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/raid1/www/Hosts/bankrupt/TCR_Public/110217.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, February 17, 2011, Vol. 15, No. 47 Headlines AARON BUERGE: Files for Chapter 7 Bankruptcy AHERN RENTALS: Misses $10.9MM Interest Payment on Feb. 15 ALLEGIANT TRAVEL: S&P Assigns 'BB-' Corporate Credit Rating ALTACANADA ENERGY: Obtains Financing and Credit Facility Extension AMBAC FINANCIAL: Plan Exclusivity Hearing on Friday AMBAC FINANCIAL: Vanguard Disposed Of Ambac Shares AMERICAN FOLK ART: Won't Sell Artwork to Pay Interest ANGARAKA LIMITED: Court Continues Hearing on Plan to March 3 APPLESEED'S INTERMEDIATE: Taps Kirkland & Ellis as Bankr. Counsel APPLESEED'S INTERMEDIATE: U.S. Trustee Forms Creditors Committee APPLESEED'S INTERMEDIATE: Wants Klehr Harrison as Co-Counsel ARROWHEAD GENERAL: S&P Gives Stable Outlook, Affirms 'B-' Rating BAYTEX ENERGY: S&P Assigns 'BB-' Rating to US$150 Mil. Debt BERNARD L MADOFF: Wilpon Wants Early Discovery From Trustee BERNARD L MADOFF: 'Surrogate Father' Moved Billions in Account BLOSSOM VALLEY: Has to Confirm Plan by July 18 to Avoid Conversion BORDERS GROUP: Files for Chapter 11 in Manhattan BORDERS GROUP: Gets Court Approval of GE Capital DIP Financing BORDERS GROUP: Case Summary & 30 Largest Unsecured Creditors BORDERS GROUP: 5 Agree Realty Properties Included in Closings BRANSON AIRPORT: In Restructuring Talks With Goldman, Bondholders BROWNIE'S MARINE: Trebor Unit Faces BB&T Foreclosure Suit BURLINGTON COAT: S&P Assigns 'B-' Rating to $1 Bil. Senior Loan BWAY HOLDING: S&P Assigns 'B' Rating to New $587.5 Mil. Loan CABI SMA: Files Schedules of Assets And Liabilities CALAIS RESOURCES: Completes Financial Statement Audits CARIAN MANAGEMENT: Plan Confirmation Hearing Continued to March 23 CAMBIUM LEARNING: S&P Assigns 'B' Rating to $175 Mil. Senior Notes CARIBBEAN PETROLEUM: Insurer to Pursue Lawsuit Against Firm CARSON CITY: Case Summary & 20 Largest Unsecured Creditors CB HOLDINGS: Former Exec. Sentenced on Fraud & Tax Evasion CHEM RX: Court Sets Mar. 17 Confirmation Hearing on Competing Plan CHEM RX: U.S. Trustee Forms New 4-Member Creditors Panel CITIZENS DEV'T: Wants to Access Cash Collateral Until August 31 CITIZENS DEV'T: Wants Plan Filing Deadline Extended to March 31 COLT DEFENSE: S&P Lower Ratings to 'B-' on Weaker Results COMPTON PETROLEUM: Centennial Energy Holds 5.21% Equity Stake CONSOLIDATED HORTICULTURE: Black Diamond Can Bid at Auction CONSOLIDATED HORTICULTURE: March 14 Hearing on More Exclusivity COUNTRYVIEW MHC: Court Sets March 14, 2011 Claims Bar Date CREDIT-BASED ASSET: Plan Outline Hearing Set for February 28 CROWN FOREX: Feds Want In on $84M Civil Suit vs. Crown Forex DATATEL INC: S&P Changes Outlook on 'B' Rating to Negative DBSD N.A.: 2nd Cir. Affirms Designation of DISH's Vote DIMAS SANTIAGO: Retainer Not Subject to Sec. 726 Disgorgement DREIER LLP: Chernov Cleared From Saleh Holdings Suit DUTCHMAN COMPANY: Case Summary & 6 Largest Unsecured Creditors ELITE LANDINGS: Hearing on ABRG's Plan Outline Moved to March 16 EUROPA STONE: Rasmus Asset Advisors to Conduct Liquidation EQUITY OFFICE PROPERTIES: Blackstone Restructures $7BB Debt FAYETTEVILLE MARKETFAIR: Asks Court to Dismiss its Chapter 11 Case FRANCHISE KINGS: Case Summary & Largest Unsecured Creditor FRANCISCAN COMMUNITIES: Court Sets March 7 Confirmation Hearing FRE REAL ESTATE: Files List of 20 Largest Unsecured Creditors FRE REAL ESTATE: Gets Court's Interim Nod to Use Cash Collateral FREESCALE SEMICONDUCTOR: S&P Puts 'B-' Rating on Positive Watch G-SWDE1 LLC: Voluntary Chapter 11 Case Summary GAS CITY: Has Until April 20 to Complete Sale Process & File Plan GLOBAL ENERGY: Says Chapter 11 Plan Declared Effective GULF FLEET: Hearing on Adequacy of Disclosure Statement on March 1 HARRISBURG, PA: Alvarez & Marsal Tapped as Advisor HCR HEALTHCARE: S&P Assigns 'B+' Rating to $150 Mil. Senior Notes HOME NETWORK BUILDERS: N.J. Court Won't Hear Shareholders' Appeal HUGO SAND: Case Summary & 20 Largest Unsecured Creditors INVISTA BV: S&P Puts 'BB-' Corp. Rating on CreditWatch Positive ISTAR FINANCIAL: Declares Dividends on Five Series of Preferreds JACK GINDI: 10th Cir. Says Debtor's Appeal Was Not Stayed JACK GINDI: 10th Cir. Says Biz Partner Entitled to Stay Relief JAVO BEVERAGE: Receives Final Financing Approval JEMAB FAMILY: Voluntary Chapter 11 Case Summary KWITCHURBELIAKIN: Dist. Court Affirms Chapter 11 Trustee Order L FRUMUSA FAMILY: Court Dismiss Chapter 11 Case LACK'S STORES: Austin Developer Bids for West Anderson Property LANCASTER FINANCING: S&P Gives Neg. Outlook, Affirms 'BB' Rating LAXAI PHARMA: Voluntary Chapter 11 Case Summary LEE COUNTY: S&P Changes Outlook to Stable, Affirms 'BB' Rating LEHMAN BROTHERS: Proposes Foster & Graham as Special Counsel LEHMAN BROTHERS: Weil to Represent A&M, Debtor in Employee Suit LEHMAN BROTHERS: J. Taylor Wants to Pursue Counterclaim LEHMAN BROTHERS: LCPI Balks at Fidelity Nat'l Motion to Compel LEHMAN BROTHERS: LCPI Inks Deal to Elevate Interests in Mach Gen LEVEL 3 COMMUNICATIONS: Southeastern Asset Has 31.1% Stake M. SLAVIN & SONS: Close to $800,000 Financing MAGNOLIA FINANCE: S&P Raises Ratings on $9 Mil. Notes to 'B+' MAJESTIC LIQUOR: 2nd Amended Plan Declared Effective MAJESTIC STAR: Gets Court's Nod to Continue Using Cash Collateral MANHATTAN PHARMA: Bondholders Agree to Forbearance Until Yearend MAURO PADILLA: Bankruptcy Judge Dismisses Chapter 11 Case MAYAGUEZ ADVANCED: MEDHS's Suit vs. SISSO Goes Back to State Court MEDICAL EDUCATION: Suit vs. SISSO Goes Back to State Court MESA AIR: CRAFT to Sell, Transfer General Unsecured Claims MESA AIR: Refine Inc. Buys Transamerica's Claims MINERALS CONTINENTAL: Case Summary & 20 Largest Unsec Creditors MONEY TREE: Incurs $4.10 Million Net Loss in Dec. 25 Quarter MPG OFFICE: To Default on $470MM Loan for California Plaza Tower MSR RESORT: Taps Houlihan for Advice on Restructuring or Sale MSR RESORT: Singapore Makes $1.5 Billion Offer for Resorts MSR RESORT: Wins Approval to Use Cash Collateral Until Feb. 28 NBTY INC: S&P Assigns Ratings to $1.9 Bil. Loan at 'BB-' NEW CENTURY FIN'L: Morgan Stanley Considered Acquisition OLDE PRAIRIE: Can't Bring Tortious Interference Claims v. Lender PHILADELPHIA RITTENHOUSE: iStar Wants Chapter 11 Case Dismissed PLATINUM INVESTMENTS: Case Summary & 5 Largest Unsecured Creditors PLEDGER PALACE: Case Summary & 17 Largest Unsecured Creditors QUIGLEY CO: Has Until March 15 to File New Restructuring Plan RBZ REALTY: Voluntary Chapter 11 Case Summary RENAISSANCE GRAND: Citi Takes Control After Lenders Foreclosed RICHARD FORDE: 4th Cir. Affirms Bankruptcy Fraud Judgment RJ WAREHOUSE: Case Summary & 10 Largest Unsecured Creditors SEAHAWK DRILLING: Taps Simmons & Company as Transaction Advisor SEAHAWK DRILLING: Wants to Hire Alvarez as Restructuring Advisor SEAHAWK DRILLING: Wins Okay to Tap Into Bankruptcy Loan SINCLAIR BROADCAST: BlackRock Discloses 5.92% Equity Stake STANTON PARK: Case Summary & 20 Largest Unsecured Creditors STILLWATER MINING: BlackRock Discloses 6.29% Equity Stake SUNCAL COS: Has Until Today to Fight Plans for Various Projects TAVERN ON THE GREEN: Hotel Operator Disputes Trademark Claim TAWK DEVELOPMENT: Files List of 20 Largest Unsecured Creditors TAWK DEVELOPMENT: Files Schedules of Assets And Liabilities TOWER OAKS: Section 341(a) Meeting Scheduled for March 14 TOWER OAKS: Taps Cohen Baldinger as Bankruptcy Counsel TRANSPORTADORA DE GAS: Regulator Extends Intervention for 120 Days TRIBUNE CO: Court Needs to Use Cramdown Process in Plans TRIBUNE CO: U.S. Trustee Objects to Both Plans TRIBUNE CO: Officers & Directors Oppose Both Plans TRIBUNE CO: Zell Says 'Lottery-Ticket Litigation' Hinders Plans TRIBUNE CO: Proposes $52-Mil. Contribution to Food Network TRIBUNE CO: Court Sends J. Allen, et al., to Mediation TRUMP ENTERTAINMENT: Landry's Buys Altantic City Resort for $38MM US TELEPACIFIC: S&P Assigns 'B-' Rating to $460 Mil. Senior Loan VIRGINIA LUMINOR: Case Summary & 3 Largest Unsecured Creditors WESTLAND PARCEL: Can Access Ban's Cash Collateral Until May 31 WHITTLE DEV'T: Court Extends Plan Filing Deadline to April 4 WILMINGTON PRINTING: Files for Bankruptcy Amids BB&T Foreclosure WINGATE AIRPORT: Uncompleted LV Airport Hotel Files for Ch. 11 WORD WORLD: Has Deal to Sell Assets to Standard General W.R. GRACE: Opposition to Garlock Plea for Documents Gains Support W.R. GRACE: BlackRock Inc. Hikes Equity Stake to 5.25% * MERS Doesn't Confer Right to Foreclose, Judge Says * Only Motion Proper to Enforce Discharge Injunction * Malpractice Claim Discharged Although Not Listed * U.S. Panel to Probe FDIC Bank Resolutions, Loss-Share Deals * Canada November Bankruptcies Rise 1.1% From October 9 * Bankruptcy Would Be 'Last Resort' for US Cities, Says Miller * City Budget Troubles Spur States to Expand Oversight Abilities * State Bankruptcy Proposal Criticized by Both Parties * Cypress Group Executives Leave Firm to Form Torque Capital * Alvarez & Marsal Boosts Advisory Team for P.E., M&A Clients * David Drez Joins Wick Phillips * Recent Small-Dollar & Individual Chapter 11 Filings ********* AARON BUERGE: Files for Chapter 7 Bankruptcy -------------------------------------------- The Springfield News-Leader reports that banker and former TV "Bachelor" Aaron Buerge has filed for personal bankruptcy under Chapter 7. Cara Restelli at KY3 News reports that according to court documents, Mr. Buerge and his businesses are owed $7 million. Among Mr. Buerge's largest liabilities are Trolley's restaurant and the Vandivort Center building on Walnut Street in downtown Springfield. According to KY3, Mr. Buerge's filing came nine months after Mr. Buerge's Springfield-based business Trolley's LLCs filed for Chapter 11 bankruptcy. Mr. Buerge is president of First National Bank. AHERN RENTALS: Misses $10.9MM Interest Payment on Feb. 15 --------------------------------------------------------- Ahern Rentals, Inc., has not made the scheduled $10.9 million payment of interest due on Feb. 15, 2011, on its outstanding 9.25% Second Priority Senior Secured Notes due 2013. Ahern has entered into a forbearance agreement with a majority of the revolving lenders under its Credit Agreement pursuant to which, subject to conditions, the lenders will take no action as a result of (a) any default under the Credit Agreement that arises from non-payment of interest on the Notes or (b) specified other events that could result in a default between now and Aug. 21, 2011. The decision to not make the interest payment on the Notes was done with the support of the holders of the Term Loan under Ahern's Credit Agreement as well as the holders of a majority of the outstanding principal of the Notes. In addition, effective immediately, Ahern will cease to file current, quarterly and annual reports with the Securities and Exchange Commission. Ahern had previously announced on July 1, 2010 that it had engaged Oppenheimer & Co. Inc. as its financial advisor to review financing alternatives, including alternatives relating to the revolving portion of its Credit Agreement which matures in August 2011. As of Feb. 14, 2010, Ahern had availability of $33.5 million on its revolver. "Our decision today is an important first step in extending the maturity of our Credit Agreement. We are engaged in discussions with the lenders under our Credit Agreement and the holders of a majority of the outstanding principal of our Notes aimed at addressing the maturity of our Credit Agreement, and our decision to not make the payment was done with their support. The decision was part of our strategy to extend the maturity date of the revolving portion of our Credit Agreement, and with $33.5 million of availability on our revolver, we have sufficient liquidity to meet our commitments to our employees, customers and vendors," said Don Ahern, Chief Executive Officer. "After a few very difficult years due to the recession in the United States, we have been experiencing a significant improvement in all areas of our business, particularly during the past six months, with a significant increase in our utilization levels and improving pricing. Ahern provides a valuable service for its customers and the discussions with our lenders and noteholders do not affect our commitment to continuing to offer customers highly reliable and quality equipment and service. It is business as usual and we anticipate no impact on our employees, customers and vendors." About Ahern Rentals Ahern Rentals, Inc. -- http://www.ahern.com/-- headquartered in Las Vegas, Nevada, is a regional equipment supplier with 71 branches predominately in the Southwest region of the United States. The Company specializes in high reach equipment. For the 12 months ended June 2010 Ahern generated revenues of $275 million. As of Sept. 30, 2010, Ahern had $562,881,000 in total assets and $648,871,000 in total liabilities, including second priority senior secured notes payables of $237,870,000, and $85,990,000 in stockholders' deficit. * * * As reported by the Troubled Company Reporter on Aug. 30, 2010, Moody's Investors Service lowered the probability of default rating of Ahern Rentals to Caa3 from Caa2, the rating on Ahern's $237 million 9.25% second lien notes due August 2013 to Ca (LGD 5, 72%) from Caa3 (LGD 5, 81%), and the speculative grade liquidity rating to SGL-4 from SGL-3. The corporate family rating of Caa2 has been affirmed. The rating outlook has been revised to negative from stable. The downgrades reflected a weak liquidity profile, leverage exceeding 11 times, and Moody's view that non- residential construction activity levels in Ahern's region will not significantly rebound in 2011. Liquidity profile weakness stems from near-term (August 2011) expiration of Ahern's $310 million asset-based revolving credit line, which had borrowings of $284 million on June 30, 2010. The Caa3 probability of default downgrade reflects a challenging revolver refinancing environment and Moody's view that Ahern's very high leverage increases risk of a capital re-structure/ creditor loss event that Moody's would probably consider a default. ALLEGIANT TRAVEL: S&P Assigns 'BB-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Allegiant Travel Co., parent of low fare airline Allegiant Air. At the same time, S&P assigned its 'BB-' issue- level rating to the company's proposed $125 million secured term loan B due 2017 with a recovery rating of '4', indicating S&P's expectations of average (30%-50%) recovery in a payment default scenario. The outlook is stable. "The ratings on Allegiant reflect its relatively small size within the U.S. airline industry, its reliance on leisure travelers, its relatively old and fuel-inefficient fleet (offset somewhat by low ownership costs), and the high risk and cyclical nature of the airline industry," said Standard & Poor's credit analyst Betsy Snyder. "Also incorporated in the rating is the company's low- cost structure and low leverage, each among the best of the U.S. rated airlines. Under its criteria, S&P characterizes Allegiant's business risk profile as weak and its financial risk profile as significant." The outlook is stable. The rating assumes the announced fleet additions and incremental debt, and its new Hawaii service, resulting in a weaker financial profile (although one that's still among the best of U.S. airlines). "S&P could lower the rating if earnings and cash flow are weaker than anticipated, due to higher- than-expected fuel prices and/or weak demand and pricing, or weaker-than-expected margins on the new Hawaii service, resulting in FFO to debt declining to below 30% on a sustained basis," MS. Snyder continued. "On the other hand, if unrestricted cash declined below $200 million, S&P could lower the rating. S&P believes it is unlikely the rating would be upgraded based on the risks associated with expansion." ALTACANADA ENERGY: Obtains Financing and Credit Facility Extension ------------------------------------------------------------------ AltaCanada Energy Corp. on Feb. 10 unveiled the first closing of its refinancing totaling roughly C$10,300,000 comprised of C$7,700,000 of new equity and the conversion to equity of C$2,600,000 of debt. The financing will reduce debt, will provide positive working capital and enable the Company to continue its Montana Bakken exploration program with joint venture/farm-out partners Reliable Energy Ltd. and One Earth Oil and Gas Inc., including the drilling of three new Montana Bakken wells, the first of which the Company expects will be spudded on or about Feb. 24, 2011. The refinancing of AltaCanada has been accomplished under agreements with Cornerstone Capital Asset Management L.P., as lead, and Stonecap Securities Inc., through the issuance of convertible preferred shares and represents a significant milestone for the Company, including these elements: * The Company's name will be changed to Montana Exploration Limited reflecting the Company's new focus on its substantial existing acreage position and other potential plays. * Charles V. Selby, currently Chairman, will assume the role of Executive Chairman of Montana Exploration effective immediately. * The share capital of the Company will be consolidated on the basis of one new share of Montana Exploration for every 10 existing common shares of AltaCanada which was to become effective at the opening of trading on Tuesday, February 15, 2011. * Subscriptions have been accepted for convertible preferred shares totaling C$7.7 million to date, with a follow-on closing scheduled for the week of February 14, 2011. The C$7.7 million of subscriptions is comprised of: -- Under the terms of a participation agreement, AltaCanada's farm-in partner has subscribed for C$1.5 million and will have a six month option to acquire AltaCanada's Canadian non-core properties for their full proved and probable independent engineering values using a 10% NVP discount. -- Insiders and persons sourced by insiders of AltaCanada have subscribed for approximately C$3.0 million. -- The balance of the subscriptions received to date have been comprised of several institutional investors that will be well-positioned to participate in future financing activity by the Company if the current exploration program is successful. * Indebtedness of the Company to the National Bank of Canada will be reduced by C$2.275 million to a total of C$5.7 million and the Company will no longer be in forbearance with the Bank. The Company's current credit facility with National Bank will be extended to November 30, 2011. The National Bank will be issued 5,000,000 warrants, each to acquire one pre-consolidation common share (500,000 post-consolidation common shares in the aggregate) in consideration for the extension. * Roughly C$3.3 million of subordinate debt of AltaCanada will also be exchanged for convertible preferred shares. The holder of the remaining subordinated debt has agreed to extend the repayment of such debt until November 30, 2011 and will be granted 1,500,000 warrants, each to acquire a pre-consolidation common share (150,000 post-consolidation common shares in the aggregate) in consideration of such agreement. * Remaining proceeds from the first closing estimated at C$4 million will be applied to reduce the Company's trade payables, to meet the Company's obligations under the current drilling program, to pursue other exploration activities on the Company's lands and for other general and administrative costs. Calgary, Alberta-based AltaCanada Energy Corp. (TSX-V: ANG) -- http://www.altacanada.com/-- is engaged in the acquisition, exploitation and production of crude oil and natural gas reserves in Western Canada and Montana. AMBAC FINANCIAL: Plan Exclusivity Hearing on Friday --------------------------------------------------- Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York adjourned the hearing on Ambac Financial Group, Inc.'s motion to extend exclusive periods to file a Chapter 11 plan and solicit acceptances for that plan from February 16, 2011 to February 18, 2011. The adjournment was disclosed in a notice filed with the Court by Allison H. Weiss, Esq., at Dewey & LeBoeuf LLP, in New York, counsel to the Debtor, on February 9. The Debtor's Exclusivity Motion was previously scheduled to be heard on February 16. By its current request, the Debtor seeks to extend its Exclusive Plan Filing Period through September 6, 2011 and its Exclusive Solicitation Period through November 3, 2011. The Court also adjourned the hearing on the Debtor's request to extend its deadline to decide on leases. Ambac is asking the Court to extend the period by which it may assume or reject its unexpired non-residential real property leases, through and including June 6, 2011. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FINANCIAL: Vanguard Disposed Of Ambac Shares -------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 9, 2011, The Vanguard Group, Inc. disclosed that that it is no longer a 5% shareholder of Ambac Financial Group, Inc.'s common stock. It now has 0.00% stake in AFG. Vanguard Group also does not own more than 5% of AFG common stock on behalf of another person. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of Vanguard Group, is the beneficial owner of [___] shares or 0.00% of the common stock of AFG as a result of its serving as investment manager of collective trust accounts. VFTC directs the voting of those shares. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN FOLK ART: Won't Sell Artwork to Pay Interest ----------------------------------------------------- Bloomberg News' Philip Boroff and Katya Kazakina reported earlier this month that Maria Ann Conelli, Executive Director of The American Folk Art Museum, said in an interview the museum won't sell its collection to pay interest on $31.9 million it borrowed to construct a new building, after defaulting on payments in July 2009. Ms. Conelli said the museum will sell art only "to purchase for the collection." She said expects to have a balanced budget for the fiscal year ending June 30. "We've been hitting our target every single month." The American Folk Art Museum has missed a total of $3.7 million in payments to a debt service fund for the new premises, a Jan. 5 filing to bondholders said. According to Bloomberg, total missed payments are up by about $2 million in the past year -- averaging $7,700 each weekday. The Troubled Company Reporter, citing Katherine Clarke of The New York Observer, reported on February 2, 2011, that The American Folk Art Museum missed a payment due Jan. 1 on municipal bonds originally issued a decade ago to fund the move to its West 53rd Street headquarters. Bond insurance kicked in. The New York Observer indicated that the museum also has disclosed that it is $3.7 million short of the funds needed to make the next payment, due July, and that it has little expectation of being able to raise the funds in the interim. ANGARAKA LIMITED: Court Continues Hearing on Plan to March 3 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas has continued the hearing on Angaraka Limited Partnership's proposed Plan of Reorganization, originally scheduled for Jan. 26, 2011, to March 3, 2011, at 9:30 a.m. As reported in the Troubled Company Reporter on Oct. 12, 2010, under the plan, each holder of allowed unsecured claims will receive over a period of six months from the Effective Date, two equal payments payable on each quarterly distribution date until the claim is paid in full. Old equity interests will be canceled on the Effective Date and each holder thereof will receive equity interests in the Reorganized Debtor equal to the old equity interest. About Angaraka Limited Partnership Newport Beach, California-based Angaraka Limited Partnership, in November 2005, acquired and assumed indebtedness secured by, among other things, a Deed of Trust on four, Class B/C, garden-apartment properties located in the Dallas/Fort-Worth Metroplex. The Properties -- Woodchase, Clarendon, Keller Oaks, and Sycamore Hills -- total 750 units and range in date of construction from 1979 to 1983. The Company filed for Chapter 11 bankruptcy protection on May 31, 2010 (Bankr. N.D. Tex. Case No. 10-33868). Vincent P. Slusher, Esq., and J. Seth Moore, Esq. at DLA Piper LLP US, in Dallas, Tex., assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million. APPLESEED'S INTERMEDIATE: Taps Kirkland & Ellis as Bankr. Counsel ----------------------------------------------------------------- Appleseed's Intermediate Holdings LLC, et al., ask for authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP as bankruptcy counsel, nunc pro tunc to the Petition Date. K&E will, among other things: a. attend meetings and negotiate with representatives of the Debtors' creditors and other parties in interest; b. take all necessary actions to protect and preserve the Debtors' estates, including prosecute actions on the Debtors' behalf, defend any action commenced against the Debtors and represent the Debtors' interests in negotiations concerning all litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; c. prepare all pleadings in connection with the Chapter 11 cases, including motions, applications, answers, orders, reports and papers necessary or otherwise beneficial to the administration of the Debtors' estates; and d. represent the Debtors in connection with obtaining any postpetition financing and authority to continue using cash collateral. The Debtors have also filed an application to tap Klehr Harrison Harvey Branzburg LLP as co-counsel. The Debtors intend for Klehr Harrison to represent the Debtors in matters that Klehr Harrison can handle more efficiently than K&E or which cannot be handled by K&E due to conflicts of interest. The Debtors assure the Court that the services of Klehr Harrison will complement, and not duplicate, the services to be rendered by K&E. K&E will implement appropriate procedures to ensure that there is minimal, if any, duplication. K&E will be paid based on the rates of its professionals: Richard M. Cieri $995 Joshua A. Sussberg $715 Brian E. Schartz $590 Partners $590-$995 Of Counsel $450-$995 Associates $360-$715 Paraprofessionals $145-$305 Richard M. Cieri, a partner at K&E, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. A hearing on the Debtors' request to hire K&E has been rescheduled to February 18, 2011, at 2:00 p.m. (ET). The hearing was initially set for February 11, 2011. About Appleseed's Intermediate Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard Brands sells clothing to people 55 and older. Orchard Brands has 17 brands including Appleseed's, Draper's & Damon's, Gold Violin, Haband and Norm Thompson. It publishes catalogs and has stores under its Appleseed's and Draper's & Damon's brands. It has annual sales of about $1 billion and earnings before interest, taxes, depreciation and amortization are about $50 million, sources said told Bloomberg. Appleseed's is owned by Golden Gate Capital Corp., which also holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc. and Zale Corp. Appleseed's Intermediate and its affiliates filed for Chapter 11 bankruptcy protection on January 19, 2011 (Bankr. D. Del. Lead Case No. 11-10160). Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, serves as local counsel to the Debtors. Moelis & Company LLC is the Debtors' investment banker and financial advisor. Alvarez & Marshal North America, LLC, is the Debtors' restructuring advisor. Pricewaterhousecoopers LLP is the Debtors' independent auditor. Kurtzman Carson Consultants LLC is the notice, claims and balloting agent. Appleseed's Intermediate estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. APPLESEED'S INTERMEDIATE: U.S. Trustee Forms Creditors Committee ---------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors of Appleseed's Intermediate Holdings LLC and its debtor-affiliates. The members of the Committee are: 1) RR Donnelley & Sons Company Attn: Dan Pevonka 3075 Highland Parkway, Downers Grove, Illinois 60515 Tel: 630-322-6931 Fax: 630-322-6052 2) Gould Paper Corp. Attn: Michael Ritter 11 Madison Avenue New York, New York 10010 Tel: 212-301-8682 Fax: 212-547-3409 3) News America Marketing Attn: Joseph M Borrow 20 Westport Road Wilton, Connecticut 06897 Tel: 203-563-6304 Fax: 203-563-6736 4) Protex International Attn: Carl Jenkins 1771 Cardinal Way Hatfield, Philadelphia 19440 Tel: 215-721-7504 Fax: 215-721-7505 5) Eastman Footwear Group, Inc. Attn: Max M. Mizrachi 34 West 33rd Street, 7th Floor New York, New York 10001 Tel: 212-629-0282 Fax: 212-268-4169 6) Seasons Apparel Inc. Attn: Mitchel Nichnowitz 1010 Crenshaw Blvd., Suite 250 Torrance, California 90501 Tel: 732-821-4779 Fax: 732-940-0468 7) Valassis Attn: Hal Manoian One Target Centre Windsor, Connecticut 06095 Tel: 860-285-6336 Fax: 860-285-6480 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Appleseed's Intermediate Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard Brands sells clothing to people 55 and older. Orchard Brands has 17 brands including Appleseed's, Draper's & Damon's, Gold Violin, Haband and Norm Thompson. It publishes catalogs and has stores under its Appleseed's and Draper's & Damon's brands. It has annual sales of about $1 billion and earnings before interest, taxes, depreciation and amortization are about $50 million, sources said told Bloomberg. Appleseed's is owned by Golden Gate Capital Corp., which also holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc. and Zale Corp. Appleseed's Intermediate and its affiliates filed for Chapter 11 bankruptcy protection on January 19, 2011 (Bankr. D. Del. Lead Case No. 11-10160). Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E. Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, serves as local counsel to the Debtors. Moelis & Company LLC is the Debtors' investment banker and financial advisor. Alvarez & Marshal North America, LLC, is the Debtors' restructuring advisor. Pricewaterhousecoopers LLP is the Debtors' independent auditor. Kurtzman Carson Consultants LLC is the notice, claims and balloting agent. Appleseed's Intermediate estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. APPLESEED'S INTERMEDIATE: Wants Klehr Harrison as Co-Counsel ------------------------------------------------------------ Appleseed's Intermediate Holdings LLC, et al., ask for authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Klehr Harrison Harvey Branzburg LLP as co- counsel, nunc pro tunc to the Petition Date. Klehr Harrison will: a. advise the Debtors of their rights, powers and duties as debtors and debtors in possession; b. take necessary action to protect and preserve the debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved and the preparation of objections to claims filed against the Debtors' estates; c. prepare motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; and d. perform all other necessary legal services in connection with the Debtors' Chapter 11 cases. The Debtors have also filed an application to retain and employ Kirkland & Ellis LLP as co-counsel to Klehr Harrison. The Debtors intend for Klehr Harrison to represent the Debtors in matters that Klehr Harrison can handle more efficiently or which cannot be handled by K&E due to conflicts of interest. The Debtors assure the Court that Klehr Harrison will complement, and not duplicate, the services to be rendered by K&E. Klehr Harrison will implement appropriate procedures to ensure that there is minimal, if any, duplication. Klahr Harrison will be paid based on the rates of its professionals: Partners $400-$660 Of Counsel $325-$400 Associates $250-$385 Paraprofessionals $175 Domenic E. Pacitti, Esq., a partner at Klehr Harrison, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. A hearing on the Debtors' request to hire K&E has been rescheduled to February 18, 2011, at 2:00 p.m. (ET). The hearing was initially set for February 11, 2011. About Appleseed's Intermediate Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard Brands sells clothing to people 55 and older. Orchard Brands has 17 brands including Appleseed's, Draper's & Damon's, Gold Violin, Haband and Norm Thompson. It publishes catalogs and has stores under its Appleseed's and Draper's & Damon's brands. It has annual sales of about $1 billion and earnings before interest, taxes, depreciation and amortization are about $50 million, sources said told Bloomberg. Appleseed's is owned by Golden Gate Capital Corp., which also holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc. and Zale Corp. Appleseed's Intermediate and its affiliates filed for Chapter 11 bankruptcy protection on January 19, 2011 (Bankr. D. Del. Lead Case No. 11-10160). Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E. Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. Moelis & Company LLC is the Debtors' investment banker and financial advisor. Alvarez & Marshal North America, LLC, is the Debtors' restructuring advisor. Pricewaterhousecoopers LLP is the Debtors' independent auditor. Kurtzman Carson Consultants LLC is the notice, claims and balloting agent. Appleseed's Intermediate estimated assets at $100 million to $500 million and debts at $500 million to $1 billion in its Chapter 11 petition. ARROWHEAD GENERAL: S&P Gives Stable Outlook, Affirms 'B-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Arrowhead General Insurance Agency Inc. to stable from negative. At the same time, Standard & Poor's affirmed its 'B-' counterparty credit rating on Arrowhead. Standard & Poor's also assigned a 'B-' rating on Arrowhead's pending $115 million first-lien term loan, due 2016, and $15 million revolver, due 2015. S&P expects the revolver to remain undrawn at closing. The recovery rating on the senior secured credit facilities is '3', which indicates S&P's expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default. In addition, S&P assigned a 'CCC' rating on Arrowhead's pending $42 million second-lien term loan, due in 2017. The recovery rating on the second-lien term loan is '6', indicating S&P's expectation of negligible (0%-10%) recovery for lenders in the event of a payment default. "S&P revised the outlook to stable, in part, to reflect its view that Arrowhead's refinancing will improve its liquidity metrics prospectively," said Standard & Poor's credit analyst John Iten. "S&P expects the new credit agreement to have more favorable financial covenants than those of its existing facilities, which should mitigate S&P's concerns on Arrowhead remaining covenant- compliant." The stable outlook also reflects Standard & Poor's view that Arrowhead's operating performance moderately improved from the prior year. Additionally, in Standard & Poor's view, Arrowhead's management team is strong. "S&P expects that Arrowhead will continue to produce strong operating performance in 2011 and 2012," said Mr. Iten. "S&P also expect moderate top-line growth, fixed charge coverage at 2.0x or higher, and debt to EBITDA of 5.0x or lower in 2011. Additionally, S&P expects the company to remain in compliance with its quarterly scheduled bank loan covenants with reasonable cushions." BAYTEX ENERGY: S&P Assigns 'BB-' Rating to US$150 Mil. Debt ----------------------------------------------------------- Standard & Poor's Rating Services said it assigned its 'BB-' issue-level debt rating and '5' recovery rating to Calgary, Alta.- based Baytex Energy Corp.'s proposed US$150 million senior unsecured debt issue due 2021. At the same time, Standard & Poor's raised its issue-level rating on the company's existing C$150 million senior unsecured notes to 'BB-' from 'B+' and revised the recovery rating to '5' from '6', indicating S&P's expectation of modest (10%-30%) recovery at the time of default for both note issues. S&P has revised its enterprise valuation and recovery ratings to reflect S&P's opinion of the company's expected reserves growth in 2010 from year-end 2009 reported reserves, and S&P's updated assumption that borrowing base limits and bank overcollateralization targets will restrict the total claim on the asset-based lending credit facility to no more than 85% of S&P's reserves valuation at the time of default. As a result, S&P's recovery analysis incorporates an expectation that the borrowing base would be reduced in the distressed price environment contemplated in S&P's simulated default scenario. "Although S&P has maintained a very conservative unit reserves valuation, due to the high proportion of lower value heavy oil in the company's reserves portfolio, based on S&P's revised valuation methodology, S&P estimates greater potential recovery at the time of default, than what was calculated under its previous valuation methodology," said Standard & Poor's credit analyst Michelle Dathorne. "S&P's estimated enterprise value also includes its expectation that Baytex's 2010 reserves base will increase from the company's reported 2009 year-end reserves," Ms. Dathorne added. Baytex is a Canadian conventional oil and gas upstream company that produces heavy oil, light oil, and natural gas. The heavy oil production accounts for approximately 60% of production and 70% of oil-equivalent reserves. Its operations consist predominantly of cold primary production, which produces conventional heavy oil without the assistance of steam injection. The light oil and natural gas operations produce light and medium gravity crude oil, natural gas, and natural gas liquids from fields in Alberta and British Columbia. Ratings List Baytex Energy Corp. Corporate credit rating BB/Stable/- Rating Assigned Prop US$150 mil. sr. unsec. debt due 2021 BB- Recovery rating 5 Rating Raised/Recovery Rating Revised To From -- ---- C$150 mil. sr. unsec. debt due 2021 BB- B+ Recovery rating 5 6 BERNARD L MADOFF: Wilpon Wants Early Discovery From Trustee ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fred Wilpon and his family, the owners of the New York Mets baseball club, filed a motion in bankruptcy court demanding that Irving Picard, the trustee for Bernard L. Madoff Investment Securities Inc., turn over evidence the trustee obtained from third parties such as Merrill Lynch & Co. Inc. Mr. Wilpon wants the evidence the trustee has in possession as a matter of "simple fairness" notwithstanding that the Wilpon Group has not yet filed an answer to the lawsuit. According to the report, Mr. Wilpon says he wants to know the information the trustee had in his possession from third parties when he filed the complaint in December. Mr. Wilpon says it's a matter of "simple fairness" to permit discovery from the trustee at this point in the lawsuit, even though the Wilpon defendants are yet to file an answer. The Madoff trustee, however, objects to the proposal, saying there is no right to discovery this early in a lawsuit. A hearing on the request is scheduled for Feb. 22. As reported by the Troubled Company Reporter in January 2011, Mr. Picard is seeking up to about $1 billion from Fred Wilpon, his brother-in-law Saul Katz, their partners, relatives and entities related to their real-estate investment firm, Sterling Equities Associates. Mr. Picard has alleged the Mets owners and their business partners failed to investigate direct warnings and evidence that Mr. Madoff was conducting a Ponzi scheme, while reaping hundreds of millions of fictitious profits. He is seeking the return of nearly $300 million in fictitious profits, as well as up to $700 million in principal withdrawn since 2002. Messrs. Wilpon and Katz have called the allegations "abusive, unfair and untrue." "The plain truth is that not one of the Sterling partners ever knew or suspected that Madoff ran a Ponzi scheme," they said in a statement. The bankruptcy judge has directed the trustee and the Wilpon group to mediate with former New York Governor Mario M. Cuomo. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Oct. 29, 2010, a total of US$5.69 billion in claims by investors has been allowed, with US$741.2 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BERNARD L MADOFF: 'Surrogate Father' Moved Billions in Account -------------------------------------------------------------- Bob Van Voris at Bloomberg News reports that Norman F. Levy, a New York real estate broker described as a "surrogate father" to Bernard Madoff, transferred more than $83 billion in and out of his account with the convicted con man from 1998 to 2001, the Securities Investor Protection Corp. said in a letter. Other Madoff clients put in a total of $10.2 billion and took out $8.5 billion during the same period, according to a Jan. 24 letter from the SIPC to U.S. Representative Scott Garrett, a Republican from New Jersey, who is looking into the fraud. Mr. Levy died in 2005 at age 93. Suspicious transactions by the customer dealing with Mr. Madoff's firm "most often and in the largest dollar amount" during that time should have alerted JPMorgan Chase & Co. to the Ponzi scheme, according to allegations in a complaint against the bank demanding $6.4 billion for its role in managing Mr. Madoff's main account, Bloomberg News said. A copy of the SIPC's Jan. 24 Letter is available for free at: http://bankrupt.com/misc/SIPC_Jan24_Letter.pdf Lawsuit Against Customer 1 Irving Picard, the trustee liquidating Mr. Madoff's firm, claims in the complaint that JPMorgan, the second-largest U.S. bank by assets, was aware of "what appeared to be a check-kiting scheme" in December 2001 between Mr. Madoff and a customer. The client, identified only as "Customer 1," also engaged in "suspicious loan activity" involving Customer 1 and another longtime Madoff friend, according to the complaint, which was unsealed last week. According to Bloomberg News, based on the transaction figures produced by the SIPC for Mr. Garrett, Mr. Levy is the only investor in Mr. Madoff's defunct investment firm, Bernard L. Madoff Investment Securities LLC, whose transaction volume matches up with Mr. Picard's allegations against Customer 1. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Oct. 29, 2010, a total of US$5.69 billion in claims by investors has been allowed, with US$741.2 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BLOSSOM VALLEY: Has to Confirm Plan by July 18 to Avoid Conversion ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of California, directed Blossom Valley Investors, Inc., and Pear Avenue Investors LLC, to file a new plan and disclosure statement by April 1, 2011, and have a plan confirmed by July 18, or their Chapter 11 case may be converted. As reported in the Troubled Company Reporter on Jan. 25, 2010, the Debtors have filed a plan that provides for the sale of the Debtors' interest in Messina Condos and Oak Knoll single family homes properties, collectively valued at $34.3 million. According to the Debtors' case docket, the Court held a hearing on Jan. 13, to consider adequacy of the proposed Plan of Reorganization. The Plan contemplates payment, in full, of any of the priority unsecured claims on the initial distribution date. Unsecured claims held by insiders are subordinated to all other classes and will be paid from the net proceeds of Messina Gardens and Oak Knoll as the net proceeds become available, only after other classes have been paid in full. A full-text copy of the Disclosure Statement, as amended, is available for free at: http://bankrupt.com/misc/BlossomValley_AmendedDS.pdf About Blossom Valley Investors, Inc San Jose, California-based Blossom Valley Investors, Inc., and Pear Avenue Investors LLC filed for Chapter 11 protection (Bankr. N.D. Calif. Case Nos. 09-57669 and 09-57670) on Sept. 10, 2009. Joseph R. Dunn, Esq., and Jeffry A. Davis, Esq., at Mintz Levin Cohn Ferris Glovsky Popeo PC, represent the Debtors in their restructuring efforts. Blossom Valley disclosed $45,825,415 in assets and $42,237,904 in liabilities as of the Chapter 11 filing. BORDERS GROUP: Files for Chapter 11 in Manhattan ------------------------------------------------ BORDERS GROUP BANKRUPTCY NEWS reports that Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. "It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company's lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term," Mike Edwards, Borders Group President, said in a press release announcing the Chapter 11 filing. Borders said that it has received commitments for $505 million in debtor-in-possession financing led by GE Capital, Restructuring Finance. Borders said that it is serving customers in the normal course, including honoring its Borders Rewards program, gift cards and other customer programs. Borders, however, said it has identified certain underperforming stores -- equivalent to approximately 30% of the company's national store network -- that are expected to close in the next several weeks. A list of the 200 closing stores is available at no charge at: http://bankrupt.com/misc/Borders_ClosingStores.pdf Borders emphasized that the closings were a reflection of economic conditions, cost structures and viability of locations, among other factors, and not on the dedication and productivity of the workforce in these stores. Financials For the fiscal year ended Jan. 29, 2011, Borders recorded net sales of approximately $2.3 billion. As of Dec. 25, 2010, the Debtors had incurred net year-to-date losses of approximately $168.2 million. Borders had total assets of $1.28 billion and total debts of $1.29 billion as of Dec. 25, 2010. A total of $196.05 million is outstanding under a prepetition revolver from lenders, led by Bank of America, N.A., as administrative agent. and $48.6 million under a prepetition term loan from lenders led by G.A. Capital, as administrative agent. The prepetition revolver and term loan are secured by substantially all of Borders' assets, excluding real estate holdings. Pershing Square Capital Management, L.P., LeBow Gamma Limited Partnership, UBS AG, and Bennett S. LeBow each owns or controls with the power to vote 5% or more of the voting securities of the Debtor. As of Feb. 8, a total of 72,042,189 shares were outstanding with 2,413 holders of these shares. Store Closing Sales Borders Group has submitted to the Bankruptcy Court an emergency motion for approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. According to Holly Felder Etlin, managing director of AP Services LLC, the 200 underperforming stores identified by Borders are operating at a significant loss and represent a drain on Borders' liquidity. Each week the 200 stores remain open causes Borders to suffer approximately $2 million of losses. Border has ceased supplying the closing stores. Before filing for bankruptcy, Borders Group, on Feb. 3, 2011, through their then advisors at FTI Consulting, Inc., began contacting the nation's largest liquidation firms to gauge interest in a process to solicit bids for store closing sales. Two groups -- (1) Great American Group LLC and Gordon Brothers Retail Partners LLC and (2) Hilco Merchant Resources, LLC, Tiger Capital, and SB Capital Group -- participated in bidding for a stalking horse position. Following a 3-day bidding, on Feb. 13, the Hilco Group emerged as the party with the higher and better bid. Compared to the GB Group's bid, the Hilco Group's bid provides a guaranty percentage that is 2% higher, which equates to almost $4 million more in proceeds for the Debtors. The Hilco Group's bid would pay the Debtors (i) a guaranteed amount of 73% of the cost value of all merchandise located at the Closing Stores and which Borders estimate will bring at least $131 million and as much as $148 million into the estates, plus (ii) a 50% share of any proceeds received during the SCSs after a 5% fee and recovery of expenses. Borders Group is seeking the Bankruptcy Court's approval to conduct an auction to select a liquidator where the Hilco Group is the stalking horse bidder. Hilco Group will receive a $1,000,000 break-up fee if it is outbid at the bankruptcy auction. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees (who are required to work one shift per month, and usually do so at special events), all of whom are located in the United States and Puerto Rico. Borders' employees are not subject to any collective bargaining agreements. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Gets Court Approval of GE Capital DIP Financing -------------------------------------------------------------- Borders Group Inc. disclosed that the U.S. Bankruptcy Court for the Southern District of New York has approved its $505 million in debtor-in-possession financing led by GE Capital, Restructuring Finance. Borders will use the funds, among other things, to pay vendors, publishers and other suppliers for post-petition goods and services and to operate its day-to-day business. In addition, Borders announced that the Court has approved additional "First Day Motions" so that ongoing business will not be disrupted. In this regard, Borders received permission from the Court to, among other things: * Honor its Borders Rewards and Borders Rewards Plus programs, gift cards and other customer programs; * Pay its employee wages and benefits substantially in the ordinary course of business; and, * Continue to maintain its cash management systems. Mike Edwards, President, Borders Group, stated, "We are moving quickly right at the outset of the Chapter 11 process to restore stability to our business and protect our enterprise and its brand. We now have financing to pay our vendors and other related parties in a timely fashion for post-petition goods and services, with the funding and related court approvals to operate our business effectively on a day-to-day basis. We look forward to continuing to meet the needs of our customer base and being a preeminent and innovative retailer in this space." * * * The Wall Street Journal's A.D. Pruitt reports that Chief Judge Arthur Gonzalez of U.S. Bankruptcy Court in Manhattan on Wednesday held off ruling on a Borders Group's motion establishing its store-closing procedures, saying that matter would be heard Thursday morning. Borders plans to close roughly a third of its 642 stores, with the largest number of closings in California, Florida, Illinois and Texas. According to the Journal, the 4.9 million square feet of store closings will be especially painful for smaller shopping centers anchored by Borders's superstores. Their average vacancy rate will more than double to 9.5% from 4.2%, the Journal relates, citing commercial real estate researcher CoStar Group. That's higher than the national average of 7.2%, CoStar said. CoStar saidshopping centers that have Borders superstores comprise some 86 million square feet of retail space in total. "It's a huge impact," said Chris Macke, senior retail strategist with CoStar. According to the Journal, one of the hardest hit landlords will be Farmington Hills, Mich.-based Agree Realty Corp., a small real estate investment trust which counts Borders as its second-largest tenant, after Walgreen Co. Borders leases 14 of the 80 properties that Agree owns and operates. Of those, five stores accounting for $2.6 million in annual rental revenue, some 7% of the company's total, are slated for closing. The Journal reports that Agree said in a statement it "anticipated such an event and worked to diversify" its tenants. Agree's shares have fallen 9.8% since the beginning of the year. Agree also owns Borders's headquarters in Ann Arbor. The Journal relates that Jim Sullivan, an analyst at research firm Green Street Advisors, said that nearly all the retail REITs have Borders as a tenant, but most receive less than 1% of their total rental revenue from those leases. He said that Simon Property Group, the country's largest retail landlord, has leases for roughly 20 Borders stores at its 200 U.S. malls. The Journal also notes General Growth Properties Inc., which emerged from bankruptcy protection in November, holds leases for 36 Borders stores. GGP declined to comment on how many of the 36 would be shuttered. The Journal notes Mr. Sullivan, of Green Street, predicted it will be difficult for landlords to fill the larger Borders bookstores that have two stories because not many tenants accept such spaces. "What works for bookstores doesn't work for a lot other retail uses," he said. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees (who are required to work one shift per month, and usually do so at special events), all of whom are located in the United States and Puerto Rico. Borders' employees are not subject to any collective bargaining agreements. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Borders Group, Inc. 100 Phoenix Drive Ann Arbor, MI 48108 Bankruptcy Case No.: 11-10614 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Borders, Inc. 11-10615 Borders International Services, Inc. 11-10616 Borders Direct, LLC 11-10617 Borders Properties, Inc. 11-10618 Borders Online, Inc. 11-10619 Borders Online, LLC 11-10620 BGP (UK), Limited 11-10621 Chapter 11 Petition Date: February 16, 2011 Bankruptcy Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Bankruptcy Judge: Martin Glenn Type of Business: Borders Group runs more than 500 Borders superstores in about 45 states and Puerto Rico, as well as about 175 small-format shops under the Waldenbooks, Borders Express, and Borders Outlet banners. Its bookstores offer up to 170,000 book, music, and movie titles and regularly host live literary events and musician showcases to attract customers. The chain also peddles products via its Web site. Debtors' Legal Counsel: David M. Friedman, Esq. David S. Rosner. Esq Andrew K. Glenn, Esq. Jeffrey R. Gleit, Esq. KASOWITZ, BENSON, TORRES & FRIEDMAN LLP 1633 Broadway New York, New York 10019 Telephone: (212) 506-1700 Facsimile: (212) 506-1800 E-mail: DFriedman@kasowitz.com DRosner@kasowitz.com AGlenn@kasowitz.com JGleit@kasowitz.com Debtors' Financial Advisors: JEFFERIES & COMPANY'S INC. Debtors' Lease and Real Estate Services Provider: DJM PROPERTY MANAGEMENT Debtors' Interim Management and Restructuring Services Provider: AP SERVICES LLC The Debtors' Claims and Notice Agent: THE GARDEN CITY GROUP, INC. P.O. Box 9690 Dublin, Ohio 43017-4990 Counsel for the DIP Agents: MORGAN, LEWIS & BOCKIUS LLP Wendy Walker, Esq. Sandra Vrejan, Esq. COUNSEL FOR THE WORKING CAPITAL AGENT RIEMER & BRAUNSTEIN LLP Donald E. Rothman, Esq. COUNSEL FOR GA CAPITAL LLC Attorneys for Bank of America, N.A., Agent for Prepetition Revolving Lenders: Julia Frost-Davies, Esq. Andrew Gallo, Esq. BINGHAM MCCUTCHEN LLP Total Assets: $1.28 billion as of Dec. 25, 2010 Total Debts: $1.29 billion as of Dec. 25, 2010 The petitions were signed by Scott Henry, the Debtor's chief financial officer. Borders Group's List of 30 Largest Unsecured Creditors: Entity/Person Nature of Claim Claim Amount ------------- --------------- ------------ Penguin Putnam Inc. Trade Debt $41,118,914 200 Old Tappan Road Bldg. 1 Attn: Lindsay Carter Old Tappan, NJ07675 Attn: Jim Crofton Phone: (201) 767-2918 Fax: (201) 767-5029 E-mail: jim.crofton@us.penguingroup.com Hachette Book Group Trade Debt $36,879,656 USA P.O. Box 8828 Boston, MA 02114-8828 Attn: Tom Maciag Phone: (800) 759-0190 Fax: (800) 286-9471 E-mail: Tom.Maciag@hbgusa.com Simon & Schuster Inc. Trade Debt $33,757,445 JP Morgan Attn: Lockbox 70660 131 S. Dearborn 6th Fl. Chicago, IL 60603 Attn: Dennis Eulau Phone: (800) 732-1685 Fax: (201) 767-5029 E-mail: dennis.eulau@simonandschuster.com Random House Trade Debt $33,461,062 Box 223384 500 Ross Street 154-0455 Pittsburgh, PA 15262 Attn: Anne Davis Phone: (410) 386-7414 Fax: (410) 386-7439 E-mail: andavis@randomhouse.com Harper Collins Trade Debt $25,793,451 Publishers P.O. Box 360846 Pittsburgh, PA 15251-6846 Attn: Janet Gervasio Phone: (570) 941-1495 Fax: (570) 941-1553 E-mail: janet.gervasio@harpercollins.com Macmillan/MPS Trade Debt $11,434,306 175 Fifth Avenue New York, NY 10010 Attn: Peter Garabedian Phone: (540) 672-7600 ext. 7544 Fax: (540) 672-7540 E-mail: Peter.Garabedian@macmillan.com John Wiley and Sons Inc. Trade Debt $11,191,435 Attn: Kevin Glennon 432 Elizabeth Avenue Somerset, NJ 08873 Phone: (732) 302-2210 Fax: (732) 320-2300 E-mail: kglennon@wiley.com Perseus Distribution Services Trade Debt $7,776,292 15636 Collections Center Drive Chicago, IL 60693 Attn: Charles Gallagher Phone: (212) 223-2969 ex. 134 Fax: (212) 223-1504 E-mail: Charles.gallagher@PerseusBooks.com Source Interlink Companies Trade Debt $6,879,906 275000 Riverview Center Boulevard Suite 201 Bonita Springs, FL 34134 Attn: Alene Mangino Phone: (239) 949-4450 Fax: (239) 495-5158 E-mail: Alene.Mangino@sorc.com Twentieth Century Fox Trade Debt $6,445,467 Bank of America Attn: Lockbox #402665 6000 Feldwood Road College Park, GA 30349 Attn: Al Leonard Phone: (310) 369-5083 Fax: (310) 369-8799 E-mail: Al.Leonard@fox.com Seattle's Best Coffee Inc. Trade Debt & $4,991,818 P.O. Box 84348 Commission Seattle, WA 98124-5648 Attn: Frank Smith Phone: (206) 318-5258 Fax: (206) 624-3262 E-mail: frank.smith@seattlesbest.com F&W Media Inc. Trade Debt $4,546,275 P.O. Box 715157 Columbus, OH 43271-5157 Attn: Amanda Enderle Phone: N/A Fax: (513) 531-4082 E-mail: Amanda.Enderle@fwmedia.com Houghton Mifflin Harcourt Trade Debt $4,400,756 Attn: Mary A. Durrance, Finance Credit Department 9400 South Pk Center Loop Orlando, FL 32819 Attn: Jim Diamond Phone: (800) 521-3185 ext. 3234 Fax: (407) 363-6917 E-mail: James.Diamond@hmhpub.com Sony Music Entertainment Inc. Trade Debt $4,273,824 c/o Mellon Bank Dept. Ch 10247 Palatine, IL 60055-0247 Attn: Neil Carfora Phone: (800) 444-6922 Fax: (201) 777-3694 E-mail: Neil.Carfora@sonymusic.com Workman Publishing Company Trade Debt $4,003,126 225 Varick Street 9th Floor New York, NY 10014-4381 Attn: Phil Gerace Phone: (212) 254-5900 Fax: (212) 254-8098 E-mail: phil@workman.com Diamond Comic Distributors Trade Debt $3,906,550 1966 Greenspring Dr. #300 Timonium, MD 21093 Attn: Larry Swanson Phone: (410) 427-9339 Fax: (212) 254-8098 E-mail: phil@workman.com U M G D Trade Debt $3,754,699 c/o Bank of America P.O. Box 98279 Chicago, OK 60693 Attn: Joe Flores Phone: (800) 779-6699 Fax: (317) 595-5190 E-mail: jlflores@umusic.com Warner Elektra Atlantic Trade Debt $3,396,812 Dept Ch 10125 Palatine, IL 60055-0125 Attn: James Theodoulou Phone: (818) 238-6489 Fax: (818) 729-3568 E-mail: James.Theodoulou@wmg.com The McGraw-Hill Companies Trade Debt $3,093,871 P.O. Box 2258 Carol Stream, IL 60132-2258 Attn: Phil Ruppel Phone: (800) 722-4726 Fax: (614) 755-5654 E-mail: philip_ruppel@mcgraw-hill.com Sony Pictures Home Ent Trade Debt $2,930,139 c/o Mellon Bank P.O. Box 120001 Dept. 0648 Dallas, TX 75312-0648 Attn: Neil Carfora Phone: (310) 255-5593 Fax: (310) 861-5068 E-mail: Neil.Carfora@sonymusic.com Pearson Education Inc. Trade Debt $2,784,766 200 Old tappan Road Old Tappan, NJ 07675 Attn: Jim Crofton Phone: (201) 964-6104 Fax: (201) 767-5029 E-mail: jim.crofton@us.penguingroup.com Rosetta Stone Ltd. Trade Debt $2,226,553 Dept. Ch 17714 Palatine, IL 60055-7714 Attn: Matt Sysak Phone: (540) 236-5428 ext. 5135 Fax: (540) 432-0953 E-mail: msysak@rosettastone.com National Book Network Inc. Trade Debt $1,956,713 P.O. Box 62188 Baltimore, MD 21264-2188 Attn: Jeff Harris Phone: (717) 794-3800 Fax: (717) 794-3804 E-mail: jharris@nbnbooks.com WW Norton & Company Inc. Trade Debt $1,940,826 Box 2626 P.O. Box 8500 Philadelphia, PA 19178-2626 Attn: Katherine Pinto Phone: (212) 354-5500 Fax: (800) 458-6515 E-mail: kpinto@wwnorton.com Zondervan Corporation Trade Debt $1,886,752 Department CH10303 Palatine, IL 60055-0303 Attn: Angela Harms Phone: (800) 727-1309 Fax: (616) 698-3350 E-mail: angela.harms@zondervan.com EMI Music Trade Debt $1,782,358 Dept. CH 17714 Palatine, IL 60055-0380 Attn: Gil Castaniada Phone: (323) 871-5414 Fax: (800) 288-2362 E-mail: Gil.Castaniada@emicap.com Hay House Inc. Trade Debt $1,725,589 P.O. box 5100 2776 Loker Ave W Carlsbad, CA 92018 Attn: Reid Tracy Hone: (760) 431-7695 Fax: (760) 929-2035 E-mail: RTracy@HayHOuse.com Elsevier Science Trade Debt $1,606,992 P.O. Box 0848 Carol Stream, IL 60132-0848 Emmett Hamilton Phone: (314) 523-5036 Fax: (314) 453-7020 E-mail: E.Hamilton@Elsevier.com Papyrus-Recycled Greetings Trade Debt $1,490,891 3613 Solutions Center Chicago, IL 60677-3006 Attn: Connie Holland Phone: (800) 777-9498 Fax: (773) 868-8329 E-mail: Connie.Holland@prgreetings.com Publications Intl Ltd Trade Debt $1,079,421 Dept 77 3401 Chicago, IL 60678-3401 Attn: Tom Broughton Phone: (212) 986-1782 Fax: (847) 676-3671 E-mail: TBroughton@pubint.com BORDERS GROUP: 5 Agree Realty Properties Included in Closings ------------------------------------------------------------- In connection with the bankrutpcy filing of Borders Group, Inc.. and certain of its subsidiaries, including Borders, Inc., Agree Realty Corporation announced that it currently has 14 properties leased to Borders, Inc. under triple net leases, including 13 retail properties and the Borders Group, Inc. corporate headquarters in Ann Arbor, Michigan. Two of the Borders retail locations are not occupied by Borders, but are occupied by subtenants under sublease agreements. The Company records annualized rental revenues of approximately $7.4 million, including approximately $1 million in non-cash rental revenues annually, from Borders, Inc. The revenue from Borders amounts to approximately 20% of the Company's annualized base rental revenues. Borders filed an anticipated store closing list with the bankruptcy court that included five of the Company's properties, which five stores generate approximately $2.6 million of the Company's annualized base rental revenues. The various leases are with Borders, Inc. and are guaranteed by Borders Group, Inc. The Company has provided substitute borrowing base properties to replace Borders stores under its $55 million credit facility, and the credit facility banks have acknowledged that the financial condition of Borders and any default under any of the non-recourse loans secured by a property leased to Borders shall not be deemed a default under the credit facility. "We wish Borders success in their plans announced today to restructure and operate under Chapter 11," said Joey Agree, President and Chief Operating Officer of the Company. "While uncertainty has clouded Borders for the past three years, our organization has anticipated such an event and worked to diversify our portfolio with leading national retailers." About Agree Realty Agree Realty is engaged in the ownership, management and development of properties which are primarily single tenant properties leased to major retail tenants and neighborhood community shopping centers. The Company owns and operates a portfolio of 80 properties, located in 17 states and containing 3.5 million square feet of leasable space. BRANSON AIRPORT: In Restructuring Talks With Goldman, Bondholders ----------------------------------------------------------------- Bloomberg News' Jonathan Keehner, Martin Z. Braun and Jeffrey McCracken reported earlier this month that Branson Airport LLC, which is led by former Greenwich Capital Markets executive Stephen Peet, is in talks with a fund managed by New York-based Goldman Sachs and other bondholders over restructuring debt, according to a person familiar with the project. The Goldman Sachs fund, according to Bloomberg, holds revenue bonds backed by Branson Airport, a privately owned $155 million facility that opened in May 2009 in the Ozark Mountain region near Branson, Missouri. If an agreement can't be reached on adjusting debt terms and infusing more equity in the project, creditors could seek control of the airport, which includes a 58,000-square- foot terminal, the person told Bloomberg. Bloomberg said the airport, which has dipped into reserve funds to pay bondholders, lost $9.8 million for the first three quarters of 2010, according to its filings. Bloomberg also said Jeff Bourk, executive director of the airport, and Mr. Peet didn't return calls and e-mails seeking comment. Goldman Sachs spokeswoman Andrea Raphael declined to comment. BROWNIE'S MARINE: Trebor Unit Faces BB&T Foreclosure Suit --------------------------------------------------------- Branch Banking and Trust Company has sued Trebor Industries, Inc., a wholly owned subsidiary of Brownie's Marine Group, Inc., in the Circuit Court of the 17th Judicial Circuit in and for Broward County Florida to enforce a mortgage and a promissory with a balance of $885,000 and a second mortgage and promissory note with a balance of $199,991. Trebor received a copy of the suit on January 25, 2011. Brownie's Marine Group disclosed under the Company's Form 10-Q for the period ended Sept. 30, 2010, that Trebor converted its revolving line of credit that matured on December 2, 2009, into the Term Loan that matures on Feb. 12, 2011. As part of the conversion, Trebor granted BB&T a second mortgage on the underlying security, which includes a mortgage on Brownie's Marine Group's executive offices and manufacturing facilities located in Fort Lauderdale, Florida and Trebor's assets and inventory. The Company's chief executive officer also executed a personal guaranty of all amounts due under the Secured Notes. On Sept. 15, 2010, Trebor received a default letter from BB&T demanding Secured Notes, be brought current by October 15, 2010. Under the terms of the default notice, if Brownie's Marine Group failed to bring the loans current by Oct. 15, 2010, the Bank would accelerate as due the full principal and accrued interest due under the Secured Notes, as well as initiate collection and legal action and seek foreclosure on the Security. As of Dec. 31, 2010, the Company was roughly five months in arrears on payments to BB&T. Under the Complaint, BB&T has demanded a judgment in its favor of $1,083,965, as of Jan. 10, 2011, which reflects the outstanding balance on the Secured Notes, together with additional interest and court and attorney fees. Brownie's Marine Group intends to respond to the Complaint and defend the action commenced by BB&T. In addition, the Company will also explore a possible settlement or forbearance agreement with BB&T. There can be no assurance that the Company will be able to negotiate a settlement or forbearance agreement with BB&T. Any judgment in favor of BB&T would have a material adverse impact on the Company's continuing business and operations. About Brownie's Marine Group Brownie's Marine Group, Inc., designs, tests, manufactures and distributes recreational hookah diving, yacht based scuba air compressor and nitrox generation systems, and scuba and water safety products through its wholly owned subsidiary Trebor Industries, Inc. The Company sells its products both on a wholesale and retail basis, and does so from its headquarters and manufacturing facility in Fort Lauderdale, Florida. The Company does business as (dba) Brownie's Third Lung, the dba name of Trebor Industries, Inc. The Company's common stock is quoted on the OTCBB under the symbol "BWMG". As of Sept. 30, 2010, the Company had total assets of $2,067,510, total liabilities of $2,028,924, and stockholders' equity of $38,586. BURLINGTON COAT: S&P Assigns 'B-' Rating to $1 Bil. Senior Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned Burlington, N.J.-based Burlington Coat Factory Warehouse Corp.'s proposed $1 billion senior secured term loan B facility due 2017 its issue-level rating of 'B-' (at the same level as the 'B-' corporate credit rating on the company). S&P also assigned this debt a recovery rating of '4', indicating S&P's expectation of average (30%-50%) recovery for lenders in the event of a payment default. At the same time, S&P assigned BCF's proposed $400 million senior unsecured notes due 2019 its issue-level rating of 'CCC' (two notches lower than the 'B-' corporate credit rating) with a recovery rating of '6', indicating S&P's expectation of negligible (0%-10%) recovery for noteholders in the event of a payment default. The company intends to use proceeds from the offerings, along with borrowings under the unrated asset-based revolving credit facility, to pay a $250 million special dividend to its sponsor, Bain Capital Partners LLC, and to repay existing debt ($305 million 11.125% senior notes due 2014, a term loan B due 2013 of which $777.6 million is outstanding, and $99.3 million 14.5% senior discount notes due 2014) issued by BCF and Burlington Coat Factory Investment Holdings Inc. Upon completion of the refinancing and the repayment of the existing debt, S&P will withdraw its ratings on these issues. The ratings on the new issues are subject to review of final terms and documents. In addition, S&P affirmed its 'B-' corporate credit rating on the company. The outlook is stable. The ratings on BCF, a specialty off-price apparel and home goods retailer, reflect S&P's assessment of the company's business risk profile as vulnerable, based on its participation in the intensely competitive and highly fragmented off-price apparel and home goods industry, along with substantial seasonality and cyclicality. S&P estimates that the company should be able to maintain adequate liquidity and that margins should be relatively flat year over year. As a result, S&P believes BCF's financial risk profile is likely to remain highly leveraged in the near term, with thin cash flow measures and moderate cash balances. BWAY HOLDING: S&P Assigns 'B' Rating to New $587.5 Mil. Loan ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' rating and '3' recovery rating to BWAY Holding's new $587.5 million senior secured credit facilities, indicating S&P's expectations for meaningful recovery (50%-70%) in the event of a payment default. ICL Industrial Containers ULC is a co-issuer. At the same time, S&P affirmed the 'B' corporate credit ratings on BWAY Parent Co. Inc. (the holding company and indirect parent of both BWAY Holding Co. and BWAY Corp.), BWAY Holding Co. (the borrower under the secured credit facilities), and BWAY Corp. (the operating subsidiary of holding company BWAY Holding Co.) The existing issue ratings and the recovery ratings on the senior unsecured notes due 2018 and the PIK toggle notes due 2015 remained unchanged. The outlook for all corporate credit ratings is stable. The company is using the proceeds from to refinance the outstanding senior secured credit facilities. The new senior secured facilities consist of a $75 million revolving credit facility due 2016 and a $512.5 million term loan B due 2018. CABI SMA: Files Schedules of Assets And Liabilities --------------------------------------------------- Cabi SMA Tower I LLP filed with the U.S. Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property B. Personal Property $15,014,691 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $34,128,377 E. Creditors Holding Unsecured Priority Claims $104,000 F. Creditors Holding Unsecured Non-priority Claims $3,293,066 ------------ ------------ TOTAL $15,014,691 $37,525,443 A full-text copy of the Schedules of Asset and Liabilities is available for free at http://ResearchArchives.com/t/s?735b Miami, Florida-based Cabi SMA Tower I, LLLP -- fka Cabi SMA Retail 1, LLC; Cabi SMA, LLLP; Cabi SMA Tower 2, LLC; Cabi SMA Tower 2, LLLP; Capital at Brickell; Cabi SMA Retail 2, LLLP; Cabi SMA Retail 2, LLC; Cabi SMA Tower 1, LLC; and Cabi SMA Retail I, LLLP -- owns multiple vacant parcels around South Miami Avenue and S.W. 14th Street in Miami, Florida. It filed for Chapter 11 bankruptcy protection on December 28, 2010 (Bankr. S.D. Fla. Case No. 10- 49009). Mindy A. Mora, Esq., at Bilzin Sumberg, Attorneys At Law, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Cabi Downtown, LLC (Bankr. S.D. Fla. Case No. 09-27168) and Cabi New River, LLC (Bankr. S.D. Fla. Case No. 10-49013) filed separate Chapter 11 petitions. CALAIS RESOURCES: Completes Financial Statement Audits ------------------------------------------------------ Calais Resources, Inc., said last week its independent auditors have completed audits of the Company's financial statements for the fiscal years ended May 31, 2005, 2006, 2007, 2008, 2009 and 2010. The completion of these audits marks the most significant milestone the Company has made towards achieving regulatory compliance since 2004, when severe financial difficulties left the Company substantially without cash, employees or legal or audit services. R. David Russell, the Company's new CEO and Executive Chairman of the Board said, "This has been a monumental and long-overdue task that would not have been possible without the meticulous and dedicated support of our legal, accounting and audit teams. I am pleased to be past this significant hurdle and am anxious to begin the next phase of our plan to achieve regulatory compliance in the next few months." To achieve regulatory compliance, the Company must first file all delinquent quarterly and annual financial filings with the U.S. Securities and Exchange Commission and the British Columbia Securities Commission. The process of completing these filings is expected to take until April 2011; however, full compliance may take longer and is up to the discretion of the SEC and BCSC. In addition, a National Instrument 43-101 Technical Report on the Company's resource properties will soon be filed on SEDAR as required by the BCSC. The process to lift the current Cease Trade Order in British Columbia, Canada, will also be initiated concurrent with the aforementioned filings. The Company also announced certain financial information for the fiscal year ended May 31, 2010 (audited). In addition, it released certain information regarding its first and second fiscal quarters ended August 31, 2010, and Nov. 30, 2010, respectively. Results of Operations The Company also reported that during the fiscal year ended May 31, 2010, it posted a net loss of $3.2 million, driven by interest and financing costs related to the Company's then- outstanding debt as well as certain non-recurring losses. The Company recently lowered its interest and financing fees as the result of a February 2010 renegotiation of its debt portfolio. The Company reported net losses of $393,853 and $397,729 during the quarters ended August 31, 2010, and November 30, 2010, respectively. Deficit accumulated during the development stage was $45,781,468 as of May 31, 2010. The Company ended its 2010 fiscal year with $27,919 in cash, which was not sufficient for ongoing operations. During the following six months, the Company completed several private placements and ended its fiscal second quarter with $1.2 million in cash. These capital-raising activities are intended to fund the Company's plan to achieve regulatory compliance and further exploration of its mining properties. Common shares outstanding were 76,278,142, 93,478,142, and 126,886,895 as of May 31, 2010, August 31, 2010, and November 30, 2010, respectively. Since May 31, 2010, the Company has executed against a plan to lower its trade debts through payoff and debt settlements. Between May 31, 2010, and Nov. 30, 2010, the Company lowered its outstanding trade payables by approximately 22% from $524,799 at May 31, 2010 to $404,429 as of Nov. 30, 2010. In February 2010, the Company consolidated its fragmented debt structure into one note payable to Brigus Gold Corporation. As of May 31, 2010, the balance of this note was $10,253,878 and the balance has remained unchanged since that time. On Jan. 18, 2011, the Company announced an extension until June 30, 2011, of the forbearance period of the Company's note payable to debt restructure. Management believes that the extension will allow sufficient time for Calais to satisfy and/or extinguish its debt to Brigus. The Company entered into settlement agreements with several parties to its Canadian-dollar-based convertible debentures in December 2010, thereby extinguishing nearly all of its $5 million in convertible debenture liabilities outstanding as of May 31, 2010. "We have made significant progress towards alleviating the Company's debt obligations and streamlining our cost structure," said Mr. Russell. "I look forward to updating investors with our full financial statements and updates on our continued turnaround efforts as we continue to work towards a full revocation of the 2004 Cease Trade Order from the BCSC." Calais will schedule an annual meeting of shareholders in the next four months to take place in the Denver, Colorado area. About Calais Denver, Colorado-based Calais Resources, Inc., (OTC Pink Sheets: CAAUF) is an exploration and development company which owns and operates the Cross and Caribou gold and silver mine operations in Colorado and the White Caps mine operation in Manhattan, Nevada. The Company is currently in the initial stages of reviewing the reopening of the fully permitted Cross Mine, which includes resuming underground exploration activities in Colorado and surface exploration in Nevada. CARIAN MANAGEMENT: Plan Confirmation Hearing Continued to March 23 ------------------------------------------------------------------ Upon the motion of Debtor Carian Management, Inc., the U.S. Bankruptcy Court for the District of Puerto Rico has continued the hearing on confirmation of its proposed plan of reorganization, originally scheduled for March 9, 2011, at 9:00 a.m., to March 23, 2011, at 9:00 a.m. As reported in the Troubled Company Reporter on Jan. 14, 2011, the Bankruptcy Court approved on Dec. 3, 2010, the disclosure statement explaining the Debtor's proposed Plan of Reorganization. According to the Disclosure Statement, the Plan will be substantially supported by the Debtor's operations and the possible sale or surrender of assets in payment to the Debtor's creditor Banco Popular de Puerto Rico if necessary to ensure the Debtor's operation. With respect to the secured claim of Banco Popular, the two outstanding term loans (with a total outstanding balance of $11,963,632), that are secured by the Debtor's real property, will be combined into a single term loan up to the value of the collateral with an amortization period of 30 years and an interest rate of the prime rate plus 1%. The obligation is secured up to an amount of $11,892,000. The remaining portion of the obligation will be treated as unsecured. The secured claim of CRIM ($166,369) will be paid over the course of 72 monthly payments plus interest at the prime rate. With respect to general unsecured claims aggregating $5,965,721, AAA Imports, Inc., will take on the $4,855,504 revolving loan to Westernbank. Carian will accept responsibility for AAA Imports' obligation as an unsecured debt but will not make any payments on the obligation unless AAA Imports defaults. With respect to the remaining claims, the Debtor will distribute a dividend of 10% on all claims paid over the course of 72 months from the effective date. About Carian Management, Inc. Dorado, Puerto Rico-based Carian Management, Inc.'s prime business is the ownership, maintenance and development of the real property that it leases to its sister company, AAA Imports and other customers. The Company filed for Chapter 11 protection on May 13, 2010 (Bankr. D. P.R. Case No. 10-04052). Carmen D. Torres, Esq., at the Law Offices of C. Conde, assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million as of the petition date. The Debtor's affiliate, AAA Imports, Inc., filed a separate Chapter 11 petition on May 12, 2010. CAMBIUM LEARNING: S&P Assigns 'B' Rating to $175 Mil. Senior Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned Dallas, Texas-based Cambium Learning Group Inc.'s $175 million Rule 144A senior secured notes due 2017 its issue-level rating of 'B' (at the same level as the 'B' corporate credit rating on the company). S&P also assigned the notes a recovery rating of '4', indicating S&P's expectation of average (30% to 50%) recovery for noteholders in the event of a payment default. S&P expects that the company will use proceeds from the notes to repay in full its existing secured credit facility and senior unsecured notes, and retain $10 million in cash for general corporate purposes. Pro forma debt at the company, including $13 million of capital lease obligations, was $188 million, and pro forma cash was $27 million as of Dec 31. 2010. The corporate credit rating on Cambium Learning Group and operating subsidiary Cambium Learning Inc. is 'B', and the rating outlook is stable. The rating reflects S&P's expectation that revenues and EBITDA will be relatively flat in 2011, as increased federal funding for the intervention and special education market niche should offset weak local and state funding, in S&P's view. S&P expects lease-adjusted debt leverage (after amortization of prepublication costs) to remain relatively flat, at around 5x in 2011, based on S&P's expectation of minimal debt reduction. Cambium's business risk profile is vulnerable, in S&P's opinion, owing to the integration risk inherent in the December 2009 merger with Voyager Learning Co., the cyclicality of government funding for educational services, and the effect on the company's profitability. S&P views the company's financial risk profile as highly leveraged, because of Cambium's high debt-to-EBITDA ratio and weak discretionary cash flow due to ongoing high product development spending. The company's competitive position as a provider of supplemental educational products for the growing market niches serving underperforming and special education students does not offset these factors. The rating outlook is stable, reflecting S&P's expectation of flat operating performance and debt leverage in 2011. Still, S&P could lower the rating to 'B-' if the company is not able to reduce costs in line with expectations, if discretionary cash flow remains negative, and if reductions in government funding pressure operating performance. More specifically, this scenario could occur if revenues and EBITDA decrease 9% and 25%, respectively, resulting in a leverage increase to 6.5x. Although less likely, S&P could raise the rating to 'B+' if Cambium is able to achieve cost reductions, generate good discretionary cash flow, and consistently maintain debt leverage below 4x over the next two years. This scenario could occur if revenues and EBITDA increase 10% and 20%, respectively, and could transpire if increased federal funding is sustained. Ratings List Cambium Learning Group Inc. Cambium Learning Inc. Corporate Credit Rating B/Stable/-- New Rating Cambium Learning Group Inc. $175M Rule 144A sr secd nts due 2017 B Recovery Rating 4 CARIBBEAN PETROLEUM: Insurer to Pursue Lawsuit Against Firm ----------------------------------------------------------- Dow Jones' DBR Small Cap reports that an insurer and tanker owner facing potentially millions of dollars in liabilities connected to a massive explosion that sent Caribbean Petroleum Corp. into bankruptcy say they must be allowed to pursue their lawsuits against Caribbean Petroleum. About Caribbean Petroleum San Juan, Puerto Rico-based Caribbean Petroleum Corporation, aka CAPECO, owns and operates certain facilities in Bayomon, Puerto Rico for the import, offloading, storage and distribution of petroleum products. Caribbean Petroleum sought Chapter 11 protection (Bankr. D. Del. Case No. 10-12553) on August 12, 2010, nearly 10 months after a massive explosion at its major Puerto Rican fuel storage depot virtually shut down the company's operations. The Debtor estimated assets of US$100 million to US$500 million and debts of US$500 million to US$1 billion as of the Petition Date. Affiliates Caribbean Petroleum Refining, L.P., and Gulf Petroleum Refining (Puerto Rico) Corporation filed separate Chapter 11 petitions on August 12, 2010. John J. Rapisardi, Esq., George A. Davis, Esq., and Zachary A. Smith, Esq. at Cadwalader, Wickersham & Taft LLP serve as lead counsel to the Debtors, and Mark D. Collins, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., serve as local counsel. The Debtors' financial advisor is FTI Consulting Inc. The Debtors' chief restructuring officer is Kevin Lavin of FTI Consulting Inc. Kurtzman Carson Consultants LLC serves as the noticing, claims and balloting agent. CARSON CITY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Carson City Plaza, LLC 2989 Highway 50 East Carson City, NV 89701 Bankruptcy Case No.: 11-50439 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Kevin A. Darby, Esq. DARBY LAW PRACTICE, LTD. 4777 Caughlin Parkway Reno, NV 89519 Tel: (775) 322-1237 Fax: (775) 996-7290 E-mail: kevin@darbylawpractice.