/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110308.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 8, 2011, Vol. 15, No. 66 Headlines 699 MERRICK: Case Summary & 5 Largest Unsecured Creditors 9339 ALONDRA: Voluntary Chapter 11 Case Summary 1031 TAX GROUP: Wave III Settlement Fairness Hearing on June 27 A+HC HOLDING: Section 341(a) Meeting Scheduled for April 1 A+HC HOLDING: Files Schedules of Assets & Liabilities A+HC HOLDING: Wants to Use Banco Popular's Cash Collateral ACCENT WINDOWS: Case Summary & 20 Largest Unsecured Creditors ALDA PHARMACEUTICALS: Posts C$325,300 Loss in Dec. 31 Quarter AMBAC FIN'L: K. Veera Responds to Summary Judgment Motion AMBAC FIN'L: Bar Date Extended to July 2 for D&Os AMBAC FIN'L: AAC Incurs $1.47 Billion Net Loss in 2010 AMERLINK LTD: Court Dismisses RICO Claims in Suit v. D&Os APPALACHIAN REGIONAL: Fitch Affirms 'BB-' Rating on Revenue Bonds APPLESEED'S INTERMEDIATE: Reaches Creditor Accord ARCTIC EXPRESS: 7th Cir. Remands Class Suit by Drivers Group ARLINGTON HOSPITALITY: DIP Lender Not Entitled to Additional Fees B GREEN: Roserberg Rich Raises Going Concern Doubt BANK OF FLORIDA: Posts $627,000 Net Loss in Sept. 30 Quarter BANNING LEWIS: Wants Plan Exclusivity Until May 31 BEARINGPOINT INC: Wants $47 Million Contract Suit Stayed for Now BEAZER HOMES: CEO McCarthy Resolves SEC Clawback Claims BETTER EXISTENCE: BEHIV Files For Chapter 7 Bankruptcy Protection BERNARD L MADOFF: SEC Launches Probe of Ex-Top Atty.'s Madoff Ties BI-LO LLC: Not Liable for Friarsgate CAM Charges BNA SUBSIDIARIES: Confirmation Hearing Set for Mar. 22, 2011 BW PROPERTY: Voluntary Chapter 11 Case Summary C-BASS: Judge Gropper Approves Disclosure Statement CAPITOL BANCORP: Restates Financials for $11.7-Mil. Loan Losses CARBON BEACH: Hearing on Amended Chapter 11 Plan Set for Thursday CATALYST PAPER: Posts C$398.2 Million Net Loss in 2010 CATHAY GENERAL: Fitch Affirms Issuer Default Rating at 'BB' CHINA TEL GROUP: RBSM LLP Resigns as Independent Accountant CIRCLE ENTERTAINMENT: Merlin to Bring 3 Attractions to Orlando CICSCO INC.: Case Summary & 19 Largest Unsecured Creditors COTTLE FINANCIAL: Case Summary & 2 Largest Unsecured Creditors CPW ACQUISITION: Court Won't Hear Dispute Over Fortress Fees CROSS LANES: Case Summary & 8 Largest Unsecured Creditors CROWN HOLDINGS: Fitch Raises Default Rating to 'BB'; Outlook Pos. DAIICHI SOLAR: Case Summary & 20 Largest Unsecured Creditors DAUERWALDEN, INC.: Case Summary & 5 Largest Unsecured Creditors DAVE DUERSON: Filed for Bankruptcy in September DELUXE CORPORATION: Moody's Assigns Ba2 Rating to $200 Mil. Notes DELUXE HOLDINGS: Case Summary & 20 Largest Unsecured Creditors DOMMER CONSTRUCTION: Subcontractor's Financier May Amend Claim DULATOWN OUTREACH: Case Summary & 10 Largest Unsecured Creditors E-DEBIT GLOBAL: Enters Into Joint Venture With ebackup Inc. ECONOMIC DEVELOPMENT: Case Summary & 8 Largest Unsecured Creditors ENERGY FUTURE: Calls Aurelius' Default Allegation 'Meritless' EUGENE PIPE: Case Summary & 20 Largest Unsecured Creditors EURAMAX INTERNATIONAL: Moody's Affirms 'Caa1' Corp. Family Rating EVANS OIL: Reports $39.7 Million in Liabilities EVEREST HEIGHTS: Section 341(a) Meeting Scheduled for March 24 EVERGREEN ENERGY: Regains Listing Compliance With NYSE Arca FAIRVUE CLUB: Gallatin, New Owner, to Reopen Club Mid-March FIDELITY PROPERTIES: Parties Withdraw Plea to Dismiss Ch. 11 Case FIRSTFED FINANCIAL: Wins Court Nod to Hire Garden City Group FKF MADISON: Judge Approves Loan Over Creditors' Objections FLEETWOOD FOOD: Voluntary Chapter 11 Case Summary FNB UNITED: Banking Unit Converts $5-Mil. of Term Loan to Shares FOREST GROVE: Court Rejects Disclosure Statement, Dismisses Case FOXCO ACQUISITION: Moody's Upgrades Corp. Family Rating to 'B3' FRANK J. GOMES: Creditors Withdraw Plea to Dismiss Chapter 11 Case GENERAL MOTORS: Court OKs $420-Mil. Claims Reserve GENERAL MOTORS: Removal Period Extended 1 Year After Confirmation GENERAL MOTORS: Brown Rudnick Directed to Submit Rule 2019 Notice GIGOPTIX LIMITED: PwC Raises Going Concern Doubt GOTTSCHALKS INC: Discloses Termination of Registration of RSP GREAT ATLANTIC & PACIFIC: Panel Withdraws Plea to Hire Lowenstein GREAT ATLANTIC & PACIFIC: Local 342 vs. Pathmark Stores GREAT ATLANTIC & PACIFIC: $629,000 in Claims Switch Hands February GREEN MANOR: Case Summary & 3 Largest Unsecured Creditors HALLMARK WOODWORKERS: Case Summary & 20 Largest Unsec Creditors HEADWATERS INC: Moody's Assigns 'B2' Rating to Senior Notes HOA RESTAURANT: Moody's Assigns 'B3' Rating to $165 Mil. Notes HORIZON LINES: Moody's Retains 'Caa1' Corporate Family Rating I/OMAGIC CORP: Simon & Edward Raises Going Concern Doubt ILLINOIS FINANCE: Fitch Cuts Ratings on $190 Mil. Bonds to 'BB-' INDUSTRIAS ARENERAS: Case Summary & 20 Largest Unsecured Creditors INNOVIDA HOLDINGS: Receiver Takes Over, Can Pursue Chapter 11 KALIMATA INC: Case Summary & 4 Largest Unsecured Creditors KATUMBH, LLC: Case Summary & 13 Largest Unsecured Creditors LAFAYETTE INVESTORS: Case Summary & 12 Largest Unsecured Creditors LANDMARK ATLANTIC: Court Prefers Case Dismissal, Not Conversion LEVEL 3: Fitch Assigns 'B+/RR2' Rating to $500 Mil. Senior Notes MACCO PROPERTIES: Creditors Panel Has OK to Hire Welch as Counsel MAACO PROPERTIES: US Trustee Appoints 3 Members to Creditors Panel MERUELO MADDUX: Seeks Relief from Paying Lawyers' Fees METROPCS WIRELESS: Moody's Assigns 'Ba1' Rating to $1.5 Bil. Loan MONTEBELLO, CA: Fiscal Mess Raises Insolvency Fears MORGANS HOTEL: JV Assigns Stake in LV Hard Rock Hotel to Lender MORITZ WALK: Must File Plan by April 15 to Avoid Foreclosure MORNINGSIDE HEIGHTS: Terrace in the Sky in Chapter 11 MORTGAGE LENDERS NETWORK: Authorized to Destroy Files MOSDOS CHOFETZ: Board's Approval of Site Plan Voids Violations MSCI INC: Moody's Upgrades Corporate Family Rating to 'Ba1' MSR RESORT: Paulson, Five Mile Offer $30 Million Loan MWM CARVER: Files Chapter 11 Petition for Full-Payment Sale NATIONAL JOCKEY CLUB: Judge Dismisses Suit v. Carey NAT'L MEMORIAL PARK: Rasmus Auctioneers Conducts Liquidation NEBRASKA BOOK: Said to Tap Advisors for Possible Chapter 11 NEW SOLUTIONS: Case Summary & 4 Largest Unsecured Creditors NEW STREAM: Investors Seek to Force Bankruptcy, Want Trustee NEW STREAM: Involuntary Chapter 11 Case Summary NO FEAR RETAIL: Has Court's Nod to Reject 12 Unexpired Leases NORDYKE VENTURES: Case Converted to Chapter 7 NORTEL NETWORKS: Ex-Workers Want Fast-Track of Claim Status Bill NORTEL NETWORKS: Posts $4.061 Billion Net Loss in 2010 OCTAVIUS TOWER: Fitch Assigns 'CCC' Issuer Default Rating PALM HARBOR: Court Approves Sale of Assets to Fleetwood PC DEVELOPMENT: Case Summary & 10 Largest Unsecured Creditors PEA RIVER: Case Summary & 18 Largest Unsecured Creditors PILGRIM'S PRIDE: Court Says Rejection of N.C. Growers' Pacts Valid PJ FINANCE: Owner of 32 Apartment Locations in Chapter 11 PJ FINANCE: Case Summary & 20 Largest Unsecured Creditors PLANT INSULATION: Inks Settlement Pact with Arrowood Indemnity POPLAR VILLAS: Voluntary Chapter 11 Case Summary PREMIER NW: Case Summary & 20 Largest Unsecured Creditors PRESIDIO INC: Moody's Affirms 'B1' Corporate Family Rating RANCHES HOLDINGS: Case Summary & 5 Largest Unsecured Creditors RITE AID: Completes Refinancing of Tranche 3 Term Loan RIVER ROAD: Files Plan for O'Hare InterContinental Chicago Hotel ROBERT RYNDERS: Files For Chapter 11 Bankruptcy Protection S & Y ENTERPRISES: Files Amended Schedules of Assets & Liabilities S & Y ENTERPRISES: Has Until March 11 to File Chapter 11 Plan SABRE DEFENCE: Court Sets March 10 as Auction Date SEMCRUDE LP: Plains Marketing Has Green Light to Amend Complaint S.J. HOSPITALITY: Case Summary & 13 Largest Unsecured Creditors SOUTH EDGE: District Court Affirms Rejection of Briefing Schedule SOUTH EDGE: FTI's Cynthia Nelson is Chapter 11 Trustee SPIRIT TOURS: Files for Chapter 11 Bankruptcy Protection SUN COUNTRY: Sale On Track; Trustee Expecting LOI Shortly SUNCAL COS: Lehman Commercial Paper Bids for LBREP Projects SUPERIOR ACQUISITIONS: Disc. Statement Hearing Set for April 1 SUPERIOR ACQUISITIONS: Ch. 11 Trustee Agrees to DRMG Stay Relief TERRA BENTLEY II: Village Denied Derivative Standing TERRESTAR CORP: Colbeck Wants Additional Adequate Protection TERRESTAR CORP: Files Schedules of Assets & Liabilities TERRESTAR CORP: Files Statement of Financial Affairs TERRESTAR NETWORKS: Proposes to Purchase Equipment for $557,472 TERRESTAR NETWORKS: Sprint Filing Identical Claims, Says Panel TERRESTAR NETWORKS: Committee Challenge Period Moved to March 11 TEXAS-SCARBOROUGH: Case Summary & 12 Largest Unsecured Creditors TRICO MARINE: Plan Outline Hearing Set for April 13 TULLY'S COFFEE: Names Cathy Campbell as Chief Financial Officer VECTAIR USA: Case Summary & 16 Largest Unsecured Creditors VETTA LLC: Case Summary & 20 Largest Unsecured Creditors VULCAN MATERIALS: Moody's Cuts Senior Unsec. Ratings to 'Ba1' WHISPERING WIND: Voluntary Chapter 11 Case Summary WISCONSIN CHEESEMAN: All Plant Assets to be Sold at Public Auction WTB FINANCIAL: Fitch Downgrades Preferred Stock Rating to 'BB+' ZOGENIX INC: Recurring Losses Prompt Going Concern Doubt * Circuits Now Split on Negative Equity on Auto Loans * Holding Repossessed Car Warrants $13,000 in Damages * Two Ex-Bank of America Execs. Buying More Failed Banks * Congress Warned That Reform Hurts Small Banks * DiNapoli Tells CNBC State Bankruptcy Talk is 'Irresponsible' * Michigan Governor Directs Cities to Begin Tightening Their Belts * Moody's: Municipal Market Continues to Face Credit Pressure * Moody's: Default Wave Failed to Sink Investor Recoveries * Moody's: Defaults Down Dramatically in 2010 * Lenny Goldberg Talks About Construction Subcontractor Defaults * Perkins Coie Opens NY Office to Expand Restructuring Practice * Large Companies With Insolvent Balance Sheets ******** 699 MERRICK: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------- Debtor: 699 Merrick Road Realty, LLC 12 Wilbur Street Lynbrook, NY 11563 Bankruptcy Case No.: 11-71229 Chapter 11 Petition Date: March 3, 2011 Court: U.S. Bankruptcy Court Eastern District of New York (Central Islip) Judge: Robert E. Grossman Debtor's Counsel: Fred S. Kantrow, Esq. THE LAW OFFICES OF AVRUM J. ROSEN, PLLC 38 New Street Huntington, NY 11743 Tel: (631) 423-8527 Fax: (631) 423-4536 E-mail: fkantrow@avrumrosenlaw.com Scheduled Assets: $1,821,000 Scheduled Debts: $3,587,273 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nyeb11-71229.pdf The petition was signed by 9339 ALONDRA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 9339 Alondra Blvd., LLC 156 S. Clark Drive Beverly Hills, CA 90211 Bankruptcy Case No.: 11-19071 Chapter 11 Petition Date: March 3, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Jennifer L. Jones, Esq. THE WESTWOOD LAW GROUP, APC 9107 Wilshire Boulevard, Suite 450 Beverly Hills, CA 90210 Tel: (310) 623-4420 Fax: (310) 461-1901 E-mail: Jdgrad03@Yahoo.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 Javid Somekh, managing member. 1031 TAX GROUP: Wave III Settlement Fairness Hearing on June 27 --------------------------------------------------------------- Judge James Ware issued a revised order preliminary approving the Wave III Class Settlement with the Boulder Defendants and the MacDowell Parties. A Fairness Hearing pursuant to Rule 23(e) of the Federal Rules of Civil Procedure is scheduled to be held before the Court on June 27, 2011 at 9:00 a.m., to consider Class Counsel's motion for final approval of the deal. Class Representatives, on behalf of themselves and the Settlement Class and Gerard A. McHale, Jr., P.A., the Liquidation Trustee for the 1031 Debtors Liquidation Trust, pursuant to the plan of reorganization confirmed in the chapter 11 bankruptcy cases for the 1031 Tax Group, LLC, et al., and the 1031 Debtors Liquidation Trust, have entered into a Stipulation and Agreement of Settlement with Boulder Capital LLC, Boulder Columbus LLC, Boulder West Oaks LLC, Boulder Holdings VI, LLC, Boulder Holdings X, LLC, and Roy S. MacDowell, Jr. and Virginia MacDowell, Baystone Investor, LLC, Baystone Residual, LLC, and Baystone Fund I GP, LLC. The Wave III Settlements will total $21,975,000: -- the Kutak Parties collectively contributing $8,975,000; -- Citibank contributing $5,900,000; -- the Foley Defendants contributing $1,700,000; -- the Boulder Defendants contributing $2,000,000; and -- Jorden Burt and Richard Simring contributing $3,400,000 The settlements will add to the Wave I and Wave II Settlements. The Wave III Settling Defendants deny any wrongdoing, fault, liability or damage to the Class or the Trustee and deny that they acted improperly in any way. In view, however, of the uncertainty and expense of litigation, the Wave III Settling Defendants have agreed to pay these amounts in exchange for, among other things, a full, final and complete release of, among other claims, all asserted and unasserted claims against them and Rule 23 Bar Orders protecting them from any further or potential claims. The Wave III Settlements will not resolve claims against the other non-settling defendants and litigation will continue against those defendants. The case is Anita Hunter, et al., v. Citibank, N.A., et al., Case Nos. 09-md-02028 JW, 09-CV-02079-JW (N.D. Calif.) A copy of the Court's March 2, 2011 revised order is available at http://is.gd/jVbG2Xfrom Leagle.com. About 1031 Tax Group Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- was a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. 