/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110302.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 2, 2011, Vol. 15, No. 60 Headlines 3985 CORNERSTONE: Voluntary Chapter 11 Case Summary ADVANTAGE BLASTING: Involuntary Case Taken Over by Ch. 11 Trustee AEP TEXAS: Fitch Affirms BB+ Rating on Jr. Subordinated Debentures AEG 777: Voluntary Chapter 11 Case Summary AERIE RESORT: Receiver Cuts Asking Price Again AMERICAN REPROGRAPHICS: S&P Affirms 'BB-' Corporate Credit Rating AMERISTAR CASINOS: Neilsen Estate Deal Cues Moody's Rating Review AMERICAN TREE: Financial Woes Cue Chapter 11 Bankruptcy Filing AMERICAS ENERGY: Posts $720,000 Net Loss in Dec. 31 Quarter ANCHOR BLUE: Nears Auction for Brand, Logo AUTOCLUB BODY: Clawback Suit v. Kalb Survives Motion to Dismiss BARTON HILL: SC Judge Urges Owners to File for Bankruptcy BERNARD L MADOFF: Picard Seeks Return of $2.1BB From Tremont BERNARD L MADOFF: Picard Seeks Return of $16MM From Merrill Unit BIG HORN LAND: Dist. Ct. Affirms Approval of Wehners Accord BOARDROOM PROPERTIES: Case Summary & 2 Largest Unsecured Creditors BORDERS GROUP: Barnes & Noble Interested in Some Store Locations BORDERS GROUP: Sec. 341 Meeting of Creditors Set for March 22 BORDERS GROUP: US Trustee Appoints Unsecured Creditors' Committee BUDDHA BUILDING: Case Summary & 7 Largest Unsecured Creditors CAESARS ENTERTAINMENT: $400MM Loans Won't Move Fitch's CCC Rating CAMP COOLEY: ETC Katy Asks Court to Lift Automatic Stay CAMP COOLEY: GMAC Seeks Stay Relief to Foreclose on Vehicle CAMP COOLEY: Has Nod to Hire ESA to Market Mineral Assets CAPMARK FINANCIAL: Moody's Withdraws 'C' Senior Unsec. Rating CASPIAN SERVICES: Posts $1.6 Million Net Loss in Dec. 31 Quarter CATALYST PAPER: Letko Brosseau Discloses 7.59% Equity Stake CDW CORP: S&P Raises Corporate Credit Rating to 'B' CEDAR FUNDING: Creditors Approve Liquidation Plan CEMTREX INC: Reports $144,200 Net Income in Dec. 31 Quarter CHINA GINSENG: Posts $188,900 Net Loss in Dec. 31 Quarter CINCINNATI BELL: Peninsula Capital Discloses 8.9% Equity Stake CLOVERLEAF ENTERPRISES: Closes Rosecroft Raceway Sale to Penn COACH AMERICA: Moody's Gives 'Caa1/LD' After Distressed Exchange COMPETITIVE TECHNOLOGIES: Has $1.3MM Loss in 2 Mos. Ended Dec. 31 COMSTOCK RESOURCES: Moody's Assigns 'B2' Rating to $250 Mil. Notes COMSTOCK RESOURCES: S&P Assigns 'B' Rating to $250 Mil. Notes CONEX HOLDINGS: C. Stanziale Named Interim Chapter 7 Trustee CONEX INTERNATIONAL: Involuntary Case Taken Over by Ch. 11 Trustee CONMED CORP: S&P Affirms Corporate Credit Rating at 'BB-' CONSOLIDATED HORTICULTURE: Judge OKs $31-Mil. Sale to Lender CONTINENTAL COIN: 9th Circuit Rejects Two Appeals COYOTES HOCKEY: Hulsizer, Goldwater Fight Over Bonds CREDIT ACCEPTANCE: Moody's Assigns 'B1' Rating to Senior Notes DBSD N.A.: Noteholders Float Own $750-Million Reorganization Plan DBSD N.A.: Tweaks Sale Agreement With Dish Network DECODE GENETICS: Insurance Broker's Fee Not Avoidable DEVELOPERS DIVERSIFIED: S&P Gives Stable Outlook, Keeps BB Rating EASTMAN KODAK: S&P Lowers 'CCC' Corporate Rating From 'B-' EASTMAN KODAK: FMR LLC Discloses 6.782% Equity Stake EMAK WORLDWIDE: Files Reorganization Plan; DS Hearing on April 7 EMIVEST AEROSPACE: Plan Due Date Moved; Assets Marketing Ongoing ENERGY FUTURE: Receives Default Letter From Aurelius ENERGY FUTURE: Event of Default Won't Affect Moody's Ratings ENERGY FUTURE: Fitch Maintains 'CCC' Rating, Outlook Negative FAIRMOUNT MINERALS: S&P Assigns 'BB-' Rating to $1.075 Bil. Loan FATBURGER RESTAURANTS: Puts 26 Store Locations for Sale FIRST PHYSICIANS: Posts $1.7 Million Net Loss in Dec. 31 Quarter FLINT TELECOM: Posts $2.2 Million Net Loss in Dec. 31 Quarter FORD MOTOR: Wellington Management Discloses 4.91% Equity Stake FORD MOTOR: Evercore Trust Discloses 7.97% Equity Stake FORUM HEALTH: Committee Wants Ch. 11 Trustee to Take Over FREDDIE WAYNE LONG: Bankr. Court Rules on Pleadings in ReVest Suit FREESCALE SEMICONDUCTOR: Moody's Upgrades Default Ratings to 'B3' GENERAL MOTORS: Creditors Committee Files Revised GUC Trust Pact GENERAL MOTORS: JPMorgan Seeks Oral Argument at Plan Hearing GENERAL MOTORS: Parties React to $420 Million Claims Reserve GLC LIMITED: Files for Chapter 11 to Sell Assets GLC LIMITED: Case Summary & 20 Largest Unsecured Creditors GLEN ROSE: Posts $956,000 Net Loss in Dec. 31 Quarter GLOBAL CROSSING: FMR LLC Discloses 15% Equity Stake GOLF CLUB AT AVERY: Case Summary & 20 Largest Unsecured Creditors GPS PAINTING: Case Summary & 13 Largest Unsecured Creditors GRAND ISLAND LIQUOR: Court Denies Use of Pathway Bank Collateral GRAY TELEVISION: FMR LLC Discloses 14.454% Equity Stake GREEN PLANET: Reports $167,800 Net Income in Dec. 31 Quarter GULFSTREAM INT'L: General Claims Bar Date on March 16 HAMPTON ROADS: David Twiddy Resigns as Exec. Vice President HEALTHSOUTH CORP: FMR LLC Discloses 10.473% Equity Stake HEALTHSOUTH CORP: Wellington Management Holds 1.47% Equity Stake HEALTHSOUTH CORP: Invesco Ltd. Discloses 6.0% Equity Stake HINESLEY FAMILY: Court Won't Appoint Ch. 11 Trustee for Now HUDSON HOLDING: Posts $3.9 Million Net Loss in Dec. 31 Quarter INNKEEPERS USA: Groups Balks at Lehman/Five Mile's 374MM Buyout JB'S FAMILY: Returns to Chapter 11 to Reorganize Restaurants JB'S FAMILY: Case Summary & 20 Largest Unsecured Creditors JC PENNEY: $900 Mil. Share Repurchase Won't Affect Moody's Ratings JC PENNEY: S&P Affirms Corporate Credit Rating at 'BB+' JETBLUE AIRWAYS: FMR LLC Discloses 14.990% Equity Stake JETBLUE AIRWAYS: Wellington Management Holds 5.68% Equity Stake JOSEPH A STEPHENS: Court Denies Plan Confirmation JOSHUA HOTEL: Case Summary & 18 Largest Unsecured Creditors KRONOS INTERNATIONAL: To Redeem EUR 80MM Sr. Notes at 102.167% KY USA ENERGY: Farm-Out Assignments Aren't Executory Contracts LARRY C MITCHELL: 11th Circuit Reverses Tax Ruling LEHR CONSTRUCTION: Court Extends Schedules Deadline to April 6 LEHMAN BROTHERS: $1.173 Billion Already Paid to Professionals LEHMAN BROTHERS: NY Regulators' Suit vs. E&Y Takes Detour LEHMAN BROTHERS: Wins Approval of Greenbrier Settlement LEHMAN BROTHERS: Wins Approval of Swedbank AB Settlement LEVEL 3 COMMS: Loomis Sayles Discloses 10.98% Equity Stake LEWIS CRANE: Caterpillar Financial Wins Guaranty Suit LIEBFRIED AVIATION: Court Directs Accountant to Disgorge Fees LOEHMANN'S HOLDINGS: Emerges From Chapter 11 Protection MA BB OWEN: Files for Chapter 11 in Sherman, Texas MA BB OWEN: Voluntary Chapter 11 Case Summary MARC DREIER: Ch. 7 Trustee Sues Anguillan Developer for $1.5MM MDG CAPITAL: Three Residential Communities Now in Chapter 11 MDG CAPITAL: Voluntary Chapter 11 Case Summary MEG ENERGY: Moody's Publishes 'B1' Probability of Default Rating MESA AIR: Exits Chapter 11 as a Strong, Competitive Airline MESA AIR: Wins Approval of US Bank/Finame Agreement MESA AIR: Has Settlement Allowing Ariz. Rev. Dept. Claims MESA AIR: signs Deal Assuming Bonds and Disallowing Zurich Claims MID WEST HOTEL: Gainesville Holiday Inn Owner Files for Chapter 11 MID WEST HOTEL: Voluntary Chapter 11 Case Summary MK NETWORK: Files for Chapter 11 Due to Fifth Street Dispute MK NETWORK: Case Summary & 20 Largest Unsecured Creditors MORNINGSIDE HEIGHTS: Restaurant to Remain Open While in Ch. 11 MOULDI SAYEH: Court Grants Ch. 11 Trustee's Bid for Damages MPG OFFICE: David Tepper Discloses 8.68% Equity Stake NAVISTAR INTERNATIONAL: FMR LLC Discloses 14.655% Equity Stake NAVISTAR INTERNATIONAL: Jeffrey Altman Holds 8.09% Equity Stake NAVISTAR INTERNATIONAL: Wellington Holds 6.67% Equity Stake NAVISTAR INTERNATIONAL: Evercore Equity Stake Down to 0% NAVISTAR INTERNATIONAL: Retiree Trusts No Longer Own Shares NEW ORIENTAL: Amends 8-K, Files Copy of Conversion Agreement NEW ORIENTAL: Posts $2.5 Million Net Loss in Dec. 31 Quarter NEW ENTERPRISE: S&P Puts 'B+' Rating on CreditWatch Negative NEXTMART INC: Posts $103,300 Net Loss in Dec. 31 Quarter NORTH AMERICAN PETROLEUM: Well Operators Had No Valid Contract OCWEN FINANCIAL: Fitch Affirms Issuer Default Rating at 'B+' ONTARIO KUSHWOOD: Case Summary & 2 Largest Unsecured Creditors ORIENT EXPRESSIONS: Case Summary & 13 Largest Unsecured Creditors PACIFIC COAST: Case Summary & 19 Largest Unsecured Creditors PACIFIC SAFETY: Forbearance Period Extended Until March 31 PAMELA CARVEL: Files for Chapter 11 Bankruptcy Protection PENN TREATY: Robert Alper Discloses 5.1% Equity Stake PERONE PROPERTIES: Case Summary & 2 Largest Unsecured Creditors PERRY ELLIS: Moody's Assigns 'B2' Proposed Senior Bonds PROVISION HOLDING: Posts $802,300 Net Loss in Dec. 31 Quarter QWEST COMMUNICATIONS: FMR LLC Discloses 10.258% Equity Stake REGAL ENTERTAINMENT: Anschutz Company Holds 47.8% Equity Stake REGAL ENTERTAINMENT: Holds 28.4% Equity Stake in CineMedia Inc. REGIONS FINANCIAL: Moody's Confirms 'Ba3' Long-Term Ratings RIVER ISLAND: Files for Chapter 11 in Fort Lauderdale RIVER ISLAND: Case Summary & 20 Largest Unsecured Creditors ROBERT PRINTZ: Bankruptcy Judge Denies Cash Collateral Plan ROOTER MASTER: Case Summary & 20 Largest Unsecured Creditors RUGGED BEAR: Committee Seeks to Retain Jager Smith as Counsel RUGGED BEAR: Court Approves Retention of Consensus Advisory RYLAND GROUP: FMR LLC Discloses 15% Equity Stake RYLAND GROUP: Janus Capital Discloses 6.2% Equity Stake S & J: Case Summary & 9 Largest Unsecured Creditors SABRE DEFENCE: Trustee Seeks to Move Forward With Bankruptcy Sale SES SECURITIES: Case Summary & 8 Largest Unsecured Creditors SIGNAL ELECTRIC: Case Summary & 20 Largest Unsecured Creditors SINOFRESH HEALTHCARE: Inks Consulting Agreement with Gary Zweig SOMERSET PROPERTIES: Court Conditionally Approves Plan Outline SONRISA REALTY: Court Confirms Compass Bank's Exit Plan SOURCE PRECISION: Assigns All Assets to Finn for Liquidation SOUTHWEST SPORTS: Court Dismisses Portion of Suit v. Kleem et al. SUNRISE SENIOR: Reports $100.82 Million Net Income in 2010 SW GEORGIA ETHANOL: Can File Schedules & Statements Until March 8 SW GEORGIA ETHANOL: Section 341(a) Meeting Set For March 17 SW GEORGIA ETHANOL: Wants to Hire FMW & JCF as Co-Counsel SW OWNERSHIP: Files for Chapter 11 in Austin SW OWNERSHIP: Case Summary & 20 Largest Unsecured Creditors TEAMWORK PHYSICAL: Case Summary & 20 Largest Unsecured Creditors TELIPHONE CORP: Posts $30,600 Net Loss in Dec. 31 Quarter TEREX CORPORATION: Moody's Lifts Ratings on Senior Notes to 'Ba3' TERRESTAR NETWORKS: EchoStar No Longer Interested in TSN's Assets TERRESTAR NETWORKS: Urquhart & Sullivan Represents Solus, et al. TEXAS COMPETITIVE: Fitch Maintains CCC Rating, Outlook Negative TH PROPERTIES: Susquehanna Bids $8.5MM for Burbank Grove Project TH PROPERTIES: Suit vs. Lexon Goes Back to Trial Court TMST INC: Chap. 11 Trustee to Tap BroadStreet as Consultant TRICO MARINE: Launches Offer for Fin'l Restructuring Plan ULTIMATE ACQUISITION: Court OKs Cash Collateral Use Until Apr. 29 ULTIMATE ACQUISITION: Court OKs Consultant Pact and Closing Sale ULTIMATE ACQUISITION: Taps Campbell & Levine as Delaware Counsel ULTIMATE ACQUISITION: Taps Falcon Advisors as Financial Advisors UNITED REFINING: S&P Reports Additional Liquidity Support US DATAWORKS: Has $619,200 Restated Loss in FY Ended March 31 VENTANA HILLS: Confirmation & Collateral Hearings Moved to Apr. 12 VENTANA HILLS: Seeks to Employ CB Richard Ellis as Appraiser VIASAT INC: Moody's Affirms Corporate Family Rating at 'Ba3' WELLINGTON PRESERVE: Court Approves J. Byington as Accountant WINDSTREAM CORPORATION: Fitch Affirms 'BB+' Issuer Default Rating WILLIAM COLLICOTT MANN: Chapter 11 Conversion Denied YELLOWSTONE MOUNTAIN: Judge Kirscher Won't Recuse Self * Bankruptcy Courts Prepare for Possible Shutdown, DBR Says * James Barz Joins Robbins Geller Rudman & Dowd LLP * Jeffrey Chadwick Joins McGuireWoods Chicago Office * Jones Day's Bapna & Kirkland's Ginzburg Move to Quinn Emanuel * Upcoming Meetings, Conferences and Seminars ********* 3985 CORNERSTONE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: 3985 Cornerstone Apartments, LLC dba CORNERSTONE APARTMENTS c/o A. Laruffa P.O. Box 938 San Clemente, CA 92674 Bankruptcy Case No.: 11-04870 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Eric Slocum Sparks, Esq. ERIC SLOCUM SPARKS PC 110 S. Church Avenue, #2270 Tucson, AZ 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 E-mail: eric@ericslocumsparkspc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Anthony P. Laruffa, manager. Debtor-affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Mission Creek I, LLC 10-39624 12/13/2010 ADVANTAGE BLASTING: Involuntary Case Taken Over by Ch. 11 Trustee ----------------------------------------------------------------- Roberta A. DeAngelis, U.S. Trustee for Region 3, has appointed Charles Stanziale as Chapter 11 trustee for Advantage Blasting & Coating, LLC. Wells Fargo Bank, N.A., had asked the U.S. Bankruptcy Court for the District of Delaware to (i) appoint a Chapter 11 trustee for in the bankruptcy cases of Conex International, LLC, and Advantage Blasting & Coating, LLC; and (ii) appoint an interim Chapter 7 trustee in the bankruptcy case of Conex Holdings, LLC. Mr. Stanziale was also appointed as Chapter 11 trustee for Conex International and interim Chapter 7 trustee for Conex Holdings. Conex Holdings is the sole member of both International Conex and ABC, and is wholly owned by CopperCom, Inc. Wells Fargo said that Conex Holdings, as the sole member of Conex International and sole shareholder of ABC, has grossly mismanaged their affairs and has breached its fiduciary duties by, among other things, shuttering the businesses of Conex International for Conex Holdings' own apparent gain. Wells Fargo recounts that on Aug. 8, 2008, Conex International entered into a credit agreement with a group of lenders led by Wells Fargo, as agent. Pursuant to the Credit Agreement, Conex received a term loan of $120 million and a revolving loan of $30 million. All of the Alleged Debtors are identified as Loan Parties under the Credit Agreement and are jointly and severally obligated to Wells Fargo, as Agent, and the Lenders. According to Wells Fargo, starting in 2009, and continuing through the Petition Date, Conex International ceased to make required principal and interest payments under the Credit Agreement, constituting an Event of Default thereunder. Past due principal payments are currently $42 million and past due interest had accrued to $8 million by February 2011. Beginning in February 2010, the Lenders notified Conex of its continuing default. Wells Fargo discloses that as a result of the Events of Default, and due in part to an enterprise value of substantially less than the Alleged Debtors' indebtedness, the Lenders requested that CopperCom consent to a turnover of its ownership of Conex International to the Lenders and Conex's existing management. CopperCom refused. CopperCom also refused to permit the Lender to have discussions with existing management regarding the possible restructuring of the Conex's balance sheet, unless CopperCom was permitted to control the time, place and participants at the discussions. CopperCom refused to permit Conex and its management to pursue value maximizing transactions unless CopperCom could control the economics, Wells Fargo said. CopperCom, according to Wells Fargo, subsequently refused to initiate discussions with AIG, a Mezzanine Lender, until the proposed restructuring of Conex International's debt had been consummated. Wells Fargo said, "As it became apparent that CopperCom might not obtain the consent of AIG as contemplated, the Agent broached the possibility of filing a consensual, pre- packaged Chapter 11 bankruptcy case followed by an asset sale. Although CopperCom initially appeared amenable to this alternative, it nonetheless failed to take even the most basic steps toward this process." After months of prodding by the Lenders, CopperCom finally approached AIG in January 2011 about eliminating its subordinated Conex debt. "At that time, instead of seeking to eliminate AIG's subordinated debt, CopperCom offered AIG $5 million of subordinated debt, as well as a larger equity stake than had been contemplated by the parties," Wells Fargo stated. At the same time CopperCom was purporting to negotiate with AIG, CopperCom was directing Conex International to divert cash collateral away from the possession and control of Agent and the Lenders. On Feb. 2, 2011, the Lenders discovered that Conex had diverted upwards of $4 million of cash into accounts other than accounts at Wells Fargo or otherwise subject to account control agreements, in direct contravention of the Credit Agreement. Wells Fargo says that after the Lenders' second demand that all funds be immediately returned to the Approved Accounts, Conex International returned approximately $1.8 million of the diverted funds to an approved account, but it informed the Lenders that it would not return the remaining $2 million. Wells Fargo is represented by Stuart M. Brown -- sbrown@eapdlaw.com; R. Craig Martin -- rcmartin@eapdlaw.com; and Cynthia Moh Baldwin -- cbaldwin@eapdlaw.com -- at Edwards Angell Palmer & Dodge LLP and Alan P. Solow -- alan.solow@dlapiper.com; Richard A. Chesley -- richard.chesley@dlapiper.com; and Gregory S. Otsuka -- gregory.otsuka@dlapiper.com -- at DLA Piper LLP (US). About Advantage Blasting On Feb. 20, 2011, Wells Fargo, Bank of Montreal, and The Prudential Insurance Company of America, commenced an involuntary Chapter 7 bankruptcy case against Conex Holdings, LLC, and an involuntary Chapter 11 bankruptcy cases against Conex International, LLC (Bankr. D. Del. Case No. 11-10503) and Advantage Blasting & Coating, LLC (Bankr. D. Del. Case No. 11- 10502). AEP TEXAS: Fitch Affirms BB+ Rating on Jr. Subordinated Debentures ------------------------------------------------------------------ Fitch Ratings has upgraded the ratings of AEP Texas Central and concurrently affirmed the long-term ratings for American Electric Power Co. and its other subsidiaries: AEP Texas North, Appalachian Power Co., Columbus Southern Power Co., Indiana Michigan Power Co., Kentucky Power Co., Ohio Power Co., Public Service Co. of Oklahoma, and Southwestern Electric Power Co. Additionally, Fitch has assigned short-term ratings to TCC, TNC, APC, PSO and SWEPCO of 'F2'. The Rating Outlooks for TCC, AEP, CSP, APC, I&M, KPC, PSO, TNC and SWEPCO are Stable. The Rating Outlook for OPC remains Positive pending the proposed merger with CSP. Approximately $17.5 billion of debt is affected by the rating actions. A full list of rating actions follows at the end of this release. Key drivers of the ratings affirmations include: AEP's regulatory and geographic diversification via ownership of nine rated electric utility subsidiaries; generally balanced regulatory environments; consolidated credit metrics that are consistent with Fitch's 'BBB' Issuer Default Rating guidelines, a solid competitive position with ownership of low-cost coal-fired assets as well as a relatively low risk strategy of investing in transmission assets. Recent financial performance at the company has been bolstered by base rate increases in Kentucky and West Virginia, favorable weather across AEP's service territories, effective cost control measures as well as continued improvement in the economy, particularly in the industrial sector. AEP's ratios of EBITDA to interest and funds from operations to interest were 4.2 times and 4.3x, respectively, for the year ended Dec. 31, 2010. Consolidated leverage, as measured by the ratio of Debt to EBITDA, was 4.0x for the same time period. AEP has modest levels of parent debt. Fitch forecasts that AEP's consolidated credit metrics will remain at or near current levels through 2014, taking into account previously received and planned rate increases, normalized weather and continued economic recovery. Rating concerns relate to: AEP's exposure to emissions regulations and legislation given the company's large coal-fired generation fleet, regulatory uncertainty in Ohio regarding the pending electric security plan filing at AEP Ohio (CSP and OPC), increased customer switching in CSP's commercial sector and permitting and merchant price risk issues surrounding SWEPCO's Turk coal plant construction project. Of additional concern is the uncertainty related to the termination of the AEP East power pool. AEP's largest exposure to future carbon laws and other emissions regulations is in Ohio, which encompasses approximately 42% of total coal-fired generation. Fitch notes that Ohio Senate Bill 221, which was enacted in May 2008, specifically provides electric utilities with the ability to recover carbon related environmental costs. On Jan. 27, 2011, AEP Ohio filed a petition with the Public Utilities Commission of Ohio, to establish a new electric security plan for the period Jan. 1, 2012 through May 31, 2014. In addition, the companies plan to file a $93.2 million joint distribution rate case in March of this year. The PUCO is expected to rule on the ESP no later than the fourth quarter of this year. AEP does have the option to file for a Market Rate Option should the PUCO approve an ESP that is unacceptable to the company. Fitch notes that the current market structure in Ohio for electric companies makes it challenging for utilities to make longer-term investments (beyond the three-year horizon) in generation. This is not an immediate concern for AEP Ohio due to the excess capacity at OPC, which has a reserve margin of 42%. An additional issue that has recently arisen in Ohio is the increased customer switching in CSP's southern commercial jurisdiction, in total about 3% in 2010 and expected to grow to 17% in 2011. While this equates to approximately 6% of AEP Ohio's total load, and 1.5% of total AEP load, the higher shopping levels, coupled with the three-year ESP plans, could place pressure on the operating efficiencies of the Ohio utilities over the longer term. On Jan. 4, 2011, APC made a filing with the Virginia State Corporation Commission that detailed the AEP East pool members' (APC, I&M, KPC, CSP and OPC) intent to terminate the interconnection agreement. The pool members now have a three-year time frame in which to work out a settlement and new arrangement. The decision to evaluate the pool was initially raised by regulatory concerns, particularly from Virginia, that the current pool arrangement resulted in a lack of transparency. At this time, Fitch believes it is unlikely that the new arrangements to replace the current pool will have material credit rating impacts and will continue to monitor developments. AEP expects to generate about $1.1 billion of cash through accelerated depreciation, including $300 million in 2011, $550 million in 2012 and $225 million in 2013. Management has not specified how it intends to use the cash but has indicated that they are reviewing several options, including reducing parent level debt and/or funding pension expense and a lawsuit settlement. AEP has a sufficient short-term liquidity position, with approximately $2.6 billion of net available liquidity as of Dec. 31, 2010, including $294 million of cash on hand. AEP has credit facilities totaling $3.4 billion, of which two $1.5 billion credit facilities support the company's commercial paper program. The revolving credit agreements contain a covenant that requires AEP to maintain a debt to total capitalization at or below 67.5%. The $478 million facility that matures in April 2011 is currently used to support the various variable rate debt and floating rate debt. Management plans to retire the facility and enter into bilateral agreements as a replacement. Consolidated debt maturities over the next several years are considered manageable and are: $616 million in 2011, $565 million in 2012 and $1.1 billion in 2013. The next parent-only maturity is in 2015, when $243 million of senior notes becomes due. Fitch expects maturing debt to be funded through a mix of internal cash generation and external refinancings. AEP's 2011 capital spending budget is approximately $2.6 billion, with $2.9 billion projected in 2012. Major projects and investments include transmission projects and environmental compliance. Capex financing is anticipated to be met through a combination of internally generated cash and external debt issuances. Fitch has upgraded these ratings with a Stable Outlook: TCC -- IDR to 'BBB+' from 'BBB'; -- Senior unsecured debt and pollution control bonds to 'A-' from 'BBB+'; -- Preferred stock to 'BBB' from 'BBB-'. Fitch has assigned these ratings: TCC TNC PSO SWEPCO APC -- Short-term IDR 'F2'. Fitch has affirmed these ratings with a Positive Outlook: OPC -- IDR at 'BBB'; -- Senior unsecured debt and pollution control bonds at 'BBB+'; -- Preferred Stock at 'BBB-'; -- Short-term IDR and Commercial Paper at 'F2, Fitch has affirmed these ratings with a Stable Outlook: AEP -- IDR at 'BBB'; -- Senior Unsecured Debt at 'BBB'; -- Junior Subordinated Debentures at 'BB+'; -- Short-term IDR at 'F2'; -- Commercial Paper at 'F2'. AEP Texas North -- IDR at 'BBB+'; -- Senior unsecured debt at 'A-'; -- Preferred stock at 'BBB'. APC -- IDR at 'BBB-'; -- Senior unsecured debt and pollution control revenue and solid waste disposal bonds at 'BBB'; -- Preferred Stock at 'BB+'. CSP -- IDR at 'BBB+'; -- Senior Unsecured Debt and Pollution Control Bonds at 'A-'; -- Short-term IDR and Commercial Paper at 'F2. I&M -- IDR at 'BBB-'; -- Senior Unsecured Debt at 'BBB'; -- Preferred Stock at 'BB+'; -- Short-term IDR at 'F2'. KPC -- IDR at 'BBB-'; -- Senior Unsecured Debt at 'BBB'; -- Short-term IDR at 'F2'. PSO -- IDR at 'BBB'; -- Senior unsecured debt and pollution control revenue bonds at 'BBB+'; -- Preferred stock at 'BBB-'. SWEPCO -- IDR at 'BBB-'; -- Senior Unsecured Debt at 'BBB'; -- Preferred Stock at 'BB+'. AEG 777: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: AEG 777 LLC 7740 SW 104 Street, Suite 209 Miami, FL 33156 Bankruptcy Case No.: 11-15286 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: Laurel M. Isicoff Debtor's Counsel: Joel M. Aresty, Esq. JOEL M. ARESTY P.A. 13499 Biscayne Boulevard, #T-3 No. Miami, FL 33181 Tel: (305) 899-9876 Fax: (305) 723-7893 E-mail: aresty@mac.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Abel Victores, president. AERIE RESORT: Receiver Cuts Asking Price Again ---------------------------------------------- The Victoria Times Colonist reports that the receiver in charge of the insolvent Aerie Resort has dropped the asking price for the property to $4.75 million. According to the report, court appointed trustee Ken Glover said many people have been looking at the 34-hectare estate, which closed its doors in 2009, but no one has been able to come up with the financing. The Times Colonist relates that Mr. Glover said they hoped dropping the price might spark some action before the summer. "Otherwise we could have it for another winter," the report quotes Mr. Glover as saying. The Times Colonist notes that the trustee listed the property with DTZ Barnicke at $6.9 million in 2009, a price that was dropped to $5.9 million and now to the $4.75 million figure. The Aerie was on the market in 2004 for $13 million, at that point being sold by original owner Maria Schuster. Ms. Schuster closed the Aerie in November 2010 following three difficult years. A sale must be approved by the courts. Aerie Resort is a luxury hotel on the Malahat, British Columbia. The hotel is set on 33 hectares and includes three buildings with 35 guestrooms. Glover-Drennan is the receiver of the property. AMERICAN REPROGRAPHICS: S&P Affirms 'BB-' Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Walnut Creek, California-based reprographics and printing company American Reprographics Company. S&P removed this rating, along with all related issue-level ratings on the company's debt, from CreditWatch, where S&P placed it with negative implications on Oct. 22, 2010. The rating outlook is negative. At the same time, S&P assigned its 'BB-' corporate credit rating to parent company American Reprographics Company. "The 'BB-' rating reflects S&P's expectation that ARC's revenue and cash flow will remain highly cyclical and could take some time to recover from the current protracted real estate downturn," said Standard & Poor's credit analyst Tulip Lim. S&P estimates that revenue will decline at a mid-single-digit percentage rate and EBITDA will decline at a low-double-digit to low-teens percentage pace. S&P regards ARC's business risk as weak given its dependence on U.S. construction spending. S&P views the company's financial risk profile as aggressive, given its somewhat high debt leverage. ARC has a leading market position in the fragmented reprography market and has significant cost advantages from its nationwide presence. However, S&P considers its business profile to be weak because its end markets are highly concentrated (more than 75% of net sales are derived from printing for the architectural, engineering, and construction segments) and the company has a high geographic concentration in California. ARC's operating performance is linked to the U.S. construction market, particularly that of nonresidential construction (approximately 70% of ARC's total revenue is nonresidential related), which S&P expects to remain weak over the near term. AMERISTAR CASINOS: Neilsen Estate Deal Cues Moody's Rating Review ----------------------------------------------------------------- Moody's Investors Service placed the ratings of Ameristar Casinos, Inc. on review for possible downgrade following the company's announcement that it has entered into a binding agreement with the Co-Executors of the Estate of Craig H. Neilsen to purchase 26,150,000 shares of Ameristar common stock held by the Neilsen Estate at a price of $17.50 per share, for a total price of $457,625,000. Ratings Placed on review for possible downgrade: -- Corporate Family Rating at Ba3 -- Probability of Default Rating at Ba3 -- $650 million 9 �% senior unsecured notes 2014 at B2 (LGD 5, 84%) The review for possible downgrade considers the material increase in leverage that is expected to occur given the debt financed nature of the share repurchase. In connection with the transaction, Ameristar plans to obtain approximately $2.1 billion in new debt financing, the proceeds of which will be used to retire approximately $1.5 billion of existing indebtedness and to fund the share repurchase. Pro forma for the share repurchase, debt/EBITDA will be about 6.5 times compared to about 5 times reported at Dec. 31, 2010. In addition to the expected increase in leverage, Moody's review will focus on Ameristar's free cash flow outlook and ability and willingness to reduce leverage over the longer-term. Any downgrade of Ameristar's Corporate Family and Probability of Default ratings would likely be limited to one-notch. The transaction is expected to close in the second quarter of 2011, subject to financing and customary closing conditions and regulatory approvals. The shares to be repurchased represent approximately 45 percent of Ameristar's outstanding shares and 83 percent of the Neilsen Estate's current ownership in Ameristar. After giving effect to the transaction, the Neilsen Estate will own approximately 17 percent of Ameristar's outstanding common stock. Ameristar Casinos, Inc., owns and operates eight hotel/casinos in six jurisdictions. The company generates approximately $1.2 billion of consolidated net revenues. AMERICAN TREE: Financial Woes Cue Chapter 11 Bankruptcy Filing -------------------------------------------------------------- American Tree Co., a third-generation family business, is in Chapter 11 bankruptcy. American Tree specializes in excavating, tree removal and landscaping. The company has an office on Route 149 and a shop and yard on Bay Road in Queensbury, New York. According to The Post-Star, Vice President John Stranahan said a series of major health problems precipitated the financial trouble. "We went through a really long period of trials," The Post-Star quotes Mr. Stranahan as stating. The report discloses that the medical issues forced Mr. Stranahan to take a year and a half off from the family business, which limited the amount of work the company could take on. "We cut our gross receipts by 50 percent, which obviously couldn't cover our debt," Mr. Stranahan said. The report relates that Mr. Stranahan has since recovered and is back at work. He said the Company is looking to bring back its commercial accounts and fill some of the dozen positions it previously cut. He hopes Chapter 11 will help American Tree gain more flexibility with its lenders. American Tree Co., Inc., filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 11-10488) on Feb. 25, 2011. Robert J. Rock, Esq., in Albany, New York, serves as counsel. In its schedules, the Debtor disclosed $2,499,975 in assets and $1,323,241 in liabilities. Assets include property in Queensbury, about four dozen trucks, trailers, pieces of equipment, and machinery. American Tree's voluntary Chapter 11 case summary was posted in yesterday's Troubled Company Reporter. AMERICAS ENERGY: Posts $720,000 Net Loss in Dec. 31 Quarter ----------------------------------------------------------- Americas Energy Company-AECo, formerly Trend Technology Corporation, filed its quarterly report on Form 10-Q, reporting a net loss of $720,000 on $775,000 of revenue for the third quarter ended Dec. 31, 2010, compared with a net loss of $21,000 on $1.01 million of revenue for the three months ended Dec. 31, 2009. The Company's balance sheet as of Dec. 31, 2010, showed $26.0 million in total assets, $6.0 million in total liabilities, and stockholders' equity of $20.0 million. Weaver & Martin, LLC, in Kansas City, Mo., expressed substantial doubt about Americas Energy's ability to continue as a going concern, following the Company's results for the period from July 13, 2009 (inception), through March 31, 2010. The independent auditors noted that the Company has suffered recurring losses and had negative cash flows from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7427 About Americas Energy Knoxville, Tenn.-based Americas Energy Company-AECo currently operates surface mines in southeastern Kentucky. In March 2010, the Company acquired Evans Coal Corp. for $7,000,000 in cash, a $25,000,000 promissory note and a 2% overriding royalty on all coal sales generated from the properties acquired from Evans. Evans owns or controls by lease mineral rights and currently operates by use of contractors, two surface mines in Bell County and one in Knox County, Kentucky. In addition, the Company has rights to oil properties located in Cumberland County, Kentucky that are intended for future development. ANCHOR BLUE: Nears Auction for Brand, Logo ------------------------------------------ Dow Jones' DBR Small Cap reports that Anchor Blue Holding Corp. is preparing to auction off its intellectual property -- trademarks, pattern books and simple, navy-and-white logo -- paving the way for the brand to live beyond the California company's liquidation. Company officials plan to sell the Company's intellectual portfolio as part of Anchor Blue's Chapter 11 case, according to DBR. In addition to the store's trademarks, logos and Web site, the sale also includes the style and pattern books that show the clothing cuts and fashion guidelines for the Company's jeans, graphic T-shirts and other apparel. Those pattern guidelines could be the sale's biggest draw, said Gabe Fried of Streambank, a Massachusetts firm hired by Anchor Blue to handle the auction, the report notes. Abut Anchor Blue Anchor Blue is a specialty retailer of casual apparel and accessories for the teenage market. Founded in 1972, the Company has 117 stores located in nine western and southwestern states: Arizona, California, Colorado, New Mexico, Oregon, Texas, Utah and Washington. The Company employs 1,400 full and part-time employees in their stores and their corporate headquarters in Corona, California. Anchor Blue is an indirect affiliate of Sun Capital Partners, a Florida-based investment firm. Anchor Blue Holding Corp., together with Anchor Blue Inc., filed for Chapter 11 bankruptcy protection on Jan. 11, 2011 (Bankr. D. Del. Lead Case No. 11-10110). As of Jan. 1, 2011, the Debtors' books and records reflected total combined assets of roughly $24.7 million (book value) and total combined liabilities of roughly $38.5 million. Neil Herman, Esq., and Rachel Mauceri, Esq., at Morgan Lewis, in Philadelphia, Pennsylvania, serves as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. An Official Committee of Unsecured Creditors has been formed in the Chapter 11 cases. AUTOCLUB BODY: Clawback Suit v. Kalb Survives Motion to Dismiss --------------------------------------------------------------- Bankruptcy Judge A. Jay Cristol denied a defendant's request to dismiss Autoclub Body And Paint Service, Inc., v. Stuart R. Kalb a/k/a Stuart R. Kalb, Trustee, Adv. Pro. No. 10-3696 (Bankr. S.D. Fla.). The Debtor filed the action against Defendant on Nov. 3, 2010, seeking recovery of a preferential transfer made by the Debtor to or for the benefit of the Defendant. In its complaint, the Debtor alleges that Auto Paint & Supply of Lakeland, Inc. obtained a Final Judgment against the Debtor for $7,879 in 2004. The Complaint further states that Auto Paint & Supply of Lakeland assigned all of its rights, title and interest in and to the Judgment to Defendant and, on March 13, 2009, pursuant to Defendant's instructions, the Miami-Dade County Sheriff attempted to execute and levy on the Debtor's property. Finally, the Complaint alleges that, as a result of the Sheriff's levy, the Debtor agreed to pay $15,340 in full satisfaction of the Judgment to avoid the Sheriff levying on the Debtor's property. Plaintiff avers the $15,340 paid to Defendant on March 13, 2009, constitutes a transfer of the Debtor's property as such term is defined in 11 U.S.C. Sec. 101(54). A copy of the Court's Feb. 23, 2011 Memorandum Opinion and Order is available at http://is.gd/TlWkKVfrom Leagle.com. Based in Hialeah, Florida, Autoclub Body and Paint Service, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 09-20354) on May 27, 2009, represented by Jeffrey N. Schatzman, Esq. -- notices@schatzmanlaw.com -- at Schatzman & Schatzman, P.A.. The Debtor scheduled total assets of $422,265 and total debts of $1,547,215. BARTON HILL: SC Judge Urges Owners to File for Bankruptcy --------------------------------------------------------- Thomas J. Prohaska at The Buffalo News reports that New York State Supreme Court Justice Richard C. Kloch, Sr., urged the owners of the Barton Hill Hotel to file for bankruptcy, but their attorneys said they are working to prevent that by having a major hotel operator buy into the Lewiston facility. According to the report, in a court appearance last week, Judge Kloch rejected a request from Iddleson Group, holder of a delinquent mortgage on the 72-room hotel, to place the hotel in receivership. A receiver would have collected all the hotel's revenues and sent them to Iddleson, after keeping a share for himself. Judge Kloch, The Buffalo News discloses, said the Barton Hill needs "reorganization," and he pointed out that he could force the hotel into bankruptcy by signing a foreclosure order. Judge Klock invited Justin W. Gray, attorney for the Iddleson Group, to submit such an order. "It's not going to be long," Mr. Gray replied. If Judge Kloch signed that order, the only way to prevent Iddleson from seizing the hotel would be for the Barton Hill to file for Chapter 11 bankruptcy protection. Also, the hotel owes $43,025 in back taxes and has been placed on Niagara County's tax foreclosure list. A Chapter 11 filing would prevent the county from taking title and auctioning off the hotel, The Buffalo News says. In addition to the back taxes, the hotel owes the county $67,178 in delinquent payments in lieu of taxes. The Niagara County Legislature voted Feb. 1, 2011, to authorize a lawsuit against the hotel to try to collect; the suit was filed Tuesday in State Supreme Court. BERNARD L MADOFF: Picard Seeks Return of $2.1BB From Tremont ------------------------------------------------------------ Chad Bray, writing for Dow Jones Newswires, reports that Irving Picard, the trustee seeking to recover assets for victims of Bernard Madoff's fraud, is seeking the return of more than $2.1 billion in transfers to Tremont Group Holdings Inc. and its affiliates. According to Dow Jones, the lawsuit, which was originally filed under seal in December and amended this week, alleges that Tremont or its affiliates helped funnel more than $4 billion over a 15-year period to Mr. Madoff's firm, making it the second-largest set of feeder funds to Mr. Madoff. Dow Jones reports that in the amended lawsuit, Mr. Picard alleged that Tremont and its affiliated funds repeatedly ignored "red flags" that Mr. Madoff's business could be a fraud. "They quite simply did not want to know, remaining willfully ignorant in order to maximize their own profits and serve their own-self interest," the lawsuit said, according to the report. Dow Jones relates the suit alleges that Tremont earned more than $180 million in fees in the six years before Mr. Madoff's fraud came to light in December 2008 and as much as $240 million over the life of the relationship. Dow Jones also relates Tremont, which is being wound down, is a subsidiary of Oppenheimer Acquisition Corp., a unit of Massachusetts Mutual Life Insurance Co. Mr. Picard also has sued Oppenheimer and MassMutual as part of the lawsuit. Dow Jones reports that Tremont and its subsidiaries agreed last week to pay $100 million to establish a settlement fund to compensate investors in its funds who allegedly lost money to Mr. Madoff. Tremont and its subsidiaries continue to deny wrongdoing. 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 Feb. 18, 2011, a total of US$6.85 billion in claims by investors has been allowed, with US$791.1 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: Picard Seeks Return of $16MM From Merrill Unit ---------------------------------------------------------------- Chad Bray, writing for Dow Jones Newswires, reports that Irving Picard, the trustee seeking to cover assets for victims of Bernard Madoff's fraud, is seeking the return of at least $16 million in transfers to a Merrill Lynch & Co. unit, Merrill Lynch International & Co. Dow Jones relates that Mr. Picard's lawsuit was unsealed Monday. According to Dow Jones, the lawsuit alleges that the Merrill Lynch International failed to respond to "clear red flags" about possible fraud at Mr. Madoff's firm while separately structuring investments involving Madoff feeder funds. In particular, the suit asserts that: -- Merrill Lynch International, between June 2005 and August 2007, sold about $58.3 million in structured notes and warrants tied to the returns of several so-called "Absolute Alpha" indices. The indices were composed of several different funds, including two Fairfield Greenwich Group funds that acted as feeders to Mr. Madoff. At inception, the Fairfield Sentry Ltd. Or Fairfield Sigma Ltd. funds composed about 10% of each "Absolute Alpha" index; -- The notes were structured at the time that parent Merrill Lynch declined to do business with Mr. Madoff because it had concluded his structure -- simultaneously as investment adviser, prime broker and custodian -- lent itself to fraud and Mr. Madoff's investment advisory business might be fraudulent; -- At the time it was structuring the notes, Merrill Lynch International also repeatedly refused trades involving Mr. Madoff exposure. Merrill Lynch is now part of Bank of America Corp. Dow Jones William Halldin, a Merrill Lynch spokesman, said, "We believe there is no merit to this claim and we will vigorously defend against it." 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 Feb. 18, 2011, a total of US$6.85 billion in claims by investors has been allowed, with US$791.1 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. BIG HORN LAND: Dist. Ct. Affirms Approval of Wehners Accord ----------------------------------------------------------- Big Horn Land & Cattle Co., LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Ind. Case No. 09-_____) on Feb. 3, 2009, after losing a state court action, Case No. 44CO1-0711-CC-071, in LaGrange County, Indiana. The bankruptcy case was later converted to Chapter 7, and Yvette Kleven was appointed as Chapter 7 Trustee. After the bankruptcy filing, an appeal was taken by Big Horn in the Indiana Court of Appeals, Case No. 44A03-0904-CV-152, and that appeal has been stayed pending the bankruptcy trustee's decision to prosecute or dismiss that appeal. The state court case was a consolidated matter in which the land contract sellers, David and Deemia Wehner, sued Big Horn for foreclosure. Big Horn had filed a separate lawsuit claiming breach of contract, unjust enrichment and fraud in the inducement that was consolidated with the foreclosure action. At trial, Big Horn elected the remedy of rescission based upon the alleged fraud of the Wehners that was discovered after Big Horn took possession, and when Big Horn sought to build on one of the purchased/advertised parcels. The other theories alleged in Big Horn's complaint were withdrawn and not tried to the court. The trial court granted foreclosure to the Wehners and denied rescission of the contract. A timely appeal was then filed. Once the bankruptcy was filed, the Wehners initially asked the Chapter 7 Trustee to abandon the property, but later made an agreement to pay $4,000 for the Chapter 7 Trustee to dismiss the state court appeal. The Chapter 7 Trustee filed her first Motion to Approve that Compromise settlement for $4,000 on June 4, 2009. Rudolfo Rodriguez objected to the first compromise, and a trial was held on Oct. 8, 2009 with a subsequent briefing scheduled ordered. Bankruptcy Judge Robert E. Grant entered his order denying the Chapter 7 Trustee's First Motion to Compromise on March 22, 2010. Subsequently, on June 24, 2010, the Chapter 7 Trustee filed her Second Motion to Compromise. Mr. Rodriguez again objected. A trial was held on that Second Motion for Compromise on Sept. 8, 2010. Judge Grant granted the Motion to Compromise and to dismiss the state court appeal on Sept. 14, 2010. Mr. Rodriguez, as Creditor/Objector, filed his timely Notice of Appeal on Sept. 27, 2010. He also filed a Motion for Stay of the Dismissal of the state court appeal which was granted on Oct. 20, 2010. District Judge William C. Lee affirmed the Bankruptcy Court ruling. Judge Lee held that the Bankruptcy Court did not err when it found that the compromise is in the best interests of the estate and a proper exercise of the Chapter 7 Trustee's judgment and discretion. The appellate case is Rudolfo Rodriguez, v. Yvette Kleven, Trustee, Civil No. 1:10cv391-WCL (N.D. Ind.). A copy of the Court's Feb. 23, 2011 Opinion and Order is available at http://is.gd/1WbAwPfrom Leagle.com. BOARDROOM PROPERTIES: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Boardroom Properties, LLC 70007 Highway 111 Rancho Mirage, CA 92270 Bankruptcy Case No.: 11-16499 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Central District of California (Riverside) Judge: Scott C. Clarkson Debtor's Counsel: James C. Bastian, Jr., Esq. SHULMAN HODGES & BASTIAN LLP 26632 Towne Centre Drive, #300 Foothill Ranch, CA 92610-2808 Tel: (949) 340-3400 E-mail: jbastian@shbllp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/cacb11-16499.pdf The petition was signed by Jack P. Downes, managing member. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- S&J Property Holdings, LLC, a 11-16514 02/28/11 California limited liability company BORDERS GROUP: Barnes & Noble Interested in Some Store Locations ---------------------------------------------------------------- Barnes & Noble, Inc., revealed in a recent conference call that it plans to take over locations that Borders Group, Inc., is planning to close as part of the bankrupt bookchain's restructuring process, Shira Ovide wrote for the Deal Journal of The Wall Street Journal. Barnes & Noble Chief Executive William Lynch said certain of Borders' closed stores appear attractive to the company given that landlords of those locations may be willing to negotiate for lower rental costs, Ms. Ovide related. Barnes & Noble disclosed that about 75% of the 200 closing stores are direct competitors of Barnes & Noble stores, Ms. Ovide noted. According to The Journal article, the disclosure left some analysts wondering why Barnes & Noble would spend any more money on bricks-and-mortar retail business when physical books are on the decline. To this comment, Mr. Lynch responded that Barnes & Noble stores continue to be profitable compared to Borders, which is said to be losing $2 million a week on the store locations that will be shuttered, the article added. Barnes & Noble also suspended distribution of dividends to take advantage of "market opportunities," the Deal Journal related. The suspension of the dividend will help fund Barnes & Noble's investment in digital business and possible takeover of certain shuttered Borders locations, Mr. Lynch said, according to Bloomberg News. 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. 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. David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought 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. 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: Sec. 341 Meeting of Creditors Set for March 22 ------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, will convene a meeting of the creditors of Borders Group Inc. and its debtor affiliates on Tuesday, March 22, 2011, at 2:00 p.m. Eastern Time, at the office of the U.S. Trustee, 4th Floor, at 80 Broad Street, in New York. This is the first meeting of creditors under Section 341(a) of the Bankruptcy Code. The meeting offers creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Attendance by the Debtor's creditors at the meeting is welcome, but not required. 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. 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. David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought 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. 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: US Trustee Appoints Unsecured Creditors' Committee ----------------------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Code, Tracy Hope Davis, the United States Trustee for Region 2, appointed on Feb. 24, 2011, seven creditors to serve as members of the Official Committee of Unsecured Creditors in the Chapter 11 cases of Borders Group, Inc., and its debtor affiliates. The Committee members consist of publishers and landlords of Borders Group: (1) Penguin Group (USA) Inc. Attn: Alexander Gigante Sr. VP Legal Affairs/Corporate Counsel 375 Hudson Street New York, NY 10014 Tel: (212) 366-2959 Fax: (212) 366-2867 (2) HarperCollins Publishers, LLC Attn: John Shrearer Vice President, Credit 100 Keystone Industrial Park Scranton, Pennsylvania 18512 Tel: (570) 941-1244 Fax: (570) 941-1590 (3) Random House, Inc. Attn: William C. Sinnott Vice President, Credit & Disbursements 400 Hahn Road Westminster, Maryland 21157 Tel: (410) 386-7480 Fax: (410) 386-7439 (4) The Perseus Books Group Attn: Charles Gallagher Chief Financial Officer 387 Park Avenue - 12th Floor New York, NY 10016 Tel: (212) 340-8133 Fax: (212) 340-8105 (5) Sony Music Entertainment Attn: Susan S. Danz Vice President of Credit & Collections 210 Clay Avenue Lyndhurst, New Jersey 07071 Tel: (201) 777-3643 (6) GGP Limited Partnership Attn: Julie Minnick Bowden National Bankruptcy Manager 110 North Wacker Drive Chicago, Illinois 60606 Tel: (312) 960-2707 Fax: (312) 442-6374 (7) Simon Property Group Attn: Ronald M. Tucker Vice President/Bankruptcy Counsel 225 W. Washington Street Indianapolis, Indiana 46204 Tel: (317) 263-2346 Fax: (317) 263-7901 Penguin Putnam Inc. is the Debtors' largest unsecured creditor with a $41,118,914 claim. Random House has a $33,461,062 claim against the Debtors. Harper Collins follows Random House in the largest unsecured creditors list with a claim of $25,793,451. Perseus holds a $7,776,292 claim against the Debtors and Sony Music a $4,273,824 claim. GGP LP and Simon Property are landlords to various Borders stores. GGP previously disclosed that it is the landlord to more than 30 Borders-owned stores, which represent 5% of Borders' total store count. Lowenstein Sandler has been appointed to represent the Unsecured Creditors Committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. 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. 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. David M. Friedman, Esq., David S. Rosner. Esq, Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought 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. 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) BUDDHA BUILDING: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Buddha Building LLC 213 NW 10th Ave., Suite 200 Portland, OR 97209 Bankruptcy Case No.: 11-31480 Chapter 11 Petition Date: February 27, 2011 Court: United States Bankruptcy Court District of Oregon Judge: Trish M. Brown Debtor's Counsel: Stephen Boyke, Esq. LAW OFFICE OF STEPHEN T. BOYKE 806 SW Broadway #1200 Portland, OR 97205 Tel: (503) 227-0417 E-mail: steve@boykelaw.