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb11-50439.pdf The petition was signed by Dwight Millard, managing member. Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Dwight & Sandra Millard __-____ __/__/__ Gordon Park Apartments, LLC 10-51330 04/13/10 MFB Regency, LLC 10-51331 04/13/10 Stanton Park Development, Inc. 11-50438 02/14/11 CB HOLDINGS: Former Exec. Sentenced on Fraud & Tax Evasion ---------------------------------------------------------- Michael L. Diamond at the Daily Record reports that U.S. District Judge Mary L. Cooper in Trenton, New Jersey, sentenced Michael Mulligan, a former executive at CB Holdings Corp., to eight months of home confinement for his role in awarding contracts to vendors who offered kickbacks. The Daily Record discloses that Mr. Mulligan pleaded guilty to conspiracy to commit mail fraud and tax evasion. He was also sentenced to three years probation. According to the report, the U.S. Government in its criminal complaint said Mulligan accepted the construction work for no cost or at a deep discount. It also claimed that Mr. Mulligan accepted high-end appliances from a vendor that supplied refrigeration services, accepted a fraudulent check in the mail of more than $4,000 from a vendor that sold bakery products, and Mulligan failed to report taxable income to the Internal Revenue Service. About CB Holding New York-based CB Holding Corp. had 20 Charlie Brown's Steakhouse, 12 Bugaboo Creek Steak House, and seven The Office Beer Bar and Grill restaurants when it filed for bankruptcy protection. The Company closed 47 locations before filing for Chapter 11. Following a bankruptcy auction, CB Holding sold its The Office restaurant chain to winning bidder Villa Enterprises Ltd. for $4.68 million. Landry's Restaurants has signed a deal to the 12 Bugaboo Creek stores for $3 million, plus upward adjustments for cash and inventory in the stores at closing, absent higher and better offers at a March 7 auction. CB Holding and its affiliates filed for Chapter 11 bankruptcy protection on Nov. 17, 2010 (Bankr. D. Del. Case No. 10-13683). Christopher M. Samis, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring effort. The Garden City Group, Inc., is the Debtors' notice, claims and solicitation agent. Jeffrey N. Pomerantz, Esq., Jason S. Pomerantz, Esq., and Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors. CB Holding estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. * * * According to the Troubled Company Reporter on Feb. 11, 2011, CB Holding Corp. received an order from Bankruptcy Judge Mary Walrath Feb. 8 extending the exclusive periods for it to file and secure support for a Chapter 11 plan. The exclusive time for the Debtor to file a plan of reorganization has been extended to June 15. The Debtor has until August 12 to solicit support for the plan. The order is without prejudice for a request by the Debtor for another extension. CHEM RX: Court Sets Mar. 17 Confirmation Hearing on Competing Plan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has approved the disclosure statement in support of Canadian Imperial Bank of Commerce, New York Agency, as administrative agent for the first lien lenders, and the official committee of unsecured creditors' joint plan of liquidation for CRC Parent Corporation, et al., f/k/a Chem RX Corportion, et al. Ballots either for acceptance or rejection of the Plan must be submitted no later than 5:00 p.m. on March 10, 2011. The confirmation hearing will be held at 2:00 p.m. on March 17, 2011. Written objections to confirmation of the Plan or proposed modifications of the Plan, if any, must be filed no later than 5:00 p.m. on March 10, 2011. The Voting and Balloting Agent will file the Ballot Tabulation Certification no later than Mar 14, 2011. As reported in the Troubled Company Reporter on Jan. 11, 2011, CIBC, as administrative agent for the first lien lenders, and the official committee of unsecured creditors for Chem Rx Corp. filed with the U.S. Bankruptcy Court a Joint Plan of Liquidation and related Disclosure Statement for Chem Rx. The central component of the Plan is the compromise and settlement of the Committee Litigation and any and all Claims and Estate Causes of Action by the Creditors Committee on behalf of the Debtors' Estates as of the Effective Date against the Secured Lenders and the First Lien Agent, subject to the occurrence of the Effective Date. Additionally, the Plan contemplates the establishment of a Litigation Trust to prosecute Estate Causes of Action. The Plan proposes the following treatment for the various claims and interests in the Debtor: Class 1. Priority Claims. Unimpaired. Paid in full in Cash, without interest. Class 2. Other Secured Claims. Impaired. Each holder of an Allowed Other Secured Claim will receive, at the option of the First Lien Agent (a) Cash equal to the net proceeds of the sale or disposition of the Collateral securing that holder's Allowed Other Secured Claim, without interest; or (b) the Collateral; or (c) such other Plan distribution necessary to satisfy the requirements of the Bankruptcy Code. Class 3. Secured Lender Claims. Impaired. Each holder of an Allowed Secured Lender Claim will receive: a. its Pro Rata share of (i) 100% of the Available Proceeds; (ii) beneficial interests in the Litigation Trust; and (iii) any Assets of the Debtors remaining on the Effective Date, except for (x) the Consummation Account, (y) Causes of Action and (z) the Litigation Trust Reserve. b. upon satisfaction of all Allowed Administrative Claims, Allowed Priority Claims, Allowed Priority Tax Claims and Allowed Other Secured Claims, its Pro Rata share of the amounts remaining in the Consummation Account, provided that the Plan Administrator will be entitled to deduct certain amounts as provided under the Plan. c. tax refunds or any other refund of any kind or nature. d. the releases to the Released Claims. Class 4. General Unsecured Claims. Impaired. Holders of Allowed General Unsecured Claims will receive their Pro Rata share of the beneficial interests in the Litigation Trust and receive Litigation Trust Distributions in accordance with and pursuant to Section 6.3.9 of the Plan and the terms of the Litigation Trust Reserve on the Effective Date. Class 5. Subordinated Claims. Impaired. Holders of Subordinated Claims will receive, upon full payment of Secured Lender Claims, Secured Lender Deficiency Claims and Second Lien Lender Claims, any remaining interest in the Litigation Trust Distributions. Class 6. Equity Interests. Impaired. All Equity Interests will be deemed canceled and extinguished, and the holders will not receive any Plan or Litigation Distribution, or be entitled to retain any property or interest in property. The Available Proceeds refer to the Cash on hand in the Manufacturers and Traders Trust Company (M&T) Account, the Escrow Account held by Greenberg Traurig LLP, and the Wells Fargo Account on the Effective Date, immediately following the funding of the Consummation Account and the Litigation Trust Reserve pursuant to terms of the Plan. The Consummation Account means the account to be established by the Plan Administrator on the Effective Date which will be funded (a) first, from funds in the M&T Account at the Effective Date; and (b) thereafter, in an amount up to a maximum of $4.6 million, (i) first, from the funds remaining in the Escrow Account on the Effective Date and (ii) finally, from the funds available in the Wells Fargo Account on the Effective Date. The Litigation Reserve refers to the money market account to be established by the Litigation Trustee and funded in the amount of $2 million on the Effective Date. A copy of the First Amended Plan of Liquidation is available for free at: http://bankrupt.com/misc/ChemRx.BlacklinedCommitteeDS.pdf About Chem RX Corp. Long Beach, N.Y.-based Chem RX Corporation, aka Paramount Acquisition Corp. -- http://www.chemrx.net/-- is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. The Company and five affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, in Delaware, represent the Company in its restructuring. Cypress Holdings, LLC, is the Company's financial advisor. RSR Consulting, LLC, is the Company's chief restructuring officer. Brunswick Group LLP is the Company's public relations consultant. Grant Thornton LLP is the Company's independent auditor. Lazard Middle Market LLC is the Company's investment banker. Eichen & Dimeglio PC is the Company's tax advisor. Kurtzman Carson Consultants is the Company's claims and notice agent. Attorneys at White & Case and Fox Rothschild LLP serve as co- counsel to the Official Committee of Unsecured Creditors Chanin Capital Partners LLC serves as Restructuring and Financial Advisor for the Official Committee of Unsecured Creditors. The Company disclosed $169,690,868 in assets and $178,281,128 in debts as of Feb. 28, 2010. Chem Rx changed its name to CRC Parent Corp. following the sale of its business to PharMerica Corp. at a bankruptcy court-sanctioned auction. PharMerica paid $70.6 million and assumed specified liabilities. The deal enabled PharMerica to move into the New York and New Jersey markets. CHEM RX: U.S. Trustee Forms New 4-Member Creditors Panel -------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, has filed an amended notice of appointment of the Committee of Unsecured Creditors in the Chapter 11 cases of Chem RX Corporation and its debtor-affiliates. Integra NV, Inc., and HealthEx Corp., both resigned from the committee effective Feb. 4, 2011. The revised Committee Members are: 1. SAC Domestic Capital Funding, Ltd. Attn: Brian Spenner 72 Cummings Point Road Stamford, CT 06902 Tel: (203) 890-3474 Fax: (203) 823-4020 2. Anda, Inc. Attn: Dennis Cape 2915 Weston Road Weston, FL 33331 Tel: (954) 217-4316 Fax: (800) 758-5254 3. Healthsource Dist. LLC Attn: Mike Sosnowik 1133 Greenwood Road, Suite F Baltimore, MD 21208 Tel: (516) 837-9876 Fax: (516) 371-2099 4. UFCW Local 348 Health & Welfare Fund Attn: Diana Puglisi 9235 4th Avenue Brooklyn, NY 11209 About Chem RX Corp. Long Beach, N.Y.-based Chem RX Corporation, aka Paramount Acquisition Corp. -- http://www.chemrx.net/-- is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. The Company and five affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, in Delaware, represent the Company in its restructuring. Cypress Holdings, LLC, is the Company's financial advisor. RSR Consulting, LLC, is the Company's chief restructuring officer. Brunswick Group LLP is the Company's public relations consultant. Grant Thornton LLP is the Company's independent auditor. Lazard Middle Market LLC is the Company's investment banker. Eichen & Dimeglio PC is the Company's tax advisor. Kurtzman Carson Consultants is the Company's claims and notice agent. Attorneys at White & Case and Fox Rothschild LLP serve as co- counsel to the Official Committee of Unsecured Creditors Chanin Capital Partners LLC serves as Restructuring and Financial Advisor for the Official Committee of Unsecured Creditors. The Company disclosed $169,690,868 in assets and $178,281,128 in debts as of February 28, 2010. Chem Rx changed its name to CRC Parent Corp. following the sale of its business to PharMerica Corp. at a bankruptcy court-sanctioned auction. PharMerica paid $70.6 million and assumed specified liabilities. The deal enabled PharMerica to move into the New York and New Jersey markets. CITIZENS DEV'T: Wants to Access Cash Collateral Until August 31 --------------------------------------------------------------- Citizens Development Corp. asks the U.S. Bankruptcy Court for the Southern District of California for permission to use their secured lenders' cash collateral until Aug. 31, 2011, pursuant to a budget. The Debtor relates that a previous court order allowed it to access of cash collateral until Feb. 28, 2011. The Debtor asks the Court to set a March 1 hearing on its request for further access to cash collateral collateral. The Debtor says these creditors may assert an interest in the Debtor's cash collateral as that cash collateral relates to the revenues generated by the Debtor's assets other than the Country Club assets and the Hotel assets: D&A Semi Annual Mortgage Fund III, LC; Telesis Community Credit Union; and Pacific West TD Fund II, LP. The Debtor notes, of the creditors, Telesis Community Credit Union will likely assert an interest in the revenues generated by the Recreation Center, which is the only asset of the Debtor that is currently generating income for the Debtor. The Debtor is in the process of finalizing a cash collateral stipulation with D&A Semi Annual Mortgage Fund III. The Debtor tells the Court that it must be able to use the revenue it generates in order to pay postpetition operating expenses, including, but not limited to, insurance, utilities, and maintenance expenses, all of which are necessary to maintain the Debtor's assets and the Debtor's going concern value. Failure to pay these expenses would likely lead to a diminution in the value of the assets, as well as a loss of business which would reduce income. As adequate protection, the Debtor proposes to provide the any creditor with an actual lien on the Debtor's cash collateral with a replacement lien against the Debtor's assets, with the replacement lien to have the same extent, validity, and priority as the pre-petition lien held by the creditor. A full-text copy of the proposed cash collateral budget is available for free at http://ResearchArchives.com/t/s?735a About Citizens Development Corp. San Marcos, California-based Citizens Development Corp., owns and operates the Lake San Marcos Resort and Country Club located in San Diego County. The Company filed a voluntary petition for relief under Chapter 11 (Bankr. S.D. Calif. Case No. 10-15142) on August 26, 2010. Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, represents the Debtor. The Debtor estimated its assets and debts at $10 million to $50 million. Chapter 11 petitions were also filed by affiliates LSM Executive Course, LLC (Bankr. S.D. Calif. Case No. 10-07480), and LSM Hotel, LLC (Bankr. S.D. Calif. Case No. 10-13024). CITIZENS DEV'T: Wants Plan Filing Deadline Extended to March 31 --------------------------------------------------------------- Citizens Development Corp. asks the U.S. Bankruptcy Court for the Southern District of California to extend its exclusive periods to file a Chapter 11 plan of reorganization until March 31, 2011, and solicit acceptances of that plan until May 23, 2011. A hearing is set for March 1, 2011, at 2:00 p.m., to consider approval of the extension request. Krikor J. Meshefejian, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., tells the Court that the Debtor is attempting to formulate its plan of reorganization and obtain the requisite funds to implement a plan. The Debtor is now discussing financing opportunities with various cash sources and is determining whether there is a need to hire an investment banker to assist the Debtor in its reorganization efforts. About Citizens Development Corp. San Marcos, California-based Citizens Development Corp., owns and operates the Lake San Marcos Resort and Country Club located in San Diego County. The Company filed a voluntary petition for relief under Chapter 11 (Bankr. S.D. Calif. Case No. 10-15142) on August 26, 2010. Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, represents the Debtor. The Debtor estimated its assets and debts at $10 million to $50 million. Chapter 11 petitions were also filed by affiliates LSM Executive Course, LLC (Bankr. S.D. Calif. Case No. 10-07480), and LSM Hotel, LLC (Bankr. S.D. Calif. Case No. 10-13024). COLT DEFENSE: S&P Lower Ratings to 'B-' on Weaker Results --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Colt Defense LLC to 'B-' from 'B'. S&P also lowered the issue rating on the company's unsecured notes to 'B-' from 'B', although the '4' recovery rating is unchanged. The ratings are removed from CreditWatch, where they were placed with negative implications on Nov. 16, 2010. The outlook is stable. West Hartford, Conn.-based Colt Defense, a manufacturer of small arms for the military and law enforcement, has been experiencing significantly lower revenues (down 35% in the first nine months of 2010 compared with same period in 2009) and earnings (EBITDA down 67%) due to decreased demand for its M4 carbine from its main customer, the U.S. military, as well as law enforcement customers. The company had planned to replace this demand with orders from international customers and new products, but has had only limited success as a large order expected in 2010 was delayed. "The lower volumes have also resulted in deteriorating margins, mitigated somewhat by cost reduction efforts," said Standard & Poor's credit analyst Christopher DeNicolo. S&P expects liquidity to remain adequate for near term operational and financial needs. The company had almost $69 million of cash at the end of the third quarter and there are no material debt maturities until 2017. On Nov. 1, 2010, Colt Defense replaced its $50 million revolving credit facility with a $10 million letter of credit facility, but with no maintenance financial covenants. S&P expects free cash flow to be around breakeven in 2011, as higher earnings are offset by some working capital investment to support higher sales, so we do not expect the company to need to access the revolver for cash borrowings in the near term. COMPTON PETROLEUM: Centennial Energy Holds 5.21% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 8, 2011, each of Centennial Energy Partners, LLC and Peter K. Seldin disclosed beneficial ownership of 14,434,660 shares of common stock of Compton Petroleum Corporation representing 5.21% of the shares outstanding. As of December 31, 2009, there were 263,573,461 Common Shares outstanding. About Compton Petroleum Compton Petroleum Corporation is an exploration and production company. The Company explores for, develops, and produces oil and gas in western Canada. Compton's interests include the areas of Shekille, Senex, Deep Basin, Rimbey, and Vulcan/Gladys, all in Alberta, Canada. The Company's balance sheet at Sept. 30, 2010, showed $1.81 billion in total assets, $857.02 million in total liabilities, and stockholder's equity of $954.53 million. * * * Moody's Investors Service has withdrawn Compton Petroleum's ratings following the repayment of its rated debt. Ratings withdrawn include the 'Caa1' Corporate Family Rating and Probability of Default Rating, and the 'Caa2' senior unsecured notes rating. As reported by the Troubled Company Reporter on Dec. 1, 2010, Standard & Poor's Ratings Services withdrew its 'B' long- term corporate credit rating on Compton Petroleum Corp. At the same time, Standard & Poor's withdrew its 'B-' senior unsecured rating and '5' recovery rating on subsidiary Compton Petroleum Finance Corp.'s US$193.5 million senior unsecured notes. S&P withdrew the ratings at the Company's request. CONSOLIDATED HORTICULTURE: Black Diamond Can Bid at Auction ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hines Nurseries Inc., which was purchased in a bankruptcy sale in January 2009 by Black Diamond Capital Management LLC, will be sold at auction on Feb. 25. According to Mr. Rochelle, Hines Nurseries, which returned to Chapter 11 in October 2010, set a Feb. 23 deadline for bids. The hearing for approval of the sale will take place Feb. 28. Mr. Rochelle relates that secured lenders are permitted to bid their claims rather than cash. Rules for the auction require that there be a cash component large enough to cover expenses of the Chapter 11 case, including professional fees, financing for the case, and $250,000 toward expenses after the sale. In addition to being the owner, Black Diamond's affiliate, Black Diamond Commercial Finance LLC, is a secured creditor holding all of the $8 million term loan and a $16 million subordinated loan. Black Diamond also holds 53% of the $48.6 million asset-backed loan. About Consolidated Horticulture Based in Irvine, California Consolidated Horticulture Group LLC, doing business as Hines Nurseries LLC -- http://www.hineshorticulture.com/-- operates nursery facilities located in Arizona, California, Oregon and Texas. Through its affiliate, the company produces and distributes horticultural products. Black Diamond Capital Management LLC purchased Hines Nurseries Inc. in a bankruptcy sale in January 2009. The resulting reorganization plan, confirmed in January 2009, paid secured creditors in full on their $35.9 million in claims while providing as much as $12 million toward debt owing to suppliers both before and after the bankruptcy filing. The business bought by Black Diamond was renamed to Consolidated Horticulture. Consolidated Horticulture and its affiliates filed for Chapter 11 protection on October 12, 2010 (Bankr. D. Del. Lead Case No. 10-13308). Laura Davis Jones, Esq. and Timothy P. Cairns, Esq. at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel to the Debtors. Attorneys at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., serve as bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Lowenstein Sandler PC as counsel and Blank Rome LLP as co-counsel. Consolidated Horticulture estimated $100 million to $500 million in assets and $50 million to $100 million in debts in the Chapter 11 petition. CONSOLIDATED HORTICULTURE: March 14 Hearing on More Exclusivity --------------------------------------------------------------- Consolidated Horticulture Group LLC, et al., asked the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive period to file a Chapter 11 plan and solicit acceptance of the plan by four months to June 9, 2011 and August 8, 2011, respectively. There will be a hearing on March 14 on the request for an extension. The Debtors are hopeful that they will be able to file a plan of liquidation after completing the auction and sale process of its assets. Since the commencement of their Chapter 11 cases four months ago, the Debtors have engaged in extensive efforts in marketing their assets to conduct an auction and sale of substantially all of their assets. On December 17, 2010, the Court entered an order approving bidding procedures for the sale, scheduling the auction for February 25, 2011, and a hearing to consider the sale for February 28, 2011. About Consolidated Horticulture Irvine, California-based Consolidated Horticulture Group LLC, doing business as Hines Nurseries LLC -- http://www.hineshorticulture.com/-- operates nursery facilities located in Arizona, California, Oregon and Texas. Through its affiliate, the company produces and distributes horticultural products. Black Diamond Capital Management LLC purchased Hines Nurseries Inc. in a bankruptcy sale in January 2009. The resulting reorganization plan, confirmed in January 2009, paid secured creditors in full on their $35.9 million in claims while providing as much as $12 million toward debt owing to suppliers both before and after the bankruptcy filing. The business bought by Black Diamond was renamed to Consolidated Horticulture. Consolidated Horticulture and its affiliates filed for Chapter 11 protection on October 12, 2010 (Bankr. D. Del. Lead Case No. 10-13308). Laura Davis Jones, Esq. and Timothy P. Cairns, Esq. at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel to the Debtors. Attorneys at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., serve as bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Lowenstein Sandler PC as counsel and Blank Rome LLP as co-counsel. Consolidated Horticulture estimated $100 million to $500 million in assets and $50 million to $100 million in debts in the Chapter 11 petition. COUNTRYVIEW MHC: Court Sets March 14, 2011 Claims Bar Date ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois has set March 14, 2011, as the general bar date for the filing of claims against the bankruptcy estate of Countryview MHC Limited Partnership. Governmental units have until May 28, 2011, to file their claims. All claims must be filed electronically or at the following address: Clerk of the U.S. Bankruptcy Court 219 South Dearborn Street, Room 713 Chicago, IL 60604 About Countryview MHC Countryview MHC Limited Partnership is an Illinois limited partnership that owns a manufactured home community, consisting of approximately 275 sites, situated in Franklin, Indiana. It filed for Chapter 11 bankruptcy protection on November 29, 2010 (Bankr. N.D. Ill. Case No. 10-52722). Eugene Crane, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. CREDIT-BASED ASSET: Plan Outline Hearing Set for February 28 ------------------------------------------------------------ The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Feb. 28, 2011, at 11:00 a.m. (prevailing Eastern Time), to consider adequacy of the Disclosure Statement explaining Credit-Based Asset Servicing and Securitization LLC, et al.'s Plan of Reorganization. Objections were due February 11, at 5:00 p.m. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. The Disclosure Statement is intended to assist the holders of Claims in Classes 4(a)(i), 4(a)(ii), 4(b), 5 and 6 in making an informed judgment regarding whether they should exercise the "Release Opt-Out Election." According to the Disclosure Statement, the Plan provides for, among other things: -- Substantive consolidation of the Debtors estates, except for the estate of Sunfish Management Group LLC (Sub-Con Debtors); -- Payment in full of all Unclassified Claims; -- Payment in full of all Allowed Class 1 Priority Non-Tax Claims; -- Holders of Allowed Class 2 Senior Lender Claims will receive all cash that does not constitute released collateral and all other remaining collateral will be transferred to CB Senior Lender, LLC, a Delaware limited liability company, on behalf of the senior lenders; -- Holders of Allowed Class 3 Claims will receive, on the Effective Date (A) Cash that constitutes released collateral in the amount of the Allowed claim; (B) turnover of the Assets that constitute collateral security for the Allowed claim, solely to the extent that assets (1) constitute Released Collateral or (2) are not Cash, and the Holder of Allowed claim has a valid, perfected and enforceable first- priority Lien on the assets, or (C) less favorable treatment as may be agreed upon by the holder of the claim; -- Holders of Allowed Class 4(a)(i) Senior Unsecured Claims Against Sub-Con Debtors that do not exercise the Release opt-out election will receive on the Effective Date, the sum of (i) Holders Fully Diluted Class 4(a) Ratable Portion of the Liquidation Trust Interests, (ii) Holders Base Class 4(a)(i)(1) Ratable Portion of the Class 5 Ratable Portion of the Liquidation Trust Interests, and (iii) Holders Base Class 4(a)(i)(1) Ratable Portion of the Class 6 Ratable Portion of the Liquidation Trust Interests; -- Holders of Allowed Class 4(a)(ii) Trade Debt and Employee Claims Against Sub-Con Debtors that do not exercise the release opt-out election will receive on the Effective Date, the Holders Fully Diluted Class 4(a) Ratable Portion of the Liquidation Trust Interests; -- Holders of Allowed Class 4(b) General Unsecured Claims Against Sunfish Management Group LLC that do not exercise the release opt-out election will receive on the Effective Date, the Holders Ratable Portion of the Sunfish Management Group Distribution Fund; -- Holders of Allowed Class 5 Subordinated Debt Claims and Allowed Class 6 TruPs Claims will be deemed to transfer their Liquidation Trust Interests to the Holders of Allowed Class 4(a)(i)(1) Claims in accordance with the contractual subordination provisions in the documents under which the Subordinated Debt Claims and TruPs Claims* arise, respectively, and section 510(a) of the Bankruptcy Code; -- Holders of Allowed Class 4(a)(i) Senior Unsecured Claims, Class 4(a)(ii) Trade Debt and Employee Claims, and Class 4(b) General Unsecured Claims that do exercise the release opt-out election will receive no property or distributions under the Plan; -- All Allowed Class 7 Securities Litigation Claims will receive no property or distribution under the Plan in accordance with the effect of Section 510(b) of the Bankruptcy Code; and -- The indefeasible cancellation of all Allowed Class 8 Interests in the Debtors. * TruPs are six issuances of C-BASS subordinated promissory notes as part of trust-preferred securities issuances totaling $285 million. On June 1, 2011, or as reasonably practicable thereafter, the Debtors Will commence dissolution proceedings and pay all applicable fees from cash that constitutes released collateral. The Plan also contemplates the appointment of the Liquidation Trustee on the Effective Date to administer certain post-Effective Date responsibilities and exercise post-Effective Date rights under the Plan and the Liquidation Trust Agreement. Further, on the Effective Date, the Debtors will establish the Disputed Claims Reserve and will deposit therein, cash that constitutes Released Collateral in an amount equal to the sum of the Face Amount of all Administrative Claims and all Priority Claims that are, or that the Debtors anticipate will become (including those potential claims not yet filed), Disputed Claims. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/CREDIT-BASEDASSET_DS.pdf The Debtors are represented by: Peter S. Partee, Sr., Esq. Jack A. Molenkamp, Esq. Andrew Kamensky, Esq. HUNTON & WILLIAMS LLP 200 Park Avenue, 53rd Floor New York, NY 10166-0136 Tel: (212) 309-1000 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. CROWN FOREX: Feds Want In on $84M Civil Suit vs. Crown Forex ------------------------------------------------------------ Bankruptcy Law360 reports that federal prosecutors are seeking to jump into a U.S. Commodity Futures Trading Commission civil suit accusing the principals and subsidiaries of Crown Forex SA of perpetrating a massive foreign exchange scheme to defraud investors of $84 million. As reported in the Troubled Company Reporter-Europe on June 16, 2009, Reuters said that Crown Forex SA Chairman Ibrahim Ali said the foreign exchange provider had appealed to the Federal Administrative Tribunal against a bankruptcy ruling by Swiss markets regulator FINMA. Reuters recalled FINMA ruled on Feb. 23, 2009, to liquidate Crown following a money laundering investigation. Mr. Ali, as cited by Reuters, said the investigation had hampered the company's efforts to meet the requirements for a banking license, including an audit. Reuters related that according to Mr. Ali, Crown was cleared but FINMA took control of the company anyway, citing possible liquidity issues. In a May 29 report Reuters disclosed the financial regulator took control of Crown on Dec. 9, 2008. It declared the company bankrupt on May, 29, 2009, the report said. Based in Bassecourt, Switzerland, Crown Forex SA -- http://www.crownforex.com/-- offers trading on 13 currency pairs + gold and silver. DATATEL INC: S&P Changes Outlook on 'B' Rating to Negative ---------------------------------------------------------- Standard & Poor's Ratings Services revised its 'B' rating outlook on Fairfax, Va.-based Datatel Inc. to negative from stable. The 'B' corporate credit rating on the company was affirmed, along with all other existing ratings on the company's borrowings. The outlook change reflects the upsizing of Datatel's previous $430 million refinancing transaction to $460 million. The upsizing increases leverage to the low-7x area from the high-6x area under the transaction's previous terms, and from the low-5x area prior to the launch of the proposed transaction. Standard & Poor's expects Datatel's revenues and operating margins to continue to improve modestly over the next few quarters, reflecting its price increases for maintenance revenues and new license sales. In addition, S&P expects leverage to increase modestly over the next quarter due to the seasonal nature of Datatel's cash flows and its need to fund working capital throughout the year, before reducing to the mid-6x area by the end of 2011. Pro forma for the dividend payment, adjusted leverage rises to the low-7x area from the 5x area as of the December 2010 quarter. Datatel provides enterprise resource planning software products tailored to midtier higher education institutions. Its suite of ERP software modules includes solutions for student administration, financial aid, finance, human resources, and fundraising. More than 775 educational institutions, including mid-level two- and four-year colleges and specialty schools, currently use these products. Many of its competitors enjoy greater scale, financial resources, revenue diversity, or the ability to compete for larger, more profitable, and prestigious higher education clients. In its segment, however, Datatel is the No. 2 provider, after SunGard Higher Education Solutions, a subsidiary of SunGard Data Systems Inc. (B+/Stable/--) Due to Datatel's modest scale, second-tier competitive position, and narrow product focus, S&P views the company's business risk profile as vulnerable. Datatel's trailing-12-month revenue grew about 10% from the year- earlier period, to approximately $150 million as of the December 2010 quarter, on growth in new software sales and a modest increase in maintenance revenues. Latest-12-month adjusted EBITDA margins improved 100 basis points year over year to the 39% area, reflecting cost-reduction actions and growth in its higher-margin maintenance service revenues. Standard & Poor's views Datatel's financial risk profile as highly leveraged, reflecting its LBO in 2009 and the pending dividend recapitalization. In addition, the company's free operating cash flows and borrowing requirements are highly seasonal. As a result, S&P expects trailing-12-month leverage to approach the mid-7x area over the next quarter and then decline to the high-6x area by the end of 2011 on stable-to-modest EBITDA growth and net reduction of debt. Pro forma trailing-12-month leverage is currently 7.2x as of the December 2010 quarter. Adjusted leverage rose to the high-7x area from the mid-4x area following its 2009 LBO, and the company was able to reduce it the 5x area by the end of 2010, primarily from EBITDA growth. This provided the cushion within the rating to enable the dividend recapitalization. While leverage is initially high for the rating, S&P anticipates near- term deleveraging. DBSD N.A.: 2nd Cir. Affirms Designation of DISH's Vote ------------------------------------------------------ Addressing an issue of apparent first impression for the court, WestLaw reports, the Second Circuit Court of Appeals has ruled that a bankruptcy court did not err when, pursuant to 11 U.S.C. Sec. 1126(e), it designated the vote of an entity which, as the Chapter 11 debtors' indirect competitor and the part-owner of a direct competitor, bought a blocking position in, and in fact the entirety of, a class of claims, after a plan had been proposed. The entity acted with the intention not to maximize its return on the debt, but to enter a strategic transaction with the debtor- telecommunications companies in order to acquire the debtors' spectrum rights. This case echoed the case that motivated Congress to impose the good faith requirement in the first place, Texas Hotel Securities Corp. v. Waco Development Co., 87 F.2d 395 (5th Cir. 1936), the Second Circuit found. The Bankruptcy Code provides no guidance about what constitutes a bad faith vote to accept or reject a plan, the court explained, noting the paucity of precedents on the Sec. 1126(e) "good faith" voting requirement in any context, much less the present context. In re DBSD North America, Inc., ---F.3d----, 2011 WL 350480 (2nd Cir.). About DBSD North America Headquartered in Reston, Virginia, DBSD North America Inc., aka ICO Member Services Inc., offers satellite communications services. It has launched a satellite, but is in the developmental stages of creating a satellite system with components in space and on earth. It presently has no revenues. The Company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-13061). James H.M. Sprayregen, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., and Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the financial advisors to the Debtors. The Garden City Group Inc. is the claims agent for the Debtors. DBSD estimated assets and debts of $500 million to $1 billion in its Chapter 11 petition. Timothy A. Barnes, Esq., and Steven J. Reisman, Esq., at CURTIS, Mallet-Prevost, Colt & Mosle LLP, in New York, represent the Official Committee of Unsecured Creditors. The ad hoc committee of certain parties that hold or manage holdings of those certain 7.5% Convertible Senior Secured Notes Due 2009 issued by DBSD is represented by Dennis F. Dunne, Esq., Risa M. Rosenberg, Esq., and Jeremy S. Sussman, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York; and Andrew M. Leblanc, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Washington, DC. Sprint Nextel is represented by Eric Moser, Esq., at K&L Gates LLP, in New York; and John H. Culver III, Esq., and Felton E. Parrish, Esq., at K&L Gates LLP, in Charlotte, North Carolina. Dish is represented in the case by J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York. DIMAS SANTIAGO: Retainer Not Subject to Sec. 726 Disgorgement ------------------------------------------------------------- Bankruptcy Judge Michael B. Kaplan ruled that Steven Abelson, Esq., at Abelson, Truesdale & Radowitz, LLC -- who represented Dimas and Dianne Santiago in their Chapter 11 case -- holds a valid security retainer which is not subject to disgorgement under 11 U.S.C. Sec. 726. Since no party in interest has challenged the necessity or reasonableness of the legal services rendered by Mr. Abelson, the Court granted his application for compensation. The Santiagos' case was converted to Chapter 7 and Mr. Abelson filed, belatedly, his application seeking final compensation. The Chapter 7 Trustee, Theodore Liscinski, Jr., Esq., objected and sought disgorgement of any prepetition retainer paid to Mr. Abelson, to ensure payment first of allowed Chapter 7 administrative expenses. Judge Kaplan held that a professional holding a security interest in a prepetition retainer cannot be forced to share that retainer with other administrative claimants solely to achieve pro rata distribution pursuant to Sec. 726(b). A copy of the Court's February 10, 2011 decision is available at http://is.gd/Soff5Gfrom Leagle.com. Based in Millstone, New Jersey, Dimas and Dianne Santiago filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 08-22666) on July 4, 2008. In their petition, the Santiagos listed $1 million to $10 million in both assets and debts. DREIER LLP: Chernov Cleared From Saleh Holdings Suit ---------------------------------------------------- Judge Bernard J. Fried dismissed Saleh Holdings Group, Inc., v. Joel A. Chernov, 650177/2010 (N.Y. Sup. Ct.). Saleh sued Mr. Chernov for his alleged participation in Marc Dreier's fraudulent dealings. On Oct. 21, 1997, nonparty Marc S. Dreier, on behalf of nonparty Dreier & Baritz LLP, executed a promissory note bearing the principal amount of $550,000 and payable to Saleh Holdings. The note was secured by a personal guaranty. The guaranty, but not the note, was secured by a collateral mortgage on real property located at 27 Meadow Lane, Westhampton Beach, New York, owned jointly by Marc Dreier and nonparty Elisa Dreier, his wife. The guaranty and the mortgage bear the signature of Marc Dreier and the apparent signature of Elisa Dreier. Mr. Chernov, an attorney employed by D & B, notarized the signatures, swearing that both signatories personally appeared before him. However, Elisa Dreier attests that she never signed either the guaranty or the mortgage, did not sign them in Mr. Chernov's presence, did not authorize anyone to sign them on her behalf, and did not represent to Mr. Chernov that she signed the documents or authorized anyone to sign them on her behalf. Saleh Holdings would not have loaned D & B the principal amount, had it known that Elisa Dreier did not sign the documents. D & B paid $55,000 in principal on the note. D & B and its successor firm, Dreier LLP, duly made monthly interest payments on the note in accordance with the oral modification through November 2008, and then defaulted, following the arrest of Marc Dreier on unrelated criminal charges and Dreier LLP's closing. In 2008, Dreier LLP filed for Chapter 11 bankruptcy relief (Bankr. S.D.N.Y. Case No. 08-15051). In 2009, Marc Dreier filed for Chapter 7 bankruptcy relief (Bankr. S.D.N.Y. Case No. 09-10371). On April 4, 2009, Saleh Holdings filed proof of a secured claim in the amount of $495,000 against Dreier LLP in the bankruptcy proceeding, seeking to recover the allegedly outstanding principal amount on the note. On September 23, 2009, Saleh Holdings filed an amended adversary complaint against Dreier LLP, Marc Dreier, and Elisa Dreier to enforce the note and guaranty and seeking to recover $495,000 in outstanding principal. Subsequently, Saleh Holdings voluntarily discontinued its claims against Dreier LLP and Marc Dreier. Elisa Dreier moved to dismiss the guaranty claim asserted against her on the grounds that the claim was time barred, and that the mortgage had been satisfied. The bankruptcy court granted the motion, and dismissed the breach of guaranty claim, solely on statute of limitations grounds. In March 2010, Saleh Holdings filed a notice of dismissal with prejudice of its claims against Elisa Dreier in the bankruptcy proceedings. Subsequently, in March 2010, Saleh Holdings sued Mr. Chernov for fraud and aiding and abetting fraud on allegations that Mr. Chernov fraudulently notarized Elisa Dreier's signature on the guaranty and collateral mortgage with the knowledge that Elisa Dreier did not sign these documents, and as part of a scheme to fraudulently induce Saleh Holdings to loan D & B $550,000. Saleh Holdings seeks to recover $495,000, an amount equal to the outstanding principal, together with prejudgment interest accruing from November 2008 through the date of judgment and costs of collection, including attorneys' fees. Mr. Chernov seeks dismissal of the complaint in its entirety. Chernov and Saleh Holdings dispute whether Saleh Holdings has alleged facts sufficient to support claims for fraud and aiding and abetting fraud. According to Judge Fried, the facts alleged in the complaint, together with the surrounding circumstances, even when deemed true, do not give rise to a reasonable inference that Mr. Chernov committed fraud or aided and abetted another in the commission of a fraud against Saleh Holdings. A copy of the NY Slip Opinion 50142(U), dated January 31, 2011, is available at http://is.gd/LMTo5Ifrom Leagle.com. About Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On December 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee. Wachovia Bank National Association, Sheila M. Gowan as trustee for Dreier LLP's Chapter 11 Estate, and Steven J. Reisman as post- confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DUTCHMAN COMPANY: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Dutchman Company, Inc. 7055 State Route 43 Kent, OH 44210 Bankruptcy Case No.: 11-50493 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Sean D. Malloy, Esq. MCDONALD HOPKINS LLC 600 Superior Ave E, Suite 2100 Cleveland, OH 44114-2653 Tel: (216) 348-5400 E-mail: smalloy@mcdonaldhopkins.