131 Tax Group had total assets of $164.23 million and total liabilities as of Sept. 30, 2007. The Company and 15 of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 07-11448) on May 14, 2007. Gerard A. McHale, Jr., was appointed Chapter 11 trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the Chapter 11 trustee. Kurtzman Carson Consultants LLC acts as claims and notice agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. Former CEO Edward H. Okun is in federal prison at Northern Neck Regional Jail in Warsaw, Virginia, after being convicted of mail fraud and other charges. Mr. Okun allegedly engaged in several misappropriations of funds of 1031 Tax Group and other entities. The funds were used for Mr. Okun's lavish lifestyle including acquiring properties and luxury asset. A+HC HOLDING: Section 341(a) Meeting Scheduled for April 1 ---------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of A+HC Holding, Inc.'s creditors on April 1, 2011, at 9:00 a.m. The meeting will be held at Ochoa Building, 500 Tanca Street, First Floor, San Juan, Puerto Rico. 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. San Juan, Puerto Rico-based A+HC Holding, Inc., aka Farmacias El Amal, filed for Chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 11-01428) on Feb. 24, 2011. Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $32,711,487 in total assets and $29,266,889 in total debts as of the Petition Date. A+HC HOLDING: Files Schedules of Assets & Liabilities ----------------------------------------------------- A+HC Holding, Inc., has filed with the U.S. Bankruptcy Court for the District of Puerto Rico its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $45,713 B. Personal Property $32,665,774 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $23,978,994 E. Creditors Holding Unsecured Priority Claims $403,632 F. Creditors Holding Unsecured Non-priority Claims $4,884,264 ----------- ----------- TOTAL $32,711,487 $29,266,889 San Juan, Puerto Rico-based A+HC Holding, Inc., aka Farmacias El Amal, filed for Chapter 11 bankruptcy protection on Feb. 24, 2011 (Bankr. D. P.R. Case No. 11-01428). Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, serves as the Debtor's bankruptcy counsel. A+HC HOLDING: Wants to Use Banco Popular's Cash Collateral ---------------------------------------------------------- A+HC Holding, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to use the cash collateral of Banco Popular de Puerto Rico until April 1, 2011. On Feb. 2, 2010, the Debtor entered into a loan and security agreement with Westernbank Puerto Rico for a maximum credit facility of $25 million, which was utilized by the Debtor to purchase 22 pharmacies from PMC Marketing, Corp., through a public sale, approved by the Court on Jan. 15, 2010. The loan is secured by substantially all of the Debtor's assets. Westernbank was closed on April 30, 2010, by the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, who appointed the Federal Deposit Insurance Corporation as receiver. FDIC and BPPR entered into a loss sharing agreement as to Westernbank's assets, by which BPPR acquired the Loan. At the time of the filing of the Debtor's Chapter 11 case, the Debtor owed BPPR $23,978,994 on the loan. Charles A. Cuprill-Hernandez, Esq., at Charles A. Cuprill, P.S.C. Law Offices, explains that the Debtor needs access to the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at http://bankrupt.com/misc/A_HC_budget.pdf The Debtor says that BPR is adequately protected in the Debtor's use of cash collateral, since the mitigation and contingency plan will allow the Debtor to preserve BPPR's collateral and maximize the same, inclusively through probable sales of pharmacies. The Puerto Rico Administration for the Services of Mental Health and Against Addiction and the Debtor agreed in February 2011 on a contingency plan to mitigate the potential risks involved in having the narcotics and controlled substances unattended and dispersed through the Debtor's 22 pharmacies across Puerto Rico. The contingency plan required the Debtor to remove all narcotics and controlled substances form the 22 locations under armed escort and to concentrate the same in one pharmacy location in the metropolitan area under 24-hour surveillance, as quickly as possible. The Debtor says that BPPR's interest in the stream resulting from the liquidation of the Debtor's assets and in the probable sale of the Debtor's pharmacies, which isn't possible without the mitigation and contingency plan and the use of BPPR's cash collateral, is additional adequate protection to BPPR in the Debtor's use of BPPR's cash collateral, since BPPR will be receiving a replacement lien of equal value or more than the requested use of its cash collateral. The Debtor will comply with the reporting requirements under the Loan. BPPR has not consented to the use of its cash collateral and has requested the Court to prohibit the Debtor's use of its cash collateral. According to BPPR, the Debtor resumed operations and has not disclosed the source of its funding to operate. BPPR says that the Debtor has failed to make any deposits with BPPR since Feb. 17, 2011. BPPR is represented by O'Neill & Borges. About A+HC Holding San Juan, Puerto Rico-based A+HC Holding, Inc., aka Farmacias El Amal, filed for Chapter 11 bankruptcy protection on Feb. 24, 2011 (Bankr. D. P.R. Case No. 11-01428). Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $32,711,487 in total assets and $29,266,889 in total debts as of the Petition Date. ACCENT WINDOWS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Accent Windows, Inc. 12300 Pecos Street Westminster, CO 80234 Bankruptcy Case No.: 11-14348 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Jeffrey S. Brinen, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: jsb@kutnerlaw.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/cob11-14348.pdf The petition was signed by Terry Marcovich, president. ALDA PHARMACEUTICALS: Posts C$325,300 Loss in Dec. 31 Quarter ------------------------------------------------------------- ALDA Pharmaceuticals Corp. reported a net loss of C$325,359 on C$49,324 of sales for the three months ended Dec. 31, 2010, compared with a net loss of C$337,750 on C$996,659 of sales for the same period of the prior fiscal year. The Company's balance sheet at Dec. 31, 2010, showed C$1,006,059 in total assets, C$1,043,260 in total liabilities, and a stockholders' deficit of C$37,201. "The Company has no history of pre-tax profit and in the previous three years has had only limited annual revenues for each of the years it has been operating," the Company said in the filing. "The Company sustained operating losses for each of its fiscal years and has sustained significant accumulated operating losses." The auditor's reports to the shareholders are expressed in accordance with Canadian reporting standards, which do not require a reference to conditions and events that cast substantial doubt on the Company's ability to continue as a going concern when these are adequately disclosed in the financial statements. "Had the Company's financial statements been audited by U.S. auditors, the Company may have received a 'going concern' qualification," according to the Management's discussion and analysis on the 2010 results. A full-text copy of the interim consolidated financial statements is available for free at http://researcharchives.com/t/s?7474 A full-text copy of the Management's Discussion & Analysis is available for free at http://researcharchives.com/t/s?7475 About ALDA Pharmaceuticals Based in Richmond, BC, Canada, ALDA Pharmaceuticals Corp. -- http://www.aldacorp.com/-- is principally engaged in the development, production and marketing of infection control agent products, principally a product marketed as "T36(R)". ALDA trades on the TSX Venture Exchange in Vancouver, Canada under the symbol "APH" and on the OTC BB under the symbol "APCSF". AMBAC FIN'L: K. Veera Responds to Summary Judgment Motion --------------------------------------------------------- As reported in the Jan. 25, 2011 edition of the Troubled Company Reporter, Ambac Financial Group, Inc., commenced an adversary proceeding in the U.S. Bankruptcy Court for the Southern District of New York for a declaratory relief to confirm applicability of the automatic stay and for injunction against Karthikeyan V. Veera on Jan. 18, 2011. In March 2010, Mr. Veera commenced a putative class action before the U.S. District Court in the Southern District of New York on behalf of himself and a putative class consisting of all participants in the Ambac Financial Group, Inc. Savings Incentive Plan for the period from October 1, 2006 to July 2, 2008, against numerous alleged Plan fiduciaries, including certain current and former directors of the Debtor, the Savings Plan Administrative Committee under the Debtor's Plan, the Savings Plan Investment Committee, and the Compensation Committee of the Debtor's Board of Directors. The class action alleges breach of the defendants' fiduciary duties under the Employment Retirement Income Security Act of 1974. The Debtor has filed a motion, asking Bankruptcy Judge Shelley Chapman to enter: (a) a summary judgment declaring that the protections of the automatic stay are applicable to: -- the claims against the ERISA Action Defendants; or -- the efforts of Mr. Veera to obtain extremely burdensome, expensive and time-consuming discovery from the Debtor and its current management in connection with the prosecution of the ERISA Action; or (b) an injunction preventing Mr. Veera from continuing to prosecute the ERISA Action until the effective date of a Chapter 11 plan in the Debtor's bankruptcy case. Karthikeyan Veera is not interested in disrupting Ambac Financial Group, Inc.'s reorganization efforts or distracting its officers and employees from working towards reorganization, Stephen J. Fearon, Jr., Esq., at Squitieri & Fearon, LLP, in New York, tells Judge Chapman of the U.S. Bankruptcy Court for the Southern District of New York. Mr. Veera, according to Mr. Fearon, is simply trying to prosecute his "ERISA Action" by obtaining discovery to support his claims. The Debtor attempts to make Mr. Veera's subpoena relevant to the adversary proceeding the Debtor commenced by misrepresenting Mr. Veera's positions to the Bankruptcy Court, Mr. Fearon points out. However, Mr. Veera has not admitted that he cannot prosecute a putative ERISA action before the U.S. District Court for the Southern District of New York without discovery -- only that the discovery from the Debtor would help him pursue his claims against 14 individuals and three committees that were fiduciaries to the Ambac Financial Group, Inc. Savings Investment Plan, Mr. Fearon contends. Indeed, Mr. Veera has drastically pared the number of requests in the subpoena from 62 to eight and has further limited the scope and breadth of his requests in order to minimize possible effects on the Debtor's reorganization efforts, Mr. Fearon discloses. A full-text copy of the revised subpoena can be found in Mr. Veera's response, available for free at: http://bankrupt.com/misc/Ambac_VeeraReply2SummJudgMo.pdf Mr. Fearon clarifies that Mr. Veera has absolutely no claim against the Debtor nor is the Debtor a named defendant to the ERISA Action. Mr. Fearon explains that Mr. Veera did not name the Debtor as a defendant because, as the Debtor had argued, the Debtor had no fiduciary responsibilities with respect to the Plan and thus could not properly be named as a defendant in the ERISA Action. As the Debtor has conceded, the Non-Debtor Defendants' right to indemnification is not absolute, Mr. Fearon asserts. Mr. Veera seeks to recover from the Non-Debtor Defendants for their independent fiduciary breaches under ERISA, Mr. Fearon stresses. Revised Subpoena Still Burdensome, Debtor Argues Counsel to the Debtor, Richard Q. Reinthaler, Esq., at Dewey & LeBoeuf LLP, in New York, asserts that although less burdensome, Mr. Veera's subpoena list still seeks a large volume of documents and e-mails of questionable relevance to the issues in the ERISA Action. Mr. Reinthaler points out that six of the eight requests appear to have nothing to do with the Plan or the issues in the ERISA Action. Mr. Reinthaler also notes that although only three of the requests seek the production of e-mails, a preliminary search of the various Ambac servers resulted in approximately 227,000 "hits" using the search terms proposed by Mr. Veera. More importantly, Mr. Veera's admission that he will be able to proceed with the ERISA Action without the discovery from the Debtor establishes that there is simply no justification for the financial burden and distraction of time the Debtor has incurred in connection with the Summary Judgment Motion and will incur if ordered to comply with Mr. Veera's discovery requests, Mr. Reinthaler stresses. "The expenditure of $2 million to comply with Mr. Veera's discovery requests is not something the Debtor should have to undertake at the whim of a class action plaintiff, particularly where the Debtor is at a critical juncture of its reorganization efforts and needs the 'breathing spell' afforded by Section 362 of the Bankruptcy Code," according to Mr. Reinthaler. Mr. Reinthaler further contends that Mr. Veera is wrong in arguing that the individual Non-Debtor Defendants have no indemnification rights because they are being sued in their capacities as ERISA Savings Plan fiduciaries rather than in their capacities as directors, officers, or employees of the Debtor. The only reason the Individual Non-Debtor Defendants are being sued as "fiduciaries" is because they were asked, in their capacities as directors, officers, or employees, to serve on the various committee Non-Debtor Defendants, Mr. Reinthaler points out. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FIN'L: Bar Date Extended to July 2 for D&Os ------------------------------------------------- Bankruptcy Judge Shelley Chapman extended the claims bar date through July 2, 2011, solely with respect to any claim to be asserted by any of Ambac Financial Group, Inc.'s former officers or directors against the Debtor for indemnification, contribution, or reimbursement. The Claims Bar Date may be further extended with respect to any claim by any of the Former Officers or Directors at the discretion of the Debtor and without further notice or order of the Court, Judge Chapman held. Judge Chapman clarified that entry of the Bar Date Order Extension does not constitute a consent by any of the Former Officers or Directors to the jurisdiction of the Bankruptcy Court. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMBAC FIN'L: AAC Incurs $1.47 Billion Net Loss in 2010 ------------------------------------------------------ Ambac Assurance Corporation filed on March 2, 2011, statutory financial statements as of and for the year ended Dec. 31, 2010, for AAC, Ambac Assurance Corporation Segregated Account and Everspan Financial Guarantee Corporation. As of Dec. 31, 2010, AAC has $7,940,034,635 in total assets, $6,913,114,454 in total liabilities, and $1,026,920,181 in equity. AAC recorded a net loss of $1,471,903,054 for the year 2010. AAC listed $625,356,082 in cash, cash equivalents and short term investments at the beginning of 2010, and $512,619,523 of cash and cash equivalents at the end of the same year. Full-text copies of the 2010 Annual Reports are available for free at: * AAC's Annual Report http://bankrupt.com/misc/AAC2010AnnualReport.pdf * Segregated Account's Annual Report http://bankrupt.com/misc/AACSegAcct2010AnnualStme.pdf * Everspan's Annual Report http://bankrupt.com/misc/Everspan2010AnnualStme.pdf Ambac Assurance is a guarantor of public finance and structured finance obligations, has a Caa2 rating from Moody's Investors Service, Inc., and is the principal operating subsidiary of Ambac Financial Group, Inc. Ambac Financial, headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed for a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Ambac Financial will continue to operate in the ordinary course of business as "debtor-in- possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac Financial's common stock trades in the over-the-counter market under ticker symbol ABKFQ. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed $30.05 billion in total assets, $31.47 billion in total liabilities, and a $1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of ($394.5 million) and total liabilities of $1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about $1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AMERLINK LTD: Court Dismisses RICO Claims in Suit v. D&Os --------------------------------------------------------- Bankruptcy Judge J. Rich Leonard dismissed, at the defendants' behest, claims pursuant to Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. Sections 1961-1968, incorporated in chapter 75D of North Carolina's general statutes, in the suit, Stephen L. Beaman, Trustee, v. John M. Barth, Jr. and wife Tracy M. Barth; Richard B. Spoor and wife Walton Spoor; John M. Barth and wife Eileen M. Barth; Harlingen Stables, Inc.; Tall Grass Farms, Inc.; Pro-Form Construction, Inc.; National Consumer Cooperative Bank; Thomas R. Slocum; Terry Castle; Steven J. Gugenheim; Horizon Trust & Investment Management, N.A.; JR International Holdings, LLC; and Capital Community Foundation, Inc., Adv. Pro. No. 10-00164 (Bankr. E.D.N.C.). When AmerLink was formed, Richard B. Spoor was the sole owner and shareholder of the corporation. In the fall of 2006, groundwork was laid for the creation of an AmerLink employee stock option plan. The ESOP was adopted on Sept. 29, 2006, with an effective date of Oct. 1, 2005. Horizon Trust & Investment Management, N.A., acted as trustee for the ESOP. Eleven days prior to adoption of the ESOP, Sept. 18, 2006, John M. Barth, Jr., was hired as President and CEO of the Debtor. During this time, Thomas R. Slocum was a director and officer of the Debtor, serving as the Vice President and Secretary. AmerLink's business records showed assets, property, and equipment valued at $17,036,117 at the time of the ESOP adoption. The same records indicated long term liabilities totaling $11,933,502. Retained earnings were $4,895,078. On Dec. 8, 2006, Pro-From Construction, Inc., was created as a subsidiary of the Debtor. AmerLink was the sole shareholder of Pro-Form. Shortly thereafter, on Dec. 14, 2006, Mr. Spoor, as AmerLink's sole shareholder, reconstituted AmerLink's board of directors. Mr. Spoor was elected chairman of the board. Junior, Slocum, Stephen Gugenheim, and Terry Castle were also elected to AmerLink's board of directors on the same date. Messrs. Gugenheim and Castle refer to themselves as the "outside directors" because they were not members of the board at the time the ESOP was created. On Dec. 19, 2006, two separate entities, In The Woods, Inc., and Harlingen Holdings, Inc., were merged into the Debtor. Mr. Spoor controlled both Woods and Harlingen Holdings at the time of merger. Less than a week later, on Dec. 21, 2006, AmerLink adopted the first amendment to the ESOP. The effective date of the first amendment was Dec. 30, 2006. The plaintiff contends that Messrs. Spoor and Junior, aided by fellow board of director members and certain lenders, formulated an elaborate scheme to get Mr. Spoor out of AmerLink with as much money as possible. Under the plaintiff's theory, the ESOP is the linchpin, serving as a conduit to knowingly deplete the Debtor's coffers for personal gain. With respect to the federal and state RICO claims specifically, the plaintiff asserts that Messrs. Spoor, Junior, Gugenheim, Castle, Slocum, and Senior as a group constitute an enterprise as defined in 18 U.S.C. Sec. 1961(1)(4) and N.C. Gen. Stat. Sec. 75D-3(a); and, that the collective conduct of the enterprise, which was engaged in interstate commerce, evidences the common purpose to deprive the Debtor of assets to enrich Mr. Spoor and position Junior to take over the Debtor. In response, the defendants argue that the plaintiff fails to plead with particularity a relationship between separate acts which would establish a pattern, scheme, or ongoing fraudulent activity that caused proximate harm to the Debtor. A copy of the Court's March 3, 2011 Order is available at http://is.gd/b2t44Nfrom Leagle.com. AmerLink, Ltd., was in the business of log home manufacturing, e.g., processing logs into home kits and contracting for installation of homes. AmerLink filed for Chapter 11 bankruptcy on Feb. 11, 2009. The case was converted to Chapter 7 (Bankr. E.D.N.C. Case No. 09-01055) and Stephen L. Beaman was appointed as Chapter 7 trustee. APPALACHIAN REGIONAL: Fitch Affirms 'BB-' Rating on Revenue Bonds ----------------------------------------------------------------- Fitch Ratings has taken this rating action on Appalachian Regional Healthcare, as part of its continuous surveillance effort: Kentucky Economic Development Finance Authority -- $71,500,000 refunding and improvement revenue bonds series 1997 affirmed at 'BB-'. Fitch has also revised ARH's Rating Outlook to Stable from Positive. Rating Rationale: -- The revision in Outlook reflects the decline in profitability at ARH which has occurred in fiscal year 2010 and continues into the six-month interim period, coupled with a weakening inpatient utilization trend and increased leverage ratios due to additional debt; -- While ARH's profitability metrics are adequate compared to the rating category, the system's maximum annual debt service coverage and debt to capitalization ratios are consistently weaker for the rating category reflecting a highly leveraged entity with extremely limited debt capacity; -- Although ARH's liquidity ratios improved in 2010, days in current liabilities are very high, and future liquidity growth could be constrained because of the system's future pension liability obligations and potential capital needs; -- Additional credit concerns include a 10% increase in ARH's bad debt expense from the prior year, reflecting the system's challenging service area whose characteristics include high poverty levels, relatively high unemployment statistics with a large proportion of revenues from Medicaid, Medicare and self pay patients. Key Rating Drivers -- Maintaining stability in operating profitability; -- Sustaining the current liquidity position; -- Additional debt which could negatively pressure the rating. Security: Bonds are secured by a pledge of gross revenues of the system. Credit Summary: In 2010, ARH's profitability metrics exceeded the medians for the rating category, but profitability was significantly lower than it was in 2009, debt ratios were higher and debt service coverage declined. ARH had achieved its stated objective increasing its cash reserves and is well on track to meet its objective of 100 days cash on hand by 2015, but virtually every other financial metric declined in 2010 versus 2009, and, with the exception of the system's liquidity ratios, these deteriorating trends continue into the six-month interim period ending June 30, 2010. In addition, although ARH's days cash on hand ratio is good for the rating level, days in current liabilities is higher than the median for the category. For the fiscal year ending 2010, ARH earned $7.5 million from operations producing an operating margin of 1.3% and an operating EBITDA margin of 6.7%; both ratios are weaker than in the prior year when the system produced a 3.2% operating margin and an 8.8% operating EBITDA margin. ARH is behind budget for fiscal 2011 with a projected operating income of $7.7 million. MADS coverage by operating EBITDA dipped to 1.7 times versus 2.2x in the prior year. The system's debt to capitalization ratio increased to 91% from 86% in the prior year while debt to operating EBITDA grew to 2.5x from 2.0x in 2009. This pattern continues when comparing the fiscal 2011 interim results. The six month period ended Dec. 31, 2010 versus the six month period ended Dec. 31, 2009 exhibited weaker profitability, marginally weaker coverage and higher capital ratios, in contrast to the continuing growth in liquidity ratios. ARH currently has $123 million in unrestricted cash and investments that calculate to 94.5 days of cash on hand, a 5.5x cushion ratio and a cash to debt ratio of 129.5%. This cash excludes $12 million of cash collateral that has been pledged related to a letter of credit for a pension waiver from the Pension Benefit Guaranty Corporation. Based on June 30, 2010 audited financial statements, total outstanding debt was $94.3 million consisting of $65.1 million outstanding debt on the series 1997 bonds, $7.6 million