default in making the required payments. Absent appropriate default language, priority tax creditors would be required to pursue collection proceedings in the Court if the Debtors default under the Plan, he asserts. He further avers that the injunction provisions improperly attempt to enjoin creditors from exercising their rights of setoff, which are explicitly protected under Section 553 of the Bankruptcy Code. The exculpation provisions of the DCL Plan should not extend to non-debtors as with respect to the injunction, he insists. The Competing Plans The Honorable Kevin J. Carey has scheduled a hearing for 10:00 a.m. on March 7, 2011, to consider confirmation of one of the three plans of reorganization proposed for Tribune Company and certain of its subsidiaries in its chapter 11 proceeding. Judge Carey approved a General Disclosure Statement and three Specific Disclosure Statements describing the competing plans on Dec. 9, 2010. The competing plans before the Court are proposed by: (1) Tribune Company and its debtor affiliates, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo, Gordon & Co., L.P., and JPMorgan Chase Bank, N.A.; (2) Aurelius Capital Management, LP, Deutsche Bank Trust Company Americas, Law Debenture Trust Company of New York, and Wilmington Trust Company; and (3) King Street Acquisition Company, LLC, King Street Capital, LLP and Marathon Asset Management, L.P. King Street, et al., known as the Bridge Lender Group, have withdrawn their proposed Chapter 11 plan. They have agreed to support the Chapter 11 plan proposed by the Debtors. Jan. 28, 2011, is the deadline for creditors to cast their ballots to accept or reject the Plans. Confirmation objections must be filed and served by Feb. 15, 2011. 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 Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America 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. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. 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) TRIBUNE CO: Parties File Plan & LBO-Related Discovery Requests -------------------------------------------------------------- Parties-in-interest in Tribune Co.'s bankruptcy cases filed notices of deposition of these parties: * Aurelius Capital Management, L.P. * Centerbridge Partners, LLP * Deutsche Bank Trust Company Americas * Law Debenture Trust Company of New York * Wilmington Trust Company * Jeffrey H. Aronson * Mark Brodsky of Aurelius Capital * Daniel Gropper of Aurelius Capital * Vivek Melwani of Centerbridge Partners * Bruce Karsh * Kenneth Liang * Wayne Smith Topics of deposition include, among other things, any analysis, evaluation, and valuation of the leveraged buyout causes of action and any other causes of action or claims preserved under the DCL Plan, the Noteholder Plan or the Bridge Lender Plan. The analysis, evaluation, negotiation, and communications concerning the DCL Plan, including, without limitation, the confirmation of the Plan, the good faith of the proponents in propounding that Plan, the feasibility of the Plan, the compliance of that Plan with Section 1129 of the Bankruptcy Code, any tax issue relating to the Plan, potential creditor recoveries, classification of claims, voting processes, Preserved Causes of Action, including, but not limited to, the merits of those claims, potential defendants, and potential recoveries, and the decision to oppose the DCL Plan. Service of Discovery Requests Aurelius and Law Debenture Trust Company of New York continue to serve notices of deposition and subpoenas to: * Gavin Baiera, * Thomas Fuller, * Bruce Karsh, * Kenneth Liang, * Wayne Smith * Miriam Kulnis * Peter Knapp * Eddy Hartenstein * Chandler Bigelow * Daniel Kazan * Donald Liebentritt * Robert Bellack * Mark Shapiro * Mary Agnes Wilderotter Subpoenas have been delivered to: * David S. Kurtz, c/o Arthur H. Ruegger at SNR Denton * Thane W. Carlston at Moelis & Co * Nils Larsen, c/o Andrew Vail at Jenner & Block LLP * Donald Bernstein of Davis Polk & Wardwell LLP * Howard Seife at Chadbourne & Parke LLP * Roseanne Kurmaniak at Citigroup, Inc. * James Conlan at Sidley Austin LLP * Robert T. Kirchner * Bruce Bennett * William A. Niese * Bryan Whittman Objections to Discovery Requests The Official Committee of Unsecured Creditors complained to Judge Carey on the subpoenas served by Aurelius and Law Debenture saying the subpoenas did not contain any instructions limiting the scope of the requests to the respective roles of the individuals working for the Committee. The Creditors' Committee and Buena Vista Television, LLC, complained that Aurelius' discovery requests are too broad. The Committee also said that, in light of the impending discovery cut-off, the DCL Plan Proponents asked the Court to require Aurelius to review certain documents that are purportedly being withheld on the basis of privilege and provide the DCL Plan Proponents with a document-by-document privilege log as to those documents, and produce documents regarding its acquisition of its Tribune assets. The Debtors asked Judge Carey to quash the deposition notice of their counsel, James F. Conlan, Esq., at Sidley Austin, because the information in his possession is protected by attorney-client privilege, common interest, and work product privileges. The Creditors' Committee likewise asked the Court to quash the deposition notice of its counsel, Howard Seife, Esq., at Chadbourne & Parke, LLP, on the same grounds. JPMorgan Morgan Chase Bank, N.A., also asked the Court to quash the deposition notice of its primary outside bankruptcy counsel, Donald Bernstein, Esq., because any non-privileged information Mr. Bernstein possesses about the LBO settlement negotiations are redundant of the information from Miriam Kulnis, Esq., who will be deposed by Aurelius. Oaktree Capital Management, L.P., and Angelo, Gordon & Co. L.P. opposed the deposition of its lead lawyer noting that Law Debenture is proceeding with depositions of two principals of each of Oaktree and Angelo Gordon and has sought and received substantial discovery from the two companies. Zwerdling, Paul, Kahn & Wolly, P.C., counsel for the Washington- Baltimore Newspaper Guild, Local 32035, told the Court that all non-privileged documents responsive to the discovery requests were produced, contrary to Aurelius' assertion. Other parties-in-interest, like Teitelbaum & Baskin, LLP, which serves as counsel to William A. Niese, a retiree serving on the Creditors' Committee, complained that Aurelius misstates the facts and does not accurately report the