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 six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ohnb11-50493.pdf The petition was signed by Scott R. Terhune, vice president. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- The Hugo Sand Company 11-50492 02/14/2011 ELITE LANDINGS: Hearing on ABRG's Plan Outline Moved to March 16 ---------------------------------------------------------------- The hearing to consider approval of the disclosure statement of Asset Based Resource Group, LLC, as successor servicer to Acorn Capital Group, in support of its competing plan for Debtors Petters Aviation, LLC, and Elite Landings, LLC, has been continued to March 16, 2011, at 10:30 a.m., before the Honorable Robert J. Kressel, U.S. Bankruptcy Court for the District of Minnesota, Courtroom 8 West, U.S. Courthouse, 300 South Fourth Street, in Minneapolis, Minnesota. As reported in the Troubled Company Reporter on Nov. 1, 2010, Asset Based Resource Group, LLC, and an unsecured creditor, proposed a competing Plan because it believes that the Debtors' Plan is not confirmable under the existing circumstances. ABRG related that as of the date of the Disclosure Statement, the Debtors' Plan has not yet been confirmed by the Bankruptcy Court. According to the Disclosure Statement, ABRG's Plan provides for the continued liquidation of the Debtors' businesses and the prompt distribution of proceeds to creditors with allowed claims. ABRG says that certain provisions of the Debtors' Plan are not in the best interests of the Debtors' creditors or their estates and are reflective of the indirect influence of Douglas A. Kelley, the receiver of certain of the Debtors' affiliates, over the Chapter 11 cases. In particular, the Debtors' Plan proposes, among other things, (i) to classify claims and interests in 13 separate classes; (ii) to treat all unsecured creditors of Petters Aviation as part of one class without a convenience election and without disallowing insider claims; (iii) to appoint the Debtors' existing president and chief executive officer as the person responsible for the Debtors' continued wind-down without any oversight by creditors for whose benefit the liquidation is being conducted; and (iv) for existing equity holders to retain their ownership interest in the Debtors despite the failure to satisfy senior classes in full. To remedy the problems with the Debtors' Plan, ABRG's Plan provides, among other things, for (i) a simplified classification structure with only 6 separate classes of claims and interests; (ii) the creation of a convenience class available for creditors whose claims are $150,000 or less (or who elect to reduce their claim to such amount); (iii) the creation of a creditors' trust and the appointment of an independent creditors' trustee to manage the Debtors' remaining affairs; and (iv) the cancellation of the existing equity interests in Petters Aviation. In light of these improvements from the Debtors' Plan, ABRG believes, and will demonstrate at the confirmation hearing, that its Plan is both confirmable and in the best interests of the Debtors' creditors and their estates. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/EliteLandingsABRGPlan.pdf ABRG's counsel can be reached at: Daniel C. Beck, Esq. Christopher A. Camardello, Esq. Michael A. Rosow, Esq. WINTHROP & WEINSTINE, P.A. 225 South Sixth Street, Suite 3500 Minneapolis, MN 55402-4629 Tel: (612) 604-6400 About Elite Landings Based in Minnetonka, Minnesota, Elite Landings, LLC was, prior to filing for bankruptcy, engaged in the business of purchasing Airbus Corporate Jet Aircraft from Airbus S.A.S. and reselling them. The company filed for Chapter 11 relief on Oct. 9, 2008 (Bankr. D. Minn. Case No. 08-45210). Cass Weil, Esq., and James A. Rubensteien, Esq., at Moss & Barnett, in Minneapolis, Minn., represent Elite Landings, LLC as counsel. In its petition, the Company estimated between $10 million and $50 million in assets and debts. The company is a wholly owned subsidiary of Petters Aviation, LLC. Petters Aviation is the owner of 84.4% of the issued and outstanding stock in MN Airline Holdings, Inc., which, in turn, owns 100% of the stock in MN Airlines, LLC dba Sun Country Airlines. Petters Aviation filed its Chapter 11 case on October 6, 2008. Both MN Airline Holdings, and MN Airlines, LLC are debtors-in- possession in Chapter 11 cases pending in the district. Petters Aviation is a wholly owned subsidiary of Thomas Petters, Inc., which is in turn owned 100% by Thomas J. Petters, individually. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the company in 1988. Petters Company, Inc. is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc. and Petters Group Worldwide, LLC, filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08-45258, respectively). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc. estimated debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC, estimated debts of not more than $50,000. As reported in the Troubled Company Reporter on Oct. 7, 2008, Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on Oct. 6, 2008 (Lead Case No. 08-45136). Petters Aviation, LLC, is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. Sun Country Airlines won confirmation of its plan of reorganization on September 13, 2010. The plan provides for cash payments to certain creditors, as well as a distribution of equity in the reorganized company to other creditors. Polaroid Corp., which was owned by Petters since 2005, filed its second voluntary petition for Chapter 11 protection on Dec. 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). PLR Acquisition LLC, a joint venture composed of Hilco Consumer Capital L.P. and Gordon Brothers Brands LLC, acquired most of Polaroid's assets -- including the Polaroid brand and trademarks -- in May 2009. They paid $87.6 million for the brand. Debtor Polaroid Corp. was renamed to PBE Corp. following the sale. The case was converted to Chapter 7 on Aug. 31, 2009, and John R. Stoebner serves as the Chapter 7 Trustee. EUROPA STONE: Rasmus Asset Advisors to Conduct Liquidation ---------------------------------------------------------- Rasmus Asset Advisors disclosed the online liquidation auctions of Cherokee Wholesalers Acquisition Corporation and Europa Stone, according to Christopher R. Rasmus. "We are making a complete liquidation of both Cherokee Wholesalers and Europa Stone," explained Rasmus. "We have divided these inventories into four online auctions. This is an excellent opportunity to pay auction prices for new building inventories as well as some nicely maintained warehouse, material handling and office equipment." "They are a victim of the failing economy," said Rasmus. "This is a Uniform Commercial Code (UCC) sale by order of the secured creditors. This is a complete liquidation and everything will sell to the highest bidders." Warehouse and material handling equipment from Cherokee Wholesalers' 40,000 square-foot warehouse distribution facility, including forklifts, trucks, pallet racking, office and business equipment is open for online bidding now at http://www.rasmus.com/,along with over $2 Million in new hardwood flooring inventory, hardwood molding, retail inventory, tools and machinery. "Europa Stone has filed Chapter 11 bankruptcy and this sale is by order of the U.S. Bankruptcy Court for the Eastern District of Virginia," said Rasmus. "Europa Stone is an international importer of the finest stone and marble products and a leading distributor in the Washington, DC, area." All marble and granite slab inventory, slab frames, kitchen inventory, trucks, forklifts, cranes, office and business equipment from Europa Stone will sell at online only auction to the highest bidders. These four online only auctions will begin closing on Wednesday, February 23, 2011. Bidders must register prior to bidding. Items may be inspected during scheduled preview times. For more details and terms, visit http://www.rasmus.com/or call (703) 768-9000. About R.L. Rasmus R.L. Rasmus Auctioneers, Inc. was founded in 1981 to provide asset recovery and auction services to the legal, banking and business community. Emerging out of the technology and used equipment business, Rasmus has been unconventional in its approach to asset liquidation. Rasmus is one of a handful of liquidators who has combined the benefits of traditional liquidation techniques with the power of the internet to create a liquidation model which is fast, affordable, flexible, efficient and astoundingly effective. About Cherokee Wholesalers Cherokee Wholesalers was a family-run business founded in 1965, and was the largest distributor in the Washington DC metro area. EQUITY OFFICE PROPERTIES: Blackstone Restructures $7BB Debt ----------------------------------------------------------- Lingling Wei and Eliot Brown, writing for The Wall Street Journal, report that Blackstone Group LP has reached an agreement to restructure about $7 billion of the remaining debt tied to its 2007 purchase of Sam Zell's Equity Office Properties Trust, according to people familiar with the matter. The deal is expected to be finalized by year's end. The sources told the Journal that under the deal the maturity of the debt will be extended to 2014 from 2012. In exchange, Blackstone will pay down the $7 billion debt by 10% and the interest rate on the remaining debt will increase by one percentage point, these people said. Blackstone purchased Equity Office for $39 billion. But immediately after the acquisition, Blackstone sold about $30 billion of properties to raise cash and reduce the debt taken on for the buyout. According to the Journal, most of those who picked up the buildings from Blackstone in 2007-the list reads like a Who's Who in real estate-have hit financial problems because they were overwhelmed by the debt they took on to do the deals. The Journal relates that the 149 Equity Office buildings Blackstone held on to had $7 billion of debt, including $4.9 billion of mortgages that were packaged and sold as commercial- mortgage-backed securities and about $2.1 billion of "mezzanine," or junior, debt that fills the gap between the first mortgage and the equity. The buildings are generating enough income to service all their debt, and their debt doesn't mature until 2012. But, like most of the properties in the Equity Office portfolio, they likely have dropped in value even though property values have rebounded in recent months. The Journal says the debt extension is expected to make it easier for Blackstone to come up with an exit strategy for the remaining EOP portfolio, which largely is made up of top-tier buildings in Boston, New York and California. The Journal says Blackstone could choose between selling the entire portfolio in an initial public offering or selling it in parts to deal-hungry investors such as publicly traded real-estate investment trusts and sovereign-wealth funds. The largest building in the portfolio, valued at about $1 billion by some estimates, is 1095 Ave. of the Americas in Midtown Manhattan, whose tenants include insurer MetLife Inc. and law firm Dechert LLP. The Journal notes the deal marks the second major restructuring Blackstone has pulled off this year. In the other deal, Blackstone reworked the balance sheet of Hilton Worldwide Inc., the firm's single-largest investment, cutting Hilton's $20 billion debt load by nearly $4 billion. FAYETTEVILLE MARKETFAIR: Asks Court to Dismiss its Chapter 11 Case ------------------------------------------------------------------ Fayetteville Marketfair Investors, LLC, asks the U.S. Bankruptcy Court for the Eastern District of North Carolina to dismiss its Chapter 11 case, citing that an order authorizing the stipulation it signed with Stefan Johansson, Jackson Ward, and Capmark Finance, Inc., for the compromise and settlement of their mutual claims, was entered on Nov. 23, 2010. The pertinent terms of the stipulation proposed to surrender the Debtor's property to Capmark, deem the Debtor's plan and disclosure statement withdrawn, and the parties were to exchange mutual releases. As reported in the Troubled Company Reporter on Dec. 29, 2010, the stipulation also provided for the termination of the automatic stay with respect to Capmark, who will be permitted to exercise all of its remedies under the loan documents and against the collateral. About Fayetteville Marketfair Miami, Florida-based Fayetteville Marketfair Investors, LLC, filed for Chapter 11 (Bankr. E.D. N.C. Case No. 09-10859) on Dec. 14, 2009. William P. Janvier, Esq., and Samantha J. Younker, Esq., at Janvier Law Firm, PLLC, in Raleigh, North Carolina, represent the Debtor. The Company estimated assets and debts at $10 million to $50 million. FRANCHISE KINGS: Case Summary & Largest Unsecured Creditor ---------------------------------------------------------- Debtor: Franchise Kings, Inc. 1 South New York Ave. Atlantic City, NJ 08401 Bankruptcy Case No.: 11-14065 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: Michael P. Resavage, Esq. MICHAEL P. RESAVAGE, P.A. 293 Shell Road Carneys Point, NJ 08069 Tel: (856) 299-9919 Fax: (856) 299-9980 E-mail: mpresavage@resavagelaw.com Estimated Assets: $0 to $50,000 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 ------ --------------- ------------ Jenna D. Evans, Esq. $3,000,000 Deeb, Petrakis, Blum & Murphy, P.C. 1601 Market Street, Suite 2600 Philadelphia, PA 19103 The petition was signed by Nancy J. Davis, president. FRANCISCAN COMMUNITIES: Court Sets March 7 Confirmation Hearing --------------------------------------------------------------- The U.S. Bankruptcy Court has approved the adequacy of the information contained in Franciscan Communities Villa De San Antonio's disclosure statement filed in support of its liquidating plan under Chapter 11 of the Bankruptcy Code. As a result, the solicitation of votes either for acceptance or rejection of the plan may now commence. The Bankruptcy Court has set March 2, 2011, at 4:00 p.m. as the deadline for the submission of votes either for rejection or acceptance of the plan. The hearing on confirmation of the Plan will be March 7, 2011, at 2:00 p.m. Written objections to confirmation of the Plan must be filed and served so as to be received no later than 4:00 p.m. on March 2, 2011, by the following: Ronald Hornberger, Esq. PLUNKETT & GIBSON, INC. 70 N.E. Loop 410, Suite 1100 San Antonio, TX 78216 (Counsel for the Debtor) - and - The Office of the United States Trustee 615 E. Houston, Rm. 533 P.O. Box 1539 San Antonio, TX 78295-1539 Attn: James Rose The Debtor has sold substantially all its assets to KSL San Antonio, L.L.C., for $17,225,281, plus the assumption or satisfaction of certain assumed and the provision of certain funds regarding minimum payments to or on behalf of certain claims. The Debtor has used the proceeds of that sale to make certain distributions to Secured Lenders and to pay necessary costs and expenses of the Sale. Any remaining proceeds from the Sale of the assets, together with any remaining Cash Collateral and funds received from KSL, will be used to make payments under the Plan. Allowed Secured Claims have been paid in full to the extent that payment will be made on any Allowed Secured Claim from the proceeds of the Asset Sale. The Secured Lenders will not have any allowed Unsecured or Undersecured claim. Allowed Unsecured Claims will be paid in cash, a pro-rata payment of at least $100,000 from current available cash and further cash available from KSL. There will be no distribution to the owner of the Debtor and it is anticipated that, following the consummation of the Plan, the Debtor will take such steps as are necessary under applicable state law to dissolve and cease to exist as a legal entity. A copy of the First Amended Disclosure Statement is available for free at http://bankrupt.com/misc/FranciscanCommunities.DS.pdf About Franciscan Communities San Antonio, Texas-based Franciscan Communities Villa De San Antonio is an Illinois not-for-profit corporation that, prior to the sale of substantially all of its assets to KSL San Antonio, L.L.C., operated a senior living community consisting of 114 independent living apartments, 24 independent living garden homes and 55 assisted living units near what is generally referred to as the "medical center area" of San Antonio, Texas. The sale closed in June 2010. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Texas Case No. 10-50712) on Feb. 26, 2010. Ronald Hornberger, Esq., at Plunkett & Gibson, Inc., in San Antonio, Tex., assists the Company in its restructuring effort. In its schedules, the Debtor disclosed $35,470,922 in assets and $39,456,816 in liabilities. FRE REAL ESTATE: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------- FRE Real Estate Inc. filed with the U.S. Bankruptcy Court for the Northern District of Texas a list of its 20 largest unsecured creditors: Creditor Nature of Claim Amount -------- --------------- ------ Sidney Wicks Revocable property lease $153,701 Trust c/o Michael John Klein CPA 5743 Corsa Avenue #216 Westlake Village, CA 91362 AMB Security trade payable $123,356 PO Box 61000 San Francisco, CA 94161 IBS trade payable $83,892 PO Box 59975 Dallas, TX 75229 Reliant Energy electricity services $79,732 Pate Engineers trade payable $64,452 City Wide Building Services trade payable $18,883 Las Colinas Association trade payable $18,212 Weir Brothers trade payable $15,940 Mitec Net trade payable $15,313 Champion Commercial trade payable $15,296 Entech Sales & Services trade payable $13,833 Geary Porter & Donovan PC trade payable $13,594 Coppeli Heating & A/C trade payable $12,401 Plant Place trade payable $11,147 Henry & Jones trade payable $10,130 Nail Robert Lynn trade payable $9,907 Glast Phillips & Murray PC trade payable $8,642 Air Performance Service trade payable $8,604 Mustang Lighting Inc. trade payable $8,443 Romack Company trade payable $6,725 A full-text copy of the list of 20 largest unsecured creditors is available for free at http://ResearchArchives.com/t/s?735d About FRE Real Estate Dallas, Texas-based FRE Real Estate, Inc., owns, leases and operates approximately 38 parcels of real property located in Texas and Louisiana. In addition to approximately 29 parcels of raw land, the Debtor's real property holdings include approximately 6 operating office buildings, 1 apartment complex, and two airplane hangers, including a large income producing office building located just north of LBJ Freeway in Farmers Branch, Texas, known as "Fenton Centre" and an income producing office building in New Orleans, Louisiana, known as the "Amoco Building." FRE Real Estate filed for Chapter 11 bankruptcy protection on January 4, 2011 (Bankr. N.D. Tex. Case No. 11-30210). John P. Lewis, Jr., at the Law Office of John P. Lewis, Jr., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $100 million to $500 million. FRE REAL ESTATE: Gets Court's Interim Nod to Use Cash Collateral ---------------------------------------------------------------- FRE Real Estate, Inc., sought and obtained interim authorization from the U.S. Bankruptcy Court for the Northern District of Texas to use the cash collateral until March 2011 securing their obligations to their prepetition lenders. The Debtor says that its lenders are protected by an equity cushion since they are all over-secured. The fair value of the Debtor's real properties is approximately $234 million. The amount of secured claims representing the first lien secured debt on the Debtor's properties to be scheduled in this case will be approximately $182 million. Thus, the Debtor believes there is approximately $50 million of equity in its properties beyond the first lien secured debt. The amount of unsecured "trade claims" to be scheduled in this case will approximate $1.4 million. The amount of secured or priority "tax claims" representing unpaid 2010 property taxes to be scheduled in this case will be approximately $2.9 million. Within the 90-day period immediately preceding the Petition Date, NexBank, the lender on the Debtor's property known as the Fenton Centre, swept the Debtor's accounts and took possession of several million dollars of funds that would have otherwise been used by the Debtor to operate the Fenton Centre. The total amount swept by NexBank during this time period was approximately $3,707,909.33. Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/FRE_REAL_ESTATE_budget.pdf In exchange for using the cash collateral, the Debtor proposes to grant the prepetition lenders replacement and substitute liens. Each lender's cash collateral will be segregated in separate bank accounts from other lenders' cash collateral, so that each lender's cash collateral will not be commingled with any other lender's cash collateral. The Debtor will maintain a separate segregated account for revenues and disbursements for each property of each lender and will report to each lender the revenues and expenses on a property by property basis. To the extent any lender is receiving and holding cash collateral in a lockbox or other account, the Lender will transfer the funds to the Debtor's segregated account for the property in an amount sufficient to pay all expenses for January 2011 set forth in the budgets for the property from which the cash collateral was generated, together with sufficient funds to pay the ground leases at Westgrove Air Plaza and Addison Hanger I to the extent of available cash collateral from those properties, respectively. The Debtor will provide to the lenders statements reflecting its financial activity, and additional information, statements, and reports concerning the Debtor's financial condition and its assets, as and when reasonably requested. The Debtor will seek a final hearing on its request to use cash collateral. About FRE Real Estate Dallas, Texas-based FRE Real Estate, Inc., owns, leases and operates approximately 38 parcels of real property located in Texas and Louisiana. In addition to approximately 29 parcels of raw land, the Debtor's real property holdings include approximately 6 operating office buildings, 1 apartment complex, and two airplane hangers, including a large income producing office building located just north of LBJ Freeway in Farmers Branch, Texas, known as "Fenton Centre" and an income producing office building in New Orleans, Louisiana, known as the "Amoco Building." FRE Real Estate filed for Chapter 11 bankruptcy protection on January 4, 2011 (Bankr. N.D. Tex. Case No. 11-30210). John P. Lewis, Jr., at the Law Office of John P. Lewis, Jr., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $100 million to $500 million. FREESCALE SEMICONDUCTOR: S&P Puts 'B-' Rating on Positive Watch --------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed all its ratings, including the 'B-' corporate credit rating, on U.S. semiconductor manufacturer Freescale Semiconductor Inc. on CreditWatch with positive implications. "With the S-1 filing by Freescale Semiconductor Holdings Limited I, Freescale could experience rapid delevering from initial public offering proceeds, in addition to its expanding base of EBITDA generation," said Standard & Poor's credit analyst Lucy Patricola. S&P calculate that reported EBITDA was $922 million in fiscal year 2010 and that debt to EBITDA was 8.25x. Pro forma for a potential initial IPO of up to $1.15 billion (assuming all proceeds are used to reduce debt), leverage would decline to 7x). "Further, S&P expects that Freescale will continue to experience modestly positive operating trends," added Ms. Patricola. "S&P expects mid-single-digit growth for the semiconductor industry in 2011 and, in S&P's opinion, Freescale is likely to track to the industry." Margins are likely to improve somewhat through 2011, reflecting better utilization throughout the year as well as the exit of manufacturing facilities in Sendai, Japan and Toulouse, France. S&P believes EBITDA will expand in 2011 and that pro forma for the IPO, leverage could decline to below 6x by fiscal year-end 2011. S&P will monitor the company's progress for both the IPO launch and operating trends. Based on current performance expectations and the current initial size of the IPO, an upgrade would likely be limited to one notch. G-SWDE1 LLC: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: G-SWDE1, LLC 3455 Cliff Shadows Parkway, Suite 220 Las Vegas, NV 89129 Bankruptcy Case No.: 11-11991 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: I Scott Bogatz, Esq. BOGATZ & ASSOCIATES, P.C. 3455 Ciff Shadows Pkwy, Suite 110 Las Vegas, NV 89129 Tel: (702) 776-7000 Fax: (702) 776-7900 E-mail: rpoll@isbnv.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 Thomas J. Devore, chief operating officer of LEHM, LLC, Debtor's manager. GAS CITY: Has Until April 20 to Complete Sale Process & File Plan ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois extended Gas City Ltd. and its affiliates' exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until April 20, 2011, and May 20, respectively. As reported in the Troubled Company Reporter on Feb. 14, 2011, the Debtors requested (i) until May 24, for the exclusive plan filing period; and (ii) until July 22, for the exclusive solicitation period. According to the Debtors, they require additional time to complete the sale process and determine the most beneficial conclusion and exit from bankruptcy for their estates and creditors, based in part on the sale results. The Debtors said an extension of their exclusive periods to file and solicit acceptances to a chapter 11 plan is necessary to prevent the distraction and additional strain on the Debtors' limited resources that would be caused if a competing chapter 11 plan were to be filed while the Debtors are trying to maximize value for all creditors through the sale process. About Gas City Gas City Ltd. -- http://www.gascity.net/-- based in Frankfort, Ill., is an independent petroleum marketer with locations in Northeast Illinois, Northwest Indiana, Florida and Arizona. Gas City sought Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 10-47879) on Oct. 26, 2010, estimating assets at $50 million to $100 million and debts at $100 million to $500 million. Gas City's parent, the William J. McEnery Revocable Trust dated Apr. 22, 1993, filed a separate Chapter 11 petition (Bankr. N.D. Ill. Case No. 10-47895). Paul V. Possinger, Esq., at Proskauer Rose LLP, and Daniel A. Zazove, Esq., at Perkins Coie LLP, represent the Debtors. A. Jeffrey Zappone at Conway Mackenzie is the Debtors' chief restructuring officer. Kurtzman Carson Consultants is the Debtors' claims agent. The Official Committee of Unsecured Creditors has tapped Pachulski Stang Ziehl & Jones LLP and Levenfeld Pearlstein, LLC, as co-counsel and Mesirow Financial Consulting, LLC, as financial advisors. GLOBAL ENERGY: Says Chapter 11 Plan Declared Effective ------------------------------------------------------ Global Energy Holdings Group Inc. and its debtor-affiliates set Jan. 24, 2011, as the effective date of the Chapter 11 Plan of reorganization, wherein creditors holding general unsecured claims against the Debtors' estate as of Nov. 25, 2009, will be entitled to receive distributions in accordance with the terms of the Plan to the extent that their claims are allowed. According to the Troubled Company Reporter on Nov. 5, 2010, the U.S. Bankruptcy Court for the District of Delaware confirmed Global Energy Holdings Group, Inc., et al.'s Plan of Reorganization. The Plan contemplates the consolidation of the Debtors' estates for the purposes of all actions associated with confirmation and consummation of the Plan and Plan distributions. The Plan is also predicated upon the Debtors' sale of its property. The net cash proceeds of any of the sale transactions, after deduction of reasonable and customary closing costs, will be used to pay allowed claims of creditors. Holders of general unsecured claims aggregating $3.5 million to $4.0 million will be paid in cash from the liquidating trust. Equity Interests will be cancelled on the effective date. A full-text copy of the disclosure statement explaining the terms of the Plan is available for free at: http://ResearchArchives.com/t/s?735c About Global Energy Holdings Atlanta, Georgia-based Global Energy Holdings Group, Inc. -- http://www.gnhgroup.com/-- is a diversified renewable energy company. Global develops renewable energy projects, including biomass gasification and landfill-gas-to-energy projects. The Company filed for Chapter 11 on November 25, 2009 (Bankr. D. Del. Case No. 09-14192). Charles J. Brown, Esq. at Archer & Greiner, P.C. represents the Debtor in its restructuring effort. As of Sept. 30, 2009, the Debtor disclosed total assets of $10.30 million and total debts of $5.27 million. GULF FLEET: Hearing on Adequacy of Disclosure Statement on March 1 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Louisiana will continue on March 1, 2011, at 10:00 a.m. the hearing on the adequacy of Gulf Fleet Holdings, Inc., et al.'s disclosure statement explaining the proposed plans of reorganization of the Debtors. The Court will also hear on that day: a. the Debtors' motion for increase of exclusive period in which their plans are to be accepted in order to maintain exclusivity; b. the motion for relief from stay on behalf of Bank of America; c. the motion to determine the value of collateral on behalf of Gulf Fleet Management, LLC; d. the application to approve compromise on behalf of Gulf Fleet Management, LLC; and e. the motion of Comerica Bank, as administrative & collateral agent for senior bank lenders, to apply certain rules governing adversary proceedings to confirmation on behalf of Comerica Bank. As reported by the Troubled Company Reporter on Jan. 31, 2011, the hearings on the adequacy of the disclosure statement and the motion to increase exclusive period in which the plans are to be accepted in order to maintain exclusivity were first scheduled on January 25, 2011, at 10:00 a.m. It was scheduled to continue on February 8, 2011, at 10:00 a.m. Lafayette, Louisiana-based Gulf Fleet Holdings, Inc. -- along with affiliates Star Marine, LLC; Gulf Wind, LLC; Gulf Service, LLC; Gulf Worker, LLC; Hercules Marine, LLC; Gulf Fleet, LLC; Gulf Fleet Marine, Inc.; Gulf Fleet Management, LLC; Gulf Fleet Offshore, LLC; and Gulf Ocean Marine Services, LLC -- sought Chapter 11 protection (Bankr. W.D. La. Case No. 10-50713) on May 14, 2010. Benjamin W. Kadden, Esq., Christopher T. Caplinger, Esq., and Stewart F. Peck, Esq., at Lugenbuhl, Wheaton, Peck, Rankin & Hubbard in New Orleans, La., represent the Debtors. The Debtor is operating under the terms of cash collateral agreements with lenders led by Comerica Bank and Brightpoint Capital Partners Master Fund, L.P. Gulf Fleet estimated $100 million to $500 million in assets and $50 million to $100 million in debts in its Chapter 11 petition. In their schedules, affiliate Gulf Fleet, LLC, disclosed $2,088,277 in assets and $83,891,116 in liabilities; Gulf Fleet Management, LLC, disclosed $943,256 in assets and $45,071,399 in liabilities; and Gulf Ocean Marine Services, LLC, disclosed $15,777,138 in assets and $79,513,230 in liabilities. The official committee of unsecured creditors is represented by Alan H. Goodman, Esq., who has an office in New Orleans, and Christopher D. Johnson, Esq., and Hugh M. Ray, Jr., Esq., who have offices in Houston, Texas. HARRISBURG, PA: Alvarez & Marsal Tapped as Advisor -------------------------------------------------- Dow Jones' DBR Small Cap reports that financial turnaround firm Alvarez & Marsal is joining efforts to tackle the fiscal distress of Harrisburg, Pa., the capital city struggling under an immense debt burden. The report relates that the restructuring firm approached attorneys at Cravath, Swaine and Moore to offer its expertise, said Cravath partner Richard Levin, whose firm was hired by the city council in Nov. to advise on a possible bankruptcy filing and other options to deal with the city's financial troubles. DBR notes that Mr. Levin spoke at a Harrisburg City Council meeting to provide an update on the law firm's pro bono work. Joining him was Bill Roberti, head of Alvarez & Marsal's public sector group, who told the council, "we're simply here to help Cravath ferret out the facts" in financial documents, the report says. DBR discloses that the consultants, who will also work for free, will provide support to Cravath as the lawyers produce their report with recommendations, which is expected by the end of March. HCR HEALTHCARE: S&P Assigns 'B+' Rating to $150 Mil. Senior Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' issue-level rating to HCR's proposed $150 million senior secured revolving credit facility due 2016, and $400 million senior secured term loan B due 2018. The recovery rating on the debt is '2', which indicates S&P's expectation for substantial (70% to 90%) recovery in the event of payment default. The rating outlook is stable. "The speculative-grade rating on Toledo, Ohio-based HCR HealthCare LLC, which primarily operates nursing homes and assisted living facilities under the Manor Care name, reflects its weak business risk profile highlighted by vagaries associated with uncertain third-party reimbursement and its relatively narrow business focus," said Standard & Poor's credit analyst David Peknay. The rating also considers HCR's highly-leveraged financial risk profile. S&P expects HCR to repay most of its current debt shortly when it completes the pending sale/leaseback of nearly all of its properties to HCP. Still, S&P believes that the company will remain highly leveraged on a lease-adjusted basis. S&P's weak business risk profile for HCR reflects its concentration in the nursing home industry, which represents about 85% of revenues. While the company is a large national provider of hospice and home care in a largely fragmented field with numerous small, local competitors, this segment only contributes about 10% to 15% of revenues. HCR's narrow industry focus, notwithstanding its large portfolio of more than 300 nursing homes and assisted living facilities, makes the company highly dependent on uncertain third-party reimbursement. Medicaid accounts for about 28% of total revenues, and Medicare combined with managed care accounts for about 54% of revenues. In S&P's view, changes in payment rates are not only volatile, but are subject to cuts. Medicare, primarily a federally funded program for the elderly, increased rates by 3% for its 2009 rate year (beginning Oct. 1, 2008), only to lower them by 1% for rate year 2010, then raise them by 1.7% for rate year 2011. S&P believes that the potential for rate reductions under government programs, in general, is increased by growing budget pressures. In particular, state- funded Medicaid programs for the indigent are vulnerable in the weak economic environment. Moreover, with some 60% of its facilities located in five states, HCR is especially subject to any cuts by Florida, Illinois, Michigan, Ohio or Pennsylvania. HOME NETWORK BUILDERS: N.J. Court Won't Hear Shareholders' Appeal ----------------------------------------------------------------- In Leonard A. Bove, Jr. and Denise Czyzewicz, v. Gloucester County Federal Savings Bank, No. A-2956-09T2 (N.J. Super. Ct.), the plaintiffs appeal from two orders: the first granting summary judgment and dismissing their complaint with prejudice because they lacked standing to assert the claimed causes of action, and the second entering judgment against Ms. Czyzewicz on the counterclaim filed by Gloucester County Federal Savings Bank. Following a review, the Superior Court of New Jersey, Appellate Division, concluded that the plaintiffs' appeal is not properly before the court. The Superior Court dismissed the appeal. "We decline to address these issues as the underlying dispute is not final," the Superior Court's ruling said. Plaintiffs are shareholders of Home Network Builders, Inc., and members of Home Network Builders at Maple Shade, LLC. Beginning in 1999, HNB obtained financing from GCF for the acquisition and construction of an 18-lot residential development in Maple Shade to be known as "The Community at Farmhouse Lane". In 2002, GCF cut the funding and HNB defaulted on its loan repayment obligations. GCF commenceed foreclosure proceedings. HNB filed a Chapter 11 petition on Nov. 17, 2005, staying the foreclosure proceedings. GCF filed its proof of claim as a secured creditor seeking $1,592,476.02. Ultimately, the consolidated bankruptcy matters were converted to Chapter 7 liquidations. A Chapter 7 Trustee was appointed to oversee the liquidation of the businesses. GCF and the Chapter 7 trustee reached a global settlement of all disputes raised in the adversary proceedings. After the stipulation of settlement was negotiated but prior to its finalization, plaintiffs sued GCF, alleging that it negligently and tortiously failed to timely disburse construction funding to HNB and misappropriated loan funds. The claims matched those asserted in HNB's counter-claims previously filed in the foreclosure action. GCF counterclaimed, seeking payment from plaintiffs on their guarantees. GCF also moved for summary judgment dismissal of plaintiffs' complaint, relying on the terms of the stipulation of settlement entered in the bankruptcy proceedings. The complaint was initially venued in Burlington County and transferred to Gloucester County. In a bench opinion supporting the grant of summary judgment, the court found "every count" of plaintiffs' complaint "relate[d] back to" HNB and only asserted harm caused to HNB. A copy of the Court's January 10, 2011 decision is available at http://is.gd/7FLRuXfrom Leagle.com. The panel consists of Judges R. B. Coleman, Marie Lihotz and J. N. Harris. HUGO SAND: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: The Hugo Sand Company 7055 State Route 43 Kent, OH 44240 Bankruptcy Case No.: 11-50492 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Sean D. Malloy, Esq. MCDONALD HOPKINS LLC 600 Superior Ave E, Suite 2100 Cleveland, OH 44114-2653 Tel: (216) 348-5400 E-mail: smalloy@mcdonaldhopkins.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/ohnb11-50492.pdf The petition was signed by Scott R. Terhune, vice president. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Dutchman Company, Inc. 11-50493 02/14/2011 INVISTA BV: S&P Puts 'BB-' Corp. Rating on CreditWatch Positive --------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its 'BB-' corporate credit rating on INVISTA B.V. on CreditWatch with positive implications. S&P withdrew all its issue-level ratings on INVISTA and its subsidiaries as the company has repaid all rated debt. "The recent repayment of INVISTA's remaining $325 million of notes due 2012 benefits its debt maturity profile and, together with the planned asset sale, is likely to result in lower overall debt levels," said Standard & Poor's credit analyst Cynthia Werneth. "In addition, S&P views the planned sale of the polymer and resins assets as favorable to credit quality, because industry overcapacity has resulted in poor earnings in this business in recent years." The ratings on INVISTA reflect its weak business risk profile and significant financial risk profile. INVISTA is a leading global producer of nylon, spandex, and polyester fibers and the chemical intermediates that INVISTA and others use to make them. The company also produces intermediates used in the manufacture of polyurethane, coatings, solvents, and rigid foam, as well as nylon engineering polymers for automotive, electrical, consumer electronics, and sporting goods applications. INVISTA also holds large positions in downstream applications, such as fibers used in nylon carpeting and airbags, and benefits from brands including STAINMASTER(R) carpet fiber and LYCRA(R) fiber. Nevertheless, most of its products are commodities, and sales and earnings deteriorated sharply during the recent recession, hit hard by the demand downturn in housing, auto, retail clothing, and industrial markets. Annual EBITDA dropped to less than zero in 2008 and 2009 from more than $800 million in 2007. However, since early 2009, financial performance has strengthened significantly as a consequence of demand improvement, steps INVISTA took to substantially reduce capacity across most of its businesses, and the benefits of more than $2.4 billion that its owners invested between the third quarter of 2008 and Sept. 30, 2010. EBITDA for the 12 months ended Sept. 30, 2010, exceeded $500 million. At that date, total debt (which S&P adjust to include tax-effected postretirement and environmental liabilities and capitalized operating leases) to EBITDA was 2.2x. S&P believes that INVISTA's debt repayment and strengthening operating performance may warrant a modest upgrade. S&P expects to resolve the CreditWatch in coming weeks after evaluating recent performance as well as management's strategic, capital spending, and capitalization plans. Among other things, S&P will focus on the likely level of free operating cash flow (which only recently turned positive) and the potential for large future investments. ISTAR FINANCIAL: Declares Dividends on Five Series of Preferreds ---------------------------------------------------------------- iStar Financial Inc.'s Board of Directors has declared dividends on the Company's Series D, Series E, Series F, Series G, and Series I Preferred Stock. For all five series of Preferred Stock, dividends are payable on March 15, 2011 to holders of record on March 1, 2011. A dividend of $0.50 per share will be paid on the 8.00% Series D Preferred Stock; a dividend of $0.492188 per share will be paid on the 7.875% Series E Preferred Stock; a dividend of $0.4875 per share will be paid on the 7.80% Series F Preferred Stock; a dividend of $0.478125 per share will be paid on the 7.65% Series G Preferred Stock; and a dividend of $0.46875 per share will be paid on the 7.50% Series I Preferred Stock. About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company's balance sheet at Sept. 30, 2010, showed $10.47 billion in total assets, $8.70 billion in total liabilities, and stockholders' equity of $1.76 billion. * * * iStar carries a 'C' issuer default rating from Fitch Ratings Services. Fitch lowered, among other things, the IDR from 'CC' to 'C' in October 2010, noting that there is substantial amount of debt maturities in the second quarter of 2011, consisting primarily of a second lien term loan and second lien revolving credit agreement in aggregate amounting to approximately $1.7 billion, and an unsecured revolving credit facility of approximately $500 million. In order to avoid maturity defaults on the second lien obligations and unsecured revolving credit facility due June 2011, a coercive debt exchange would need to be effected, whereby the company negotiates with certain of its debt holders a material reduction in terms to avert bankruptcy, Fitch said. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. JACK GINDI: 10th Cir. Says Debtor's Appeal Was Not Stayed --------------------------------------------------------- WestLaw reports that the automatic stay did not apply to a Chapter 11 debtor's appeal to a state appellate court of a judgment entered against him, the Tenth Circuit Court of Appeals has ruled, relying upon its precedent to affirm lower-court decisions. In so holding, however, the Court of Appeals noted that the other circuit courts to have considered the issue had ruled to the contrary, and that the treatise upon which it had relied in reaching its earlier holding had explicitly rejected its view. It thus found tempting a request to overrule its prior decision, but declined to do so since the state appellate court had already resolved the debtor's appeal. The Court of Appeals thus followed its precedent on appeal, but indicated that the circuit's bankruptcy courts might wish to rule in the alternative when the issue arose in future cases. In re Gindi, --- F.3d ----, 2011 WL 489690 (10th Cir.). A copy of the Tenth Circuit's decision dated Feb. 14, 2011, is available at http://is.gd/oQ1VCYfrom Leagle.com. In this proceeding, the Appellant is represented by: Craig A. Weinberg, Esq. Stevens, Littman, Biddison, Tharp & Weinberg, LLC 250 Arapahoe, Suite 301 Boulder, CO 80302-5854 Jack Gindi, the Debtor, is represented by: Cynthia T. Kennedy, Esq. Kennedy & Kennedy, P.C. 308-1/2 E. Simpson St. Lafayette, CO 80026 Telephone: (303) 604-1600 and Bank of the West is represented by: Annie Caitlin Howe, Esq. Gregory L. Williams, Esq. Markus Williams Young & Zimmerman LLC 1700 Lincoln, Suite 4000 Denver, CO 80203 Telephone: (303) 830-0800 E-mail: ahowe@markuswilliams.com gwilliams@markuswilliams.com Jack Gindi filed a chapter 11 petition (Bankr. D. Colo. Case No. 09-24436) on July 20, 2009. A copy of the Debtor's chapter 11 petition is available at http://bankrupt.com/misc/cob09-24436p.pdf at no charge. JACK GINDI: 10th Cir. Says Biz Partner Entitled to Stay Relief -------------------------------------------------------------- Jack Gindi filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code while the Colorado Court of Appeals was considering two appeals arising out of a lawsuit brought against him by Andreas Chizzali, his former partner in two companies. The bankruptcy court refused to lift the automatic stay to permit further proceedings regarding the two issues raised by Mr. Chizzali in his appeal; but it ruled that the automatic stay did not apply to Mr. Gindi's separate appeal. The Tenth Circuit Bankruptcy Appellate Panel affirmed and Mr. Chizzali timely appealed to the Tenth Court. Circuit Judges Carlos F. Lucero, David M. Ebel, and Harris Hartz affirmed. The Tenth Circuit, however, held that Mr. Chizzali was entitled to relief from the stay on one of his issues before the Colorado appellate court. "We affirm the denial of Chizzali's motion challenging the automatic stay of his appeal of the state court's dismissal of the contempt proceedings, we affirm the decision to allow gindi to continue his appeal, and we affirm the denial of Chizzali's motion to lift the stay under Sec. 362(d)(1). But we reverse the denial of Chizzali's motion under Sec. 362(d)(2) to lift the stay of his appeal of the order setting aside the entry of default against Bank of the West and remand for entry of an order lifting that stay," Judge Hartz, who penned the decision, said. The case before the Tenth Circuit is Andreas Chizzali, v. Jack Gindi and Bank of the West, No. 10-1186 (10th Cir.). A copy of the decision, dated Filed February 14, 2011, is available at http://is.gd/WqTkvPfrom Leagle.com. Jack Gindi filed for Chapter 11 bankruptcy (Bankr. D. Colo. 09-_____) on July 20, 2009. JAVO BEVERAGE: Receives Final Financing Approval ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Javo Beverage Co. Inc. received final approval on Feb. 11 for $3.3 million in financing provided by a current investor. Coffee Holdings LLC has committed to provide up to $3.151 million of financing, of which $500,000 plus interest and any all other amounts due the prepetition loan will be reserved for a dollar- for-dollar roll-up of a certain secured revolving promissory note, dated January 6, 2011, issued prepetition to Coffee Holdings by the Debtor. A copy of the DIP financing agreement is available for free at: http://bankrupt.com/misc/JAVO_BEVERAGE_dipfinancingpact.pdf The DIP facility will mature no later than June 30, 2011. The DIP loans will bear interest at a rate equal to the London Interbank Offered Rate plus 8.0%, with LIBOR subject to a floor of 1.5%. Interest will be payable monthly, in cash, in arrears, calculated on the basis of the actual number of days elapsed in a 360-day year. In the event of default, the Debtor will pay an additional 2% default interest per annum. The Debtor will pay the DIP Lender an up-front commitment fee of 3.0% of the aggregate amount of the DIP commitment. The DIP Facility will be secured by automatically perfected superpriority senior liens with respect to (i) any unencumbered assets of the Debtor, wherever located, now or hereafter owned, provided, that the DIP Lender's liens on the proceeds of the avoidance actions will be split 50-50 with Accord Financial, Inc., pursuant to its debtor-in-possession facto funding being provided simultaneously with the DIP Facility; (ii) assets securing the prepetition loan; and (iii) funds advanced by the DIP Lender in the control account. The DIP Facility will also be secured by junior liens on all other assets of the Debtor that are subject to valid and perfected liens in existence at the time of commencement of the bankruptcy case or to valid liens in existence at the time of the commencement. The DIP lien is subject to a carve-out for U.S. Trustee and Clerk of Court fees; fees payable to professional employed in the Debtors' case; and up to $25,000 in fees of the committee in pursuing actions challenging the DIP Lenders' lien. The Debtor also sought approval to use cash collateral. The Debtor was indebted to the Coffee Holdings at least (i) 500,000 in principal amount of the prepetition loan made by the DIP Lender, plus any interest, fees and expenses, as provided in prepetition loan documents; (ii) $12 million in principal amount in respect of the DIP Lender's 10% notes beneficially owned by it plus any interest, fees, and expenses in accordance with the terms thereof; and (iii) $5.2 million in principal amount in respect of the DIP Lender's PIK Note, ranking senior in priority to the 10% Notes, beneficially owned by it plus any interest, fees, and expenses in accordance with the terms thereof. In exchange for the use of cash collateral, the DIP Lender is granted a valid, perfected replacement security interest in and lien on all of the DIP collateral, and superpriority claims, with priority in payment over any and all administrative expenses. Disclosure Statement Hearing on March 16 As reported by the Troubled Company Reporter on February 15, 2011, the Bankruptcy Court 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's Plan of Reorganization. Objections, if any, are due March 9, 2011, at 4:00 p.m. 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 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). Debra A. Riley, Esq., at Allen Matkins Leck Gamble Mallory & Natsis LLP, serves as the Debtor's bankruptcy counsel. Robert J. Dehney, Esq., and Matthew B. Harvey, Esq., at Morris, Nichols, Arsht & Tunnell LLP, is the Debtor's co-counsel. 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. JEMAB FAMILY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: JEMAB Family Limited Partnership P.O. Box 641 Putnam Valley, NY 10579 Bankruptcy Case No.: 11-35321 Chapter 11 Petition Date: February 13, 2011 Court: United States Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Timothy G. Griffin, Esq. LAW OFFICES OF TIMOTHY G. GRIFFIN 77 Pondfield Rd. Bronxville, NY 10708 Tel: (914) 771-5252 Fax: (914) 771-6752 E-mail: timgriffin1@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 Eileen Myers, partner. KWITCHURBELIAKIN: Dist. Court Affirms Chapter 11 Trustee Order -------------------------------------------------------------- District Judge Joseph S. Van Bokkelen held that the bankruptcy court did not abuse its discretion in appointing a chapter 11 trustee in Kwitchurbeliakin, LLC's Chapter 11 case. LaPorte Savings Bank filed the motion to appoint a trustee. A copy of the District Court's January 10, 2011 opinion and order is available at http://is.gd/cEBYuafrom Leagle.com. Kwitchurbeliakin LLC, was formed on April 27, 2004, by its members Todd Apfel and Luise Marie Lesser. On the same day, Mr. Apfel and Ms. Lesser formed Arnie's Bowling and Recreation Center, Inc. Kwitchurbeliakin, dba Thunderbird Lanes, filed for Chapter 11 (Bankr. N.D. Ind. Case No. 10-30824) on March 4, 2010. Judge Harry C. Dees, Jr., presided over the case. Rosalind G. Parr(JLS), Esq. -- nwibankruptcy@yahoo.com -- serves as the Debtor's counsel. In its petition, the Debtor listed $1 million to $10 million in both assets and debts. L FRUMUSA FAMILY: Court Dismiss Chapter 11 Case ----------------------------------------------- Bankruptcy Judge John C. Ninfo, II, dismissed the Chapter 11 case and authorized the dissolution of L. Frumusa Family Enterprise P1, LLC, pursuant to 11 U.S.C. Sec. 1112(b), at the behest of Morgan Serene Park, LLC. A copy of the Court's February 14, 2011 Decision and Order is available at http://is.gd/6kGF94from Leagle.com. Lawrence Frumusa Land Development LLC, purportedly proceeding "pro se," filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 09-21126) on ______ __, 2009, and Lawrence Frumusa filed a chapter 11 petition (Bankr. W.D.N.Y. Case No. 09-21527) on June 5, 2009. Mr. Frumusa was represented by James B. Glucksman, Esq., and Jonathan S. Pasternak, Esq., at Rattet Pasternak & Gordon- Oliver in Harrison, N.Y. Mr. Frumusa disclosed $8,607,260 in assets and liabilities of $18,885,237 at the time of the filing. The cases were ultimately converted to Chapter 7 cases, at which time Michael H. Arnold, Esq., was appointed as the Chapter 7 Trustee for Land Development, and Lee E. Woodard, Esq., was appointed as the Chapter 7 Trustee for the Frumusa Case. P1 was placed in Chapter 11 bankruptcy by various alleged creditors in the United States Bankruptcy Court for the Northern District of New York, Albany Division, on May 19, 2010. At that time, real property owned by P1, commonly known as Phase 1, Scenic Village, was the subject of a pending New York State Court mortgage foreclosure proceeding, in which a receiver had been appointed. The P1 bankruptcy case was later transferred to the Bankruptcy Court for the Western District of New York (Bankr. W.D.N.Y. Case No. 10-21371) and an order for relief was entered on September 15, 2010. Mr. Arnold was designated as the individual responsible to file schedules and act on behalf of P1. On September 2, 2010, Morgan Serene Park, which had purchased the first mortgage on Phase 1 subsequent to the commencement of the Foreclosure Proceeding, sought and obtained relief from the automatic stay to proceed with all aspects of the Foreclosure Proceeding. On December 10, 2010, a creditor's committee was appointed in the P1 case, however, the Committee has never engaged counsel to represent it, in part because the Committee has acknowledged that there were no unencumbered assets available in the P1 estate to pay an attorney for the Committee. LACK'S STORES: Austin Developer Bids for West Anderson Property --------------------------------------------------------------- The Austin American-Statesman, citing court documents, reports that Austin developer Peter Barlin has submitted a bid to buy the West Anderson Lane property in Austin, Texas that until recently was home to a Lack's furniture store According to the report, the bid, for $3.1 million in cash "plus other considerations," was submitted in the bankruptcy court as part of Lacks Stores Inc.'s ongoing Chapter 11 case. Mr. Barlin, the Statesman relates, is a longtime developer whose projects include Penn Field on South Congress Avenue, where he and partners redeveloped a former military training site into offices and restaurants. The report notes a March 2 auction is scheduled in Houston to complete the sales, at which time bids could rise if there are multiple bidders for the properties. The Statesman discloses that the Austin property, at 2020 W. Anderson Lane, was the only one Lack's owned in this area; the other stores were leased. It includes a 56,000 square foot building and 4.9 acres of land, with a 2010 appraised value of $2.87 million. About Lack's Stores Victoria, Texas-based Lack's Stores, Incorporated, is one of the largest, independently-owned retail furniture chains in the United States. Lack's Stores is a chain of 36 retail stores and operates under the trade styles Lacks and Lacks Home Furnishings. The Company sells a complete line of furnishings for the home including furniture, bedding, major appliances and home electronics. The stores are located in South, Central, and West Texas. Lack's Stores and its affiliates filed for Chapter 11 bankruptcy protection on November 16, 2010 (Bankr. S.D. Tex. Lead Case No. 10-60149). The Debtor estimated its assets and debts at $100 million to $500 million. Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and Richard H. London, Esq., at Vinson & Elkins LLP, serve as counsel to the Debtor. Huron Consulting Group, Inc., is the financial advisor. LANCASTER FINANCING: S&P Gives Neg. Outlook, Affirms 'BB' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook to negative from stable on Lancaster Financing Authority, Calif.'s tax allocation bonds, issued for the central business district project area. At the same time, S&P affirmed the 'BB' long-term rating on the TABs. "S&P base the outlook revision on its view of the continued assessed value declines across all project areas that have reduced surplus net tax increment revenues available for transfer to the CBD project area," said Standard & Poor's credit analyst Sussan Corson. Should declining assessed value trends continue, the CBD project area could lose access to diminishing overall surplus nonhousing net tax increment revenues from other project areas. Should the agency rely on its debt service reserve or not have access to surplus tax increment revenue, S&P could lower the rating. The rating reflects what S&P views as: * Only 0.34x nonhousing maximum annual debt service coverage, based on the fiscal 2011 AV tax base after senior pass-through payments to underlying taxing agencies; * Another 4.0% decline in AV in fiscal 2011 after a 9.6% drop in total AV for the project area in the past two years; and * A concentrated tax base, with the 10 leading taxpayers comprising 33% of incremental AV in the project area. These weaknesses are somewhat mitigated by S&P's opinion of: * The agency's practice of transferring unpledged nonhousing tax increment in other project areas to cover a relatively small $148,000-$155,000 annual debt service on the bonds; and * A fully funded cash debt service reserve at $122,044. A first lien on incremental property taxes derived from the CBD project area, net of housing set-asides (except for those used to cover a small portion of housing-related debt service) and pass- through payments under agreements with Antelope Water District and Los Angeles County on behalf of a consolidated fire protection district, secures the bonds. The 440-acre CBD, which is in the city of Lancaster's historical business center, is primarily made up of commercial property and is the focus of the city's civic center and cultural development efforts. Lancaster, with a population of 153,373, is about 65 miles northeast of Los Angeles in the southwest portion of Antelope Valley. LAXAI PHARMA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Laxai Pharma Ltd. fdba NexGen Biofuels Ltd. fdba Healthcare Technologies Ltd. 8905 Regents Park Dr., Suite 210 Tampa, FL 33647 Bankruptcy Case No.: 11-02497 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Richard J. McIntyre, Esq. MCINTYRE, PANZARELLA, THANASIDES & ELEFF 6943 East Fowler Avenue Temple Terrace, FL 33617 Tel: (813) 899-6059 Fax: (813) 899-6069 E-mail: rich@mcintyrefirm.com Estimated Assets: $0 to $50,000 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 Murty Azzarapu, director. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- OSR Holding Corp. 11-02494 02/14/11 LEE COUNTY: S&P Changes Outlook to Stable, Affirms 'BB' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to stable from negative and affirmed its 'BB' long-term and underlying ratings on Lee County Industrial Development Authority, Fla.'s various healthcare facilities bonds, issued for Shell Point Village, a life-care-based continuing-care retirement community in Fort Myers, Fla. "The revised outlook reflects S&P's view of SPV's improved operations and occupancy over the past two years, and its expectation that SPV will remain profitable while continuing to improve its weak liquidity levels," said Standard & Poor's credit analyst Margaret McNamara. "If SPV is unable to maintain its improved operations and demand, if liquidity continues to decline, or if, although unlikely, SPV issues any additional debt over the next two years, S&P may revise the outlook back to negative," Ms. McNamara added. Standard & Poor's also affirmed its 'AA/A-1' rating on the authority's series 1999B and 2002 variable-rate demand bonds, issued for SPV based on the low correlation joint criteria. In S&P's view, the rating reflects the security of Bank of America N.A.'s ('A+/A-1') letter of credit for the two issues, and the 'BB' SPUR on SPV. Both LOCs expire in November 2012. The 'BB' ratings reflect S&P's assessment of SPV's historically strong demand and market position as Florida's largest CCRC, with approximately 2,000 residents and occupancy levels that rebounded in fiscal 2009 and 2010 following the repricing of certain contracts; its improved operations in fiscal 2010, generating good adjusted coverage of 2.2 x compared with 1.7x in fiscal 2009; and its stable and experienced management team that has a strong record of designing, building, preselling, and filling its projects on time and, for the most part, within budget. Credit concerns that S&P believes partially mitigate these strengths include SPV's general industry pressures related to the housing market and local regional economy; its limited balance sheet, with 137 days' cash on hand and an unrestricted cash-to- debt ratio of just 14% at fiscal year-end 2010 and 13% on Dec. 31, 2010; and its high debt leverage, with an adjusted debt-to-capital ratio of 51% in fiscal 2010. The obligated group's pledge of revenue, debt service reserve fund, and mortgages secures the bonds. The obligated group consists of SPV and Alliance, a retirement community in Deland, Fla. that has a common governance structure with SPV (collectively referred to as the SPV obligated group). The financial results referred to in this analysis pertain to the SPV obligated group and nonobligated affiliates of both SPV and Alliance, unless otherwise noted. Total rated debt outstanding is approximately $202 million as of June 30, 2010. In addition, SPV has approximately $18 million of other unrated long-term debt in the form of notes and a term loan. However, Standard & Poor's analysis includes all debt outstanding. SPV is predominately a type 'A' life-care community, and as of the June 30, 2010 audit, there is no liability to provide future services. LEHMAN BROTHERS: Proposes Foster & Graham as Special Counsel ------------------------------------------------------------ Lehman Brothers Holdings Inc. and its affiliated debtors filed an application to employ Foster, Graham, Milstein & Cailsher LLP as their special counsel. Foster Graham has served as one of the "ordinary course" professionals of the Debtors. Its fees and expenses, however, might exceed the $1 million compensation cap for OCPs, prompting the Debtors to seek court approval to employ the firm pursuant to Section 327 of the Bankruptcy Code. As special counsel, the firm will continue to provide the same services, which include pursuing loss recovery litigation and representing LBHI in the defense of claims related to the purchase, sale, transfer and securitization of mortgage loans. Foster Graham will be paid for its services on an hourly basis and will be reimbursed for its expenses. The hourly rates for the firm's professionals range from $325 to $425 for partners, $225 to $325 for associates, and $100 to $150 for paralegals and non-lawyer professionals. In an affidavit, Daniel Calisher, Esq., at Foster Graham, declares that the firm "is not currently adverse to the Debtors or their affiliates." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Weil to Represent A&M, Debtor in Employee Suit --------------------------------------------------------------- Harvey Miller, Esq., at Weil Gotshal & Manges LLP, in New York, the lead bankruptcy counsel for Lehman Brothers Holdings Inc., filed with the Bankruptcy Court an affidavit disclosing that Wendy Uvino, a former Lehman employee, filed a lawsuit against Lehman Brothers Holdings Inc., Alvarez and Marsal LLC, and its employee, Robert Hershan. Ms. Uvino asserts causes of action for constructive discharge and hostile work environment in connection with her employment with LBHI, according to the affidavit. The lawsuit was filed in the U.S. Bankruptcy Court for the Southern District of New York on December 14, 2010. "As the defendants' interests are aligned, Weil has agreed to jointly represent the defendants with respect to the resolution of this matter," Mr. Miller said in the affidavit. Mr. Miller also disclosed that it is representing A&M and some of the Debtors' affiliates in another lawsuit filed by a certain Robert Parker. Mr. Parker alleges that the defendants engaged in conduct that purportedly arose to intentional interference with contract, intentional interference with economic advantage and conspiracy in connection with Lehman's defense of a securities class action. The lawsuit was filed in the Superior Court of the State of California City and County of San Francisco on October 21, 2010. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: J. Taylor Wants to Pursue Counterclaim ------------------------------------------------------- A former employee of Lehman Brothers Holdings Inc.'s broker- dealer unit has sought a court ruling determining that the automatic stay does not prevent him from prosecuting his counter- claim against the company. Jason Taylor was formerly employed as an investment representative in Lehman Brothers Inc.'s office in Dallas, Texas. He was allegedly summarily terminated after LBI was put under liquidation in September 2008. Mr. Taylor filed a counter-claim against LBHI in response to an arbitration case the company brought against him before the Financial Industry Regulatory Authority. He seeks in the FINRA arbitration the principal amount of the note he executed to memorialize an upfront bonus that was offered to induce him to resign from his job at Morgan Stanley DW Inc. and bring his clients with him to LBI. Willard Knox, Esq., at Paduano & Weintraub LLP, in New York, says Mr. Taylor lost some of his clients because of LBHI's misrepresentation and failure to disclose its true financial status. Unaware of LBHI's true financial condition, Mr. Taylor repeatedly assured his clients that all was well at the company and that they need not move their accounts elsewhere, according to Mr. Knox. "Lehman's wrongdoing and bankruptcy severely damaged and, in some cases, destroyed Mr. Taylor's client relationships," Mr. Knox says in court papers. "Given that the Lehman bankruptcy continues, Mr. Taylor still must assist clients whose assets are frozen and thus cannot be reinvested and must do so without compensation," Mr. Knox says. The Court will hold a hearing on March 23, 2011, to consider approval of the request. The deadline for filing objections is March 16, 2011. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LCPI Balks at Fidelity Nat'l Motion to Compel -------------------------------------------------------------- Lehman Commercial Paper Inc. asks the Court to deny approval of Fidelity National Title Insurance Company's motion to compel. Fidelity National filed the motion to compel LCPI to comply with the firm's insurance policies. The move came after LCPI allegedly refused to cooperate with Fidelity National in investigating the company's claims as required under those policies by denying the insurance firm access to information. Fidelity National issued the insurance policies to LCPI for the deeds of trust recorded against three real estate development projects in Southern California to secure the loans provided for those projects. LCPI's lawyer, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in Houston, Texas, says the company has cooperated and will continue to cooperate with Fidelity National in producing the documentation to aid the insurance firm's investigation. "LCPI has provided Fidelity with a substantial amount of relevant information, materials and documentation, including the very information Fidelity alleges LCPI has failed to produce," Mr. Perez says in court papers. Mr. Perez sees the insurance firm's request as a "procedurally improper attempt to obtain equitable relief from the Court." He points out that under the bankruptcy laws, a proceeding to obtain equitable relief must be filed as an adversary case. New York-based Cadwalader Wickersham & Taft LLP, which also serves as LCPI's legal counsel, has filed a declaration in support of the company's objection. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LCPI Inks Deal to Elevate Interests in Mach Gen ---------------------------------------------------------------- Lehman Commercial Paper Inc. has entered into an agreement in connection with the elevation of certain interests in Mach Gen LLC and the assumption of certain open trades. The signatories to the agreement are Barclays Capital Inc., Strategic Value Master Fund Ltd., BDF Limited and the court- appointed trustee for Lehman Brothers Inc., James W. Giddens. Under the deal, Barclays agreed to drop its claim to the participation interests in certain equity interests in MACH Gen, which were acquired by SVM and BDF Limited from LCPI. Barclays also agreed with the elevation of those participation interests pursuant to an assignment and acceptance agreement. SVMF and BDF previously entered into two assignment and acceptance agreements with LBI, which call for the elevation of the participation interests so that they would become the record holder and beneficial owner of those interests. Under the deal, SVMF and BDF are required to take all actions necessary to consummate the trades they entered into with LBI for the purchase of certain equity interests in MACH Gen. These include the payment of $5.930 million, of which more than $5.4 million is on account of the trades to which SVMF is party. A full-text copy of the agreement is available without charge at http://bankrupt.com/misc/LBHI_STIPMachGen.pdf The Court will consider approval of the agreement on February 14, 2011, at 12:00 p.m. The deadline for filing objections is February 14, 2011, at 11:00 a.m. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3 COMMUNICATIONS: Southeastern Asset Has 31.1% Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 8, 2011, Southeastern Asset Management, Inc. disclosed that it beneficially owns 537,757,880 shares of common stock of Level 3 Communications Inc. representing 31.1% of the shares outstanding. Longleaf Partners Fund owns 197,596,758 or 11.4% equity stake while Mason O. Hawkins owns no shares of the Company. As of November 2, 2010, there were 1,669,210,966 shares of common stock of the Company outstanding. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company's balance sheet at Dec. 31, 2010, showed $8.35 billion in total assets, $8.51 billion in total liabilities and $157 million in stockholders' deficit. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. M. SLAVIN & SONS: Close to $800,000 Financing --------------------------------------------- Lisa Fickenscher at Crain's New York reports that M. Slavin & Sons, which has recently filed for Chapter 11 bankruptcy protection, lost a lot of business in 2009 and 2010. The Company cut payroll by almost 50% during that time to lower its expenses and also shut down unprofitable lines of business. There are currently 105 employees. According to Crain's, the Company's liabilities include a $5.4 million debt to Capital One and an $11 million debt to the Hunts Point Cooperative Market. The Company's assets include approximately, $400,000 in cash and receivables totaling more than $3.1 million and inventory of about $600,000. The company also owns 13 lots of property in Brooklyn and Queens. The Company, Crain's relates, said it is close to reaching a deal with a finance company for an $800,000 loan to be used as working capital, allowing it to continue purchasing inventory and making deliveries. The Company was perhaps hurt by the diversity of its offerings. About M. Slavin & Sons M. Slavin & Sons, Ltd., is a seafood vendor based in Bronx, New York. Founded in the early 1900s, the Company also operates a processing facility in Point Judith, Rhode Island. The Company delivers seafood, including whole fish, fillets, live shellfish and breaded, smoked, canned or frozen products, to more than 1,000 customers in the tri-state area. M. Slavin & Sons filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-10589) on Feb. 14, 2011. Gerard R. Luckman, Esq. at Silvermanacampora, LLP, in Jericho, New York, represents the Debtor. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million as of the Chapter 11 filing. MAGNOLIA FINANCE: S&P Raises Ratings on $9 Mil. Notes to 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Magnolia Finance I PLC's $9 million collateralized debt obligation referenced fixed-rate notes series 2005-19 to 'B+' from 'CCC-' and removed it from CreditWatch with positive implications. The rating on the fixed-rate notes is dependent on the lower of S&P's ratings on (i) the interest rate and credit default swap counterparty, Credit Suisse First Boston International (A+), and (ii) the reference obligation, CSAM Funding II's class D notes due Oct 15, 2019 ('B+ (sf)/NM'). The rating action follows the Feb. 8, 2011, raising of S&P's rating on the reference obligation to 'B+ (sf)' and its removal from Creditwatch with positive implications. S&P may take subsequent rating actions on the fixed-rate notes due to the changes in S&P's ratings assigned to the reference obligation or Credit Suisse First Boston International. MAJESTIC LIQUOR: 2nd Amended Plan Declared Effective ---------------------------------------------------- Majestic Liquor Stores Inc. and its debtor-affiliates say that their second amended joint Chapter 11 plan of reorganization became effective: -- Dec. 31, 2010, is the effective date of the plan as to the the Majestic debtors; and -- Jan. 1, 2011, is the effective date of the plan as John Bratton, Kyle Fair, and Suzanne Fair. The Dec. 29, 2010 edition of the Troubled Company Reporter reported on the U.S. Bankruptcy Court for the Northern District of Texas's confirmation of Majestic Liquor Stores, Inc., et al.'s Plan of Reorganization, as twice amended. The Plan provides that the Reorganized Debtors will assume the liability for and obligation to perform and make all distributions or payments on account of all Allowed Claims. All distributions or payments will be made by the respective responsible Reorganized Debtors. The estimated percentage recovery for all creditors is 100%, except for the Class 6 - NRP Claim which is unknown. The payments to be made by Reorganized Majestic under the Plan will be funded from Reorganized Majestic's income and revenues from operation of its business. The payments to be made by Reorganized Majestic Grapevine under the Plan will be funded from (a) available cash on hand held by Reorganized Grapevine and (b) payments received by Reorganized Majestic Grapevine from Reorganized Majestic under the Plan on account of Majestic Grapevine's Rejection Claim against Majestic arising from Majestic's rejection of the lease between Majestic Grapevine and Majestic with respect to the Cuney Property. The payments to be made by Reorganized Majestic Properties under the Plan will be made from the Majestic Properties Savings Account. The payments to be made by the Reorganized Individual Debtors under the Plan will be funded from (a) the funds received by the Reorganized Individual Debtors on account of the Bratton/Fair Tax Refunds, (b) the Reorganized Individual Debtors' future earnings, and (c) other sources of available cash on hand of the Reorganized Individual Debtors. About Majestic Liquor Fort Worth, Texas-based Majestic Liquor Stores, Inc. -- dba Double T Discount Beer & Wine No. 2, et al. -- was incorporated in 1955. It operates Texas retail stores for the sale of liquor, beer, wine and bar supplies. The Company operates 46 retail stores and three wholesale locations. Majestic Liquor together with its affiliates filed for Chapter 11 bankruptcy protection on June 6, 2010 (Bankr. N.D. Tex. Case No. 10-43849). J. Robert Forshey, Esq., and Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, assists the Company in its restructuring effort. Focus Management Group USA Inc. is the Company's financial advisor. The Company estimated its assets and debts at $10 million to $50 million. Kyle Tate Fair filed for Chapter 11 protection on June 8, 2010 (Bankr. N.D. Tex. Case No. 10-43885) John Y. Bonds, III, Esq., at Shannon, Gracey, Ratliff & Miller, represents the Debtor. MAJESTIC STAR: Gets Court's Nod to Continue Using Cash Collateral ----------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware has amended, at the behest of the Majestic Star Casino, LLC, et al., the final order authorizing the Debtor's use of cash collateral. The Troubled Company Reporter on Dec. 22, 2010 reported on the Bankruptcy Court's entry of a final order authorizing the Debtors' use of cash representing collateral for secured lenders. Under the amended court order, the Debtor is authorized to continue using the cash collateral until April 17, 2011. The Debtors will use the cash collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/MAJESTIC_STAR_budget.pdf Prepetition, the Debtors had entered into a loan and security agreement with a syndicate of lenders led by Wells Fargo Capital Finance, Inc., as agent, wherein the secured lenders made loans and provided other financial accommodations with the Debtors. The prepetition credit agreement provided for revolving loans in an aggregate principal amount of up to $80 million. Payments authorized and made by the Debtors have reduced the principal amount of prepetition first lien obligations to $62,513,514 through and including Jan. 21, 2011. The Debtors granted the Agent valid and perfected first-priority continuing liens on and security interests in the collateral. The Debtors are also indebted to the Bank of New York Mellon Trust company, N.A., in the aggregate principal amount of $300 million through and including January 21, 2011, exclusive of accrued but unpaid interest, costs, fees and expenses. The Debtors granted Bank of New York valid and perfected second-priority continuing liens on and security interests in the collateral. As adequate protection, the Agent will be provided with (i) a cash paydown of the principal amount of the prepetition first lien obligations to $58 million; (ii) current cash payment of interest at the rate being charged on the prepetition first lien obligations as of the Petition Date and reasonable and documented fees and expenses otherwise required to be paid by the Debtors pursuant to the terms of the prepetition credit agreement; (iii) a cash collateral extension fee of $175,000, to be shared among the Secured Lenders on a pro rata basis; (iv) administrative claims as provided for herein; and (v) solely to the extent of diminution in the value of the collateral, additional and replacement security interests and liens in and upon all real or personal assets of the Debtors' estates that would constitute collateral. To the extent of diminution in the value of the collateral, the Agent and Bank of New York are granted, effective and perfected as of the Petition Date, a valid and perfected replacement security interest in, and lien on, the collateral. The Agent is granted an allowed administrative claim, to the extent that the adequate protection liens don't adequately protect the diminution in the value of the collateral. The Debtors will provide the Lenders weekly and monthly reports, documents and other information. Until the expiration date, the Debtors are required to maintain, on a weekly basis a minimum cash balance of at least 80% of the lowest weekly ending cash balance amount, or at least $39 million, for each month as set forth in the budget. About Majestic Star The Majestic Star Casino, LLC -- aka Majestic Star Casino, aka Majestic Star -- is based in Las Vegas, Nev., and is a wholly owned subsidiary of Majestic Holdco, LLC, which is a wholly owned subsidiary of Barden Development, Inc. The Company was formed on December 8, 1993, as an Indiana limited liability company to provide gaming and related entertainment to the public. The Company commenced gaming operations in the City of Gary at Buffington Harbor, located in Lake County, Inc., on June 7, 1996. The Company is a multi-jurisdictional gaming company with operations in three states -- Indiana, Mississippi and Colorado. The Company sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 09-14136) on November 23, 2009. The Company's affiliates -- The Majestic Star Casino II, Inc., The Majestic Star Casino Capital Corp., Majestic Star Casino Capital Corp. II, Barden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC, Majestic Holdco, LLC, and Majestic Star Holdco, Inc. -- filed separate Chapter 11 petitions. The Majestic Star Casino's