in other bonded debt, and approximately $21.6 million in other long-term debt. In fiscal year 2011, ARH borrowed $13,000,000 (USDA loan) to finance the construction of a patient tower at its Whitesburg facility, increasing its maximum annual debt service to $22.2 million from $20.4 million. ARH is contemplating another USDA loan within the next few years to address other capital needs of the system. Fitch will evaluate the impact of any additional issuance at that time and believes ARH's debt capacity is limited at the current rating level. ARH has maintained a solid market position in its service areas, but utilization trends are essentially flat except for ER visits which have recovered to prior levels after a dip in 2009. This is a critical area for ARH since 60% of its admissions come through the ER. Physician recruitment and retention continues to be an ongoing challenge but the system has added six additional physicians over the past year. ARH's service area is also challenging. Unemployment rates range from 10 to 11.8% in the system's Kentucky service compared to a national unemployment rate of approximately 9%. Economic statistics are similar for the system's West Virginia market, though not as severe. Sixty percent of ARH's revenue mix comes from a combination of Medicare and Medicaid and 12% of the revenues are self pay. Appalachian Regional Healthcare is a not-for-profit health system serving 350,000 residents across Eastern Kentucky and Southern West Virginia. Operating nine hospitals, multi-specialty physician practices, home health agencies, homecare stores and retail pharmacies, ARH is the largest provider of care and single largest employer in southeastern Kentucky and the third largest private employer in southern West Virginia. Total revenues in fiscal 2010 were $594 million. ARH covenants to disclose only annual financial information and utilization statistics, however, the system's disclosure practices are excellent. APPLESEED'S INTERMEDIATE: Reaches Creditor Accord ------------------------------------------------- Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that Joshua A. Sussberg, a lawyer for Appleseed's Intermediate Holdings LLC, told the bankruptcy judge at a hearing that the company has reached a global resolution that "paves a clear path to emergence" from bankruptcy protection. The settlement got unsecured creditors to support the company's restructuring proposal by funding a trust to pursue potential litigation, Mr. Sussberg said. The trust would be funded with $2.5 million, with the first $1 million available for investigations or to distribute among unsecured creditors, Judge Sussberg told Bankruptcy Judge Kevin Gross, according to Mr. Rochelle's report. Mr. Rochelle relates that unsecured creditors wouldn't have received any recovery under the current reorganization proposal. The recovery plan will be modified incorporating the accord and the support of the unsecured creditors' committee. The remaining $1.5 million would be used to prosecute any lawsuits. Appleseed's filed a pre-negotiated reorganization plan that would cut its debt by more than $420 million, or more than half, according to a company statement. The plan, which must be approved by May 21, is supported by more than 80% of lenders with first priority of repayment and unanimously by lenders with a secondary priority. ARCTIC EXPRESS: 7th Cir. Remands Class Suit by Drivers Group ------------------------------------------------------------ Plaintiffs Owner Operator Independent Drivers Association, Inc., and Carl Harp and Michael Wiese, as representatives of the certified class of owner-operators, seek to enforce a final judgment obtained in a class action brought on behalf of independent owner-operator truck drivers against a regulated motor carrier, Arctic Express Inc., for maintenance escrow funds owed to the owner-operators. Plaintiffs assert that Comerica Bank, through which Arctic kept several accounts and a revolving line of credit, holds a portion of the funds included in the judgment in breach of a statutory trust created pursuant to the Truth-in- Leasing regulations of the Motor Carrier Act, 49 U.S.C. Sections 14101-02, 14704; 49 C.F.R. Sec. 376.12. Plaintiffs seek restitution of the maintenance escrows allegedly withdrawn unlawfully by Comerica from the trust account as a reduction on Arctic's loan balance. On cross-motions for summary judgment, the district court granted summary judgment in favor of Comerica and denied plaintiffs' motion. A three-man panel consisting of Circuit Judges Alan Eugene Norris, Deborah L. Cook, and Richard Allen Griffin, affirmed in part, reversed in part, and remanded the case for further proceedings consistent with its opinion. "We agree with the district court that genuine issues of material fact exist which preclude a ruling, as a matter of law, on Comerica's statute of limitations defense. The district court correctly ruled that this is a question for the trier of fact to resolve," said Judge Griffin, who wrote the opinion. The lawsuit has its origins in a $5.5 million class action settlement agreement that Arctic and its affiliate, D & A Associates Ltd., entered into with plaintiffs, representatives of a certified class of "owner-operators," who independently own, lease, and operate motor carrier equipment for the transportation of commodities. OOIDA is an owner-operator business association with over 141,000 members throughout the United States and Canada. Messrs. Harp and Wiese are individual owner-operators who contracted with Arctic to lease motor vehicle equipment. Arctic is a federally regulated motor carrier that provides transportation services to the shipping public. D & A is a non- carrier company that leases truck units to independent owner- operators. The case is Owner Operator Independent Drivers Association, Inc.; Carl Harp, as representatives of the Class and the Certified Class of Owner-Operators; Michael Wiese, as representatives of the Class and the Certified Class of Owner-Operators, Appellants, v. Comerica Bank, Appellee, No. 09-3463 (6th Cir.). A copy of the Court's March 3, 2011 opinion is available at http://is.gd/AV5iNT from Leagle.com. OOIDA et al. are represented by: Joyce E. Mayers, Esq. THE CULLEN LAW FIRM, PLLC 1101 30th Street, N.W. Suite 300 Washington DC 20007 Telephone: 202-944-8600 Facsimile: 202-944-8611 E-mail: jem@cullenlaw.com Comerica Bank is represented by: Alycia N. Broz, Esq. VORYS, SATER, SEYMOUR AND PEASE LLP 52 East Gay Street Columbus, OH 43215 Telephone: 614-464-5481 Facsimile: 614-719-4810 E-mail: anbroz@vorys.com Headquartered in Hilliard, Ohio, Arctic Express Inc., is one of America's largest refrigerated transportation services. Arctic Express and D&A Associates, Ltd., filed for chapter 11 protection on Oct. 31, 2003 (Bankr. S.D. Ohio Case No. 03-66797). Nicholas A. Franke, Esq., and Lisa A. Epps, Esq., at Spencer Fane Britt & Browne LLP and Guy R. Humphrey, Esq., at Chester, Willcox & Saxbe LLP, represented the Debtors in their restructuring effort. The Bankruptcy Court confirmed the Third Amended Plan of Reorganization filed by Arctic Express and its debtor-affiliate on Sept. 9, 2004. ARLINGTON HOSPITALITY: DIP Lender Not Entitled to Additional Fees ----------------------------------------------------------------- This is a bankruptcy case with a complicated factual and procedural background, but one that boils down to a simple question: who breached the parties' postpetition financing agreement? Arlington Hospitality, Inc., and its subsidiaries, operators of the AmeriHost hotel chain, filed for Chapter 11 bankruptcy in August 2005. Arlington needed funds to meet its obligations during the pendency of the bankruptcy proceeding, and to that end, entered into a postpetition financing agreement on the eve of the bankruptcy filing with Arlington LF, LLC, a single- purpose entity that had been created for that purpose. LF lent Arlington $3.53 million under the agreement, but shortly thereafter, relations between the parties soured. LF began to have misgivings about its role as a post-petition lender and signaled that it did not wish to make further loans, while Arlington did not pay certain fees associated with the loan. Shortly thereafter, Arlington's assets were successfully sold in the bankruptcy proceeding, and Arlington repaid LF the full $3.53 million it had borrowed, with interest. LF, believing it was still owed the additional fees Arlington had not paid, filed a motion in the bankruptcy court to recover them, along with additional default interest. Arlington, believing it had met all of its obligations and owed nothing more to LF, opposed the request. The bankruptcy court held a trial on the matter and ruled in Arlington's favor, concluding that LF had breached the agreement. The district court reversed and remanded, and the bankruptcy court ruled for LF on the second ground. The district court again reversed, this time on a different basis, with instructions to the bankruptcy court to rule in Arlington's favor. LF appeals to the Seventh Circuit. A three-man panel consisting of Circuit Judges William Joseph Bauer, Diane Wood, and Ann Claire Williams, concluded that LF repudiated the parties' agreement, and is not entitled to any additional fees or costs. The Seventh Circuit affirmed the District Court's ruling. Judge Williams, who penned the opinion, held that the finding that LF committed an anticipatory repudiation of the parties' lending agreement was not clearly erroneous. While Arlington did fail to pay fees that were due immediately per the parties' agreement, by the time LF properly informed Arlington of the potential breach by using the notice procedures in the Interim Order approving DIP financing, LF had already breached the agreement. Having walked away from the agreement before Arlington's breach ever became effective, LF cannot now invoke the Interim Order to obtain the additional fees and interests it seeks. The appellate case is Arlington LF, LLC, Appellant, v. Arlington Hospitality, Inc., et al., Appellees, No. 09-3560 (7th Cir.). A copy of the Seventh Circuit's March 3, 2011 decision is available at http://is.gd/Tu0K81from Leagle.com. * * * Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that based on the ruling, when a lender repudiated an agreement to finance a Chapter 11 case, the bankrupt company wasn't liable to pay fees owing to the lender. Basing on Illinois law, the appeals court ruled that the lender was not entitled to payment of funding fees and default interest. The case Arlington LF LLC v. Arlington Hospitality Inc., 09-3560, 7th U.S. Circuit Court of Appeals (Chicago), involves the owner of a real estate project in Chapter 11, which received an $11 million DIP loan commitment to finance the reorganization from a pre- bankruptcy lender, which was also a potential purchaser. The loan agreement required the bankrupt company to pay the lender more than $300,000 in commitment and funding fees. The lender decided against buying and providing financing. About Arlington Hospitality Based in Arlington Heights, Illinois, Arlington Hospitality, Inc., dba Amerihost Properties, Inc., and its affiliates developed and constructed limited service hotels and owned, operated, managed and sold those hotels. The Company operated 15 AmeriHost Inn Hotels under leases from PMC Commercial Trust. Arlington Hospitality, Inc., serves as a guarantor under these leases. Arlington Inns Inc., an affiliate, filed for bankruptcy protection on June 22, 2005 (Bankr. N.D. Ill. Case No. 05-24749), the Honorable A. Benjamin Goldgar presiding. Arlington Hospitality and additional debtor-affiliates filed for chapter 11 protection on Aug. 31, 2005 (Bankr. N.D. Ill. Lead Case No. 05-34885), represented by Catherine L. Steege, Esq., at Jenner & Block LLP. Chanin Capital LLC served as the company's investment banker. David W. Wirt, Esq., at Winston &Strawn, represented the Official Committee of Unsecured Creditors. As of March 31, 2005, Arlington Hospitality reported $99 million in total assets and $94 million in total debts. The Debtors proposed a Joint Plan of Orderly Liquidation in August 2007. B GREEN: Roserberg Rich Raises Going Concern Doubt -------------------------------------------------- B Green Innovations, Inc., filed on March 4, 2011, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2010. Rosenberg, Rich, Baker, Berman and Company, in Somerset, New Jersey, expressed substantial doubt about B Green Innovations' ability to continue as a going concern. The independent auditors noted that the Company had negative cash flow from operations from date of inception, and recurring net losses. The Company reported a net income of $987,631 on $177,198 of sales for 2010, compared with a net loss of $2.08 million on $108,120 of sales for 2009. The Company's balance sheet as of Dec. 31, 2010, showed $1.33 million in total assets, $1.18 million in total liabilities, all current, and stockholders' equity of $143,788. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?747c About B Green Innovations Matawan, N.J.-based B Green Innovations, Inc. (OTC BB: BGNN) -- http://www.bgreeninnovations.com/-- is dedicated to becoming a "green" technology company, focused on acquiring and identifying promising technologies that address environmental issues. The first technology will be used to create new products from recycled tire rubber. BANK OF FLORIDA: Posts $627,000 Net Loss in Sept. 30 Quarter ------------------------------------------------------------ Bank of Florida Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $627,000 for the three months ended Sept. 30, 2010, compared with a net loss of $78.1 million for the same period of 2009. The Company's balance sheet at Sept. 30, 2010, showed $4.4 million in total assets, $424,000 in total liabilities, and stockholders' equity of $4.0 million. On May 28, 2010, the Company's three bank subsidiaries were closed by the Florida Office of Financial Regulation and placed into receivership with the Federal Deposit Insurance Corporation. The Company's only remaining operations, the Florida Trust Company, cannot be expected to provide significant revenues or profits relative to the potential of the Company's prior operations Although the Company is presently continuing to operate the Trust Company it is also currently evaluating its options relative to the Trust Company, which include continuing to operate it, selling it, merging it into another financial and any other reasonable, viable strategic transaction. If the Company ultimately elects an option other than continuing to operate the Trust Company, it is the Company's intent to wind down its operations following divestiture of the Trust Company. "If we do elect to divest of the Trust Company, or if we are not successful in continuing its operations in a profitable manger, we may not be able to continue as a going concern. In which case, share of our common stock will have no value," the Company said in the filing. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7470 About Bank of Florida Corporation Naples, Fla.-based Bank of Florida Corporation was incorporated in Florida in September 1998. On May 28, 2010, each of the Company's three subsidiary banks (Bank of Florida - Southwest, Bank of Florida - Southeast and Bank of Florida - Tampa Bay) was closed by the Florida Office of Financial Regulation and placed into receivership with the Federal Deposit Insurance Corporation ("FDIC"). Since then, the Company's only remaining operations are the Florida Trust Company. BANNING LEWIS: Wants Plan Exclusivity Until May 31 -------------------------------------------------- Bill Rochelle, Bloomberg News' bankruptcy columnist, reports Banning Lewis Ranch for the first time is requesting an extension of the exclusive right to propose a Chapter 11 plan. If granted by the bankruptcy court in Delaware at an April 25 hearing, the new deadline would be May 31. The report relates that Banning Lewis says it intends to file a plan by the end of May. Between now and then, it hopes to identify a purchaser. So far, 30 potential buyers signed confidentiality agreements to gain access to the so-called data room, Banning Lewis said. About Banning Lewis Banning Lewis Ranch Co. is the owner of the undeveloped portion of a 21,000-acre ranch in Colorado Springs, Colo. Banning Lewis Ranch is a master-planned community in Colorado Springs, Colorado. The first section built, the 350-acre Northtree Village, opened in September 2007 and will have 1,000 homes priced from the high $100,000s to the mid-$300,000s. Banning Lewis Ranch filed for Chapter 11 bankruptcy protection from creditors on October 28, 2010 (Bankr. D. Del. Case No. 10-13445). It estimated assets of $50 million to $100 million and debts of $100 million to $500 million in its Chapter 11 petition. An affiliate, Banning Lewis Ranch Development I & II, LLC, also filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446). Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel to the Debtors. Edward A. Phillips of Eisner Amper LLP has been retained as the Company's chief restructuring officer. BEARINGPOINT INC: Wants $47 Million Contract Suit Stayed for Now ---------------------------------------------------------------- Bankruptcy Law360 reports that BearingPoint Inc. is seeking to stay a suit against the U.S. Department of the Interior over a canceled contract and the DOI's attempted recovery of $47 million in re-procurement costs, saying an earlier suit and the Company's bankruptcy case should take precedence. BearingPoint filed a motion to stay on March 3, 2011, in the U.S. Court of Federal Claims, according to Law360. About BearinPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection (Bankr. S.D.N.Y., Case No. 09-10691) on Feb. 18, 2009. BearingPoint disclosed total assets of $1.655 billion and debts of $2.201 billion as of Dec. 31, 2008. The Debtors' legal advisor was Weil, Gotshal & Manges, LLP. Their restructuring advisor was AlixPartners LLP, and their financial advisor and investment banker was Greenhill & Co., LLC. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represented the Creditors' Committee. Garden City Group served as claims and notice agent. On the petition date, BearingPoint filed a Chapter 11 plan of reorganization negotiated with lenders prepetition. BearingPoint, however, changed course and pursued a sale of its units, after determining that creditor recoveries would be maximized through sales of the businesses. On Dec. 22, 2009, the Bankruptcy Court entered an order confirming the Debtors' Modified Second Amended Joint Plan. On Dec. 31, 2009, a Notice of Effective Date of the Plan was filed with the Bankruptcy Court. John DeGroote was appointed as liquidating trustee under the Plan. The liquidating trustee is represented by Katherine Dobson, Esq., at Bingham McCutchen, in Hartford, Connecticut. The trustee also has retained McKool Smith P.C. and Whiteford, Taylor & Preston L.L.P. to pursue claims against former company officers. Attorneys for John DeGroote can be reached at: BINGHAM McCUTCHEN LLP Jeffrey S. Sabin, Esq. 399 Park Avenue New York, NY 10022 Telephone: (212) 705-7000 Facsimile: (212) 702-3668 E-mail: jeffrey.sabin@bingham.com Sabin Willett, Esq. One Federal Street Boston, MA 02110 Telephone: (617) 951-8000 Facsimile: (617) 345 - 5033 E-mail: sabin.willett@bingham.com - and - MCKOOL SMITH P.C. Peter S. Goodman, Esq. One Bryant Park, 47th Floor New York, NY 10036 Telephone: (212) 402-9400 Facsimile: (212) 402-9444 E-mail: pgoodman@mckoolsmith.com Lew LeClair, Esq. Robert Manley, Esq. 300 Crescent Court, Suite 1500 Dallas, TX 75201 Telephone: (214) 978-4000 Facsimile: (214) 978-4044 E-mail: lleclair@mckoolsmith.com rmanley@mckoolsmith.com Basil A. Umari 600 Travis, Suite 7000 Houston, TX 77002 Telephone: (713) 485-7300 Facsimile: (713) 485-7344 E-mail: bumari@mckoolsmith.com BEAZER HOMES: CEO McCarthy Resolves SEC Clawback Claims ------------------------------------------------------- Beazer Homes USA, Inc.'s President and Chief Executive Officer, Ian J. McCarthy has reached a resolution with the United States Securities and Exchange Commission of the previously disclosed claim under Section 304 of the Sarbanes-Oxley Act. Under Section 304, where a public company corrects errors in its financial statements resulting from misconduct, the SEC can clawback for the company incentive cash and equity based compensation and stock profits earned by the company's CEO, even if he did not engage in the misconduct. In resolving the claim against Mr. McCarthy, the SEC did not personally charge him with engaging in the underlying misconduct or allege that he otherwise violated the federal securities laws. Under the terms of the settlement, Beazer will receive approximately $6.5 million in cash plus certain vested and unvested shares of Beazer stock. In May of 2008, Beazer restated its financial statements covering fiscal years 2002-2007. As previously disclosed, in 2008 and 2009 the company resolved the federal and state governmental investigations into misconduct involving these financial statements. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at Dec. 31, 2010, showed $1.90 billion in total assets, $1.55 billion in total liabilities and $349.65 million in stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "stable" outlook, from Standard & Poor's, (ii) 'Caa1' probability of default and long term corporate family ratings from Moody's, and (iii) 'B-' issuer default rating, with stable outlook, from Fitch Ratings. Fitch said in November 2010 that the ratings and Outlook for Beazer reflect the company's healthy liquidity position, improved capital structure as well as the challenges still facing the housing market. Fitch expects existing home sales will decline 7.5% in 2010 and increase 6% in 2011. S&P said in November 2010 that although Beazer's business and liquidity profiles have improved, S&P doesn't anticipate raising its ratings on the company over the next 12 months because S&P expects costs associated with the company's heavy debt load will weigh on profitability. The 'Caa1' corporate family rating reflects Moody's expectation that Beazer has reduced costs sufficiently that it will continue to reduce losses in fiscal 2011. The impairments and other charges are likely to be less material going forward, given the company's improving gross margin performance, stabilizing pricing environment, and increasing absorptions. However, Moody's expectation is that Beazer's cash flow performance will weaken in 2011, as the benefits of inventory liquidation have largely played out. The ratings also reflect the company's extended debt maturity profile, improved Moody's-adjusted debt leverage, and increased net worth position. BETTER EXISTENCE: BEHIV Files For Chapter 7 Bankruptcy Protection ----------------------------------------------------------------- Joseph Erbentraut at the Windy City Times reports that Better Existence With HIV, a Chicago HIV/AIDS service organization has filed for Chapter 7 bankruptcy protection. A meeting of creditors scheduled for March 21, 2011. BEHIV will be represented by David P. Leibowitz of the Lakelaw Law Center in the forthcoming proceedings. The Windy City Times notes BEHIV said it would be closing its doors and transferring its housing and case management clients to other service agencies. The announcement came less than a month after the abrupt announcement that its executive director Eric Nelson had resigned. They cited reduced individual giving during the previous two years and a changing funding relationship with the AIDS Foundation of Chicago-namely a "pending decision" on the part of AFC to suspend its funding of agencies, like BEHIV, who lack an on-site medical clinic. Mr. Erbentraut reportys that BEHIV's most recent federal tax return says the organization faced outstanding debts including a $133,615 line of credit. The return further indicates the organization's net assets had shrunk from $81,431 to $17,492 over the course of that year. BERNARD L MADOFF: SEC Launches Probe of Ex-Top Atty.'s Madoff Ties ------------------------------------------------------------------ Bankruptcy Law360 reports that the U.S. Securities and Exchange Commission reportedly initiated an investigation into former SEC general counsel David Becker, who is also facing a clawback suit from the Bernard L. Madoff bankruptcy trustee. Law360, citing a Wall Street Journal report on Friday, says SEC Chairwoman Mary Schapiro requested an inspector general review of Mr. Becker's involvement with the Madoff bankruptcy and any possible conflicts of interest. 