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 seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/orb11-31480.pdf The petition was signed by Janis Alexander, manager. CAESARS ENTERTAINMENT: $400MM Loans Won't Move Fitch's CCC Rating ----------------------------------------------------------------- According to Fitch Ratings, Caesars Entertainment Corp.'s announced plan to borrow $400 million in senior secured term loans has no ratings impact on Caesars' or Caesars Entertainment Operating Co.'s 'CCC' Issuer Default Ratings. The transfer of assets out of CEOC is a slight negative with respect to recovery prospects at CEOC in the event of default. However, using those assets to secure project financing in order to complete Project Linq (a shopping, retail and entertainment corridor on the Las Vegas Strip) and the Octavius Tower at Caesars Palace Las Vegas improves the operational recovery prospects for CEOC. This transaction is consistent with management's strategy of attempting to grow into the highly leveraged capital structure, rather than seeking to create a more sustainable capital structure by reducing debt. The company is betting that the positive operating leverage expected to materialize on the Strip over the next couple of years will drive significantly improved Las Vegas performance, with Linq and the Octavius Tower helping to fuel that improvement. The Rating Outlook remains Stable, supported by the company's adequate liquidity profile, which provides the company a few years for the LV operating recovery and the macro-economic recovery to accelerate. Given Caesars' highly levered balance sheet and refinancing needs in 2015, Fitch does not believe the company could manage through another decline in economic activity. The proposed six-year term loan would be borrowed by newly created subsidiaries outside of CEOC, where most of Caesars' operating subsidiaries and debt reside. The loan proceeds would be used to fund the completion of the Octavius Tower and Project Linq, which is between Flamingo and Imperial Palace. The existing assets related to these projects will be transferred from CEOC to the newly created subsidiaries. Once the projects are complete, wholly-owned subsidiaries of CEOC will lease the Octavius Tower and the gaming component of Project Linq for a total of $50 million per year and CEOC will guarantee those lease payments. Caesars, the parent HoldCo, expects to provide a completion guarantee with respect to Project Linq for up to $75 million and $25 million with respect to Octavius Tower. Caesars will also guarantee interest payments until both projects open and guarantee to provide equity cures for up to $50 million to ensure maintenance of the term loan's leverage ratio covenants. Beyond these guarantees, the term loan is non-recourse to Caesars or CEOC. Caesars will contribute between $100 million to $150 million in addition to the term loan to complete the projects. Although Fitch views the transfer of the Octavius Tower and the Project Linq land outside of the CEOC restricted group as a negative, Fitch's recovery analysis, which is incorporated into the current Recovery Ratings, has assigned negligible enterprise value to these assets. Therefore there is no material impact on the RRs. The recovery analysis, dated Dec. 15, 2010, is available at 'www.fitchratings.com' or by clicking on the link below. CEOC's 4Q'10 and year-end results within Fitch's expectations: CEOC's full-year 2010 property EBITDA net of cash-based corporate expense was $1.437 billion, which was consistent with Fitch's base case expectation. In the fourth quarter, trends improved at the Las Vegas region CEOC properties, with a 2-3% same-store revenue increase over the prior year. CEOC's Atlantic City properties continue to struggle with revenues declining 11% in the quarter and EBITDA declining 63%. Fitch currently rates Caesars and CEOC: Caesars Entertainment Corp. -- Long-term IDR 'CCC'. Caesars Entertainment Operating Co. (CEOC, fka Harrah's Operating Co.) -- Long-term IDR 'CCC'; -- Senior secured first-lien revolving credit facility and term loans 'B/RR2'; -- Senior secured first-lien notes 'B/RR2'; -- Senior secured second-lien notes 'C/RR6'; -- Senior unsecured notes with subsidiary guarantees 'C/RR6'; -- Senior unsecured notes without subsidiary guarantees 'C/RR6'. Chester Downs and Marina LLC -- Long-term IDR 'B-'; -- Secured term loans 'BB-'. The Rating Outlook is Stable. CAMP COOLEY: ETC Katy Asks Court to Lift Automatic Stay ------------------------------------------------------- Gas utility ETC Katy Pipeline, Ltd., asks the Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas to lift the automatic stay in Camp Cooley, Ltd.'s bankruptcy case. ETC wants to proceed with litigating its petition in condemnation in state district court, in the case styled ETC Katy Pipeline, Ltd., Cause No: 08-03-18,050-CV, in the District Court of Robertson County, Texas. ETC filed its original petition on March 17, 2008, seeking to acquire a 50-foot wide permanent easement for a single natural gas pipeline, a 25-foot wide permanent access road easement and a permanent utility easement, and two temporary workspace easements. More specifically, ETC seeks to acquire: (i) a permanent easement containing 11.3818 acres to be used for a single natural gas pipeline and appurtenant facilities; (ii) a permanent easement containing 0.7317 acres for an access road, a communications line, and an electric powerline; (iii) a temporary workspace easement containing 8.3871 acres; and (iv) a temporary workspace easement containing 4.554 acres. The term of the temporary workspace easements will be for a period of 12 months from the date that ETC obtains possession of the property. On Jan. 13, 2009, the three Special Commissioners entered an award in the Lawsuit awarding $770,000 to North CC Pipeline Corridor and $0 to Camp Cooley Ltd. On Jan. 27, 2009, ETC appealed that award by filing an objection to the decision and award of the Special Commissioners and is pursuing that appeal. The Debtor has represented that North CC Pipeline Corridor merged into Camp Cooley, Ltd., prior to Camp Cooley filing bankruptcy. Debtor does not oppose ETC's request. A hearing on the request will be held on April 6, 2011, at 2:00 p.m. ETC is represented by Thompson & Knight LLP. About Camp Cooley Franklin, Texas-based Camp Cooley Ltd. operates an agricultural and farming business. Camp Cooley is the entity resulting from the merger of these entities effective Nov. 7, 2009: North CC Pipeline, LLC; Birkel CCR GP LLC; CCR Royalty, Ltd.; Ultimate Genetics, LLC; and Camp Cooley Genetics, LLC. Camp Cooley filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 09-61311) on Nov. 8, 2009. The Company estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities. R. Glen Ayers Jr., Esq., at Langley and Banack, Inc., originally represented the Company in its restructuring effort. The firm, however, was terminated in October 2010. The Debtor is being represented by Blake L. Beckham, Esq., at Beckham & Mandel, and Debra L. Innocenti, Esq., Raymond W. Battaglia, Esq., and Robert K. Sugg, Esq., at Oppenheimer Blend Harrison & Tate Inc. CAMP COOLEY: GMAC Seeks Stay Relief to Foreclose on Vehicle ----------------------------------------------------------- The U.S. Bankruptcy Court will reconvene on March 10, 2011 at 2:00 p.m. to consider the request of Ally Servicing, LLC f/k/a GMAC for an order for relief from the automatic stay in the bankruptcy case of Camp Cooley Ltd., and alternatively for adequate protection. On October 31, 2008, Camp Cooley executed a Retail Installment Contract payable to Ally for $20,888. As security for the Contract, the Debtor granted to Ally a lien on a 2008 Chevrolet Suburban VIN #3GNFC16058G196322. The Debtor is past due for the July 2010 through October 2010 payments for a total amount past due of $1,032.48 and is therefore in default. The payoff on the Contract as of Nov. 9, 2010 is $19,173.79. Because of the default cause exists to terminate the stay pursuant to 11 U.S.C. Sec. 362(d)(1), Ally argues. Attorney for Ally is: Blake Rasner, Esq. 510 North Valley Mills Drive, Suite 600 Waco, Texas 76710 Telephone: (254) 776-3336 Facsimile: (254) 776-6823 About Camp Cooley Franklin, Texas-based Camp Cooley Ltd. operates an agricultural and farming business. Camp Cooley is the entity resulting from the merger of these entities effective Nov. 7, 2009: North CC Pipeline, LLC; Birkel CCR GP LLC; CCR Royalty, Ltd.; Ultimate Genetics, LLC; and Camp Cooley Genetics, LLC. Camp Cooley filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 09-61311) on Nov. 8, 2009. The Company estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities. R. Glen Ayers Jr., Esq., at Langley and Banack, Inc., originally represented the Company in its restructuring effort. The firm, however, was terminated in October 2010. The Debtor is being represented by Blake L. Beckham, Esq., at Beckham & Mandel, and Debra L. Innocenti, Esq., Raymond W. Battaglia, Esq., and Robert K. Sugg, Esq., at Oppenheimer Blend Harrison & Tate Inc. CAMP COOLEY: Has Nod to Hire ESA to Market Mineral Assets --------------------------------------------------------- Camp Cooley, Ltd., sought and obtained authorization from the Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas to employ Energy Spectrum Advisors, Inc., to assist with the sale of the Debtor's mineral interests. The Debtor determined to sell its Mineral Interests and selected ESA as its agent to assist it in the marketing of the Mineral Interests. ESA will develop strategies for the sale of the Mineral Interests, compile appropriate sales materials, identify potential buyers, and market the Mineral Interests to potential buyers. Upon identifying potential purchasers, ESA will assist the Debtor in negotiating the terms of a sale, or sales, of the Mineral Interests. If ESA is successful in completing a Sale or Sales of the Mineral Interests, ESA will be paid (a) a minimum success fee of $350,000, (b) upon a Sale or Sales in excess of $8.75 million, additional success fees equal to 4.0% of the gross sales price above $8.75 million. ESA will be entitled to reimbursement of its reasonable costs and expenses associated with its performance of the Agreement. The expenses will not exceed $5,000 without the Debtor's prior written approval. To the best of the Debtor's knowledge, ESA is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. About Camp Cooley Franklin, Texas-based Camp Cooley Ltd. operates an agricultural and farming business. Camp Cooley is the entity resulting from the merger of these entities effective Nov. 7, 2009: North CC Pipeline, LLC; Birkel CCR GP LLC; CCR Royalty, Ltd.; Ultimate Genetics, LLC; and Camp Cooley Genetics, LLC. Camp Cooley filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 09-61311) on Nov. 8, 2009. The Company estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities. R. Glen Ayers Jr., Esq., at Langley and Banack, Inc., originally represented the Company in its restructuring effort. The firm, however, was terminated in October 2010. The Debtor is being represented by Blake L. Beckham, Esq., at Beckham & Mandel, and Debra L. Innocenti, Esq., Raymond W. Battaglia, Esq., and Robert K. Sugg, Esq., at Oppenheimer Blend Harrison & Tate Inc. CAPMARK FINANCIAL: Moody's Withdraws 'C' Senior Unsec. Rating ------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings for Capmark Financial Group Inc. The ratings have been withdrawn because Capmark filed for relief under Chapter 11 of the U.S. Bankruptcy Code and Moody's believes it lacks adequate information to maintain the ratings. These ratings have been withdrawn: * Capmark Financial Group Inc. -- senior unsecured rating at C Moody's last rating action with respect to Capmark Financial Group was on September 4, 2009, when Moody's downgraded the company to C from Caa1. Capmark is a commercial real estate finance company headquartered in Horsham, PA. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. CASPIAN SERVICES: Posts $1.6 Million Net Loss in Dec. 31 Quarter ---------------------------------------------------------------- Caspian Services, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.6 million on $15.6 million of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $2.2 million on $13.4 million of revenues for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $114.9 million in total assets, $85.3 million in total liabilities, and stockholders' equity of $29.6 million. As reported in the Troubled Company Reporter on Jan. 29, 2011, Hansen, Barnett & Maxwell P.C., in Salt Lake City, Utah, expressed substantial doubt about Caspian Services' ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company is in violation of certain loan covenants which allows for the lenders to exercise acceleration features and declare the loans and accrued interest immediately due and payable. Should any of these parties determine to exercise their acceleration rights, the Company would not have sufficient funds to repay any of the loans. At Sept. 30, 2010, the Company also had negative working capital of $50.3 million. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7425 Salt Lake City, Utah-based Caspian Services, Inc., provides diversified oilfield services to the oil and gas industry in western Kazakhstan. CATALYST PAPER: Letko Brosseau Discloses 7.59% Equity Stake ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Letko, Brosseau & Ass. Inc. disclosed that it beneficially owns 28,958,745 shares of common stock of Catalyst Paper Corp. representing 7.59% of the total shares outstanding. A total of 381,753,490 shares of common stock were outstanding as of Dec. 31, 2009. About Catalyst Paper Based in Richmond, British Columbia, in Canada, Catalyst Paper Corporation (TSX:CTL) manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With six facilities located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million tonnes. The Company's balance sheet at Sept. 30, 2010, showed C$1.73 billion in total assets, C$1.32 billion in total liabilities, and stockholders' equity of C$406.2 million. * * * In mid-March 2010, Moody's Investors Service downgraded Catalyst's Corporate Family Rating to 'Caa1' from 'B3'. Catalyst's CFR downgrade anticipates a marked deterioration in the company's financial performance over the coming year, with significant EBITDA erosion compared to 2009 levels and negative free cash flow generation. In May 2010, Standard & Poor's Ratings Services revised the outlook on Catalyst to stable from negative. S&P affirmed the 'CCC+' long-term corporate credit rating on the Company. The ratings on Catalyst reflect S&P's view of the company's highly leveraged capital structure, history of weak profitability, fiber supply issues, and its participation in cyclical commodity markets. In Standard & Poor's opinion, these risks are partially mitigated by the company's revenue diversity and improving cost profile. CDW CORP: S&P Raises Corporate Credit Rating to 'B' --------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Vernon Hills, Ill.-based CDW Corp. to 'B' from 'B-'. S&P also raised all issue-level ratings on the company's debt. The outlook is stable. "The ratings on CDW reflect S&P's expectation that growth in North American IT spending and consistent profitability will support modest improvements in its highly leveraged financial profile in the near term, despite highly competitive industry conditions," said Standard & Poor's credit analyst Martha Toll-Reed. CDW is the leading value-added-reseller of IT products and services to business, government, and education customers in the U.S. and Canada. It reaches its existing and prospective customers through catalogs, direct mail, outbound telemarketing, Web sites and Web advertising, and a direct sales force. CDW's fair business profile reflects the company's good position in the highly fragmented value-added reseller market for technology products and services, offset by a narrow geographic presence and relatively low-margin characteristics. CEDAR FUNDING: Creditors Approve Liquidation Plan ------------------------------------------------- Larry Parsons at the Monterey County Herald reports that a liquidation plan for Cedar Funding, a Monterey mortgage broker that fell into bankruptcy nearly three years ago and left hundreds of investors high and dry, has been approved by the firm's creditors. That sets the stage for a U.S. Bankruptcy Court judge to issue a final decree at a June 2 hearing on Cedar Funding's Chapter 11 case. The report relates that to continue winding down the mortgage company's assets, a new administrator will take over from trustee Todd Neilson who oversaw Cedar Funding's battered real estate portfolio since owner David Nilsen filed for bankruptcy in May 2008. Creditors, most of them former investors in Cedar Funding's real estate loans and mortgage investment pool, approved the liquidation plan in balloting completed in early February. The plan, the Monterey County Herald, estimates that creditors would receive 5 to 10 cents on every dollar of valid claims. An accountant working for the trustee put the probable return rate at 7.6% in the most recent analysis filed in court. "They accepted a plan for an orderly liquidation, transfer or development of remaining properties, maybe, over a gradual period of time," Monterey County Herald quotes Mr. Nilsen as stating. About Cedar Funding Monterey, California-based Cedar Funding Inc. -- http://www.cedarfundinginc.com/-- was a mortgage lender. David Nilsen, the principal, filed for Chapter 11 bankruptcy for Ceder Funding after the Company stopped monthly payments to its investors. Cedar Funding filed a Chapter 11 petition on May 26, 2008 (Bankr. N.D. Calif. Case No. 08-52709) due to the collapse of its Ponzi scheme. Cedar Funding accepted many millions of dollars from hundreds of individuals who believed they were acquiring fractional interests in loans that were secured by real property. Many more invested with CFI through a related entity, Cedar Funding Mortgage Fund LLP, that acquired fractional interests in the name of the Fund. CFI failed to record assignments of its deeds of trust that would have provided security interests to most of its investors, including the Fund. R. Todd Neilson has been appointed Chapter 11 Trustee in the case. Cecily A. Dumas, Esq., at Friedman, Dumas and Springwater, in San Francisco, represents Mr. Neilson. The Debtor estimated assets of less than $50,000 and debts of $100 million to $500 million in its Chapter 11 petition. CEMTREX INC: Reports $144,200 Net Income in Dec. 31 Quarter ----------------------------------------------------------- Cemtrex, Inc., filed its quarterly report on Form 10-Q, reporting net income of $144,217 on $1.8 million of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $32,916 on $891,454 of revenues for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $2.4 million in total assets, $3.2 million in total liabilities, and a stockholders' deficit of $772,180. As reported in the Troubled Company Reporter on Jan. 21, 2011, Gruber & Company, LLC, in Saint Louis, Mo., expressed substantial doubt about Cemtrex's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has a negative equity and negative working capital. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?742e Farmingdale, N.Y.-based Cemtrex, Inc., is engaged in manufacturing and selling the most advanced instruments for emission monitoring of particulate, opacity, mercury, sulfur dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey services for carbon creation projects from abatement of greenhouse gases pursuant to Kyoto protocol and assists project owners in selling of carbon credits globally. The Company's products are sold to power plants, refineries, chemical plants, cement plants & other industries including federal and state governmental agencies. CHINA GINSENG: Posts $188,900 Net Loss in Dec. 31 Quarter --------------------------------------------------------- China Ginseng Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $188,916 on $919,877 of revenue for the three months ended Dec. 31, 2010, compared with a net loss of $106,310 on $58,579 of revenue for the same period ended Sept. 30, 2009. The Company's balance sheet at Dec. 31, 2010, showed $10.1 million in total assets, $4.7 million in total liabilities, and stockholders' equity of $5.4 million. The Company has accumulated deficits of $2,224,961 and $1,727,592 as of Dec. 31, 2010, and June 30, 2010, respectively, and there are existing uncertain conditions the Company foresees relating to its ability to obtain working capital and operate successfully," the Company said in the filing. "Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?742c Changchun City, China-based China Ginseng Holdings, Inc., was incorporated on June 24, 2004, in the State of Nevada. The Company conducts business through its four wholly owned subsidiaries located in Northeast China. The Company has been granted 20 year land use rights to 3,705 acres of lands by the Chinese government for ginseng planting and it controls control through lease approximately 750 acres of grape vineyards. CINCINNATI BELL: Peninsula Capital Discloses 8.9% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Peninsula Capital Advisors, LLC and Peninsula Investment Partners, L.P. disclosed that they beneficially own 18,000,000 shares of common stock of Cincinnati Bell Inc. representing 8.9% of the shares outstanding. At Oct. 31, 2010, there were 201,781,187 common shares outstanding. About Cincinnati Bell Cincinnati Bell Inc., with headquarters in Cincinnati, Ohio, provides telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. * * * The Company carries a 'B+' corporate credit rating from Standard & Poor's. S&P said in November 2010 that the rating reflects the Company's highly leveraged financial risk profile, with expectations for limited discretionary cash flow after capital spending, which is currently elevated to expand its data center business. The Company has a 'B' Issuer Default Rating, and Stable outlook, from Fitch. Fitch said in November 2010 that 'B' IDR for reflects expectations for relatively high, albeit stable leverage and its diversified revenue profile. In addition, its wireline and wireless businesses generate strong free cash flows. In November 2010, Moody's Investors Service affirmed the Company's B1 Corporate Family Rating and Probability of Default Rating. The stable outlook is based on Moody's expectations that CBB will be able to maintain stable EBITDA levels by offsetting access line losses through increased efficiencies in its incumbent wireline operations and by growing data and broadband revenues in its wireless segment. CLOVERLEAF ENTERPRISES: Closes Rosecroft Raceway Sale to Penn ------------------------------------------------------------- Andrea K. Walker, writing for The Baltimore Sun, reports that Penn National Gaming Inc. has completed its acquisition of Rosecroft Raceway, enabling the Prince George's racetrack to emerge from Chapter 11 bankruptcy. According to the report, the racetrack's reorganization plan was dependent on the former owner of Rosecroft, Cloverleaf Enterprises Inc., to sell most of its assets, including the track. A bankruptcy judge approved Penn National's $11 million bid for the track in February, but the transaction was finalized Monday, according to The Baltimore Sun. The Baltimore Sun discloses that the Chapter 11 case though is still wrapped up in court because a competing bidder, Landow Partners, wishes to submit a higher bid. A hearing is scheduled for March. About Cloverleaf Enterprises Cloverleaf Enterprises Inc. -- http://www.rosecroft.com/-- owned the Rosecroft Raceway, a harness track in Fort Washington, Maryland. The Company filed for Chapter 11 protection (Bankr. D. Md. Case No. 09-20056) on June 3, 2009, represented by Nelson C. Cohen, Esq., at Zuckerman Spaeder LLP in Washington, D.C. The Company estimated $10 million to $50 million in assets and $1 million to $10 million in debts in its Chapter 11 petition. In April 2010, Judge Paul Mannes denied a motion to sell the assets, saying the sale "primarily benefits" the track's sole shareholder. The Company's operations were halted in June 2010. In November 2010, the U.S. Trustee named James J. Murphy to serve as Cloverleaf's Chapter 11 trustee. COACH AMERICA: Moody's Gives 'Caa1/LD' After Distressed Exchange ---------------------------------------------------------------- Moody's Investors Service changed Coach America Holdings Inc.'s probability of default rating to Caa1/LD from Caa3 following the completion of a restructuring which Moody's views as a distressed exchange. In approximately three business days, Moody's will remove the LD designation. The PDR going forward will be Caa1. In a related action, Moody's revised the rating outlook to stable from negative upon the execution of an amended first lien credit facility that reset leverage covenant requirements going forward, while affirming the Corporate Family Rating of Caa1. Ratings Rationale Coach America executed a debt restructuring on February 18, 2011 which involved a change in its capital structure and amendments to its first lien bank credit facility. Moody's deemed that Coach America defaulted on its second lien term loan because the debt is believed to have been bought back by an affiliate of the Company's shareholders led by the company's largest shareholder, Fenway Partners, at a discount resulting in an economic loss for the debt holders when it was exchanged for $24.5 million of common equity. Concurrent with the conversion of debt to equity, the Company also announced an additional $25 million equity investment from Coach America's shareholders and an amended first lien credit agreement. As part of the bank amendment, leverage covenant thresholds were reset and the interest rate on the first lien term loan increased, however the company has elected to pay the incremental interest in-kind, thereby preserving liquidity. The change in outlook to stable from negative reflects the adequate liquidity profile subsequent to these transactions. The affirmation of the Caa1 CFR continues to reflect Coach America's continuing highly levered capital structure, very weak EBIT to interest coverage (under one times) and negative free cash flow. Moody's expects that the company's financials are likely to remain depressed throughout the intermediate term notably given the ongoing economic malaise combined with anticipated required capital investments. Moody's also acknowledges that Coach America benefits from high proportions of contracted or chartered business and maintains strong market positions in its markets. Nonetheless, the lack of free cash flow available to pay down debt limits Coach America's ability to meaningfully reduce elevated debt coverage metrics. Given Moody's expectation of negative free cash flow due to a combination of maintenance capital expenditure requirements and expenditures related to lease expirations in 2011, positive momentum in the ratings/and or outlook in the near term is unlikely. If the company's margins were to deteriorate, if volumes were to further decline, or if orderly access to the revolver and maintaining a good amount of financial covenant cushion were to lessen, these events could trigger a negative action. Credit metrics that would likely accompany the aforementioned include: debt/EBITDA above 7.0 times, EBITA to interest below 0.5x and persistent negative free cash flow. Ratings changed: -- Probability of Default Rating changed to Caa1/LD from Caa3 (will revert to Caa1 in approximately three business days) Ratings affirmed: -- Corporate Family Rating at Caa1 -- $30 million 1st lien revolving credit facility due 2013, at Caa1 (LGD-3, 44%) -- $50 million 1st lien letter of credit facility due 2014, at Caa1 (LGD-3, 44%) -- $195 million 1st lien term loan due 2014, at Caa1 (LGD-3, 44%) -- $50 million 1st lien delayed draw term loan due 2014, at Caa1 (LGD-3, 44%) -- $30.5 million 2nd lien term loan due 2014, at Caa3 (LGD-6, 90%) -- Rating outlook changed to stable from negative The last rating action was on February 2, 2011, when Moody's lowered Coach America's Corporate Family Rating to Caa1 and Probability of Default rating to Caa3, both from B3. Coach America Holdings, Inc., headquartered in Dallas, Texas, is a charter bus operator and motorcoach services provider in the United States. The company had fiscal year 2010 revenues of approximately $417 million. COMPETITIVE TECHNOLOGIES: Has $1.3MM Loss in 2 Mos. Ended Dec. 31 ----------------------------------------------------------------- On Nov. 15, 2010, the Board of Directors of Competitive Technologies, Inc., approved a fiscal year-end change from July 31 to Dec. 31, in order to align its fiscal periods with the calendar year. The Company filed its transitional report on Form 10-Q, reporting a net loss of $1.3 million on $68,272 of revenue for the two months ended Dec. 31, 2010, compared with a net loss of $745,098 on $268,353 of revenue for the three months ended Dec. 31, 2010. The Company's balance sheet as of Dec. 31, 2010, showed $3.2 million in assets, $2.5 million of debts, and stockholders' equity of $651,360. As reported in the Troubled Company Reporter on Nov. 2, 2010, Mayer Hoffman McCann CPAs, in New York, expressed substantial doubt about Competitive Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that at July 31, 2010, the Company has incurred operating losses since fiscal year 2006. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?7423 Fairfield, Conn.-based Competitive Technologies, Inc. -- http://www.competitivetech.net/-- provides distribution, patent and technology transfer, sales and licensing services. The Company earns revenue in three ways, retained royalties from licensing its clients' and its own technologies to its customer licensees, product sales fees, and sales of inventory. COMSTOCK RESOURCES: Moody's Assigns 'B2' Rating to $250 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to Comstock Resources, Inc.'s proposed $250 million senior unsecured notes due 2017. Proceeds from the notes will be used to fund a tender offer for the company's existing senior unsecured notes due 2012 and to repay all outstanding revolving credit facility borrowings. The LGD point estimate on Comstock's existing senior unsecured notes was changed to LGD5-73% from LGD5-75%. The outlook is stable. Ratings Rationale The proposed notes issuance and tender offer would increase total debt by $33 million, $6 million of which would be applied toward estimated fees and expenses with the remaining $27 million going toward funding 2011 capital spending. "The transaction enhances Comstock's liquidity with increased revolver availability, a larger cash balance, and no debt maturities until 2015," commented Jonathan Kalmanoff, Moody's Analyst. "Leverage on production and reserves would increase only slightly (pro-forma Dec. 31, 2010), and this increase has the potential be moderated by increased production and reserves once the $27 million of net proceeds is applied toward the company's 2011 drilling program." Comstock's B1 CFR reflects the company's small scale in terms of proven developed reserves, its geological concentration, production which consists of 94% un-hedged natural gas in a low gas price environment, and leverage which is low compared to similarly rated peers. The rating also considers the risks inherent in Comstock's very early stage operations in the Eagle Ford, which account for one third of planned 2011 capital spending, as well as the potential for improvement in both profitability and diversification if the company is able to economically develop its liquids focused Eagle Ford acreage. Comstock has good liquidity. Following this note offering, the company will have an undrawn senior secured credit facility with a $481 million borrowing base and $29 million of cash. The facility does not mature until 2015, and the company's existing $300 million 8.375% notes don't mature until 2017. Financial covenants consist of a Minimum Tangible Net Worth of $625,000 and a Current Ratio of at least 1.0x. Moody's believe that Comstock will remain well within these limits through 2011, and that the revolver will provide ample liquidity as the company outspends cash flow. Substantially all of Comstock's oil and gas reserves are pledged as security under the credit facility which limits the extent to which asset sales could provide a source of additional liquidity. The B2 senior unsecured note rating reflects both the overall probability of default of Comstock, to which Moody's assigns a PDR of B1, and a loss given default of LGD5-73%. The size of the senior secured revolver's potential priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the B1 CFR under Moody's Loss Given Default Methodology. The relatively small size of Comstock's proven developed reserve base combined with its high percentage of natural gas production makes positive ratings action unlikely in the near future. Over the longer term, positive ratings action could occur if liquids production were to increase to 50% or proven developed reserves were to increase to 200,000 mboe while maintaining leverage on production and reserves at current levels. Alternately, positive ratings action could be driven by a reduction in leverage on production and reserves with Debt / Average Daily Production sustained below $10,000/boe. A deterioration in F&D costs leading to an increase in leverage on production and reserves with Debt / Average Daily Production sustained above $20,000/boe, a deterioration in liquidity, or a leveraged full cycle ratio sustained significantly below 1.0x could lead to native ratings action. Moody's last rating action for Comstock was on October 6, 2009, when Moody's assigned a B2 rating to the company's proposed offering of $200 million senior unsecured notes due 2017, affirmed the B1 Corporate Family Rating, B1 Probability of Default (PDR) Rating, and the B2 rating on the $175 million senior unsecured notes due 2012. Comstock Resources, Inc., is an independent exploration and production company headquartered in Frisco, Texas. COMSTOCK RESOURCES: S&P Assigns 'B' Rating to $250 Mil. Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' rating to Comstock Resources' proposed $250 million senior unsecured note offering. S&P has assigned a '6' recovery rating to this debt, indicating S&P's expectation of negligible (0% to 10%) recovery in the event of payment default. The U.S. exploration & production company plans to use the proceeds to retire its $172 million of senior unsecured notes due March 1, 2012, and to pay down borrowings under its credit facility ($45 million as of Dec. 31, 2010). Pro forma for the notes issuance and debt paydown, Comstock will have about $560 million in adjusted total debt (adjusted for operating leases and future abandonment liabilities). S&P's 'BB-' corporate credit rating and stable outlook on Frisco, Texas-based Comstock Resources remain unchanged. The ratings reflect S&P's expectation that natural gas prices will remain weak, which will pressure the company's profitability; the company's small and geographically concentrated reserve base; and the capital-intensive and cyclical nature of the exploration & production industry. S&P's ratings also take into account Comstock's current low leverage, adequate liquidity, and experienced management team. Ratings List Comstock Resources Corporate credit rating BB-/Stable/-- New Rating Proposed $250 mil sr unsecd nt B Recovery rating 6 CONEX HOLDINGS: C. Stanziale Named Interim Chapter 7 Trustee ------------------------------------------------------------ Roberta A. DeAngelis, U.S. Trustee for Region 3, has appointed Charles Stanziale as Chapter 11 trustee for Advantage Blasting & Coating, LLC. Wells Fargo Bank, N.A., had asked the U.S. Bankruptcy Court for the District of Delaware to (i) appoint a Chapter 11 trustee for in the bankruptcy cases of Conex International, LLC, and Advantage Blasting & Coating, LLC; and (ii) appoint an interim Chapter 7 trustee in the bankruptcy case of Conex Holdings, LLC. Mr. Stanziale was also appointed as Chapter 11 trustee for Conex International and interim Chapter 7 trustee for Conex Holdings. Conex Holdings is the sole member of both International Conex and ABC, and is wholly owned by CopperCom, Inc. Wells Fargo said that Conex Holdings, as the sole member of Conex International and sole shareholder of ABC, has grossly mismanaged their affairs and has breached its fiduciary duties by, among other things, shuttering the businesses of Conex International for Conex Holdings' own apparent gain. Wells Fargo recounts that on Aug. 8, 2008, Conex International entered into a credit agreement with a group of lenders led by Wells Fargo, as agent. Pursuant to the Credit Agreement, Conex received a term loan of $120 million and a revolving loan of $30 million. All of the Alleged Debtors are identified as Loan Parties under the Credit Agreement and are jointly and severally obligated to Wells Fargo, as Agent, and the Lenders. According to Wells Fargo, starting in 2009, and continuing through the Petition Date, Conex International ceased to make required principal and interest payments under the Credit Agreement, constituting an Event of Default thereunder. Past due principal payments are currently $42 million and past due interest had accrued to $8 million by February 2011. Beginning in February 2010, the Lenders notified Conex of its continuing default. Wells Fargo discloses that as a result of the Events of Default, and due in part to an enterprise value of substantially less than the Alleged Debtors' indebtedness, the Lenders requested that CopperCom consent to a turnover of its ownership of Conex International to the Lenders and Conex's existing management. CopperCom refused. CopperCom also refused to permit the Lender to have discussions with existing management regarding the possible restructuring of the Conex's balance sheet, unless CopperCom was permitted to control the time, place and participants at the discussions. CopperCom refused to permit Conex and its management to pursue value maximizing transactions unless CopperCom could control the economics, Wells Fargo said. CopperCom, according to Wells Fargo, subsequently refused to initiate discussions with AIG, a Mezzanine Lender, until the proposed restructuring of Conex International's debt had been consummated. Wells Fargo said, "As it became apparent that CopperCom might not obtain the consent of AIG as contemplated, the Agent broached the possibility of filing a consensual, pre- packaged Chapter 11 bankruptcy case followed by an asset sale. Although CopperCom initially appeared amenable to this alternative, it nonetheless failed to take even the most basic steps toward this process." After months of prodding by the Lenders, CopperCom finally approached AIG in January 2011 about eliminating its subordinated Conex debt. "At that time, instead of seeking to eliminate AIG's subordinated debt, CopperCom offered AIG $5 million of subordinated debt, as well as a larger equity stake than had been contemplated by the parties," Wells Fargo stated. At the same time CopperCom was purporting to negotiate with AIG, CopperCom was directing Conex International to divert cash collateral away from the possession and control of Agent and the Lenders. On Feb. 2, 2011, the Lenders discovered that Conex had diverted upwards of $4 million of cash into accounts other than accounts at Wells Fargo or otherwise subject to account control agreements, in direct contravention of the Credit Agreement. Wells Fargo says that after the Lenders' second demand that all funds be immediately returned to the Approved Accounts, Conex International returned approximately $1.8 million of the diverted funds to an approved account, but it informed the Lenders that it would not return the remaining $2 million. Wells Fargo is represented by Stuart M. Brown -- sbrown@eapdlaw.com; R. Craig Martin -- rcmartin@eapdlaw.com; and Cynthia Moh Baldwin -- cbaldwin@eapdlaw.com -- at Edwards Angell Palmer & Dodge LLP and Alan P. Solow -- alan.solow@dlapiper.com; Richard A. Chesley -- richard.chesley@dlapiper.com; and Gregory S. Otsuka -- gregory.otsuka@dlapiper.com -- at DLA Piper LLP (US). About Conex Holdings On Feb. 20, 2011, Wells Fargo, Bank of Montreal, and The Prudential Insurance Company of America, commenced an involuntary Chapter 7 bankruptcy case against Conex Holdings, LLC, and an involuntary Chapter 11 bankruptcy cases against Conex International, LLC (Bankr. D. Del. Case No. 11-10503) and Advantage Blasting & Coating, LLC (Bankr. D. Del. Case No. 11- 10502). CONEX INTERNATIONAL: Involuntary Case Taken Over by Ch. 11 Trustee ------------------------------------------------------------------ Roberta A. DeAngelis, U.S. Trustee for Region 3, has appointed Charles Stanziale as Chapter 11 trustee for Advantage Blasting & Coating, LLC. Wells Fargo Bank, N.A., had asked the U.S. Bankruptcy Court for the District of Delaware to (i) appoint a Chapter 11 trustee for in the bankruptcy cases of Conex International, LLC, and Advantage Blasting & Coating, LLC; and (ii) appoint an interim Chapter 7 trustee in the bankruptcy case of Conex Holdings, LLC. Mr. Stanziale was also appointed as Chapter 11 trustee for Conex International and interim Chapter 7 trustee for Conex Holdings. Conex Holdings is the sole member of both International Conex and ABC, and is wholly owned by CopperCom, Inc. Wells Fargo said that Conex Holdings, as the sole member of Conex International and sole shareholder of ABC, has grossly mismanaged their affairs and has breached its fiduciary duties by, among other things, shuttering the businesses of Conex International for Conex Holdings' own apparent gain. Wells Fargo recounts that on Aug. 8, 2008, Conex International entered into a credit agreement with a group of lenders led by Wells Fargo, as agent. Pursuant to the Credit Agreement, Conex received a term loan of $120 million and a revolving loan of $30 million. All of the Alleged Debtors are identified as Loan Parties under the Credit Agreement and are jointly and severally obligated to Wells Fargo, as Agent, and the Lenders. According to Wells Fargo, starting in 2009, and continuing through the Petition Date, Conex International ceased to make required principal and interest payments under the Credit Agreement, constituting an Event of Default thereunder. Past due principal payments are currently $42 million and past due interest had accrued to $8 million by February 2011. Beginning in February 2010, the Lenders notified Conex of its continuing default. Wells Fargo discloses that as a result of the Events of Default, and due in part to an enterprise value of substantially less than the Alleged Debtors' indebtedness, the Lenders requested that CopperCom consent to a turnover of its ownership of Conex International to the Lenders and Conex's existing management. CopperCom refused. CopperCom also refused to permit the Lender to have discussions with existing management regarding the possible restructuring of the Conex's balance sheet, unless CopperCom was permitted to control the time, place and participants at the discussions. CopperCom refused to permit Conex and its management to pursue value maximizing transactions unless CopperCom could control the economics, Wells Fargo said. CopperCom, according to Wells Fargo, subsequently refused to initiate discussions with AIG, a Mezzanine Lender, until the proposed restructuring of Conex International's debt had been consummated. Wells Fargo said, "As it became apparent that CopperCom might not obtain the consent of AIG as contemplated, the Agent broached the possibility of filing a consensual, pre- packaged Chapter 11 bankruptcy case followed by an asset sale. Although CopperCom initially appeared amenable to this alternative, it nonetheless failed to take even the most basic steps toward this process." After months of prodding by the Lenders, CopperCom finally approached AIG in January 2011 about eliminating its subordinated Conex debt. "At that time, instead of seeking to eliminate AIG's subordinated debt, CopperCom offered AIG $5 million of subordinated debt, as well as a larger equity stake than had been contemplated by the parties," Wells Fargo stated. At the same time CopperCom was purporting to negotiate with AIG, CopperCom was directing Conex International to divert cash collateral away from the possession and control of Agent and the Lenders. On Feb. 2, 2011, the Lenders discovered that Conex had diverted upwards of $4 million of cash into accounts other than accounts at Wells Fargo or otherwise subject to account control agreements, in direct contravention of the Credit Agreement. Wells Fargo says that after the Lenders' second demand that all funds be immediately returned to the Approved Accounts, Conex International returned approximately $1.8 million of the diverted funds to an approved account, but it informed the Lenders that it would not return the remaining $2 million. Wells Fargo is represented by Stuart M. Brown -- sbrown@eapdlaw.com; R. Craig Martin -- rcmartin@eapdlaw.com; and Cynthia Moh Baldwin -- cbaldwin@eapdlaw.com -- at Edwards Angell Palmer & Dodge LLP and Alan P. Solow -- alan.solow@dlapiper.com; Richard A. Chesley -- richard.chesley@dlapiper.com; and Gregory S. Otsuka -- gregory.otsuka@dlapiper.com -- at DLA Piper LLP (US). About Conex International On Feb. 20, 2011, Wells Fargo, Bank of Montreal, and The Prudential Insurance Company of America, commenced an involuntary Chapter 7 bankruptcy case against Conex Holdings, LLC, and an involuntary Chapter 11 bankruptcy cases against Conex International, LLC (Bankr. D. Del. Case No. 11-10503) and Advantage Blasting & Coating, LLC (Bankr. D. Del. Case No. 11- 10502). CONMED CORP: S&P Affirms Corporate Credit Rating at 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB-' corporate credit rating on medical device manufacturer ConMed Corp. At the same time, S&P lowered its credit rating on the company's senior secured revolving credit agreement and term loan to 'BB-' from 'BB', and affirmed its 'B' rating on the senior subordinated convertible notes. The recovery rating on the senior secured debt is revised to '3', indicating S&P's expectation for meaningful (50% to 70%) recovery of principal in the event of a payment default, from '2', indicating S&P's prior expectation for substantial (70% to 90%) recovery of principal in the event of a payment default. S&P affirmed the '6' recovery rating on the senior subordinated convertible notes, indicating its expectation for negligible (0 to 10%) recovery of principal in the event of default. The rating outlook is stable. The downgrade of the senior secured debt ratings is a function of the increased size of this debt class relative to S&P's estimate of the enterprise's value in the event of default. "The speculative-grade rating on Utica, New York-based ConMed Corp. recognizes the company's reduction in debt leverage over the past few years and its improved liquidity, but also reflects S&P's view that debt-financed acquisitions are likely," said Standard & Poor's credit analyst Gail I. Hessol. Over the medium term, S&P expects the company's financial risk profile to be significant. S&P characterizes ConMed's business risk profile as fair. The company faces substantial competition and its profitability has been lackluster. CONSOLIDATED HORTICULTURE: Judge OKs $31-Mil. Sale to Lender ------------------------------------------------------------ Bankruptcy Law360 reports that Hines Nurseries LLC won bankruptcy court approval Monday to sell its assets to lender Black Diamond Capital Management LLC for as much as $31 million, allowing the debtor to continue operations but promising little in terms of recovery for creditors. Law360 relates that after an auction failed to produce any other qualified bids, Black Diamond credit bid the outstanding amount on Hines' debtor-in-possession financing, $21.5 million, and agreed to include whatever additional DIP. As reported in the TCR on Feb. 17, 2011, Hines Nurseries was scheduled to convene an auction on Feb. 25 as long as competing bids would be sent by Feb. 23. The sale hearing was scheduled Feb. 28. 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 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 Oct. 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. CONTINENTAL COIN: 9th Circuit Rejects Two Appeals ------------------------------------------------- The U.S. Court of Appeals for the Ninth Circuit denied separate appeals lodged by creditor Roger Virtue and Nancy Hoffmeier Zamora, the Chapter 11 trustee for the estate of Continental Coin Corporation. The parties separately appeal the district court's affirmance of two orders of the bankruptcy court pursuant to 28 U.S.C. Sec. 158(d). Specifically, the Chapter 11 Trustee contests the bankruptcy court's order allowing an amended adversary complaint to be filed. Mr. Virtue contests the bankruptcy court's order barring certain claims from the amended complaint, denying his request for appointment of counsel under 11 U.S.C. Sec. 327(a), and staying the adversary action pending appeal without requiring a bond. Mr. Virtue contends that the Chapter 11 Trustee improperly liquidated the Debtor's estate. On July 31, 2007, Mr. Virtue filed a motion for leave to sue the Chapter 11 Trustee and her counsel, alleging that the Chapter 11 Trustee failed to: (1) give notice of her intent to assume the leases for the Debtor's mint and retail facilities; (2) hire brokers to assist with the sale or valuation of the leases, equipment, machinery and personal property; (3); accept reasonable offers for the leases and property, thus causing a significant loss for the estate; and (4) respond to Mr. Virtue's requests for information. Mr. Virtue sought recovery from the Chapter 11 Trustee and her counsel based on the legal theories of breach of fiduciary duty, gross negligence, negligence, and legal malpractice. On Dec. 12, 2007, the bankruptcy court held that the Chapter 11 Trustee was entitled to quasi-judicial immunity for negligence, but that Mr. Virtue could pursue his claims against the Chapter 11 Trustee for gross negligence and for breach of fiduciary duty. It prohibited Mr. Virtue from filing a complaint alleging self- dealing or breaches of the duty of loyalty, as no such allegations had been brought in the proposed complaint lodged with the motion. It also prohibited Mr. Virtue from pursuing claims related to the Chapter 11 Trustee's failure to move to set aside the assumption of the Ground Leases or failure to hire a real estate broker, both of which the bankruptcy court found to fall under the "business judgment rule." Additionally, the bankruptcy court held that Mr. Virtue could not sue the Chapter 11 Trustee's attorneys because her attorneys owe no statutory or fiduciary duty to the creditors of the estate, and Mr. Virtue lacked standing to assert a malpractice claim. Finally, the bankruptcy court held that Mr. Virtue could not hire his own attorneys to represent the estate in a suit against the Chapter 11 Trustee, and that he was not entitled to prior approval of an administrative expense to pay his attorneys out of the estate. On Dec. 21, 2007, the Chapter 11 Trustee appealed. On the same day, Mr. Virtue filed a motion to modify the order. He sought a determination that the Chapter 11 Trustee could be held liable for the negligent violation of her statutory duties and that he could sue the Chapter 11 Trustee's counsel. On Dec. 28, 2007, Mr. Virtue filed his complaint against the Chapter 11 Trustee and her counsel. On Jan. 8, 2008, the Chapter 11 Trustee filed a motion to stay the Dec. 12, 2007 Order and the adversary proceeding. On Jan. 31, 2008, the bankruptcy court denied Mr. Virtue's motion and granted the Chapter 11 Trustee's motion for a stay. The bankruptcy court construed Mr. Virtue's motion to modify as a motion for reconsideration. The court also denied Mr. Virtue's request to conduct discovery and to require the Chapter 11 Trustee and her counsel to post a bond as a condition of the stay. On Feb. 5, 2008, Mr. Virtue filed his notice of appeal of both the Dec. 12, 2007 and Jan. 31, 2008 Orders. On Feb. 8, 2008, the Chapter 11 Trustee filed an amended notice of appeal and notice of cross-appeal. District Judge Percy Anderson affirmed the bankruptcy court's rulings on Aug. 21, 2009. A copy of the Ninth Circuit's Feb. 25, 2011 Memorandum is available at http://is.gd/HIS0aOfrom Leagle.com. The panel consists of Circuit Judges Alfred Goodwin, Andrew Kleinfeld, and Susan Graber. Continental Coin Corporation filed a voluntary Chapter 11 petition (Bankr. C.D. Calif. Case No. 00-15821) on July 19, 2000. The Debtor owned and operated a retail store that sold precious gems, jewelry, numismatic coins, gold bullion, precious metals and collectibles, and exchanged foreign currency. It also owned a mint facility that made decorative and commemorative coins, refined precious metals, and subleased office and retail space to 18 subtenants. The Debtor owned the leases for the Retail Store, Mint, and office space. Nancy Hoffmeier Zamora was appointed as Chapter 11 trustee on Aug. 31, 2001. COYOTES HOCKEY: Hulsizer, Goldwater Fight Over Bonds ---------------------------------------------------- Mike Sunnucks at the Phoenix Business Journal reports that the prospective Phoenix Coyotes owner Matthew Hulsizer and Goldwater Institute CEO Darcy Olsen disagree about what is driving up the cost of bonds the city of Glendale, Arizona, wants to sell to help the Chicago investment broker buy the hockey franchise. According to the report, Mr. Hulsizer told Fox Sports Arizona in Chicago last night that the threat of a Goldwater Institute lawsuit challenging Glendale's $197 million incentive package is adding as much as $100 million to interest payments the West Valley city will pay on those bonds over the next 30 years. "The rate that the city would have to pay on the bond is unnecessarily high -- to the tune of $100 million over the next thirty years," Mr. Hulsizer told FSAZ's Todd Walsh during the Coyotes-Chicago Blackhawks game. "This is due to questions from the Goldwater Institute." Goldwater, according to the Phoenix Business Journal, has threatened to sue Glendale over the Coyotes deal saying the money being given to Hulsizer to manage Jobing.com Arena and from bond proceeds may violate a prohibition on government gifts to businesses in the Arizona Constitution. Mr. Hulsizer says he's ready to close on the Coyotes purchase and wants Goldwater to make a decision on a lawsuit. But Olsen isn't ready to do that. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. In the third quarter of 2009, Judge Redfield T. Baum approved the sale of the Phoenix Coyotes to the National Hockey League, which had bought the team to quash a plan by bidder Jim Balsillie's to move the team to Ontario, Canada. Coyotes was sent to Chapter 11 to effectuate a sale by owner Jerry Moyes to Mr. Balsillie. CREDIT ACCEPTANCE: Moody's Assigns 'B1' Rating to Senior Notes -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Credit Acceptance's $100 million add-on to its $250 million Senior Secured Notes, due in 2017. The company's B1 Corporate Family and Senior Secured Notes ratings, as well as the negative outlook, remain unchanged. Credit Acceptance anticipates using the proceeds to finance a portion of the $125 million stock buyback, to be completed by March 17, 2011. The Notes feature terms that are consistent with Credit Acceptance's existing $250 million Senior Secured Notes. New Senior Secured Notes holders will share collateral pari passu with the existing $250 million Senior Secured Notes and the $170 million Revolving Credit Facility. The Senior Secured Notes rating is based on Credit Acceptance's fundamental credit characteristics and the position of the Notes in the company's capital structure. Moody's views the company's repeated use of debt to finance share buybacks as an aggressive use of the balance sheet and expects that Credit Acceptance will utilize cash flows from operations over the next several quarters to decrease leverage from post- buyback levels. The debt-financed buyback will increase Credit Acceptance's leverage from 1.5x to 2.3x. Moody's expects that the 2.3x level of leverage will be the company's highest. At the same time, Moody's notes that the company has sufficient liquidity under its credit facilities to finance new loan growth and benefits from a satisfactory debt maturity profile, with no significant debt maturities until June 2012. The Corporate Family rating reflects the company's relatively stable returns and strong franchise position. However, Credit Acceptance remains vulnerable to adverse economic developments caused by its exposure to the subprime consumer segment and the company's significant asset encumbrance level limits its operational and financial flexibility. In addition, Credit Acceptance's dependence on performance and confidence-sensitive wholesale funding also introduces renewal/refinancing risk In its last rating action dated January 19, 2010, Moody's Investors Service had assigned first-time Corporate Family and Senior Secured Notes ratings of B1 to Credit Acceptance, both with a negative outlook. Credit Acceptance, headquartered in Southfield, Michigan, is an auto finance company focused on subprime consumers. DBSD N.A.: Noteholders Float Own $750-Million Reorganization Plan ----------------------------------------------------------------- Bankruptcy Law360 reports that a group of noteholders in DBSD North America Inc. floated its own $750 million debt-for-equity reorganization plan Friday that purportedly would fast-track confirmation by partly incorporating a previously confirmed, Federal Communications Commission-approved plan. Law360 says the ad hoc committee of noteholders' plan also would be much quicker than Dish Network Corp.'s proposal to take over DBSD for $1.1 billion. As reported in the Troubled Company Reporter, DBSD filed on Feb. 1 a motion for approval of a sale agreement for DISH Network to acquire 100% of the equity of the reorganized DBSD N.A. for roughly $1 billion subject to certain adjustments, including interest accruing on DBSD North America's existing debt, pursuant to an "Alternate Plan." Under the agreement, subject to and contingent on both an unconditional Federal Communications Commission approval and anti-trust clearance, the Debtors' assets will be sold to DISH and the proceeds of such sale distributed to Senior Noteholders and General Unsecured Creditors. The Debtor also sought approval of a debtor-in-possession credit facility from DISH, which will consist of a non-revolving, multiple draw term loan in the aggregate principal amount of $87.5 million. Sprint Nextel Corporation and senior secured noteholders are opposing the sale to DISH. They say that the plan to sell to DISH "significantly undervalues the Debtors' assets and would provide a recovery for unsecured creditors that is substantially worse than" the plan previously negotiated by DBSD with noteholders, ICO Global Communications (Holdings) Limited, and Sprint Nextel in January. 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. DBSD N.A.: Tweaks Sale Agreement With Dish Network -------------------------------------------------- Dow Jones' DBR Small Cap reports that DBSD North America Inc. has tweaked its sale agreement with Dish Network Corp.-including the removal of a crucial "no-shop" provision that creditors had objected to-ahead of a hearing on the $1.1 billion sale offer this week and a bankruptcy judge has set aside two weeks for a hearing to consider Tribune Co.'s Chapter 11 plan and a rival offering from investment firm Aurelius Capital Management, the company's largest unsecured creditor. As reported in the Troubled Company Reporter, DBSD filed on Feb. 1 a motion for approval of a sale agreement for DISH Network to acquire 100% of the equity of the reorganized DBSD N.A. for roughly $1 billion subject to certain adjustments, including interest accruing on DBSD North America's existing debt, pursuant to an "Alternate Plan." Under the agreement, subject to and contingent on both an unconditional Federal Communications Commission approval and anti-trust clearance, the Debtors' assets will be sold to DISH and the proceeds of such sale distributed to Senior Noteholders and General Unsecured Creditors. The Debtor also sought approval of a debtor-in-possession credit facility from DISH, which will consist of a non-revolving, multiple draw term loan in the aggregate principal amount of $87.5 million. Sprint Nextel Corporation and senior secured noteholders are opposing the sale to DISH. They say that the plan to sell to DISH "significantly undervalues the Debtors' assets and would provide a recovery for unsecured creditors that is substantially worse than" the plan previously negotiated by DBSD with noteholders, ICO Global Communications (Holdings) Limited, and Sprint Nextel in January. 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. DECODE GENETICS: Insurance Broker's Fee Not Avoidable ----------------------------------------------------- WestLaw reports that a broker services agreement executed by the Chapter 11 debtor and its insurance broker, and the payment of the broker services fee called for by that agreement, were authorized by the bankruptcy court's final insurance order and, thus, the fee could not be recovered by the liquidating trustee under 11 U.S.C. Sec. 549, the section of the Bankruptcy Code governing the avoidance of postpetition transactions. The order authorized the debtor to "revise, extend, renew, supplement or change" its current insurance policies and broker agreements that were "in the ordinary course of business as set forth in the Motion." The motion, in turn, described the debtor's ordinary course of business as purchasing directors' and officers' (D&O) liability insurance policies and as entering broker agreements with its broker to procure the policies. The "tail policy" for which the fee was incurred provided coverage for an extended claims reporting period for the debtor's D&O policies, thereby revising, extending, supplementing, and/or changing the debtor's D&O policies and bringing the tail policy within the scope of the order. In re DGI Resolutions, Inc., --- B.R. ----, 2011 WL 590471 (Bankr. D. Del.) (Walsh, J.). A copy of the Honorable Peter J. Walsh's Memorandum Opinion dated Feb. 17, 2011, in DGI Liquidating Trust v. William Gallagher Associates Insurance Brokers, Inc., Adv. Pro. No. 10-55355 (Bankr. D. Del.), is available at http://is.gd/JQ2BQdat no charge. About deCODE Genetics deCODE Genetics Inc. nka DGI Resolution, Inc. sought chapter 11 protection (Bankr. D. Del. Case No. 09-14063) on Nov. 16, 2009, disclosing $69.9 million in assets and $314 million in liabilities, and represented by lawyers at Richards, Layton & Finger, P.A., in Wilmington, Del. The bankruptcy court confirmed a liquidating chapter 11 plan on May 27, 2010. That plan estimated that unsecured creditors would recover about 3% on their prepetition claims, and appointed Walker, Truesdell, Roth & Associates as the liquidating trustee. The liquidating trustee is represented by lawyers at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Del. DEVELOPERS DIVERSIFIED: S&P Gives Stable Outlook, Keeps BB Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Developers Diversified Realty Corp. to stable from negative. In addition, S&P affirmed its 'BB' corporate credit rating on DDR. At the same time, S&P raised its recovery rating on the rated senior unsecured notes to '2' from '3', indicating that lenders can expect a substantial recovery (70%-90%) in the event of a payment default. The raising of the recovery rating resulted in the upgrade of the company's senior unsecured notes to 'BB+' from 'BB'. The '2' recovery rating affects roughly $1.7 billion of rated senior unsecured notes currently outstanding, and reflects S&P's practice of assigning recovery ratings to all debt with a speculative-grade rating. "S&P's outlook revision acknowledges the improvements to the company's operating performance, as occupancy has stabilized and same-store net operating income has been positive for three consecutive quarters," explained credit analyst Elizabeth Campbell. "The recovery rating and unsecured upgrades reflect DR's capital transactions during 2010, which reduced DDR's leverage." The outlook is stable. S&P believes that DDR's debt coverage measures, while low, should be stable this year as deleveraging benefits and portfolio income growth are offset by the higher costs associated with the company's actions to extend its debt tenor. S&P would consider raising its corporate credit rating on the company based on strengthened fixed-charge coverage measures and further deleveraging, although S&P presently view this as unlikely in the near term, given next year's above-average refinancing volume. Alternatively, S&P would lower the credit rating if covenant-defined debt coverage slips from current 1.7x- 1.8x levels or if leverage or liquidity weakens. EASTMAN KODAK: S&P Lowers 'CCC' Corporate Rating From 'B-' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Rochester, N.Y.-based Eastman Kodak Co. to 'CCC' from 'B-'. S&P removed the rating from CreditWatch, where S&P placed it with negative implications on Jan. 26, 2011. The rating outlook is negative. Issue-level ratings on the company's debt were also lowered and removed from CreditWatch in conjunction with the corporate credit rating change. The 'CCC' corporate credit rating reflects S&P's expectation that Eastman Kodak's pace of cash consumption will remain high over the near term. It also reflects S&P's expectation of continued secular volume decline of the traditional photographic products and services business, that the company's consumer digital imaging businesses will not quickly turn convincingly profitable, and that intellectual property earnings, which constitute a significant portion of the company's EBITDA, could decline significantly from 2010 levels. These factors underpin S&P's view of Kodak's business risk as vulnerable (see Criteria Methodology: Business Risk/Financial Risk Matrix Expanded, May 27, 2009) and support S&P's view that revenue and EBITDA will decline in 2011. S&P views the company's financial risk profile as highly leveraged because of the risk that its earnings and cash flow could become insufficient to support its debt. Kodak's film business, including its Entertainment Imaging business, has been declining for several years. In addition, the company continues to invest in its consumer and commercial inkjet products, which are still incurring losses. Kodak's digital camera business is also declining at a brisk pace because of pricing pressure, intense competition, and technological improvements of digital cameras within mobile phones. S&P believes this business is now unprofitable. In 2010, Kodak's revenue declined 6%. Revenue from the company's traditional Film, Photofinishing and Entertainment Group declined 22%. Revenue in the Consumer Digital Imaging Group increased 5%, while revenue in the Graphic Communications Group declined 2%. EBITDA increased during 2010 because of high-margin one-time intellectual property transactions. S&P estimates that excluding these one-time intellectual property transactions, the company's EBITDA (after restructuring charges) swung to a loss in 2010. S&P believes that revenue will decline in the high teens percentage area in 2011 due to continue declines in the traditional film business, brisk declines in the digital camera business, a falloff in one-time intellectual property related earnings, and the potential for continued revenue declines in the company's Graphic Communications Group. Based on S&P's projections, S&P believes that Kodak's EBITDA will be negative in 2011. EASTMAN KODAK: FMR LLC Discloses 6.782% Equity Stake ---------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC disclosed that it beneficially owns 18,592,031 shares of common stock of Eastman Kodak Co representing 6.782% of the shares outstanding. The number of shares outstanding of the Company's common stock as of Feb. 11, 2011 was 268,882,900 shares. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. As of Dec. 31, 2010, the Company's balance sheet showed $6.84 billion in total assets, $7.34 billion in total liabilities and a $498 million deficit. As reported by the Troubled Company Reporter on January 31, 2011, Standard & Poor's Ratings Services placed its 'B-' corporate credit rating for Kodak, as well as all related issue-level ratings on the Company's debt, on CreditWatch with negative implications. The CreditWatch placement follows Kodak's fourth- quarter earnings announcement. At Dec. 31, 2010, the Company's cash balance was $1.6 billion -- a decline from $2 billion at Dec. 31, 2009. Revenue declined 6% for the year. Traditional revenue declined 22%, while digital revenue increased 1% for the year. The Company's revenue, earnings, and cash flow in 2010 benefited from one-time intellectual property license transactions. S&P doesn't expect IP-related cash flow to recur at the same level in 2011. Standard & Poor's credit analyst Tulip Lim said, "We could lower the rating if we believe that the Company may not have sufficient liquidity for its needs in 2011 and 2012." EMAK WORLDWIDE: Files Reorganization Plan; DS Hearing on April 7 ---------------------------------------------------------------- EMAK Worldwide, Inc., filed a proposed Joint Plan of Reorganization and its Disclosure Statement with the U.S. Bankruptcy Court for the Central District of California in Los Angeles on Feb. 28, 2011. The Disclosure Statement is currently scheduled for a Bankruptcy Court hearing on April 7, 2011. The Plan has the support of the Company's preferred equity holder. EMAK CEO Jim Holbrook stated, "With the confidence and loyalty of our clients and the unrelenting focus of our talented employees, we are now poised to build our marketing services businesses even further. Our goal is clear: to help our clients by designing and executing powerful marketing programs that deliver bottom line results for their brands." About Emak Worldwide Los Angeles, California-based EMAK Worldwide, Inc., a Delaware corporation, fka Equity Marketing, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 10-42779) on Aug. 5, 2010. Jeffrey M. Reisner, Esq., at Irell & Manella LLP, assists the Debtor in its restructuring effort. The Debtor disclosed $4,392,115 in assets and $7,485,567 in liabilities as of the Petition Date. An affiliate, EMAK Worldwide Service Corp., A Delaware Corporation, filed a separate Chapter 11 petition (Bank. C.D. Calif. Case No. 10-42784) on Aug. 5, 2010. EMAK Worldwide Service disclosed $4,423,652 in assets and $3,123,135 in liabilities as of the Petition Date. EMAK's other operating subsidiaries are excluded from these voluntary petitions, including its Equity Marketing, Logistix, Neighbor and Upshot agencies and operations in Asia. EMIVEST AEROSPACE: Plan Due Date Moved; Assets Marketing Ongoing ---------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods of Emivest Aerospace Corporation to: -- file a Chapter 11 plan of reorganization until May 18, 2011; and -- solicit acceptances of that plan until July 17, 2011. The Debtor told the Court that it is in the process of marketing its business with the goal of a sale of substantially all of its assets. The full attention of the Debtor's personnel and professionals is currently focused on maximizing the value of the Debtor's estate through this sale process. In addition to the ongoing sale process, the Debtor has focused substantial effort on other time-critical matters since the Petition Date, including, but not limited to: a) negotiate and address issues related to interim and final debtor-in-possession financing and related financing issues; b) comply with reporting obligations and all other duties as a debtor in possession, including preparing the schedules of assets and liabilities and statement of financial affairs; and c) stabilize its business in a manner that will maximize value for all parties in interest. About Emivest Aerospace Emivest Aerospace Corporation -- http://www.sj30jet.com/-- is a U.S.-based aircraft manufacturing company and a subsidiary of Emirates Investment & Development PSC. Emivest Aerospace Corporation produces the SJ30 light jet. Emivest Aerospace Corporation filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-13391) on Oct. 20, 2010. Emivest estimated assets and debts between $50 million and $100 million. Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, serves as counsel to the Debtor. Morgan Joseph & Co. Inc. is the financial advisor to the Debtor. The Debtor also hired DLA Piper LLP (US) as special counsel to assist in the marketing of its assets. Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to the Official Committee of Unsecured Creditors. Deloitte Financial Services LLP is the Committee's financial advisor. ENERGY FUTURE: Receives Default Letter From Aurelius ---------------------------------------------------- Citibank, N.A., as Administrative Agent under that certain Credit Agreement, dated as of Oct. 10, 2007, as amended Aug. 7, 2009, by and among Energy Future Competitive Holdings Company, as guarantor, Texas Competitive Electric Holdings Company LLC, as borrower, and the lenders party thereto from time to time, has informed TCEH that Citibank received a letter from Aurelius Capital Management, LP, a lender under the TCEH Senior Secured Credit Facilities, alleging that TCEH is in default under the terms of the TCEH Senior Secured Credit Facilities. Energy Future Holdings Corp believes that all of the allegations in Aurelius' letter are without merit. Neither the letter from Aurelius nor the communication from Citibank regarding the letter causes the acceleration of any of Energy Future Holdings Corp.'s, TCEH's or their respective affiliates' debt, including the TCEH Senior Secured Credit Facilities. The letter from Aurelius principally alleges that certain intercompany loans from TCEH to EFH, its indirect parent company, do not comply with the requirement in the TCEH Senior Secured Credit Facilities that these loans be made on an arm's-length basis. Aurelius further alleges that this noncompliance has resulted in a failure to make certain mandatory prepayments under the TCEH Senior Secured Credit Facilities. TCEH disagrees with each of Aurelius' allegations. The Company believes the loans comply with the arm's-length requirement in the TCEH Senior Secured Credit Facilities and that no event of default has occurred. The loans reflect arm's-length terms that are comparable to the terms that unrelated parties would have negotiated in the market. Information regarding these loans, including the interest rate and amounts outstanding thereunder, has been disclosed in numerous filings with the Securities and Exchange Commission by EFCH and discussed on numerous EFH quarterly investor calls. Citibank has advised the Company that, as of Feb. 24, 2011, Aurelius holds approximately $50 million aggregate principal amount of term loans as a lender of record, or approximately 0.2%, of the approximately $23.9 billion aggregate principal amount of debt outstanding under the TCEH Senior Secured Credit Facilities. Of the hundreds of lenders of record under the TCEH Senior Secured Credit Facilities, no other lender was listed in the letter as supporting Aurelius' allegations and, as of the date of Feb. 25, 2011, no other lender has asserted that these loans constitute an event of default under the TCEH Senior Secured Credit Facilities. Generally, under the terms of the TCEH Senior Secured Credit Facilities, the Administrative Agent is only required to declare the debt under the TCEH Senior Secured Credit Facilities immediately due and payable if an event of default occurs and is continuing and the lenders holding a majority of such outstanding debt request the acceleration of the debt. The Company intends to defend itself vigorously against these allegations and to continue operating in compliance with the terms and conditions of each of EFH's, TCEH's and their respective affiliates' debt agreements, including the TCEH Senior Secured Credit Facilities. About Energy Future Holdings EFH -- http://www.energyfutureholdings.com/-- is a Dallas-based holding company engaged in competitive and regulated energy market activities, primarily in Texas. Its portfolio of competitive businesses consists primarily of TXU Energy, a retail electricity provider with approximately 2 million customers in Texas, and Luminant, which is engaged largely in power generation and related mining activities, wholesale power marketing and energy trading. Luminant has approximately 15,400 MW of generation in Texas, including 2,300 MW fueled by nuclear power and 8,000 MW fueled by coal. Luminant is also the largest purchaser of wind-generated electricity in Texas and fifth largest in the United States. EFH's regulated operations consist of Oncor, which operates the largest electricity distribution and transmission system in Texas with more than three million delivery points, 103,000 miles of distribution conductors and 15,000 miles of transmission lines. While EFH indirectly owns approximately 80 percent of Oncor, the management of Oncor reports to a separate board with a majority of directors that are independent from EFH. The Company's consolidated balance sheets at Dec. 31, 2010, showed $46.388 billion in total assets, $52.299 billion in total liabilities, and a stockholders' deficit of $5.911 billion. * * * In October 2010, Moody's Investors Service downgraded the Corporate Family Rating for Energy Future's to Caa2 from Caa1; downgraded EFH's Probability of Default Rating to Caa3 from Caa2 and affirmed the SGL-4 Speculative Grade Liquidity assessment. EFH's rating outlook remains negative. "The downgrade is triggered by the persistent environment of low natural gas and power commodity prices and low average heat rates, which collectively drag down EFH's current and expected cash flow generation. There is little evidence indicating a significant improvement to natural gas commodity prices, and as a result, EFH is likely to remain in financial distress," Moody's said. Energy Future carries a 'CCC' issuer default rating from Fitch Ratings. ENERGY FUTURE: Event of Default Won't Affect Moody's Ratings ------------------------------------------------------------ Moody's Investors Service said that a recent assertion made by an investor that a term loan at a subsidiary of Energy Future Holdings Corp. (Caa2 Corporate Family Rating, negative rating outlook, SGL-4) has incurred an event of default will not, at this time, affect the ratings or rating outlooks for the company or its subsidiaries. On Friday, February 25, 2011, an investor in Texas Competitive Electric Holdings' senior secured first lien term loan B asserted to the lead arranger, Citibank, N.A., that an event of default has occurred with respect to an intercompany loan not being in compliance with the credit agreement. It is Moody's understanding that Citibank will be working with the lenders in TCEH's senior secured securities to discuss this assertion. TCEH is a wholly owned subsidiary of Energy Future Competitive Holdings, which in turn, is a wholly owned subsidiary of EFH. EFH's consolidated capital structure is complex and consists of numerous borrowings between subsidiaries; up stream and down stream guarantees and various incurrence tests between its credit agreement and indentures. EFH's cash flows are primarily generated by its un-regulated power generation activities (which includes a retail electric distribution business) at TCEH. Cash flow generation is highly influenced by market fundamentals which remain outside of the control of management, including the price of natural gas commodities and regional market heat rates. EFH recently reported slightly more than $1 billion in cash flow from operations for 2010, which excludes the contributions of its 80% owned regulated transmission and distribution utility, Oncor Electric Delivery Company LLC (Oncor: Baa1 senior secured, stable outlook). EFH reported cash flows of $1.7 billion in 2009, $1.5 billion in 2008, $1.8 billion in 2007 and $5.0 billion in 2006, which included the contributions of Oncor. In Moody's opinion, these cash flows which supported approximately $38 billion in debt for 2010 versus roughly $14 billion in 2006, leaves the company with little financial flexibility. "This is likely the first of many such assertions by investors" said Jim Hempstead, Senior Vice President, "but Moody's believe both EFH and TCEH are appropriately positioned within their respective rating categories at this time." From a liquidity perspective, Moody's is primarily concerned with TCEH's maintenance covenant associated with its senior secured first lien credit agreement. Moody's incorporate a view that TCEH is likely to experience a significant reduction in the cushion related to this covenant in 2011. If market fundamentals worsen, TCEH could, theoretically, experience a covenant violation. Any event of default could prevent TCEH from borrowing under its revolver and cross-defaults would also be triggered across EFH. Moody's anticipate that Oncor will likely remain insulated from these challenges currently being experienced by its affiliate. Nevertheless, Oncor's ratings could be negatively impacted by the financing activities being pursued by its ultimate parent, EFH. Specifically, should EFH continue to issue debt securities which effectively place a lien on the 80% equity ownership that EFH maintains in Oncor, Moody's would view the debt as a form of permanent leverage for Oncor, despite its strong ring-fence type provisions that remain in place. Moody's continue to view the disclosure in both Oncor's and EFH's public SEC filings, including the most recent Form 10-K's, which discuss the risk of the ring- fence not working as planned, as a credit negative for Oncor. EFH maintains business activities in unregulated power generation, retail distribution of electricity and regulated transmission and distribution services in the greater North Texas region. EFH is headquartered in Dallas, Texas. ENERGY FUTURE: Fitch Maintains 'CCC' Rating, Outlook Negative ------------------------------------------------------------- Fitch Ratings does not expect to take any immediate rating action on Energy Future Holdings Corp., Texas Competitive Electric Holdings Company LLC or their affiliates based on recent allegations from lender Aurelius Capital Management LP. Fitch currently rates both companies 'CCC' with Negative Rating Outlooks. On Feb. 25, 2011, EFH issued an 8-K to report that Citibank, N.A., as an administrative agent for the TCEH Senior Secured Credit Facilities (Facilities), had received a letter from Aurelius alleging that TCEH is in default under the terms of its Facilities. Aurelius, a lender under the TCEH's Facilities, holding as a lender of record approximately $50 million of term loans as of Feb. 24, 2011, is making an assertion that the inter- company loans from TCEH to EFH were not made on an arm's-length basis, thus violating the arm's length requirement under the Facilities. Aurelius further alleges that this non-compliance has resulted in a failure to make certain mandatory prepayments under the Facilities. TCEH believes that Aurelius' allegations are without merit and should not cause the acceleration of any of EFH's, TCEH's or their respective affiliates' debt. The inter-company loans from TCEH to EFH are permitted under TCEH's Facilities. The outstanding amount under these loans stood at $1.9 billion as of Dec. 31, 2010. Fitch will continue to monitor the situation and believes that protracted uncertainty related to it could limit EFH's ability to restructure its debt on a timely basis. FAIRMOUNT MINERALS: S&P Assigns 'BB-' Rating to $1.075 Bil. Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB-' issue-level rating (same as the corporate credit rating) and '4' recovery rating to U.S.-based frac sand producer Fairmount Minerals Ltd.'s proposed $1.075 billion senior secured credit facility. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in the event of a payment default. The facility is expected to consist of a $75 million senior secured revolving credit facility due 2015 and a $1 billion senior secured term loan due 2017. Proceeds from the proposed bank credit facility will be used to refinance existing debt and fund a dividend to shareholders. The ratings on the company's existing bank credit facility will be withdrawn once the proposed transaction is completed. At the same time, S&P affirmed its 'BB-' corporate credit rating on Fairmount. The rating outlook is stable. The rating affirmation reflects S&P's view that solid natural gas shale drilling activity will support Fairmount's improving operating performance and credit metrics in the near term. "The 'BB-' corporate credit rating for Fairmount Minerals reflects the combination of what S&P considers to be its fair business risk profile and aggressive financial risk profile as indicated by its modest size and scope, exposure to cyclical end markets, and significant customer concentration," said Standard & Poor's credit analyst Maurice Austin. "The company's relatively good margins and competitive position within the frac sand market partially offset these negative factors." The rating and outlook incorporate S&P's expectation that Fairmount will generate in excess of $200 million in EBITDA in fiscal 2010, reflecting solid frac sand demand due to fairly robust natural gas shale drilling activity. This level of earnings will support pro forma credit metrics in-line with a 'BB-' rating, given the capital structure, with debt leverage of about 4x and funds from operations to total debt of around 15%. S&P believes that operating performance and credit metrics in 2011 will strengthen given S&P's expectation that natural gas shale drilling activity will remain robust and capacity expansion will enable Fairmount to increase volumes and sales. In addition, S&P expects that a shift in product mix will help margin improvement. Consequently, S&P expects Fairmount to generate 2011 EBITDA in excess of $300 million with revenue growth of about 18% and gross margins of between 35% and 45%, resulting in adjusted leverage of about 3x and FFO to total of about 20%. S&P considers these levels in-line with its view of its aggressive financial risk profile and an appropriate level for the rating given its fair business risk profile. FATBURGER RESTAURANTS: Puts 26 Store Locations for Sale ------------------------------------------------------- Nancy Luna at The Orange County Register reports that 26 Fatburger locations in California and Nevada will go up for sale on Friday as part of a Chapter 11 bankruptcy proceeding. National Franchise Sales, a franchise brokerage company in Newport Beach, will oversee the sale of the restaurants. Three of the 26 restaurants are in Orange County and were once operated by Fatburger Restaurants of California Inc. According to The Orange County Register, the locations of the Fatburger restaurants that are up for sale are: a) Orange County: -- Irvine: 3021 Michelson Drive -- Newport Beach: 401 Newport Center Drive (Fashion Island) -- Orange: 2318 N. Tustin St. b) Other CA. locations: -- Baldwin Hills: 3650 Martin Luther King Blvd. -- Hollywood: 1611 N. Vermont Ave. -- Granada Hills: 16848 Devonshire St. -- W. Hollywood: 7450 Santa Monica Blvd. -- Woodland Hills: 21911 Ventura Blvd. -- Sherman Oaks: 14402 Ventura Blvd. -- Redondo Beach: 1698 Pacific Coast Hwy. -- Palm Springs: 451 S. Paseo Dorotea -- Morongo: 49500 Seminole Drive, Cabazon Ca. -- Rancho Cucamonga: 11226 4th St. Suite 101 c) Nevada locations: -- Sunset Station: 1301 West Sunset Road Henderson NV -- Fiesta Henderson: 777 West Lake Mead Drive Henderson NV -- Green Valley: 2300 Paseo Verde Henderson NV -- Sunset: 4663 E. Sunset Rd. Henderson NV -- Red Rock: 11011 W. Charleston Blvd Las Vegas NV -- Santa Fe Station: 4949 North Rancho Drive Las Vegas NV -- Texas Station: 2101 Texas Star Lane Las Vegas NV -- Strip Suite: 3763A, 3765 South Las Vegas Blvd Las Vegas NV -- Rancho: 4525 North Rancho Drive Las Vegas NV -- Nellis: 2485 South Nellis Blvd. Las Vegas NV -- Flamingo: 6775 West Flamingo Road Las Vegas NV -- Fort Apache: 4199 South Fort Apache Blvd. Las Vegas NV -- Charleston: 4851 W. Charleston Blvd. Las Vegas Sherman Oaks, California-based Fatburger Restaurants of California Inc. and Fatburger Restaurants of Nevada Inc. filed for Chapter 11 bankruptcy protection on April 7, 2009 (Bankr. C.D. Calif. 09- 13964 and 09-13965). FIRST PHYSICIANS: Posts $1.7 Million Net Loss in Dec. 31 Quarter ---------------------------------------------------------------- First Physicians Capital Group, Inc, filed its quarterly report on Form 10-Q, reporting a net loss of $1.7 million on $7.9 million of revenue for the three months ended Dec. 31, 2010, compared with a net loss of $2.1 million on $9.4 million of revenue for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $24.6 million in total assets, $28.9 million in total liabilities, $191,000 in non-redeemable preferred stock, $12.2 million in redeemable preferred stock, and a stockholders' deficit of $16.7 million. As reported in the Troubled Company Reporter on Feb. 21, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about First Physicians Capital Group's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has experienced recurring losses from operations. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?7422 About First Physicians Beverly Hills, Calif.-based First Physicians Capital Group, Inc. (OTC BB: FPCG) -- http://www.fpcapitalgroup.com/-- is an operator of healthcare services firms in the U.S. FLINT TELECOM: Posts $2.2 Million Net Loss in Dec. 31 Quarter ------------------------------------------------------------- Flint Telecom Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.2 million on $4.4 million of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $10.0 million on $4.1 million of revenues for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $10.2 million in total assets, $17.7 million in total liabilities, $4.9 million in redeemable equity securities, and a stockholders' deficit of $12.4 million. As reported in the Troubled Company Reporter on October 26, 2010, L.L, Bradford & Company, LLC, in Las Vegas, Nev., expressed substantial doubt about Flint Telecom's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted that the Company has suffered losses from operations, negative cash flows from operations and current liabilities exceed current assets. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7431 About Flint Telecom Overland Park, Kan.-based Flint Telecom Group, Inc. (OTC BB: FLTT) -- http://www.flinttelecomgroup.com/-- operates its business through six wholly-owned subsidiaries, Cable and Voice Corporation, Phone House, Inc., Flint Prepaid, Inc. (previously named Wize Communications, Inc.), Digital Phone Solutions, Inc., Ingedigit International, Inc. and Gotham Ingedigit Financial Processing Corp. dba Power2Process. The Company provides next generation turnkey voice, data and wireless services through partner channels primarily in the United States. FORD MOTOR: Wellington Management Discloses 4.91% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP disclosed that it beneficially owns 167,184,646 shares of common stock of Ford Motor Company representing 4.91% of the shares outstanding. As of Feb. 14, 2011, Ford had outstanding 3,711,858,859 shares of Common Stock and 70,852,076 shares of Class B Stock. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The Company provides financial services through Ford Motor Credit Company. Ford Motor's balance sheet at Sept. 30, 2010, showed $177.07 billion in total assets, $178.81 billion in total liabilities, and a stockholders' deficit of $1.77 billion. * * * Ford Motor has a 'BB' issuer default rating, with positive outlook, from Fitch Ratings; 'Ba2' corporate family rating and probability of default rating from Moody's Investors Service; and a 'BB-' corporate credit rating, with positive outlook, from Standard & Poor's. Fitch said at the end of January 2011 that Ford's ratings reflect its continued strong financial performance and the substantial debt reduction accomplished in the fourth quarter of 2010, both of which outperformed Fitch's previous expectations. FORD MOTOR: Evercore Trust Discloses 7.97% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Evercore Trust Company, N.A., disclosed that it beneficially owns 271,017,955 shares of common stock of Ford Motor Company representing 7.97% of the shares outstanding. As of Feb. 14, 2011, Ford had outstanding 3,711,858,859 shares of Common Stock and 70,852,076 shares of Class B Stock. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The Company provides financial services through Ford Motor Credit Company. Ford Motor's balance sheet at Sept. 30, 2010, showed $177.07 billion in total assets, $178.81 billion in total liabilities, and a stockholders' deficit of $1.77 billion. * * * Ford Motor has a 'BB' issuer default rating, with positive outlook, from Fitch Ratings; 'Ba2' corporate family rating and probability of default rating from Moody's Investors Service; and a 'BB-' corporate credit rating, with positive outlook, from Standard & Poor's. Fitch said at the end of January 2011 that Ford's ratings reflect its continued strong financial performance and the substantial debt reduction accomplished in the fourth quarter of 2010, both of which outperformed Fitch's previous expectations. FORUM HEALTH: Committee Wants Ch. 11 Trustee to Take Over --------------------------------------------------------- The Official Committee of Unsecured Creditors of Forum Health and its debtor-affiliates asks the Hon. Kay Woods of the U.S. Bankruptcy Court for the Northern District of Ohio to appoint a Chapter 11 trustee to oversee the Debtors' bankruptcy cases. The Creditors Committee tells Judge Woods, at the beginning of this month, it filed a plan of liquidation, under which the Committee estimates that holders of allowed unsecured claims against the Debtors will be paid 15% to 17% of the amounts of their allowed unsecured claims against the Debtors. In response to the Committee's plan, the Debtors have proposed to dismiss two of their chapter 11 cases, and thereby relinquish more than $12 million in unrestricted funds that can and should be used to pay the Debtors' creditors. According to the Committee, on the same day, the Debtors also proposed a settlement with the Pension Benefit Guaranty Corporation. The Debtors refused the Committee's request to participate in the Debtors' negotiations with the PBGC. Nine days after the Committee filed its plan of liquidation, the Debtors filed their own plan of liquidation, premised on their Dismissal Motions and the Proposed PBGC Settlement. The Debtors' Plan anticipates a drastically lower payout to the Debtors' unsecured creditors (4.88% to 5.36%), due to the more than $12 million to be given away by the Dismissal Motions. The Committee relates that the Debtors have clearly breached their fiduciary duties to maximize value for their creditors. Moreover, the Debtors have demonstrated an utter disregard for their creditors' best interests, according to the Committee. The Committee intends to object to the Debtors' dismissal motions. In the event that the Court determines that there are grounds to grant the dismissal motions, the Committee requests that the Court appoint a trustee pursuant to Sections 1104(a)(3) and 1112(b)(1) of the Bankruptcy Code, because such an appointment is in the best interests of the Debtors' creditors. About Forum Health Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). In its petition, Forum Health estimated $100 million to $500 million in assets and debts. McDonald Hopkins LLC and Nadler, Nadler and Burdman Co., L.P.A., serve as the Debtors' chapter 11 co-counsel. Huron Consulting Services LLC is the Debtors' Chief Restructuring Officer and Financial Support Personnel. Houlihan Lokey Howard and Zukin Capital, Inc. are the Debtors' investment bankers. Ernst & Young LLP is the Debtors' independent auditor. Baker and Hostetler and Thompson Hine LLP serve as special counsel. Squire, Sanders & Dempsey LLP serve as the bond counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. Alston & Bird LLP serves as counsel to the Official Committee of Unsecured Creditors. Alston & Bird LLP is the Debtor's counsel. Grant Thornton LLP is the financial advisor to the Creditors Committee. FREDDIE WAYNE LONG: Bankr. Court Rules on Pleadings in ReVest Suit ------------------------------------------------------------------ In ReVest, LLC, v. Freddie Wayne Long, Adv. Pro. No. 09-5303 (Bankr. D. Kans.), ReVest filed two motions for summary judgment and Freddie Wayne Long seeks to amend his counterclaim to add (1) ReVest Rentals, LLC, and William Brent Hurst as defendants, (2) Southwest National Bank and the Merlin G. Troutman Trust as necessary parties, (3) a claim for deceptive acts and practices under the Kansas Consumer Protection Act, and (4) a claim for slander of title. ReVest objects to Mr. Long's Motion to Amend on grounds that it is untimely, prejudicial, futile, and brought in bad faith. Bankruptcy Judge Robert E. Nugent issued a ruling on Feb. 22, 2011, with respect to Mr. Long's Motion to Add. A copy of the Order is available at http://is.gd/QELTZnfrom Leagle.com. In a separate ruling the next day, Judge Nugent graned ReVest, LLC's motion to enjoin Mr. Long from prosecuting a state court action that is nearly identical to that which he has filed via his counterclaims in the adversary proceeding. A copy of the Court's Order Feb. 23 Order is available at http://is.gd/Wb6VeTfrom Leagle.com. Freddie Wayne Long filed for Chapter 13 relief (Bankr. D. Kans. Case No. 09-12827) on Aug. 31, 2009. He converted his case to Chapter 11 on March 4, 2010. FREESCALE SEMICONDUCTOR: Moody's Upgrades Default Ratings to 'B3' ----------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of Freescale Semiconductor, Inc., to B3 from Caa1, upgraded the senior secured debt rating to B1 from B2, upgraded the senior subordinated notes rating to Caa2 from Caa3 and upgraded the Speculative Grade Liquidity Rating to SGL-2 from SGL-3. The rating outlook was changed to positive from stable. This is a summary of the rating actions: Rating Actions: -- Corporate Family Rating to B3 from Caa1 -- Probability of Default Rating to B3 from Caa1 -- Speculative Grade Liquidity Rating to SGL-2 from SGL-3 -- $ 590 Million (originally $750 Million) Senior Secured Revolving Credit Facility due 2012 to B1 (LGD-3, 30%) from B2 (LGD-3, 30%) -- $2.237 Billion (originally $2.265 Billion) Senior Secured Extended Maturity Term Loan due 2016 to B1 (LGD-3, 30%) from B2 (LGD-3, 30%) -- $ 750 Million 10.125% Senior Secured Notes due 2018 to B1 (LGD-3, 30%) from B2 (LGD-3, 30%) -- $1.380 Billion 9.25% Senior Secured Notes due 2018 to B1 (LGD-3, 30%) from B2 (LGD-3, 30%) -- $ 764 Million (originally $1.6 Billion) 10.125% Senior Subordinated Notes due 2016 to Caa2 (LGD-6, 93%) from Caa3 (LGD-6, 93%) Current Ratings: -- $ 57 Million (originally $500 Million) Senior Unsecured Floating Rate Notes due 2014 - Caa2 (LGD-5, 80%) -- $ 255 Million (originally $1.5 Billion) 9.125%/9.875% Senior Unsecured Toggle Notes due 2014 - Caa2 (LGD-5, 80%) -- $ 886 Million (originally $2.35 Billion) 8.875% Senior Unsecured Notes due 2014 - Caa2 (LGD-5, 80%) -- $ 750 Million 10.75% Senior Unsecured Notes due 2020 -- Caa2 (LGD-5, 80%) Rating Rationale The upgrade of Freescale's CFR to B3 reflects the company's strong revenue growth and EBITDA expansion following the robust 2010 recovery in global demand for embedded processing semiconductors across the company's addressable end markets (i.e., automotive, industrial, networking and consumer). It also incorporates Moody's expectation for continued improvement in Freescale's operating performance, financial leverage metrics and free cash flow generation over the succeeding 12 months. The rating revision takes into consideration the company's improvement in factory utilization as a result of increased product volumes, which resulted in greater operating leverage from Freescale's fixed manufacturing cost base. Combined with cost takeouts from the 2009 restructuring, strong design win momentum and a better pricing environment, this has led to expanded gross and operating margins, higher EBITDA and lower financial leverage of 7.7x total debt to EBITDA (Moody's adjusted) compared to 20x at the end of 2009. The B3 rating is constrained by the company's substantial leverage and thin, albeit improving, interest coverage. Though Moody's anticipate Freescale to generate considerably higher FCF in 2011 ($175-$250 million, which includes payments for purchase licenses) compared to 2010 ($20 million), as a percentage of adjusted debt, Moody's expect FCF generation to be modest in the 3-5% range limiting the company's ability to de-lever from internal sources. The upgrade of Freescale's Speculative Grade Liquidity Rating to SGL-2 reflects Moody's expectation for meaningful improvement in FCF over the next 12 months combined with $1.0 billion of cash balances. Despite no financial covenants, the SGL rating is constrained by somewhat diminished financial flexibility given that Freescale has $532 million outstanding under its revolver, which has a committed capacity of $590 million. The positive rating outlook reflects Moody's expectation that Freescale will continue to deleverage through EBITDA expansion, though at a more moderate pace versus last year, supported by solid demand across the company's addressable end markets. The rating outlook also takes into account a potential meaningful deleveraging event via debt reduction from a likely $1.0 billion IPO, announced by the company in February. The rating could experience upward pressure over the next 12-18 months if Freescale is able to: drive top-line revenue growth via effective R&D investments and product development targeted to a more favorable product mix; and de-lever through EBITDA expansion and improvement in its debt capital structure via debt reduction resulting in under 6.0x total debt to EBITDA (Moody's adjusted) on a sustained basis without impairing its liquidity profile. Moody's note that to the extent an IPO is consummated and proceeds (depending on offering size) allocated to meaningfully reduce debt, the rating could experience upward pressure over a shorter timeframe. The rating could experience downward pressure to the extent demand for Freescale's core embedded processors were to weaken and earnings were to fall short of expectations or the company's liquidity profile deteriorated, as evidenced by cash balances falling below $1 billion for an extended period. The last rating action was on September 22, 2010, when Moody's assigned a Caa2 rating to the company's $750 million 10.75% senior unsecured notes due 2020. Headquartered in Austin, TX, Freescale Semiconductor, Inc., designs and manufactures embedded semiconductors for the transportation, networking and wireless markets. The company was separated from Motorola via IPO in July 2004 and taken private in a leveraged buyout in December 2006. Revenues for the twelve months ended Dec. 31, 2010, were $4.4 billion. GENERAL MOTORS: Creditors Committee Files Revised GUC Trust Pact ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Old GM's Chapter 11 cases filed with the Bankruptcy Court on Feb. 25, 2011, a revised General Unsecured Creditors Trust Agreement in further support of the Debtors' Amended Joint Chapter 11 Plan of Reorganization. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, relates that since the filing of the GUC Trust Agreement as exhibit to the Plan, the Creditors' Committee has worked with Wilmington Trust Company, as the proposed GUC Trust Administrator, FTI Consulting, Inc., as the proposed GUC Trust Monitor, the Debtors, AP Services LLC, and the U.S. Department of the Treasury, to finalize the Agreement. The changes that have been made to the Agreement are not substantive, do not affect the economics of the distributions to be made to holders of Allowed Class 3 Claims under the Plan, and do not deviate from the Trust's goal of resolving Disputed Claims and distributing assets of the GUC Trust to or on account of holders of Allowed General Unsecured Claims in Class 3, Mr. Mayer assures the Court. These changes that have been made to the Agreement include: * making all clean-up changes; * revising and clarifying distribution calculations and mechanics and adding additional detail and transparency regarding how distributions are to be made to all holders of Allowed General Unsecured Claims in Class 3; * revising distribution mechanics in order to provide for a more equitable distribution of fractional shares; * providing for two additional holdbacks and providing for additional flexibility in adjusting the size of those holdbacks to ensure that the GUC Trust will have sufficient cash available to fund all administrative expenses related to the GUC Trust and to ensure that the cost of administration is borne equitably among all holders of Allowed General Unsecured Claims. The Reporting and Transfer Holdback will provide for the up front sale of $5 million in General Motors LLC ("New GM") Securities to cover the cost of any and all Exchange Act reporting required by the GUC Trust. This is contemplated by the Plan and will be borne ratably by all holders of Allowed General Unsecured Claims; * resolving securities issues relating to the structure of the GUC Trust, including revising the Agreement to provide for compliance with all applicable rules and regulations under the U.S. Securities and Exchange Commission and the payment of associated costs; * conforming the Agreement to all revisions made to the Plan; * providing further detail and clarification regarding the Term Loan Avoidance Action and Other Avoidance Action Claims in conformity with the Avoidance Action Trust Agreement; * revising the Agreement to reflect changes in the mechanics for distributions to holders of the Asbestos Trust Claim pursuant to the Stipulation Fixing Asbestos Trust Claim and Resolving Debtors' Estimation Motion; * revising the GUC Trust Agreement to provide further detail and clarification regarding receipt and distribution of the Additional Shares, which may be paid to the GUC Trust from New GM pursuant to the Master Sale and Purchase Agreement; * revising the GUC Trust Agreement to provide for additional review and oversight by the GUC Trust Monitor and the Court; and * clarifying and providing more detail with respect to the GUC Trust's potential role in the wind-down of the Debtors' estates. Details on the changes is set forth in a table, available for free at http://bankrupt.com/misc/GM_ChangestoGUCTrustPact.pdf A full-text copy of the revised GUC Trust Agreement is available for free at http://bankrupt.com/misc/GM_Feb25GUCTrustPact.pdf The Committee-Backed Plan Motors Liquidation Company and its affiliates are scheduled to present their Chapter 11 plan for confirmation at a hearing on March 3, 2011. Old GM reached an agreement with the U.S. Department of the Treasury and creditors that will allow the company to approve a final Chapter 11 plan. Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York has approved the adequacy of the disclosure statement explaining the Plan at hearings in December. The Official Committee of Unsecured Creditors recommends that holders of general unsecured claims in Class 3 vote to accept OLD GM's Chapter 11 plan. Deadline to submit ballots is on Feb. 11, 2011. The Creditors' Committee believes the Plan provides for the best recovery for unsecured creditors as a whole and acceptance of the Plan will expedite distributions to general unsecured creditors. Pursuant to the Master and Sale Purchase Agreement, General Motors LLC ("New GM") issued to the Debtors about 10% of New GM stock and two sets of warrants for additional New GM shares, representing, collectively an additional 15% of New GM stock. The Creditors' Committee says that if the aggregate allowed general unsecured claims against the Debtors are between $35 billion and $42 billion, New GM will issue up to an additional 2% of its stock to the Debtors. Under the Plan, holders of Allowed General Unsecured Claims will receive: * An initial distribution of New GM Securities, based on the creditor's pro rata share of the total remaining general unsecured claims asserted against the estate. The creditor's pro rata share will be calculated by taking the amount of the creditor's claim and dividing it by the sum of (x) the general unsecured claims allowed at the time plus (y) the maximum amount of disputed general unsecured claims. * General Unsecured Claims Trust Units, which entitle the creditor to potentially receive additional New GM Securities as disputed general unsecured claims are disallowed or otherwise resolved. The Creditors' Committee also prepared a chart showing the likely estimated range of Allowed General Unsecured Claims in certain categories as of Nov. 11, 2010. The chart is available for free at http://bankrupt.com/misc/GM_Dec10AllowedClaimsEst.pdf A full-text copy of the Dec. 10 Letter is available for free at http://bankrupt.com/misc/GM_CommPlanSupportLtr.pdf Full-text copies of the Amended Plan and Disclosure Statement, dated Dec. 8, 2010, are available for free at: http://bankrupt.com/misc/gm_Dec8Plan.pdf http://bankrupt.com/misc/gmDec8DS.pdf About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At Sept. 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, US$971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: JPMorgan Seeks Oral Argument at Plan Hearing ------------------------------------------------------------ Pursuant to Administrative Order Re Conduct of Confirmation Hearing, the Bankruptcy Court directed that only certain parties would be heard by the Court at the hearing on confirmation of Motors Liquidation Co., formerly General Motors Corp.'s proposed Chapter 11 plan. The Administrative Order further provided: Objections by other parties, or on other issues, will be decided on the papers, absent a ruling by the Court to the contrary, sought by motion filed in advance of the Confirmation Hearing, and for good cause shown. Against this backdrop, JPMorgan Chase Bank, N.A., seeks the Court's permission to be heard at the confirmation hearing on the Amended Chapter 11 Plan of Reorganization scheduled for March 3, 2011, to address the Debtors' omnibus reply to Plan Confirmation Objections. Richard S. Toder, Esq., at Morgan, Lewis & Bockius LLP, in New York, relates that two issues relate to (i) Section 10.5 of the Plan entitled Term Loan Avoidance Action; Offsets which, by its very terms, is applicable only to the Term Loan Lenders and (ii) JPMorgan's Administrative Claim, which arises by virtue of the Final DIP Order, and similarly only impacts the Agent. As to the first issue, JPMC wants the Debtors to affirmatively state that neither the Debtors nor the GUC Trust will seek to impose a set-off beyond the scope of Section 502(d) of the Bankruptcy Code Section. Similarly, JPMC seeks a simple written acknowledgment by the Debtors that the JPMC Administrative Claim is assumed by the GUC Trust. The Committee-Backed Plan Motors Liquidation Company and its affiliates are scheduled to present their Chapter 11 plan for confirmation at a hearing on March 3, 2011. Old GM reached an agreement with the U.S. Department of the Treasury and creditors that will allow the company to approve a final Chapter 11 plan. Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York has approved the adequacy of the disclosure statement explaining the Plan at hearings in December. The Official Committee of Unsecured Creditors recommends that holders of general unsecured claims in Class 3 vote to accept OLD GM's Chapter 11 plan. Deadline to submit ballots is on Feb. 11, 2011. The Creditors' Committee believes the Plan provides for the best recovery for unsecured creditors as a whole and acceptance of the Plan will expedite distributions to general unsecured creditors. Pursuant to the Master and Sale Purchase Agreement, General Motors LLC ("New GM") issued to the Debtors about 10% of New GM stock and two sets of warrants for additional New GM shares, representing, collectively an additional 15% of New GM stock. The Creditors' Committee says that if the aggregate allowed general unsecured claims against the Debtors are between $35 billion and $42 billion, New GM will issue up to an additional 2% of its stock to the Debtors. Under the Plan, holders of Allowed General Unsecured Claims will receive: * An initial distribution of New GM Securities, based on the creditor's pro rata share of the total remaining general unsecured claims asserted against the estate. The creditor's pro rata share will be calculated by taking the amount of the creditor's claim and dividing it by the sum of (x) the general unsecured claims allowed at the time plus (y) the maximum amount of disputed general unsecured claims. * General Unsecured Claims Trust Units, which entitle the creditor to potentially receive additional New GM Securities as disputed general unsecured claims are disallowed or otherwise resolved. The Creditors' Committee also prepared a chart showing the likely estimated range of Allowed General Unsecured Claims in certain categories as of Nov. 11, 2010. The chart is available for free at http://bankrupt.com/misc/GM_Dec10AllowedClaimsEst.pdf A full-text copy of the Dec. 10 Letter is available for free at http://bankrupt.com/misc/GM_CommPlanSupportLtr.pdf Full-text copies of the Amended Plan and Disclosure Statement, dated Dec. 8, 2010, are available for free at: http://bankrupt.com/misc/gm_Dec8Plan.pdf http://bankrupt.com/misc/gmDec8DS.pdf About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At Sept. 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, US$971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Parties React to $420 Million Claims Reserve ------------------------------------------------------------ Several creditors oppose the request of Motors Liquidation Co. to establish claims reserve. They are: (1) JPMorgan Chase Bank, N.A. (2) Wells Fargo Bank Northwest, N.A. (3) Toyota Motor Corporation (4) New United Motor Manufacturing, Inc. (5) Sentry Insurance and Sentry Select Insurance Company (6) Enterprise Holdings, Inc. (7) the State of New York (8) Tracy Woody (9) Edmund J. Sterniak (10) Sharyl S. Carter As reported in the Feb. 23, 2011 edition of the Troubled Company Reporter, Motors Liquidation Co., and its debtor-affiliates ask the Bankruptcy Court to approve: (i) the establishment of a $420 million-reserve on account of certain unliquidated and disputed claims or potential claims, which are not yet allowed as set forth in the Amended Joint Chapter 11 Plan of Reorganization; and (ii) certain procedures, consistent with the procedures established under the Plan for the establishment and administration of those disputed claims reserves. According to the Feb. 23 report, under the Plan, the General Unsecured Claims Trust will set aside distributions for certain unliquidated and disputed claims, or potential claims filed in these Chapter 11 cases, which are not yet allowed. The Debtors are filing the Motion consistent with these provisions of the Plan and the GUC Trust Agreement. JPMC, as agent to the Term Loan Lenders, objects to the Claims Reserve Motion because the Debtors have failed to clearly reserve for the Term Loan Lenders' potential $1.6 billion general unsecured claim in connection with the Term Loan Avoidance Action. A lack of proper reserves for the Term Loan Claim means that in the event of a final judgment adverse to the Term Loan Lenders, there will undoubtedly be insufficient securities and units available for distribution to them, even assuming that Debtors' estimate of $370 million of disputed claims is accurate, Richard S. Toder, Esq., at Morgan, Lewis & Bockius LLP, in New York, asserts. He also contends that the Debtors improperly propose to reserve for and treat JPMorgan's filed administrative claims as unliquidated general unsecured claims. He stresses that JPMorgan made it clear that the Claims were in respect of the Agent's postpetition, administrative expenses for the reasonable fees, costs and charges in defending the Term Loan Avoidance Action, which expenses the Debtors are obligated to pay pursuant to the Final DIP Order. Wells Fargo Bank, as agent on behalf of the TPC Lenders, seeks clarification on whether the Debtors intend for the TPC Lenders' claims to be reserved for at all beyond the escrow account established under the Sale Order. Accordingly, Wells Fargo asserts that any order granting the Claims Reserve Motion should provide that the GUC Trust Administrator will reserve: (i) for the TPC Lenders' general unsecured claims up to the full $45 million amount that may be allowed consistent with the Sale Order; and (ii) for any secured claims of the TPC Lenders that may be allowed above the $90.7 million amount of the escrow account established under the Sale Order. Toyota objects to the Debtors' request because: (1) it is unclear if Toyota's Claim No. 66243 is subject to the reserve set forth in the in Claims Reserve Motion; and (2) if the Claim is subject to the reserve, Motors Liquidation Company has not adequately provided for the Claim. Toyota thus seeks that any order on the Claims Reserve Motion expressly indicate that the Claim is not subject to the proposed reserve cap. If MLC seeks to amend the Claims Reserve Motion to include the Claim, the reserve amount be increased to include an amount sufficient to account for the Claim and that the amount be specifically reserved for the Claim and not other unliquidated claims. Counsel to NUMMI, Richard M. Cieri, P.C., at Kirkland & Ellis LLP, in New York, avers that through the guise of establishing a capped general unsecured claims reserve, the Debtors unjustifiably seek to reclassify NUMMI's administrative claims as general unsecured claims in the Claims Reserve Motion. The Debtors offer no explanation why or even state this purpose directly in the Claims Reserve Motion, he points out. The Debtors simply cannot reclassify NUMMI's administrative claim through a motion requesting establishment of a capped general unsecured claims reserve, he insists. Sentry Insurance says the aggregate amount of their four claims will not exceed $1,800,000. Enterprise Holdings, Inc., formerly known as Enterprise Rent A Car Company, contends that the Debtors improperly seek estimation of its Claim No. 65719 for plan reserve purposes at an unreasonably low amount. Enterprise Holdings points out that the Debtors fail to take into account (i) previously unliquidated amounts arising from environmental clean-up expenses that have become liquidated since the initial filing of the Claim, and (ii) certain amounts that will soon become liquidated on account of expenses for environmental clean-up currently underway. The State of New York complains that the Debtors have not identified the amount contained in the "separate reserve" for liquidation claims. The State, thus, seeks clarification regarding the amount the Debtors will reserve separately for liquidation but still disputed claims, and whether that specific amount will be subject to judicial approval on notice to parties- in-interest. The State seeks to assure that any of its claims that ultimately may be allowed are properly reserved in the GUC Trust so that those allowed claims in fact paid. Ms. Woody objects that her claims were not listed in the established and allowable claims of the Debtors. Mr. Sterniak asserts that it is not fair to let GM not make good on the shares that he and others own. Debtors Talk Back At this stage of these Chapter 11 cases, in order to establish appropriate reserves and be able to move forward with distributions under their Plan, the Debtors must address any remaining unliquidated amounts, Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts. The Debtors believe that these Objections lack merit and should be overruled: (1) Toyota. The Debtors believe that the claims asserted in Toyota NUMMI's Claim are encompassed by the liquidated claim filed by Toyota for $73,798,976 for which the Debtors are reserving in its fully liquidated stated amount, and the Debtors believe that no additional reserve amounts are necessary on account of the Toyota NUMMI Claim. The Debtors will receive Toyota's proposed maximum amount for the Toyota NUMMI Claim to determine if a consensual resolution of the Toyota Objection is possible. (2) NUMMI. The Debtors intentionally included certain administrative claims in the Fully Unliquidated Claims Reserve not to improperly seek to reclassify them as general unsecured claims, but rather to provide for a distribution in the event an administrative claim is later reclassified as a general unsecured claim. Subsequently, the Debtors filed an objection to the NUMMI Administrative Claim. In light of the pending objection, the Debtors agree that the NUMMI Administrative Claim need not be reserved for as a general unsecured claim and may be removed from the Fully Unliquidated Claims Reserve. (3) State of New York. Because two of the claims filed by the State of New York are the subject of the Claims Reserve Motion, the Debtors have addressed each of the State's arguments in the Debtors' omnibus reply to objections received in connection with the Claims Reserve Motion. (4) JPMC. The Debtors have explained to JPMC that the Term Loan Lenders' potential $1.6 billion general unsecured claim in connection with the Term Loan Avoidance Action is being reserved as a liquidated claim and is therefore not included in the Claims Estimation Motion. The Debtors have also agreed with JPMC that the JPMC Administrative Claims need not be reserved for as general unsecured claims and will be removed from the Fully Unliquidated Claims Reserve. The Debtors disclose that the issues raised in the JPMorgan Objection have been addressed and that no additional relief is warranted. (5) Pro se Claimants. The Debtors attempted to reach Ms. Woody by telephone and left a message offering to estimate the amended claim at the full liquidated, general unsecured amount of $39,376 for reserve purposes only and to remove the Woody Claims from this motion. The Debtors remain open to a consensual resolution of the Woody Objection. The Debtors believe that Ms. Carter's and Mr. Sterniak's objection to relate to the treatment of general unsecured claims and equity security holders under the Plan, and that those Objections relate to confirmation. To resolve Wells Fargo's Objection, the Debtors and Wells Fargo agree that the Debtors are in compliance with the Sale Order and reserving for a General Unsecured Claim in the amount of $45 million for the TPC Lenders' potential future Allowed General Unsecured Claim. The TPC Lenders' claim is being treated as fully liquidated for reserve purposes under the Plan and was thus not included in either the Claims Reserve Motion or Claims Estimation Motion. The Committee-Backed Plan Motors Liquidation Company and its affiliates are scheduled to present their Chapter 11 plan for confirmation at a hearing on March 3, 2011. Old GM reached an agreement with the U.S. Department of the Treasury and creditors that will allow the company to approve a final Chapter 11 plan. Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York has approved the adequacy of the disclosure statement explaining the Plan at hearings in December. The Official Committee of Unsecured Creditors recommends that holders of general unsecured claims in Class 3 vote to accept OLD GM's Chapter 11 plan. Deadline to submit ballots is on Feb. 11, 2011. The Creditors' Committee believes the Plan provides for the best recovery for unsecured creditors as a whole and acceptance of the Plan will expedite distributions to general unsecured creditors. Pursuant to the Master and Sale Purchase Agreement, General Motors LLC ("New GM") issued to the Debtors about 10% of New GM stock and two sets of warrants for additional New GM shares, representing, collectively an additional 15% of New GM stock. The Creditors' Committee says that if the aggregate allowed general unsecured claims against the Debtors are between $35 billion and $42 billion, New GM will issue up to an additional 2% of its stock to the Debtors. Under the Plan, holders of Allowed General Unsecured Claims will receive: * An initial distribution of New GM Securities, based on the creditor's pro rata share of the total remaining general unsecured claims asserted against the estate. The creditor's pro rata share will be calculated by taking the amount of the creditor's claim and dividing it by the sum of (x) the general unsecured claims allowed at the time plus (y) the maximum amount of disputed general unsecured claims. * General Unsecured Claims Trust Units, which entitle the creditor to potentially receive additional New GM Securities as disputed general unsecured claims are disallowed or otherwise resolved. The Creditors' Committee also prepared a chart showing the likely estimated range of Allowed General Unsecured Claims in certain categories as of Nov. 11, 2010. The chart is available for free at http://bankrupt.com/misc/GM_Dec10AllowedClaimsEst.pdf A full-text copy of the Dec. 10 Letter is available for free at http://bankrupt.com/misc/GM_CommPlanSupportLtr.pdf Full-text copies of the Amended Plan and Disclosure Statement, dated Dec. 8, 2010, are available for free at: http://bankrupt.com/misc/gm_Dec8Plan.pdf http://bankrupt.com/misc/gmDec8DS.pdf About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At Sept. 30, 2010, GM had US$137.238 billion in total assets, US$106.522 billion in total liabilities, US$6.998 billion in preferred stock, US$971 million in non-controlling interest, and US$23.718 billion in total equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GLC LIMITED: Files for Chapter 11 to Sell Assets ------------------------------------------------ GLC Limited filed for Chapter 11 protection on Feb. 28, 2011 (Bankr. S.D. Ohio Case No. 11-11090). Prior to the Petition Date, the Debtor operated liquidation retail stores located in Proctorville, Ohio, Milan, Indiana, Pigeon Forge and Newport, Tennessee, and Nitro, LeSage and Huntington, West Virginia. The Debtor later closed the Retail Stores located in Milan, Indiana, LeSage, West Virginia and Proctorville, Ohio. In addition, the Debtor owns and operates TrustWorthy Hardware Store in Proctorville, Ohio and Dan's Sporting Goods in Huntington, West Virginia. Beginning in 2008, the Debtor began raising funds for the purchase of goods for its liquidation distribution business through investments from private investors. About 97 individuals or entities made investments in the Debtor totaling approximately $80,000,000. As of the Petition Date, the Debtor has made payments to certain Investors in the aggregate amount of $68,000,000. About $26,000,000 to $29,000,000 remains owing to certain of the Investors. Certain Investors have received payments from the Debtor in excess of the amounts the Investors invested in the Debtor. As part of the Chapter 11 case, the Debtor intends, among other things, to commence actions to recover those excess amounts from those Investors and ensure that there is an equality of distribution for similarly situated parties. In December 2010, the Debtor employed James R. Burritt as its CRO and to provide it with management and advisory services. Pursuant to a resolution dated Jan. 28, 2011 and delivered on Feb. 1, 2011, the board of directors of the Debtor authorized Mr. Burritt to act on the Debtor's behalf in the chapter 11 case and in the operation of the Debtor's businesses. According to Mr. Burritt, during the chapter 11 case, the Debtor intends, among other things, to discontinue its ongoing business operations, shut down the remaining Retail Stores, sell the inventory in the warehouses and sell the businesses and business assets associated with Dan's Sporting Goods and TrustWorthy Hardware Store, as going concerns. Since December 2010, the Debtor has been working with various industry leaders regarding the potential purchase and sale of the inventory located in the warehouses. During calendar year 2010, the Debtor had gross sales of approximately $3,742,000 and operating losses of $2,223,000. In addition, the Debtor received new investments in calendar year 2010 of $34,700,000 and made payments to Investors of $34,200,000 in calendar year 2010. To minimize the adverse effects of filing for bankruptcy protection on its businesses, the Debtor has filed various motions and applications with the Court requesting various types of "first day" relief. The first day motions include: * Motion for entry of an order granting the Debtor additional time within which to file schedules and statements; * Motion of the Debtor for an order authorizing the Debtor to pay and honor certain prepetition claims for wages, salaries, employee benefits and other compensation; * Motion of the debtor for entry of an order under 11 U.S.C. Secs. 105(a) and 366 (i) Prohibiting Utilities from Discontinuing, Altering, or refusing service, and (ii) establishing procedures for determining adequate assurances of payment; and * Emergency motion of the debtor for entry of interim and final orders (a) authorizing use of cash collateral; and (b) granting adequate protection. About GLC Limited Proctorville, Ohio-based GLC Limited is principally a liquidation company in the wholesale/retail distribution industry. It offers large selections of name brand products in many categories. The Debtor distributes its goods through a network of wholesale distributors, retail chains and discount and surplus centers. The Debtor has four warehouses for its goods which are located in Proctorville and Columbus, Ohio and Huntington, West Virginia. The Debtor currently uses, or has used at various times since its formation, the following trade names or "d/b/a" names: GLC Limited, Inc., Global Liquidation Center, Global Liquidations, Global Liquidation LLC, GLC Discount, GLC Wholesale, ShopGLC, GLC Unlimited, Dan's Sporting Goods, Dan's Sports Shop, Trustworthy Hardware Store, Lailah's Mini Mart and DJs Mini Market. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. GLC LIMITED: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: GLC Limited P.O. Box 670 Proctorville, OH 45669 Bankruptcy Case No.: 11-11090 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Southern District of Ohio (Cincinnati) Judge: Jeffery P. Hopkins Debtor's Counsel: Ronald E. Gold, Esq. FROST BROWN TODD LLC 2200 PNC Center 201 East Fifth Street Cincinnati, OH 45202 Tel: (513) 651-6800 Fax: (513) 651-6981 E-mail: rgold@fbtlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by James R. Burritt, chief restructuring officer. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Baugh, Tom Investment $4,114,000 4519 Sanderling Circle W. Boynton Beach, FL 33436 Price, Karen Investment $2,830,000 1260 West Fitzgerald Lane Bogart, GA 30622 Koury, Maurice Investment $2,774,400 P.O. Box 850 Burlington, NC 27216 Koury, Brad Investment $2,250,000 P.O. Box 850 Burlington, NC 27216 Bell, Kendrell Investment $2,000,000 2501 S. Ocean Drive, Apartment 204 Hollywood, FL 33019 Gillespie, B. Clyde Investment $1,913,167 P.O. Box 258 Graford, TX 76449 Price, Edd Investment $1,541,667 5655 Golf Club Drive Braselton, GA 30517 Allen Investment Fund Investment $1,387,500 120 Trinity Place Athens, GA 30607 Nelson Bowers Investment $1,273,334 dba Village Investments 217 Colemore Circle Lookout Mountain, TN 37350 Franchione, Dennis Investment $978,950 1403 Broken Hills/ P.O. Box 4112 Horseshoe Bay, TX 78657 J & M Brands Investment $588,500 2875 Casa Del Rio Terrace Jacksonville, FL 32257 Donnan Dyleski LLC Investment $550,000 1150 Julian Drive Watkinsville, GA 30677 Fennell, Steve Investment $427,500 600 Oglethorpe Avenue Athens, GA 30606 Tuberville, Suzanne Investment $427,500 9018 CR 6068 Lubbock, TX 79406 Williams, John M. Investment $400,000 1305 Hixson Pike Chattanooga, TN 37405 Gottfried, Mark Investment $337,500 22758 Perdido Beach Boulevard Orange Beach, AL 36561 Helton, David Investment $319,550 206 Hickory Chase Carrollton, GA 30117 Baugh, Pam Investment $300,000 4519 Sanderling Circle W. Boynton Beach, FL 33436 Allen, David Investment $262,500 120 Trinity Place Athens, GA 30607 Sullivant Holdings LLC Lease $235,000 GLEN ROSE: Posts $956,000 Net Loss in Dec. 31 Quarter ----------------------------------------------------- Glen Rose Petroleum Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $955,978 on $477,403 of oil and gas sales for the three months ended Dec. 31, 2010, compared with a net loss of $398,474 on $33,660 of oil and gas sales for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $7.1 million in total assets, $6.5 million in total liabilities, and stockholders' equity of $570,040 million. Jonathon P. Reuben CPA, An Accountancy Corporation, expressed substantial doubt about Glen Rose's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has incurred significant losses and has an accumulated deficit of $50.94 million as of March 31, 2010. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?742f About Glen Rose Katy, Tex.-based Glen Rose Petroleum Corporation (OTC BB: GLRP) -- http://www.glenrosepetroleum.com/-- owns UHC Petroleum Corporation, a Texas corporation, which is a licensed operator with the Texas Railroad Commission. UHC Petroleum is an independent producer of crude oil based in Katy, Texas. UHC Petroleum operates the Wardlaw Field, which lies in Edwards County, Texas in the southeast portion of the Val Verde Basin and is approximately 28 miles west of Rocksprings and 550 miles west of Dallas. GLOBAL CROSSING: FMR LLC Discloses 15% Equity Stake --------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC disclosed that it beneficially owns 9,074,656 shares of common stock of Global Crossing Ltd. representing 15.000% of the shares outstanding. About Global Crossing Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC) is a global IP and Ethernet solutions provider with the world's first integrated global IP-based network. The company offers a full range of data, voice and collaboration services with an industry leading customer experience and delivers service to approximately 40% of the Fortune 500, as well as to 700 carriers, mobile operators and ISPs. It delivers converged IP services to more than 700 cities in more than 70 countries around the world. The Company's balance sheet at Dec. 31, 2010 showed $2.31 billion in total assets, $2.79 billion in total liabilities and $477 million in total shareholders' deficit. The Company recorded a net loss of $172 million on $2.61 billion of revenue for the year ended Dec. 31, 2010, compared with a net loss of $141 million on $2.54 billion of revenue during the prior year. * * * As reported by the Troubled Company Reporter on March 31, 2010, Standard & Poor's Ratings Services raised all its ratings on Global Crossing, including the corporate credit rating to 'B' from 'B-'. The outlook is stable. Standard & Poor's Ratings Services said it assigned its 'CCC+' issue-level rating and '6' recovery rating to Bermuda-based Global Crossing Ltd.'s proposed $150 million of senior unsecured notes due 2019. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. GOLF CLUB AT AVERY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: The Golf Club At Avery Ranch, Ltd 3310 N. Capital of Texas Highway, Suite 200 Austin, TX 78746 Bankruptcy Case No.: 11-10503 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Western District of Texas (Austin) Judge: Craig A. Gargotta Debtor's Counsel: William A. (Trey) Wood, III, Esq. BRACEWELL & GIULIANI LLP 711 Louisiana, Suite 2300 Houston, TX 77002 Tel: (713) 223-2300 Fax: (713) 221-1212 E-mail: trey.wood@bracewellgiuliani.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/txwb11-10503.pdf The petition was signed by Robert D. Wunsch, member of general partner A.R. Golf Management Co., LLC. Affiliates that filed separate Chapter 11 petitions on Feb. 28, 2011: Debtor Case No. ------ -------- The Golf Club At Avery Ranch, Ltd 11-10503 Wunsch Family Limited Partnership 11-10504 A. R. Golf Operations, LLC 11-10505 GPS PAINTING: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: GPS Painting & Wallcovering, Inc. c/o Eliot Schneider 1307 East St Gertrude Place Suite C Santa Ana, CA 92705 Bankruptcy Case No.: 11-12662 Chapter 11 Petition Date: February 26, 2011 Court: United States Bankruptcy Court Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: R G Pagter, Esq. PAGTER AND MILLER 525 N Cabrillo Pk Dr Suite 104 Santa Ana, CA 92701 Tel: (714) 541-6072 Fax: (714) 541-6897 E-mail: gibson@pagterandmiller.com Scheduled Assets: $756,316 Scheduled Debts: $1,679,522 A list of the Company's 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-12662.pdf The petition was signed by Eliot Schneider, president. GRAND ISLAND LIQUOR: Court Denies Use of Pathway Bank Collateral ---------------------------------------------------------------- Bankruptcy Judge Timothy J. Mahoney denied the request of Grand Island Liquor Mart and Tobacco Row, LLC; Richard and Kimberly Wiseman; and Hastings Liquor Mart and Tobacco Row, LLC, to use cash collateral, the proceeds of the monthly sales of inventory, to purchase new inventory and pay operating expenses. As adequate protection for Pathway Bank's interest in the collateral, the Debtors offer a monthly payment of $6,000; sales and expense reports on a daily, weekly, or monthly basis; and a physical inventory on a regular basis. Judge Mahoney held that the Debtors' adequate protection offer, even if coupled with a willingness to allow a physical inventory at any time and to provide regular financial information to the bank, is insufficient to protect the value of the bank's interest against risks to that value consistent with the concept of indubitable equivalence. Richard and Kimberly Wiseman are the owners of two limited liability companies: Grand Island Liquor Mart and Tobacco Row, LLC, a retail liquor, beer, wine and tobacco store in Grand Island, Nebraska, and Hastings Liquor Mart and Tobacco Row, LLC, a similar business in Hastings, Nebraska. Pathway Bank is the lender to both businesses, with a blanket first lien on inventory, accounts, fixtures and equipment. The bank has no lien on personal or real estate assets of the individual debtors, but does have a guarantee from them of all of the debt of the two businesses. In 2010, the Debtors suffered an employee theft and borrowed an additional $60,000 to cover the resulting shortage. The monthly bank payment increased to $9,800. That amount proved to be too much for the businesses to support, partly because of increased competition in Grand Island and partly because of a decline in business due to road construction near the Grand Island store and the general economic downturn. The Debtors have made no bank payment since September 2010. The bank began a replevin action in January 2011. On Jan. 25, 2011, the Debtors filed for Chapter 11 (Bankr. D. Neb. Case Nos. 11-40159, 11-40160, and 11-40162). A copy of the Court's Feb. 24, 2011 order is available at http://is.gd/1l3EAofrom Leagle.com. GRAY TELEVISION: FMR LLC Discloses 14.454% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 7,427,397 shares of common stock of Gray Television Inc. representing 14.454% of the shares outstanding. As of Oct. 31, 2010, there were 51,386,313 shares of common stock outstanding. About Gray Television Formerly known as Gray Communications System, Atlanta, Georgia- based Gray Television, Inc., is a television broadcast company. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. The Company's balance sheet at Sept. 30, 2010, showed $1.25 billion in total assets, $1.10 billion in total liabilities, and stockholders' equity of $111.81 million. * * * Gray Television carries 'B-' issuer credit ratings, with stable outlook, from Standard & Poor's and 'Caa1' corporate family rating and probability of default rating, with stable outlook, from Moody's. "Moody's views the company's current level of financial leverage, as exacerbated by a concentrated maturity profile, to be unsustainable for a TV broadcaster and indicative of elevated restructuring risk over the longer-term," said Moody's Russell Solomon, Senior Vice President, in April 2010. Pro forma for the pending transaction, all of Gray's debt (including its debt-like Series D Preferred Stock) comes due in 2014-2015. Moody's believes Gray will need to significantly reduce its debt with free cash flow and will probably need to issue additional equity in order to further moderate its leverage profile over the next few years prior to accessing the capital markets again to refinance current obligations. The Caa1 CFR incorporates Moody's view that leverage will remain excessive over at least the next two years. GREEN PLANET: Reports $167,800 Net Income in Dec. 31 Quarter ------------------------------------------------------------ Green Planet Group, Inc., filed its quarterly report on Form 10-Q, reporting net income of $167,814 on $9.3 million of revenue for the three months ended Dec. 31, 2010, compared with a net loss of of $2.7 million on $15.7 million of revenue for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $12.5 million in total assets, $35.4 million in total liabilities, and a stockholders' deficit of $22.9 million. As reported in the Troubled Company Reporter on July 20, 2010, Semple, Marchal & Cooper, LLP, in Phoenix, Ariz., expressed substantial doubt about Green Planet Group's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has significant operating losses and negative working capital. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?742d About Green Planet Scottsdale, Ariz.-based Green Planet Group, Inc. (OTC BB: GNPG) -- http://www.greenplanetgroup.com/-- is engaged in the research, development, manufacturing and distribution of a variety of products that improve overall energy efficiency with a specific concentration on petroleum based energy sources. The Company currently has four wholly owned operating subsidiaries, EMTA Corp, XenTx Lubricants, Inc., White Sands, L.L.C., and Lumea, Inc. GULFSTREAM INT'L: General Claims Bar Date on March 16 ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Southern Florida set March 16, 2011, as deadline for the creditors of Gulfstream International Airlines to file proofs of claim against the Debtor. Governmental entities have until May 3 to file their proofs of claim. Dianne Byers, staff writer at The Progress, reports that Robert Shaffer, manager at DuBois Regional Airport, said he does not believe there will be any news about how debts will be paid until after the March date has passed. The Progress notes GIA currently owes the authority more than $88,000, but Mr. Shaffer said he believes it will be paid as the authority received the money it was owed by GIA for its December billings and Gulfstream officials told him DRA has been listed as a critical creditor. About Gulfstream International Fort Lauderdale, Florida-based Gulfstream International Airlines (NYSE Amex: GIA) operated a fleet of turboprop Beechcraft 19000 aircraft, and specialized in providing travelers with access to niche locations not typically covered by major carriers. GIA operated more than 150 scheduled flights per day, serving nine destinations in Florida, 10 destinations in the Bahamas, five destinations from Continental Airline's hub under the Department of Transportation's Essential Air Service Program and supports charter service to Cuba through a services agreement with Gulfstream Air Charter, Inc., an entity otherwise unrelated to the Debtors. GIA operated as a Continental Connection carrier, as well as for United Airlines, Northwest Airlines and Copa Airlines, through code share agreements. GIA has 620 employees, including 530 working full-time. Gulfstream International Group, Inc., and its units including Gulfstream International Airline, Inc., filed for Chapter 11 bankruptcy protection on Nov. 4, 2010 (Bankr. S.D. Fla. Case No. 10-44131). Brian K. Gart, Esq., at Berger Singerman, P.A., serves as the Debtors' bankruptcy counsel. Jetstream Aviation Capital, LLC and Jetstream Aviation Management, LLC, serve as financial advisors to the Debtors. Robert A. Schatzman, Esq., Steven J. Solomon, Esq., and Frank P. Terzo, Esq., at GrayRobinson, P.A., in Miami, Florida, serve as counsel to the Official Committee of Unsecured Creditors. Gulfstream International Airlines disclosed $15,967,096 in assets and $25,243,099 in liabilities in its Schedules of Assets and Liabilities. HAMPTON ROADS: David Twiddy Resigns as Exec. Vice President ----------------------------------------------------------- On Feb. 24, 2011, David R. Twiddy, the Hampton Roads Bankshares, Inc.'s Executive Vice President, announced his resignation from employment with the Company to pursue other business opportunities. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Yount, Hyde & Barbour, P.C., in Winchester, Va., expressed substantial doubt about the Company's ability to continue as a going concern in its report on the Company's restated consolidated financial statements for the year ended Dec. 31, 2009. The independent auditors noted that quantitative measures established by regulation to ensure capital adequacy require the Company and its subsidiary banks to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and Tier I capital to average assets. In addition, the Company has suffered recurring losses from operations and declining levels of capital. Hampton Roads Bankshares reported a net loss of $84.5 million on $17.9 million of net interest income for the three months ended Sept. 30, 2010, compared with a net loss of $13.4 million on $26.5 million of net interest income for the same period last year. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company said in its Form 10-Q for the September 2010 quarter that due to its financial results, the substantial uncertainty throughout the U.S. banking industry, and the Written Agreement the Company and BOHR have entered into, doubts existed regarding the Company's ability to continue as a going concern through the second quarter of 2010. However, management believes this concern has been mitigated by the initial closing of the Private Placement that occurred on Sept. 30, 2010. HEALTHSOUTH CORP: FMR LLC Discloses 10.473% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 9,899,653 shares of common stock of Healthsouth Corporation representing 10.473% of the shares outstanding. About HealthSouth Corp. Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. The Company's balance sheet at Dec. 31, 2010 showed $2.37 billion in total assets, $1.99 billion in current liabilities, $387.40 million in commitments and contingencies, and a $2.20 million shareholders' deficit. HealthSouth carries a 'B1' corporate family rating with "stable" outlook, from Moody's. It has 'B+' foreign and local issuer credit ratings, with "positive" outlook, from Standard & Poor's. HEALTHSOUTH CORP: Wellington Management Holds 1.47% Equity Stake ---------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP disclosed that it beneficially owns 1,378,084 shares of common stock of HealthSouth Corporation representing 1.47% of the shares outstanding. There were 93,341,436 shares of common stock of the Company outstanding, net of treasury shares, as of Feb. 15, 2011. About HealthSouth Corp. Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. The Company's balance sheet at Dec. 31, 2010 showed $2.37 billion in total assets, $1.99 billion in current liabilities, $387.40 million in commitments and contingencies, and a $2.20 million shareholders' deficit. HealthSouth carries a 'B1' corporate family rating with "stable" outlook, from Moody's. It has 'B+' foreign and local issuer credit ratings, with "positive" outlook, from Standard & Poor's. HEALTHSOUTH CORP: Invesco Ltd. Discloses 6.0% Equity Stake ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Invesco Ltd. disclosed that it beneficially owns 5,632,312 shares of common stock of HealthSouth Corporation representing 6.0% of the shares outstanding. There were 93,341,436 shares of common stock of the Company outstanding, net of treasury shares, as of Feb. 15, 2011. About HealthSouth Corp. Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. The Company's balance sheet at Dec. 31, 2010 showed $2.37 billion in total assets, $1.99 billion in current liabilities, $387.40 million in commitments and contingencies, and a $2.20 million shareholders' deficit. HealthSouth carries a 'B1' corporate family rating with "stable" outlook, from Moody's. It has 'B+' foreign and local issuer credit ratings, with "positive" outlook, from Standard & Poor's. HINESLEY FAMILY: Court Won't Appoint Ch. 11 Trustee for Now ----------------------------------------------------------- Bankruptcy Judge Ralph B. Kirscher denied the request of Charles Hinesley, Jr.'s to appoint a trustee in the bankruptcy case of Hinesley Family Limited Partnership No. 1. Judge Kirscher held that the Court's decision to not appoint a trustee at this time is without prejudice. The Court will not allow this case to languish. A hearing on approval of the Debtor's Disclosure Statement was held Jan. 4, 2011. At that hearing, the Court granted Debtor additional time to amend its Disclosure Statement and scheduled another hearing on approval of the Debtor's amended disclosure statement for March 1, 2011. The Debtor filed an Amended Disclosure Statement on Feb. 7, 2011. No party-in- interest has filed a timely objection to approval of the Debtor's Amended Disclosure Statement. Thus, it appears very likely that the Debtor's Amended Disclosure Statement will be approved on March 1, 2011. If the Debtor's Amended Disclosure Statement is indeed approved on March 1, 2011, the Court will then set confirmation for April 5, 2011. The Debtor will thus have roughly 35 days to convince parties-in-interest and the Court that its plan is both feasible and proposed in good faith, and that it should be permitted to proceed forward under the terms of a Chapter 11 plan. A copy of the Court's Feb. 28, 2011 Memorandum of Decision is available at http://is.gd/cMoAgUfrom Leagle.com. Hinesley Family Limited Partnership No. 1 is a limited partnership with three limited partners, each holding a 30% interest: Judith Hinesley (wife and mother), Charles Hinesley, Jr. (son) and Morgan (son). Charles Hinesley Sr. owns a 10% interest in the Debtor and is the sole general partner. The Debtor has historically been engaged in the development of raw land into subdivisions and the construction of single and multi-family residential structures. Hinesley Family Limited Partnership No. 1 filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 10-61822) on July 27, 2010. HUDSON HOLDING: Posts $3.9 Million Net Loss in Dec. 31 Quarter -------------------------------------------------------------- Hudson Holding Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $3.9 million on $7.8 million of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $1.1 million on $10.0 million of revenues for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $11.4 million in total assets, $5.4 million in total liabilities, and stockholders' equity of $6.0 million. "The Company has incurred significant losses and negative cash flows from operations in the past, and these results have had a negative impact on the Company's financial condition," the Company said in the filing. "If these trends continue in the future, they could have a material adverse effect on the Company's financial condition. Based on the Company's internal forecasts and assumptions regarding its short term cash requirements, in the event the Merger [with Rodman & Renshaw Capital Group, Inc.] is not consummated and the Company is unable to locate additional funding on acceptable terms, the Company believes that it may not have sufficient working capital or regulatory net capital to support its current operating plans through Dec. 31, 2011. This raises substantial doubt about the Company's ability to continue as a going concern." On Jan. 4, 2011, the Company entered into an Agreement and Plan of Merger with Rodman, a Delaware corporation, pursuant to which Rodman has agreed to acquire all of the outstanding shares of the Hudson Holding common stock in a stock-for-stock merger. The Merger is expected to result in a combined entity with substantially improved capital resources. Rodman or the Company are permitted to terminate the Merger Agreement if the Merger is not consummated on or before June 30, 2011. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7430 Jersey City, N.J.-based Hudson Holding Corporation (OTC BB: HDHL) -- http://www.holdingcorp.com/-- is the parent of Hudson Securities, Inc. The Company provides a full range of corporate finance, advisory, and capital markets services and institutional equity research focused on the small- and mid-cap marketplace. INNKEEPERS USA: Groups Balks at Lehman/Five Mile's 374MM Buyout --------------------------------------------------------------- Joseph Checkler, writing for the Dow Jones Daily Bankruptcy Review, reports that a group of Innkeepers USA Trust creditors joined others in protesting Five Mile Capital Partners and Lehman Brothers Holdings Inc.'s $374.4 million bid to buy the hotel owner, because the structure of the deal limits recoveries to those creditors at $2.5 million. According to the report, in a Friday filing with the U.S. Bankruptcy Court in Manhattan, Innkeepers' official committee of unsecured creditors calls the term sheet outlining the sale "unconfirmable," and says it wants a say in the review of bids. "The bidding procedures fail in certain respects to foster and promote competitive bidding, and propose impediments to third-party participation," Dow Jones quotes the committee as saying. The committee points out that while the plan calls for unsecured creditors to get $2.5 million, "it is unclear from the Term Sheet whether this sum is meant to be equivalent to or greater than the amount that is rightfully due and owing to unsecured creditors under the terms of the bankruptcy code." Mr. Checkler says one key problem the committee has is that if a competing bidder offers more for Innkeepers, unsecured creditors would not see any of the proceeds from that overbid. Several other Innkeepers creditors are objecting to the Lehman and Five Mile Plan, which calls for the two companies -- previously adversaries in the case -- to pay $374.4 million in cash and debt in exchange for a controlling stake in Innkeepers. As a key element of that deal, Midland Loan Services, which represents Innkeepers mortgage lenders owed more than $825 million, has agreed to take a $200 million reduction on that debt. A hearing on the deal is set for next week. According to the report, Appaloosa Management LP and LNR Securities Holdings LLC have come out against the plan, upset that their indirect investment in Innkeepers' mortgage debt will suffer a loss under the plan. The Lehman/Five Mile plan is the second that the Palm Beach, Fla., company has offered since its bankruptcy filing. The company had to scrap its first plan, which allowed existing owner Apollo to retain an ownership stake, after the deal was widely panned by creditors and ultimately rejected by Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and 91 affiliates filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in Washington, DC, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. Attorneys at Morrison & Foerster, LLP, represent the Official Committee of Unsecured Creditors. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. JB'S FAMILY: Returns to Chapter 11 to Reorganize Restaurants ------------------------------------------------------------ JB's Family Restaurants, Inc., filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-04986) on Feb. 28. JB's operates 21 restaurants in six western states of Arizona, New Mexico, Idaho, Utah, Wyoming and Montana. The Company is comprised of seven company restaurants and 14 franchised units. JB's Family intends to continue in the possession of properties and the management of its business as debtor in possession pursuant to Secs. 1107 and 1108 of the Bankruptcy Code. "It is the best interest of all of the creditors and JB's for the company to continue operating effectively because a successful reorganization of the company is anticipated," says Lynn Whiteford, managing member of LBW Investments LLC, which owns all of the stock in JB's. Ms. Whiteford recounts JB's business was hit particularly hard by the economic turmoil caused by the Sept. 11, 2001 terrorist attacks. As a result, JB's filed a voluntary petition (Bankr. D. Ariz. Case No. 02-03349) on March 7, 2002. JB's confirmed a 100% payment plan of reorganization on Oct. 23, 2003, and a final decree was entered on Sept. 24, 2004. According to Ms. Whiteford, JB's has worked diligently to meet its obligations under its previous plan of reorganization, but JB's is once again a victim of an economic downturn. The current recession has resulted in a decline in business, which forces a bankruptcy petition. Ms. Whiteford explains that revenues fell sharply as a result of the current recession and although the business has rebounded in the last several months, JB's is unable to continue without reorganizing under the Bankruptcy Code. JB's fell behind on its trade debt with US Foodservice, which is owed $406,453. JB's says it is pursuing a plan to return to profitability by closing or franchising those restaurants that were unprofitable, terminating the costly leases on those facilities, and operating the remaining restaurants at a profitable level and collecting franchise fees. JB's has already reduced the number of restaurants it operates from 34 in 2007, to seven as of the bankruptcy filing date. JB's has also made substantial progress in reducing the overhead and operating expenses and improving profitability for all the restaurants. "The filing of this Chapter 11 proceeding was necessary as the final step in its plan to reorganize and return to profitability," Ms. Whiteford relates. The Debtor says that in order for its operations to continue effectively and to avoid the costly adverse effects of the Bankruptcy filing, it will request specific relief in "First Day Motions": * Application Approving Employment of Thomas E. Littler, Esq., at Gordon Silver as counsel; * Motion to maintain existing bank accounts, cash management system, business forms and letterhead, and to honor gift certificates. * Motion for order allowing payment of prepetition wages, salaries and employment benefits and directing banks to honor prepetition checks for payment of prepetition obligations. * Motion to allow payment of "trust fund" taxes (payroll & sales) motion authorizing payment to Traveler's Insurance and to maintain insurance. * Motion to reject leases for restaurant locations that have been closed prepetition. About JB's JB's offers a full service family restaurant style menu. JB's was originally founded in 1961 in Provo, Utah, as a Big Boy Franchisee. In 1987, JB's terminated its franchise relationship from the Big Boy Franchise System and began franchising its own concept in 1991. Current management purchased JB's and Galaxy Diners from the Santa Barbara Restaurant Group in November 2000, through the acquisition of all the outstanding stock in JB's by LBW. LBW was formed by a management group from the JB's operations. LBW originally acquired 54 JB's Restaurants and 30 franchise units. As of Dec. 30, 2010, the Debtor reported assets of $7,299,189 and liabilities of $10,298,630. The Debtor reported $15,761,266 in revenues for 2010 and generated a pretax income of negative $442,262. JB'S FAMILY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: JB's Family Restaurants, Inc. 2207 S. 48th Street, Suite A Tempe, AZ 85282 Bankruptcy Case No.: 11-04986 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Redfield T. Baum, Sr. Debtor's Counsel: Robert C. Warnicke, Esq. GORDON SILVER 40 N. Central Avenue, #2100 Phoenix, AZ 85004 Tel: (602) 256-0400 Fax: (602) 256-0345 E-mail: phxbknotices@gordonsilver.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Lynn Whiteford, president. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alliant Food Phx Trade Debt $526,664 File 30800, P.O. Box 60000 San Francisco, CA 94160 US Foodservice Trade Debt $325,030 File 30800, P.O. Box 60000 San Francisco, CA 94160 Alliant Food Phx Trade Debt $306,562 File 30800, P.O. Box 60000 San Francisco, CA 94160 Santa Barbara Restaurant Group Trade Debt $154,251 Arizona Department of Revenue Sales Tax $153,121 Maricopa County Treasurer Trade Debt $116,905 Arizona Department of Revenue Trade Debt $111,639 Utah State Tax Commission Trade Debt $96,757 Utah State Tax Commission Sales Tax $91,299 Alliant Food Nm/Den Trade Debt $80,068 Carla Boone Trade Debt $73,036 Clark Jones Trade Debt $71,623 Mountain View Shopping Plaza Trade Debt $68,280 The Travelers Insurance Co Trade Debt $54,976 Wyoming Department of Revenue Sales Tax $41,408 Roy S. Ludlow Investment Co. Trade Debt $38,109 Carolyn D. Bowman Trust Trade Debt $37,250 Arizona Department of Revenue Trade Debt $37,028 Wyoming Department of Revenue Trade Debt $34,964 Sysco Food Services of Mt, Inc. Trade Debt $34,919 JC PENNEY: $900 Mil. Share Repurchase Won't Affect Moody's Ratings ------------------------------------------------------------------ Moody's Investors Service stated that J.C. Penney's announcement that it had approved a $900 million open market share repurchase program has no immediate impact on either the Ba1 Corporate Family Rating or the stable outlook. "J.C. Penney has ample excess cash to fund this share repurchase program while still maintaining very good liquidity," stated Moody's Senior Credit Officer Maggie Taylor. "However, given Vornado's and Pershing Square's sizable equity stake, J.C. Penney's future financial policy is currently unclear. Moody's concern that J.C. Penney's financial policy may shift to focus on returning value to shareholders places limits on the rating," Taylor added. The last rating action for J.C. Penney was on May 18, 2010, when its $400 million senior unsecured notes were rated Ba1 and the Corporate Family Rating and stable outlook were affirmed. J.C. Penney is one of the country's largest department store operators with about 1,100 locations in the United States and Puerto Rico. Revenues are about $17.8 billion. JC PENNEY: S&P Affirms Corporate Credit Rating at 'BB+' ------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB+' corporate credit rating on Plano, Texas-based J.C. Penney Co. Inc. The outlook is stable. "Although the announcement of a $900 million share repurchase program represents a meaningful shift in its financial policy," said Standard & Poor's credit analyst David Kuntz, "S&P believes that the company has sufficient cash reserves to execute its program without detriment to its credit protection metrics." "The ratings on Penney reflect recent performance that has been in line with our," added Mr. Kuntz, "as well as S&P's view that operations are likely to improve modestly over the near term." While the company has improved its credit protection profile through performance gains and debt reduction, the announcement of a $900 million share repurchase program makes substantial future debt reductions by the company much less likely, in S&P's view. JETBLUE AIRWAYS: FMR LLC Discloses 14.990% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed that they benefically own 44,109,328 shares of common stock of Jetblue Airways Corporation representing 14.990% of the shares outstanding. The number of shares outstanding of the Company's common stock as of Jan. 31, 2011 was 294,752,749 shares. About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.618 billion in total assets, $1.126 billion in total current liabilities, $2.88 billion long- term debt and capital lease obligations, $531 million construction obligation, $458 million deferred taxes, and stockholders' equity of $1.623 billion, as of Sept. 30, 2010. * * * JetBlue carries 'Caa1' long term corporate family and probability of default ratings, with positive outlook, from Moody's. It has a 'B-' long term issuer default rating, with stable outlook, from Fitch. It also has a 'B-' issuer credit ratings from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. JETBLUE AIRWAYS: Wellington Management Holds 5.68% Equity Stake --------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP disclosed that it beneficially owns 16,678,226 shares of common stock of JetBlue Airways Corporation representing 5.68% of the shares outstanding. A total of 294,752,749 shares were outstanding as of Jan. 31, 2011. About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company reported $6.618 billion in total assets, $1.126 billion in total current liabilities, $2.88 billion long- term debt and capital lease obligations, $531 million construction obligation, $458 million deferred taxes, and stockholders' equity of $1.623 billion, as of Sept. 30, 2010. * * * JetBlue carries 'Caa1' long term corporate family and probability of default ratings, with positive outlook, from Moody's. It has a 'B-' long term issuer default rating, with stable outlook, from Fitch. It also has a 'B-' issuer credit ratings from Standard & Poor's. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. JOSEPH A STEPHENS: Court Denies Plan Confirmation ------------------------------------------------- Bankruptcy Judge Letitia Z. Paul denied confirmation of Joseph A. Stephens, Jr.'s Chapter 11 plan. Judge Paul held that the Plan, which provides for the individual Chapter 11 debtor to retain non- exempt property while paying less than 100% to a non-accepting class of unsecured creditors, violates Section 1129(b)(2)(B)(ii) of the Bankruptcy Code. A copy of Judge Paul's Feb. 22, 2011 Memorandum Opinion is available at http://is.gd/P3arYffrom Leagle.com. Based in Houston, Texas, Joseph A. Stephens, Jr., dba Chulo Contruction, filed a voluntary Chapter 11 petition (Bankr. S.D. Tex. Case No. 10-31263) on Feb. 16, 2010. Mr. Stephens operates two businesses: an insurance agency, and a mortgage brokerage business. Margaret Maxwell McClure, Esq. -- mccluremar@aol.com -- serves as bankruptcy counsel. In his petition, Mr. Stephens scheduled assets of $2,861,746 and debts of $3,834,229. JOSHUA HOTEL: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Joshua Hotel Group, LLC aka La Quinta Inn & Suites Joshua 501 South Broadway Joshua, TX 76058 Bankruptcy Case No.: 11-31295 Chapter 11 Petition Date: February 27, 2011 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Jeffery D. Carruth, Esq. WEYCER, KAPLAN, PULASKI & ZUBER, P.C. 3030 Matlock Rd., Suite 201 Arlington, TX 76015 Tel: (817) 795-5046 Fax: (800) 556-1869 E-mail: jcarruth@wkpz.