discussions with its counsel during the meet-and-confer discussions about the document production made in response to the subpoenas. Warner Brothers Television Distribution, Inc., debunked Aurelius' statement saying the company and Kirkland & Ellis LLP refused to produce documents and communications. Warner Brothers said the issue of whether documents would be produced outside of its capacity as member of the Creditors' Committee was not discussed during the meet and confer on January 19. Parties Stipulate Aurelius sought and obtained approval of stipulations resolving its motion to compel JPMorgan and Oaktree and Angelo Gordon to produce certain documents related to the Federal Communications Commission. Full-text copies of the stipulation are available for free at: http://bankrupt.com/misc/tribune7843.pdf http://bankrupt.com/misc/tribune7842.pdf 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 Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America 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. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. 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) TRICO MARINE: Receives Court Nod of Noteholders Settlement ---------------------------------------------------------- Trico Marine Services, Inc. disclosed that the U.S. Bankruptcy Court for the District of Delaware approved the terms of a settlement agreement among Trico Marine, its subsidiaries Trico Shipping AS ("Trico Shipping") and Trico Supply AS ("Trico Supply") (collectively "OpCo") and a steering committee of note holders who collectively hold approximately 83% of the aggregate principal amount of Trico Shipping's outstanding 11 7/8% senior secured notes due 2014. Under the settlement agreement, Trico Marine has agreed to compromise its outstanding claims against OpCo. Trico Marine will receive 5% of the new common stock of a reorganized OpCo along with warrants to acquire an additional 10% of the new common stock, as well as other consideration. In conjunction with the settlement agreement, in order to implement the debt-for-equity swap, Trico Shipping expects to launch an out-of-court exchange offer and related solicitations shortly for Note holders to exchange their Notes for a pro rata share of the new common stock of reorganized OpCo, and enter into arrangements with the lenders under Trico Shipping's working capital facility. "This settlement is a major milestone for Trico Marine," said Richard A. Bachmann, Trico Marine's Chairman of the Board of Directors, President and Chief Executive Officer. "This clears the way for OpCo to significantly reduce its outstanding debt through an Exchange Offer, enhance liquidity and provide a strong foundation for us to continue in our overall restructuring efforts. We are pleased to be on the right track to effect a consensual agreement with our creditors at Trico Marine and at OpCo." * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Trico Marine Services Inc. won approval of the settlement with creditors of non-bankrupt subsidiaries late last week. Mr. Rochelle relates that the official committee of unsecured creditors, which previously opposed the deal, switched to supporting the accord after bondholders enlarged the pot for creditors of the holding company. The U.S. Trustee unsuccessfully opposed to the deal, contending that the settlement should only be approved as part of a Chapter 11 plan. The Debtor argued the business would suffer too much from delays during the plan confirmation process. Mr. Rochelle recounts that originally, holders of $400 million in 11.875 percent notes secured by non-bankrupt Trico operating companies were to be given ownership of the units, which provide subsea services. The bankrupt Trico parent in return was to receive warrants for 5% of common stock of the subsidiaries. Creditors dropped their opposition when they were offered 5% of the equity, $1 million in cash and five-year warrants for 10 percent of the stock. About Trico Marine Headquartered in Texas, Trico Marine Services, Inc. -- http://www.tricomarine.com/-- provides subsea services, subsea trenching and protection services, and towing and supply vessels. Trico filed for Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B. Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor disclosed US$30,562,681 in assets and US$353,606,467 in liabilities as of the Petition Date. Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No. 10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico Marine International, Inc. (Case No. 10-12650), Trico Marine Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No. 10-12652) filed separate Chapter 11 petitions. Cahill Gordon & Reindell LLP is the Debtors' special counsel. Alix Partners Services, LLC, is the Debtors' chief restructuring officer. Epiq Bankruptcy Solutions is the Debtors' claims and notice agent. Postlethwaite & Netterville serves as the Debtors' accountant and Ernst & Young LLP serves as tax advisors. Pricewaterhousecoopers LLC provides the independent accountants and tax advisors for the Debtors. Aside from the Cayman Islands holding company, Trico's foreign subsidiaries were not included in the filing and will not be subject to the requirements of the U.S. Bankruptcy Code. The Official Committee of Unsecured Creditors tapped Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn, Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel. TRONOX INC: Emerges From Chapter 11 ----------------------------------- Tronox Incorporated has successfully emerged from its Chapter 11 proceedings. "Our emergence from bankruptcy and our new capital structure is a significant accomplishment and makes Tronox a much stronger company for the benefit of our stakeholders, including our customers, vendors, employees, joint venture partner and shareholders," said Dennis L. Wanlass, Chief Executive Officer of Tronox. "We have successfully restructured our balance sheet while maintaining our business relationships and significantly improving our operating performance." Having addressed its substantial legacy environmental and other liabilities through a comprehensive settlement, Tronox is now well-positioned to compete in the titanium dioxide and specialty chemical industries. Wanlass added: "We emerge with a portfolio of world class titanium dioxide and mineral sands assets and our electrolytic business units strategically positioned to provide our customers around the globe with a reliable supply of high quality products and services. On behalf of the management team, I would like to thank the Tronox and Tiwest joint venture employees worldwide for their hard work and dedication throughout this process, and our customers and suppliers for their continued support." About Tronox Inc. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders were appointed in the cases. The Creditors Committee retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. On November 17, 2010, the Bankruptcy Court confirmed the Debtors' First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated November 5, 2010. Under the Plan, Tronox reorganized around its existing operating businesses, including its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi; Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia. TWO DETROIT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Two Detroit Street, Inc. dba The Shores Waterfront Restaurant fdba Successor by Merger to Tonawanda Island Marine Development Corp. fdba Successor by Merger to Placid Harbour Marina of North Tonawanda, Inc. 28 Red Maple Court Buffalo, NY 14228 Bankruptcy Case No.: 11-10396 Chapter 11 Petition Date: February 11, 2011 Court: United States Bankruptcy Court Western District of New York (Buffalo) Judge: Michael J. Kaplan Debtor's Counsel: Daniel F. Brown, Esq. DAMON MOREY LLP The Avant Building 200 Delaware Avenue, Suite 1200 Buffalo, NY 14202-2150 Tel: (716) 856-5500 E-mail: dbrown@damonmorey.com Scheduled Assets: $1,178,943 Scheduled Debts: $1,313,672 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nywb11-10396.pdf The petition was signed by Michael R. Charnock, president. Debtor-affiliates that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Michael R. Charnock, Sr. and Nancy C. Charnock 06-01533 06/08/06 ULTIMATE ACQUISITION: Employee Files Class Action Over Firings -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ultimate Electronics was sued in bankruptcy court for violating the Worker Adjustment and Retraining Notification Act by failing to give required notice of mass firings. Bankruptcy Law360 reports that Brenda Goentzel, a former employee, accused Ultimate Acquisition Partners LP of failing to provide its workers with the required 60 days notice prior to their termination. The said layoffs affected 170 employees. About Ultimate Electronics Ultimate Acquisition Partners LP and CC Retail, LLC, which own the U.S. consumer electronics store chain Ultimate Electronics, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on January 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Ultimate Acquisition Partners LP and CC Retail, LLC are specialty retailers of high-end entertainment and consumer electronics with 46 stores in over a dozen states, primarily in the mid-west and western United states. Of the 46 stores, 35 are operated by UAP and 11 are operated by CC Retail. All are operated under the name "Ultimate Electronics". UAP and CC Retail have more than 1,500 full-time and part-time employees. Kathleen Campbell Davis, Esq., Mark T. Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine LLC, serve as the Debtor's bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. ULTIMATE ACQUISITION: Wins Court's OK to Liquidate 46 Stores ------------------------------------------------------------ Bankruptcy Law360 reports that Ultimate Electronics' parent companies received bankruptcy court approval Friday to begin conducting going-out-of-business sales at the retail chain's 46 stores. Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware signed an order approving the retention of liquidating consultants to facilitate the sales and greenlighting procedures, according to Law360. As widely reported, Ultimate Acquisition Partners LP and CC Retail LLC, the companies behind Ultimate Electronics, are scrapping plans to reorganize the electronics retailer around their profitable stores and instead are now seeking to liquidate all 46 locations. Creditors' Objection Dow Jones' DBR Small Cap reported that unsecured creditors are protesting the "defective sale process" they said the parent companies of Ultimate Electronics are seeking to embark on in an effort to please their lenders. The report relates that the official committee representing unsecured creditors in the case Thursday took aim at Ultimate Acquisition Partners LP and CC Retail LLC, the companies behind the electronics retailer that recently unveiled plans to liquidate their 46 stores. According to DBR, the creditors claim that the companies' bid to launch going-out-of-business sales is designed solely to benefit their lenders, at the expense of unsecured creditors. "This was not a process run to maximize the value of the debtors' assets," the creditors said, the report notes. "It was the vehicle chosen by the debtors' secured lenders to assure themselves of payment in full as quickly as possible," they added. Under the companies' proposal, Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC would be brought on board to execute the liquidation, the report adds. KBCO Failed to Receive Payment Meanwhile, the Denver Business Journal reports that Ultimate Electronics has failed to turn over proceeds from December's sales of a charity CD to Denver radio station KBCO. According to the report, the rock station each year has sold its popular "Studio C" discs through Thornton-based Ultimate Electronics to raise funds for Boulder County AIDS Project and Food Bank of the Rockies. This year's sale took place Dec. 4, 2010. According to the Denver Business Journal, KBCO parent Clear Channel never got the money from Ultimate Electronics. Clear Channel also has unpaid advertising bills that Ultimate owes. Instead, Clear Channel donated $80,000 of its own funds to Boulder County AIDS Project and $20,000 to Food Bank of the Rockies. About Ultimate Electronics Ultimate Acquisition Partners LP and CC Retail, LLC, which own the U.S. consumer electronics store chain Ultimate Electronics, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on January 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Ultimate Acquisition Partners LP and CC Retail, LLC are specialty retailers of high-end entertainment and consumer electronics with 46 stores in over a dozen states, primarily in the mid-west and western United states. Of the 46 stores, 35 are operated by UAP and 11 are operated by CC Retail. All are operated under the name "Ultimate Electronics". UAP and CC Retail have more than 1,500 full-time and part-time employees. Kathleen Campbell Davis, Esq., Mark T. Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine LLC, serve as the Debtor's bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. UNION CARBIDE: Moody's Raises Rating on 6.79% Bonds From 'Ba2' -------------------------------------------------------------- Moody's Investors Service raised the rating on the 6.79% Debentures due 2025 issued by Union Carbide Corporation to Baa3 from Ba2. This debt was inadvertently omitted from a rating action on November 1, 2010, when Moody's raised UCC's ratings to Baa3 due to an internal administrative error. WALLACE TERRACE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Wallace Terrace Apartments, Limited Ptnr 336 Orange Street Charlotte, NC 28205 Bankruptcy Case No.: 11-30341 Chapter 11 Petition Date: February 11, 2011 Court: United States Bankruptcy Court Western District of North Carolina (Charlotte) Judge: George R. Hodges Debtor's Counsel: Jack G. Lezman, Esq. SCHWILM AND LEZMAN PA 181 N. Main Street, Suite 215 Mooresville, NC 28115 Tel: (704) 567-3824 Fax: (704) 536-0179 E-mail: schwilmlezman@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Elbie Wallace, manager. WASHINGTON MUTUAL: Disclosure Hearing Set for March 21 ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Washington Mutual Inc. will seek approval of additional disclosure materials on March 21 and seek confirmation on May 2 of the reorganization plan modified to comply with the bankruptcy judge's 109-page opinion on Jan. 7 finding defects in the prior version of the plan. As reported in the Feb. 9, 2011 edition of the Troubled Company Reporter, Washington Mutual said that like the prior version of the Plan, the Modified Plan contemplates, among other things, distribution of funds to holders of allowed claims against the estate in excess of approximately $7 billion, including approximately $4 billion of previously disputed funds on deposit with JPMorgan Chase Bank, N.A. The Modified Plan is still premised on a global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMCC. Mr. Rochelle relates that although WaMu believes no class is disadvantaged by the new plan, it is nonetheless soliciting acceptances from all but two classes of creditors. One class not voting again is the bank subsidiary's senior noteholders who aren't adversely affected. Among the voting classes are seven that didn't vote on the prior plan because they were to be paid in full. In the new plan, to comply with the judge's dictates, all creditors are being given the option both to vote for or against the plan and to opt out of releases being given to third parties. The judge in her opinion said it was fair for a creditor to forfeit a distribution under the plan in return for the ability to sue third parties. 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. Washington Mutual Bank was taken over on Sept. 25, 2008, 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. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York City and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unseucred Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired WaMu's assets prior to the Petition Date. WASHINGTON MUTUAL: Files Motion to Return Rights Offering Payments ------------------------------------------------------------------ BankruptcyData.com reports that Washington Mutual filed with the U.S. Bankruptcy Court a motion for an order authorizing the return of payments made pursuant to the rights offering related to the Debtors' Sixth Amend Chapter 11 Plan. BankruptcyData.com had reported that the Court said the rights offering must allow all holders of PIERS Claims, regardless of the size of their claims, the opportunity to participate in the rights offering. The payments to be returned would total over $31.6 million. 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. Washington Mutual Bank was taken over on Sept. 25, 2008, 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. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York City and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unseucred Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired WaMu's assets prior to the Petition Date. WASHINGTON MUTUAL: Insurer Seeks Quick Win in $4.5M Coverage Row ---------------------------------------------------------------- Bankruptcy Law360 reports that First American Title Insurance Co. has said the Federal Deposit Insurance Corp. lost its right to enforce an obligation to reimburse Washington Mutual Bank NA for a $4.5 million mortgage scam following WaMu's post-bankruptcy sale to JPMorgan Chase Bank NA. 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. Washington Mutual Bank was taken over on Sept. 25, 2008, 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. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York City and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unseucred Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired WaMu's assets prior to the Petition Date. WATERFORD GAMING: Supplemental Bonds Won't Affect Moody's Rating ---------------------------------------------------------------- Moody's Investors Service said that Waterford Gaming, LLC's Caa3 Corporate Family Rating and negative rating outlook are not affected by its recent supplemental indenture to its bond indenture under its 8.625% senior unsecured notes. Waterford is a special purpose company formed solely for the purpose of holding its 50% partnership interest, as a general partner, in Trading Cove Associates, a Connecticut general partnership and the manager (until January 1, 2000) and developer of the Mohegan Sun casino located in Uncasville, CT. TCA receives relinquishment fees based on certain gross revenues of the Mohegan Sun casino, which is owned and operated by the Mohegan Tribal Gaming Authority. WORD WORLD: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Word World, LLC 40 W. 23rd Street, 6th Floor New York, NY Bankruptcy Case No.: 11-10543 Chapter 11 Petition Date: February 10, 2011 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: James N. Lawlor, Esq. WOLLMUTH MAHER & DEUTSCH, LLP One Gateway Center, 9th Floor Newark, NJ 07102 Tel: (973) 733-9200 Fax: (973) 733-9292 E-mail: jlawlor@wmd-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Don Moody, chief executive officer and manager. W.R. GRACE: BNSF Seeks Reconsideration of Deal Objection Denial --------------------------------------------------------------- BNSF Railway Company asks the Bankruptcy Court to reconsider the Jan. 31 Order based on these factors: (1) The statement in footnote 46, page 40 of the Memorandum Opinion that the Court overruled BNSF's objection to the motion seeking approval of the settlement