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. BI-LO LLC: Not Liable for Friarsgate CAM Charges ------------------------------------------------ Friarsgate Investment Group, LLC, contends that, pursuant to the lease between the parties, BI-LO, LLC, owes Friarsgate for Common Area Maintenance fees at the Friarsgate Plaza Shopping Center, in Irmo, South Carolina, where BI-LO store # 526 is located. BI-LO and its affiliates object, asserting that Friarsgate's Motion is not timely and disputing the amount of the CAM charges. Bankruptcy Judge Helen E. Burris held that Friarsgate's Motion is not time barred, however, the disputed charges do not constitute CAM fees, as defined by the Lease; thus, they are the responsibility of Friarsgate. A copy of the Court's March 2, 2011 order is available at http://is.gd/1889eHfrom Leagle.com. About BI-LO LLC Headquartered in Mauldin, South Carolina, BI-LO LLC operates 214 supermarkets in South Carolina, North Carolina, Georgia and Tennessee, and employs approximately 15,500 people. Dallas-based Lone Star Funds bought the business in 2005 from Koninklijke Ahold NV, the Dutch supermarket operator. Lone Star also owns Bruno's Supermarkets LLC, a chain of 66 stores that filed under Chapter 11 in February in Birmingham, Alabama. BI-LO and its affiliates filed for Chapter 11 bankruptcy protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140). George B. Cauthen, Esq., Frank B. Knowlton, Esq., at Nelson Mullins Riley & Scarborough, L.L.P; Josiah M. Daniel, III, Esq., Katherine D. Grissel, Esq., at Vinson & Elkins L.L.P. in Dallas; and Dov Kleiner, Esq., Alexandra S. Kelly, Esq., at Vinson & Elkins L.L.P., in New York, served as bankruptcy counsel. Kurtzman Carson Consultants LLC served as notice and claims agent. BI-LO estimated between $100 million and $500 million each in assets and debts. BI-LO's Plan of Reorganization was confirmed by the Bankruptcy Court on April 29, 2010. Lone Star Funds made a $150 million equity investment in BI-LO and remains majority owner. On May 12, 2010, BI-LO emerged from bankruptcy. * * * As reported by the Troubled Company Reporter on Jan. 27, 2011, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on BI-LO LLC. At the same time, S&P assigned a 'B' issue-level rating and '4' recovery rating to the Company's proposed $285 million senior secured notes. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery of principal in the event of default. The Company intends to use the proceeds of the note issuance to pay off its term loan, fund a dividend the equity sponsors, and pay fees associated with the transaction. The TCR also reported that Moody's Investors Service downgraded BI-LO's Corporate Family and Probability of Default ratings to B2 from B1. A B2 rating was assigned to the company's proposed $285 million senior secured notes due 2019. The rating outlook is stable. BNA SUBSIDIARIES: Confirmation Hearing Set for Mar. 22, 2011 ------------------------------------------------------------ BNA Subsidiaries, LLC, sought and obtained approval of a disclosure statement explaining its proposed chapter 11 plan of reorganization and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to send the plan to creditors for a vote. The Bankruptcy Court has scheduled a confirmation hearing for 2:00 p.m. on Mar. 22, 2011, in Wilmington, Del. Confirmation objections must be filed and served by March 15, 2011. Ballots must be received by Logan & Company, Inc., by March 11, 2011. As previously reported in the Troubled Company Reporter, netDockets relates that the Debtor's pro forma financial projections show that BNA Subsidiaries will emerge from bankruptcy under the plan orchestrated by its parent with liabilities that exceed the value of its assets by over 65%. NetDockets relates that the plan provides the opportunity for someone other than BNA to acquire control of BNA Subsidiaries pursuant to a competitive sale process. That result seems unlikely at this juncture. About BNA Bureau of National Affairs is an independent publisher of information and analysis products for professionals in business and government. Petersborough, New Hampshire-based BNA Subsidiaries, LLC -- aka G-2 Reports, et al. -- was formed on Jan. 1, 2009, through the merger of Kennedy Information, Inc., which was acquired by BNA in 2000, and the Institute of Management and Administration, Inc. (or IOMA), which was acquired in 1997. BNA Subsidiaries filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13087) on Sept. 23, 2010. Marion M. Quirk, Esq., and Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $1 million to $10 million. BW PROPERTY: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: BW Property, LLC 7650 E. Redfield Road, Suite D-7 Scottsdale, AZ 85260 Bankruptcy Case No.: 11-05534 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Eileen W. Hollowell Debtor's Counsel: Paul Sala, Esq. ALLEN, SALA & BAYNE, PLC Viad Corporate Center 1850 N. Central Avenue, #1150 Phoenix, AZ 85004 Tel: (602) 256-6000 Fax: (602) 252-4712 E-mail: psala@asbazlaw.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 Michael E. Walla, vice president of Matrixx Management, LLC, manager. C-BASS: Judge Gropper Approves Disclosure Statement --------------------------------------------------- Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that Judge Allan L. Gropper of U.S. Bankruptcy Court in Manhattan said creditors can now vote on the Chapter 11 liquidation plan of C- Bass fka Credit-Based Asset Servicing and Securitization LLC. In approving the explanatory disclosure statement, Judge Gropper kept the Company on pace to have its plan approved by the court on April 11. "I think it was a fine, fine job," Dow Jones quotes Judge Gropper telling C-Bass lawyer Peter S. Partee Sr. of Hunton & Williams LLP. According to the report, C-Bass last month filed a proposal with details about how it will liquidate itself, four months after it filed its long-awaited bankruptcy. Senior lenders led by J.P. Morgan Chase & Co., owed nearly $2 billion before C-Bass filed for bankruptcy, will divvy among them about $196 million. Unsecured creditors and others lower on the totem pole would at best earn back pennies on the dollar if C-Bass is able to scrounge up more money that would be placed in a liquidation trust. But those creditors would have to vote to accept the plan in order to get any recovery. The senior lenders allowed C-Bass to use $8.2 million of their money to fund C-Bass through bankruptcy, in exchange for broad releases against lawsuits for those lenders. A full-text copy of the disclosure statement, as amended, is available for free at http://ResearchArchives.com/t/s?7479 A full-text copy of the Chapter 11 plan, as amended, is available for free at http://ResearchArchives.com/t/s?747a About Credit-Based Asset Servicing Credit-Based Asset Servicing and Securitization LLC is a subprime mortgage investor based in New York City. C-Bass is a joint venture, owned in part by units of mortgage insurers MGIC Investment Corp. and Radian Group Inc. C-Bass and seven affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-16040) on Nov. 12, 2010. C-Bass disclosed $23.7 million in assets and $2.16 billion in liabilities in its Schedules of Assets and Liabilities. The Debtors' liabilities include $195.8 million of secured debt. Peter S. Partee, Esq., Richard P. Norton, Esq., Robert A. Rich, Esq., and Scott Howard Bernstein, Esq., at Hunton & Williams LLP, represent the Debtors. Donlin, Recano & Company is the claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in C-BASS' chapter 11 cases and that committee is represented by Mark T. Power, Esq., and Jeffrey Zawadzki, Esq., at Hahn & Hessen LLP in New York. The affiliates that filed separate Chapter 11 petitions are C-BASS CBO Holding LLC, C-BASS Credit Corp., C-BASS Investment Management LLC, NIM I LLC, Pledged Property II LLC, Starfish Management Group LLC, and Sunfish Management Group LLC. CAPITOL BANCORP: Restates Financials for $11.7-Mil. Loan Losses --------------------------------------------------------------- The unaudited condensed consolidated financial statements of Capitol Bancorp Limited as of and for the three months and nine months ended Sept. 30, 2010 have been revised to reflect an additional provision for loan losses of $11.7 million which was previously recorded in the 4th quarter, resulting from Michigan Commerce Bank's amended regulatory financial statements as of and for the period ended Sept. 30, 2010 filed on Feb. 22, 2011. Michigan Commerce Bank is a significant subsidiary of Capitol. The allowance for loan losses requires significant judgment, is an estimate and is one of Capitol's critical accounting policies. Michigan Commerce Bank's amendment of its regulatory financial statements as of and for the period ended Sept. 30, 2010 to increase its allowance for loan losses and related provision for loan losses, resulted from a recently-completed joint examination of the bank by the Federal Deposit Insurance Corporation and the Office of Financial and Insurance Regulation of the State of Michigan. Such examination commenced in September 2010. The bank's decision to amend its interim financial statements was based on discussion with those regulatory agencies regarding expectations that certain examination findings, including a change in estimate regarding the bank's allowance for loan losses as of Sept. 30, 2010, would require such amendment; however, the bank has not yet received the related examination report. The bank's methodology for determination of its allowance for loan losses was reviewed and deemed acceptable by an independent third party. The election to restate third quarter does not alter previously released fourth quarter results filed by the bank as the adjustment reflects a change in the timing of the provision, not an adjustment in the amount. About Capitol Bancorp Limited Capitol Bancorp Limited (NYSE: CBC) is a national community banking company, with a network of bank operations in 14 states. Founded in 1988, Capitol Bancorp Limited has executive offices in Lansing, Mich., and Phoenix, Ariz. The Company's balance sheet at Sept. 30, 2010, shows $4.23 billion in total assets, $4.16 billion in total liabilities, and equity of $77.68 million. In September 2009, Capitol and its second-tier bank holding companies entered into a written agreement with the Federal Reserve Bank of Chicago under which Capitol has agreed, among other things, to submit to the Reserve Bank a written plan to maintain sufficient capital at Capitol on a consolidated basis and at Michigan Commerce Bank (as a separate legal entity on a stand- alone basis); and a written plan to enhance the consolidated organization's risk management practices, a strategic plan to improve the consolidated organization's operating results and overall condition and a cash flow projection. Certain of Capitol's bank subsidiaries have entered into formal agreements with their applicable regulatory agencies. Those agreements provide for certain restrictions and other guidelines and/or limitations to be followed by the banks. In 2009, Capitol commenced the deferral of interest payments on its various trust-preferred securities, as is permitted under the terms of the securities, to conserve cash and capital resources. The payment of interest may be deferred for periods up to five years. During such deferral periods, Capitol is prohibited from paying dividends on its common stock (subject to certain exceptions) and is further restricted by Capitol's written agreement with the Federal Reserve Bank of Chicago. Accrued interest payable on those securities approximated $18.1 million at June 30, 2010. CARBON BEACH: Hearing on Amended Chapter 11 Plan Set for Thursday ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has approved the stipulation entered among Carbon Beach Partners, LLC, its primary secured creditor, Builders Bank, and receiver Robb Evans & Associates, LLC, regarding hearing dates and scheduling deadlines related thereto. The stipulation states that: a. the hearings on the Debtor's Amended Chapter 11 Plan of Reorganization, the Debtor's notice of motion and motion to (a) bifurcate confirmation hearing and (b) determine current value on property with supporting declarations, the Debtor's notice of motion and motion for order authorizing Debtor in possession to incur postpetition financing in conjunction with confirmation of Plan of Reorganization, the receiver's notice of motion and motion for approval of administrative claim of Robb Evans & Associates, LLC, prepetition state court receiver and its professionals, and the Bank's notice of motion and motion by plaintiff and counter-defendant Builders Bank to dismiss the first-fourth claims of the second amended counter-claim for failure to state a claim are continued for approximately four weeks, to March 10, 2011, at 9:00 a.m.; b. discovery with respect to the valuation motion will be completed by no later than the end of the second week of February 2011; c. any responsive pleadings with supporting evidence and declarations with respect to the valuation motion, the administrative claim motion, and the dismissal motion will be filed 14 days before the date of the continued hearings; d. any replies with supporting evidence and declarations with respect to the valuation motion, the administrative claim motion, and the dismissal motion will be filed seven days before the date of the continued hearings; and e. a status conference on the borrowing