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 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txnb11-31295.pdf The petition was signed by Sunil Patel, manager. KRONOS INTERNATIONAL: To Redeem EUR 80MM Sr. Notes at 102.167% -------------------------------------------------------------- On Feb. 17, 2011, Kronos International, Inc. notified the holders of its 6 1/2% Senior Secured Notes due 2013 of a voluntary redemption of EUR 80 million principal amount of the Notes at a redemption price of 102.167% of the principal amount thereof plus accrued and unpaid interest to the redemption date. Subject to satisfying the notice and other requirements that apply to a redemption of the Notes, the redemption is expected to occur on March 24, 2011. After the redemption, there will remain outstanding EUR 320 million principal amount of the Notes. About Kronos International Kronos International, Inc., produces and markets TiO2 pigments in Europe, and is a wholly owned subsidiary of Kronos Worldwide, Inc., headquartered in Dallas, Texas. * * * As reported by the Troubled Company Reporter on June 25, 2010, Moody's Investors Service raised Kronos International's Corporate Family Rating to B3 from Caa1 and the rating on the EUR400 million senior secured notes due 2013 to Caa1 from Caa2. The upgrade reflects KII's better operating results, improved titanium dioxide market conditions and the expectation that credit metrics will improve further in 2010. The outlook is stable. Moody's also said KII's liquidity is supported by its positive cash flow from operations, cash balances and unused availability under its EUR80 million revolving credit, which matures in less than one year (May 2011). Total use of the revolver was restored to the company in May 2010 after complying with the amended covenants in the first quarter 2010. Availability had been limited to EUR51 million since the facility was amended in September 2009 to accommodate the shortfall in EBITDA generation during the global economic downturn, which would have led to a violation of the leverage covenant. The improved profitability in 2010 could allow the company to meet the original financial covenants and revert the credit facility to its pre-amendment terms and conditions. The TCR on April 19, 2010, reported that Fitch Ratings has upgraded Kronos' Issuer Default Rating to 'B-' from 'CCC' and its securities ratings: Senior secured revolving credit facility to 'BB-/RR1' from 'B+/RR1'; Senior secured notes to 'B-/RR4' from 'CCC/RR4'. The Rating Outlook has been revised to Stable from Negative. Fitch said the ratings reflect high financial leverage at Kronos International as well as Kronos Worldwide's solid market position in the TiO2 industry, the fifth largest globally with 10% of global capacity. The ratings also reflect the early stages of a recovery in the TiO2 industry and Fitch's expectations that earnings over the next 24 months will remain below the average over the period from 2005 through 2008. Moody's Investors Service raised Kronos International, Inc.'s Corporate Family Rating to B2 from B3 and the rating on the EUR400 million senior secured notes due 2013 to B3 from Caa1. The upgrade reflects KII's strong operating results, attractive titanium dioxide market conditions and the expectation that the company will continue to enjoy strong margins and positive free cash flow. The outlook is positive. KY USA ENERGY: Farm-Out Assignments Aren't Executory Contracts -------------------------------------------------------------- WestLaw reports that farmout assignments for oil and gas wells, as recorded contracts that had been fully performed by one of the parties thereto and that purported to transfer and assign oil and gas leases to the debtor, were not executory contracts, of a kind subject to 11 U.S.C. Sec. 365. Whether a contract is an executory contract, such as a debtor can assume or reject, is a question of federal, and not state, law. In re KY USA Energy, Inc., --- B.R. ----, 2011 WL 611660 (Bankr. W.D. Ky.) (Lloyd, J.). This Feb. 22, 2011, decision by the Honorable Joan A. Lloyd in K & D Energy, et al. v. KY USA Energy, Inc., et al., Adv. Pro. No. 10- 1049 (Bankr. W.D. Ky.), is an extension of her decision in In re KY USA Energy, Inc., 439 B.R. 413 (2010), finding that the underlying Farnout Agreements aren't executory contracts. KY USA Energy, Inc., based in Glasgow, Ky., sought chapter 11 protection (Bankr. W.D. Ky. Case No. 10-11424) on Sept. 14, 2010. Scott A. Bachert, Esq., at Harned Bachery & McGehee PSC in Bowling Green, Ky., represents the Company. At the time of the filing, the Debtor estimated its assets at less than $50,000 and its debts at $1 million to $10 million. LARRY C MITCHELL: 11th Circuit Reverses Tax Ruling -------------------------------------------------- The United States appeals from the district court's decision affirming an order of the bankruptcy court, in which the bankruptcy court determined that Larry C. Mitchell's federal income tax debt was dischargeable in bankruptcy. The United States Court of Appeals for the Eleventh Circuit held that the bankruptcy court erred in its finding that Mr. Mitchell had not willfully attempted to evade or defeat his taxes within the meaning of 11 U.S.C. Sec. 523(a)(1)(C). Accordingly, the district court's decision is reversed. The case is United States of America, v. Larry C. Mitchell, a.k.a. Larry Carl Hazen Mitchell, No. 10-10596 (11th Cir.). A copy of the 11th Circuit's Feb. 24, 2011 decision is available at http://is.gd/YfYec2from Leagle.com. The panel consists of Circuit Judges Charles R. Wilson and William H. Pryor Jr., and the Honorable Susan C. Bucklew, United States District Judge for the Middle District of Florida, sitting by designation. District Judge Bucklew penned the decision. Larry C. Mitchell, a.k.a. Larry Carl Hazen Mitchell, filed for Chapter 11 bankruptcy (Bankr. M.D. Ga. Case No. 06-40631) on Aug. 29, 2006, which was converted to a Chapter 7 petition on Oct. 3, 2007. A copy of Mr. Mitchells' Chapter 11 petition is available at http://bankrupt.com/misc/gamb06-40631.pdf LEHR CONSTRUCTION: Court Extends Schedules Deadline to April 6 -------------------------------------------------------------- The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York has extended, at the behest of Lehr Construction Corp., the deadline for the filing of schedules of assets and liabilities, schedules of current income and expenditures, schedules of executor contracts and unexpired leases and statements of financial affairs until April 6, 2011. Due to the burdens occasioned by preparing for its Chapter 11 case, the Debtor anticipated that it will be unable to complete its Schedules and Statements within the previous 14-day deadline. To prepare its Schedules and Statements, the Debtor must compile information from books, records, and documents relating to a myriad of claims, assets, and contracts relative to approximately 61 on-going projects. "This information is voluminous and collection of the necessary information requires an enormous expenditure of time and effort on the part of the Debtor and its employees," the Debtor said. New York-based Lehr Construction Corp. was founded in 1979. It specializes in interior construction and serves clients mainly throughout the New York metropolitan area. It serves as construction manager and general contractor for its clients Lehr filed for Chapter 11 bankruptcy protection on Feb. 21, 2011 (Bankr. S.D.N.Y. Case No. 11-10723). James A. Beldner, Esq., at Cooley LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. LEHMAN BROTHERS: $1.173 Billion Already Paid to Professionals ------------------------------------------------------------- Lehman Brothers Holdings Inc. disclosed these cash receipts and disbursements of the company, its affiliated debtors and other controlled entities for the month ended Jan. 31, 2011: Beginning Cash & Investments (01/01/11) $22,090,000,000 Total Sources of Cash 899,000,000 Total Uses of Cash (372,000,000) FX Fluctuation 16,000,000 --------------- Ending Cash & Investments (01/31/11) $18,586,000,000 LBHI reported $2.318 billion in cash and investments as of January 1, 2011, and $1.004 billion as of January 31, 2011. The monthly operating report also showed that from Jan. 1 to 31, 2011, a total of $42.937 million was paid to professionals that were retained in the Debtors' Chapter 11 cases. Meanwhile, from Sept. 15, 2008 to Jan. 31, 2011, a total of $1,173,774,000 was paid to professionals, of which $403,489,000 was paid to the Debtors' turnaround manager, Alvarez & Marsal LLC, while $272,110,000 was paid to their bankruptcy counsel, Weil Gotshal & Manges LLP. A full-text copy of the January 2011 Operating Report is available for free at: http://bankrupt.com/misc/LehmanMORJan2011.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 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. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. 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 Sept. 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 Sept. 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: NY Regulators' Suit vs. E&Y Takes Detour --------------------------------------------------------- New York state regulators face their first test soon in their lawsuit against Ernst & Young LLP over its role as auditor for Lehman Brothers Holdings Inc., according to a February 23, 2011 report by Reuters. Andrew Cuomo, former New York state attorney general, filed the lawsuit against the firm for allegedly approving the so-called repo transaction, an artificial sale and buy-back deal that enabled Lehman to hide billions of debts from regulators and allowed the company to look healthier when it reported quarterly financial data. But Ernst & Young sought for the transfer of the lawsuit from the state court to the federal court as it involves questions of federal auditing standards. Eric Schneiderman, the current NY state attorney general, wants to move the case back. Some lawyers see Ernst & Young's move as an attempt to streamline defenses as the firm is already fighting a similar lawsuit in federal court, Reuters reported. Anthony Sabino, a law professor at St. John's University in New York, said, however, that the transfer could also benefit Ernst & Young by throttling a "home court" advantage that Mr. Schneiderman could have in state court, according to the report. The biggest benefit from a change in court is that cases move faster in federal court. Mr. Sabino said that while defendants often want to slow cases down, "the accountants clearly are confident in their ability to win" and want to dispose of the case quickly. "Bringing the action to the federal courthouse levels the field," Reuters quoted Mr. Sabino as saying. An Ernst & Young spokesman said in a statement that the lawsuit presents important questions of federal law that should be decided by a federal judge. He said moving the case would allow it to be heard by U.S. District Judge Lewis Kaplan, the same judge who is already overseeing other Lehman civil lawsuits including one in which the firm is a defendant. Jake Zamansky, a securities fraud lawyer and founder of Zamansky & Associates, said Judge Kaplan may decide not to take the case, as Mr. Cuomo cited violations of the Martin Act, Reuters reported. The Martin Act is a 90-year-old law, which gives New York state regulators broad enforcement powers over securities fraud. Mr. Zamansky pointed out that because of the Martin Act, previous attempts to move cases brought by New York attorneys general have been allowed to proceed in state courts even if they appeared to involve federal matters. He expressed belief that the attorney general's choice of forum will govern. Mr. Zamansky further said that Ernst & Young should probably settle because of its potential liability for the repo transactions. He said the transactions were apparently meant to deceive investors, Reuters reported. Mr. Schneiderman has until March 4, 2011, to respond to Ernst & Young's attempt to move the case. 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 Sept. 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. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. 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 Sept. 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 Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Approval of Greenbrier Settlement ------------------------------------------------------- Lehman Commercial Paper Inc. received approval from the U.S. Bankruptcy Court for the Southern District of New York of a settlement agreement with Greenbrier Minerals Holdings LLC and its affiliates. The companies entered into the deal to settle a dispute over how much is owed to LCPI under their 2007 credit agreement. LCPI asserts that it is owed $211,322,098 under the credit agreement. Meanwhile, Greenbrier holds a claim against LCPI, which stemmed from the company's failure to provide the $10 million funding in violation of their credit agreement. Under the deal, LCPI agreed to cap its claim under the credit agreement at $200 million. The company's claim, however, will be increased by $1 million if the marketing for the joint sale of the properties of Greenbrier, Midland Trail Resources LLC, and Dolphin Mining LLC does not start before March 31, 2011. Midland Trail and Dolphin Mining own and operate met coal mining facilities in Greenbrier County, West Virginia. Greenbrier's president and chief executive, Joseph Turley III, owns a controlling interest in Midland Trail and Dolphin Mining. The settlement agreement requires Greenbrier to pay LCPI 50% of all excess cash flow on hand which will be applied against the amount owed under the credit agreement, and to withdraw its claim against the company. Eric Salzman, managing director for Lamco LLC's private equity and principal investments, says the settlement was entered into "in good faith, negotiated at arm's length and achieves a fair and equitable result for [LCPI] and its estate." A full-text copy of the settlement agreement is available for free at http://bankrupt.com/misc/LBHI_SettlementGreenbrier.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 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. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. 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 Sept. 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 Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Approval of Swedbank AB Settlement -------------------------------------------------------- Lehman Brothers Holdings Inc. and Lehman Commercial Paper Inc. received court approval of an agreement with New York-based Swedbank AB to settle the Swedish bank's claims. Swedbank filed deficiency claims, assigned Claim Nos. 67079 and 67080, against the Lehman units each asserting $565,870,087 on account of LCPI's failure to repurchase commercial mortgage loans as required under a 2002 repurchase agreement. LBHI guaranteed LCPI's payment obligations to the Swedish bank under the agreement. The settlement deal calls for the exchange of certain commercial real estate loans between the Lehman units and Swedbank and to revise the terms of some loans. It also requires LBHI to pay $10 million to Swedbank as additional consideration for the exchange of loans and provides for the allowance of each of the deficiency claims in the sum of $325 million. Each of the loans subject to the exchange corresponds to a real estate project in which Swedbank and the Lehman units have direct or indirect debt or equity investments. The properties are in Manhattan, Los Angeles, Hawaii, and Austin, Texas. Alfredo Perez, Esq., at Weil Gotshal & Manges LP, in Houston, Texas, says the exchange would allow the Lehman units to consolidate their ownership in the capital structure of those projects and maximize the value of their interest in those assets. "The settlement agreement provides the best framework to resolve their disputes with Swedbank over the deficiency claim and avoid the expense and risk inherent in litigating such a claim," Mr. Perez says. The settlement deal is formalized in a 28-page agreement, a copy of which is available for free at: http://bankrupt.com/misc/LBHI_SettlementDealSwedbank.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 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. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. 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 Sept. 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 Sept. 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 COMMS: Loomis Sayles Discloses 10.98% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Loomis Sayles & Co., L.P. disclosed that it beneficially owns 205,860,033 shares of common stock of Level 3 Communications Inc. representing 10.98% of the shares outstanding. As of Feb. 22, 2011, there were 1,673,680,085 shares of common stock 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 a $157 million 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. LEWIS CRANE: Caterpillar Financial Wins Guaranty Suit ----------------------------------------------------- Magistrate Judge Irma Carrillo Ramirez granted the Plaintiff's request for summary judgment in the suit, Caterpillar Financial Services, d/b/a FCC Equipment Financing, v. K. Kyle Lewis, Civil Action No. 3:10-CV-72-BH (N.D. Tex.). The case arises out of two written guarantees executed by K. Kyle Lewis in favor of FCC Equipment Financing: (A) On Feb. 27, 2007, FCC agreed to lend money to Lewis Crane of Dallas, L.P., pursuant to a loan and security agreement. In connection with the loan, the Defendant executed a guaranty that unconditionally guaranteed, among other things, the full and prompt performance and payment of all present and future obligations of Lewis Crane to FCC, including any attorneys' fees or expenses suffered by FCC by reason of Lewis Crane's or the Defendant's default. The Defendant's liability under the guaranty agreement was limited to 20% of the total outstanding balance. (B) On July 23, 2008, FCC agreed to lend money to LWL Management, LLC, pursuant to a loan and security agreement. That same day, the Defendant executed a guaranty agreement that unconditionally guaranteed, among other things, the full and prompt performance of all present and future obligations of LWL to FCC, including any attorneys' fees or expenses suffered by FCC by reason of LWL's or Defendant's default. The Defendant's liability under the guaranty was limited to 20% of the outstanding balance. After Lewis Crane and LWL defaulted on the loans, FCC notified the Defendant of their default and made written demand on him to pay 20% of the total outstanding indebtedness owed under the loan agreements. The Defendant failed to pay, however. On November 4, 2009, FCC filed the action seeking judgment against Defendant on the two guaranties, including 20% of all amounts due and owing under the loan agreements, pre-judgment and post- judgment interest, reasonable attorney fees, collection costs, and costs of court. A copy of the Court's Feb. 24, 2011 Memorandum Opinion and Order is available at http://is.gd/eXmBRTfrom Leagle.com. Lewis Crane of Dallas, L.P., and LWL Management, LLC, filed voluntary petitions for Chapter 11 relief (Bankr. N.D. Tex. Case No. 09-45785) on September 18, 2009. LIEBFRIED AVIATION: Court Directs Accountant to Disgorge Fees ------------------------------------------------------------- Bankruptcy Judge Melvin S. Hoffman denied a request for compensation by Joseph O'Donnell, who prepared Liebfried Aviation, Inc.'s corporate tax returns, and instead directed Mr. O'Donnell to disgorge money paid to him postpetition by the Debtor because Mr. O'Donnell accepted those payments for postpetition services without having sought, much less received, Court approval of those payments. The Chapter 7 trustee represents that his review of the Debtor's records reveals that Mr. O'Donnell has performed significant accounting work not only for the Debtor but also for Andrew Liebfried, the Debtor's principal, and the Liebfried Realty Trust of which Andrew Liebfried and his family are beneficiaries. In addition, the Chapter 7 trustee represented that the Debtor's internal accounting records indicate that during the Chapter 11 phase of the case the Debtor paid Mr. O'Donnell a total of $5,500 or $5,600 by means of at least three separate checks beginning on May 8, 2008. The Chapter 7 trustee also maintains that in January 2011, after the case had been converted, Mr. O'Donnell appears to have received an additional payment of $500 from the Debtor for accounting services previously rendered. The Chapter 7 trustee notes that based on the Debtor's internal accounting records, it appears that on at least one occasion the Debtor paid Mr. O'Donnell for worked performed for the Liebfried Realty Trust. None of these payments appeared on the Debtor's monthly operating reports filed with the United States trustee. At the hearing on his fee application, Mr. O'Donnell acknowledged that he has performed accounting services for the Liebfrieds and their entities since the mid 1990s. He blamed the Debtor's attorney for failing to disclose his connections with these Debtor affiliates stating that she had prepared his affidavit which he signed but did not read. He admitted having sent the Debtor invoices for services rendered post-petition for which he received payments from the Debtor without seeking Court approval. Apparently oblivious to the requirements of Bankruptcy Code 330, Mr. O'Donnell explained that the reason he filed the fee application presently before me was because, unlike his prior bills to the debtor, this time the debtor had failed to paid him. A copy of the Court's Feb. 25, 2011 Memorandum of Decision is available at http://is.gd/qgCyFZfrom Leagle.com. Liebfried Aviation Inc. filed for Chapter 11 bankruptcy (Bankr. D. Mass. Case No. 07-42603) on July 11, 2007, disclosing under $1 million in assets. The case was converted to Chapter 7 on Aug. 6, 2010. A copy of the Chapter 11 petition is available at http://bankrupt.com/misc/mab07-42603.pdf LOEHMANN'S HOLDINGS: Emerges From Chapter 11 Protection ------------------------------------------------------- Loehmann's Holdings, Inc. and its affiliates has successfully completed its restructuring and has emerged from Chapter 11 bankruptcy proceedings. The Company secured $45 million in exit financing from Wells Fargo Bank, N.A. and Whippoorwill Associates, Inc., as agent for its discretionary funds and accounts. The Company's Joint Plan of Reorganization was confirmed on February 8 and became effective on March 1. As part of the Plan, the Company received a $25 million capital infusion through a rights offering to its Class A Noteholders that was backstopped by Istithmar World and Whippoorwill Associates, Inc. The restructuring eliminates all $110 million of the Company's long- term bond debt, $14 million in related annual interest, $23 million in other cost reductions, and recapitalizes the balance sheet through the exchange of notes for common stock. The Company also announced that Loehmann's CEO Jerald Politzer, who guided the company through this successful bankruptcy process, has chosen to leave the Company. Joe Melvin, the Company's COO and CFO will assume the role of interim CEO. "As was our goal, we have significantly reduced our debt through the Chapter 11 process and have emerged a stronger, more financially secure company better positioned to address the opportunities and challenges of the marketplace," said Joe Melvin, interim CEO of Loehmann's. "We look forward to rededicating ourselves to building Loehmann's into an even more exciting shopping destination for our existing customers and tapping into a whole new customer base who appreciates the value and brands we bring to them." Commenting on the exit financing, Jim Dore, Group Head and Executive Vice President, Wells Fargo Capital Finance - Retail Finance Division, said, "We appreciate the opportunity to provide Loehmann's with a flexible financing solution and look forward to building our new partnership." Moving forward, the Company will focus merchandising efforts on well-known designer brands that resonate with its frequent shoppers. The Company will also refine its advertising outreach to communicate with Loehmann's core customers and potential new shoppers. Emphasis will also be placed on further building on Loehmann's successful membership program which currently has a database of over 1.5 million Insider Members. In addition, as part of the restructuring, Arthur E. Reiner and Nancy Ross have been appointed as independent members of the Board of Directors. They will join directors Dr. Shuja Ali and Kapil Zaveri of Istithmar World, and Steven Gendal and Michael Lee of Whippoorwill Associates, Inc. Mr. Reiner will be the Chairman of the Board. Mr. Reiner was Chairman and Chief Executive Officer of Macy's East. He was also Chairman and Chief Executive of Finlay Enterprises, a nation-wide fine jewelry company. In May 2003, Mr. Reiner became a director of New York & Company, Inc. and is currently Chairman of the Compensation Committee, and a member of the Corporate Nomination & Governance and Audit Committees. Ms. Ross is Founder and Chief Executive Officer of C-Suite Agenda LLC. Following a distinguished thirty-year career at Grey Advertising, her own Brand/Marketing consultancy, and senior partner at Monitor Group, Ms. Ross founded C-Suite Agenda LLC an independent brand & marketing/customer insights consultancy. Her firm helps leading organizations improve their performance through customer driven insights. Ms. Ross has also served as Brand/Marketing consultant to senior management, Board and CEOs, with substantive efforts in retail efforts of Citibank, Chase, KKR's Primedia Educational Division and Scholastic. About Loehmann's Holdings Bronx, New York-based Loehmann's Holdings, Inc., is a discount retailer with more than 60 stores. The Bronx, New York-based company is owned indirectly by Istithmar PJSC, an investment firm owned by the government of Dubai. Loehmann's filed for Chapter 11 bankruptcy protection on November 15, 2010 (Bankr. S.D.N.Y. Case No. 10-16077). It estimated its assets and debts at $100 million to $500 million. Affiliates Loehmann's Inc. (Bankr. S.D.N.Y. Case No. 10-16078), Loehmann's Operating Co. (Bankr. S.D.N.Y. Case No. 10-16079), Loehmann's Real Estate Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16080), and Loehmann's Capital Corp. (Bankr. S.D.N.Y. Case No. 10-16081) filed separate Chapter 11 petitions. Frank A. Oswald, Esq., at Togut, Segal & Segal LLP, assist the Debtors in their restructuring efforts. Perella Weinberg Partners LP is the Debtors' investment banker and financial advisor. Clear Thinking Group LLC is the Debtors' restructuring adviser. Troutman Sanders LLP is the Debtor's special corporate counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Mark S. Indelicato, Esq., Mark T. Power, Esq., and Janine M. Cerbone, Esq., at Hahn & Hessen LLP, in New York, serve as counsel for the Official Committee of Unsecured Creditors. MA BB OWEN: Files for Chapter 11 in Sherman, Texas -------------------------------------------------- Dallas-Texas-based MA BB Owen LP filed a bare-bones Chapter 11 petition (Bankr. E.D. Tex. Case No. 11-40645) in Sherman, Texas, on Feb. 28, 2011. The Debtor estimated assets and debts of $10 million to $50 million. John Marlin of MA BB Owen Holdings, LLC, signed the Chapter 11 petition. MA BB OWEN: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: MA BB Owen LP 13455 Noel Road, 23rd Floor Dallas, TX 75240 Bankruptcy Case No.: 11-40645 Chapter 11 Petition Date: February 28, 2011 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Joyce W. Lindauer, Esq. JOYCE LINDAUER, ATTORNEY AT LAW 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John Marlin of MA BB Owen Holdings, LLC, manager. MARC DREIER: Ch. 7 Trustee Sues Anguillan Developer for $1.5MM -------------------------------------------------------------- Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, reports that Salvatore LaMonica, the Chapter 7 trustee for Marc Dreier, filed the lawsuit Monday against Temenos Development received, an Anguillan developer, to recover roughly $1.5 million that Mr. Dreier spent on property on the Caribbean island, one of the former lawyer's many acquisitions before his Ponzi scheme crashed and burned. Ms. Palank relates the lawsuit seeks to recover payments that Temenos received for two real-estate parcels on the grounds that Mr. Dreier didn't receive fair or equal value in the deal. According to Ms. Palank, Mr. LaMonica accused Temenos of "unlawfully" withholding the property from Mr. Dreier and converting the property for its own use. DBR says efforts to reach Temenos Tuesday weren't successful. DBR notes the Anguilla property isn't available for LaMonica to seize and liquidate because it was among the properties forfeit to the federal government in connection with Mr. Dreier's criminal proceeding. About Marc Dreier and Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 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. Sheila M. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee for the Dreier law firm. Ms. Gowan is represented by Jason Porter, Esq., at Diamond McCarthy LLP. Wachovia Bank National Association, the Dreier LLP Chapter 11 trustee, 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 Jan. 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. MDG CAPITAL: Three Residential Communities Now in Chapter 11 ------------------------------------------------------------ MDG Capital Corporation and its affiliates filed for Chapter 11 protection (Bankr. M.D. Fla. Lead Case No. 11-3481) in Fort Myers, Florida, on Feb. 28, 2011. According to a court filing, the Debtors have offices in Maryland, West Virginia, and Florida. In addition to their commercial development, the Debtors have developed and own over 1 million square feet of commercial properties including office buildings, shopping centers, strip centers, and hotels. The Debtors also have experience in the acquisition, permitting, and construction of residential planned communities as well as marinas. The Debtors develop residential communities and have relationships with many local, regional, and national builders. The Debtors currently have three residential communities in various stages of zoning entitlement or development totaling nearly 2,000 lots. No "first day" pleadings were filed on the Petition Date other than a request for joint administration of the Chapter 11 cases. MDG CAPITAL: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: MDG Capital Corporation 2180 Immokalee Road, Suite 309 Naples, FL 34110 Bankruptcy Case No.: 11-03481 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Ft. Myers) Judge: David H. Adams Debtor's Counsel: Daniel R. Fogarty, Esq. STICHTER, RIEDEL, BLAIN & PROSSER, PA 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 E-mail: dfogarty.ecf@srbp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by William L. Klohn, authorized agent. Affiliates of MDG Capital that filed separate Chapter 11 petitions on Feb. 28, 2011: Debtor Case No. ------ -------- MDG Helmerich, LLC 11-03483 MDG Frank Helmerich, LLC 11-03484 MDG Lake Trafford, LLC 11-03485 MDG Lake Trafford Commercial, LLC 11-03486 MDG Lake Placid 2000, LLC 11-03487 MDG Forum 11, LLC 11-03489 MDG-Capital Partners Financial Centre, Inc. 11-03491 MEG ENERGY: Moody's Publishes 'B1' Probability of Default Rating ---------------------------------------------------------------- Moody's Investors Service is now publishing Probability of Default Rating of B1 assigned to the MEG Energy Corp. on August 25, 2010. Due to an internal administrative error, this rating was not previously published. The PDR rating history for this entity is: * 8/25/2010 -- B1 rating assigned. MESA AIR: Exits Chapter 11 as a Strong, Competitive Airline ----------------------------------------------------------- Mesa Air Group's Plan of Reorganization became effective allowing the company to emerge from its reorganization under Chapter 11 of the U.S. Bankruptcy Code. Mesa and its related subsidiaries entered bankruptcy protection on January 5, 2010 and Mesa's exit from bankruptcy protection in 13 months places it among the fastest reorganizations in aviation history. Mesa is well positioned to compete aggressively in the regional aviation industry, having shed inefficient aircraft, significant debt and extended our partnership with US Airways. In celebrating the company's emergence, Mesa Chairman and Chief Executive Officer Jonathan Ornstein said: "Today marks a new beginning for Mesa, one that allows the company to build on its almost 30-year history and reestablish ourselves as one of the world's leading regional airlines. We are deeply appreciative of the support we have received during our reorganization from our creditors, airline partners and employees, and we will work hard to repay this trust by building a successful Mesa Air Group." The Company's restructuring accomplishments included: -- Elimination of 100 excess aircraft and associated leases and debt which contributed to the deleveraging of Mesa's balance sheet in the approximate amount of $700 million in capitalized leases and $50 million in debt; -- Restructuring of aircraft leases and financings for Mesa's remaining CRJ 200 and Dash 8 fleets resulting in flexibility, no long term lease exposure and lower costs on the CRJ 200 50- seat regional jet aircraft; -- Emerging as a private company that will issue four new series of notes, shares of common stock, and/or warrants to purchase shares of its common stock to its creditors in exchange for their claims in the Chapter 11 proceedings; -- Extending the term of the code-share agreement with US Airways through September 2015. "Upon our exit from bankruptcy, we will take the intensity and effort of the past 13 months and transfer it from the triage of the bankruptcy process to focus on opportunities that exist in our rapidly changing industry," continued Ornstein. "Throughout our bankruptcy the Company's operations remained at the highest level of reliability and safety. Our people did a fantastic job and nothing reflects their competitive spirit better than the fact that during our bankruptcy Mesa consistently delivered operational performance which continues to lead the regional airline industry in nearly every category monitored by the U.S. Dept. of Transportation. "This strong operational performance came during a time when many of our employees contributed to our financial savings by taking additional unpaid days off. This level of dedication and the resulting operational performance has provided a solid foundation upon which to return our airline to sustained profitability and future growth. In addition, through the restructuring process Mesa is among the first regional airlines to address the risks associated with fifty-seat regional jet aircraft which have increasingly fallen out of favor with mainline carriers. We believe the elimination of exposure related to this fleet provides Mesa with a significant competitive advantage," noted Ornstein. "We would like to welcome the new members of Mesa's Board of Directors who will be joining us today including: Daniel J. Altobello, retired Chairman of LSG/Sky Chefs Onex Food Services, Inc.; Ellen N. Artist, ENA Advisors, LLC; Mitchell I. Gordon, President, Morpheus Capital Advisors; Dana J. Lockhart, DJL Advisors, LLC; Grant Lyon, President, Odyssey Capital Group; Harvey W. Schiller, Vice Chairman and President of the Sports, Media, and Entertainment Practice of Diversified Search Odgers Berndtson; Mark J. Schulte, Managing Director and head of transportation investment banking at Dahlman Rose & Co.; Don Skiados, President, Leadership Communications and Training, LLC. We look forward to working with all of our new Board members and are honored to have such distinguished individuals serving the Company," said Ornstein. "In addition, we would also like to thank our retiring Board members for their service, dedication and friendship over the years including: Richard R. Thayer; Carlos E. Bonilla; Joseph L. Manson; Maurice A. Parker; Peter F. Nostrand; Robert Beleson," added Ornstein. "Finally, we would like to thank all of the stakeholders who worked with the Company during our restructuring as well as our restructuring advisors Pachulski Stang Ziehl & Jones LLP, our corporate counsel DLA Piper, LLP (US), and our financial advisors Imperial Capital, and the others that have helped make this possible, including the support of our airline partners, customers and the communities we serve," concluded Ornstein. Mesa currently operates 76 aircraft with approximately 450 daily system departures to 94 cities, 38 states, the District of Columbia, and Mexico. Mesa operates as US Airways Express and United Express under contractual agreements with US Airways and United Airlines, respectively, and independently as go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company was founded by Larry and Janie Risley in New Mexico in 1982. 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: Wins Approval of US Bank/Finame Agreement --------------------------------------------------- Mesa Air Group, Inc. and its debtor affiliates asked Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York pursuant to Section 502 of the Bankruptcy Court and Rule 9019 of the Federal Rules of Bankruptcy Procedure, to approve and authorize Mesa Airlines, Inc., and Mesa Air Group to enter into a settlement agreement with Agencia Especial de Financiamento Industrial (FINAME), U.S. Bank National Association, solely as Security Trustee for the ERJ Aircraft, and the Official Committee of Unsecured Creditors, to resolve the Finame Claims. Finame Claims Before the Petition Date, Mesa Airlines leased 36 ERJ-145 aircraft from various owner trustees, and Finame financed the owner trustees' purchase of the ERJ Aircraft. Mesa Air Group guaranteed Mesa Airlines' obligations under the ERJ Leases. Pursuant to the Court's February 23, 2010 Rejection Procedures Order and Section 1110 Procedures Order, the Debtors and U.S. Bank, at the direction of Finame, entered into separate stipulations pursuant to Section 1110(b) of the Bankruptcy Code to extend the 60-day period set forth in Section 1110(a)(2) of the Bankruptcy Code and to establish the terms and conditions for the Debtors' postpetition use, surrender and return of the ERJ Aircraft upon the Debtors' rejection of the ERJ Leases. The Debtors rejected the ERJ Leases pursuant to Notices of Rejection dated July 30, 2010, August 31, 2010, and September 24, 2010. The Court's March 26, 2010 Bar Date Order established May 21, 2010 as the deadline to file proofs of claim by all creditors -- other than governmental units -- against the Debtors. However, pursuant to the Finame Section 1110(b) Stipulations, the Debtors and U.S. Bank agreed on extended deadlines by which U.S. Bank could file proofs of claim on behalf of Finame arising from the rejection of the ERJ Leases and the surrender and return of the ERJ Aircraft. U.S. Bank filed the Finame Claims on account, inter alia, of the damages arising from the Debtors' rejection of the ERJ Leases, the Debtors' surrender and return of the ERJ Aircraft and alleged breaches of the Rejection Procedures Order and the Finame Section 1110(b) Stipulations: * Claim Nos. 1430 and 1431, which amended Claim Nos. 1420 and 1421 and which themselves had modified Claim Nos. 959 and 958; and * Claim Nos. 1454 and 1455, which modified Claim Nos. 958, 959, 1420 and 1421. According to John W. Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, the Finame Claims have two primary components -- Asserted Administrative Expense Claims and Asserted General Unsecured Claims: (1)(i) Claim Nos. 1421, as amended, and 1454 -- along with the corresponding claims that were supplemented by these claims -- set forth an administrative expense claim pursuant to Sections 503(b) and 507(a)(2) of the Bankruptcy Code against Mesa Airlines in the aggregate amount of $36,538,972; and (ii) Claim Nos. 1420, as amended, and 1455 -- along with the corresponding claims that were supplemented by these claims -- set forth and administrative expense claim pursuant to Sections 503(b) and 507(a)(2) against Mesa Air Group in the aggregate amount of $36,538,972. (2)(i) Claim Nos. 1421, as amended, and 1454 -- along with the corresponding claims that were supplemented by these claims -- set forth a non-priority general unsecured claim pursuant to Sections 365, 502, and 1110 of the Bankruptcy Code against Mesa Airlines in the aggregate amount of at least $543,042,408; and (ii) Claim Nos. 1420, as amended, and 1455 -- along with the corresponding claims that were supplemented by these claims -- set forth a non-priority general unsecured claim pursuant to Sections 365, 502, and 1110 against Mesa Air Group in the aggregate amount of at least $543,042,408. On October 21, 2010, the Debtors filed their Objection to (i) the Alleged Administrative Portions of Claim Nos. 1430 and 1431 and (ii) Claims that were Amended and Superseded by Claim Nos. 1430 and 1431. On November 15, 2010, the Debtors also filed their Objection to the Alleged Administrative Portions of Claim Nos. 1454 and 1455. With the Court's supervision, the Debtors and Finame subsequently entered into a series of stipulations that set forth various milestones and deadlines regarding the reconciliation of the Asserted Administrative Expense Claims. The Reconciliation Stipulations would enable the parties to confer and attempt to resolve the disputed issues with respect to the Finame Claims. Settlement Agreement The Debtors and Finame have conferred regarding the Asserted Administrative Expense Claims and the Asserted General Unsecured Claims. After good-faith, arm's-length negotiations, the Debtors and Finame have reached a settlement that resolves the Administrative Expense Objections and provides for the liquidation and allowance of the Finame Claims asserted by U.S. Bank on behalf of Finame against the Debtors' estates. Mr. Lucas summarizes the salient terms of the Settlement Agreement: (a) The Asserted Administrative Expense Claims will be reduced to and allowed in the aggregate amount of $233,313. (b) The Asserted General Unsecured Claims will be reduced to and allowed in the aggregate amount of (1) $456,111,956 against Mesa Airlines and (2) $456,111,956 against Mesa Air Group. (c) The Debtors will work with Finame to approve the transfer of the Allowed General Unsecured Claims in accordance with the terms and conditions set forth in the Settlement Agreement. (d) The Debtors and Finame have agreed to certain mutual releases. Mr. Lucas notes that the agreed reduction is substantial as it represents a reduction of over 99% of the Asserted Administrative Expense Claims. The reconciliation of the Asserted General Unsecured Claims was approached in a similar fashion as the Debtors resolved other claims arising from the rejection of leveraged aircraft leases with one adjustment. Because the fair market value of certain of the ERJ Aircraft was less than the return condition component of the claim, the Debtors agreed that Finame should be entitled to a claim equal to the amount that the return condition claims exceeded the fair market value of the aircraft, Mr. Lucas relates. In the aggregate, the parties agreed that return condition claims exceeded the fair market value of the ERJ Aircraft in the amount of $15,000,000. He informs the Court that the parties agreed to allocate the amount evenly among the claims arising from the rejection of the ERJ Leases. Resolving both components of the Finame Claims on the terms set forth in the Settlement Agreement will reduce the Debtors' potential exposure to protracted litigation and the significant associated costs, Mr. Lucas tells the Court. He asserts that the Settlement Agreement is an exercise of sound business judgment and should be approved. To implement the Settlement Agreement successfully, the Debtors also seek a waiver of the 14-day stay of an order authorizing the use, sale or lease of property under Bankruptcy Rule 6004(h) to the extent the rule applies. The Creditors' Committee has determined that the Settlement Agreement is reasonable, in the best interest of the estates, and should be approved, according to Mr. Lucas. A full-text copy of the Settlement Agreement, as well as schedules of the ERJ Aircraft and Claims, are available at no charge at: http://bankrupt.com/misc/Mesa_FinameSettlementAdmGUclms021611.pdf The Debtors have also sought and obtained the Court's approval to shorten the notice required with respect to the relief sought in the Motion. * * * During the February 18, 2011 hearing, Judge Martin Glenn granted the Motion and approved the Settlement Agreement. The Debtors are authorized to settle the Finame Claims in accordance with the Settlement Agreement. Claim Nos. 1454 and 1455 will be amended to reflect the Allowed Administrative Expense Claims of $233,313. The Allowed Administrative Expense Claims will not be subject to any further objection or challenged by any party-in-interest, and no other claims under Claim Nos. 1454 and 1455 will remain. U.S. Bank, for the benefit of Finame, will only be entitled to satisfaction of the Allowed Administrative Expense Claims by either Mesa Airlines or Mesa Air Group, not both. The Allowed General Unsecured Claims will be reduced to and allowed in the aggregate amount of $456,111,956 each against Mesa Airlines and Mesa Air Group. The claim will not be subject to any further objection or challenge by any party-in-interest. Except as provided in the Settlement Agreement, U.S. Bank, in its capacity as Security Trustee with respect to Finame and the ERJ Aircraft, and Finame will not be entitled to receive any other distributions under the Plan or from the Debtors or the Reorganized Debtors on account of the Finame Claims or any other claims arising before February 18, 2011. Claim Nos. 958, 959, 1420, 1421, 1430, and 1431 are expunged from the claims registers and the 72 new claims set forth in the Settlement Agreement will be created. Recently, the Debtors and Agencia Especial de Financiamento Industrial-FINAME submitted a letter, dated February 23, 2011, informing the Court that, upon the entry of the February 18, 2011 Order approving the Settlement, the process established pursuant to the Reconciliation Process Scheduling Order - Part III has concluded and no further action need be taken under that order by the parties of the Cou 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: Has Settlement Allowing Ariz. Rev. Dept. Claims --------------------------------------------------------- Mesa Air Group Inc. and its units have reached a settlement agreement with the Arizona Department of Revenue regarding the compromise and allowance of the Department's claims. The Arizona Revenue Department filed these claims against Mesa Air Group, Inc.: (a) Claim No. 1450, for $2,977,299 for 2009 and 2010 personal property taxes, which was filed as a priority tax claim under Section 507(a)(8) of the Bankruptcy Code; (b) Claim No. 1517, for $1,500,000 for estimated 2011 personal property taxes, which was filed as an administrative claim under Section 503 of the Bankruptcy Code; (c) Claim No. 1518, for $1,500,000 for estimated 2011 personal property taxes, which was filed as an administrative claim under Section 503; and (d) Claim Nos. 28, 48, and 512, which were previously disallowed by the Court. The Court's January 26, 2010 Tax Order gives the Debtors authority to pay prepetition tax claims outside of the Debtors' Third Amended Joint Plan of Reorganization and without further Court order. Among other things, the parties agreed that: * Claim No. 1450 is allowed as an Allowed Priority Tax Claim for $2,977,299 and will be paid in accordance with the terms of the Plan. Interest will be paid on Claim No. 1450 at the rate of 4% per annum commencing from the Effective Date of the Plan. * Claim No. 1517 is estimated and is not yet due under state law. It will be paid in the ordinary course of the Debtors' business when liquidated and due under applicable state law. The Debtors will not be required to reserve for the payment of Claim No. 1517. The Debtors retain their rights to contest the amount of Claim No. 1517 when liquidated, whether it be before or after the Claims Objection Deadline established by the Plan, which is extended to November 1, 2011. * Claim No. 1518 is disallowed and expunged. * Each party will be responsible for the costs and expenses it incurred in negotiating, drafting, and executing the settlement agreement. There will not be a hearing on the stipulation unless a written objection is filed with the Court and served so as to be received by March 4, 2011, at 12:00 p.m., prevailing Eastern Time. If a written objection is timely filed, a hearing to consider the stipulation will be scheduled and a notice of the hearing will be provided separately. 