balance sheet at June 30, 2009, showed total assets of $406.42 million and total liabilities of $749.55 million. Kirkland & Ellis LLP is the Debtors' bankruptcy counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware counsel. Xroads Solutions Group, LLC, is the Debtors' financial advisor, while EPIQ Bankruptcy Solutions LLC serves as the Debtors' claims and notice agent. Michael S. Stamer, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Bonnie Glantz Fatell, Esq., and David W. Carickhoff, Esq., at Blank Rome LLP, in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. MANHATTAN PHARMA: Bondholders Agree to Forbearance Until Yearend ---------------------------------------------------------------- Manhattan Pharmaceuticals, Inc., entered into a waiver and forbearance agreement on Feb. 9, 2011, with the requisite holders of the Company's 12% senior secured notes. The Noteholders agreed to forbear the exercise of their rights under the Notes and waive the default thereof until Dec. 31, 2011. The Company issued a total of $1,725,000 principal amount of the Notes in 2008 and 2009. $1,035,000 of the Notes matured on November 19, 2010, $280,000 of the Notes matured on Dec. 22, 2010, and $410,000 of the Notes matured on Feb. 3, 2011. As part of the Extension Agreement, the Company has agreed to take prompt steps to seek to reduce its outstanding indebtedness by permitting the Noteholders to convert the Notes into shares of the Company's common stock at a conversion price of $0.01 per share, which will require the Company to obtain stockholder approval to, among other things, increase the number of the Company's authorized common stock. A copy of the agreement and list of the lenders is available at http://is.gd/asTsZI About Manhattan Pharmaceuticals Based in New York, Manhattan Pharmaceuticals, Inc. (OTCBB: MHAN) is a specialty healthcare product company focused on the development and commercialization of innovative treatments for underserved patient populations. The company is currently focused on two programs: AST-726, a nasally delivered vitamin B12 remediation treatment, and AST-915, an orally delivered product candidate for the treatment of essential tremor. The company also has an equity ownership position in Hedrin(R), a non-insecticide treatment for head lice currently being developed by Nordic Biotech for the North American market. MAURO PADILLA: Bankruptcy Judge Dismisses Chapter 11 Case --------------------------------------------------------- Patrick Danner at My San Antonio a U.S. bankruptcy judge dismissed a Chapter 11 filing by developer Mauro T. Padilla III and his wife, allowing creditors to pursue collection efforts against the couple. According to the report, Mr. Padilla, who is scheduled to be sentenced next month in federal court for lying to a bank to secure additional funding for a now-failed townhouse project near the Toyota plant, had filed bankruptcy protection in August after a lender sought to foreclose on the couple's San Antonio estate. My San Antonio relates the U.S. trustee's office last month had requested the court either dismiss the bankruptcy or convert it to a Chapter 7 liquidation, claiming the Padillas had insufficient cash flow to repay creditors. The Mr. Padillas' attempt to reorganize their debts was complicated by what they owe the IRS. The amount is reported in court papers as $750,000. But that includes taxes on income that should have been attributed to a bankrupt company that Padilla operated -- not to Mr. Padilla personally, the report quotes Mr. Padilla's bankruptcy lawyer, Steven Cennamo, as stating. The Padillas' bankruptcy listed almost $1.2 million in assets and $7.7 million in liabilities. Demetrio Duarte Jr., a lawyer for a plumbing contracting company that claims Padilla owes it $30,400, said his client is concerned about whether Padilla will be ordered to pay restitution to his victims when the developer is sentenced. According to My San Antonio, Mr. Padilla's criminal lawyer, Adam Cortez, filed a motion to postpone the March 2 sentencing. Mr. Cortez said in the court filing he needs more time to review "alleged victim statements" that will be used by prosecutors in an effort to "enhance" Padilla's sentencing. The U.S. attorney's office is opposed to the delay, Mr. Cortez wrote. Mauro T. Padilla and Maria del Rosario Padilla filed a joint Chapter 11 petition (Bankr. W.D. Tex. Case No. 10-53307) in San Antonio, Texas, on Aug. 31, 2010. The Debtors are represented by: J. Todd Malaise, Esq. Steven G. Cennamo, Esq. MALAISE LAW FIRM 909 NE Loop 410, Suite 300 San Antonio, TX 78209 Tel: (210) 732-6699 Fax: (210) 732-5826 E-mail: notices@malaiselawfirm.com stevec@malaiselawfirm.com MAYAGUEZ ADVANCED: MEDHS's Suit vs. SISSO Goes Back to State Court ------------------------------------------------------------------ Bankruptcy Judge Brian K. Tester remanded the lawsuit, Medical Educational & Health Services, Inc., v. Sistemas Integrados De Salud Del Suroeste, Inc. & Mayaguez Medical Center-Dr. Ramon Emeterio Betances, Inc., Adv. Pro. No. 10-202 (Bankr. D. P.R.), to the Commonwealth of Puerto Rico's Court of First Instance, Superior Court of Mayaguez. Medical Educational and Health Services filed a motion for possessory injunction on behalf of Mayaguez Advanced Radiotherapy Center, Inc., against Sistemas Integrados de Salud del Suroeste, Inc. and Mayaguez Medical Center in the Commonwealth of Puerto Rico's Court of First Instance, Superior Court of Mayaguez. MEDHS leased radiology facilities to MARC. The complaint in the state action avers that MARC leased a radio- oncology laboratory from MMC and that MMC improperly revoked that lease, dispossessing MEDHS and MARC of their possessory interest. Specifically, the possessory rights involve the use of parking facilities for its employees and access to a lateral entrance directly into MARC's facility located on MMC's premises used by the facility's cancer patients. In the state action, MEDHS seeks a possessory injunction against SISSO and MMC under section 690 of the Puerto Rico Code of Civil Procedure, 32 L.P.R.A. Sec. 3561. MEDHS filed the adversary proceeding seeking to remove the state action to the Bankruptcy Court under 28 U.S.C. Sec. 1452 and F.R.B.P. 9028. In its Notice of Removal, MEDHS argues that the bankruptcy removal statute, 28 U.S.C. Sec. 1452(a), grants defendants the right to "remove any claim or cause of action in a civil action [-] to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title." SISSO maintains that the lawsuit is a non-core proceeding subject to mandatory abstention under 28 U.S.C. Sec. 1334(c)(2) because the basis of the suit rests solely on Commonwealth law, and it would not have been brought in federal court absent the bankruptcy case. Judge Tester agrees that the action is a non-core proceeding that stems from Commonwealth law, lacks a federal jurisdictional basis outside of bankruptcy, and in the absence of bankruptcy, could be timely resolved in the state court where it was commenced. A copy of the Court's February 10, 2011 Opinion and Order is available at http://is.gd/ju3KDxfrom Leagle.com. About Mayaguez Advanced Radiotherapy Center Based in Mayaguez, Puerto Rico, Mayaguez Advanced Radiotherapy Center filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 09-04540) on June 2, 2009. Fausto D. Godreau Zayas, Esq. -- dgodreau@LBRGlaw.com -- at Latimer, Biaggi, Rachid & Godreau, LLP, serves as Debtor's counsel. The Debtor disclosed US$3,810,510 in total assets and US$1,357,473 in total debts in its schedules attached to the petition. About Medical Educational and Health Services Headquartered in Mayaguez, Puerto-Rico, Medical Educational and Health Services Inc. was created, specifically, to promote and advance the establishment and operation of medical educational facilities and institutions along the western areas of Puerto Rico. The Company filed for Chapter 11 bankruptcy protection on June 3, 2010 (Bankr. D. P.R. Case No. 10-04905). The Company estimated US$10 million to $50 million in assets and US$1 million to US$10 million in liabilities. The Debtor is represented by: Rafael Gonzalez Velez, Esq. 1806 Calle McLeary Suite 1-B San Juan, PR 00911-1321 Tel: (787) 726-8866 Fax: (787) 726-8877 E-mail: rgvlo@prtc.net MEDICAL EDUCATION: Suit vs. SISSO Goes Back to State Court ---------------------------------------------------------- Bankruptcy Judge Brian K. Tester remanded the lawsuit, Medical Educational & Health Services, Inc., v. Sistemas Integrados De Salud Del Suroeste, Inc. & Mayaguez Medical Center-Dr. Ramon Emeterio Betances, Inc., Adv. Pro. No. 10-202 (Bankr. D. P.R.), to the Commonwealth of Puerto Rico's Court of First Instance, Superior Court of Mayaguez. Medical Educational and Health Services filed a motion for possessory injunction on behalf of Mayaguez Advanced Radiotherapy Center, Inc., against Sistemas Integrados de Salud del Suroeste, Inc. and Mayaguez Medical Center in the Commonwealth of Puerto Rico's Court of First Instance, Superior Court of Mayaguez. MEDHS leased radiology facilities to MARC. The complaint in the state action avers that MARC leased a radio- oncology laboratory from MMC and that MMC improperly revoked that lease, dispossessing MEDHS and MARC of their possessory interest. Specifically, the possessory rights involve the use of parking facilities for its employees and access to a lateral entrance directly into MARC's facility located on MMC's premises used by the facility's cancer patients. In the state action, MEDHS seeks a possessory injunction against SISSO and MMC under section 690 of the Puerto Rico Code of Civil Procedure, 32 L.P.R.A. Sec. 3561. MEDHS filed the adversary proceeding seeking to remove the state action to the Bankruptcy Court under 28 U.S.C. Sec. 1452 and F.R.B.P. 9028. In its Notice of Removal, MEDHS argues that the bankruptcy removal statute, 28 U.S.C. Sec. 1452(a), grants defendants the right to "remove any claim or cause of action in a civil action [-] to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title." SISSO maintains that the lawsuit is a non-core proceeding subject to mandatory abstention under 28 U.S.C. Sec. 1334(c)(2) because the basis of the suit rests solely on Commonwealth law, and it would not have been brought in federal court absent the bankruptcy case. Judge Tester agrees that the action is a non-core proceeding that stems from Commonwealth law, lacks a federal jurisdictional basis outside of bankruptcy, and in the absence of bankruptcy, could be timely resolved in the state court where it was commenced. A copy of the Court's February 10, 2011 Opinion and Order is available at http://is.gd/ju3KDxfrom Leagle.com. About Mayaguez Advanced Radiotherapy Center Based in Mayaguez, Puerto Rico, Mayaguez Advanced Radiotherapy Center filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 09-04540) on June 2, 2009. Fausto D. Godreau Zayas, Esq. -- dgodreau@LBRGlaw.com -- at Latimer, Biaggi, Rachid & Godreau, LLP, serves as Debtor's counsel. The Debtor disclosed US$3,810,510 in total assets and US$1,357,473 in total debts in its schedules attached to the petition. About Medical Educational and Health Services Headquartered in Mayaguez, Puerto-Rico, Medical Educational and Health Services Inc. was created, specifically, to promote and advance the establishment and operation of medical educational facilities and institutions along the western areas of Puerto Rico. The Company filed for Chapter 11 bankruptcy protection on June 3, 2010 (Bankr. D. P.R. Case No. 10-04905). The Company estimated US$10 million to $50 million in assets and US$1 million to US$10 million in liabilities. The Debtor is represented by: Rafael Gonzalez Velez, Esq. 1806 Calle McLeary Suite 1-B San Juan, PR 00911-1321 Tel: (787) 726-8866 Fax: (787) 726-8877 E-mail: rgvlo@prtc.net MESA AIR: CRAFT to Sell, Transfer General Unsecured Claims ---------------------------------------------------------- Canadian Regional Aircraft Finance Transaction Limited No. 1 notifies the Bankruptcy Court of its intention to cause the relevant trustees under certain Trust Indentures to sell, trade or otherwise transfer the general unsecured claims that the Trustees hold against the Debtors for the benefit of CRAFT. The Trustees hold general unsecured claims against the Debtors for the benefit of CRAFT, which claims have been allowed pursuant to the Court's January 19, 2011 order approving the Settlement and Agreement between the Debtors and U.S. Bank National Association, Manufacturers and Traders Trust Company, and CRAFT. * Claim No. 1094 is allowed for $5,448,081 against Mesa Air Group, Inc. * Claim No. 1464 is allowed for $5,448,081 against Mesa Air Lines Inc. * Claim No. 1090 is allowed for $92,601,383 against Mesa Air Lines Inc. The Trustees are not transferring or assigning any of its rights or interests in the US Bank Security Deposit and the MT&T Security Deposit. It is proposed that the Trustees sell, trade or otherwise transfer the General Unsecured Claims. If the Proposed Transfer is permitted to occur, CRAFT will beneficially own claims against the Debtors in the aggregate principal amount of $92,601,383. 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: Refine Inc. Buys Transamerica's Claims ------------------------------------------------ The Bankruptcy Clerk recorded the transfer of these claims from January 25, 2011 to January 31, 2011: Claim Amount Transferor Transferee Number Transferred ---------- ---------- ------ ----------- Federal Lock and Archon Bay Capital -- $192 Safe Inc. LLC Lyddon Aero Center Archon Bay Capital -- $5,699 Inc. LLC Macke Water Systems Archon Bay Capital -- $3,796 Inc. LLC Transamerica Refine, Inc. 1434/ $10,986,661 Aviation LLC 1069/ 568 Transamerica Refine, Inc. 1435/ $10,986,661 Aviation LLC 669 Transamerica Refine, Inc. 1458/ $11,028,960 Aviation LLC 1068/ 569 Transamerica Refine, Inc. 1459/ $11,028,960 Aviation LLC 670 Notices of Partial Claim Transfers U.S. Bank National Association partially transferred certain of its claims to these entities: Claim No. Transferee Portion Claim Amount --------- ---------- ------- ------------ 1202 Brigade Leveraged Capital 50.0000% $5,829,065 Structures Funds Ltd. Kitty Hawk Master Fund II Ltd. 42.6325% $4,970,152 Kitty Hawk Master Fund Ltd. 7.3675% $858,912 1204 Brigade Leveraged Capital 50.0000% $6,075,503 Structures Funds Ltd. Kitty Hawk Master Fund II Ltd. 42.6325% $5,180,277 Kitty Hawk Master Fund Ltd. 7.3675% $895,225 1203/ Brigade Leveraged Capital 50.0000% $5,829,065 1480 Structures Funds Ltd. Kitty Hawk Master Fund II Ltd. 42.6325% $4,970,152 Kitty Hawk Master Fund Ltd. 7.3675% $858,912 1205/ Brigade Leveraged Capital 50.0000% $6,075,503 1479 Structures Funds Ltd. Kitty Hawk Master Fund II Ltd. 42.6325% $5,180,277 Kitty Hawk Master Fund Ltd. 7.3675% $895,225 Claim No. 1203 has been amended by Claim No. 1480. Claim No. 1205 has been amended by Claim No. 1479. Landesbank Baden - Wurttemberg also partially transferred certain of its claims to these entities: Claim No. Transferee Portion Claim Amount --------- ---------- ------- ------------ 1157 Kitty Hawk Master Fund Ltd. 34.0000% $3,651,836 Kitty Hawk Master Fund II Ltd. 30.0000% $3,222,208 Brigade Leveraged Capital 30.0000% $3,222,208 Structures Fund Ltd. Kitty Hawk Onshore Fund LP 6.0000% $644,441 1158/ Kitty Hawk Master Fund Ltd. 34.0000% $3,651,836 1443 Kitty Hawk Master Fund II Ltd. 30.0000% $3,222,208 Brigade Leveraged Capital 30.0000% $3,222,208 Structures Fund Ltd. Kitty Hawk Onshore Fund LP 6.0000% $644,441 1159/ Kitty Hawk Master Fund Ltd. 34.0000% $3,762,486 1442 Kitty Hawk Master Fund II Ltd. 30.0000% $3,319,841 Brigade Leveraged Capital 30.0000% $3,319,841 Structures Fund Ltd. Kitty Hawk Onshore Fund LP 6.0000% $663,968 1160 Kitty Hawk Master Fund Ltd. 34.0000% $3,762,486 Kitty Hawk Master Fund II Ltd. 30.0000% $3,319,841 Brigade Leveraged Capital 30.0000% $3,319,841 Structures Fund Ltd. Kitty Hawk Onshore Fund LP 6.0000% $663,968 Claim No. 1158 has been amended by Claim No. 1443. Claim No. 1159 has been amended by Claim No. 1442. February Claims Transfer On February 1, 2011, the Bankruptcy Clerk recorded the transfer of these claims: Claim Amount Transferor Transferee Number Transferred ---------- ---------- ------ ----------- Manufacturers & Contrarian Funds, 1094 $5,448,601 Traders Trust Co LLC 1464 $5,448,601 U.S. Bank National Contrarian Funds, 1090 $92,601,383 Association LLC 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). MINERALS CONTINENTAL: Case Summary & 20 Largest Unsec Creditors --------------------------------------------------------------- Debtor: Minerals Continental, Inc. 1725 Black River Court, NE Rio Rancho, NM 87144 Bankruptcy Case No.: 11-50435 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Alan R. Smith, Esq. THE LAW OFFICES OF ALAN R SMITH 505 Ridge St. Reno, NV 89501 Tel: (775) 786-4579 E-mail: mail@asmithlaw.com Scheduled Assets: $2,617,079 Scheduled Debts: $753,308 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb11-50435.pdf The petition was signed by Richard C. French, president. MONEY TREE: Incurs $4.10 Million Net Loss in Dec. 25 Quarter ------------------------------------------------------------ The Money Tree Inc. reported a net loss of $4.10 million on $2.46 million of interest and fee income for the three months ended Dec. 25, 2010, compared with a net loss of $3.75 million on $3.30 million of interest and fee income for the same period in the prior year. The Company's balance sheet at Dece. 25, 2010 showed $40.47 million in total assets, $90.48 million in total liabilities and $50.01 million in total shareholders' deficit. The Company said in the filing with the Securities and Exchange Commission that it has experienced significant liquidity issues due to the lack of net sales in its debt offerings during the fiscal year ended September 25, 2009 and continuing through the quarter ended December 25, 2010. The recessionary economy has negatively impacted investor confidence and, on two occasions during the past two years, the Company temporarily suspended the offering of its debt securities to the public while the Company restated previously issued financial statements to correct errors detected in those statements. In order to preserve cash, the Company tightened its risk management controls related to new loans resulting in a decrease in gross loan originations of $5.6 million for the three months ended Dec. 25, 2010 compared to the same period in the prior year, and the Company: (1) received gross proceeds of $3.8 million from the sale of debentures; (2) paid $2.6 million for redemption of debentures issued by the Company and its subsidiary, The Money Tree of Georgia Inc.; and (3) received $0.2 million in net sales of demand notes. Also, for the fiscal year ended September 25, 2010, the Company incurred net losses of $12,134,947 and a deficiency in net interest margin of $851,341. The Company had a deficiency in net interest margin of $1,660,973 and $1,433,008 for the three months ended December 25, 2010 and 2009, respectively. As of December 25, 2010 and September 25, 2010, the Company had a shareholders' deficit of $50,013,254 and $45,908,992, respectively. These factors among others raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time. Consequently, the Company's operations and other sources of funds may not provide sufficient available cash flow to meet the Company's continued redemption A full-text copy of the quarterly report on 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. MPG OFFICE: To Default on $470MM Loan for California Plaza Tower ---------------------------------------------------------------- Lingling Wei and Eliot Brown, writing for The Wall Street Journal, report that MPG Office Trust Inc., the firm formerly known as Maguire Properties that bought 24 Blackstone properties, on Monday announced it would default on a $470 million loan it is trying to restructure for the 54-story Two California Plaza tower in Los Angeles. 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. MSR RESORT: Taps Houlihan for Advice on Restructuring or Sale ------------------------------------------------------------- MSR Resort Golf Course LLC and its affiliates have filed an application to hire Houlihan Lokey Capital, Inc., as their investment banker and financial advisors, nunc pro tunc to the bankruptcy filing date. The Debtors say they need the services of Houlihan -- which has knowledge of their industry and business and experience with the Chapter 11 case -- to advise them with respect to their global restructuring. Houlihan, according to the engagement letter dated Jan. 31, 2011, will perform a broad range of services in connection with any of these transactions: -- Restructuring. The confirmation of a Chapter 11 plan of reorganization or liquidation by the Debtors; -- Sale. Any transactions that constitute the disposition of any interest in any hotel or related property; or -- Financing. Any transaction that constitutes any refinancing of all or any portion of the existing obligations of the Debtors or the placement or issuance of any equity or debt securities. Houlihan Lokey customarily charges a monthly advisory fee plus an additional fee that is contingent upon the occurrence of a specified type of transaction. Houlihan will receive: -- an initial fee of $200,000 per month, and a $150,000 fee per month thereafter; -- a fee of $6,000,000 upon the completion of a Restructuring Transaction; -- Upon completion of a Sale Transaction, a cash fee equal to (i) the greater of $6,000,000 restructuring fee and 0.35% of the aggregate gross consideration (AGC) in the case of a sale of 3 or more hotel properties, (ii) the greater of $500,000 and 0.65% of the AGC. 50% of each sale transaction fee will be credited against any Restructuring Transaction Fee; and -- Upon the closing of each financing transaction, a cash fee equal to 0.10% of the gross proceeds of any indebtedness raised or committee. 50% of all financing transaction fees will be credited against any Restructuring Fee. The Debtors agree to indemnify and hold harmless Houlihan Lokey from and against any and all losses and claims in connection with the Engagement. According to Saul E. Burian, managing director of Houlihan Lokey, the firm is a "disinterested person" within the meaning of the 11 U.S.C. Sec. 101(14) and does not hold or represent an interest materially adverse to the Debtors, their creditors, and shareholders for the matters for which the firm is to be employed. The firm can be reached at: HOULIHAN LOKEY CAPITAL, INC. 245 Park Avenue - 20th Floor New York, NY 10167 Telephone: (212) 497-4100 Facsimile: (212) 687-0529 About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla. and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On January 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc. A joint venture affiliated Morgan Stanley's CNL Hotels & Resorts owned the resorts before the foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature Feb. 1, 2011, were sent to Chapter 11 by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. MSR RESORT: Singapore Makes $1.5 Billion Offer for Resorts ---------------------------------------------------------- Five resorts that Paulson & Co. and Winthrop Realty Trust foreclosed in January and immediately put into Chapter 11 have a $1.5 billion offer from Government of Singapore Investment Corp., a sovereign-wealth fund, one of its lawyers told Bloomberg News. David McLaughlin and Netty Ismail at Bloomberg News report that Singapore and Paulson are both offering loans to finance the Chapter 11 case. Singapore is a mezzanine lender already. According to the Bloomberg report, the Singapore sovereign wealth fund seeks to buy the five resorts, one of GIC's lawyers, Michael Sage of Dechert LLP, said in an interview after unveiling the offer at a bankruptcy court hearing in New York. Bloomberg relates that GIC, which manages more than $100 billion of Singapore's foreign reserves, may be betting on a rebound in travel demand that is helping the U.S. lodging industry recover after the recession sent occupancies to a 30-year low. Occupancy in the top 25 U.S. markets climbed to 64% last year from 60% in 2009, according to Smith Travel Research Inc. "Anyone who has done well historically have bought in the down cycle in the U.S. -- as long as they can finance it," said Nigel Summers, Hong Kong-based director at Horwath Asia Pacific. GIC, ranked the world's seventh-largest state investment company by Sovereign Wealth Fund Institute, has invested in the Westin Tokyo hotel, Hyatt Hotels and a venture with Host Hotels & Resorts Inc., the owner of properties managed by Marriott International Inc., Hilton Worldwide Inc. and Starwood Hotels & Resorts Worldwide Inc. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla. and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On January 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc. A joint venture affiliated Morgan Stanley's CNL Hotels & Resorts owned the resorts before the foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature Feb. 1, 2011, were sent to Chapter 11 by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. MSR RESORT: Wins Approval to Use Cash Collateral Until Feb. 28 -------------------------------------------------------------- David McLaughlin and Netty Ismail at Bloomberg News report that U.S. Bankruptcy Judge Sean Lane approved an order allowing MSR Resort Golf Course LLC and its affiliates to use the cash collateral of lenders until Feb. 28. Without access to the cash, the resorts won't be able to operate and the "entire restructuring may be jeopardized," lawyers said in court papers. According to the report, Edward Sassower, a lawyer for the resorts, told Judge Lane that negotiations continue with lenders for a "comprehensive" cash collateral agreement. "The parties have made a lot of progress but still need more time," Mr. Sassower said. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla. and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On January 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc. A joint venture affiliated Morgan Stanley's CNL Hotels & Resorts owned the resorts before the foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature Feb. 1, 2011, were sent to Chapter 11 by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. NBTY INC: S&P Assigns Ratings to $1.9 Bil. Loan at 'BB-' -------------------------------------------------------- Standard & Poor's Ratings Services said that it is assigning issue-level and recovery ratings to NBTY Inc.'s proposed $1.9 billion senior secured credit facilities. S&P assigned a 'BB-' issue-level rating (one notch higher than the corporate credit rating on NBTY) to the proposed senior secured credit facilities. The recovery rating is '2', indicating its expectation for substantial (70% to 90%) recovery in the event of a payment default. The proposed credit facilities include a $150 million senior secured revolving credit facility and a $1.75 billion senior secured term loan. The interest rate on the new credit facility is expected to be substantially lower than company's existing loans. The proceeds will be used to refinance the existing credit facilities, including a revolver, term loan A, and term loan B. Issue-level ratings are based upon preliminary documentation and are subject to review upon final documentation. The 'B+' long-term corporate credit rating on NBTY and the stable outlook remain unchanged. S&P's ratings on NBTY reflect what S&P views as a highly leveraged financial risk profile due to the significant debt burden and its aggressive financial policy following the leveraged buyout of NBTY by The Carlyle Group in October 2010. In addition to the weak credit metrics and aggressive financial policy, the 'B+' rating on NBTY also reflects the company's participation in the highly competitive vitamins, minerals, and supplements industry, which S&P believes supports a fair business risk profile. Other factors include the company's distribution channel and product diversity, and scale. Ratings List NBTY Inc. Corporate credit rating B+/Stable/-- Ratings Assigned $1.75 bil. sr. secured term loan B BB- Recovery rating 2 $150 mil. sr. secured revolver BB- Recovery rating 2 NEW CENTURY FIN'L: Morgan Stanley Considered Acquisition -------------------------------------------------------- Morgan Stanley considered buying New Century Financial Corp., the subprime mortgage lender that filed for bankruptcy in April 2007, before acquiring Saxon Capital Inc. in 2006, Chairman John Mack said, according to reporting by Michael J. Moore at Bloomberg News. "We bought Saxon, which was one of the small firms," Mr. Mack said in a November 2010 interview released last week by the Financial Crisis Inquiry Commission. "We had actually looked at firms that were much larger -- I think it's called New Century, the one we looked at -- and thought it was too big, and we shouldn't go for it. It was a big discussion at the board." Bloomberg recounts that New Century became the largest subprime mortgage lender at that time to fail when it filed for bankruptcy less than four months after Morgan Stanley completed its purchase of Glen Allen, Virginia-based Saxon for $706 million. Morgan Stanley was one of the largest creditors to New Century before its collapse. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real state investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company offers a broad range of mortgage products designed to meet the needs of all borrowers. New Century Financial and its affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., were tapped as bankruptcy counsel. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Court confirmed the Debtors' second amended joint Chapter 11 plan of liquidation on July 15, 2008. OLDE PRAIRIE: Can't Bring Tortious Interference Claims v. Lender ---------------------------------------------------------------- The latest dispute between Olde Prairie Block Owner, LLC, and CenterPoint Properties Trust is whether or not Count II of Debtor's Objection and Counterclaim to CenterPoint's bankruptcy claim should now be dismissed with prejudice. Bankruptcy Judge Jack B. Schmetterer ruled that the prior court order dismissing Count II will be amended to dismiss that Count with prejudice. The Debtor's pending motion to extend for an indefinite period Debtor's right to file an amended Count II will be denied. The Debtor's counterclaims have their genesis in a state-court foreclosure proceeding initiated by CenterPoint. The Debtor's first set of counterclaims against CenterPoint sought (1) rescission of CenterPoint's note and mortgage based on financial duress and (2) damages for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. Both counterclaims related to CenterPoint's alleged wrongful conduct during loan negotiations. Those counterclaims were stricken for failure to state causes of action, but Debtor was given leave to amend. The Debtor then filed amended counterclaims related to the loan negotiations seeking (1) damages for breach of contractual duty to negotiate in good faith, (2) rescission of the note and mortgage based on financial duress, (3) damages for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. Those counterclaims were again stricken for failure to state causes of action, but the Debtor was again given leave to amend. The Debtor again filed amended counterclaims in the state-court foreclosure proceeding, but those counterclaims were never addressed by the state-court judge. The Debtor filed its bankruptcy petition on May 18, 2010, while those counterclaims were pending, effectively halting the foreclosure proceeding. CenterPoint is the Debtor's principal secured creditor, having extended a loan to the Debtor in February 2008 to refinance the Debtor's then-existing debt. CenterPoint's loan is secured by substantially all of the Debtor's property, which includes two parcels of real estate near McCormick Place in Chicago, Illinois, and a long-term, rent-free lease of parking spots in the McCormick Place parking garage. CenterPoint filed a claim in the Debtor's bankruptcy case asserting more than $48 million due on its secured debt. The Debtor's Supplemental Amended Objection to CenterPoint's claim asserted counterclaims in five Counts. In Count I, which was related to the negotiation of the note and mortgage, the Debtor sought rescission of the note and mortgage based on asserted economic duress. In the remaining Counts, which concerned CenterPoint's activities related to a condemnation proceeding, the Debtor sought damages for alleged tortious interference with settlement negotiations (Count II), breach of the implied contractual duty of good faith and fair dealing (Count III); breach of fiduciary duty (Count IV); and negligence (Count V). CenterPoint moved to dismiss all the counterclaims for asserted failure to state causes of action. On October 20, 2010, Count II was dismissed without prejudice for failure to plead a plausible claim. However, the Debtor was given leave to amend Count II. A copy of the Court's February 14, 2011 Memorandum Opinion is available at http://is.gd/QImPjNfrom Leagle.com. About Olde Prairie Block Owner Olde Prairie Block Owner, LLC, owns two adjacent parcels of land just north of McCormick Place in Chicago, Ill. The Company sought chapter 11 protection (Bankr. N.D. Ill. Case No. 10-22668) on May 18, 2010. The Debtor is represented by John E. Gierum, Esq., at Gierum & Mantas in Rosemont, Ill., and John Ruskusky, Esq., George R. Mesires, Esq., and Nile N. Park, Esq., at Ungaretti & Harris LLP, in Chicago, Ill. The Debtor estimated assets of $100 million to $500 million and liabilities of $10 million to $50 million at the time of the filing. The Debtor filed a Chapter 11 plan on Sept. 11, 2010, and a copy of that plan is available at http://bankrupt.com/misc/OLDEPRAIRE_Plan.pdfat no charge. PHILADELPHIA RITTENHOUSE: iStar Wants Chapter 11 Case Dismissed --------------------------------------------------------------- iStar Tara LLC, a secured creditor of Philadelphia Rittenhouse Developer L.P., asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to dismiss the Debtor's Chapter 11 case or, in the alternative, terminate the automatic stay to permit to pursue its rights and remedies under applicable non-bankruptcy law. A hearing is set for March 10, 2011 at 10:30 a.m., to consider the secured creditor's request for dismissal. According to iStar Tara, the bankruptcy case commenced after a state court judge ruled that the Debtor defaulted on its mortgage loan obligations to iStar Tara and that a receiver will be appointed for the Debtor's troubled luxury condominium development project at 10 Rittenhouse Square in center city Philadelphia. The secured creditor says the purpose of this bankruptcy case is to stay the iStar Tara mortgage foreclosure action. More precisely, the purpose of this bankruptcy case is to enable the mezzanine lender to the Debtor's equity holders to retain the control of the project that it improperly seized from the equityholders, and to forestall a court-appointed receiver from taking control. The mezzanine lender is Regional Real Estate Investment Corp. t/a Delaware Valley Real Estate Investment Fund. DVREIF's actions were improper because, inter alia, they violated a separate agreement with iStar Tara. That agreement is called an Intercreditor Agreement, although DVREIF is not a creditor of the Debtor. It is a creditor only of the Debtor's equity holders. iStar Tara is the Debtor's only secured creditor and its unsecured deficiency claim will dominate any class of unsecured claims. Thomas E. Biron, Esq., at Blank Rome LLP in Pennsylvania, Philadelphia, who represents the secured creditor, asserts that the motion should be granted as the case was commenced in bad faith as a litigation tactic in respect of the two-party dispute between iStar Tara and DVREIF. Notwithstanding that, he says, "there is a fundamental point to highlight: the Debtor can never confirm an effective reorganization plan." About Philadelphia Rittenhouse Philadelphia Rittenhouse Developer, L.P. is a joint venture between ARC Properties, Inc., based in Clifton, New Jersey, and Philadelphia-based Wheeler Brothers Holdings, LLC. The Company was formed to develop 10 Rittenhouse Square, a 33-story condominium building in Philadelphia. Rittenhouse Developer filed for chapter 11 bankruptcy in response to an action in Pennsylvania state court seeking to appoint a receiver for the development project, which was brought by one of the Company's lenders, iStar Tara, LLC. Philadelphia Rittenhouse filed a Chapter 11 petition on Dec. 30, 2010 (Bankr. E.D. Pa. Case No. 10-31201). Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, P.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $100 million to $500 million. iStar Tara, LLC is represented in the chapter 11 case by the firm of Blank Rome LLP. PLATINUM INVESTMENTS: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Platinum Investments, LLC, a Corporation P.O. Box 775 Ocean Springs, MS 39565-0775 Bankruptcy Case No.: 11-50326 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court Southern District of Mississippi (Gulfport Divisional Office) Judge: Katharine M. Samson Debtor's Counsel: William J. Little, Jr., Esq. LENTZ & LITTLE, P.A. P.O. Box 927 Gulfport, MS 39502 Tel: (228) 867-6050 Fax: (228) 867-6077 E-mail: littlewj@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 five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mssb11-50326.pdf The petition was signed by Lori Stewart, managing member. PLEDGER PALACE: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Pledger Palace Child Development & Educational Center, Inc. P.O. Box 299 Jarvisburg, NC 27947 Bankruptcy Case No.: 11-01087 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Stephani W. Humrickhouse Debtor's Counsel: John G Rhyne, Esq. HINSON & RHYNE, P.A. P.O. Box 7479 Wilson, NC 27895-7479 Tel: (252) 291-1746 E-mail: annhinson@nc.rr.com Scheduled Assets: $1,027,510 Scheduled Debts: $1,785,468 A list of the Company's 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb11-01087.pdf The petition was signed by Patricia Pledger, president. QUIGLEY CO: Has Until March 15 to File New Restructuring Plan ------------------------------------------------------------- Bankruptcy Law360 reports that a federal judge has given bankrupt Pfizer Inc. subsidiary Quigley Co. Inc. a March 15 deadline to file a new restructuring plan or face efforts by asbestos claimants to throw out the more than six-year-old case and proceed with lawsuits. About Quigley Co. Quigley Co. was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s. In September 2004, Pfizer and Quigley took steps that were intended to resolve all pending and future claims against the Company and Quigley in which the claimants allege personal injury from exposure to Quigley products containing asbestos, silica or mixed dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11 plan and a settlement with Chrysler. Quigley filed for Chapter 11 bankruptcy protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to implement a proposed global resolution of all pending and future asbestos-related personal injury liabilities. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed $155,187,000 in total assets and $141,933,000 in total debts. RBZ REALTY: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: RBZ Realty, Inc 660 Tennent Road Manalapan, NJ 07726 Bankruptcy Case No.: 11-14038 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Michael R. Speck, Esq. GARCES & GRABLER, PC 6 Throckmorton Street Freehold, NJ 07728 Tel: (732) 414-5000 Fax: (732) 414-5001 E-mail: mspeck@garcesgrabler.com Scheduled Assets: $1,100,000 Scheduled Debts: $590,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Mitchell Beja, president. RENAISSANCE GRAND: Citi Takes Control After Lenders Foreclosed -------------------------------------------------------------- Bloomberg News' Jonathan Keehner, Martin Z. Braun and Jeffrey McCracken reported earlier this month that Citigroup Inc., the third-biggest U.S. bank by assets, took control of St. Louis's Renaissance Grand Hotel & Suites in December 2010 when it bought revenue bonds backed by the 1,000-room hotel after lenders foreclosed. According to Bloomberg, two people with knowledge of the deal who asked not to be identified because the transaction was private, said the deal gives Citigroup control of the trustee that oversees the hotel after the New York-based bank bought a majority stake in $98 million of revenue bonds backed by the Renaissance from Nuveen Asset Management. Bloomberg said that, with its controlling stake in the revenue bonds, Citi may now direct the hotel's trustee, UMB Bank N.A., to sell the hotel. The Renaissance was financed by bonds sold by the Industrial Development Authority of St. Louis in 2000. According to Bloomberg, the people familiar with the matter said the hotel was foreclosed on after failing to make full interest payments on the debt in 2008. Bloomberg recounted that the Renaissance violated its bond covenants in 2004 after the convention center generated half the bookings originally anticipated, according to bond filings. Nuveen sold about $55 million of the debt for 53 cents on the dollar in December, Bloomberg data show. When Nuveen's municipal high-yield fund reported its stake in the St. Louis revenue bonds in April 2007, it valued them at 99 cents on the dollar. Bloomberg relates Steven Stogel, president of DFC Group Inc. in St. Louis, a real-estate developer who has advised the trustee, said Citigroup has sent a pair of executives to St. Louis to discuss the Renaissance with consultants. Robert Bray, general manager of the Renaissance, declined to comment through an assistant. According to Bloomberg, Mr. Stogel said the trustee and the city are to continue to work with the ownership group and to move towards improving the operations in 2011. Mr. Stogel said there will be a sale "at some point, whether it's '11, '12, '13 or '14." RICHARD FORDE: 4th Cir. Affirms Bankruptcy Fraud Judgment --------------------------------------------------------- Richard Adolphus Forde was convicted of bankruptcy fraud; conspiracy to commit bankruptcy fraud; and bank fraud. Mr. Forde appeals, raising various challenges to his convictions. The United States Court of Appeals for the Fourth Circuit, however, found no reversible error, and affirmed the judgment. The case is United States of America, v. Richard Adolphus Forde, a/k/a Euburn Richard A. Forde, Case No. 09-4704 (4th Cir.). A copy of the Fourth Circuit's decision, dated January 10, 2011, is available at http://is.gd/GVy2DSfrom Leagle.com. The panel consists of Chief Judge William Byrd Traxler, Jr., Circuit Judge Andre M. Davis, and Damon J. Keith, Senior Circuit Judge of the United States Court of Appeals for the Sixth Circuit, sitting by designation. Mr. Forde and his wife filed a Chapter 11 bankruptcy petition. The case was later converted to Chapter 7. RJ WAREHOUSE: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: RJ Warehouse Distributors Inc. Calle 37 AG-8 Ave Lomas Verdes URB Santa Juanita Bayamon, PR 00956-4740 Bankruptcy Case No.: 11-01106 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Carlos Rodriguez Quesada, Esq. LAW OFFICE OF CARLOS RODRIGUEZ QUESADA P.O. Box 9023115 San Juan, PR 00902-3115 Tel: (787) 724-2867 E-mail: cerqlaw@coqui.