motion and the Debtor's Amended Chapter 11 Plan of Reorganization will be held on the date of the continued hearings on March 10, 2011, at 9:00 a.m. to establish further deadlines with respect to discovery schedules, briefing schedules, and the Bank's opportunity to vote on the Amend Chapter 11 Plan of Reorganization and make an election. The Plan of Reorganization According to the Disclosure Statement, as amended, the Plan provides that the Debtor will emerge from Chapter 11 as a reorganized entity and will complete construction of its primary asset (an 8-unit, luxury condominium complex consisting of approximately 41,000 square feet, in Malibu, California), liquidate said asset and distribute the proceeds of said liquidation to creditors in their order of priority. Payments under the Plan will be made from the Reorganized Debtor's cash on hand from post-bankruptcy financing and from cash to be generated by the sale of the condominiums which will be completed and liquidated by the Reorganized Debtor. Upon the Effective Date, Active Mortgage Corp., the new lender, will make a loan to the Debtor in the amount of approximately $2.7 million (the Finishing Loan). The Reorganized Debtor will pay loan points of 3% to the new lender, and the loan will bear interest at 12% interest per annum, with the balance due and payable on the 18 month anniversary of the Effective Date. Active Mortgage Corp. is owned in part by certain relatives of the president of the manager of the Debtor. The repayment of the Finishing Loan will be secured by a first priority deed of trust on all the assets of the Reorganized Debtor from and after the Effective Date. The terms of the Finishing Loan are similar to the loans that the receiver tried to put in place on the property when the Bank failed to fund the Receiver and the completion of the property. Under the Plan, the claim of County of Los Angeles will be paid in full. Other secured claims will accrue interest at the rate of 5% per annum. The holders of the other secured claims will be paid the amount of allowed secured claim from the proceeds of the liquidation of the property by the Reorganized Debtor. Holders of priority unsecured claims, if any, will be paid in full in four quarterly installments beginning at the conclusion of the first full quarter after the Effective Date. The claims will earn interest at 5% until paid in full. Holders of general unsecured claims will receive their pro rata share of any liquidation proceeds based upon the amount of an allowed claim after payment of all other creditor claims as said proceeds become available. Holders of the claims will receive their pro rata share of quarterly payments based upon the Reorganized Debtor's actual sales and revenue. All holders of equity interests in the Debtor will retain their interests in the Reorganized Debtor. There will be no distributions to holders of equity interests in the Reorganized Debtor until the time as claim holders have been paid in full. The Debtor is represented by: Anne Wells, Esq. 2463 Ashland Ave. Santa Monica, CA 90405 Tel: (310) 450-6857 Fax: (310) 450-9106 E-mail: wellsanne@earthlink.net Cynthia Futter, Esq. FUTTER-WELLS PC 2463 Ashland Ave. Santa Monica, CA 90405 Tel: (310) 450-6857 Fax: (888) 907-0006 E-mail: cfutter@futterwells.com Builders Bank is represented by: Bernard R. Given II, Esq. FRANDZEL ROBINS BLOOM & CSATO, L.C. 6500 Wilshire Boulevard, Seventeenth Floor Los Angeles, California 90048-4920 Tel: (323) 852-1000 Fax: (323) 651-2577 E-mail: bgiven@frandzel.com About Carbon Beach Partners, LLC Calabasas, California-based Carbon Beach Partners, LLC, owns an 8 unit, luxury condominium complex consisting of approximately 41,000 square feet, in Malibu, California. The Company filed for Chapter 11 protection on Nov. 3, 2009 (Bankr. C.D. Calif. Case No. 09-24657). The Company disclosed $21,000,004 in assets and $17,463,557 in liabilities as of the Chapter 11 filing. Robb Evans & Associates, LLC, is the appointed receiver in the Debtor's case. CATALYST PAPER: Posts C$398.2 Million Net Loss in 2010 ------------------------------------------------------ Catalyst Paper Corporation filed on March 3, 2011, its annual report on Form 40-F for the fiscal year ended Dec. 31, 2010. The Company reported a net loss of C$398.2 million on C$1.229 billion of sales for 2010, compared with a net loss of C$5.6 million on C$1.224 billion of sales for 2009. The Company's balance sheet at Dec. 31, 2010, showed C$1.696 billion in total assets, C$1.293 billion in total liabilities, and stockholders' equity of C$403.4 million. A full-text copy of the Form 40-F is available for free at: http://researcharchives.com/t/s?7471 A full-text copy of the audited financial statements are available for free at http://researcharchives.com/t/s?7472 A full-text copy of the Management's Discussion and Analysis is available for free at http://researcharchives.com/t/s?7473 About Catalyst Paper Headquartered in Richmond, British Columbia, Canada, Catalyst Paper Corporation (TSX: CTL) -- http://www.catalystpaper.com/-- 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 four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tonnes. * * * Catalyst Paper carries Moody's Investors Service's Caa1 Corporate Family Rating. Outlook is Negative. The Company also carries Standard & Poor's Ratings Services' 'CCC+' long-term corporate credit rating. Outlook is Stable. CATHAY GENERAL: Fitch Affirms Issuer Default Rating at 'BB' ----------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Ratings of Cathay General Bancorp and its bank subsidiary, Cathay Bank at 'BB'. The Rating Outlook has been revised to Stable from Negative. The ratings affirmation reflects CATY's strong capital position relative to the rating, improving asset quality metrics and an expectation of sustained profitability. Fitch's affirmation also considers the company's concentration in commercial real estate portfolio (58% of loans). While Fitch believes CATY is still vulnerable to further losses in the portfolio given continued economic stress within its footprint, improved asset quality metrics and an adequate capital and reserve base mitigate these concerns. Fitch's Outlook revision to Stable reflects improving asset quality trends. CATY's credit costs have been declining, as inflows of non-performing loans and early stage delinquencies have been trending down. If these trends continue, CATY's profitability should commensurately improve. The outlook also considers the company's relatively strong capital position, which is considered prudent and necessary given CATY's credit concentration and its current credit issues. Although CATY's ratings are somewhat constrained by the company's substantial concentration in CRE, the company's ratings could move higher should positive credit trends continue and the company's profitability strengthens, while maintaining a sound capital and reserve base. Conversely, problem assets remain at stubbornly high levels despite improvements in other asset quality metrics, making CATY susceptible to further losses given the economic weakness in its primary markets in California. A reversal of the recent positive credit trends and the escalation of credit losses would negatively impact CATY's ratings. CATY is a $10.8 billion bank holding company headquartered in Los Angeles, CA and focuses on the Asian banking market in its geographic footprint. CATY has expanded in the Asian-American communities across the country with a presence in New York, Chicago, Massachusetts, New Jersey, Texas, and Washington State. Fitch has affirmed these ratings with a Stable Outlook: Cathay General Bancorp -- Long-term Issuer Default Rating at 'BB'; -- Short-Term IDR at 'B'; -- Preferred stock at B; -- Individual at 'C/D'; -- Support rating at '5'; -- Support floor at 'NF'. Cathay Bank -- Long-term IDR at 'BB'; -- Long-term deposits at 'BB+'; -- Short-term IDR at 'B'; -- Short-term deposits at 'B'; -- Individual at 'C/D'; -- Support rating at '5'; -- Support floor at 'NF'. CHINA TEL GROUP: RBSM LLP Resigns as Independent Accountant ----------------------------------------------------------- On Feb. 25, 2011, RBSM, LLP resigned as the independent registered public accounting firm of China Tel Group, Inc. RBSM was engaged on June 28, 2010, as the Company's independent registered public accounting firm. RBSM did not issue any audit report on the Company's financial statements for each of the two most recent fiscal years. Effective Feb. 28, 2011, by unanimous written consent of the Company's Board of Directors, the Company accepted RBSM's resignation. During the period beginning on June 28, 2010 through Feb. 25, 2011, the Company has not had any disagreements with RBSM on any matter of accounting principles or practices, financial statement disclosures or auditing scope or procedure, which disagreements, if not resolved to RBSM's satisfaction, would have caused them to make reference thereto in their reports on the Company's consolidated financial statements for such periods. The Company discloses that RBSM had notified that the terms of the Subscription and Shareholders' Agreement, dated Feb. 16, 2009, among (i) Trussnet Capital Partners (HK), Ltd., (ii) Thrive Century International Limited, (iii) Newtop Holdings Limited, (iv) ChinaComm Limited, (v) Qui Ping, (vi) Yuan Yi, (vii) CECT Chinacomm Co. Ltd., and (viii) CECT Chinacomm Shanghai Co. Ltd., was not adequately disclosed in the Company's prior filings under the Securities and Exchange Act of 1934. Members of the Company's Board of Directors discussed this subject with RBSM and authorized RBSM to respond to inquiries by the Company's successor accounting firm regarding this subject. Full-text copies of the Agreement and the Addendum thereto are available for free at: http://ResearchArchives.com/t/s?746b http://ResearchArchives.com/t/s?746c The Company is in the process of interviewing qualified public accounting firms to retain as its independent registered public accounting firm. About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. The Company's balance sheet at June 30, 2010, showed $8.9 million in total assets, $26.2 million in total liabilities, and a stockholders' deficit of $17.3 million. Mendoza Berger & Company, LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has incurred a net loss of $56.0 million for 2009, cumulative losses of $165.4 million since inception, a negative working capital of $68.8 million and a stockholders' deficit of $63.2 million, and that the Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. CIRCLE ENTERTAINMENT: Merlin to Bring 3 Attractions to Orlando -------------------------------------------------------------- Global visitor attraction operator Merlin Entertainments confirmed that it is working with entertainment company Circle Entertainment, Inc. and developer Unicorp, to bring at least three of its best known global attraction brands to Orlando including Madame Tussauds and the Orlando 'Eye' - a sensational 425 ft high wheel! Talks are well advanced, and if agreed, the attractions will form a key part of Circle and Unicorp's exciting plans for I- Walk Orlando - a new high quality development of retail, restaurant and bars and entertainment facilities scheduled to open in 2013 in the centre of International Drive at the old Mercado location. Commenting Paul Kanavos, President of Circle Entertainment, said "I-Walk Orlando will be a very exciting addition to International Drive, providing a unique mix of leisure and retail activities. When we were looking for a partner, Merlin was the obvious place to start and we welcome them to I-Walk. Merlin has a unique portfolio of indoor visitor attractions all with global reputations; but most importantly they are the owners and operators of the world famous London Eye observation wheel in the UK. They are also the second largest attraction operator in the world and are expanding very rapidly here in the USA. Circle Entertainment is committed to building and owning the Orlando Eye at I-Walk Orlando and is seeking other preeminent domestic and international locations for its Observation Wheels under its exclusive worldwide license agreement with US Thrill Rides and Bill Kitchen, its founder." Unicorp President Chuck Whittall is excited about the project and his development joint venture with Circle Entertainment. "We are so pleased to undertake this extraordinary new development opportunity that will re-shape the landscape of International Drive. We waited patiently for four years to create the ideal retail and entertainment destination. This is it and will be a world wide destination. I-Walk Orlando has secured all necessary zoning and entitlements." Commenting