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: signs Deal Assuming Bonds and Disallowing Zurich Claims ----------------------------------------------------------------- Mesa Air Group, Inc., and its affiliated debtors entered into a stipulation with Zurich American Insurance Company, its subsidiaries and affiliates, including Fidelity and Deposit of Maryland, Colonial American Casualty and Surety Co., and American Guarantee and Liability Co., with respect to certain surety bonds and claims. Before the Petition Date, Zurich issued a number of surety bonds to certain of the Debtors. Certain of the Debtors and Zurich are also parties to prepetition written indemnity agreements governing the obligations of the Parties with respect to the surety bonds issued by Zurich. Zurich filed these claims against the Debtors: Debtor Claim No. Amount ------ --------- ------ Mesa Air Group, Inc. 23 unliquidated Mesa Airlines, Inc. 24 unliquidated Freedom Airlines, Inc. 25 unliquidated Freedom Airlines 1349 $8,027 Mesa Air Group 1350 $8,027 Mesa Airlines 1351 $8,027 Freedom Airlines 1493 unliquidated Mesa Air Group 1494 $8,027 Mesa Airlines 1495 $8,027 The Debtors included certain surety bonds issued by Zurich as well as related assumption obligations in the Plan Supplement to their Second Amended Joint Plan of Reorganization filed on December 28, 2010. Zurich objected to the Plan Supplement. The Debtors and Zurich have agreed that: (a) The Debtors will assume the surety bonds and related indemnity agreements. These will be deemed assumed effective February 4, 2011, the Assumption Effective Date; (b) The Debtors will pay $18,027 to Zurich to cure all defaults existing as of the Assumption Effective Date under the Surety Bonds and Indemnity Agreements pursuant to Section 365(b)(1)(A); (c) The Debtors will pay in the ordinary course of business all undisputed amounts arising under the Surety Bonds and Indemnity Agreements after the Assumption Effective Date. The Debtors' and Zurich's rights with respect to any claims arising under the Surety Bonds and Indemnity Agreements after the Assumption Effective Date are reserved. The Debtors have provided adequate assurance of future performance under the Surety Bonds and Indemnity Agreements pursuant to Section 365(b)(1)(C) of the Bankruptcy Code; and (d) The Zurich Claims will be disallowed and expunged in their entirety. A schedule of the Surety Bonds and Indemnity Agreements being assumed by the Debtors is available at no charge at: http://bankrupt.com/misc/Mesa_ZurichStipSBonds&Clms020411.pdf 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). MID WEST HOTEL: Gainesville Holiday Inn Owner Files for Chapter 11 ------------------------------------------------------------------ Mid West Hotel Lodging, LLC, owner and operator of the Holiday Inn Express, in Gainesville, Texas, filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 11-40629) on Feb. 28, 2011. The Debtor filed together with the bankruptcy petition an emergency request for access to use cash collateral. According to the court filing, the Debtor has an immediate need to use the cash collateral of Sterling Bank, the Debtor's primary secured creditor claiming liens on, among other things, the Debtor's real property, fixtures, equipment, inventory, and accounts receivables. The Debtor says it can adequately protect the interests of the Bank by providing the Bank with a postpetition lien and a priority claim in the Chapter 11 bankruptcy case. The cash collateral will be used to continue the Debtor's ongoing operations, which includes owning and operating hotel doing business as Holiday Inn Express Gainesville located at 320 North Interstate 35, Gainesville, Texas. The Debtor intends to reorganize its affairs and needs to continue to operate in order to pay its ongoing expenses, generate additional income and to propose a plan of reorganization in this case. "This is an emergency matter since the Debtor has no outside sources of funding available to it and must rely on the use of cash collateral to continue its operations," says Arthur I. Ungerman, Esq. in Dallas, Texas, counsel to the Debtor. MID WEST HOTEL: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Mid West Hotel Lodging, LLC dba Holiday Inn Express Gainesville 320 North Interstate 35 Gainesville, TX 76240 Bankruptcy Case No.: 11-40629 Chapter 11 Petition Date: February 28, 2011 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Arthur I. Ungerman, Esq. ARTHUR I. UNGERMAN, ATTORNEY AT LAW 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972) 239-9055 Fax: (972) 239-9886 E-mail: arthur@arthurungerman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Gurpreet S. Dhaliwal, managing member. MK NETWORK: Files for Chapter 11 Due to Fifth Street Dispute ------------------------------------------------------------ MK Network, LLC, and Meridian Behavioral Health Network LLC, along with a number of related entities, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10859). MK Network, LLC and its related affiliates provide medical communication services and assist pharmaceutical and biotechnology brand teams with educating healthcare professionals on the features, benefits and appropriate prescribing of drugs. Meridian Behavioral Health Network LLC and its subsidiaries own largest for-profit behavioral healthcare company in Minnesota. The MK Network Debtors' liabilities include a secured credit facility in the approximate aggregate amount of $15,972,643 evidenced by a Credit Agreement among the Meridian Debtors and Fifth Street Finance Corporation dated as of Dec. 1, 2008. Substantially all of the MK Network Debtors' assets are pledged as collateral for their obligations thereunder. The Meridian Debtors' liabilities include a secured credit facility in the approximate aggregate amount of $4,844,535 evidenced by a Credit Agreement among the Meridian Debtors and Fifth Street Mezzanine Partners II, L.P. dated as of Jan. 1, 2007. Substantially all of the Meridian Debtors' assets are pledged as collateral for their obligations. As of the Petition Date, the Debtors collectively have approximately $750,000 in outstanding obligations to trade creditors and other vendors. The membership interests of MK Networks LLC are owned by MK Investors, LLC, a special purpose vehicle of Triton Pacific Capital Partners, and Fifth Street Capital, The Customer Link, Inc., CHCE and Insight Interactive. The membership interests of Meridian Behavioral Health, LLC is owned by Meridian Investors, LLC, a Triton Pacific Capital Partners special purpose vehicle, and Fifth Street Capital, Michael Bundy, Paul Cowdery, David Gnass, and E. Larry Atkins. Road to Chapter 11 The Debtor's manager Joseph Davis says in a court filing that the Meridian Debtors are operationally and financially sound. The Debtors have strong accounts receivable and ample liquidity. The Meridian Debtors' facilities are currently operating at greater than 90% census. While the Meridian Debtors are current in all of their payment obligations to Fifth Street, Fifth Street has noticed several alleged covenant defaults and has threatened to take precipitous action, including sweeping the Meridian Debtors' bank accounts, which would destroy their operations, and foreclosing on its collateral. Mr. Davis adds that the MK Network Debtors are also operationally sound, but are in need of financial restructuring due to a general decline in their business over the past several quarters. These Debtors' financial difficulties caused them to miss monthly interest payments due to Fifth Street in each month since September 2010, as well as the quarterly principal payments due to Fifth Street in October 2010 and January 2011. The MK Network Debtors have been aggressively seeking to rehabilitate their operations and restructure their debts outside of bankruptcy. In each case, the MK Network Debtors and the Meridian Debtors have been engaged in active negotiations with Fifth Street over the terms of a financial restructuring. While the negotiations were continuing, on Feb. 25, 2011, Fifth Street abruptly provided the Debtors with a notice of default and issued instructions to the Debtors' banks to not honor any checks or process any transfers from the Debtors' accounts. This action has effectively shut down the Debtors' operations, including, without limitation, the Debtors' ability to satisfy employee obligations. Since the notices of default were served, the Debtors continued to seek a resolution with Fifth Street, but no resolution was possible. Accordingly, the Debtors took the unfortunate but necessary step of filing their voluntary petitions to protect their business and preserve the value of their assets. Through the chapter 11 cases, the Debtors intend to rehabilitate their businesses, deleverage their balance sheets and increase liquidity to satisfy the claims of Fifth Street, vendors and other creditors under a plan of reorganization that promotes the Debtors' business plan and complies with the applicable provisions of the Bankruptcy Code. First Day Motions In order to enable the Debtors to effectively transition to chapter 11 and to minimize the effects of the chapter 11 filings, the Debtors have requested various types of relief in the First Day Motions filed, or which will be filed, with the Court. The relief sought in the First Day Motions is limited to that which is essential to allow the Debtors to transition to chapter 11. The First Day Motions include a request to use Fifth Third's cash collateral. The Debtors owed Fifth Street $20,817,178. Without the immediate use of Fifth Street's cash collateral, the Debtors will be unable to pay salaries, rent, utilities and other operating expenses incurred in the ordinary course of business and may be forced to cease operations and terminate over 260 employees. About the Debtors MK Network, LLC is a medical communications and continuing medical education company. MK Network's medical communication services assist pharmaceutical and biotechnology brand teams with educating healthcare professionals on the features, benefits and appropriate prescribing of drugs. MK Network offers continuing medical education opportunities to physicians and nurses. It collectively employs 47 persons and has a monthly payroll of $270,000. Meridian Behavioral Health Network LLC is the largest for-profit behavioral healthcare company in Minnesota. It offers a comprehensive array of outpatient, jail based, residential mental health and substance abuse services to men, women and pregnant women. Meridian operates drug, alcohol and mental rehabilitation facilities and programs throughout Minnesota. It collectively employs approximately 220 persons and have a monthly payroll of approximately $700,000. The MK Network Debtors are MK Network, LLC and its subsidiaries: MedKnowledge Group, LLC; TCL Institute LLC; Insight Interactive Network LLC; MedKnowledge Communications LLC; InteliMed Communications LLC; MK Global Communications LLC; PharMediCom LLC; MES Communications LLC; Center for Health Care Education LLC; Medfinance LLC; Chester Education Group LLC; and, The Center for Medical Knowledge LLC The Meridian Debtors are Meridian Behavioral Health LLC and its subsidiaries: Avalon Programs LLC; Alliance Clinic LLC; Cedar Ridge Treatment Center LLC; Meadow Creek LLC; Odyssey Programs LLC; Tapestry Treatment Center LLC; and, Twin Town Treatment Center LLC. Meridian and its subsidiaries had total assets of $13,932,174 and total liabilities of $12,379,110 as of Dec. 31, 2010. MK Network had consolidated assets of $27,334,969 and $29,447,953 as of Dec. 31, 2010. MK NETWORK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: MK Network, LLC 2080 Silas Deane Highway Rocky Hill, CT 06067 Bankruptcy Case No.: 11-10859 Affiliates of MK Network that filed separate Chapter 11 petitions on Feb. 28, 2011: Debtor Case No. ------ -------- MedKnowledge Group, LLC 11-10875 The Center for Medical Knowledge LLC 11-10876 Center for Health Care Education LLC 11-10877 MedKnowledge Communications LLC 11-10878 Insight Interactive Network LLC 11-10880 Intelimed Communications LLC 11-10882 MK Global Communications LLC 11-10883 PharMediCom LLC 11-10884 MES Communications, LLC 11-10885 MedFinance LLC 11-10886 TCL Institute LLC 11-10887 Chester Education Group LLC 11-10888 Meridian Behavioral Health entities that filed separate Chapter 11 petitions on Feb. 28, 2011: Debtor Case No. ------ -------- Meridian Behavioral Health, LLC 11-10860 Alliance Clinic, LLC 11-10865 Avalon Programs, LLC 11-10879 Cedar Ridge Treatment Center, LLC 11-10870 Meadow Creek, LLC 11-10871 Odyssey Programs, LLC 11-10872 Tapestry Treatment Center, LLC 11-10873 Twin Town Treatment Center, LLC 11-10867 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtors' Counsel: Samuel Jason Teele, Esq. LOWENSTEIN SANDLER, P.C. 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 Fax: (973) 597-2400 E-mail: jteele@lowenstein.com Meridian and its subsidiaries had total assets of $13,932,174 and total liabilities of $12,379,110 as of Dec. 31, 2010. MK Network had consolidated assets of $27,334,969 and $29,447,953 as of Dec. 31, 2010. The petition was signed by Joseph Davis, executive chariman. MK Network's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Customer Link, Inc. Promissory Note $3,539,178 c/o TCL Institute 104 Towerview Court Cary, NC 27513 Triton Pacific Capital Partners, Earned Fees $1,916,423 LLC 10877 Wilshire Boulevard, 12th Floor Los Angeles, CA 90024 1706 University, LLC Promissory Note $891,733 2990 Somerset Lane Orono, MN 55356 American Express Trade Debt $178,576 Genentech Inc. Trade Debt $85,000 Blue Cross Blue Shield of MN Insurance Premiums $83,906 FGMK LLC Trade Debt $54,215 2080 Realty, LLC Rental Contract $48,250 Bristol-Myers Squibb Company Trade Debt $42,086 Raveling, Lyle Trade Debt $34,500 Gemini Real Estate Leases $31,871 Medica Refunds $30,920 Barton Creek Capital Real Estate Leases $29,029 Health Partners Refunds $26,869 Littler Mendelsohn, PC Trade Debt $24,617 New Horizon Food Inc. Trade Debt $24,267 Atomic Trade Debt $20,614 Advanced Practice Solutions Trade Debt $19,583 Mintz, Levin, Cohn, Ferris, Trade Debt $19,270 Glovsky Advanced Psychiatric Care PC Trade Debt $17,995 MORNINGSIDE HEIGHTS: Restaurant to Remain Open While in Ch. 11 -------------------------------------------------------------- New York-based Morningside Heights Restaurant Corp. filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11-10731) on Feb. 22, 2011, in Manhattan. The Debtor estimated assets of up to $50,000 and debts of $100,000 to $500,000. The Debtor is represented by: Lawrence F. Morrison 140 East 45th Street 19th Floor New York, NY 10017 Tel: (212) 655-3582 Fax: (646) 539-3682 E-mail: morrlaw@aol.com Judge Stuart M. Bernstein presides over the Chapter 11 case. Marine Cole at Crain's New York Business reports that Morningside Heights was forced to file for bankruptcy due to significant federal and state tax arrears. According to the bankruptcy filing, it owes $50,000 to the IRS and $100,000 to the New York State Department of Tax and Finance. The restaurant operates Terrace in the Sky, the French Mediterranean restaurant located atop Butler Hall at 400 W. 119th Street, in New York. Ms. Cole says the restaurant will remain open for business during the reorganization. MOULDI SAYEH: Court Grants Ch. 11 Trustee's Bid for Damages ----------------------------------------------------------- The Chapter 11 Trustee, Anne White, seeks actual and punitive damages and other relief against Mouldi Sayeh for violating the automatic stay by removing estate assets from the premises with which they were imminently to be sold. In his Feb. 23, 2011 Memorandum of Decision, Bankruptcy Judge Frank J. Bailey granted compensatory damages of $51,683.30 but denied punitive damages and other relief. A copy of the Court's order is available at http://is.gd/ZdTyCZfrom Leagle.com. Mouldi Sayeh filed for Chapter 11 bankruptcy (Bankr. D. Mass. Case No. 08-19596) on Dec. 16, 2008. At the time, his assets included the real property located at 254 Newbury Street in Boston, which he operated as a small, high-end hotel. The hotel occupied the building's main and upper floors. In addition, Mr. Sayeh rented out the basement level of the building to a third party to operate a restaurant there that would complement the hotel operation upstairs. On July 28, 2009, the Court ordered the appointment of a chapter 11 trustee in the case. MPG OFFICE: David Tepper Discloses 8.68% Equity Stake ----------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, David A. Tepper and his affiliates disclosed that they beneficially own 4,176,280 shares of common stock of MPG Office Trust, Inc. representing 8.68% of the shares outstanding. As of Nov. 5, 2010, there were 48,122,290 shares of common stock outstanding. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company's balance sheet at Sept. 30, 2010, showed $3.26 billion in total assets, $4.16 billion in total liabilities, and a stockholders' deficit of $897.21 million. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. NAVISTAR INTERNATIONAL: FMR LLC Discloses 14.655% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 10,530,326 shares of common stock of common stock of Navistar International Corporation representing 14.655% of the shares outstanding. As of Nov. 30, 2010, the number of shares outstanding of the Company's common stock was 71,853,614, net of treasury shares. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Oct. 31, 2010, showed $9.73 billion in total assets, $10.65 billion in total liabilities, and a stockholders' deficit of $932.0 million. Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NAVISTAR INTERNATIONAL: Jeffrey Altman Holds 8.09% Equity Stake --------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Jeffrey A. Altman and his affiliates disclosed that they beneficially own 5,809,535 shares of common stock of Navistar International Corporation representing 8.09% of the shares outstanding. As of Nov. 30, 2010, the number of shares outstanding of the Company's common stock was 71,853,614, net of treasury shares. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Oct. 31, 2010, showed $9.73 billion in total assets, $10.65 billion in total liabilities, and a stockholders' deficit of $932.0 million. Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NAVISTAR INTERNATIONAL: Wellington Holds 6.67% Equity Stake ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP disclosed that it beneficially owns 4,809,225 shares of common stock of Navistar International Corporation representing 6.67% of the shares outstanding. As of Nov. 30, 2010, the number of shares outstanding of the Company's common stock was 71,853,614, net of treasury shares. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Oct. 31, 2010, showed $9.73 billion in total assets, $10.65 billion in total liabilities, and a stockholders' deficit of $932.0 million. Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NAVISTAR INTERNATIONAL: Evercore Equity Stake Down to 0% -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Evercore Trust Company, N.A. disclosed that it no longer owns any shares of common stock of Navistar International Corporation. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Oct. 31, 2010, showed $9.73 billion in total assets, $10.65 billion in total liabilities, and a stockholders' deficit of $932.0 million. Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NAVISTAR INTERNATIONAL: Retiree Trusts No Longer Own Shares ----------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Navistar, Inc. Non-Contributory Retirement Plan Trust, Navistar, Inc. Retirement Plan for Salaried Employees Trust, Navistar Inc. Retiree Health Benefit Trust, Navistar, Inc., Navistar International Corporation disclosed that they do not own any shares of common stock of Navistar International Corporation. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at Oct. 31, 2010, showed $9.73 billion in total assets, $10.65 billion in total liabilities, and a stockholders' deficit of $932.0 million. Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NEW ORIENTAL: Amends 8-K, Files Copy of Conversion Agreement ------------------------------------------------------------ New Oriental Energy & Chemical Corp. filed Amendment No. 1 to the Current Report on Form 8-K, which was filed with the Securities and Exchange Commission on Oct. 18, 2010, to include a copy of the referenced Indebtedness Conversion Agreement. On Oct. 18, 2010, the Company entered into an Indebtedness Conversion Agreement with Xingyang Hongchang Channel Gas Engineering Co., Ltd. for the conversion of $3,010,200 of debt into 3,010,200 shares of common stock of the Company. The converted debt consisted of loans used to fund the construction of the Company's methanol production facility. A full-text copy of the Indebtedness Conversion Agreement is available for free at: http://ResearchArchives.com/t/s?7420 About New Oriental New Oriental Energy & Chemical Corp. (NASDAQ: NOEC) -- http://www.neworientalenergy.com/-- was incorporated in the State of Delaware on November 15, 2004. The Company is an emerging coal-based alternative fuels and specialty chemical manufacturer based in Henan Province, in the Peoples' Republic of China. The Company's core products are urea and other coal-based chemicals primarily utilized as fertilizers. All of the Company's sales are made through a network of distribution partners in the Peoples' Republic of China. The Company's balance sheet at Sept. 30, 2010, showed $76.09 million in total assets, $74.32 million in total liabilities, and stockholders' equity of $1.76 million. As reported in the Troubled Company Reporter on July 2, 2010, Weinberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company incurred a net loss of $12.8 million and has negative cash flows from operations of $7.5 million for the year ended March 31, 2010, and has a working capital deficit of $44.1 million at March 31, 2010. NEW ORIENTAL: Posts $2.5 Million Net Loss in Dec. 31 Quarter ------------------------------------------------------------ New Oriental Energy & Chemical Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $2.5 million on $943,757 of revenue for the three months ended Dec. 31, 2010, compared with a net loss of $1.6 million on|$8.8 million of revenue for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $54.3 million in total assets, $51.4 million in total liabilities, and stockholders' equity of $2.9 million. As reported in the Troubled Company Reporter on July 2, 2010, Weinberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about New Oriental Energy and Chemical's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company incurred a net loss of $12,800,854 and has negative cash flows from operations of $7,511,738 for the year ended March 31, 2010, and has a working capital deficit of $44,151,502 at March 31, 2010. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7428 About New Oriental New Oriental Energy & Chemical Corp. (NASDAQ: NOEC) -- http://www.neworientalenergy.com/-- was incorporated in the State of Delaware on November 15, 2004. The Company is an emerging coal-based alternative fuels and specialty chemical manufacturer based in Henan Province, in the Peoples' Republic of China. The Company's core products are urea and other coal-based chemicals primarily utilized as fertilizers. All of the Company's sales are made through a network of distribution partners in the Peoples' Republic of China. NEW ENTERPRISE: S&P Puts 'B+' Rating on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services said that it placed its ratings, including its 'B+' corporate credit rating, on New Enterprise Stone & Lime Inc. on CreditWatch with negative implications. The CreditWatch with negative implications listing means the rating could be affirmed or lowered following the completion of S&P's review. "The CreditWatch listing reflects S&P's view that increased energy costs and poor weather conditions likely had an adverse impact on fiscal fourth quarter operating results ended February 2011, which is likely to result in near-term credit metrics at levels S&P would consider to be weak," said Standard & Poor's credit analyst Thomas Nadramia. In addition, S&P expects the weaker-than- expected operating results will likely result in cushion relative to financial maintenance covenants governing the company's bank credit facility to be reduced. While the fiscal fourth quarter is seasonally the weakest quarter for the company given the reduction in construction activity during the winter months, in its assessment S&P believes results in current quarter may have been affected more than usual given difficult weather conditions and rising energy prices. In addition, S&P believes infrastructure and highway spending will be relatively flat and private non-residential construction commercial construction to decline by about 6% in 2011 before stabilizing toward the end of the year. As a result, S&P believes NESL's operating earnings and EBITDA, which is largely tied to the Pennsylvania and New York markets, may be weaker than S&P's previous expectations during 2011, and is likely to result in reduced cushion under its bank covenants and in credit measures that may no longer be in-line with what S&P would expect for current rating. Standard & Poor's notes that NESL maintains what S&P considers to be adequate liquidity at this time, based on cash balances and availability (as of Nov. 30, 2011) under its $135 million asset-based revolving credit facility due Jan. 11, 2013. In resolving the CreditWatch listing, Standard & Poor's expects to meet with NESL's management to review its near-term operating and financial strategies given the still challenging market environment. NEXTMART INC: Posts $103,300 Net Loss in Dec. 31 Quarter -------------------------------------------------------- NextMart, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $103,356 on $0 revenue for the three months ended Dec. 31, 2010, compared with a net loss of $82,360 on $0 revenue for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $1.38 million in total assets, $3.04 million in total liabilities, and a stockholders' deficit of $1.66 million. As reported in the Troubled Company Reporter on Jan. 19, 2011. Bernstein & Pinchuk LLP, in New York, expressed substantial doubt about NextMart, Inc.'s ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has incurred significant losses from operations for the two years ended Sept. 30, 2010, and has a working capital deficiency. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7424 Beijing, PRC-based NextMart, Inc., was originally incorporated under the laws of Minnesota in 1972 and was previously known as SE Global Equity. In May 2007, the Company reincorporated into the State of Delaware and changed its name to NextMart, Inc. The Company plans to leverage the art event and art media advertising and marketing channels acquired from Beijing Chinese Art Exposition's Media Co., Ltd. ("CIGE"), a leading Chinese art services, events and media company, to offer unique art related marketing and advertising services targeting China's wealthy consumers. NORTH AMERICAN PETROLEUM: Well Operators Had No Valid Contract -------------------------------------------------------------- WestLaw reports that no meeting of the minds occurred prepetition between Chapter 11 debtors, which drilled and equipped oil and gas wells, and the companies that thereafter assumed the wells' operations with respect to the terms and conditions of their integrated contract consisting of a joint operating agreement, farmout agreement, and capital recovery agreement. Therefore, the parties did not have a contractual relationship, regardless of whether Delaware, Colorado, or Oklahoma law governed. Consequently, in an adversary proceeding brought by the debtors, and in connection with the well operators' request for an administrative expense claim, the bankruptcy court had to fashion an equitable remedy since, despite the absence of a formal contract, the parties had engaged in joint development and production efforts and continued to operate that business. Accordingly, the court determined that the debtors owned all of the drilling infrastructure, the operators owned all of the saltwater disposal (SWD) infrastructure, the debtors were responsible for both parties' pro rata share of the drilling costs, the operators were responsible for the costs associated with saltwater disposal and the SWD infrastructure, the parties were each responsible for their pro rata share of the well operating expenses, and the debtors did not have to pay, and could recover as estate property any past payments of, capital recovery charges associated with improvements to and new SWD infrastructure. In re North American Petroleum Corp. USA, --- B.R. ----, 2011 WL 590434 (Bankr. D. Del.) (Sontchi, J.). A copy of the Honorable Christopher S. Sontchi's Findings of Fact and Conclusions of Law dated Feb. 18, 2011, entered in Compass Bank, et al. v. North American Petroleum Corporation USA, et al., Adv. Pro. No. 10-51624 (Bankr. D. Del.), and North American Petroleum Corporation USA v. Equal-Energy U.S. Inc., et al., Adv. Pro. No. 10-51675 (Bankr. D. Del.), is available at http://is.gd/VR8PKYat no charge. About North American Petroleum Denver, Colorado-based North American Petroleum Corp. USA is a natural gas driller. North American Petroleum and Prize Petroleum are subsidiaries of Petroflow Energy Ltd. North American Petroleum sought Chapter 11 protection on May 25, 2010 (Bankr. D. Del. Case No. 10-11707). In its schedules, North American Petroleum disclosed $140,678,983 in total assets and $125,595,183 in total liabilities as of the Petition Date. The Debtor's affiliate, Prize Petroleum LLC, filed a separate Chapter 11 petition on May 25, 2010 (Case No. 10-11708). Prize Petroleum scheduled $121,945,092 in liabilities. These cases are being jointly administered for procedural purposes, under the case docket for North American Petroleum Corporation USA, Case No. 10-11707. On August 20, 2010, Petroflow Energy Ltd., the parent company of North American Petroleum Corporation USA and Prize Petroleum, LLC, filed a petition in the U.S. Bankruptcy Court for the District of Delaware seeking relief under Chapter 11 of the Bankruptcy Code (Case No. 10-12608). On September 10, 2010, the Bankruptcy Court granted permission for Petroflow's Chapter 11 case to be jointly administered with those of its two Chapter 11 debtor-affiliates. On September 17, 2010, Petroflow received recognition of the U.S. Chapter 11 proceedings from the Alberta Court of Queen's Bench under the Companies' Creditors Arrangement Act in Canada. In its petition, Petroflow disclosed assets and debts of between $100 million and $500 million each. David R. Seligman, Esq., Ryan Blaine Bennett, Esq., and Paul Wierbicki, Esq., at Kirkland & Ellis LLP, in Chicago, serve as lead bankruptcy counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP in Wilmington, Del., and Morton R. Branzburg, Esq., at Klehr Harrison Harvey Branzburg LLP, in Philadephia, Pa., serve as the Debtors' co-counsel. Kinetic Advisors LLC is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC, is the Debtors' notice, claims and balloting agent. OCWEN FINANCIAL: Fitch Affirms Issuer Default Rating at 'B+' ------------------------------------------------------------ Fitch Ratings has affirmed the long-term Issuer Default Rating and short-term IDR of Ocwen Financial Corp. at 'B+' and 'B', respectively. The Rating Outlook is Stable. A full list of ratings follows this release. This action follows the company's recent announcement that it is pursuing a corporate reorganization with the planned sale of assets to a newly formed company called Home Loan Servicing Solutions, Ltd. Under the terms of the proposed transaction, HLSS would acquire a portion of Ocwen's mortgage servicing rights and assume its related match funded liabilities. HLSS will then engage Ocwen to subservice the MSRs under a contractual agreement. The transaction, which is scheduled to be completed within the next several months, is contingent upon HLSS raising sufficient funds in an initial public offering. Proceeds from the sale of Ocwen's MSRs are expected primarily to be used to pay down outstanding debt, which is expected to significantly reduce the company's leverage and yield greater earnings consistency over time, given the absence of MSR valuation adjustments and a decline in interest costs. However, a significant portion of the company's revenues going forward are likely to come from subservicing revenue received from HLSS. Additionally, in Fitch's view, any positive impact from Ocwen's de-leveraging could be constrained due to the shifting of balance sheet leverage from Ocwen to a close affiliate, HLSS, on which a significant portion of its future revenue will be dependent. The Stable Rating Outlook continues to be supported by Ocwen's ability to generate a reliable earnings stream and stable operating cash flows consistent with the rating level. As a low cost servicer for subprime and high risk assets, Fitch believes that while Ocwen's expertise will remain in demand for the near future, the company's performance may come under pressure in the longer term as the subprime share of the mortgage market shrinks in line with a broader economic recovery. Still, negative rating action could develop should Ocwen's revenues be hurt by aggressive management of HLSS's balance sheet or should heightened scrutiny of the mortgage market by regulators lead to unexpected costs being imposed on mortgage servicers. Conversely, positive rating momentum could only emerge over time once Fitch has gained comfort that Ocwen, post the restructuring, is able to consistently generate a predictable operating cash flow stream over the foreseeable future. Ocwen Financial Corporation, through its subsidiaries, is a provider of residential and commercial mortgage loan servicing, special servicing and asset management services. Ocwen is headquartered in Atlanta, Georgia, with offices in the West Palm Beach, Florida, the District of Columbia, and global operations in India and Uruguay. Ocwen is a Florida corporation organized in February 1988. As of Dec. 31, 2010, the company had $2.9 billion in assets. Fitch affirms these ratings with a Stable Outlook: Ocwen Financial Corp. -- Long term IDR at 'B+'; -- Short-term IDR at 'B'; -- Senior Secured at 'BB-/RR3'. ONTARIO KUSHWOOD: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Ontario Kushwood LLC 2560 E. Philadelphia Street Ontario, CA 91761 Bankruptcy Case No.: 11-16454 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Central District of California (Riverside) Judge: Deborah J. Saltzman Debtor's Counsel: Jerry LaCues, Esq. THE LA CUES LAW GROUP 3110 Chino Avenue, Suite 230 Chino Hills, CA 91709 Tel: (909) 627-3535 E-mail: jerry@lacueslaw.com Scheduled Assets: $5,000,000 Scheduled Debts: $3,217,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/cacb11-16454.pdf The petition was signed by Daniel Kushinikov, managing member. ORIENT EXPRESSIONS: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Orient Expressions Company 4376 Rutledge Drive Palm Harbor, FL 34685 Bankruptcy Case No.: 11-03668 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Scheduled Assets: $1,873,304 Scheduled Debts: $2,908,978 A list of the Company's 13 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/flmb11-03668.pdf The petition was signed by John A. Juranek, president. PACIFIC COAST: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Pacific Coast Investment Management, Inc. dba Coastal Circle K/76 fdba A & I Business Solutions 2646 E. Alessandro # A Riverside, CA 92508 Bankruptcy Case No.: 11-16241 Chapter 11 Petition Date: February 26, 2011 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Catherine E. Bauer Debtor's Counsel: Lazaro E Fernandez, Esq. LAW OFFICE OF LAZARO E. FERNANDEZ, INC. 3600 Lime St., Suite 614 Riverside, CA 92501 Tel: (951) 684-4474 Fax: (951) 684-4625 E-mail: lef17@pacbell.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-16241.pdf The petition was signed by Anthony Seals, president/CEO. PACIFIC SAFETY: Forbearance Period Extended Until March 31 ---------------------------------------------------------- Pacific Safety Products Inc. disclosed that it is in discussions with its principal Canadian Bank regarding normalization of its credit facility, and the Bank has agreed to extend a forbearance period until March 31, 2011, to complete the process. PSP signed the Forbearance Agreement with the Bank on August 17, 2010. The Bank initially agreed pursuant to the Forbearance Agreement not to take steps to realize under the facility prior to Feb. 28, 2011, unless a terminating event as defined in the Forbearance Agreement occurs. During the initial Forbearance Period, the Company has been subject to, and in compliance with, amended covenants. PSP also reported financial results for the three month period ended Dec. 31, 2010. Sales for the second quarter of fiscal 2011 were C$5.1 million, an increase of 17.5% from the first quarter of fiscal 2011 but 32% lower than the second quarter of the prior year. Operating expenses for the second quarter of $1.4 million decreased C$200,000 or 15.2% from C$1.6 million in the first quarter of fiscal 2011, and decreased C$400,000 or 22.8% from the second quarter of the prior year. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization was breakeven for the second quarter compared to a loss of C$400,000 for the first quarter of fiscal 2011 and income of C$200,000 in the second quarter of the prior year. On Dec. 31, 2010 pursuant to a court approved plan of arrangement, PSP acquired all of the outstanding shares of Zuni Holdings Inc. in exchange for PSP common shares at a one for one exchange ratio. Zuni was amalgamated with a subsidiary of PSP and continued as Zuni Holdings Inc. The transaction was accounted for as the acquisition of the assets and liabilities of Zuni in exchange for PSP common shares valued at the date of completion of the acquisition. About PSP Pacific Safety Products Inc. (TSX VENTURE: PSP) is in the production, distribution and sale of safety products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company also provides specialized law enforcement and safety products through APS Distributors, a division of PSP that services law enforcement and public safety agencies across the country. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products to U.S. based law enforcement and private security firms. The Company also produces tactical clothing. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange. PAMELA CARVEL: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Pamela Carvel filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-14548) on Feb. 23, 2011. Paul Brinkmann at the South Florida Business Journal reports that Pamela Carvel is the niece of deceased ice cream tycoon Tom Carvel. Ms. Carvel declared assets of $32 million and debt of $614,000. All her assets are listed as litigation claims. Chapter 11 filings by individuals are included in the "* Recent Small-Dollar & Individual Chapter 11 Filings" section of the Thursday editions of the Troubled Company Reporter. PENN TREATY: Robert Alper Discloses 5.1% Equity Stake ----------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Robert H. Alper and his affiliates disclosed that they beneficially own 1,178,291 shares of common stock of Penn Treaty American Corporation representing 5.1% of the shares outstanding. As of March 28, 2008, 23,290,712 shares of the Company's Common Stock were issued and outstanding. About Penn Treaty American Penn Treaty American Corporation -- https://www.penntreaty.com/ -- through its wholly owned direct and indirect subsidiaries, Penn Treaty Network America Insurance Company, American Network Insurance Company, American Independent Network Insurance Company of New York, Network Insurance Senior Health Division and Senior Financial Consultants Company, is engaged in the underwriting, marketing and sale of individual and group accident and health insurance products, principally covering long term nursing home and home health care. On October 2, 2009, the Insurance Commissioner of the Commonwealth of Pennsylvania filed in the Commonwealth Court of Pennsylvania Petitions for Liquidation for PTNA and American Network Insurance Company. PTNA is a direct insurance company subsidiary of Penn Treaty American Corporation, and ANIC is a subsidiary of PTNA. PERONE PROPERTIES: Case Summary & 2 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Perone Properties, LLC fdba Comfort Inn dba Rodeway Inn 11810 U.S. Highway 19 Port Richey, FL 34668 Bankruptcy Case No.: 11-03593 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Scheduled Assets: $1,673,540 Scheduled Debts: $3,394,298 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/flmb11-03593.pdf The petition was signed by Isidoro Perone, managing member. PERRY ELLIS: Moody's Assigns 'B2' Proposed Senior Bonds ------------------------------------------------------- Moody's Investors Service assigned a (P)B2 to the proposed senior subordinated bonds of Perry Ellis International, Inc., and placed its B2 corporate family and probability of default ratings on review for possible upgrade. The actions follow Perry's announced plan to issue common equity in addition to the bonds. Expectations for an improved credit profile pro forma for the transactions prompted the review for upgrade. Furthermore, Moody's projects continued strong performance will result in further strengthening of credit metrics over time. Ratings Rationale The anticipated repayment of revolver borrowings with equity proceeds would reduce leverage and enhance external liquidity by increasing revolver availability, noting that Perry utilized a significant amount of its revolver capacity to fund the acquisition of Rafaella Apparel Group, Inc. Furthermore, the bond issuance would extend the maturity profile to March 2019 for the proposed bonds compared to September 2013 for the existing bonds. Moody's also affirmed the B3 rating on Perry's existing senior subordinated bonds and would likely withdraw this rating assuming the transactions occur as proposed and the company repays substantially all of the existing senior subordinated bonds. A summary of the actions follows. LGD assessments are subject to change. Perry Ellis International, Inc. -- Probability of Default Rating, Placed on Review for Possible Upgrade, currently B2 -- Corporate Family Rating, Placed on Review for Possible Upgrade, currently B2 -- Senior Subordinated Bonds due 2019, Assigned (P)B2, LGD5, 75% -- Senior Subordinated Bonds due September 2013, Affirmed B3, LGD5, 77% -- Multiple Seniority Shelf, Assigned (P)B2 -- Outlook, Changed To Rating Under Review From Positive The review for upgrade indicates the potential for an upgrade, likely not more than one notch, if Perry raises at least $50 million of net proceeds from the equity offering and applies these proceeds to debt reduction. Should Perry achieve a B1 corporate family rating, Moody's would anticipate a stable outlook. That stable outlook would assume Perry will refinance its revolver (due February 2012) over the near term and will successfully integrate the Rafaella business. Moody's expect sales could grow faster than EBITDA given the potential for cost increases to pressure margins beginning in late calendar 2011, but the stable outlook would incorporate expectations for some EBITDA growth. If Perry does not consummate the proposed transactions, Moody's would likely confirm the B2 corporate family rating and revert to a positive outlook. Perry Ellis International designs, distributes and licenses apparel and accessories for men and women. The company, through its wholly owned subsidiaries, owns or licenses a portfolio of brands that includes Perry Ellis(R), Jantzen(TM), Laundry by Shelli Segal(R), C&C California(R), Original Penguin(R) by Munsingwear(R), Callaway(R), Cubavera(R), Savane(R), Farah(R), Gotcha(TM), and Nike(R) Swim. Pro forma for the acquisition of Rafaella, Perry's annual revenue is approximately $900 million. PROVISION HOLDING: Posts $802,300 Net Loss in Dec. 31 Quarter ------------------------------------------------------------- Provision Holding, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $802,289 on $186,788 of revenues for the three months ended Dec. 31, 2010, compared with a net loss of $1.0 million on $80,995 of revenue for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed $1.3 million in total assets, $5.8 million in total liabilities, and a stockholders' deficit of $4.5 million. As reported in the Troubled Company Reporter on Nov. 23, 2010, Farber Hass Hurley LLP, in Camarillo, California, expressed substantial doubt about Provision Holding, Inc.'s ability to continue as a going concern, following the Company's fiscal year ended June 30, 2010. The independent auditors noted that the Company has incurred significant losses in 2010 and 2009 and has negative working capital of $4.3 million. A full-text copy of the Form 10-Q is available for free at http://researcharchives.com/t/s?742b About Provision Holding Based in Chatsworth, Calif., Provision Holding, Inc., is focused on the development and distribution of its patented three- dimensional, holographic interactive displays focused at grabbing and holding consumer attention particularly and initially in the advertising and product merchandising markets. QWEST COMMUNICATIONS: FMR LLC Discloses 10.258% Equity Stake ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 178,768,805 shares of common stock of Qwest Communications International Incorporated representing 10.258% of the shares outstanding. On Feb. 8, 2011, 1,765,304,139 shares of common stock were outstanding. About Qwest Based in Denver, Colorado, Qwest Communications (NYSE: Q) -- http://www.qwest.com/-- offers residential customers a new generation of fiber-optic Internet service, high-speed Internet solutions, as well as digital home phone, wireless service available through Verizon Wireless and DIRECTV services. Qwest is also the choice of 95% of Fortune 500 companies, offering a full suite of network, data and voice services for small businesses, large businesses, government agencies and wholesale customers. Additionally, Qwest participates in Networx, the largest communications services contract in the world, and is recognized as a leader in the network services market by leading technology industry analyst firms. Qwest carries a 'Ba1' corporate family and probability of default ratings from Moody's and has 'BB' issuer credit ratings from Standard & Poor's. "Our high debt levels pose risks to our viability and may make us more vulnerable to adverse economic and competitive conditions, as well as other adverse developments," the Company said in its Form 10-K for the year ended Dec. 31, 2009. At Dec. 31, the Company's consolidated debt was approximately $14.2 billion. Approximately $5.8 billion of its debt obligations come due over the next three years. This amount includes $1.265 billion of our 3.50% Convertible Senior Notes due 2025, which it may elect to redeem at any time on or after November 20, 2010 and holders may require the Company to repurchase for cash on November 15, 2010. Fitch Ratings is maintaining the Rating Watch Positive on the 'BB' Issuer Default Rating assigned to Qwest Communications International, Inc. and its subsidiaries. Concurrently, Fitch has affirmed the 'BBB-' issue rating assigned to Qwest's $1.035 billion senior secured credit facility and the senior unsecured debt issued by Qwest Corporation. Approximately $13.1 billion of debt outstanding as of June 30, 2010, including $7.9 billion of debt outstanding at QC, is affected by Fitch's action. REGAL ENTERTAINMENT: Anschutz Company Holds 47.8% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Anschutz Company and Philip F. Anschutz disclosed that they beneficially own 73,708,639 shares of Class A common stock of Regal Entertainment Group representing 47.8% of the shares outstanding. As of Feb. 22, 2011, there were 130,849,073 shares of the Company outstanding. About Regal Entertainment Group Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- is the largest motion picture exhibitor in the world. Regal's theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,739 screens in 545 locations in 38 states and the District of Columbia. Regal operates theatres in 43 of the top 50 U.S. designated market areas. The Company's balance sheet at Sept. 30, 2010, showed $2.67 billion in total assets, $2.94 billion in total liabilities, and a stockholders' deficit of $267.3 million. * * * Regal Entertainment carries 'B1' corporate family and probability of default ratings from Moody's Investors Service, 'B+' issuer default rating from Fitch Ratings, and 'B+' corporate credit rating from Standard & Poor's Ratings Services. Moody's said in February 2011 that Regal's B1 CFR reflects the trade-offs between the relative stability and the small magnitude of the company's cash flow stream. With no change expected in either parameter, and with very good liquidity, the rating outlook is stable. S&P said in February that the rating reflects S&P's view that the company's aggressive financial policies will likely cause leverage to remain elevated over the intermediate term. Furthermore, Regal's revenue and EBITDA trends are highly dependent on the performance of the U.S. box office. Other rating factors include the company's participation in the mature and highly competitive U.S. movie exhibition industry, exposure to the fluctuating popularity of Hollywood films, and the long-term risk of increased competition from the proliferation of entertainment alternatives. REGAL ENTERTAINMENT: Holds 28.4% Equity Stake in CineMedia Inc. --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Regal Entertainment Group, Anschutz Company, and Philip F. Anschutz disclosed that they beneficially own 21,452,792 shares of common stock of common stock of National CineMedia, Inc. representing 28.4% of the shares outstanding. As of Feb. 22, 2011, 54,962,822 shares of the Company's common stock (including unvested restricted shares), par value of $0.01 per share, were outstanding. About Regal Entertainment Group Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- is the largest motion picture exhibitor in the world. Regal's theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,739 screens in 545 locations in 38 states and the District of Columbia. Regal operates theatres in 43 of the top 50 U.S. designated market areas. The Company's balance sheet at Sept. 30, 2010, showed $2.67 billion in total assets, $2.94 billion in total liabilities, and a stockholders' deficit of $267.3 million. * * * Regal Entertainment carries 'B1' corporate family and probability of default ratings from Moody's Investors Service, 'B+' issuer default rating from Fitch Ratings, and 'B+' corporate credit rating from Standard & Poor's Ratings Services. Moody's said in February 2011 that Regal's B1 CFR reflects the trade-offs between the relative stability and the small magnitude of the company's cash flow stream. With no change expected in either parameter, and with very good liquidity, the rating outlook is stable. S&P said in February that the rating reflects S&P's view that the company's aggressive financial policies will likely cause leverage to remain elevated over the intermediate term. Furthermore, Regal's revenue and EBITDA trends are highly dependent on the performance of the U.S. box office. Other rating factors include the company's participation in the mature and highly competitive U.S. movie exhibition industry, exposure to the fluctuating popularity of Hollywood films, and the long-term risk of increased competition from the proliferation of entertainment alternatives. REGIONS FINANCIAL: Moody's Confirms 'Ba3' Long-Term Ratings ----------------------------------------------------------- Moody's Investors Service confirmed the long-term ratings of Regions Financial Corporation (senior Ba3) and its subsidiaries, including its lead bank, Regions Bank (stand-alone bank financial strength D+, long-term deposits Ba1). This concludes Moody's review that commenced on November 16, 2010. The rating outlook on Regions and its subsidiaries is negative. Ratings Rationale The confirmation of Regions' ratings results from the rating agency's view that, although Regions' asset quality performance is likely to remain challenged for the foreseeable future, a sharp deterioration is unlikely in the expected economic environment. Moody's had been concerned that the significant, and unexpected, risk management executive departures in the fourth quarter signaled deeper risk management problems at the company. The firm has since reported its fourth quarter results and filed its 10K, and these contained no further adverse developments. Loan loss provisions declined, but nonperforming assets remain at elevated levels and the migration of new NPAs continues. Moody's expects Regions will remain challenged in its quest to return to sustainable profitability. In the rating agency's opinion, it is likely that provisioning will continue at historically heightened levels, stemming from its credit concentrations in commercial real estate and home equity lending. Moody's further recognizes that the bank's profitability will also be challenged by revenue pressures from both regulatory headwinds and the relatively low yields on its existing loan portfolio. Looking forward, the firm's ability to generate revenue growth will be hampered by its need to increase lending margins while growing the loan portfolio in a period of heightened competitive pressure and weak loan demand. Moody's noted that the bank's capital levels are sufficient to absorb credit costs under its expected economic scenario. However, the negative outlook reflects the significant transition risk Regions is exposed to if a more adverse economic climate develops given the firm's concentrations in CRE (2.0 times tangible common equity) and home equity (1.7 times TCE). Regions' CRE and home equity include exposure in its core Southeast footprint where markets have been adversely affected by declines in real estate value. The rating agency added that Regions has good market presence in its core states, which has provided a healthy core deposit base that supports Regions healthy liquidity position. The rating agency also notes the current robustness of liquidity at the parent. These strengths help to support Regions' current ratings. These actions had no impact on the FDIC-guaranteed debt issued by Regions Bank, which remains at Aaa with a stable outlook. Moody's last rating action on Regions was on November 16, 2010, when the holding company's senior rating was lowered to Ba3 from Ba1 and the bank's long-term deposits were lowered to Ba1 from Baa3, and the ratings were left under review for possible downgrade. Regions Financial Corporation headquartered in Birmingham, Alabama, reported total assets of $132 billion at Dec. 31, 2010. Issuer: AmSouth Bancorporation, Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Subordinate Regular Bond/Debenture, Confirmed at B1 Issuer: AmSouth Bank, Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Subordinate Regular Bond/Debenture, Confirmed at Ba3 Issuer: Regions Asset Management Company, Inc. , Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Preferred Stock Preferred Stock, Confirmed at B1 Issuer: Regions Bank Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Bank Financial Strength Rating, Confirmed at D+ -- Issuer Rating, Confirmed at Ba2 -- OSO Senior Unsecured OSO Rating, Confirmed at Ba2 -- Multiple Seniority Bank Note Program, Confirmed at (P)Ba3, (P)Ba2 -- Multiple Seniority Bank Note Program, Confirmed at (P)Ba3, (P)Ba2 -- Subordinate Regular Bond/Debenture, Confirmed at Ba3 -- Senior Unsecured Deposit Rating, Confirmed at Ba1 Issuer: Regions Financial Corporation Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Issuer Rating, Confirmed at Ba3 -- Multiple Seniority Shelf, Confirmed at (P)B3, (P)Ba3 -- Multiple Seniority Shelf, Confirmed at (P)B3, (P)Ba3 -- Multiple Seniority Shelf, Confirmed at (P)B3, (P)Ba3 -- Multiple Seniority Shelf, Confirmed at (P)B3, (P)Ba3 -- Multiple Seniority Shelf, Confirmed at (P)B3, (P)Ba3 -- Subordinate Regular Bond/Debenture, Confirmed at B1 -- Subordinate Shelf, Confirmed at (P)B1 -- Senior Unsecured Regular Bond/Debenture, Confirmed at Ba3 Issuer: Regions Financing Trust II Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Preferred Stock Preferred Stock, Confirmed at B2 -- Preferred Stock Shelf, Confirmed at (P)B2 Issuer: Regions Financing Trust III Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Preferred Stock Preferred Stock, Confirmed at B2 Issuer: Union Planters Bank, National Association Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Subordinate Regular Bond/Debenture, Confirmed at Ba3 Issuer: Union Planters Corporation Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Subordinate Regular Bond/Debenture, Confirmed at B1 Issuer: Union Planters Preferred Funding Corp. Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Confirmations: -- Preferred Stock Preferred Stock, Confirmed at B2 RIVER ISLAND: Files for Chapter 11 in Fort Lauderdale ----------------------------------------------------- Fort Lauderdale, Florida-based River Island Farms, Inc., filed a bare-bones Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-15410) in its home-town. The Debtor estimated assets and debts of $10 million to $50 million as of the bankruptcy filing. Deloitte Tax LLP, owed $13,250 for services, sit atop the list of 20 largest unsecured creditors. RIVER ISLAND: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: River Island Farms, Inc. 3531 Griffin Road Fort Lauderdale, FL 33312 Bankruptcy Case No.: 11-15410 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Martin L. Sandler, Esq. SANDLER & SANDLER BY M. L. SANDLER, P.A. P.O. Box 402727 Miami Beach, FL 33140 Tel: (305) 379-6655 Fax: (786) 472-7077 E-mail: martin@sandler-sandler.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Peter Klein, CFO. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deloitte Tax LLP Services $13,250 P.O. Box 2079 Carol Stream, IL 60132-2079 Everdock, Inc. -- $10,546 8528 SW Kansas Street Stuart, FL 34997 Premium Finance Specialists Insurance $5,469 P.O. Box 100391 Pasadena, CA 91189-0391 Private Client Group Insurance $4,869 M J Stone & Assoc Services $3,414 Krause & Crane, Inc Services $2,032 City of Lauderdale Municipal Utilities $1,681 Services Kleen Cut Landscaping Services $1,600 Suncoast Lawn Service Services $1,200 FPL Utilities $1,076 Harford Insurance Co Insurance $702 Pinch A. Penny Pool Service Services $500 Harbor Beach Property Owners, Inc. Assessment $325 Patrick Exterminating Services $302 Pool Perfection Services $300 Seven Isles HOA HOA Dues $250 Sam Jolley's Plumbing Services $205 Bad Dog Bugs, LLC Trade Debt $160 Security Networks Services $149 City of Stuart Utilities $110 ROBERT PRINTZ: Bankruptcy Judge Denies Cash Collateral Plan ----------------------------------------------------------- Ryan Denham at Pantagraph.com in Bloomington, Illinois, reports that U.S. Bankruptcy Judge Mary P. Gorman denied Robert and Julie Printz' request to spend $1.7 million in cash collateral from CNH Capital America LLC -- mostly 2010 crop proceeds and unsold crops -- to jumpstart the couple's 2011 operation. Despite their plan to scale down operations to 4,750 acres and the expectation of high commodity prices, the judge said slim financial margins of error could leave CNH without adequate protection, according to the report. "The fact is that some farming expenses simply cannot be precisely predicted," Pantagraph.com quotes Judge Gorman as saying. CNH objected to the cash-collateral plan, questioning the Printzes' revenue and expense projections. The lender, which is owed almost $9 million from the Printzes, said the couple had a history of "underperforming and mismanagement." Robert Printz filed for Chapter 11 bankruptcy protection on Dec. 31, 2010 (Bankr. C.D. Ill. Case No. 10-73865) ROOTER MASTER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Rooter Master, Inc. 12004 Vose Street North Hollywood, CA 91605 Bankruptcy Case No.: 11-12425 Chapter 11 Petition Date: February 27, 2011 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Ovsanna Takvoryan, Esq. TAKVORYAN LAW GROUP, a Professional Corp. 450 N Brand Bl Suite 600 Glendale, CA 91203 Tel: (818) 291-6272 Fax: (818) 484-2126 E-mail: ovsanna@takvoryanlawgroup.com Estimated Assets: $100,001 to $500,000 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/cacb11-12425.pdf The petition was signed by Abraham Akhoian, president. RUGGED BEAR: Committee Seeks to Retain Jager Smith as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of The Rugged Bear Company, f/d/b/a RB Acquisition Corp., seeks an order from the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, for authority to retain Jager Smith P.C. as its counsel, effective as of Feb. 7, 2011. Jager Smith's services as the Creditors' Committee's counsel includes: * Legal advice with respect to (i) the Creditors' Committee's responsibilities, powers, and duties; (ii) any proposed plan of reorganization or liquidation; (iii) the prosecution of claims against third parties, and (iv) any other matters relevant to the bankruptcy case; * Assistance in the Creditors' Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor; * Review of, and representation of the Creditors' Committee with respect to, motions pending before the Court or filed with the Court after February 14, 2011; * Preparation on behalf of the Creditors' Committee of necessary applications, motions, complaints, answers, responses, orders, reports, and other legal papers; and * Performance of all other legal services for the Creditors' Committee that may be necessary and proper in this bankruptcy case or under Section 1103 of the Bankruptcy Code. Jager Smith will undertake the representation at billing rates that will be the lesser of their standard hourly rates of a blended hourly rate of $410. The hourly rates are subject to periodic adjustment to reflect economic and other conditions, and to reflect the professionals' increased experience and expertise. The professionals presently designated to represent the Creditors' Committee and their current hourly rates are: Bruce F. Smith, Partner $550 Steven C. Reingold, Partner $425 Michael J. Fencer, Partner $400 Brendan C. Recupero, Associate $375 Certain attorneys $275 - $500 Certain paraprofessionals $125 - $175 Based on the affidavit of Steven C. Reingold, Jager Smith and its partners and associates do not hold or represent any interest adverse to the interests represented by the Creditors' Committee. Jager Smith, and each of its members and associates, is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About The Rugged Bear Headquartered in Norwood, Massachusetts, The Rugged Bear Company is a chain of retail children's clothing stores New England, New York and New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 11-10577) on Jan. 25, 2011. Charles A. Dale, III, Esq., at K&L GATES LLP, serves as the Debtor's bankruptcy counsel. Consensus Advisers, LLC, is the Debtor's financial advisor. The Debtor estimated its assets and debts at $10 million to $50 million. RUGGED BEAR: Court Approves Retention of Consensus Advisory ----------------------------------------------------------- The Honorable Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, granted the request of The Rugged Bear Company, f/d/b/a RB Acquisition Corp., to employ Consensus Advisory Services LLC, nunc pro tunc to the Petition Date. The Debtor is authorized to retain Michael A. O'Hara as its Chief Restructuring Officer and Consensus Advisory subject to certain terms, including: * Mr. O'Hara and Consensus Advisory will not be employed by the Debtor to act in any other capacity in connection with the bankruptcy case. Consensus Advisory will assist Mr. O'Hara, in his capacity as Chief Restructuring Officer, to perform financial advisory and investment banking tasks subject to an $85,000 monthly cap for their fees and expenses. Any fees and expenses that exceed the monthly cap in any given month may be applied to Mr. O'Hara and Consensus Advisory's fees and expenses for any subsequent month if that month does not exceed the monthly cap. * In the event the Debtor seeks to have Mr. O'Hara or any other Consensus Advisory personnel assume executive officer positions that are different than the positions disclosed in the Motion, or to materially change the terms of the engagement by either (i) modifying the functions of personnel, (ii) adding new personnel, or (iii) altering or expanding the scope of the engagement, a motion to modify the retention will be filed. * Mr. O'Hara and Consensus Advisory will file a report of staffing by Consensus on the engagement for the previous month. The report will include the names and functions filled of the individuals assigned. All staffing will be subject to review by the Court in the event an objection is filed. * Mr. O'Hara and Consensus Advisory will file joint reports of compensation earned and expenses incurred on a monthly basis. All compensation will be subject to review by the Court in the event an objection is filed. * The success fee payable to Consensus Advisory will be approved by the Court at the conclusion of the bankruptcy case on a reasonableness standard, subject to notice and an opportunity to object by the U.S. Trustee and other parties-in-interest, and is not being pre-approved by the February 18, 2011 order approving the Motion. * The Debtor is permitted to indemnify Mr. O'Hara on the same terms as provided to the Debtor's other officers and directors under the corporate bylaws and applicable state law, along with insurance coverage under the Debtor's D&O Policy. * There will be no indemnification of Consensus Advisory or any of its affiliates. * For three years after the conclusion of their engagement, Consensus Advisory nor any of its affiliates will make any investments in the Debtor or the reorganized Debtor. About The Rugged Bear Headquartered in Norwood, Massachusetts, The Rugged Bear Company is a chain of retail children's clothing stores New England, New York and New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 11-10577) on Jan. 25, 2011. Charles A. Dale, III, Esq., at K&L GATES LLP, serves as the Debtor's bankruptcy counsel. Consensus Advisers, LLC, is the Debtor's financial advisor. The Debtor estimated its assets and debts at $10 million to $50 million. RYLAND GROUP: FMR LLC Discloses 15% Equity Stake ------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 6,618,093 shares of common stock of Ryland Group Incorporated representing 15.000% of the shares outstanding. The number of shares of common stock of The Ryland Group, Inc., outstanding on Feb. 15, 2011, was 44,205,340. About Ryland Group Headquartered in Calabasas, California, The Ryland Group, Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol "RYL." The Company's balance sheet at Dec. 31, 2010 showed $1.65 billion in total assets, $1.09 billion in total liabilities, and $561.66 million in total equity. * * * As reported by the Troubled Company Reporter on June 21, 2010, Fitch Ratings has affirmed Ryland Group, Inc.'s ratings -- Issuer Default Rating at 'BB'; and Senior unsecured debt at 'BB'. The Rating Outlook has been revised to Stable from Negative. Ryland Group carries Moody's "Ba3" corporate family rating, "Ba3" probability of default rating, "Ba3" senior unsecured notes rating, and "SGL-2" speculative grade liquidity rating. Ryland Group carries Standard & Poor's Ratings Services' 'BB-' corporate credit and senior unsecured note ratings. RYLAND GROUP: Janus Capital Discloses 6.2% Equity Stake ------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Janus Capital Management LLC disclosed that it beneficially owns 2,722,513 shares of common stock of The Ryland Group, Inc. representing 6.2% of the shares outstanding. The number of shares of common stock of The Ryland Group, Inc., outstanding on Feb. 15, 2011, was 44,205,340. About Ryland Group Headquartered in Calabasas, California, The Ryland Group, Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol "RYL." The Company's balance sheet at Dec. 31, 2010 showed $1.65 billion in total assets, $1.09 billion in total liabilities, and $561.66 million in total equity. * * * As reported by the Troubled Company Reporter on June 21, 2010, Fitch Ratings has affirmed Ryland Group, Inc.'s ratings -- Issuer Default Rating at 'BB'; and Senior unsecured debt at 'BB'. The Rating Outlook has been revised to Stable from Negative. Ryland Group carries Moody's "Ba3" corporate family rating, "Ba3" probability of default rating, "Ba3" senior unsecured notes rating, and "SGL-2" speculative grade liquidity rating. Ryland Group carries Standard & Poor's Ratings Services' 'BB-' corporate credit and senior unsecured note ratings. S & J: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------- Debtor: S & J Property Holdings, LLC 70007 Highway 111 Rancho Mirage, CA 92270 Bankruptcy Case No.: 11-16514 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Central District of California (Riverside) Judge: Catherine E. Bauer Debtor's Counsel: James C. Bastian, Jr., Esq. SHULMAN HODGES & BASTIAN LLP 26632 Towne Centre Drive, #300 Foothill Ranch, CA 92610-2808 Tel: (949) 340-3400 E-mail: jbastian@shbllp.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 nine largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/cacb11-16514.pdf The petition was signed by Jack P. Downes, managing member. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Boardroom Properties, LLC 11-16499 02/28/11 SABRE DEFENCE: Trustee Seeks to Move Forward With Bankruptcy Sale ----------------------------------------------------------------- Dow Jones' Small Cap reports that the trustee running Sabre Defence Industries LLC's bankruptcy case is looking to proceed with a sale in Chapter 11 after convincing the winner of the company's pre-bankruptcy auction to compete again for the assets-- this time with a higher bid. Headquartered in Nashville, Tenn., Sabre Defence Industries LLC is a maker of semi-automatic, fully-automatic and assault rifles. Sabre Defence Industries LLC filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 11-01431) on Feb. 15, 2011. Sabre reported no more than $50,000 each in assets and debts in a bare-bones bankruptcy filing. See http://bankrupt.com/misc/tnmb11-01431.pdf The Nashville Business Journal notes the Company filed its Chapter 11 petition with the U.S. Bankruptcy Court in Nashville, the same district where its biggest customer -- the U.S. government -- sued the company and five of its managers. SES SECURITIES: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: SES Securities, LLC 102 Marsh Harbour Parkway, Suite 104 Kingsland, GA 31548 Bankruptcy Case No.: 11-20240 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Southern District of Georgia (Brunswick) Debtor's Counsel: Jon A. Levis, Esq. MERRILL & STONE, LLC P.O. Box 129 Swainsboro, GA 30401 Tel: (478) 237-7029 Fax: (478) 237-9211 E-mail: bkymail@merrillstonehamilton.com Scheduled Assets: $7,748,766 Scheduled Debts: $6,696,486 A list of the Company's eight largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/gasb11-20240.pdf The petition was signed by Ronald H. Sawyer, managing member. SIGNAL ELECTRIC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Signal Electric, Inc. P.O. Box 6209 Kent, WA 98064 Bankruptcy Case No.: 11-12105 Chapter 11 Petition Date: February 26, 2011 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Marc Barreca Debtor's Counsel: J Todd Tracy, Esq. CROCKER LAW GROUP PLLC 720 Olive Way Suite 1000 Seattle, WA 98101 Tel: (206) 624-9894 E-mail: ttracy@crockerlaw.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/wawb11-12105.pdf The petition was signed by Jerry Kittelson, president. SINOFRESH HEALTHCARE: Inks Consulting Agreement with Gary Zweig --------------------------------------------------------------- SinoFresh Healthcare, Inc. entered into a Consulting Agreement dated Feb. 16, 2011, with Gary Zweig, DBA, Direct to Pharmacy Sales and Marketing, LLC, a New York Limited Liability Company to outline the terms of the Agreement for Mr. Zweig to serve as Director of National sales for SINOFRESH HEALTHCARE, INC. Gary Zweig has over 25 years of experience in the Drug Wholesale Industry. As Director of Quality Care Pharmacies, an Independent Pharmacy Co-operative from 2006 to 2008 he created and implemented a direct mail and in store promotional program which was credited with increasing sales by 30%. He served as Territory Account Manager for Rochester Drug Cooperative, Inc., a regional drug wholesaler located in NYC from 2002 to 2006. Under the terms of the Agreement, Mr. Zweig will provide the Company with independent wholesale marketing advisory services including providing Sales representation and Marketing and advertising services to the Company and its products for one (1) year with annual renewals. He will be entitled to a monthly base compensation of $4,500 during that time. Mr. Zweig will also be entitled to reimbursement for all reasonable business expenses subject to a $1,000 per month ceiling, without Board approval. In addition to the base compensation, Consultant will receive payment equal to 5% of the net invoices received by the Company when paid and cleared on shipments of the Company's products for an initial term of 12 months on new wholesale distributor accounts introduced by the Consultant and a residual of 2.5% on continuing active accounts for period of 48 months, payable quarterly. The Agreement contains a Non-compete clause whereby for the term of the Agreement and one (1) year thereafter, Mr. Zweig will not directly or indirectly participate in any capacity with any business which is competitive with the business of the Company. At the end of a 90 day trial period, the Company will review the performance of the Consultant to determine whether to convert the agreement to an Employment Agreement at such terms as will be in the Company's discretion. A full-text copy of the Consulting Agreement is available at no charge at http://ResearchArchives.com/t/s?7408 About SinoFresh HealthCare Headquartered in Englewood, Florida, SinoFresh HealthCare Inc. (OTC BB: SFSH) -- http://www.sinofresh.com/-- researches, develops, and markets novel therapies to treat inflammatory and infectious diseases, and disorders of the upper respiratory system. Its products include SinoFresh Nasal Mist, a nasal spray and SinoFresh Daily Throat Spray, a throat and mouth spray. At Dec. 31, 2007, the company's balance sheet showed $1,969,852 in total assets and $4,211,710 in total liabilities, resulting in $2,241,858 stockholders' deficit. Moore Stephens Lovelace, P.A., raised substantial doubt on the ability of SinoFresh HealthCare Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. SOMERSET PROPERTIES: Court Conditionally Approves Plan Outline -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina, in an order dated Feb. 18, 2011, conditionally approved the Disclosure Statement explaining Somerset Properties SPE, LLC's Chapter 11 Plan. The Court is yet to set the confirmation hearing date. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for holders of Class 2 allowed secured and priority tax claims will be paid in full on the later date of (i) 90 days after the effective date; or (ii) the date upon which they may ordinarily be paid in full without penalty. The Debtor believes that there will be no amounts owed to Class 2. For the first three years following the effective date, the Debtor will make monthly payments to holders of Class 3 allowed secured claims of CSFB 2001-CP4 Bland Road, LLC, and Class 4 allowed secured claims of CSFB 2001-CP4 Falls of Neuse, LLC, at a secured rate. Thereafter, the allowed secured claim of class 3 will be amortized over 30 years, and the Debtor will make monthly payments according to the amortization schedule. Ten years after the effective date, the remaining unpaid portion of the allowed secured claim will be paid in full. The Plan provides that Class 5 allowed small unsecured claims will be paid 80% of their allowed claim 30 days after the effective date. Under the Plan, the Debtor will pay quarterly installments of $31,250 to be split pro rata among the allowed claims in Class 6 allowed general unsecured claims. Payments will continue until Class 6 claimants have been paid 20% of their claims. The Plan provides that allowed Equity Interest in the Debtor will remain the same. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/SomersetProperties_DS.pdf The Debtor is represented by: William P. Janvier, Esq. Janvier Law Firm, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 About Somerset Properties SPE, LLC Raleigh, North Carolina-based Somerset Properties SPE, LLC, owns six office buildings in Raleigh, North Carolina. The Company filed for Chapter 11 bankruptcy protection on (Bankr. E.D.N.C. Case No. 10-09210). The Debtor proposes to hire E. Hardy Lewis and Blanchard, Miller, Lewis & Isley, P.A. as special counsel. The Company disclosed $36,496,015 in assets and $28,825,521 in liabilities as of the Chapter 11 filing. SONRISA REALTY: Court Confirms Compass Bank's Exit Plan ------------------------------------------------------- Bankruptcy Judge Letitia Z. Paul issued an order confirming Compass Bank's Third Amended Plan of Liquidation for Sonrisa Realty Partners, Ltd. Compass Bank filed the Third Amended Plan on Feb. 21, 2011. The Third Amended Plan reflects Compass Bank's agreement with ad valorem taxing authorities as to treatment of their claim, and deletes language providing that equity interests are cancelled on the effective date. Compass Bank's Third Amended Plan calls for a sale, at an auction to be held within 120 days of the effective date, of the Debtor's real property. Compass Bank's Third Amended Plan provides generally for payment of claims on either the effective date, the date of allowance of the claims, or 30 days after the auction. If funds remain after payment of Compass Bank's claim, there will be a distribution to equity interest holders. Compass Bank's Third Amended Plan specifies that Classes 1 (Administrative Claims) and 5 (General Unsecured Non-Priority Claims) are unimpaired. The remaining classes are impaired. Classes 3 and 4 (Secured Tax Claims and Secured Claim of Compass Bank) voted to accept Compass Bank's Third Amended Plan. Class 6 (Equity Interests) voted to reject Compass Bank's Third Amended Plan. No votes were cast in Class 2. The Debtor objects to Compass Bank's Third Amended plan on grounds it was not filed in good faith. The Debtor also objects to a provision determining that Compass Bank's secured claim is allowed "in the amount of $7,664.457.42 plus post-petition interest, costs and attorney fees." Compass Bank has filed a proof of claim in each of the cases, in the amount of $8,664,457.42, secured by, inter alia, the real property owned by the Debtor and by Sonrisa Properties Ltd. On Sept. 24, 2010, Debtor filed its first plan of reorganization. The Debtor proposed to restructure its debt to Compass Bank, extending the maturity date by three years. The Debtor proposed to obtain an equity infusion of $1 million from an outside investor, which would be deposited into an account at Compass Bank and used to pay interest as it accrued. The Debtor proposed to pay administrative expenses and the claims of ad valorem taxing authorities in full, and pay unsecured claims after Compass Bank was paid in full. The Debtor also proposed that its prepetition equity interest holders would retain their interests, but would receive no payments until all creditors were paid in full. The Debtor also proposed that Compass Bank be prohibited from taking any action to enforce a judgment it has obtained against, inter alia, the Debtor's general partner, and Randal Hall, the beneficial owner of the Debtor's equity. Under the Debtor's first plan, it proposed the sale of 35 acres to an unspecified purchaser, for an unspecified price. On Oct. 20, 2010, Compass Bank filed its own first plan of liquidation and disclosure statement. On Dec. 21, 2010, the Debtor filed a motion seeking emergency approval of a sale of up to 35 acres to Tanger Devco, LLC, for $250,000 per acre. The proposed sale called for Tanger to deposit $90,000 in refundable earnest money shortly after the sale was approved, and an additional $400,000 after the expiration of a "study period," lasting one year. Tanger was to pay a nonrefundable $10,000 as an option fee for the one year study period. The court held hearings as to both the Debtor's and Compass Bank's disclosure statements. By order entered Jan. 4, 2011, the court approved the Debtor's disclosure statement, as supplemented. By order entered Jan. 20, 2011, the court approved Compass Bank's disclosure statement, as supplemented. Both orders approving the disclosure statements set a confirmation hearing for Feb. 22, 2011. On Feb. 4, 2011, the Debtor filed an amended plan. The Debtor's amended plan reflected the terms of a revised agreement between the Debtor and Tanger. Under the revised agreement, as proposed by the Debtor, Tanger would loan $1.35 million to the Debtor, to be used to make a $1 million payment to Compass Bank, to be applied as a principal reduction, and the remainder to establish an reserve to pay interest to Compass Bank as it accrues. Tanger would obtain an option, for a fee of $100, to purchase the 35 acres described in the previous plan, and an additional exclusive option to purchase an additional 15 acres. The Debtor's amended plan called for Tanger to risk only $100 as a nonrefundable sum during the one year option provided under the plan. After the first year, Tanger would be required to pay $500,000 in earnest money, and to either close the purchase or forfeit the earnest money, after 18 months after the effective date of the Debtor's proposed plan. On Feb. 10, 2011, the Debtor filed a motion to continue the hearing on confirmation of Compass Bank's plan. After a contested hearing, the motion for continuance was denied. A copy of the Court's Feb. 28, 2011 Memorandum Opinion is available at http://is.gd/RuL5jPfrom Leagle.com. About Sonrisa Properties Sonrisa Properties, Ltd., and Sonrisa Realty Partners, Ltd., each of which is a single asset real estate entity, own unimproved real property located in League City, Texas. Sonrisa Properties filed for Chapter 11 bankruptcy protection on Jan. 4, 2010 (Bankr. S.D. Tex. Case No. 10-80012), to stop Compass Bank, the largest secured creditor, from foreclosing on the property. Sonrisa Realty Partners also filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 10-30084) on the same day. The two cases are not jointly administered. Karen R. Emmott, Esq., in Houston, Texas, represents both Debtors. Sonrisa Properties disclosed $21,098,818 in assets and $8,420,540 in liabilities as of the Petition Date. Sonrisa Realty Partners estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. In February 2010, the Sonrisa Realty Partners case was transferred to the Galveston Division (Bankr. S.D. Tex. Case No. 10-80026). SOURCE PRECISION: Assigns All Assets to Finn for Liquidation ------------------------------------------------------------ Source Precision Medicine, Inc., doing business as SourceMDx, has assigned all its assets to Joseph F. Finn, Jr., C.P.A., of the firm Finn, Warnke & Gayton, LLP to be liquidated for the benefit of SourceMDx creditors. Source MDx(R) is an industry leader in developing simple blood tests that can consistently detect the presence and aggressiveness of cancer by measuring specific RNA transcripts in blood. RNA is an early biological measure of disease, providing a significant indicator of disease onset or progression in the blood stream before other clinical manifestations become observable. Source MDx(R) is the first to translate robust RNA-transcript based assays into clinically useful oncology molecular diagnostic tests using a simple, non-invasive blood test. Source MDx(R) tests are precise and calibrated measurements of white blood cell gene expression and track an individual's current health, disease status and response to therapy in a reproducible fashion. The intellectual property, patents, etc. will be sold at a sealed bid sale on Friday, April 29, 2011 at noon. Persons interested in bidding must sign a Confidentiality Disclosure Agreement obtained from Finn's Office - jffinnjr@finnwarnkegayton.com or 781-237-8840. They will then receive a bid package. About Joseph F. Finn Joseph F. Finn, Jr., C.P.A. is the founding partner of the firm, Finn, Warnke & Gayton -- http://www.finnwarnkegayton.com-- Certified Public Accountants of Wellesley Hills, Massachusetts. He works primarily in the area of management consulting for distressed enterprises, bankruptcy accounting and related matters, such as assignee for the benefit of creditors and liquidating agent for a corporation. He has been involved in a number of loan workouts and bankruptcy cases for thirty-five (35) years. His most recent Assignments for the Benefit of Creditors in the biotech field include Spherics, Inc., ActivBiotics, Inc., Prospect Therapeutics, Inc., EPIX Pharmaceuticals Inc. and NoblePeak Vision Corp. SOUTHWEST SPORTS: Court Dismisses Portion of Suit v. Kleem et al. ----------------------------------------------------------------- The defendants in Southwest Sports Center, Inc., v. John Kleem, et al., Adv. Pro. No. 10-1312 (Bankr. N.D. Ohio), seek dismissal of the suit for lack of subject matter jurisdiction. The parties have previously litigated the real estate appraisal and sale of the plaintiff-debtor's commercial property in state court proceedings. The defendants ask the Court to dismiss the adversary complaint for lack of subject matter jurisdiction based on the Rooker-Feldman doctrine, which holds federal courts, except for the U.S. Supreme Court, do not have appellate jurisdiction over final state court judgments. In his Feb. 23, 2011 Memorandum of Opinion, Bankruptcy Judge Arthur I. Harris granted the defendants' motion to dismiss as to Counts VI and VII and denied as to Counts I through V. The Court will conduct a status conference at 1:30 p.m. on March 15, 2011. A copy of the Court's Feb. 23, 2011 Memorandum of Opinion is available at http://is.gd/4tD2fBfrom Leagle.com. Southwest Sports Center Inc. owns commercial real property located at 975 and 1005 West Bagley Road, Berea, Ohio. The commercial property is comprised of a golf driving range, a Dairy Queen Restaurant, a miniature golf course, and a single-family residence. Southwest Sports Center filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 09-21982) on Dec. 20, 2009. SUNRISE SENIOR: Reports $100.82 Million Net Income in 2010 ---------------------------------------------------------- Sunrise Senior Living, Inc. filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission reporting net income of $100.82 million on $1.40 billion of total operating revenue for the twelve months ended Dec. 31, 2010, compared with a net loss of $133.51 million on $1.46 billion of total operating revenue during the prior year. The Company also reported net income $50.38 million on $319.03 million of total operating revenue for the three months ended Dec. 31, 2010, compared with net income of $10.70 million on $362.96 million of revenue for the same period during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $701.45 million in total assets, $576.90 million in total liabilities, and $124.55 million in total equity. "2010 was a year of strengthening Sunrise and we are now well positioned to take advantage of great opportunities in 2011 and the years to come," said Mark Ordan, Sunrise's chief executive officer. "Bottom line 2010 performance is benefitted by outsized gains realized in our restructuring. Our operating results are adversely affected by the reduction of revenue from our restructuring without an equivalent reduction of expenses, and our G&A was adversely affected by non-recurring items. While we are excited by our progress, optimistic and committed to our future, we have in our 10-K and supplemental 8-K provided investors with meaningful additional detail to enable a fuller understanding of both our progress and of the risks we still need to tackle." The Company previously reported in its Annual Report on Form 10-K for the year ended Dec. 31, 2009 filed with the SEC and amended on March 31, 2010, that certain conditions raised substantial doubt about its ability to continue as a going concern. These conditions included, at that point in time, (i) significant debt maturing in 2010, (ii) a significant amount of debt in default and (iii) the Company's inability to borrow under its Bank Credit Facility. Since then, the Company has been able to extend or repay a significant amount of debt, generate liquidity through asset sales and other actions, and improve its core operations. We expect to have sufficient cash to meet our obligations in 2011. Accordingly, the Company no longer has substantial doubt about its ability to continue as a going concern for a reasonable period of time. A full-text copy of the Annual Report is available for free at: http://ResearchArchives.com/t/s?741a About Sunrise Senior McLean, Va.-based Sunrise Senior Living, Inc. (NYSE: SRZ) -- http://www.sunriseseniorliving.com/-- is a provider of senior living services in the United States, Canada, the United Kingdom and Germany. At June 30, 2010, the Company operated 356 communities, including 307 communities in the United States, 15 communities in Canada, seven communities in Germany and 27 communities in the United Kingdom, with a total unit capacity of roughly 35,400. SW GEORGIA ETHANOL: Can File Schedules & Statements Until March 8 ----------------------------------------------------------------- The Hon. James D. Walker, Jr., of the U.S. Bankruptcy Court for the Middle District of Georgia extended the deadline for Southwest Georgia Ethanol LLC dba Southwest Georgia Ethanol LLC to file its schedules of assets and liabilities, and statements of financial affairs until March 8, 2011. About Southwest Georgia Ethanol Southwest Georgia Ethanol LLC, a unit of First United Ethanol Co., owns and operates an ethanol production facility located on 267 acres in Mitchell County, Georgia, producing 100 million gallons of ethanol annually. Ethanol production operations commenced in October 2008. Revenue was $168.9 million for fiscal year ended Sept. 30, 2010. The Debtor said profitability and liquidity have been materially reduced by unfavorable fluctuations in commodity prices for ethanol and corn. Southwest Georgia Ethanol sought bankruptcy protection (Bankr. M.D. Ga. 11-10145) in Albany, Georgia, on February 1, 2011. John Michael Levengood, Esq., at McKenna Long & Aldridge LLP, in Atlanta, Georgia, serves as counsel to the Debtor. Morgan Keegan & Company, Inc., is the investment banker and financial advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtor's balance sheet showed $164.7 million in assets and $134.1 million in debt as of Dec. 31, 2010. Bloomberg News notes that since 2008, at least 11 ethanol-related companies have sought court protection, including VeraSun Energy Corp., once the second-largest U.S. ethanol maker; units of Pacific Ethanol Inc.; and White Energy Holding Co. Donald F. Walton, United States Trustee for Region 21, selected three creditors to serve on an Official Committee of Unsecured Creditors of Southwest Georgia Ethanol LLC dba Southwest Georgia Ethanol LLC. SW GEORGIA ETHANOL: Section 341(a) Meeting Set For March 17 ----------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors of Southwest Georgia Ethanol LLC dba Southwest Georgia Ethanol LLC on March 17, 2011, at 1:30 p.m. in 345 W. Broad St., Old Alb. Federal Courthouses & Post Office, 3rd Floor in Albany, Georgia. 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. About Southwest Georgia Ethanol Southwest Georgia Ethanol LLC, a unit of First United Ethanol Co., owns and operates an ethanol production facility located on 267 acres in Mitchell County, Georgia, producing 100 million gallons of ethanol annually. Ethanol production operations commenced in October 2008. Revenue was $168.9 million for fiscal year ended Sept. 30, 2010. The Debtor said profitability and liquidity have been materially reduced by unfavorable fluctuations in commodity prices for ethanol and corn. Southwest Georgia Ethanol sought bankruptcy protection (Bankr. M.D. Ga. 11-10145) in Albany, Georgia, on February 1, 2011. John Michael Levengood, Esq., at McKenna Long & Aldridge LLP, in Atlanta, Georgia, serves as counsel to the Debtor. Morgan Keegan & Company, Inc., is the investment banker and financial advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtor's balance sheet showed $164.7 million in assets and $134.1 million in debt as of Dec. 31, 2010. Bloomberg News notes that since 2008, at least 11 ethanol-related companies have sought court protection, including VeraSun Energy Corp., once the second-largest U.S. ethanol maker; units of Pacific Ethanol Inc.; and White Energy Holding Co. Donald F. Walton, United States Trustee for Region 21, selected three creditors to serve on an Official Committee of Unsecured Creditors of Southwest Georgia Ethanol LLC dba Southwest Georgia Ethanol LLC. SW GEORGIA ETHANOL: Wants to Hire FMW & JCF as Co-Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors of Southwest Georgia Ethanol LLC dba Southwest Georgia Ethanol LLC asks the Hon. James D. Walker, Jr., of the U.S. Bankruptcy Court for the Middle District of Georgia for permission to employ Fife M. Whiteside P.C. of Columbus, and Georgia and james C. Frenzel, P.C., of Atlanta as its co-counsel. FMW will, among other things: a) serve as the primary contact to the Committee; b) advise the Committee with respect to its rights, powers, and duties in the proceedings; c) assist and advise the Committee in its consultations with the Debtor relative to the administration of this proceeding; and d) assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in the proceeding. JCF will, among other things: a) serve as general litigation, environmental, and bankruptcy counsel for the Committee; b) assist the investigation of the Committee into the acts, conduct, assets, liabilities, and financial condition of the Debtor and of the operation of the business of the Debtor; c) assist the Committee in analyzing the claims of the creditors of the Debtor and in negotiating with the creditors; d) advise and represent the Committee in connection with administrative matters arising in the proceeding, including the obtaining of credit, sale of assets, and rejection or assumption of executory contracts and unexpired leases; and e) assist the Committee in its analysis of, and negotiations with, the Debtor or any third party concerning matters related to, among other things, the terms of a Chapter 11 plan for the Debtor. FMW stated present fees rates at $300 per hour for attorney, and $100 per hour for paraprofessionals and law clerks. JCF stated present fee rates of between $200 and $350 per hour for attorneys and $100 per hour for paraprofessionals and law clerks. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Southwest Georgia Ethanol Southwest Georgia Ethanol LLC, a unit of First United Ethanol Co., owns and operates an ethanol production facility located on 267 acres in Mitchell County, Georgia, producing 100 million gallons of ethanol annually. Ethanol production operations commenced in October 2008. Revenue was $168.9 million for fiscal year ended Sept. 30, 2010. The Debtor said profitability and liquidity have been materially reduced by unfavorable fluctuations in commodity prices for ethanol and corn. Southwest Georgia Ethanol sought bankruptcy protection (Bankr. M.D. Ga. 11-10145) in Albany, Georgia, on February 1, 2011. John Michael Levengood, Esq., at McKenna Long & Aldridge LLP, in Atlanta, Georgia, serves as counsel to the Debtor. Morgan Keegan & Company, Inc., is the investment banker and financial advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtor's balance sheet showed $164.7 million in assets and $134.1 million in debt as of Dec. 31, 2010. Bloomberg News notes that since 2008, at least 11 ethanol-related companies have sought court protection, including VeraSun Energy Corp., once the second-largest U.S. ethanol maker; units of Pacific Ethanol Inc.; and White Energy Holding Co. Donald F. Walton, United States Trustee for Region 21, selected three creditors to serve on an Official Committee of Unsecured Creditors of Southwest Georgia Ethanol LLC dba Southwest Georgia Ethanol LLC. SW OWNERSHIP: Files for Chapter 11 in Austin -------------------------------------------- SW Ownership, LLC, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 11-10485) in Austin, Texas on Feb. 28, 2011. The Dallas- based company estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities. The Debtor owns real property in Llano County and Burnet County, Texas, and the partially completed luxury golf course community on the site, which is commonly referred to as "Skywater Over Horseshoe Bay." Third Avenue Real Estate Opportunities Fund, L.P., The Patriot Group, LLC, and Footbridge Limited Trust, constituting all of the Class A-1 and A-2 members of SW Ownership Holdings LLC, signed a resolution sending the Debtor to Chapter 11. SW Ownership Holdings is the sole member of the Debtor. According to the resolution, SW Ownership intends to pursue claims against the International Bank of Commerce, including a "lender- liability" lawsuit in connection with loans from IBC to the Debtor in the original principal amounts of $30 million and $5 million, respectively. SW Ownership has a debtor-in-possession financing for $9 million from Soundview Real Estate Partners III, to facilitate the ongoing development of the Project and to cover the costs and expenses associated with the Bankruptcy case and IBC Claims. SW OWNERSHIP: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: SW Ownership, LLC 325 N. St. Paul Street, Suite 2150 Dallas, TX 75201 Bankruptcy Case No.: 11-10485 Chapter 11 Petition Date: February 28, 2011 Court: U.S. Bankruptcy Court Western District of Texas (Austin) Judge: H. Christopher Mott Debtor's Counsel: Jay Ong, Esq. MUNSCH HARDT KOPF & HARR, P.C. 401 Congress Avenue, Suite 3050 Austin, TX 78701 Tel: (512) 391-6100 Fax: (512) 391-6149 E-mail: jong@munsch.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Charles W. Cargill, authorized signatory. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Skywater Management, LLC -- $275,000 255 Alhambra Circle, Suite 325 Coral Gables, FL 33134 Nelson Lewis Inc. -- $219,452 P.O. Box 235 Marble Falls, TX 78654 THG Construction Services -- $123,197 5500 N. Highway 281 Marble Falls, TX 78654 Horseshoe Bay Resort -- $111,999 Nicklaus Design, LLC -- $94,280 Skywater Realty, LLC -- $77,906 Bury & Partners -- $47,407 Wood lake Outdoor, Inc. -- $47,369 Gameplan Resort Solutions -- $40,000 Willis Environmental Engineering -- $33,148 Kenneth Cleveland -- $30,000 HB Rose Associates, LLC -- $26,450 Vita Planning & Landscape -- $23,855 Architecture Elizabeth Christian & Associates -- $23,163 PR Professional Turf Products, LP -- $22,074 Kolar Advertising - Marketing -- $21,067 Star Security & P.I., Inc. -- $15,837 Bryant Taylor Gordon Golf -- $14,300 Holland & Knight LLP -- $9,831 City of Horseshoe Bay -- $9,637 TEAMWORK PHYSICAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Teamwork Physical Therapy, Inc. 536 Hawthorn Street North Dartmouth, MA 02747 Bankruptcy Case No.: 11-11601 Chapter 11 Petition Date: February 28, 2011 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Henry J. Boroff Debtor's Counsel: David B. Madoff, Esq. MADOFF & KHOURY LLP 124 Washington Street, Suite 202 Foxboro, MA 02035 Tel: (508) 543-0040 Fax: (508) 543-0020 E-mail: madoff@mandkllp.com Richard Nelson, CPA NELSON & CO., C.P.A. LTD. Scheduled Assets: $802,275 Scheduled Debts: $1,211,561 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/mab11-11601.pdf The petition was signed by Albert E. Audette, president. TELIPHONE CORP: Posts $30,600 Net Loss in Dec. 31 Quarter --------------------------------------------------------- Teliphone Corp. filed its quarterly report on Form 10-Q, reporting a net loss of US$30,587 on US$1.0 million of revenues for the three months ended Dec. 31, 2010, compared with net income of US$150,673 on US$1.4 million of revenues for the same period of the prior fiscal year. The Company's balance sheet as of Dec. 31, 2010, showed US$1.6 million in total assets, US$2.1 million in total liabilities, and a stockholders' deficit of US$491,538. As reported in the Troubled Company Reporter on Jan. 5, 2011, KBL, LLP, in New York, expressed substantial doubt about Teliphone Corp.'s ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has sustained operating losses and significant working capital deficits in the past few years. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7426 Montreal, Canada-based Teliphone Corp. (OTCQB: TLPH) -- http://www.teliphone.ca/-- provides broadband telephone services utilizing its voice over Internet protocol (VoIP) technology platform. TEREX CORPORATION: Moody's Lifts Ratings on Senior Notes to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service upgraded Terex Corporation's senior unsecured notes to Ba3 from B2 and its senior subordinated notes to B3 from Caa1. The rating agency affirmed the company's Corporate Family and Probability of Default Ratings at B2 and the company's Speculative Grade Liquidity Rating at SGL-2. The ratings outlook remains stable. Upgrades: Issuer: Terex Corporation -- Senior Subordinated Conv./Exch. Bond/Debenture, Upgraded to B3, LGD5, 76% from Caa1, LGD5, 81% -- Senior Subordinated Regular Bond/Debenture, Upgraded to B3, LGD5, 76% from Caa1, LGD5, 81% -- Senior Secured Bank Credit Facility, Upgraded to LGD1, 06% from LGD1, 08% -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3, LGD1, 06% from B2, LGD4, 51% Affirmations: -- CFR at B2; -- PDR at B2; -- Senior Secured Bank Credit facility at Ba2; -- Speculative Grade Liquidity Rating at SGL-2. Ratings Rationale The affirmation of the company's B2 CFR and PDR reflects the company's recent operating improvement and the reduction in its net losses along with the expectation that the company will see further improvement in profitability as 2011 progresses. The ratings also incorporate the company's strong, well established position as a manufacturer of heavy equipment for the construction, infrastructure, and energy markets, as well as its good liquidity profile. These factors are balanced against its high leverage, weak profitability, and increasing competition in some markets. The affirmation of the company's SGL liquidity rating at SGL-2, indicates good liquidity, and reflects the company's high cash position with over $1.4 billion of cash and equivalents and investments in marketable securities (primarily 5.8 million shares Bucyrus) as of Dec. 31, 2010, versus $929 million at the end of 2009. The SGL also reflects the room under its covenants as its principal covenant is a $250 million minimum liquidity requirement until June 30, 2011. The upgrade of the company's senior unsecured and senior subordinated notes reflects the change in the company's capital structure due to the prepayment of the company's 7 3/8% notes previously due in 2014 and the addition of subsidiary guarantees to unsecured and senior subordinated notes. The change in notching is consistent with Moody's loss given default ratings methodology. The stable outlook reflects the belief that the company should experience an improvement in its operating performance as 2011 progresses and the belief that the company's large cash and equivalents and investments combined with its covenant recess under its bank credit agreement provides additional room for the company to manage through the difficult environment. These factors provide Terex with the financial flexibility to contend with the current economic downturn. The stable outlook reflects the view that its credit metrics are unlikely to improve meaningfully over the short term. The last rating action was on June 28, 2010, at which time Moody's changed the company's Speculative Grade Liquidity Rating to SGL-2 from SGL-3 and affirmed the company's Corporate Family and Probability of Default Ratings at B2. Terex Corporation, headquartered in Westport, CT, is a diversified global manufacturer supporting the construction, mining, utility and other end markets. Revenues for 2010 totaled approximately $4.4 billion. TERRESTAR NETWORKS: EchoStar No Longer Interested in TSN's Assets ----------------------------------------------------------------- Charlie Ergen of EchoStar Corporation said on Feb. 24, 2011, that his company has dropped its interest in TerreStar Networks in light of EchoStar's recent acquisition of satellite broadband provider Hughes Communications, according to Peter B. de Selding of Space News. EchoStar is one of TerreStar Network's largest secured creditors and is also the bankrupt company's debtor-in-possession lender. EchoStar previously committed to sponsor a proposed restructuring plan for TerreStar, where EchoStar agreed to a debt-for-equity swap of it interests in TerreStar. EchoStar also agreed to backstop a rights offering under the TerreStar plan. However, the transaction failed to materialize in light of an opposition lodged by certain TerreStar noteholders. Mr. Ergen said, Space New relates, that the Hughes transaction offers an immediate payoff on the EchoStar investment, where the TerreStar deal was a "longer-term, and speculative, play on the value of radio spectrum." "If you had a dollar to spend, Hughes was a much better fit for us," Mr. Ergen said in a conference call with investors, according to Space News. "It is a more strategic fit, a better fit and a more immediate return than spectrum. We still hold a lot of TerreStar debt and we hope to be able" to monetize it once TerreStar and its debtors figure out how to proceed and emerge from bankruptcy protection, the report quoted Mr. Ergen as saying. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which were filed on Oct. 19, 2010 . The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC is currently seeking to have its case deemed jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11- 10612 (SHL). The seven Debtor entities who seek joint administration with TSC are: * TerreStar New York Inc., * Motient Communications Inc. * Motient Holdings Inc., * Motient License Inc., * Motient Services Inc., * Motient Ventures Holdings Inc., and * MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks Inc. or TSN, the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100,000,001 to $500,000,000 in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Urquhart & Sullivan Represents Solus, et al. ---------------------------------------------------------------- Quinn Emanuel Urquhart & Sullivan LLP filed with the Court on Feb. 25, 2011, a verified statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure to disclose that it represents these parties in the TerreStar Corp. and its affiliates' Chapter 11 cases: 1. Solus Alternative Asset Management LP 430 Park Avenue New York, NY 10022 2. Och-Ziff Holdings Corp. 9 West 57th Street New York, NY 10019 3. NexBank SSB 13455 Noel Rd. 1st Floor, Galleria Tower II Dallas, Texas 75240 Solus and Och-Ziff each own shares of Series B Preferred Stock of TerreStar Corporation. As of Feb. 25, 2011, Solus holds approximately 86,000 shares of the Preferred Stock while Och-Ziff holds approximately 35,000 shares of the Preferred Stock. Solus also is a lender under the Term Loan Credit Agreement, dated as of Nov. 19, 2010, among TSC, TerreStar Holdings Inc., certain lender parties, and NexBank; and has entered into a commitment letter with TSC, dated Feb. 2, 2011, regarding Solus' contemplated provision of a debtor-in-possession financing facility and financing for a proposed plan of reorganization. Solus has made advances under the Term Loan Agreement in the principal amount of approximately $1.97 million. NexBank is the administrative agent under the Term Loan Agreement. Quinn Emanuel was retained by Solus on June 8, 2010, and on Nov. 5, 2010, Och-Ziff executed a joinder to Quinn Emanuel's engagement letter. NexBank retained Quinn Emanuel on Nov. 17, 2010. Solus and Och-Ziff agreed to pay Quinn Emanuel' fees and expenses in connection with the engagement, which payments were to be made pro rata based on their portion of Preferred Stock holdings. However, TSC has agreed to pay Solus' and NexBank's legal fees pursuant to the Term Loan Agreement and the Commitment Letter. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which were filed on Oct. 19, 2010 . The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC is currently seeking to have its case deemed jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11- 10612 (SHL). The seven Debtor entities who seek joint administration with TSC are: * TerreStar New York Inc., * Motient Communications Inc. * Motient Holdings Inc., * Motient License Inc., * Motient Services Inc., * Motient Ventures Holdings Inc., and * MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks Inc. or TSN, the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100,000,001 to $500,000,000 in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TEXAS COMPETITIVE: Fitch Maintains CCC Rating, Outlook Negative --------------------------------------------------------------- Fitch Ratings does not expect to take any immediate rating action on Energy Future Holdings Corp., Texas Competitive Electric Holdings Company LLC or their affiliates based on recent allegations from lender Aurelius Capital Management LP. Fitch currently rates both companies 'CCC' with Negative Rating Outlooks. On Feb. 25, 2011, EFH issued an 8-K to report that Citibank, N.A., as an administrative agent for the TCEH Senior Secured Credit Facilities (Facilities), had received a letter from Aurelius alleging that TCEH is in default under the terms of its Facilities. Aurelius, a lender under the TCEH's Facilities, holding as a lender of record approximately $50 million of term loans as of Feb. 24, 2011, is making an assertion that the inter- company loans from TCEH to EFH were not made on an arm's-length basis, thus violating the arm's length requirement under the Facilities. Aurelius further alleges that this non-compliance has resulted in a failure to make certain mandatory prepayments under the Facilities. TCEH believes that Aurelius' allegations are without merit and should not cause the acceleration of any of EFH's, TCEH's or their respective affiliates' debt. The inter-company loans from TCEH to EFH are permitted under TCEH's Facilities. The outstanding amount under these loans stood at $1.9 billion as of Dec. 31, 2010. Fitch will continue to monitor the situation and believes that protracted uncertainty related to it could limit EFH's ability to restructure its debt on a timely basis. TH PROPERTIES: Susquehanna Bids $8.5MM for Burbank Grove Project ---------------------------------------------------------------- The Honorable Stephen Raslavich will convene a hearing in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on March 10, 2011, at 10:30 a.m., to consider, subject to any higher and better offers, TH Properties LP's motion to sell certain lots of real property located in the single family residential development commonly known as the Burbank Grove Project located in Upper Providence Township, Montgomery County, Pa., free and clear of all liens, claims, interests and encumbrances. An entity known as Susquehanna has offered $8,500,000 for the property. Any competing bid must top Susquehanna's offer by $250,000 and must provide for the release of the Lender (as defined in the Sale Motion) under an existing tri-party agreement between Upper Providence Township, the Debtor and the Lender. An auction is scheduled for March 8, 2011, at 9:00 a.m. at the offices of Montgomery, McCracken, Walker and Rhoads, LLC, in Philadelphia. About T.H. Properties Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Northgate Development Company, LP (Bankr. E.D. Calif. Case No. 09-____) was among the affiliates that filed. Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP, represent the Debtors in their restructuring efforts. T.H. Properties estimated assets between $100 million and $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. A creditors' committee has been appointed in the Debtors' chapter 11 proceedings. Affiliate Wynstone Development Group, LP (Bankr. E.D. Calif. Case No. 10-17863) filed for Chapter 11 protection on September 14, 2010. It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. TH PROPERTIES: Suit vs. Lexon Goes Back to Trial Court ------------------------------------------------------ Lexon Insurance Company appeals from an order of the Court of Common Pleas of Montgomery County which granted, in part, Hatfield Township's petition for a preliminary injunction, directing Lexon to pay the Township monetary proceeds from a surety bond. The surety bond was posted by T.H. Properties, L.P. and issued by Lexon in accordance with a land development agreement between the Township and T.H Properties. The Township sued Lexon seeking (1) a declaratory judgment that Lexon is obligated by the Bond to pay the Township the remaining principal amount of $1,269,772, plus interest from September 19, 2009, costs, attorneys' fees, and punitive damages; and (2) a permanent injunction seeking payment of the Bond principal. The Commonwealth Court of Pennsylvania on Feb. 23, 2011, vacated the trial court order and remanded the matter to the trial court for reconsideration of the Township's request. The appellate court panel consists of Judges Mary Hannah Leavitt, Kevin Brobson, and Johnny J. Butler. Judge Brobson wrote the opinion. Judge Leavitt wrote a dissenting opinion. The case is Hatfield Township, Montgomery County, Pennsylvania, v. Lexon Insurance Company, No. 1318 C.D. 2010 (Pa. Commonwealth Ct.). A copy of the Feb. 23 opinion is available at http://is.gd/NPZdCFfrom Leagle.com. About T.H. Properties Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Northgate Development Company, LP (Bankr. E.D. Calif. Case No. 09-____) was among the affiliates that filed. Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP, represent the Debtors in their restructuring efforts. T.H. Properties estimated assets between $100 million and $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. A creditors' committee has been appointed in the Debtors' chapter 11 proceedings. Affiliate Wynstone Development Group, LP (Bankr. E.D. Calif. Case No. 10-17863) filed for Chapter 11 protection on September 14, 2010. It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. TMST INC: Chap. 11 Trustee to Tap BroadStreet as Consultant ----------------------------------------------------------- Joel I. Sher, Chapter 11 Trustee for (i) TMST, Inc., f/k/a Thornburg Mortgage, Inc., (ii) TMST Acquisition Subsidiary, Inc., f/k/a Thornburg Acquisition Subsidiary, Inc., (iii) TMST Home Loans, Inc., f/k/a Thornburg Mortgage Home Loans, Inc., and (iv) TMST Hedging Strategies, Inc., f/k/a Thornburg Mortgage Hedging Strategies, Inc., seeks to employ BroadStreet Capital Partners, LP as his analytic consultant. As analytic consultant, BroadStreet Capital will assist the Chapter 11 Trustee in making a determination as to the viability of potential causes of action that one or more of the Debtors' estates may have against third parties with whom the Debtors conducted business prepetition. In that regard, BroadStreet Capital will render certain consulting and advisory services to the Chapter 11 Trustee, including: * To provide mark-to-market or loan-level data analysis of CUSIPs chosen by the Trustee; * To provide analysis of comparable security CUSIPs where pricing is not available; * To provide written reports summarizing the analysis performed; * To provide litigation support and expert testimony as require; and * To provide other additional services as the Trustee may reasonably request from time to time. The firm will be paid for its services at hourly rates. Generally, for a mark-to-market analysis, the rate will be $525 per hour. For a loan-level data analysis, the rate will be $675 per CUSIP. BroadStreet Capital's rates per hour are a blended rate made up of these personnel: Head of Group $1,000 Senior Research Manager $725 Senior Data Analyst $400 Data Programmer $275 To the extent the firm is asked to provide testimony, the rate would be $1,000 per hour. The Chapter 11 Trustee believes that BroadStreet Capital does not hold any interest adverse to any Debtor's estates and, while employed by the Trustee, will not represent any person having an interest adverse to any Debtor's estate. The Trustee also believes that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Md. Lead Case No. 09-17787). Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, is tapped as counsel. Orrick, Herrington & Sutcliffe LLP is employed as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., are tapped as investment banker and financial advisor. Protiviti Inc. is also engaged for financial advisory services. KPMG LLP is the tax consultant. Epiq Systems, Inc., is claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. TRICO MARINE: Launches Offer for Fin'l Restructuring Plan --------------------------------------------------------- Trico Marine Services, Inc.'s subsidiaries Trico Supply AS and Trico Shipping AS have launched an offer to implement a financial restructuring plan pursuant to an amended restructuring support agreement with a group of noteholders who together hold approximately 83% of the aggregate principal amount of Trico Shipping's outstanding 11-7/8% senior secured notes due 2014. "With the support of the majority of our noteholders, we are pleased to begin this important step in soliciting the participation of our creditors and other stakeholders in our financial restructuring plan," said Richard A. Bachmann, Trico Marine's Chairman of the Board of Directors, President and Chief Executive Officer. "We believe launching the Exchange Offer and the related transactions are an important step toward the goal of reducing Trico Supply's outstanding debt while providing stability and operating flexibility that will benefit our employees, customers, partners and vendors. We are confident that these efforts to strengthen Trico Supply's balance sheet will position us for the long-term. Importantly, we would like to thank our hard working employees, loyal customers and vendors and our creditors for their support during this process." Pursuant to the RSA, which sets forth the terms of the Company's financial restructuring plan, Trico Shipping has launched an out- of-court exchange offer to noteholders to exchange their Notes for a pro rata share, together with the lenders under Trico Shipping's working capital facility, of 95% of the common stock of DeepOcean Group Holding AS, a to-be-formed Norwegian company that would be the holding company of the Trico Supply Group. The Exchange Offer is subject to, among other things, the condition that at least 99% of the outstanding Notes validly tender and not withdraw their Notes and the receipt of consent from Trico Shipping's secured working capital credit facility lenders. The Exchange Offer is also accompanied by a consent solicitation to noteholders to amend the indenture by eliminating or modifying certain restrictive covenants and other provisions. In connection with the restructuring,the U.S. Bankruptcy Court with jurisdiction over the Trico Marine bankruptcy cases has approved a settlement that compromises the intercompany claims and equity interests held by Trico Marine and certain subsidiaries in the Company in exchange for 5% of the New Common Stock and warrants to acquire an additional 10% of the New Common Stock, which the Company expects would ultimately be distributed to certain creditors of Trico Marine. The restructuring also would provide a new $100 million first priority senior secured credit facility that would be used to refinance some existing debt and fund working capital borrowings. Upon successful consummation of the Exchange Offer and related transactions, the Company would reduce its estimated total debt outstanding to approximately $75 million. As an alternative to the Exchange Offer, the Company agreed in the RSA to solicit acceptances from its noteholders of a prepackaged plan of reorganization. In the event certain conditions to the Exchange Offer are not satisfied, and if a sufficient number of holders and amount of Notes vote to accept the Prepackaged Plan, the Company intends to file petitions under chapter 11 of the U.S. Bankruptcy Code and pursue an in-court restructuring. In the event the Company files a Prepackaged Plan, the Company expects to fund its working capital requirements with a debtor-in-possession financing facility provided by the Supporting Noteholders that would be adequate to cover administrative costs as well as payments to vendors during the pendency of the chapter 11 proceedings. If confirmed, the Prepackaged Plan would have principally the same effect as the Exchange Offer. The Company does not anticipate interruption in its operations during the restructuring regardless of whether the Company conducts its restructuring in or out of the chapter 11 process. The Company expects to move quickly through the reorganization process with its same commitment to quality, consistency and customer service as has been its hallmark since its inception. Under the proposed restructuring, the Company intends to continue serving customers in the normal course. Additionally, it intends to continue to pay in full all vendors and suppliers under normal terms in the ordinary course of business. The implementation of the transactions contemplated by the RSA is dependent on a number of factors and approvals, however, there can be no assurance that the treatment of creditors outlined above will not change significantly. Pursuant to the RSA, the Supporting Noteholders have agreed to, among other things, (1) support and use commercially reasonable efforts to complete the financial restructuring, including by tendering their Notes into the Exchange Offer, delivering their consents in a related consent solicitation and voting in favor of the Prepackaged Plan; and (2) not exercise remedies or direct the trustee to exercise remedies under the indenture governing the Notes for any default or event of default that has occurred or may occur thereunder. The RSA may be terminated by the Supporting Noteholders or the Company upon the occurrence of certain events enumerated in the RSA. The Exchange Offer is being made, and the New Common Stock is being offered and issued within the United States only to "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended or institutional "accredited investors," as defined in Rule 501 under the Securities Act, and outside the United States to non-U.S. investors. The New Common Stock to be offered has not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. About Trico Marine Headquartered in Texas, Trico Marine Services, Inc. -- http://www.tricomarine.com/-- provides subsea services, subsea trenching and protection services, and towing and supply vessels. Trico filed for Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B. Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor disclosed US$30,562,681 in assets and US$353,606,467 in liabilities as of the Petition Date. Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No. 10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico Marine International, Inc. (Case No. 10-12650), Trico Marine Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No. 10-12652) filed separate Chapter 11 petitions. Cahill Gordon & Reindell LLP is the Debtors' special counsel. Alix Partners Services, LLC, is the Debtors' chief restructuring officer. Epiq Bankruptcy Solutions is the Debtors' claims and notice agent. Postlethwaite & Netterville serves as the Debtors' accountant and Ernst & Young LLP serves as tax advisors. Pricewaterhousecoopers LLC provides the independent accountants and tax advisors for the Debtors. Aside from the Cayman Islands holding company, Trico's foreign subsidiaries were not included in the filing and will not be subject to the requirements of the U.S. Bankruptcy Code. The Official Committee of Unsecured Creditors tapped Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn, Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel. ULTIMATE ACQUISITION: Court OKs Cash Collateral Use Until Apr. 29 ----------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware granted the motion of Ultimate Acquisition Partners, LP, et al., to use cash collateral on an interim basis. Subject to the terms and conditions of the Feb. 11, 2011 Third Interim Cash Collateral Order and subject to the commencement of the Store Closing Sales of the Liquidation Assets, the Debtors are authorized to use the Cash Collateral for the period from the Petition Date through April 29, 2011. The Cash Collateral may be used solely to make disbursements for each one-week period in accordance with the budget. The actual aggregate cash disbursements during each Weekly Disbursement Period will not exceed the total disbursement amount for each Weekly Disbursement Period set forth in the Budget. Any amounts not disbursed in any individual Weekly Disbursement Period may not be carried over and disbursed in any future Weekly Disbursement Period. Disbursements made to Professionals and the Liquidating Consultants pursuant to the Budget will not be included in the Weekly Disbursement Cap, and may be disbursed pursuant to the terms and conditions of the Interim Cash Collateral Order. General Electric Capital Corporation, in its capacities as lender and as agent for the Senior Lender -- the Senior Agent -- may authorize, in its sole discretion, higher amounts for any Weekly Disbursement Cap without further Court approval. As adequate protection against any diminution in value, pursuant to Sections 361 and 363(e) of the Bankruptcy Code, the Senior Agent, for the benefit of itself and other Senior Secured Parties, is granted additional and replacement continuing valid, binding, enforceable, non-avoidable, and automatically perfected postpetition security interests in and liens on any and all presently owned and hereafter acquired personal property, applicable real property, and all other assets of the Debtors in and to the same extent, validity and priority as they existed on the Petition Date on the Prepetition Collateral. This excludes any of the Debtors' claims or causes of action arising under Sections 502(d), 544, 545, 547, 548, 549, 550, and 553 of the Bankruptcy Code and any other avoidance or similar action under the Bankruptcy Code. J.B. Hunt is also granted a replacement continuing valid, binding, enforceable, non-avoidable, and automatically perfected postpetition security interest in and liens on the goods in its possession as of the Petition Date, including any proceeds from the sale of those possessed goods, in and to the same extent, validity and priority as J.B. Hunt's lien on the Possessed Goods that existed on the Petition Date. As further adequate protection, the Debtors are authorized and directed to provide adequate protection payments to the Senior Agent, for the benefit of itself and other Senior Secured Parties, in the form of payment of all of the aggregate cash of the Debtors in all accounts as of 2:00 p.m., Eastern Time, on Tuesday of each week in excess of $1,500,000, net of all outstanding checks. Furthermore, the Senior Agent, for the benefit of itself and the other Senior Secured Parties, will be entitled to payment of interest and fees on a postpetition basis in accordance with the Senior Loan Documents. Any aggregate accrued unpaid interest and fees will be added to the total amount due of the Senior Secured Indebtedness and paid in the same manner as the Senior Secured Indebtedness. The Senior Agent and the other Senior Secured Parties will be permitted to retain expert consultants and financial advisors, who will be given reasonable access, for purposes of monitoring the businesses of the Debtors and the Collateral. A copy of the Interim Cash Collateral Order is available at no charge at: http://bankrupt.com/misc/TCR_UAP_3rdInterimCashCollOrd021111.pdf All objections to the Motion, to the extent not withdrawn or resolved, are overruled. A final hearing to consider the entry of a final order is set for March 10, 2011, at 3:00 p.m., Eastern Time. Written objections to the relief requested on a final basis must be filed no later than 4:00 p.m. on March 3, 2011. About Ultimate Electronics Ultimate Acquisition Partners LP and CC Retail, LLC, which own the U.S. consumer electronics store chain Ultimate Electronics, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on January 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Ultimate Acquisition Partners LP and CC Retail, LLC are specialty retailers of high-end entertainment and consumer electronics with 46 stores in over a dozen states, primarily in the mid-west and western United states. Of the 46 stores, 35 are operated by UAP and 11 are operated by CC Retail. All are operated under the name "Ultimate Electronics". UAP and CC Retail have more than 1,500 full-time and part-time employees. Kathleen Campbell Davis, Esq., and Mark T. Hurford, Esq., at Campbell & Levine LLC, in Wilmington, Del., and Jay L. Welford, Esq., and Judith Greenstone Miller, Esq., in Southfield, Mich., serve as the Debtor's bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. No trustee, examiner or official committee of unsecured creditors has been appointed in the Debtors' cases. ULTIMATE ACQUISITION: Court OKs Consultant Pact and Closing Sale ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted the motion of Ultimate Acquisition Partners, LP, et al., finding that the Consultant Agreement, Store Closing Sales and related relief are in the best interests of the Debtors' estates, their creditors and other parties-in-interest. Among other things, the Debtors are authorized to conduct the Store Closing Sales of the Liquidation Assets at 46 stores in accordance with the Consultant Agreement, as revised in the order. A copy of the agreement is available at no charge at http://bankrupt.com/misc/TCR_UAP_OrdConsAgrSale021111.pdf The Debtors are also authorized and empowered to enter into the approved Consultant Agreement -- a joint venture agreement with Gordon Brothers Retail Partners, LLC and Hilco Merchant Resources, LLC -- pursuant to which Gordon Brothers and Hilco Merchant will serve as the exclusive consultants to the Debtors in connection with a going-out-of-business, store-closing sale at the Debtors' 46 retail stores. Pursuant to Sections 327 and 328 of the Bankruptcy Code, the Debtors are authorized to employ and retain the consultants as their liquidation consultant, effective nunc pro tunc to February 4, 2011. The Consultants will be compensated in accordance with the terms of the Consultant Agreement. The Liquidation Assets will be sold free and clear of any and all mortgages, security interests, conditional sales or title agreements, and liens and security interests, among others. The Sale Proceeds will be used and applied (i) to pay the obligations of the Debtors and their estates to the Consultants under the Consultant Agreement, and (ii) in accordance with the Court's February 11, 2011 Interim Cash Collateral order and accompanying budget, subject to the entry of the Final Cash Collateral order. The Senior Secured Parties and J.B. Hunt agree to this distribution of the Sale Proceeds. Gift certificates, gift cards, and merchandise credits issued by the Debtors before the Sale Commencement Date will be accepted and honored by the Consultants during the Sale Term. The Debtors or the Consultants will accept the return of any goods purchased, provided that the consumer returns the merchandise within the time period prescribed by the return policy that was in effect when the merchandise was purchased. The Debtors will provide a weekly report to the Official Committee of Unsecured Creditors regarding all fees, expenses, and other issues in connection with the sale. The Debtors will also timely remit payments to the landlords up until the date of assumption or rejection of applicable leases. All objections to the Motion, to the extent not previously withdrawn or resolved, are overruled. About Ultimate Electronics Ultimate Acquisition Partners LP and CC Retail, LLC, which own the U.S. consumer electronics store chain Ultimate Electronics, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on January 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Ultimate Acquisition Partners LP and CC Retail, LLC are specialty retailers of high-end entertainment and consumer electronics with 46 stores in over a dozen states, primarily in the mid-west and western United states. Of the 46 stores, 35 are operated by UAP and 11 are operated by CC Retail. All are operated under the name "Ultimate Electronics". UAP and CC Retail have more than 1,500 full-time and part-time employees. Kathleen Campbell Davis, Esq., and Mark T. Hurford, Esq., at Campbell & Levine LLC, in Wilmington, Del., and Jay L. Welford, Esq., and Judith Greenstone Miller, Esq., in Southfield, Mich., serve as the Debtor's bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. No trustee, examiner or official committee of unsecured creditors has been appointed in the Debtors' cases. ULTIMATE ACQUISITION: Taps Campbell & Levine as Delaware Counsel ---------------------------------------------------------------- Ultimate Acquisition Partners LP and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Campbell & Levine LLC as its Delaware counsel. The Debtors selected the firm to provide advice and counsel relating to their Chapter 11 cases. Any services the firm may perform, however, will not duplicate services that Jaffe, Raitt, Heuer & Weiss P.C. is presently providing. A hearing is set for March 29, 2011 at 10:30 a.m., to consider the Debtor's request. Objections, if any, are due March 9, 2011, at 4:00 p.m. The firm's professionals and their hourly rates are: Designations Hourly Rates ------------ ------------ Partners $375-$500 Associates $225-$335 Para-professionals $100-$150 The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Ultimate Acquisition Ultimate Acquisition Partners LP and CC Retail, LLC, which own the U.S. consumer electronics store chain Ultimate Electronics, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on January 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Ultimate Acquisition Partners LP and CC Retail, LLC are specialty retailers of high-end entertainment and consumer electronics with 46 stores in over a dozen states, primarily in the mid-west and western United states. Of the 46 stores, 35 are operated by UAP and 11 are operated by CC Retail. All are operated under the name "Ultimate Electronics". UAP and CC Retail have more than 1,500 full-time and part-time employees. Kathleen Campbell Davis, Esq., Mark T. Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine LLC, serve as the Debtor's bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. The cases are jointly administered. ULTIMATE ACQUISITION: Taps Falcon Advisors as Financial Advisors ---------------------------------------------------------------- Ultimate Acquisition Partners LP and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Falcon Advisors Inc. as their consultant and financial advisor. A hearing is set for March 29, 2011 at 10:30 a.m., to consider the Debtor's request. Objections, if any, are due March 9, 2011, at 4:00 p.m. The firm will, among other things: i) oversee the engagement of Debtors' counsel and review of counsel's fee applications and fee statements; ii) negotiate the engagement of Gordon Brothers/Hilco as the store liquidation consultant to the Debtors; iii) assist the Debtors in developing and negotiating a plan of liquidation; iv) coordinate and advice regarding prioritizing and expediting information production to the Committee professionals; and v) assist Debtors in marketing and selling remaining non- inventory assets and provide assistance in all aspects of such transactions, including selection of consultants to be utilized by the Debtors, negotiation of the consultants' engagement agreements, facilitating due diligence requests with potential asset purchasers and negotiating asset purchase agreement(s). Mark W. Stephens, president of the firm, charges $420 per hour for services rendered. The Debtor assures the Court that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. About Ultimate Acquisition Ultimate Acquisition Partners LP and CC Retail, LLC, which own the U.S. consumer electronics store chain Ultimate Electronics, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on January 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Ultimate Acquisition Partners LP and CC Retail, LLC are specialty retailers of high-end entertainment and consumer electronics with 46 stores in over a dozen states, primarily in the mid-west and western United states. Of the 46 stores, 35 are operated by UAP and 11 are operated by CC Retail. All are operated under the name "Ultimate Electronics". UAP and CC Retail have more than 1,500 full-time and part-time employees. Kathleen Campbell Davis, Esq., Mark T. Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine LLC, serve as the Debtor's bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. The cases are jointly administered. UNITED REFINING: S&P Reports Additional Liquidity Support --------------------------------------------------------- Standard & Poor's Ratings Services has republished an article on United Refining Co. to reflect additional liquidity support available to the company. S&P said that it lowered its issue-level rating on United Refining Co.'s proposed $365 million senior secured notes due 2018 to 'B' (the same as the corporate credit rating) from 'B+'. At the same time, S&P has revised its recovery rating on the proposed notes to '3' from '2', indicating S&P's expectation for meaningful (50% to 70%) recovery in the event of payment default. "The rating action follows United's plan to upsize its senior secured note offering to $365 million from the originally proposed $350 million, which will result in recovery at the upper end of the 50% to 70% range, consistent with a '3' recovery rating," said Standard & Poor's credit analyst Marc D. Bromberg. The refiner plans to use the proceeds to retire its $324 million of senior unsecured notes due August 2012. As of Nov. 30, 2010, United had $520 million of adjusted debt. Standard & Poor's ratings on Warren, Penn.-based United Refining (United) reflects the company's currently weak liquidity position, its reliance on one refinery for most of its cash flows to service debt and other obligations and its exposure to the cyclical PADD 1 region. The current rating reflects S&P's expectation that liquidity, which was more than $70 million on Nov. 30, 2010, will be sufficient to cover fixed spending requirements in 2011 of $50 million (liquidity is further supported by a $38.5 million tax refund that the company received on Feb. 18, 2011, and by potential proceeds from business interruption or settlements from Enbridge as a result of the 6B rupture). S&P characterize the business profile as vulnerable and the financial risk profile as highly leveraged. Ratings List United Refining Co. Corporate credit rating B/Negative/-- Downgraded To From -- ---- Proposed $365 mil sr secd nts due 2018 B B+ Recovery Rating 3 2 US DATAWORKS: Has $619,200 Restated Loss in FY Ended March 31 ------------------------------------------------------------- US Dataworks, Inc., filed on Feb. 22, 2011, Amendment No. 2 on Form 10-K/A to amend its Annual Report on Form 10-K for the fiscal year ended March 31, 2010, filed with the Commission on June 29, 2010, to correct an error in the financial statements related to the Company's accounting for a software license sold during the quarter ended March 31, 2010. The Company recognized all of the license fee revenue associated with the License in March 2010 when the license agreement was executed and the software was provided to the customer. In November 2010, the Company entered into a separate service agreement with the customer. However, the original accounting did not consider the impact of essential services which are common for such software to meet the customer's intended use. Therefore, the Company has determined that the software license fee revenue should have been recognized over the period the professional services are rendered. The Company reported a net loss of $619,221 on $7.9 million of revenue for the fiscal year ended March 31, 2010, compared with a net loss of $2.0 million on $8.0 million of revenue for the fiscal year ended March 31, 2009. The Company's balance sheet at March 31, 2010, showed $6.1 million in total assets, $4.8 million in total liabilities, and stockholders' equity of $1.3 million. "We believe we currently have adequate cash to fund anticipated cash needs through March 31, 2011," the Company said in the filing. "However, we may need to raise additional capital in the future. Any equity financing may be dilutive to shareholders, and debt financing, if available, will increase expenses and may involve restrictive covenants. We may be required to raise additional capital, at times and in amounts that are uncertain, especially under the current capital market conditions. In addition, there may be limited access to capital due to being listed on OTC Bulletin Board." "These factors raise substantial doubt about our ability to continue as a going concern." About US Dataworks Sugar Land, Tex.-based US Dataworks, Inc. (OTC BB: UDWK) -- http://www.usdataworks.com/-- provides enterprise payments solutions to financial institutions, billers and government entities. VENTANA HILLS: Confirmation & Collateral Hearings Moved to Apr. 12 ------------------------------------------------------------------ The hearings with respect to the motions of Ventana Hills Associates, Ltd. to (i) approve the use of cash collateral, and (ii) confirm its Amended Plan of Reorganization and the competing Plan of Reorganization of Anglo Irish Bank have been continued to April 12, 2011, at 10:30 a.m. About Ventana Hills Associates Ventana Hills Associates, Ltd., is the owner and operator of a residential apartment project located in Pittsburgh, Pennsylvania, known as "Ventana Hills Apartments. Ventana Hills Apartments was constructed in 2002 as a rental apartment community, in two phases, and was purchased by the Debtor in 2004 for $50,000. Ventana Hills Associates and affiliate Ventana Hills Phase II, L.P., filed for Chapter 11 on November 3, 2009 (Bankr. N.D. Ill. Case No. 09-41755). The Debtors each estimated assets of and debts of $50 million to $100 million in their respective petitions. Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd., in Chicago, Illinois, represent the Debtor. VENTANA HILLS: Seeks to Employ CB Richard Ellis as Appraiser ------------------------------------------------------------ Ventana Hills Associates, Ltd. asks the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, for authority to employ Randal Dawson and CB Richard Ellis as its appraiser for the purpose of updating the CBRE Appraisal in accordance with the terms of the engagement letter, dated February 16, 2011, with compensation to be finally determined by the Court. Richard H. Fimoff, Esq., at Robbins, Salomon & Patt, Ltd., in Chicago, Illinois, relates that the Debtor requires the CBRE Appraisal to be updated due to: (a) Declines in capitalization rates since the completion date of the CBRE Appraisal, which declines have substantially increased the value of the Debtor's apartment complex; (b) The need to establish the value of the Debtor's apartment complex as of the confirmation hearing date, set for April 12, 2011; and (c) Debtor's ongoing efforts to refinance its apartment complex, which requires a current valuation of the Debtor's apartment complex by a highly respected appraiser. According to the Engagement Letter, CBRE's scope of work will include: * Phase I: Property inspection to the extent necessary to adequately identify the real estate. Research relevant market data, to the extent necessary to produce credible appraisal results. * Consulting and Advisory Services and Litigation Support Services, including expert testimony; preparation of critiques of opposing experts' reports or testimony; preparation of rebuttal reports; forensic real property investigations; and additional research or financial modeling. The Debtors and CBRE propose that the fee for the assignment to be (i) $5,000 for Phase I - Written Appraisal Reports, and (ii) based on an hourly rate for Phase II - Consulting and Advisory Services and Litigation Support Services. All work will be prepared under the direction of Mr. Dawson. He can be contacted at: Randal D. Dawson, MAI, MRICS Senior Vice President CB Richard Ellis, Inc. 311 South Wacker Drive, Suite 400 Chicago, Illinois 60606 Tel. No.: 312-233-8685 Fax No. : 312-277-3453 E-mail : randal.dawson@cbre.com Based on the affidavit of Randal Dawson, CBRE and its professionals do not hold or represent any interest adverse to the estate and are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. About Ventana Hills Associates Ventana Hills Associates, Ltd., is the owner and operator of a residential apartment project located in Pittsburgh, Pennsylvania, known as "Ventana Hills Apartments. Ventana Hills Apartments was constructed in 2002 as a rental apartment community, in two phases, and was purchased by the Debtor in 2004 for $50,000. Ventana Hills Associates and affiliate Ventana Hills Phase II, L.P., filed for Chapter 11 on November 3, 2009 (Bankr. N.D. Ill. Case No. 09-41755). The Debtors each estimated assets of and debts of $50 million to $100 million in their respective petitions. Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd., in Chicago, Illinois, represent the Debtor. VIASAT INC: Moody's Affirms Corporate Family Rating at 'Ba3' ------------------------------------------------------------ Moody's Investors Service affirmed the Ba3 corporate family and probability of default ratings for ViaSat, while at the same time, upgraded ViaSat's speculative grade liquidity to a SGL-2, indicating a good liquidity, from SGL-3, indicating adequate liquidity. The rating outlook remains stable. The liquidity rating revision results from the company's recent upsize and extension of its revolving term loan facility. With a $45 million cash balance (Dec. 31, 2010) and a newly upsized and extended $325 million revolving term loan (upsized from $275 million at January 11, 2011, with the maturity date extended to January 2016 from July 2012) that is substantially undrawn ($50 million outstanding at Dec. 31, 2010), ViaSat has more than ample sources of funding with which to cover anticipated disbursements. Over the forward four quarter SGL horizon, Moody's expect the company to be cash flow negative as satellite-related capital expenditures continue. Despite the cash drain, with the company's conservative leverage, Moody's do not expect financial covenant compliance issues to constrain access to liquidity. The combination of ViaSat's liquidity attributes results in liquidity now being assessed as good. The up-size of the revolving credit facility has a modest negative impact on the company's senior unsecured notes. This caused the loss given default assessment to be revised downwards (see ratings listing below). Rating and Outlook Actions: Issuer: ViaSat, Inc. -- Corporate Family Rating, unchanged at Ba3 -- Probability of Default Rating, unchanged at Ba3 -- Speculative Grade Liquidity Rating, revised to SGL-2 from SGL-3 -- Senior Unsecured Regular Bond/Debenture, unchanged at B1, with the loss given default assessment revised to LGD5, 76% from LGD5, 73% Ratings Rationale ViaSat has a Ba3 corporate family rating, a Ba3 probability of default rating, an SGL-2 speculative grade liquidity rating, and a stable ratings outlook. ViaSat's core government services business provides a relatively stable cash flow. This is credit positive as is the relatively stable -- pre capital expenditure -- cash flow from its satellite broadband business. ViaSat is in the process of constructing and launching, later this year, a new satellite that will have industry-leading transfer speeds. While the related future growth potential is exciting, completion and execution risks (operational capabilities, market reception, and financial exploitability are unproven) are credit negative. Given operational risks, ViaSat has taken a prudent stance with its financial arrangements. Conservative leverage is credit-positive. Further, while the company has generally under-performed relative to expectations over the past year or so, the approximately $100 million of equity raised last March ensured that leverage remained at levels appropriate for the Ba3 ratings. The company's liquidity position is also well-managed and supports the ratings. Rating Outlook The ratings outlook is stable. Despite expectations that free cash flow will continue to be negative for the next several quarters, Moody's anticipate continued business and cash flow expansion with leverage remaining in the 2.0-to-2.5x range. What Could Change the Rating -- Up While positive ratings migration is not anticipated until subsequent to ViaSat-1 being launched, its capabilities proven, and its economic exploitation initiated, consideration for positive ratings actions could occur in the event Moody's expects Debt/EBITDA to be sustained comfortably below 2x, and the company has access to ample liquidity. However, as Moody's expect ViaSat to construct and launch additional satellites, it is unlikely that the rating will progress beyond Ba3 for some time. What Could Change the Rating -- Down Event risks involving significant delays/impairments in top-line growth from ViaSat-1, integration difficulties involving WildBlue, or sustained growth initiatives are the likely catalysts for adverse ratings actions. These would likely involve liquidity issues and Debt/EBITDA being expected to exceed 3.0x for a sustained period of time. Headquartered in Carlsbad, California, ViaSat, Inc., is a leading producer of satellite and other wireless communications and networking systems to government and commercial customers. WELLINGTON PRESERVE: Court Approves J. Byington as Accountant ------------------------------------------------------------- Judge Erik P. Kimball of the U.S. Bankruptcy Court for the Southern District of Florida approved the application of Wellington Preserve Corporation to retain Jamie J. Byington, C.P.A. of Cherry, Bekaert & Holland, L.L.P., as its accountant, specially for the purpose of (i) preparing accountings for 2008, 2009, and 2010; (ii) preparing 2008, 2009, and 2010 federal and Florida state income tax returns with supporting schedules; and (iii) preparing Form 5472, Information Return of a 25% Foreign- Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business for years required. The Debtor is authorized to pay a $7,500 retainer to Jamie J. Byington, C.P.A. to be applied to fees and expenses as further authorized by the Court. Miami, Florida-based Wellington Preserve Corporation filed for Chapter 11 on April 27, 2010 (Bankr. S.D. Fla. Case No. 10-22049). Ronald G Neiwirth, Esq., who has an office in Miami, Florida, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $50 million to $100 million. WINDSTREAM CORPORATION: Fitch Affirms 'BB+' Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed these ratings of Windstream Corporation: -- Long-Term Issuer Default Rating at 'BB+'; -- $750 million senior secured revolving credit facility due 2013 at 'BBB-'; -- $101 million senior secured credit facility, Tranche A due 2011 at 'BBB-'; -- $182 million senior secured credit facility, Tranche A2 due 2013 at 'BBB-'; -- $287 million senior secured credit facility, Tranche B due 2013 at 'BBB-'; -- $1.064 billion senior secured credit facility, Tranche B2 due 2015 at 'BBB-'; -- Senior unsecured notes at 'BB+'. The Rating Outlook is Stable. Other subsidiary ratings were affirmed as listed at the end of the release. As a result of a tender offer, and the redemption on Feb. 23, 2011 of the remaining notes not tendered, these ratings were withdrawn: Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises Finance Corp. (co-issuers) -- IDR 'BB+'; -- Senior secured notes 'BBB-'. Windstream's ratings incorporate expectations for the company to generate strong operating and free cash flows and to have access to ample liquidity. Moreover, Windstream's revenues are becoming more diversified through additional business and data services revenue as a result of recent acquisitions. Acquisitions in 2009 and 2010 have also added scale. These positive factors aid in partly offsetting the effect of competition for consumer voice services on the company's operations, which is Fitch's principal concern. There is some near-term risk regarding the integration of acquisitions completed in late 2010, but in Fitch's view the risk is likely to be modest, owing to the company's experience with acquiring and incorporating small- and medium-sized acquisitions. Fitch believes the initial effect of the fourth quarter acquisitions of Q-Comm Corporation and Hosted Solutions Acquisition, LLC on Windstream's leverage was modest, and once synergies are realized by the end of 2011, leverage will be within the current expectations for Windstream's 'BB+' IDR. Windstream has also disclosed it will make a $60 million pension contribution in 2011 using stock, rather than cash, to manage overall leverage. Fitch estimates Windstream's 2011 leverage will approximate 3.4 times, at the upper end of the company's 3.2x to 3.4x historical range. Windstream's use of equity to partly fund the Iowa Telecommunications Services, Inc., NuVox Inc., D&E Communications, Inc., and Q-Comm transactions is a notable mitigant to pressure on the credit profile. In Fitch's view, the principal operating risks faced by Windstream consist of wireless substitution and competition from cable multiple-system operators offering voice and data services. Fitch believes Windstream's competitive exposure to cable MSOs is lower than that of the urban-based regional Bell operating companies. To mitigate the effects of competition within its customer base for consumer voice service revenues, Windstream is growing revenue from business services, as well as high-speed data services provided to consumers and businesses. The company also provides bundles to residential customers that include satellite-provided video services through an agreement with DISH Network. On Dec. 31, 2010, Windstream had $590 million available on its revolver and $42 million of cash on its balance sheet. In November 2010, Windstream expanded its revolving credit facility to $750 million from $500 million. Through amendments in 2009 and 2010, the maturity of $182.3 million of the $283 million outstanding on term loan A has been extended from July 2011 to July 2013. The term loan B, which as of Dec. 31, 2010, had a $1.351 billion balance outstanding, now has approximately $1.064 billion maturing in December 2015 rather than in July 2013. In September 2010, Windstream's facilities were amended to allow the company to receive certain broadband stimulus grants, to increase the amount of permitted incremental senior secured debt under the facilities to $1.6 billion from $800 million and to permit the company to extend the term loan B to the extent not previously extended. Principal financial covenants in the credit facilities require a minimum interest coverage ratio of 2.75x and a maximum leverage ratio of 4.5x. There are limitations on capital spending, and the dividend is limited to the sum of excess free cash flow and net cash equity issuance proceeds subject to pro forma leverage of 4.5x or less. Maturities in 2011 and 2012 approximate $139 million and $44 million, respectively. In Fitch's view, free cash flow will be sufficient to repay maturing debt in 2011 and 2012. Fitch expects free cash flow for Windstream to be in the $350 million to $450 million range in 2011. Capital spending is expected to rise in 2011 to a range of $520 million to $580 million from $415 million in 2010. The rise is due to factoring in the full- year effect of ongoing spending by companies acquired in 2010, an increase in stimulus-related broadband spending, and the potential for success-based capital in the Hosted Solutions and Q-Comm acquisitions. The company's cash flows are expected to benefit from an increase in bonus depreciation in 2011. Fitch has affirmed Windstream's subsidiary ratings: Windstream Georgia Communications -- IDR at 'BB+'; -- $30 Million Senior Notes due 2013 at 'BBB-'. Windstream Holdings of the Midwest -- IDR at 'BB+'; -- $100 Million Secured Notes due 2028 at 'BB+'. The Rating Outlook for all ratings is Stable. WILLIAM COLLICOTT MANN: Chapter 11 Conversion Denied ---------------------------------------------------- Bankruptcy Judge William L. Stocks denied a motion by M. Dale Swiggett, pro se, to convert the Chapter 7 bankruptcy case of William Collicott Mann and Virginia Mathis Mann (Bankr. M.D.N.C. Case No. 09-80494) to one under Chapter 11 of the Bankruptcy Code, overturn the Manns' Chapter 7 discharge, and throw out Chapter 7 trustee Sara A. Conti and appoint a new trustee. The Chapter 7 case was commenced on March 26, 2009. When the case was commenced, the Debtors owned real estate located in Alamance County, North Carolina, that had been developed as a golf course known as Quarry Hills Golf Club. On July 31, 2009, the Chapter 7 Trustee filed a motion seeking court approval of a sale of the Golf Course Property to an entity known as Tri-G, LLC. Following two hearings that were held after due and proper notice, the Court approved the sale on Sept. 30, 2009. The sale closed Oct. 7, 2009. The Debtors were granted a discharge on Dec. 7, 2009. The Motion by Mr. Swiggett was filed on Jan. 12, 2011, nearly two years after the petition date and some 15 months after the conveyance of the Golf Course Property to Tri-G. The Debtors and the Chapter 7 Trustee objected, asserting that Mr. Swiggett is not a creditor in the case nor otherwise a party in interest and therefore does not have standing to seek relief pursuant to the Motion. A copy of the Court's Feb. 25, 2011 Opinion and Order is available at http://is.gd/2joPY6from Leagle.com. YELLOWSTONE MOUNTAIN: Judge Kirscher Won't Recuse Self ------------------------------------------------------ Bankruptcy Judge Ralph B. Kirscher threw out a request by Timothy L. Blixseth to disqualify and remove the judge from all matters in which Mr. Blixseth is a litigant. Tim Blixseth accused Judge Kirscher of favoritism and siding with his ex-spouse, Edra Blixseth. Among others, Mr. Blixseth said Judge Kirscher's law clerk has engaged in ex parte communications with one of Mr. Blixseth's adversaries, urging his adversary to finalize a settlement with Mr. Blixseth before Mr. Blixseth could renege; and numerous times Judge Kirscher ruled on important motions against Mr. Blixseth before Mr. Blixseth had an opportunity to file a response permitted under the rules. In a Feb. 25, 2011 Memorandum of Decision, available at http://is.gd/0rbXzBfrom Leagle.com, Judge Kirscher explained why he should stay. About Yellowstone Club Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Club and its affiliates filed for Chapter 11 on Nov. 10, 2008 (Bankr. D. Montana, Case No. 08-61570). The Company's owner affiliate, Edra D. Blixseth, filed for Chapter 11 on March 27, 2009 (Case No. 09-60452). In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners, LLC, acquired equity ownership in the reorganized Club for $115 million. Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented the Debtors. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. * Bankruptcy Courts Prepare for Possible Shutdown, DBR Says ----------------------------------------------------------- Eric Morath, writing for Dow Jones' Daily Bankruptcy Review, reports that the administrators of the federal court system are making preparations for a possible government shutdown that could have a wide-ranging impact on bankruptcy attorneys. According to Mr. Morath, if a budget impasse in Congress results in a federal government shutdown, which could happen as soon as Friday, the court system will be among a wide swath of government functions potentially affected. DBR says the result for bankruptcy attorneys could range from a minor inconvenience, such as delayed hearings and slower processing of filings, to a major disruption -- possibly including the closure of courts and the shutdown of the electronic document- filing system known as PACER. According to Mr. Morath, officials at the Administrative Office of the U.S. Courts, the agency that support the operations of federal courts, has held a meeting to ready contingencies in case there is a government shutdown. Mr. Morath says negotiations on Capitol Hill continue this week, and Democrats and Republicans appear to be closing in on a compromise that could extend funding for the government until March 18. Mr. Morath also reports that in the event of a federal government shutdown, it may be the U.S. bankruptcy courts that keep the federal judiciary humming. According to Mr. Morath, Judge Randall L. Dunn of the U.S. Bankruptcy Court in Portland, Oregon and the president of the National Conference of Bankruptcy Judges, said bankruptcy courts, which collect substantial fees from both businesses and consumers filing for relief from creditors, could be a key funding source. Judge Dunn recounted that in the shutdowns of the mid-1990s, bankruptcy fees funded the rest of the court system for about two weeks. In the event of a shutdown this year, he hopes that could happen again. Judge Dunn said in an interview last week he and others on the bench are discussing the possibility of a federal shutdown. DBR also reports that Karen Redmond, spokeswoman for the Administrative Office of the U.S. Courts, said in an interview last week that in a long shutdown, the Administrative Office's director would need to evaluate PACER and other court services to determine when and in which order they would be shut. According to DBR, a recent Congressional Research Service report indicated that the 1995 and 1996 shutdowns did have some impact on bankruptcy courts. More than 3,500 bankruptcy cases were suspended during that time. Still, that is just a small faction of all cases. In 1995, for example, about 77,000 bankruptcies were filed each month. According to DBR, Robert Lawless, a bankruptcy law professor at the University of Illinois, said it's difficult to predict how a prolonged shutdown would affect the courts. Mr. Lawless explained that electronic court filings "barely existed the last time there was a federal shutdown," and that "things move much more quickly in today's bankruptcy courts, with companies and creditors often demanding quick action." DBR also reports that Ted Berkowitz, Esq., a partner at Farrell Fritz, said: "We did practice bankruptcy law before Pacer, and it was a kinder, gentler day because we actually all knew each other." DBR also notes that Donald Workman, Esq., a partner with Baker & Hostetler, said: "The business of going out of business must continue." * * * Andy Sullivan and Kim Dixon at Reuters report that the House of Representatives on Tuesday voted to extend government funding for two more weeks. Reuters said the move would avert a federal shutdown but do nothing to resolve a bitter debate over the federal budget. According to Reuters, the Democratic-led Senate agreed to vote on the House-passed measure at 11 a.m. EST (1600 GMT) on Wednesday. Senior aides said the Senate would give it final congressional approval, clearing the way for President Barack Obama to sign the bill into law. Reuters also notes that current funding is due to expire on Friday. The bill drafted by House Republican leaders, which passed by a vote of 335-91, would give President Obama and Congress until March 18 to agree on funding levels for the rest of this fiscal year that ends on Sept. 30. * James Barz Joins Robbins Geller Rudman & Dowd LLP --------------------------------------------------- Robbins Geller Rudman & Dowd LLP disclosed that Chicago trial lawyer and former assistant U.S. Attorney James E. Barz has joined the firm as a partner. "We are honored that Jim has decided to join the firm," said Robbins Geller's Darren Robbins. "Barz's substantial trial and appellate experience as a prosecutor and complex civil litigator will prove invaluable to Robbins Geller's clients." Robbins Geller currently represents hundreds of institutional investors across the globe, including some of the largest pension funds in the United States, Canada and the European Union. According to RiskMetrics, Robbins Geller has secured more recoveries for aggrieved shareholders than any other plaintiffs' securities firm in each of the past three years. "I'm extremely proud to join the terrific lawyers at Robbins Geller, including many other former prosecutors, who have successfully prosecuted the largest securities class action recovery in history (over $7 billion for Enron shareholders) and the largest options backdating class action win in history (nearly $1 billion for UnitedHealth shareholders)," said Barz. "It was a natural fit, given the number of significant cases the firm has in the Northern District of Illinois, and the firm's willingness to take cases to trial to maximize recoveries for its clients, as exemplified by the historic jury verdict Robbins Geller won for shareholders in the Household case." Barz brings significant trial experience to the firm, having served as lead counsel in numerous jury trials as a partner at Mayer Brown LLP and an assistant United States Attorney in Chicago. As a federal prosecutor, he served in the General Crimes, Money Laundering and Forfeiture, and Public Corruption Sections, prosecuting complex financial and accounting frauds, tax offenses, bankruptcy fraud, money laundering offenses, and public corruption cases, and successfully secured convictions in every trial he prosecuted. A registered CPA and ICPAS Excel Award winner, Barz graduated first in his class from Loyola University Chicago's School of Business Administration and with honors from Northwestern University School of Law where he currently teaches Trial Advocacy as an Adjunct Professor. * Jeffrey Chadwick Joins McGuireWoods Chicago Office ---------------------------------------------------- Bankruptcy Law360 reports that McGuireWoods LLP said Monday it was expanding its bankruptcy practice with the addition of a former Katten Muchin Rosenman LLP attorney to the firm's Chicago office. The firm said Jeffrey Chadwick would join the Chicago operation's restructuring and insolvency department as a partner, focusing on bankruptcy, reorganization and creditors' rights, according to Law360. * Jones Day's Bapna & Kirkland's Ginzburg Move to Quinn Emanuel --------------------------------------------------------------- In a declaration filed in the Chapter 11 cases of Lehman Brothers Holdings Inc., Susheel Kirpalani, Esq., a member of Quinn Emanuel Urquhart & Sullivan LLP, in New York, disclosed that Abhishek Bapna and Maria Ginzburg joined the firm as associate and partner, respectively. Mr. Bapna was an associate at Jones Day LLP prior to joining Quinn Emanuel. While at Jones Day, he represented Lehman Brothers Holdings Inc. and its affiliated debtors in litigation matters including two lawsuits they filed against Nomura International PLC and Nomura Securities Co. Ltd. Meanwhile, Ms. Ginzburg was formerly a partner at Kirkland & Ellis LLP. She represented the liquidators of Lehman Brothers Australia Limited while at Kirkland. Mr. Bapna's representation of the Debtors and Ms. Ginzburg's representation of the liquidators ceased upon joining Quinn Emanuel, according to the declaration. The Official Committee of Unsecured Creditors in Lehman Brothers Holdings' Chapter 11 cases retained Quinn Emanuel as special counsel. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as bankruptcy counsel to the Creditors Committee. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 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. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Mar. 4, 2011 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Hyatt Regency Century Plaza, Los Angeles, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 7-9, 2011 INTERNATIONAL COUNCIL OF SHOPPING CENTERS Debt Workout, Transactions, and Repositioning of Distressed Assets The Wharton School, University of Pennsylvania, Philadelphia, Pa. Contact: 1-646-728-3468 or www.icsc.org/2011UV Mar. 7-9, 2011 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition Duberstein U.S. Courthouse, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - Florida Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 10-12, 2011 AMERICAN BANKRUPTCY INSTITUTE SUCL/ Alexander L. Paskay Seminar on Bankruptcy Law and Practice Marriott Tampa Waterside, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 17-19, 2011 AMERICAN BANKRUPTCY INSTITUTE Byrne Judicial Clerkship Institute Pepperdine University School of Law, Malibu, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ April 27-29, 2011 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott, Chicago, IL Contact: http://www.turnaround.org/ May 5, 2011 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts - New York City Association of the Bar of the City of New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ May 6, 2011 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Hilton New York, New York, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ June 6, 2011 AMERICAN BANKRUPTCY INSTITUTE Canadian-American Cross-Border Insolvency Symposium Fairmont Royal York, Toronto, Ont. Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Mich. Contact: http://www.abiworld.org/ July 21-24, 2011 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 27-30, 2011 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Sanctuary at Kiawah Island, Kiawah Island, S.C. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 4-6, 2011 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: Feb. 21, 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 ***