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb11-01106.pdf The petition was signed by Angel M. Roman Cardona, president. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Angel M. Roman Cardona 11-01053 02/11/2011 SEAHAWK DRILLING: Taps Simmons & Company as Transaction Advisor --------------------------------------------------------------- Seahawk Drilling, Inc., et al., ask for authorization from the U.S. Bankruptcy Court for the Southern District of Texas to employ Simmons & Company International as transaction advisor. Simmons & Company will, among other things: (a) develop and present to the Debtors a list of prospective Purchasers; (b) perform financial analyses of the Debtors and prospective Purchasers in the context of a possible business combination; (c) assist the Debtors in preparing a brochure to be utilized in discussions with prospective Purchasers which will describe the Debtors in detail as may be appropriate under the circumstances; and (d) counsel the Debtors as to strategy and tactics for Initiating discussions and negotiating with a prospective Purchaser and participating in such discussions and Negotiations. The Debtors will pay Simmons & Company: (a) an advisory fee of $250,000, payable in cash on the date of the letter agreement; (b) an additional monthly fee of $75,000, payable in cash on the first day of each 30-day period beginning four weeks after the date of this letter agreement; (c) an opinion fee of $500,000, payable in cash upon initial delivery of Simmons & Company's Opinion to the Company without regard to the conclusions expressed in the Opinion; (d) if, by December 31, 2011, (a) a Business Combination is consummated or (b) the Company enters into an agreement which subsequently results in a Business Combination, a transaction fee in an amount equal to $1.5 million plus 2.150% of the aggregate purchase price paid in the Business Combination in excess of $70 million, payable in cash upon the closing of such Business Combination or, in the case of a tender offer or exchange offer, upon the first purchase or exchange of shares pursuant to tender offer or exchange offer, as the case may be. Any fees previously paid to Simmons & Company will be deducted from any fee to which Simmons & Company is entitled; (e) if by December 31, 2011, the Debtors enter into an agreement in connection with a Transaction, the Debtors agree to pay Simmons & Company fees on the equity component of the Transaction as: (1) if Simmons & Company is requested by the Debtors to render an opinion as to the fairness, from a financial point of view, of the Transaction, an opinion fee of $500,000 payable in cash upon initial delivery of the opinion to the Company without regard to the conclusions expressed in the opinion. (2) a transaction fee payable in cash upon closing of a Transaction as: (a) for a Transaction for which equity is raised in an amount of $100,000,000 or less, a transaction fee equal to 2.1% of the equity amount. (b) for a Transaction for which equity is raised in an amount of $250 million, a transaction fee equal to 1.5% of the equity amount. (c) for a Transaction for which equity is raised in an amount of $500 million, a transaction fee equal to 1.3% of the equity amount. (d) for a Transaction for which equity is raised in an amount of $1 million, a transaction fee equal to 1.0% of the equity amount. (e) for a Transaction for which equity is raised in an amount greater than $1 million, a transaction fee equal to $10 million. (f) for a Transaction for which equity is raised in an amount between each of the equity amounts specified in clauses (b), (c), (d) and (e) above, the transaction fee will be a sliding scale fee based on the foregoing fee percentages. (g) any fees previously paid to Simmons & Company will be deducted from any transaction fee to which Simmons & Company is entitled; and (f) if the Company enters into an agreement to effect a Business Combination or a Transaction and the agreement provides for a payment at any time to the Debtors in the event the Business Combination or Transaction contemplated thereby is terminated or otherwise not consummated, the Debtors agree to pay Simmons & Company a transaction fee equal to the lesser of (i) the transaction fee that would have been paid to Simmons & Company, as the case may be, or (ii) 25% of the Break-up Payment, payable in cash if and when such Breakup Payment is made to the Debtors. In the case of a Business Combination, any fees paid to Simmons & Company will be deducted from any fee to which Simmons & Company is entitled and, in the case of a Transaction, any fees paid to Simmons & Company will be deducted from any fee to which Simmons & Company is entitled. To the best of the Debtors' knowledge, Simmons & Company is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. 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. 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 Hire Alvarez as Restructuring Advisor ---------------------------------------------------------------- Seahawk Drilling, Inc., et al., ask for authorization from the U.S. Bankruptcy Court for the Southern District of Texas to employ Alvarez & Marsal North America, LLC, as restructuring advisor. A&M will, among other things: (a) assist the Debtors in the preparation of financial- related disclosures required by the Court, including the Debtors' Schedules of Assets and Liabilities, Statements of Financial Affairs and Monthly Operating Reports; (b) assist the Debtors with information and analyses required pursuant to the Debtors' debtor-in-possession financing; (c) assist with the identification and implementation of short-term cash management procedures; (d) provide advisory assistance in connection with the development and implementation of key employee compensation and other critical employee benefit programs. A&M will be paid based on the rates of its professionals: Managing Director $625-$850 Director $450-$625 Associate $300-$450 Analyst $225-$300 Dean E. Swick, a Managing Director with A&M, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. 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. 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: Wins Okay to Tap Into Bankruptcy Loan ------------------------------------------------------- Dow Jones' DBR Small Cap reports that Seahawk Drilling Inc. won court permission to begin drawing on the $35 million bankruptcy loan that will ensure its continued operations during its newly launched Chapter 11 restructuring. According to DBR, at a hearing before the U.S. Bankruptcy Court in Corpus Christi, Texas, Judge Richard S. Schmidt granted the oil- rig operator interim approval of a bankruptcy-financing package from a lender group led by D.E. Shaw Direct Capital Portfolios LLC. DBR says Judge Schmidt will consider granting final approval of the loan at a Feb. 22 hearing. The report relates that among the other so-called "first day" requests Judge Schmidt granted at the hearing were motions to continue paying Seahawk employees, insurance and taxes and to employ the bankruptcy lawyers, financial advisers and other professionals that will guide the company through its restructuring. 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. SINCLAIR BROADCAST: BlackRock Discloses 5.92% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on February 8, 2011, BlackRock, Inc. disclosed that it beneficially owns 2,925,834 shares of common stock of Sinclair Broadcast Group Inc representing 5.92% of the shares outstanding. As of November 1, 2010, there were 49,434,012 shares of Class A common stock and 30,933,859 shares of Class B common outstanding. About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. * * * Sinclair Broadcast has a 'B1' corporate family rating from Moody's. It has a 'B+' corporate credit rating from Standard & Poor's Ratings Services. "The CFR continues to reflect still high financial risk, nonetheless, and the inherent cyclicality of the broadcast television business, among other factors," Moody's said in August 2010. "The 'B+' rating reflects S&P's expectation that Sinclair will be able to reduce its leverage further by the end of 2010 through revenue and EBITDA growth and lower debt balances," explained Standard & Poor's credit analyst Deborah Kinzer in August 2010. Moody's Investors Service raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of- Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on August 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. STANTON PARK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Stanton Park Development, Inc. 2989 Hwy 50 East Carson City, NV 89701 Bankruptcy Case No.: 11-50438 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Kevin A. Darby, Esq. DARBY LAW PRACTICE, LTD. 4777 Caughlin Pkwy Reno, NV 89519 Tel: (775) 322-1237 Fax: (775) 996-7290 E-mail: kevin@darbylawpractice.com Estimated Assets: $0 to $50,000 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/nvb11-50438.pdf The petition was signed by Dwight Millard, president. Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Dwight & Sandra Millard __-____ __/__/__ Gordon Park Apartments, LLC 10-51330 04/13/10 MFB Regency, LLC 10-51331 04/13/10 Millard Realty and Construction __-___ __/__/__ Carson City Plaza, LLC 11-50439 02/14/11 STILLWATER MINING: BlackRock Discloses 6.29% Equity Stake --------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission on February 8, 2011, BlackRock, Inc., disclosed that it beneficially owns 6,156,623 shares of common stock of Stillwater Mining Co. representing 6.29% of the shares outstanding. At October 19, 2010 the Company had outstanding 97,899,036 shares of common stock, par value $0.01 per share. About Stillwater Mining Billings, Montana-based Stillwater Mining Company -- http://www.stillwatermining.com/-- is the only U.S. producer of palladium and platinum and is the largest primary producer of platinum group metals outside of South Africa and Russia. The Company's shares are traded on the New York Stock Exchange under the symbol "SWC." The Company's balance sheet at Sept 30, 2010, showed $778.23 million in total assets, $287.90 million in total liabilities, and stockholders' equity of $490.33 million. Stillwater carries 'Caa1' corporate family and probability of default ratings, with 'stable' outlook, from Moody's Investors Service. It has 'B' issuer credit ratings from Standard & Poor's. SUNCAL COS: Has Until Today to Fight Plans for Various Projects --------------------------------------------------------------- SunCal Cos. has until today to challenge the Chapter 11 plan of a handful of stalled Southern California real-estate projects while it appeals a ruling approving a settlement between Lehman Brothers Holdings Inc. and Chapter 11 trustee Alfred H. Siegel, the bankruptcy trustee overseeing the projects. According to Joseph Checkler, writing for Dow Jones Newswires, Judge Erithe A. Smith on Thursday technically sided with the bankruptcy trustee, denying SunCal's stay request on "insufficient grounds," but said SunCal would get a seven-day temporary stay while it seeks another stay pending appeal to a panel of bankruptcy judges. As reported in the Troubled Company Reporter on Dec. 30, 2010, Judge Smith approved the deal between Lehman Brothers' commercial- paper unit and Mr. Siegel, paving the way for the sale of a handful of stalled Southern California real-estate projects Lehman helped finance in conjunction with SunCal. Late in January, Judge Smith allowed creditors of the stalled projects to vote on the bankruptcy plan filed by Mr. Siegel. The plan, according to Dow Jones, describes how the Chapter 11 trustee intends to pay the projects' creditors. Dow Jones says the key component of the plan is a compromise between Mr. Siegel and Lehman's commercial paper unit that calls for the trustee to sell the properties through a Chapter 11 plan. Lehman and other first- lien lenders, owed $230 million, will have the right to bid their debt in order to acquire the land--a process known as credit bidding. The initial bid will be $45 million. Lehman has agreed to cover the trustee's expenses and allow a portion of the sale proceeds and any other recoveries to flow to unsecured creditors. SunCal argues that the Chapter 11 trustee hasn't proved the plan is fair to all creditors. According to Mr. Checkler, SunCal lawyer Ronald Rus, Esq., at Rus Miliband & Smith, told Dow Jones Friday, "We think that it's pretty clear there are fundamental inconsistencies in [the judge's] order because of the conflicting nature of the relief the trustee said he was looking for." Dow Jones says Mr. Siegel has called SunCal's claims "meritless." Mr. Siegel is overseeing the bankruptcy cases of several SunCal real-estate projects encompassing more than 5,000 acres in Southern California. Those properties, which took on more than $300 million in debt in 2006 and 2007, were valued at just $62 million. Dow Jones notes a confirmation hearing on the plan is set to begin on April 1 . If Judge Smith doesn't sign an order confirming the plan by April 30, Lehman can move to foreclose on the properties. Dow Jones says Lehman wasn't immediately available for comment. 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. TAVERN ON THE GREEN: Hotel Operator Disputes Trademark Claim ------------------------------------------------------------ According to Indianapolis Star reporter Bruce C. Smith, White Lodging Services, the owners of the new Downtown JW Marriott in Indianapolis, Indiana, has sued Jil Mazer-Marino, the Chapter 7 trustee of the Tavern on The Green, over JW's use of "Tavern" on its Tavern on the Plaza establishment. The report relates White Lodging Services received a letter dated Jan. 10 from Ms. Mazer-Marino demanding they: -- stop using the name Tavern on the Plaza, alleging trademark infringement with Tavern on the Green; and -- abandon their August 2010 application for a U.S. trademark for the name Tavern on the Plaza. According to the IndyStar, Ms. Mazer-Marino claims in the letter to White Lodging that the name in Indianapolis is "confusingly similar" to the New York City eatery's trademarked name. She said it "will cause significant and irreparable damage to the TOG estates and the goodwill that has been established in TOG's trademarks." IndyStar relates White Lodging filed suit against Ms. Mazer-Marino and former operators LeRoy Adventures last week in U.S. District Court in Indianapolis, asking a federal judge to declare the Plaza name doesn't violate the trademark. The suit filed by Greenfield attorney Paul B. Overhauser countered that the term "tavern" is as common as beer and buffalo wings to describe food service establishments. IndyStar says Mazer-Marino didn't return calls for further comment Friday or to explain her authority to claim ownership of the Tavern on the Green name. About Tavern on the Green Tavern on the Green LP was the operator of the 75-year-old restaurant in New York's Central Park. Tavern on the Green was founded in 1934 by New York Parks Commissioner Robert Moses and the license was bought by restaurateur Warner LeRoy in 1974. The Company filed for Chapter 11 on September 9, 2009 (Bankr. S.D.N.Y. Case No. 09-15450). It estimated up to $50 million each in assets and debts. The restaurant closed New Year's Eve 2010. In March 2010, the city of New York City won the right to the trade name, "Tavern on the Green," the restaurant's major assets. The Tavern on the Green name was valued at $19 million. New York City -- Tavern's landlord -- and the LeRoy family, which ran the restaurant since 1976, both claimed ownership of the trademark. Following the trademark ruling, the bankruptcy judge converted the case to Chapter 7. Jil Mazer-Marino was appointed Chapter 7 trustee. TAWK DEVELOPMENT: Files List of 20 Largest Unsecured Creditors -------------------------------------------------------------- Tawk Development LLC filed with the U.S. Bankruptcy Court for the District of Nevada a list of 20 largest unsecured creditors. Creditor Amount -------- ------ Principal Financial Group $755,768 Attn: Managing Member P.O. Box 14416, Dept. 400 Des Moines, IA 50306-3416 Bart Walker $327,871 P.O. Box 35799 Las Vegas, NV 89133 Desert Inn Management $81,000 Attn: Managing Member 5067 Madre Mesa Drive #2069 Las Vegas, NV 89108 Elliott, Lewis, Lieber & Stumpf, Inc. $47,530 Charles, Kane & Dye LLP $39,645 Pro-Tect Security $22,563 Dan Marx $21,390 Republic Services of Southern Nevada $7,111 Apartment Guide $5,976 Black & Lobello $3,851 NV Energy $3,425 Nevada Home Group $3,000 Las Vegas Valley Water District $2,815 A-1 National Fire Co., Inc. $2,198 HD Supply Facilities Maintenance $1,096 Realty Pest Services $1,040 Corelogic Safe Rent $471 Cherokee Blind & Door $321 Southwest Gas $143 Mobile Carpet & Upholstery Cleaning $50 A full-text copy of the List Of 20 Largest Unsecured Creditors is available for free at http://ResearchArchives.com/t/s?735f Las Vegas, Nevada-based Tawk Development, LLC, owns and operates a 198-unit resort style apartment complex known as Falcon Landing, which is located at 5067 Madre Mesa Drive in Las Vegas. It filed for Chapter 11 bankruptcy protection on January 14, 2011 (Bankr. D. Nev. Case No. 11-10584). Talitha B. Gray, Esq., at Gordon & Silver, Ltd., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. TAWK DEVELOPMENT: Files Schedules of Assets And Liabilities ----------------------------------------------------------- Tawk Development LLC filed with the U.S. Bankruptcy Court for the District of Nevada its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property $22,500,000 B. Personal Property $247,153 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $19,935,848 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims $1,230,094 ------------ ------------ TOTAL $22,747,153 $21,165,942 A full-text copy of the Schedules of Assets and Liabilities is available for free at http://ResearchArchives.com/t/s?735e Las Vegas, Nevada-based Tawk Development, LLC, owns and operates a 198-unit resort style apartment complex known as Falcon Landing, which is located at 5067 Madre Mesa Drive in Las Vegas. It filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11- 10584) on Jan. 14, 2011. Talitha B. Gray, Esq., at Gordon & Silver, Ltd., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. TOWER OAKS: Section 341(a) Meeting Scheduled for March 14 --------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of Tower Oaks Boulevard, LLC's creditors on March 14, 2011, at 9:00 a.m. The meeting will be held at 6305 Ivy Lane, Sixth Floor, Greenbelt, Maryland 20770. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Raleigh, North Carolina-based Tower Oaks Boulevard, LLC, owns and operates the commercial property identified as 2701 Tower Oaks Boulevard. It filed for Chapter 11 bankruptcy protection on (Bankr. D. Md. Case No. 11-12413) Feb. 8, 2011. Steven H. Greenfeld, Esq., at Cohen, Baldinger & Greenfeld, LLC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. Affiliate Sun Control Systems, Inc., filed a separate Chapter 11 petition on December 13, 2010 (Bankr. D. Md. Case No. 10-37991). TOWER OAKS: Taps Cohen Baldinger as Bankruptcy Counsel ------------------------------------------------------ Tower Oaks Boulevard, LLC, asks for authorization from the U.S. Bankruptcy Court for the District of Maryland to employ Cohen Baldinger & Greenfeld, LLC, as bankruptcy counsel. Cohen Baldinger will: (a) give debtor legal advice with respect to its powers and duties as debtor-in-possession in the continued operation of its business and management of its property; (b) prepare on behalf of your applicant as debtor-in- possession necessary applications, answers, orders, reports and other legal papers; and (c) perform all other legal services for debtor as debtor- In-possession which may be necessary herein. Neither the Debtor nor Cohen Baldinger disclosed how Cohen Baldinger will be compensated for its services. Steven H. Greenfeld, Esq., a member at Cohen Baldinger, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Raleigh, North Carolina-based Tower Oaks Boulevard, LLC, owns and operates the commercial property identified as 2701 Tower Oaks Boulevard. It filed for Chapter 11 bankruptcy protection (Bankr. D. Md. Case No. 11-12413) on Feb. 8, 2011. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. Affiliate Sun Control Systems, Inc., filed a separate Chapter 11 petition on December 13, 2010 (Bankr. D. Md. Case No. 10-37991). TRANSPORTADORA DE GAS: Regulator Extends Intervention for 120 Days ------------------------------------------------------------------ Dow Jones' DBR Small Cap reports that Argentina's natural-gas regulator, Enargas, said it has extended its intervention in one of the Country's leading natural-gas distribution companies, Transportadora de Gas del Norte SA, or TGN, for four months. Headquartered in Buenos Aires, Transportadora de Gas del Norte SA -- http://www.tgn.com.ar/-- is one of the two largest transporters of natural gas in Argentina, delivering approximately 40% of the country's total gas consumption and more than 50% of Argentine total gas exports. The northern Argentine gas pipeline system connects major gas fields in northern and central-western Argentina. The company benefits from an exclusive 35-year concession contract, ending Dec. 28, 2027, which may be extended for an additional 10 years. The parent company is Gasinvest S.A., which has a 56.35% stake and comprises five companies: Totalfinaelf (27.2%), Transcogas Inversora S.A. (22.3%), Compania General de Combustibles (5%), Organizacion Techint (27.2%), and Petroliam Nasional Berhad (18.3%). In addition, CMS Gas Argentina holds 23.5% of Transportadora Norte's shares, while the remaining 20% is traded on the Buenos Aires stock exchange. * * * As reported in the Troubled Company Reporter-Latin America on November 19, 2009, Fitch Ratings assigned Transportadora Gas del Norte's proposed exchange note offering of US$247.3 million seven year notes (new notes) a rating of the 'CCC' and a recovery rating of 'RR4'. The new notes have been assigned a long-term national scale rating of 'BB(arg)'. The Rating Outlook is Stable. In addition, Fitch has assigned preliminary local and foreign currency Issuer Default Ratings of 'CCC', which would replace the currently outstanding local and foreign currency IDRs of 'D' upon completion of the debt restructuring. TRIBUNE CO: Court Needs to Use Cramdown Process in Plans -------------------------------------------------------- Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware will need to use the cramdown process under the Bankruptcy Code in the Chapter 11 cases of Tribune Co. and its debtor affiliates because neither of the competing plans in the cases received the required acceptances from all creditor classes, Bloomberg News reported. Epiq Bankruptcy Solutions, LLC, the Debtors' voting and solicitation agent, submitted with the Court on February 11, 2011, results of the voting process. The results showed that each of the two competing plans of reorganization filed in the Debtors' bankruptcy cases obtained the required number of votes under the Bankruptcy Code to be deemed eligible for confirmation. The plan of reorganization proposed by the Debtors, co-proposed by the Official Committee of Unsecured Creditors, JPMorgan Chase Bank, N.A., Angelo Gordon & Co., L.P., and Oaktree Capital Management, L.P., was overwhelmingly approved by the holders of the Senior Loan Claims and the Bridge Loan Claims, as well as most classes of trade and other general unsecured claimants. The company's plan was not approved by the holders of the Senior Noteholder Claims and the PHONES Notes Claims. The company's plan was also rejected by creditors of a few dozen subsidiaries, including Los Angeles Times Newspapers, Inc. The plan of reorganization sponsored by Aurelius Capital Management, a large holder of Senior Noteholder Claims, and the indenture trustees for the Senior Notes and the PHONES Notes, was rejected by virtually all classes of voting creditors other than the Senior Noteholder Claims and PHONES Notes Claims classes. One notable holdout from support of either plan was a unit of Equity Group Investments, the firm run by Tribune Chairman Sam Zell, which is a creditor by virtue of a $225 million subordinated note pledged by Tribune Co. as part of the 2007 leveraged buyout of Tribune Co., according to news sources. Equity Group Investments is vulnerable to litigation under both plans, and the firm's counsel has argued in court that the plans don't reflect that an independent examiner in the case largely absolved Mr. Zell from potential claims, Chicago Tribune pointed out. "These results are as we expected and we are pleased that they confirm broad support for the restructuring plan supported by the Company and its co-proponents," Don Liebentritt, Tribune's Chief Restructuring Officer, said in a press release. "We continue to prepare for the confirmation hearing set to begin on March 7th and remain confident that the court will confirm our plan over the Aurelius/Noteholder plan." A full-text copy of the Voting Results is available for free at: http://bankrupt.com/misc/Tribune_VotingResults.pdf Judge Carey will consider confirmation of both or either of the competing plans on March 7. Objections to the confirmation of the plans are due today, February 15. The Chapter 11 Plans There are two remaining proposed plans of reorganization in Tribune's Chapter 11 case. The company's plan, also supported by its co-proponents, the Official Committee of Unsecured Creditors, JPMorgan Chase Bank, N.A., Angelo Gordon & Co., L.P., and Oaktree Capital Management, L.P., was overwhelmingly approved by the holders of the Senior Loan Claims and the Bridge Loan Claims, as well as most classes of trade and other general unsecured claimants. As expected, the company's plan was not approved by the holders of the Senior Noteholder Claims and the PHONES Notes Claims. The plan being sponsored by Aurelius Capital Management, a large holder of Senior Noteholder Claims, and the indenture trustees for the Senior Notes and the PHONES Notes, was rejected by virtually all classes of voting creditors other than the Senior Noteholder Claims and PHONES Notes Claims classes. "These results are as we expected and we are pleased that they confirm broad support for the restructuring plan supported by the Company and its co-proponents," said Don Liebentritt, Tribune's Chief Restructuring Officer. "We continue to prepare for the confirmation hearing set to begin on March 7th and remain confident that the court will confirm our plan over the Aurelius/Noteholder plan." 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: U.S. Trustee Objects to Both Plans ---------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, objects to the confirmation of the plans of reorganization proposed by both the Debtors, et al., and Aurelius Capital Management, L.P., et al. On the Debtors' Plan, the U.S. Trustee complains that releases in the DCL Plan are very extensive and contemplate releases of the oft-discussed LBO-Related Causes of Action. The U.S. Trustee asserts that the DCL Plan Proponents must justify the validity of the Debtor Releases for each and every party that is listed in the definition of Released Parties or Related Persons. The U.S. Trustee notes that the Debtor Releases favor current and former officers, directors and professionals, yet the Debtors have not demonstrated that these current and former officers, directors, and professionals provided a substantial contribution of assets to the reorganization. On the Noteholder Plan, the U.S. Trustee asserts that it cannot be confirmed because it contains no provisions for the Court or parties-in-interest to test the reasonableness of the payment of fee and expense claims of certain creditor groups, including a number of the Noteholder Plan Proponents. The U.S. Trustee also complains that the Noteholder Plan contains no provision addressing the requirement to file post-confirmation reports and pay post-confirmation fees until all cases are closed, converted or dismissed. The Chapter 11 Plans There are two remaining proposed plans of reorganization in Tribune's Chapter 11 case. The company's plan, also supported by its co-proponents, the Official Committee of Unsecured Creditors, JPMorgan Chase Bank, N.A., Angelo Gordon & Co., L.P., and Oaktree Capital Management, L.P., was overwhelmingly approved by the holders of the Senior Loan Claims and the Bridge Loan Claims, as well as most classes of trade and other general unsecured claimants. As expected, the company's plan was not approved by the holders of the Senior Noteholder Claims and the PHONES Notes Claims. The plan being sponsored by Aurelius Capital Management, a large holder of Senior Noteholder Claims, and the indenture trustees for the Senior Notes and the PHONES Notes, was rejected by virtually all classes of voting creditors other than the Senior Noteholder Claims and PHONES Notes Claims classes. "These results are as we expected and we are pleased that they confirm broad support for the restructuring plan supported by the Company and its co-proponents," said Don Liebentritt, Tribune's Chief Restructuring Officer. "We continue to prepare for the confirmation hearing set to begin on March 7th and remain confident that the court will confirm our plan over the Aurelius/Noteholder plan." 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: Officers & Directors Oppose Both Plans -------------------------------------------------- Certain current and former directors and officers of the Debtors object to the confirmation of the plans of reorganizations proposed by both Tribune Co., et al., and Aurelius Capital Management, L.P., et al., asserting that each Plan fails to comply with the requirements of Section 1129 of the Bankruptcy Code and include provisions that cannot be approved in equity and under applicable law. The Officers and Directors -- Harry Amsden, Dennis FitzSimons, Bob Gremillion, Don Grenesko, David Hiller, Tim Landon, Tom Leach, Luis Lewin, Mark Mallory, Dick Malone, Ruthellyn Musil, John Reardon, Scott Smith, John Vitanovec, Kathy Waltz, and David Williams -- are named defendants in Adversary Proceeding No. 10- 54010 filed by the Official Committee of Unsecured Creditors. The Committee seeks billions of dollars in recoveries from the Officers and Directors based on, among other things, breach of fiduciary duties and violations of Sections 160 and 173 of the Delaware Corporation Law. The DCL plan contains impermissible releases and injunctions, proposes incomprehensible and illusory judgment reduction procedures, unlawfully eviscerates claims and is otherwise neither fair nor equitable. Unless the Debtors show that each provided- for release is truly necessary to the reorganization success, including those to be given to "Related Parties," the proposed bar order must be rejected, the Officers and Directors assert. Both Plans propose a scheme whereby certain "state law" causes of action will be disclaimed or abandoned, and assigned to a creditors' trust from non-debtor third parties who gave no affirmative consent to the assignment, Jeffrey C. Wisler, Esq., at Connolly Bove Lodge & Hutz LLP, in Wilmington, Delaware, points out. This scheme, Mr. Wisler asserts, is clearly designed to circumvent, limit, eliminate and otherwise prejudice defenses, cross-claims and third-party claims arising from and relating to the Avoidance Actions that are otherwise available to the Officers and Directors. The Plans contain other provisions that may purport to prejudice the Officers and Directors' rights and claims. Accordingly, the Officers and Directors further object to the Plan: -- The Noteholder Plan serves to nullify or otherwise modify the exculpation provided to the Officers and Directors under the Debtors' corporate documents and applicable law. -- Notwithstanding any provisions of the Plans to the contrary, the Court must retain jurisdiction over any litigation trust or creditors' trust that may be created to assure that their conduct is consistent with any confirmed Plan, the confirmation order and the Court's other orders. -- Since the lengthy, complex Plans have been drafted and proposed with the intent to prejudice the rights, claims and defenses of the Officers and Directors, any confirmation order must expressly preserve all rights, claims and defenses that are otherwise not expressly affected by the confirmation order. Mark Hianik, John Birmingham, Tom Ehlmann, Peter Knapp, and Crane Kenney, former officers of certain Debtors and named defendant in at least one adversary proceeding filed by the Committee, join in the confirmation objection of the Officers and Directors. Robert R. McCormick Tribune Foundation and Cantigny Foundation also join in the Officers and Directors' confirmation objection. The Chapter 11 Plans There are two remaining proposed plans of reorganization in Tribune's Chapter 11 case. The company's plan, also supported by its co-proponents, the Official Committee of Unsecured Creditors, JPMorgan Chase Bank, N.A., Angelo Gordon & Co., L.P., and Oaktree Capital Management, L.P., was overwhelmingly approved by the holders of the Senior Loan Claims and the Bridge Loan Claims, as well as most classes of trade and other general unsecured claimants. As expected, the company's plan was not approved by the holders of the Senior Noteholder Claims and the PHONES Notes Claims. The plan being sponsored by Aurelius Capital Management, a large holder of Senior Noteholder Claims, and the indenture trustees for the Senior Notes and the PHONES Notes, was rejected by virtually all classes of voting creditors other than the Senior Noteholder Claims and PHONES Notes Claims classes. "These results are as we expected and we are pleased that they confirm broad support for the restructuring plan supported by the Company and its co-proponents," said Don Liebentritt, Tribune's Chief Restructuring Officer. "We continue to prepare for the confirmation hearing set to begin on March 7th and remain confident that the court will confirm our plan over the Aurelius/Noteholder plan." 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: Zell Says 'Lottery-Ticket Litigation' Hinders Plans --------------------------------------------------------------- A central feature of both the plans of reorganization proposed by Tribune Co., et al., and Aurelius Capital Management, L.P., et al., is the wholesale assignment of causes of action to a litigation trust without consideration of whether the assigned claims have merit or whether it is in the best interests of creditors and the Debtors' estates to fund the pursuit of those claims without regard to the likelihood of success, EGI-TRB LLC and its president, Samuel Zell, point out. This misuse of Estate funds to pursue meritless lottery-ticket litigation is improper and should prevent confirmation, David J. Bradford, Esq., at Jenner & Block LLP, at Chicago, Illinois, argues. That defect, Mr. Bradford adds, is compounded by an inappropriate effort to strip potential defendants of statutory safe-harbor defenses and disable them from asserting their own rights of indemnification, contribution, and affirmative claims against third parties. In short, the Plans seek to launch unfounded litigation and to prevent the fair defense of those claims and no party would be more unfairly prejudiced by these Plan provisions -- and no party would be more inappropriately left subject to baseless claims -- than EGI-TRB and its president, Mr. Zell, Mr. Bradford tells the Court. Mr. Bradford points out that the Debtors' estates have already incurred substantial cost to obtain the findings of an independent and highly-regarded examiner about the merits of these claims -- an examination demanded by many of the same creditors that now lead the litigation charge, but the Chapter 11 Examiner's Report showed exactly why these claims should not be pursued. In the case of EGI-TRB and claims related to the 2007 LBO, the Examiner found: (a) It is "highly unlikely" a court would "conclude that any claims for aiding and abetting breach of fiduciary duty could be sustained based on the conduct of any potential defendants, including Mr. Zell and EGI-TRB, at Step One." In addition, it is "reasonably unlikely" that any aiding and abetting claim could succeed as to Step Two because there is no "sufficient basis to conclude that the Zell Group aided and abetted a breach of any fiduciary duties in connection with the Leveraged ESOP Transactions." (b) It is "reasonably unlikely" that any unjust enrichment claims would be meritorious, including any such claim against Mr. Zell or EGI-TRB. (c) It is "reasonably unlikely" that a court would find that the Debtors incurred their obligations under the Step One Transactions with the actual intent to delay, hinder, or defraud their creditors. (d) There is no "plausible basis . . . to justify equitable subordination of the EGI-TRB Notes" or equitable disallowance of EGI-TRB's claims. (e) Even if satisfaction of the Exchangeable EGI-TRB Note at Step Two could be a preferential transfer, it is "reasonably likely" that a court would find that the transaction is subject to an ordinary course of business defense. Further, and as an overriding matter, the Examiner's Report contained no suggestion and identified no evidence that Mr. Zell and EGI-TRB acted with anything other than good faith -- though the Examiner did conclude that other parties may not have acted in good faith in connection with the Step Two Transactions. Accordingly, regardless of any potential Step Two claims that he may have identified against other parties, the Examiner found no credible basis to assert any liability against EGI-TRB or Mr. Zell for claims related to Step Two, Mr. Bradford argues. Despite those preclusive findings, the proponents of both the Debtors' Plan and Aurelius's Plan seek to assign purported claims against EGI-TRB to their respective litigation trusts anyway. In doing so, the Plan proponents have included inequitable provisions designed for the sole purpose of preventing EGI-TRB and other defendants from fairly defending themselves, Mr. Bradford asserts. In taking this unprecedented step of not only seeking to pursue litigation that has been found to be baseless, but also seeking to strip the targets of their defenses and rights, the plan proponents have gone too far, EGI-TRB and Mr. Zell complains. For those reasons, both Plans contain provisions which run afoul of Section 1129 of the Bankruptcy Code and neither Plan should be confirmed. The Chapter 11 Plans There are two remaining proposed plans of reorganization in Tribune's Chapter 11 case. The company's plan, also supported by its co-proponents, the Official Committee of Unsecured Creditors, JPMorgan Chase Bank, N.A., Angelo Gordon & Co., L.P., and Oaktree Capital Management, L.P., was overwhelmingly approved by the holders of the Senior Loan Claims and the Bridge Loan Claims, as well as most classes of trade and other general unsecured claimants. As expected, the company's plan was not approved by the holders of the Senior Noteholder Claims and the PHONES Notes Claims. The plan being sponsored by Aurelius Capital Management, a large holder of Senior Noteholder Claims, and the indenture trustees for the Senior Notes and the PHONES Notes, was rejected by virtually all classes of voting creditors other than the Senior Noteholder Claims and PHONES Notes Claims classes. "These results are as we expected and we are pleased that they confirm broad support for the restructuring plan supported by the Company and its co-proponents," said Don Liebentritt, Tribune's Chief Restructuring Officer. "We continue to prepare for the confirmation hearing set to begin on March 7th and remain confident that the court will confirm our plan over the Aurelius/Noteholder plan." 