with CNA Financial Corp. and its affiliates. However, the Court actually sustained the objection. Clarifying language was added to the Order approving the settlement as requested by BNSF. (2) The statement on page 40 of the Memorandum Opinion that "There is nothing in the Bankruptcy Code, and BNSF has pointed to no case law, that indicates that a plan must pay attorneys' fees in connection with the underlying tort claims or the indemnity or contribution claims arising from those torts." In contrast, BNSF's argument that the Joint Plan of Reorganization must provide for the allowance of its contractual rights to attorneys' fees was recognized and implemented by the Plan Proponents by the addition of Section 5.14 of the TDP, as defined in the Plan, which provides for allowance of those attorneys' fees. (3) BNSF's objection concerning the treatment of its state law contribution claims. BNSF did not argue that holders of Direct Claims are being paid 100% of the value of their claims, while BNSF is being paid 6% of the value of its claims as the Court stated at page 41 of the Memorandum Opinion. Rather, BNSF objected that the awarded value of the claim is improperly reduced, in cases where the Direct Claimant was exposed solely, or nearly solely, to Grace asbestos. A third party, like BNSF, who is required to pay Grace's several share of liability through a derivative claim should be entitled to receive an award equal to the full value of Grace's share of liability, and not be limited to a highly reduced award solely on the grounds that the Direct Claimant was initially able to recover from that third party. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Wins Nod to Amend 2010 L/C Facility Agreement --------------------------------------------------------- W.R. Grace & Co. and its debtor affiliates obtained final approval from Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to amend their 2010 postpetition letter of credit facility to extend the facility's stated termination date from March 1, 2011, to March 1, 2012. The Court, in February last year, authorized the Debtors to enter into the Facility Agreement, which provides for a letter of credit facility in the amount of $100 million. The L/C Facility, according to Adam Paul, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, enables the Debtors to provide letters of credit to counterparties on an as-needed basis during the ordinary course of their business operations. The Debtors intend to maintain the L/C Facility until they emerge from Chapter 11, Mr. Paul says. The Debtors say they do not anticipate emerging from their Chapter 11 cases and entering into exit financing prior to March 1, 2011. They have, therefore, negotiated and agreed upon with Bank of America, N.A., an extension of the Stated Termination Date until March 1, 2012. The L/C Facility Amendment contemplates the Debtors paying an amendment fee of $250,000, which the Debtors believe is a fair and reasonable fee under the circumstances of their Chapter 11 cases, for extending the L/C Facility's term for another year. The L/C Facility Amendment also gives the Debtors the option to increase at any time prior to the Stated Termination Date the total facility from $100 million to $120 million in exchange for a total facility increase fee of 25 basis points times the entire $20 million increase. The option to increase the Total Facility will allow the Debtors greater flexibility in managing their business operations as efficiently and effectively as possible, says Mr. Paul. The collateral arrangements of the Facility Agreement will cover any increase in the Total Facility. All other terms and conditions of the Facility Agreement remain unchanged, including but not limited to the secured financing arrangements. However, the Agent and the L/C Issuers will extend the Stated Termination Date and grant the Debtors an option to increase the Total Facility from $100 million to $120 million only if the cash collateral security arrangements documented in the L/C Facility Order and the Facility Agreement continue to secure obligations under the Total Facility, and the Debtors pay the Amendment Fee and, if applicable, the Total Facility Increase Fee. The Debtors assure the Court that they have negotiated the L/C Facility Amendment with the Agent at arm's-length and in good faith. Entering into the L/C Facility Amendment is in the best interest of the Debtors' estates, because the Debtors need a letter of credit facility to conduct their daily business operations efficiently and effectively, Mr. Paul asserts. There are no commercially practical alternatives to having an L/C Facility, and were the Debtors to allow the L/C Facility to expire without it being renewed or replaced, their business operations could face considerable -- and entirely unnecessary -- disruption, he adds. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Wins Nod to Extend Credit Agreement With ART -------------------------------------------------------- W.R. Grace & Co. and its debtor affiliates received the Bankruptcy Court's authority to amend the credit agreement between W.R. Grace & Co.-Conn. and Advanced Refining Technologies LLC to further extend the agreement's termination date to February 28, 2012. Since 2001, Grace and Chevron Products Company, a division of Chevron U.S.A. Inc., have held ART as a joint venture, with each party holding a 50% equity interest in the venture. Grace and Chevron Capital Corporation, an affiliate of Chevron USA, have entered into separate, substantially identical credit agreements with ART under which they each provide ART with a separate $15 million revolving line of credit. The Grace ART Credit Agreement expires on February 28, 2011. The ART Credit Agreements provide financing to ART for working capital requirements so that excess cash from ART's business operations can be used to pay dividends to Grace and Chevron and to fund ART growth without that cash having to be tied up to fund periodic working capital "spikes." In 2011 and thereafter, ART expects to continue experiencing those spikes in working capital requirements, and it therefore will continue to require the existing lines of credit, particularly if excess cash has been either distributed in dividends or used to further invest in the ART joint venture. For these reasons, Grace and Chevron Capital have determined that they should extend the ART Credit Agreements' expiration dates to February 28, 2012. In view of the nature of ART's business operations and working capital requirements, Grace and Chevron Capital have concluded that it is more cost-effective to continue the existing lines of credit than it would be for ART to hold excess cash in order to meet fluctuations in working capital requirements if and when they occur. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) YRC WORLDWIDE: Fitch Affirms 'CC' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has affirmed the ratings of YRC Worldwide Inc.: -- Issuer Default Rating at 'CC'; -- Secured credit facility rating at 'B-/RR2'; -- Senior unsecured rating at 'C/RR6'. In addition, Fitch has withdrawn all ratings on YRCW's YRC Regional Transportation, Inc. subsidiary. YRC Regional Transportation has no rated debt outstanding, and Fitch does not expect the subsidiary to be an active issuer in the future. YRCW's ratings apply to a $714 million secured revolving credit facility, a $257 million secured term loan and a total of $71 million in senior unsecured convertible notes. YRCW's ratings reflect the significant risk still present in the trucking company's credit profile, despite improving business conditions and increased traction on cost savings. Although operating cash flow improved sequentially throughout 2010, free cash flow remained negative for the full year despite very low capital spending and the deferral of most interest and fees associated with the company's bank facility and asset-backed securitization facility. The company also is not currently contributing to its multiemployer pension plans sponsored by the International Brotherhood of Teamsters. In addition to weak cash generation, risk is heightened by a relatively heavy debt burden, although this may be at least partially addressed with the proposed recapitalization transaction slated to occur in the next few months. In general, though, Fitch believes the company will need a combination of increased volumes, higher freight yields and reduced operating expenses to generate sufficient free cash flow to avoid a liquidity squeeze in the next 12 to 18 months. During 2010, YRCW experienced improvement in its overall operating performance, especially in its Regional Transportation segment, which has benefited from a turnaround in the Upper Midwest auto industry. In the fourth quarter of 2010, Regional Transportation's tonnage per day increased a relatively solid 14% year-over-year, while the unit's revenue per hundredweight (revenue/cwt.) grew 1.6%, demonstrating the improving demand conditions in its core markets. The improvements in both measures drove overall revenue at the unit up nearly 17% and were responsible for a 3.9% increase in YRCW's consolidated revenue in the quarter. The National Transportation unit continued to struggle, however, with daily tonnage down 7.7%, although revenue/cwt. rose 4.2%. National Transportation's revenue declined 2.5% in the quarter, and with the unit comprising about two-thirds of the company's consolidated revenue, continued weakness in the unit's volumes will weigh on YRCW's top line until tonnage levels improve. Looking into 2011, Fitch expects YRCW's business levels and revenue to strengthen modestly throughout the year along with an improving U.S. economy. However, customer concerns over the company's financial condition are likely to put some pressure on revenue growth, at least until the proposed recapitalization is completed. The proposed recapitalization transaction is included as a requirement in the most recent amendment to the company's concessionary labor agreement with the IBT. The amendment defines a qualifying transaction as one that reduces the amount of the company's bank debt by at least $300 million. YRCW is required to enter into a memorandum of understanding with its bank group for a qualifying transaction by Feb. 28, 2011, in order for the concessions agreed to by the IBT to remain in effect. In addition, the company and the bank group must have final documentation for the transaction completed by March 15, 2011, and the transaction must close by May 13, 2011. Meeting these milestone dates is a requirement for the company's labor agreement and its multiemployer pension plan contribution deferral agreement (CDA) to remain in effect. Meeting these dates also is a requirement of the most-recent amendments to the company's credit facility and ABS agreements. Unless all of the relevant parties, including the company, its bank group and the IBT, agree to a revision of the timeline, missing these dates would nullify the various agreements and likely force the company into bankruptcy. No details have been made public regarding how the recapitalization transaction will be structured. Therefore, the effect that the transaction will have on YRCW's ratings, if successfully completed, is unclear. Although a debt to equity swap with the banks would reduce the company's debt and leverage, it would do little to help the company's near-term free cash flow, although it would ultimately reduce interest costs and likely would help to convince certain of YRCW's customers that the company was on a sounder financial footing. More positive for the company's credit profile would be a transaction that materially improves the company's liquidity position in addition to reducing its debt. Additional liquidity would increase the company's financial flexibility as it gains traction on volumes and continues to restructure its National Transportation business. Notably, on its fourth quarter earnings call, management dismissed the idea of splitting up the National and Regional Transportation businesses, suggesting that a sale of one of those units as part of the recapitalization transaction is unlikely. Aside from the recapitalization transaction, YRCW has been working with the IBT over the past two years to reduce costs and increase work rule flexibility. It also has reached an agreement with the union on an extension of its labor agreement by two years, with the current contract now expiring in 2015. The changes to the labor agreement have contributed to a decline in the company's labor costs, with salaries, wages and employee benefits declining to 60% of revenue in the fourth quarter of 2010 from 63% of revenue in the year-earlier period. With the most-recent agreement, YRCW also is slated to begin contributing to its multiemployer pension plans in June of this year, with the company estimating that contributions according to the revised agreement will run at a rate of around $7 million per month. Management hopes that it can offset the effect of the contributions with better labor productivity. Fitch views