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: Proposes $52-Mil. Contribution to Food Network ---------------------------------------------------------- Tribune Co. and its units ask the Bankruptcy Court to permit Tribune Company to cause non-debtor Tribune (FN) Cable Ventures, Inc., to make a capital contribution of $52,803,821 to Television Food Network, G.P., in accordance with the terms of a TFN partnership agreement, to which TVC is a party. Formed as a Delaware general partnership in 1993, TFN owns and operates "Food Network", a 24-hour lifestyle cable television channel focusing on food and related topics. As of the Petition Date, TCV, a non-Debtor subsidiary of Tribune Broadcasting Company and an indirect subsidiary of Tribune, owned a 31.3% partnership interest in TFN, and Scripps Networks, LLC and Cable Program Management Co., G.P. collectively held the remaining 68.7% partnership interest in TFN. In May 2010, Scripps commenced a new cable television channel, "The Cooking Channel," primarily devoted to cooking instruction, food information, and other directly related topics. The Cooking Channel is currently available in approximately 57 million households with a lineup consisting of new, original programming, as well as syndicated content and programming from Food Network's library that explores the food content genre at a more detailed level, including expert advice and techniques. It was intended by the Scripps Parties at the time The Cooking Channel was launched that The Cooking Channel would be integrated into TFN to create a unique pair of food-focused channels operating efficiently under one infrastructure. On August 27, 2010, Scripps made a capital contribution of all of the outstanding membership interests of Cooking Channel, LLC, the entity owning the assets comprising The Cooking Channel, to TFN, resulting in Cooking Channel, LLC becoming a wholly-owned subsidiary of TFN. Based upon due diligence, the analysis performed by Lazard Freres and Co. LLC, and extensive negotiations, TCV agreed that the fair market value of the CC Contribution is $350,000,000. TCV wishes to make a capital contribution to TFN so that it may continue to participate in the economic benefits of TFN without a dilution of its percentage interest as result of the CC Contribution. The Debtors have determined that TCV must make a capital contribution of $52,803,821 in order to avoid a dilution of its ownership interest. The Debtors said in court papers that the financial projections and asset valuations contained in the disclosure statement accompanying their plan of reorganization anticipate that the TVC Contribution will be made and therefore do not reflect TVC's interest in TFN as being diluted. The Debtors believe that the TCV Contribution represents a prudent and advantageous investment. Failure to make the TVC Contribution would, in the opinion of both the Debtors and Lazard, negatively impact the distributable value available to creditor constituencies in the Debtors' Chapter 11 cases, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, tells the Court. 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 Sends J. Allen, et al., to Mediation ------------------------------------------------------ Bankruptcy Judge Kevin Carey directed the Debtors and James Allen, Charles Evans, Pearls Evans, Gary Grant, Loretta Grant, Bill McNair and Sean Serrao to agree on two potential mediators in New York. The Court ordered the Debtors and James Allen, et al., to use their reasonable best efforts to schedule a mediation session that includes the participation of Mitchell's Newspaper Deliver Service with one of the potential mediators by March 11, 2011. The judge directed the parties to report on the status of their mediation at a status conference scheduled for the March 22, 2011 hearing. As reported in the Troubled Company Reporter, James Allen, et al., filed a motion for class treatment of their class proofs of claim against the Debtors and in response to Tribune's objection to their motion for class certification and class treatment of their class proof of claim. According to James Allen, et. al., the circumstances of the case favor class certification. Adam Hiller, Esq., at Pinckney, Harris & Weidinger, LLC, attorney for James Allen, et. al., tells the Court that the class members are people who worked for less than minimum wage. Their written contract states that they worked for LBN Consulting, LLC, rather than Tribune. Accordingly, the class members are unlikely to be aware they could have filed a proof of claim against the Debtors, Mr. Hiller explains. Mr. Hiller avers that the Motion should not be denied for untimeliness. He adds that "[t]here is no bright-line rule setting the clock within which a claimant must move for certification. Rather, the facts determine when a delay is undue." quoting the case Rodriquez v. Tarragon Corp. (In re Tarragon Corp.), Case No.: 09-10555. The ultimate question of whether promoters are independent contractors goes directly to the merits, Mr. Hiller maintains. James Allen, et al., are not required to prove their case at this time, but simply show that Rule 23 of the Federal Rules of Civil Procedure requirements are satisfied, he relates. 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) TRUMP ENTERTAINMENT: Landry's Buys Altantic City Resort for $38MM ----------------------------------------------------------------- Drew Fitzgerald, writing for The Wall Street Journal, reports that Landry's Inc. agreed to buy the Trump Marina Hotel and Casino in Atlantic City, N.J., for $38 million. The Journal notes Trump Entertainment Resorts Inc. has been selling off properties to lessen its debt load. Landry's operates a number of seafood and steak restaurant chains. Landry's Chairman and Chief Executive Tilman J. Fertitta bought what was then called Landry's Restaurants Inc. last October after a long-running takeover effort. About Trump Entertainment Atlantic City, New Jersey-based Trump Entertainment Resorts, Inc. -- http://www.trumpcasinos.com/-- owns and operates three casino resort properties: Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, located on the Boardwalk in Atlantic City, New Jersey, and Trump Marina Hotel Casino, located in Atlantic City's Marina District. Together, at these properties, the company operates approximately 6,600 slot machines, nearly 350 table games and over 3,600 hotel rooms. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 protection on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP served as the Company's auditor and accountant, and Lazard Freres & Co. LLC was the financial advisor. Garden City Group served as claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels obtained confirmation of its Chapter 11 plan on April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. US TELEPACIFIC: S&P Assigns 'B-' Rating to $460 Mil. Senior Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Los Angeles-based competitive local exchange carrier U.S. TelePacific Corp.'s proposed $460 million senior secured credit facility, consisting of a $25 million revolver and $435 million term loan. S&P rated the bank loan 'B-' with a '4' recovery rating, which indicates S&P's expectation for average (30% to 50%) recovery for lenders in the event of a payment default. The company will used proceeds from the term loan to refinance $361 million of existing debt, fund the $20 million acquisition of Covad Wireless, add about $41 million of cash to the balance sheet, and pay related fees and expenses. At the same time, S&P affirmed its 'B-' corporate credit rating on parent company U.S. TelePacific Holdings Corp. The outlook is stable. Pro forma operating lease-adjusted leverage is elevated at about 6.8x and modestly higher than TelePacific's leverage of 6.4x as of Dec. 31, 2010. Nevertheless, S&P's rating incorporates the expectation of additional small acquisitions, which could slightly reduce leverage if they are funded with cash from the balance sheet. The ratings on TelePacific continue to reflect a highly leveraged financial risk profile and a high degree of business risk stemming from substantial competition from larger and better capitalized incumbent telephone companies. The ratings also reflect pricing pressure, a lack of sustainable competitive advantages, low barriers to entry, integration risk, and market concentration. Tempering factors include the company's solid EBITDA margins relative to its peer group and access-line growth because of low penetration levels and improving churn. VIRGINIA LUMINOR: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Virginia Luminor Real Estate, LLC 43720 Trade Center Place, Suite 140 Sterling, VA 20166 Bankruptcy Case No.: 11-11020 Chapter 11 Petition Date: February 14, 2011 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Christopher S. Moffitt, Esq. CHRISTOPHER S. MOFFITT, P.C. 218 North Lee St. 3rd Floor Alexandria, VA 22314-2631 Tel: (703) 683-0075 Fax: (703) 997-8430 E-mail: moffittlawoffices@gmail.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 three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb11-11020.pdf The petition was signed by Michael D. Lessin, managing member. WESTLAND PARCEL: Can Access Ban's Cash Collateral Until May 31 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Westland Parcel J Partners LLC and Pacific Western National Bank to use, on an interim basis, cash collateral of Pacific Western National Bank and T. Courtney until May 31, 2011. The Debtor may exceed any line item in the Budget by up to 15% in any one month, as long as the overage for all items in the aggregate does not exceed 15% of the total budget amount for that month, with the savings in one month to be carried over to any line item into subsequent months. Creditors holding a secured interest in cash collateral will be granted replacement liens to the same validity and priority as their prepetition liens. A continued hearing is set for May 18, 2011, at 9:30 a.m., at 255 East Temple Street Courtroom 1539 in Los Angeles, California. A full-text copy of the cash collateral budget is available for free at http://ResearchArchives.com/t/s?7359 Long Beach, California-based Westland Parcel J Partners, LLC, filed for Chapter 11 bankruptcy protection on November 15, 2010 (Bankr. C.D. Calif. Case No. 10-58987). Jeffrey S Shinbrot, Esq., at The Shinbrot Firm, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate David William Neary (Bankr. C.D. Calif. Case No. 10- 39802) filed separate Chapter 11 petition on July 20, 2010. WHITTLE DEV'T: Court Extends Plan Filing Deadline to April 4 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas extended the exclusive periods of Whittle Development Inc. and its debtor-affiliates to file a Chapter 11 plan of reorganization until April 4, 2011, and solicit acceptances of that plan until June 15, 2011. The initial deadline to file for Chapter 11 plan expired on Feb. 1, 2011. About Whittle Development Rockwall, Texas-based Whittle Development Inc. is a Sub Chapter S property development company wholly owned by Robert S. Whittle. It owns significant acreage in and around the northeastern shore of Lake Ray Hubbard, as well as other parts of Rockwall County, Texas. Its business is the sale and development of its holdings for highest and best uses of its land "inventory" to third party end users or other more direct developers. Whittle Development filed for Chapter 11 bankruptcy protection on October 4, 2010 (Bankr. N.D. Tex. Case No. 10-37084). Whittle Development estimated its assets and debts at $10 million to $50 million at the Petition Date. Whittle Development's case is jointly administered with Rockwall, Texas-based Mariah Bay Development Inc., which is also a Sub Chapter S corporation wholly owned by Robert S. Whittle. Mariah Bay filed for Chapter 11 bankruptcy protection on October 4, 2010 (Bankr. N.D. Tex. Case No. 10-37085). Mariah Bay estimated its assets and debts at $10 million to $50 million at the Petition Date. Edwin Paul Keiffer, Esq., at Wright Ginsberg Brusilow P.C., assists the Debtors in their restructuring efforts. Mariah Bay's affiliate, Mariah Bay Leasing Corporation, filed a separate Chapter 11 petition on February 19, 2010 (Bankr. N.D. Tex. Case No. 10-31171). WILMINGTON PRINTING: Files for Bankruptcy Amids BB&T Foreclosure ---------------------------------------------------------------- Wayne Faulkner at StarNews Online reports that Wilmington Printing Co. filed for Chapter 11 protection amid foreclosure actions by BB&T. Wilmington Printing owed the bank more than $212,000 on an acre of land and the building at 420 N. Fourth St., according to the filing. The filing puts the value of those properties at more than $875,000. According to the report. Algernon Butler III of Butler & Butler, the Wilmington law firm representing Wilmington Printing, said the Company filed for Chapter 11 to "enable them to market the real estate, and they felt that Chapter 11 would afford them the best possibility for maximizing the return to creditors." Wilmington Printing said it owes more than $746,000 to the Pension Benefit Guaranty Corp. for unfunded benefits to its former employees. That unsecured debt, however, is disputed. Other secured claims from creditors include $82,600 from the N.C. Department of Revenue for sales taxes and $16,400 in New Hanover County property taxes. Wilmington Printing Co., operator of a printing facility in Wilmington, North Carolina, filed for Chapter 11 protection (Bankr. E.D. N.C. Case No. 11-00786) on Feb. 3, 2011. Algernon L. Butler, III, Esq., at Butler & Butler, LLP, in Wilmington, represents the Debtor. In its schedules, the Debtor disclosed $978,206 in assets and $1,699,462 in liabilities. WINGATE AIRPORT: Uncompleted LV Airport Hotel Files for Ch. 11 -------------------------------------------------------------- Wingate Airport South, LLC, the owner of an uncompleted Wyndham hotel near the Las Vegas airport, filed for Chapter 11 protection. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the petition claims the hotel is worth $12 million. Debt is $9.5 million, including $2.2 million in secured claims. The remainder is unsecured. Steve Green at the Las Vegas Sun the filing listed creditors including Park Place Properties LLC with a claim of more than $6.6 million against the building, contractor Crowne Tradewinds LLC with a claim of more than $605,000, and Clark County, owed more than $43,000 for property taxes. Las Vegas, Nevada based Wingate Airport South, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 11-11950) on Feb. 11, 2011, in its hometown. Neil J. Beller, Esq., at Neil J. Beller, Ltd., serves as counsel to the Debtor. In its schedules, the Debtor disclosed assets of $12,000,000 and liabilities of $9,497,529. WORD WORLD: Has Deal to Sell Assets to Standard General ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Word World LLC, the owner of the children's animated television series of the same name, filed a Chapter 11 petition along with an agreement to sell the assets for $1.5 million in cash to a fund affiliated with Standard General LP. Mr. Rochelle relates that Standard General, based in New York, is to provide $1.4 million in financing for the Chapter 11 case. Anything outstanding on the loan will be offset against the purchase price. As part of the acquisition, Standard General will provide as much as $500,000 to cure breaches on contracts to be assumed. An auction will be held to determine if there is a better offer. Mr. Rochelle said Word World disclosed assets of $300,000 and $14.5 million in debt in its schedules. Liabilities include $5.8 million owing to trade suppliers and $9.6 million on unsecured notes. About Word World WordWorld, LLC, provides learning products and interactive resources for preschoolers. It also offers Public Broadcasting Service, which broadcasts local TV shows and plans activities for kids, parents, and teachers. The Company was founded in 2002 and is based in New York, New York. Revenue was $3.4 million last year and $4.9 million in 2009. The project had been funded with $20 million provided by the U.S. Department of Education. Word World filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-10543) on Feb. 10, 2011. James N. Lawlor, Esq., at Wollmuth Maher & Deutsch, LLP, in Newark, New Jersey, serves as counsel to the Debtor. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. W.R. GRACE: Opposition to Garlock Plea for Documents Gains Support ------------------------------------------------------------------ Motley Rice LLC and the Official Committee of Asbestos Claimants in The Flintkote Company, WR Grace & Co., North American Refractories Co. and Pittsburg Corning Corp. bankruptcy cases join in the responses of the Law Office of Peter G. Angelos, PC, et. al., and Kazan, McClain, Lyons, Greenwood & Harley, et. al., in opposition to Garlock Sealing Technologies, LLC's request for authority to access Rule 2019 Statements. In response to the objections, Garlock Sealing argues that its motion for access is not a discovery motion and its need for the information is not relevant to the standard for access to court- filed records. Garlock asserts that it is invoking its right to access. Garlock explains that any member of the public has a right to obtain the exhibits, so long as it would not cause a "clearly defined and serious injury." Garlock also argues that it is a mistake to refer to the exhibits as confidential given no court has sealed them or made a finding that they should be sealed. Garlock says the law firm objectors do not come close to carrying their burden of demonstrating a clearly defined and serious injury that will occur if Garlock has access. None of the law firms addresses how access to names of persons participating in the bankruptcy cases could increase the risk of harm in any way, Garlock points out. Garlock Sealing sought and obtained leave from the Court to file a reply to the objections raised against its motion to access the 2019 statements. 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: BlackRock Inc. Hikes Equity Stake to 5.25% ------------------------------------------------------ BlackRock, Inc., disclosed in a Schedule 13G filed with the U.S. Securities and Exchange Commission on February 9, 2011, that it is deemed to beneficially own 3,837,753 shares of W.R. Grace stock representing 5.25% of the 73,078,925 Grace shares outstanding as of October 31, 2010. 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) * MERS Doesn't Confer Right to Foreclose, Judge Says ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Robert E. Grossman from Central Islip, New York, ruled on Feb. 10 in a 37-page opinion that the electronic system for keeping track of ownership of home mortgages and mortgage notes is insufficient to prove ownership, According to Mr. Rochelle, the case involved the Mortgage Electronic Registration System, known as MERS, which Judge Grossman described as being created to replace "our traditional system of public recordation of mortgages." Judge Grossman's decision said that the MERS system by itself doesn't show ownership and allow the purported owner to file a motion seeking permission to foreclose. Mr. Rochelle relates that MERS argued unsuccessfully that it serves as agent for all its members, thus avoiding the need for recording every transfer of a note and mortgage. The case is In re Agard, 10-77338, U.S. Bankruptcy Court, Eastern District of New York (Central Islip). * Only Motion Proper to Enforce Discharge Injunction ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in San Francisco ruled on Feb. 10 that a claim for contempt arising from violation of a discharge injunction is a contested matter that can be brought only by motion in the bankruptcy court where the bankruptcy was pending. In Barrientos v. Wells Fargo Bank NA, 09-55810, U.S. 9th Circuit Court of Appeals (San Francisco), the bankrupt sued a mortgage lender for violation of a discharge injunction under Section 524 of the Bankruptcy Code. The lender allegedly was continuing to report an outstanding debt that had been discharged in bankruptcy. According to Mr. Rochelle, U.S. District Judge Robert C. Jones, sitting by designation from the District of Nevada, said that because the issue could only be raised in the bankruptcy court, the Bankruptcy Rules require using a motion rather than a complaint to enforce the discharge injunction. * Malpractice Claim Discharged Although Not Listed -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that before a lawyer filed bankruptcy, he committed malpractice by failing to make a proper filing of a client's security interest. The failure became evident only after the lawyer received his discharge in bankruptcy. According to Mr. Rochelle, U.S. District Judge Thomas Russell in Owensboro, Kentucky, ruled on Feb. 4 that the resulting debt was discharged even though the former client wasn't listed among creditors. Judge Russell said the former client wasn't denied due process because it was a so-called no-asset bankruptcy, where creditors received nothing. The client's inability to recover resulted from the lack of assets, not denial of due process. The case is Republic Bank & Trust Co. v. Hutchinson, 10-123, U.S. District Court, Western District of Kentucky (Owensboro). * U.S. Panel to Probe FDIC Bank Resolutions, Loss-Share Deals ------------------------------------------------------------- Phil Mattingly at Bloomberg News reports that the U.S. House Financial Services Committee plans to review the Federal Deposit Insurance Corp.'s handling of the more than 300 bank failures the agency has handled since the start of the subprime mortgage crisis. According to the report, the panel amended its proposed oversight agenda to include a review of resolution procedures at the FDIC, the independent federal agency that acts as receiver for failed banks. More than 300 lenders have been shuttered since credit markets froze in 2008. Bloomberg discloses that Representative Lynn Westmoreland, a Georgia Republican, offered the amendment, which also requires the committee to look into the FDIC's use of loss-sharing agreements to attract buyers for failed bank assets. In those agreements, the FDIC agrees to bear a portion of any losses on the assets. * Canada November Bankruptcies Rise 1.1% From October 9 ------------------------------------------------------- Canada's bankruptcy superintendent reported on its Web site that the total number of insolvencies (bankruptcies and proposals) in Canada increased by 5.2% in November 2010 from the previous month. Bankruptcies increased by 1.1%, whereas proposals increased by 14.2%. Over the past 10 years, there were only three years when the total number of insolvencies filed in the month of November was lower than the total number filed in October. The total number of insolvencies in November 2010 was 1.6% lower than the total number of insolvencies in November 2009. Consumer insolvencies have decreased by 0.9%, while business insolvencies have decreased by 17.8%. For the 12-month period ending November 30, 2010, total insolvencies decreased by 10.5% compared with the 12-month period ending Nov. 30, 2009. It is worth noting that the total volume of insolvency still remains 21.4% higher than the 12-month period (October 2007 - September 2008) preceding the recession. For the 12-month period ending November 30, 2010, consumer insolvencies decreased by 10.0% compared with the 12-month period ending November 30, 2009. Consumer bankruptcies decreased by 19.5 percent, while consumer proposals increased by 22.4%. For the same period, 96.3% of total insolvencies were filed by consumers. Business insolvencies for the 12-month period ending November 30, 2010, fell by 22.9% compared with the 12-month period ending November 30, 2009. A reduction in the number of insolvencies among the retail trade; manufacturing; transportation and warehousing; accommodation and food services; and construction sectors largely contributed to this decrease. The proportion of proposals in consumer insolvencies increased to 31.0% during the 12-month period ending Nov. 30, 2010, up from 22.8% during the 12-month period ending Nov. 30, 2009. This increase may be an indication that consumers are taking advantage of changes to the Bankruptcy and Insolvency Act. The changes, implemented on Sept. 18, 2009, allow consumers more flexibility in filing proposals. In November 2010, two proceedings were filed under the Companies' Creditors Arrangement Act: Tuscan Ventures Inc. and Tuscan Villas Ltd., and Boutique Jacob, Inc. * Bankruptcy Would Be 'Last Resort' for US Cities, Says Miller -------------------------------------------------------------- Bankruptcy would be a "last resort" for U.S. cities with financial problems because it might last many years without certainty of resolving issues such as union contracts, bankruptcy lawyer Harvey Miller told Bloomberg Television last week. Meanwhile, William Selway at Bloomberg News reports that Republicans and Democrats in the U.S. House criticized a proposal to allow states to file for bankruptcy to escape their debts, calling it an unnecessary intrusion into local affairs that could roil the bond market. According to the report, Republican Representative Lamar Smith of Texas, chairman of the House Judiciary Committee, said in Washington on Feb. 14 that allowing bankruptcy filings could encourage profligate borrowing and penalize even sound states with higher interest costs. Representative John Conyers, a Democrat from Michigan, said it is a "useless" idea. Democrat Hank Johnson, a Georgia Democrat, also said it was an unnecessary step that's motivated by opposition to public-employee unions, a major source of campaign contributions for Democrats. * * * As reported in the Jan. 24, 2011 edition of the Troubled Company Reporter, Newt Gingrich, the former speaker of the House of Representatives, is pushing for legislation that would allow U.S. states to file for bankruptcy. Mr. Gingrich, a Republican party figure and a potential presidential candidate for 2012, told Reuters that the legislation will likely be introduced in Congress February. Mr. Gingrich has championed on a move to change federal law that would let states file for bankruptcy in order to handle their long-term budget problems despite resistance from states and investors in the $2.8 trillion municipal bond market. Currently, Chapter 9 of the Bankruptcy Code, which allows cities, counties and other units of local government units to restructure their debts, doesn't include states. States have reported $140 billion of budget gaps for fiscal 2012 as the worst recession since the 1930s cut tax receipts by the largest amount on record, Bloomberg News reported, citing the Center on Budget and Policy Priorities, a Washington research group. * City Budget Troubles Spur States to Expand Oversight Abilities ---------------------------------------------------------------- Dow Jones' DBR Small Cap reports that states are taking new steps to expand their oversight of town and city finances to stay ahead of any brewing fiscal troubles. The report relates that California Controller John Chiang and several state lawmakers last Tuesday unveiled bills that would give the controller more authority to audit local finances and advise troubled municipalities. Meanwhile, DBR relates, the Michigan Treasury is sponsoring a new training program last week for potential "emergency financial managers" who would help turn around distressed cities and towns. The moves come as other states, including Indiana, are evaluating their procedures for monitoring local finances as some investors in the nation's $2.9 trillion municipal-bond market raise concerns about the impact of the economy on state and local finances, the report notes. * State Bankruptcy Proposal Criticized by Both Parties ------------------------------------------------------ William Selway at Bloomberg News reports that Republicans and Democrats in the U.S. House criticized a proposal to allow states to file for bankruptcy to escape their debts, calling it an unnecessary intrusion into local affairs that could roil the bond market. According to the report, Republican Representative Lamar Smith of Texas, chairman of the House Judiciary Committee, said in Washington Feb. 14 that allowing bankruptcy filings could encourage profligate borrowing and penalize even sound states with higher interest costs. Representative John Conyers, a Democrat from Michigan, said it is a "useless" idea. Democrat Hank Johnson, a Georgia Democrat, also said it was an unnecessary step that's motivated by opposition to public-employee unions, a major source of campaign contributions for Democrats. Bankruptcies Carry Problems Bankruptcy Law360 reports that financial and legal experts told legislators Monday that establishing a state bankruptcy option to address the risk of underfunded state pension plans would wreak havoc with municipal bond markets and could amount to an unconstitutional overstep of states' sovereignty. According to Law360, solutions exist beyond bankruptcy to deal with the stormy financial forecasts many states are now facing, Chapman & Cutler LLP partner James Spiotto told the House Judiciary Committee subcommittee. Dow Jones' DBR Small Cap reports that Utah Governor Gary Herbert said that giving states the option to seek bankruptcy protection should be considered only as a "last resort." * * * As reported in the Jan. 24, 2011 edition of the Troubled Company Reporter, Newt Gingrich, the former speaker of the House of Representatives, is pushing for legislation that would allow U.S. states to file for bankruptcy. Mr. Gingrich, a Republican party figure and a potential presidential candidate for 2012, told Reuters that the legislation will likely be introduced in Congress February. Mr. Gingrich has championed on a move to change federal law that would let states file for bankruptcy in order to handle their long-term budget problems despite resistance from states and investors in the $2.8 trillion municipal bond market. Currently, Chapter 9 of the Bankruptcy Code, which allows cities, counties and other units of local government units to restructure their debts, doesn't include states. States have reported $140 billion of budget gaps for fiscal 2012 as the worst recession since the 1930s cut tax receipts by the largest amount on record, Bloomberg News reported, citing the Center on Budget and Policy Priorities, a Washington research group. * Cypress Group Executives Leave Firm to Form Torque Capital ------------------------------------------------------------ Dow Jones' DBR Small Cap reports that three executives from Cypress Group have left the business to form Torque Capital Group LLC, a lower midmarket firm that has struck its first deal. The Cypress Group is a New York-based private equity group, which manages two private equity funds. Cypress invests in privately negotiated transactions. Investments made by Cypress include Cinemark, Inc., AMTROL, Inc., Williams Scotsman, Inc., WESCO International, Inc., ClubCorp, Inc., Danka Business Systems PLC, MedPointe Inc., Montpelier Re Holdings, Ltd., Republic National Cabinet Corp., Catlin Group Ltd., The Meow Mix Company, Financial Guaranty Insurance Company (FGIC), Communications & Power Industries, Inc., Affinia Group Inc., Stone Canyon Entertainment Corporation, Cooper-Standard Automotive and Scottish Re Group Limited. * Alvarez & Marsal Boosts Advisory Team for P.E., M&A Clients ------------------------------------------------------------- Dow Jones' DBR Small Cap reports that the advisory firm behind the administration of collapsed investment bank Lehman Brothers Holdings Inc. has bolstered its transaction services team in response to a "steady surge" in demand among buyout firms and corporate buyers. * David Drez Joins Wick Phillips -------------------------------- Wick Phillips Gould & Martin, LLP, a full-service business law firm, announces that David J. Drez III has joined the firm as a partner. Mr. Drez will be based in the firm's Fort Worth office. A trial lawyer specializing in complex business disputes, Mr. Drez represents clients in a variety of industries, including oil and gas, electric utility, real estate, banking and finance, and construction. David will continue to represent clients in federal and state courts throughout Texas, in addition to other jurisdictions. Before his move to Wick Phillips, Mr. Drez was a partner with Haynes and Boone, LLP, based in that firm's Fort Worth office. "We are delighted that David has decided to join the firm, and he will be a key senior member of our litigation practice," said Todd Phillips, a founding partner of the firm. "He is a respected and highly regarded trial lawyer that is a strong addition to the Wick Phillips team. Our Fort Worth practice is growing rapidly, and adding David to the team further demonstrates our commitment to serving the Tarrant County business community." Mr. Drez has represented a number of high profile clients involving bankruptcy, contract disputes, and damage claims, among other commercial litigation cases. Most recently, he was the lead trial counsel in a federal fraud trial concerning the sale of two lines of fiber optic products. Mr. Drez successfully tried the case, resulting in a $12.5 million jury verdict on behalf of his client. Licensed to practice in Texas, New York and Louisiana, Mr. Drez has more than ten years of experience in all phases of litigation in the trial and appellate courts. He is admitted in the U.S. Supreme Court, U.S. Court of Appeals for the Fifth Circuit, all U.S. district courts in Texas and Western District of Louisiana. "Wick Phillips continues to build a talented and diverse team of experts, and I am excited to be a part of it. The firm believes that superior legal work, in conjunction with personal service and attention to clients, is the foundation of the practice," said Drez. "Every attorney in the firm is dedicated to achieving the best possible outcome for our clients, and as we expand, we will never lose sight of that goal." Mr. Drez graduated cum laude with a J.D. from Southern Methodist University, and received a B.A. from Tulane University. Prior to his affiliation with Haynes and Boone, Mr. Drez served as a law clerk for the Honorable James T. Trimble, Jr. in the United States District Court for the Western District of Louisiana. About Wick Phillips Gould Serving the legal needs of businesses in a broad range of industries, Wick Phillips -- http://www.wickphillips.com/-- practices law with purpose. Specialty areas include commercial litigation, bankruptcy, creditor's rights, civil appeals, corporate, corporate advisory, labor and employment, and securities. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Angela Cameron Bankr. N.D. Ala. Case No. 11-40328 Chapter 11 Petition filed February 9, 2011 In Re Saraland Dental Center, P.C. Bankr. S.D. Ala. Case No. 11-00477 Chapter 11 Petition filed February 9, 2011 See http://bankrupt.com/misc/alsb11-00477.pdf In re Anthony Daleo Bankr. D. Ariz. Case No. 11-03283 Chapter 11 Petition filed February 9, 2011 In Re Developmental Dynamics Incorporated Bankr. C.D. Calif. Case No. 11-15523 Chapter 11 Petition filed February 9, 2011 filed pro se In Re Developmental Dynamics Family Services Inc. Bankr. C.D. Calif. Case No. 11-15527 Chapter 11 Petition filed February 9, 2011 filed pro se In re Juan Andrade Bankr. C.D. Calif. Case No. 11-15634 Chapter 11 Petition filed February 9, 2011 In re Michael Dalton Bankr. N.D. Calif. Case No. 11-30506 Chapter 11 Petition filed February 9, 2011 In re Joseph Travers Bankr. S.D. Calif. Case No. 11-02112 Chapter 11 Petition filed February 9, 2011 In Re Wright Wing Investments, Inc. dba Buffalo Wings and Rings dba T Bone'z Southwestern Grill and Saloon Bankr. W.D. Ky. Case No. 11-30573 Chapter 11 Petition filed February 9, 2011 See http://bankrupt.com/misc/kywb11-30573.pdf In Re Novo, Inc. dba Novo Salon dba Edward Perruzzi Bankr. D. Mass. Case No. 11-11006 Chapter 11 Petition filed February 9, 2011 See http://bankrupt.com/misc/mab11-11006.pdf In Re People's First Finance, Inc. Bankr. D. Nev. Case No. 11-11775 Chapter 11 Petition filed February 9, 2011 filed pro se In re William Schneider Bankr. E.D. N.Y. Case No. 11-70713 Chapter 11 Petition filed February 9, 2011 In re Rozanna Mulhollen Bankr. D. Ore. Case No. 11-60531 Chapter 11 Petition filed February 9, 2011 In Re Strategic Edge Logistics, LLC Bankr. M.D. Pa. Case No. 11-00874 Chapter 11 Petition filed February 9, 2011 See http://bankrupt.com/misc/pamb11-00874.pdf In Re Shirley Diamond Bankr. D. Ariz. Case No. 11-03346 Chapter 11 Petition filed February 10, 2011 In re Cynthia Rodriguez Bankr. C.D. Calif. Case No. 11-15769 Chapter 11 Petition filed February 10, 2011 In Re Mermaid's - Seafood And Grill, LLC aka Mermaid's Grill Bankr. E.D. Calif. Case No. 11-23388 Chapter 11 Petition filed February 10, 2011 See http://bankrupt.com/misc/caeb11-23388.pdf In re Sayed Hussein Bankr. E.D. Calif. Case No. 11-23439 Chapter 11 Petition filed February 10, 2011 In re Mischa McNab Bankr. N.D. Calif. Case No. 11-10450 Chapter 11 Petition filed February 10, 2011 In re Sylvia Mendoza Bankr. N.D. Calif. Case No. 11-51247 Chapter 11 Petition filed February 10, 2011 In Re GHMD, LLC Bankr. D. Colo. Case No. 11-12401 Chapter 11 Petition filed February 10, 2011 See http://bankrupt.com/misc/cob11-12401.pdf In re Charles K. Mullins Bankr. M.D. Ga. Case No. 11-50400 Chapter 11 Petition filed February 10, 2011 In Re Merk Services, Inc. dba Tub Doctor Bankr. S.D. Ga. Case No. 11-10266 Chapter 11 Petition filed February 10, 2011 See http://bankrupt.com/misc/gasb11-10266.pdf In re Edward-John Pajian Bankr. N.D. Ill. Case No. 11-05096 Chapter 11 Petition filed February 10, 2011 In re Donald Ware Bankr. E.D. Ky. Case No. 11-50378 Chapter 11 Petition filed February 10, 2011 In Re Anamorphic Systems, Inc. aka ASI Bankr. D. Nev. Case No. 11-50393 Chapter 11 Petition filed February 10, 2011 See http://bankrupt.com/misc/nvb11-50393.pdf In Re Western Residential Services, Inc. Bankr. D. Nev. Case No. 11-11854 Chapter 11 Petition filed February 10, 2011 See http://bankrupt.com/misc/nvb11-11854.pdf In Re N.Y. Thymes and Deli d/b/a C'est Cheese Bankr. D. N.J. Case No. 11-13781 Chapter 11 Petition filed February 10, 2011 See http://bankrupt.com/misc/njb11-13781.pdf In re Peter Hoffman Bankr. D. Ore. Case No. 11-31008 Chapter 11 Petition filed February 10, 2011 In re Eugene Brower Bankr. E.D. Wash. Case No. 11-00617 Chapter 11 Petition filed February 10, 2011 In re James Phillips Bankr. E.D. Wash. Case No. 11-00602 Chapter 11 Petition filed February 10, 2011 In Re Jalaran, LLC Bankr. M.D. Pa. Case No. 11 00903 Chapter 11 Petition filed February 10, 2011 See http://bankrupt.com/misc/pamb11-00903.pdf In re Donald Huber Bankr. W.D. Wash. Case No. 11-41013 Chapter 11 Petition filed February 10, 2011 In Re Kirkland Resources LLC Bankr. W.D. Wash. Case No. 11-11438 Chapter 11 Petition filed February 10, 2011 In re Robert Rynders Bankr. W.D. Wis. Case No. 11-10707 Chapter 11 Petition filed February 10, 2011 In Re Larry Hodge Excavating & Hauling Inc. Bankr. N.D. Ala. Case No. 11-80495 Chapter 11 Petition filed February 11, 2011 See http://bankrupt.com/misc/alnb11-80495.pdf In Re Michael Hanson Bankr. D. Ariz. Case No. 11-03553 Chapter 11 Petition filed February 11, 2011 In Re Robert Schiel Bankr. D. Ariz. Case No. 11-03522 Chapter 11 Petition filed February 11, 2011 In Re Casting Office, Inc. Bankr. C.D. Calif. Case No. 11-15980 Chapter 11 Petition filed February 11, 2011 See http://bankrupt.com/misc/cacb11-15980.pdf In Re Michael Forbes Bankr. C.D. Calif. Case No. 11-15920 Chapter 11 Petition filed February 11, 2011 In Re Carl Wilson Bankr. D. Kan. Case No. 11-10273 Chapter 11 Petition filed February 11, 2011 In Re Prieur Leary Bankr. E.D. La. Case No. 11-10415 Chapter 11 Petition filed February 11, 2011 In Re AB Investments, L.L.C. Bankr. E.D. Mo. Case No. 11-41127 Chapter 11 Petition filed February 11, 2011 See http://bankrupt.com/misc/moeb11-41127.pdf In Re Avalon Logistics, Inc. Bankr. D. N.J. Case No. 11-13955 Chapter 11 Petition filed February 11, 2011 See http://bankrupt.com/misc/njb11-13955.pdf In Re Swartwout Construction, Inc. Bankr. N.D. N.Y. Case No. 11-10320 Chapter 11 Petition filed February 11, 2011 See http://bankrupt.com/misc/nynb11-10320.pdf In Re Angel Ramon Cardona Bankr. D. Puerto Rico Case No. 11-01053 Chapter 11 Petition filed February 11, 2011 n Re Paul Cook Bankr. M.D. Tenn. Case No. 11-01308 Chapter 11 Petition filed February 11, 2011 In Re Victor McClure Bankr. N.D. W.Va. Case No. 11-00215 Chapter 11 Petition filed February 11, 2011 In Re David Ramz Bankr. W.D. Wash. Case No. 11-11465 Chapter 11 Petition filed February 11, 2011 In Re Leroy Jordan Bankr. C.D. Calif. Case No. 11-16068 Chapter 11 Petition filed February 13, 2011 In Re Larry Hodge Bankr. N.D. Ala. Case No. 11-80524 Chapter 11 Petition filed February 14, 2011 In Re Kevin Kowalchuk Bankr. D. Ariz. Case No. 11-03607 Chapter 11 Petition filed February 14, 2011 In Re Stanley Torgerson Bankr. D. Ariz. Case No. 11-03677 Chapter 11 Petition filed February 14, 2011 In Re Keenan Cheung Bankr. C.D. Calif. Case No. 11-16135 Chapter 11 Petition filed February 14, 2011 In Re Leroy Jordan Bankr. C.D. Calif. Case No. 11-16068 Chapter 11 Petition filed February 13, 2011 In Re Nicholas Cotton Bankr. C.D. Calif. Case No. 11-16221 Chapter 11 Petition filed February 14, 2011 In Re Marilou Cayabyab Bankr. N.D. Calif. Case No. 11-51333 Chapter 11 Petition filed February 14, 2011 In Re Robert Dills Bankr. N.D. Calif. Case No. 11-10502 Chapter 11 Petition filed February 14, 2011 In Re Derrick Broadaway Bankr. E.D. Va. Case No. 11-70615 Chapter 11 Petition filed February 14, 2011 ********* 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 ***