the changes to wages and work rules that the company has achieved as a positive, however, the severely underfunded position of the multiemployer pension plans remains a risk that ultimately could drive up the company's required contributions. Although information related to the funded status of the plans is not readily available, the company noted in its 2009 Annual Report that its contingent liability with respect to a full withdrawal from all of the multiemployer plans would be an estimated $7 billion. Despite the improving market conditions and lower cost structure arising from the IBT agreement and the restructuring of the National Transportation segment, YRCW's credit protection metrics remain very weak. The company ended 2010 with $1.07 billion of debt (face value), including $338 million of lease financing obligations and $139 million of pension contribution deferral obligations. The company produced negative free cash flow (calculated as net cash from operations less capital expenditures) of ($18) million despite very low capital spending of only $20 million. Net cash from operations for the full year was only $1.1 million. Fitch estimates that funds flow from operations adjusted leverage was about 9.2 times at year-end 2010. Fitch expects YRCW's credit profile will improve somewhat over the course of 2011, even when excluding any effects from the proposed recapitalization transaction, as operating leverage leads to increased margins on higher business volumes. Certain of the company's credit protection metrics will be strengthened further if the recapitalization is successful. Liquidity at year-end 2010 totaled $196 million, including $143 million in cash and $53 million in unrestricted revolver availability. Another $71 million of restricted revolver availability was potentially available to the company with the permission of the banks. In the face of negative free cash flow, liquidity was supported over the course of the year largely through asset sales and sale-leasebacks, with proceeds from property disposals totaling $86 million. The company also realized $34 million in proceeds from the sale of its YRC Logistics business. In 2011, liquidity will continue to be challenged, as the company has $223 million in debt maturities coming due over the course of the year, including $123 million of ABS borrowings. YRCW also plans to spend between $150 million and $175 million on capital expenditures during the year, although it is unclear to Fitch that the company will have sufficient liquidity to invest at this level. Management has forecasted additional property sale proceeds of $40 million to $50 million in 2011, and, after availing itself of recently-enacted pension relief legislation, it expects to contribute $30 million to its non-union pension plans. Arkansas Best Freight System Inc., one of YRCW's competitors and a unit of Arkansas Best Corporation, has filed a lawsuit in Federal court alleging that the various concessionary agreements entered into between YRCW and the IBT violate the National Master Freight Agreement. The NMFA is the predominant labor agreement between the IBT and trucking companies employing the union's members. ABF is seeking to nullify the revised IBT agreements with YRCW in addition to seeking $750 million in damages. In December 2010, the lawsuit was dismissed on the grounds that ABF did not have legal standing to sue. In January 2011, ABF filed an appeal, which media reports suggest could be heard as soon as April of this year. Although the ultimate outcome is unclear, if ABF is successful in both nullifying YRCW's contract concessions with the IBT and receiving the $750 million damage award, Fitch believes the likelihood of YRCW filing for Chapter 11 bankruptcy protection is high. The rating of 'B-/RR2' on the company's secured credit facility reflects its substantial collateral coverage and superior recovery prospects in the 70% to 90% range in a distressed scenario. On the other hand, the rating of 'C/RR6' on the company's unsecured convertible notes reflects Fitch's expectation that recoveries on those notes would be poor, in the 0% to 10% range in a distressed scenario. The low level of expected recovery for the unsecured debt is due to the substantial amount of higher-priority secured debt in the company's capital structure. * Great American Group Introduces Quarterly Auctions ---------------------------------------------------- Great American Group, L.L.C., will begin conducting online auctions on a quarterly basis in 2011, focusing on specific market sectors throughout the year. The Company plans vertical auctions in four industry sectors, including production/manufacturing, healthcare/technology, construction/rolling stock/fleet, and processing equipment. "For the past 37 years, we have conducted thousands of live and online auctions that offer companies an efficient, cost-effective method for the marketing and disposal of their surplus commercial assets," said Mark Weitz, GA Industrial President. "Based on the quantities of the most common assets our clients bring to auction, we've identified these vertical auctions as the most popular among buyers nationwide." By combining common surplus items from multiple sellers into a single online auction and marketing the sale as a stand-alone event, auction expenses are reduced for each seller. "This makes the sale attractive to sellers because the auction costs are spread among them," Mr. Weitz said. "Buyers also find it easier because they have a broader range of assets to choose from within a single auction." Great American Group, L.L.C. -- http://www.greatamerican.com-- provides asset disposition, valuation, and appraisal services, to retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional service firms. Great American Group handles the marketing campaign for the online sale, conducts the auction and provides payment processing services for sellers, including invoicing, collection and disbursement of sale proceeds. It has offices in Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York and San Francisco. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Share- Total Working Holders' Assets Capital Equity Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- -------- ABRAXAS PETRO AXAS US 178.1 (5.2) (1.7) ABSOLUTE SOFTWRE ABT CN 117.9 (12.8) (11.9) ACCO BRANDS CORP ABD US 1,187.7 292.8 (79.8) AEGERION PHARMAC AEGR US 2.9 (29.5) (27.3) ALASKA COMM SYS ALSK US 624.8 2.6 (15.3) AMER AXLE & MFG AXL US 2,114.7 33.0 (468.1) AMERICAN STANDAR ASEN US 0.0 (0.1) (0.1) AMR CORP AMR US 25,357.0 (2,102.0) (3,643.0) ANACOR PHARMACEU ANAC US 20.4 (1.6) (8.2) ARKSON NUTRACEUT AKSN US - (0.0) (0.0) ARQULE INC ARQL US 94.1 45.1 (9.7) ARVINMERITOR INC ARM US 2,814.0 357.0 (990.0) AUTOZONE INC AZO US 5,640.5 (584.3) (817.2) BLUEKNIGHT ENERG BKEP US 296.0 (427.8) (152.8) BOARDWALK REAL E BOWFF US 2,343.6 - (100.8) BOARDWALK REAL E BEI-U CN 2,343.6 - (100.8) BOSTON PIZZA R-U BPF-U CN 112.0 2.0 (115.5) BRAVO BRIO RESTA BBRG US 162.8 (28.9) (61.5) CABLEVISION SY-A CVC US 7,501.6 (157.7) (6,222.8) CABLEVISION SY-A CVY GR 7,501.6 (157.7) (6,222.8) CAMPUS CREST COM CCG US 327.5 - (60.7) CC MEDIA-A CCMO US 17,393.5 1,410.4 (7,219.6) CENTENNIAL COMM CYCL US 1,480.9 (52.1) (925.9) CENVEO INC CVO US 1,393.6 220.0 (332.5) CHENIERE ENERGY CQP US 1,797.0 30.3 (521.9) CHENIERE ENERGY C64 GR 1,797.0 30.3 (521.9) CHENIERE ENERGY LNG US 2,616.5 (137.1) (431.0) CHOICE HOTELS CHH US 403.3 (11.5) (75.5) CINCINNATI BELL CBB US 2,593.0 9.1 (611.4) CLEVELAND BIOLAB CBLI US 11.9 (9.7) (10.0) COMMERCIAL VEHIC CVGI US 289.3 114.0 (5.7) CUMULUS MEDIA-A CMLS US 324.1 (2.5) (349.3) DENNY'S CORP DENN US 312.7 (10.7) (102.4) DISH NETWORK-A DISH US 9,292.9 733.1 (1,416.5) DISH NETWORK-A EOT GR 9,292.9 733.1 (1,416.5) DISH NETWORK-A EOT TH 9,292.9 733.1 (1,416.5) DOMINO'S PIZZA DPZ US 425.7 104.1 (1,241.9) DUN & BRADSTREET DNB US 1,727.3 (612.4) (717.4) EASTMAN KODAK EK US 6,844.0 960.0 (498.0) ENDOCYTE INC ECYT US 11.4 4.7 (2.6) EPICEPT CORP EPCT SS 6.7 (1.1) (14.2) EXELIXIS INC EXEL US 372.9 (11.8) (217.6) FORD MOTOR CO F* MM 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO F US 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO F SW 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO FORDP FP 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO F BB 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO FMC1 TH 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO F1EUR EU 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO FMC1 GR 180,330.0 (18,558.0) (1,740.0) FREDDIE MAC FMCC* MM 2,288,730.0 - (58.0) GENCORP INC GY US 991.5 71.4 (195.1) GLG PARTNERS INC GLG US 400.0 156.9 (285.6) GLG PARTNERS-UTS GLG/U US 400.0 156.9 (285.6) GRAHAM PACKAGING GRM US 2,806.8 268.0 (530.7) HANDY & HARMAN L HNH US 374.2 62.1 (8.9) HEALTHSOUTH CORP HLS US 1,796.9 124.3 (394.9) HICKS ACQUISITIO HKACU US 0.8 (0.8) (0.1) HOVNANIAN ENT-A HOV US 1,817.6 1,101.9 (337.9) HOVNANIAN ENT-A HO3 GR 1,817.6 1,101.9 (337.9) HOVNANIAN ENT-B HOVVB US 1,817.6 1,101.9 (337.9) HUGHES TELEMATIC HUTC US 111.4 1.9 (42.1) INCYTE CORP INCY US 464.6 305.0 (128.9) INTERMUNE INC ITMN US 143.9 10.2 (67.7) IPCS INC IPCS US 559.2 72.1 (33.0) ISTA PHARMACEUTI ISTA US 112.2 8.8 (71.8) JAZZ PHARMACEUTI JAZZ US 108.0 (13.3) (0.8) JUST ENERGY GROU JSTEF US 1,760.9 (339.4) (328.6) JUST ENERGY GROU JE CN 1,760.9 (339.4) (328.6) KNOLOGY INC KNOL US 658.7 53.5 (5.3) KV PHARM-A KVP GR 358.6 (81.1) (139.1) LIGAND PHARM-B LGND US 112.6 (1.4) (1.1) LIGHTING SCIENCE LSCG US 60.0 28.3 (122.4) LIN TV CORP-CL A TVL US 782.4 21.2 (146.9) LIN TV CORP-CL A LTVA GR 782.4 21.2 (146.9) LORILLARD INC LO US 3,296.0 1,509.0 (225.0) MAINSTREET EQUIT MEQ CN 399.4 - (8.5) MANNKIND CORP MNKD US 277.3 55.8 (185.5) MEAD JOHNSON MJN US 2,293.1 472.9 (358.3) MOODY'S CORP MCO US 2,540.3 409.2 (309.7) MORGANS HOTEL GR MHGC US 759.1 47.0 (42.1) MPG OFFICE TRUST MPG US 3,267.4 - (897.2) NATIONAL CINEMED NCMI US 836.1 40.5 (340.8) NAVISTAR INTL NAV US 9,730.0 2,246.0 (924.0) NEWCASTLE INVT C NCT US 3,760.1 - (591.2) NEXSTAR BROADC-A NXST US 607.6 31.2 (189.9) NORTH AMERICAN G NMGL US 0.0 (0.1) (0.1) NPS PHARM INC NPSP US 228.8 147.8 (149.8) NYMOX PHARMACEUT NYMX US 0.9 (1.0) (1.8) OTELCO INC-IDS OTT US 331.6 27.5 (3.5) OTELCO INC-IDS OTT-U CN 331.6 27.5 (3.5) OTELCO INC-IDS ODB GR 331.6 27.5 (3.5) PALM INC PALM US 1,007.2 141.7 (6.2) PDL BIOPHARMA IN PDLI US 257.5 26.1 (304.5) PETROALGAE INC PALG US 5.9 (8.2) (51.6) PLAYBOY ENTERP-A PLA/A US 165.8 (16.9) (54.4) PLAYBOY ENTERP-A PLB GR 165.8 (16.9) (54.4) PLAYBOY ENTERP-B PLA US 165.8 (16.9) (54.4) PLAYBOY ENTERP-B PLBB GR 165.8 (16.9) (54.4) PLAYBOY ENTERP-B PLBB TH 165.8 (16.9) (54.4) PRIMEDIA INC PRM US 215.5 (5.8) (97.8) PRIMO WATER CORP PRMW US 29.0 (29.4) (9.6) PROTECTION ONE PONE US 562.9 (7.6) (61.8) QUALITY DISTRIBU QLTY US 284.3 26.9 (132.9) QWEST COMMUNICAT Q US 18,959.0 (1,163.0) (1,425.0) REGAL ENTERTAI-A RGC US 2,670.3 114.1 (267.3) REGAL ENTERTAI-A RETA GR 2,670.3 114.1 (267.3) RENAISSANCE LEA RLRN US 53.8 (38.5) (35.1) REVLON INC-A REV US 794.8 86.9 (991.8) REVLON INC-A RVL1 GR 794.8 86.9 (991.8) RIGNET INC RNET US 93.2 9.5 (11.6) RSC HOLDINGS INC RRR US 2,718.0 (60.8) (37.3) RURAL/METRO CORP RURL US 285.3 60.1 (98.6) SALLY BEAUTY HOL SBH US 1,670.4 371.1 (406.1) SINCLAIR BROAD-A SBGI US 1,485.9 36.4 (157.1) SINCLAIR BROAD-A SBTA GR 1,485.9 36.4 (157.1) SMART TECHNOL-A SMT US 559.1 201.9 (63.2) SMART TECHNOL-A SMA CN 559.1 201.9 (63.2) SMART TECHNOL-A 2SA GR 559.1 201.9 (63.2) STEREOTAXIS INC STXS US 47.5 (6.2) (5.3) SUN COMMUNITIES SUI US 1,164.1 - (131.0) SWIFT TRANSPORTA SWFT US 2,577.9 237.4 (83.2) SWIFT TRANSPORTA 72W GR 2,577.9 237.4 (83.2) SYNERGY PHARMACE SGYP US 2.7 (2.3) (1.8) TAUBMAN CENTERS TCO US 2,546.9 - (527.9) TEAM HEALTH HOLD TMH US 807.7 17.9 (51.4) THERAVANCE THRX US 212.6 161.1 (141.1) THERAVANCE HVE GR 212.6 161.1 (141.1) UAN CULTURAL & C GHBAU US 1.0 (0.4) (0.2) UNISYS CORP UIS US 3,020.9 538.7 (933.8) UNITED CONTINENT UAL US - (1,186.0) (2,206.0) UNITED RENTALS URI US 3,693.0 156.0 (20.0) VECTOR GROUP LTD VGR US 859.0 245.3 (37.7) VENOCO INC VQ US 766.2 20.4 (94.8) VIRGIN MOBILE-A VM US 307.4 (138.3) (244.2) VISTEON CORP VC US 5,147.0 1,184.0 (737.0) VONAGE HOLDINGS VG US 362.4 (0.1) (111.4) WARNER MUSIC GRO WMG US 3,604.0 (602.0) (228.0) WEIGHT WATCHERS WTW US 1,103.1 (377.9) (708.2) WORLD COLOR PRES WC CN 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WCPSF US 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WC/U CN 2,641.5 479.2 (1,735.9) WR GRACE & CO GRA US 4,271.7 1,371.3 (68.8) YRC WORLDWIDE IN YRCW US 2,634.7 (250.7) (95.8) ********* 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 by e-mail. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases by individuals and business entities estimating assets and debts or disclosing assets and liabilities at less than $1,000,000. The list includes links to freely downloadable images of the small-dollar business-related 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. Jhonas Dampog, 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 2011. 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 ***