Merlin Entertainments' CEO Nick Varney said "I-Walk Orlando is destined to be a 'must visit' destination for Orlando's millions of visitors. With this project we believe Merlin, Unicorp and Circle Entertainment will be bringing an exceptional group of new attractions to what is undoubtedly the best and most exciting location for family entertainment any where in the world. More than that, in October we are opening LEGOLAND Florida in Winter Haven, our second LEGOLAND theme park in the USA and fifth in the world underlining the importance of North America, and Florida in particular, as key development areas for Merlin." About Circle Entertainment Circle Entertainment Inc. (CEXE.PK), formerly FX Real Estate and Entertainment Inc., owns 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas Property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. On June 23, 2009, as a result of the default under the first mortgage loan, the first lien lenders had a receiver appointed to take control of the property. The Company is headquartered in New York City. The Company's balance sheet at Sept. 30, 2010, showed $142.3 million in total assets, $525.3 million in total liabilities, and a stockholders' deficit of $383.0 million. * * * As reported in the Troubled Company Reporter on April 15, 2010, LL Bradford, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company is in default under the mortgage loan, has limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. The Company disclosed in its Form 10-Q for the quarter ended June 30, 2010, that it has no current cash flow and cash on hand as of August 13, 2010, is not sufficient to fund its short-term liquidity requirements, including its ordinary course obligations as they come due. On April 21, 2010, the Company's remaining Las Vegas subsidiary, namely FX Luxury Las Vegas I, LLC, filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Nevada (Case No. 10-17015). The Company's Las Vegas subsidiary filed for Chapter 11 bankruptcy on April 21, 2010, and a plan of liquidation or reorganization will eventually be implemented under which the Company will surrender ownership of the Las Vegas Property. Under such a plan, it is extremely unlikely the Company will receive any material interest or benefit. CICSCO INC.: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: CICSCO, Inc. aka Colorado Industrial 9000 E Nichols Ave Centennial, CO 80112-3475 Bankruptcy Case No.: 11-14311 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Harvey Sender, Esq. SENDER & WASSERMAN, P.C. 1660 Lincoln St., Ste. 2200 Denver, CO 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 E-mail: Sendertrustee@sendwass.com Scheduled Assets: $1,984,130 Scheduled Debts: $1,781,165 A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cob11-14311.pdf The petition was signed by James R. Prall, president. COTTLE FINANCIAL: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Cottle Financial Services, Inc. dba Elmore County Finance P.O. Box 925 Wetumpka, AL 36092 Bankruptcy Case No.: 11-30562 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court Middle District of Alabama (Montgomery) Judge: William R. Sawyer Debtor's Counsel: Michael A. Fritz, Sr., Esq. FRITZ HUGHES & HILL, LLC 7020 Fain Park Drive, Suite 1 Montgomery, AL 36117 Tel: (334) 215-4422 Fax: (334) 215-4424 E-mail: bankruptcy@fritzandhughes.com Scheduled Assets: $983,353 Scheduled Debts: $1,038,325 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/almb11-30562.pdf The petition was signed by Fran C. Cottle. CPW ACQUISITION: Court Won't Hear Dispute Over Fortress Fees ------------------------------------------------------------ CPW Acquisition Corp. objects to compensation and reimbursement of expenses paid to Dewey & LeBouef, LLP and Arnold & Porter, LLP as counsel to Fortress Credit Corp., and seeks remittance of those fees to the estate. CPW submits that $301,216 of the legal fees, which have been paid out of proceeds from the sale of property in London, England, are objectionable. Fortress contends that the Bankruptcy Court lacks jurisdiction over the proceeds from the sale of the London Property. Chief Bankruptcy Judge Arthur J. Gonzalez held that when Fortress filed a claim against the estate, it conferred "core" jurisdiction on the Bankruptcy Court. Nevertheless, Judge Gonzalez said, the Bankruptcy Court also recognizes that in "certain international disputes the prudent and just action for a federal court is to abstain from the exercise of jurisdiction," citing In re Regus Business Centre Corp., 301 B.R. at 128 (citing Turner Entertainment Co. v. Degeto Film GmbH, 25 F.3d 1512, 1518 (11th Cir. 1994)). Judge Gonzalez concluded that the Bankruptcy Court will exercise its discretion to abstain from deciding the objections under the permissive abstention doctrine of 28 U.S.C. Sec. 1334(c)(1). Therefore, CPW's Motion Objecting to Compensation and Reimbursement of Expenses Paid to Dewey & Lebouef LLP and Arnold & Porter LLP as Counsel to Fortress Credit Corp. is denied without prejudice for the Debtor to bring an appropriate claim consistent with the Court's opinion. A copy of the Court's March 3, 2011 Opinion is available at http://is.gd/5rr8flfrom Leagle.com. Attorneys for CPW Acquisition Corp. are: Sanford P. Rosen, Esq. Jeffrey S. Davis, Esq. ROSEN & ASSOCIATES, P.C. 747 Third Avenue New York, NY 10017-2803 Telephone: (212) 223-1100 Facsimile: (212) 223-1102 E-mail: srosen@rosenpc.com jdavis@rosenpc.com Counsel for Fortress Credit Corp. is: Lisa Hill Fenning, Esq. ARNOLD & PORTER LLP. 44th Floor 777 South Figueroa Street Los Angeles, CA 90017-5844 Telephone: 213-243-4019 Facsimile: 213-243-4199 E-mail: Lisa.Fenning@aporter.com CPW Acquisition Corp. and its affiliate, Robert Lane Estates, Inc. each commenced a voluntary chapter 11 case (Bankr. S.D.N.Y. Case Nos. 08-14623 and 08-14625) on Nov. 20, 2008, represented by Sanford P. Rosen, Esq., and Jeffrey S. Davis, Esq., at Sanford P. Rosen & Associates, P.C. The Robert Lane case was dismissed by Court order dated Nov. 24, 2009. Robert Lane estimated $1 million to $10 million in both assets and debts as of the Chapter 11 filing. CROSS LANES: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cross Lanes Hospitality, LLC 420 Goff Mountain Road Cross Lanes, WV 25313 Bankruptcy Case No.: 11-20168 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court Southern District of West Virginia (Charleston) Judge: Ronald G. Pearson Debtor's Counsel: James W. Lane, Jr., Esq. LAW OFFICES OF JIM LANE, JR. 205 Capitol St, Suite 400 P.O. Box 11806 Charleston, WV 25301 Tel: (304) 342-0081 Fax: (304) 343-3365 E-mail: jim.lane@jimlaneattorneyatlaw.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 eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wvsb11-20168.pdf The petition was signed by Pinakin Thakor, corporate representative. CROWN HOLDINGS: Fitch Raises Default Rating to 'BB'; Outlook Pos. ----------------------------------------------------------------- Fitch Ratings has upgraded the ratings for Crown Holdings, Inc., and its subsidiaries Crown Cork & Seal Company, Inc., Crown Americas, LLC, and Crown European Holdings, SA, with a Positive Outlook. The ratings upgrade reflects the positive progress within Crown's operating segments and financial profile which has led to sustainable improvements in profitability and credit measures. Fitch bases the Positive Outlook on expectations for solid growth in revenue and cash generation during the next 18 months as a result of announced capacity expansion projects. Consequently, Crown should continue to improve its credit profile as the company further reduces leverage through cash flow growth. Support for Crown's ratings is due to the stable cash flows associated with its contractual commitments and cost pass-through despite a challenging economic global environment. Cost-containment measures and price increases have also led to continued profitability improvements. In 2011, Fitch expects solid volume demand will continue across the majority of Crown's regions. In particular, supply/demand characteristics should remain tight in its emerging markets region with the company indicating that the planned capacity expansion is sold out. Past capacity rationalizations and selective mix realignments by the can industry in its mature markets also provides pricing stability. Consequently, Fitch anticipates moderate growth in the mid-single- digit range for EBITDA in 2011 which should further strengthen Crown's operational prospects. This is based on expectations for stable to increasing profitability levels. Crown's geographical diversification across both mature and emerging markets with a diverse customer mix results in a balanced revenue stream that can lend greater stability through economic cycles. Crown's credit profile was strengthened through repayment/refinancing transactions associated with its term loan and nearer-term debt maturities during the past several quarters. Crown's term loan facilities that mature on Nov. 15, 2012 totaled $292 million at the end of 2010 compared with $744 million in 2009. Fitch believes Crown has significant flexibility in addressing its remaining maturities that are slightly in excess of $400 million during the next two years. Adjusted leverage (including accounts receivable securitization and lease expense) at the end of 2010 was approximately 3.2 times. Crown's liquidity is very good and includes its sustainable free cash flow generation, cash and availability under its revolving facility and securitization programs. Crown's $1.2 billion credit facility matures in June 2015 with borrowings at the end of 2010 of $184 million. FCF in 2010, following Fitch adjustments for minority interests payments, totaled approximately $400 million. In 2011, FCF will likely be approximately $100 million less due to spending on success based capital projects. Cash levels, which were $463 million for 2010, are expected to decline moderately over the longer term. Crown also has two accounts receivable securitization programs: a EUR120 million program maturing in November 2011 and a $200 million North American program maturing in March 2013. As of Dec. 31, 2010, Crown had $208 million of securitized receivables. Crown's debt agreements also give the company significant flexibility and material capacity to issue additional debt. As expected, Crown shifted its priorities for excess cash to shareholder-friendly initiatives. During the second half of 2010, Crown entered into two accelerated share repurchase programs in August and December for $250 million in total. In addition, Crown announced that its Board of Directors has authorized the repurchase of up to $600 million of the company's common stock through the end of 2012. Minority interest dividends increased substantially during the past several years to $112 million in 2010 as profitability increased across its emerging markets region. Fitch expects dividend payments to increase moderately going forward as a result of the continue volume growth. Credit risks include the increase in revenue exposure to more volatile, higher-growth emerging markets, macro events outside the control of the company, the asbestos liability, and pension funding. As multiple can operators rapidly expand capacity in emerging market regions, the risk for over-capacity could occur. However, Fitch believes the company has taken prudent steps because of its local knowledge and experience to minimize that occurrence. In addition, Crown has significant flexibility to address unexpected cash requirements on the business. The Rating Outlook is currently Positive. Fitch expects that a ratings upgrade is possible based on these factors: -- Adjusted leverage continues to improve to the upper 2x range; -- Capacity expansion/demand ramp-up as expected in its emerging markets regions; -- Cash generation increases proportionately through volumes increases; -- Continuation of current financial policies and not pursuing permanently leveraging transactions. Fitch has upgraded these ratings: Crown: -- Issuer Default Rating to 'BB' from 'BB-'. CCS: -- IDR to 'BB' from 'BB-'; -- Senior unsecured notes to 'BB-' from 'B+'. CA: -- IDR to 'BB' from 'BB-'; -- Senior unsecured notes to 'BB' from 'BB-'' CEH: -- IDR to 'BB' from 'BB-'; -- Senior unsecured notes to 'BB' from 'BB-'. In addition, Fitch has affirmed these ratings: CA: -- Senior secured dollar term facility at 'BBB-'; -- Senior secured dollar revolving facility at 'BBB-'. CEH: -- Senior secured euro term facility at 'BBB-'; -- Senior secured euro revolving facility at 'BBB-'; -- Senior secured euro 1st priority notes at 'BBB-' . DAIICHI SOLAR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Daiichi Solar World, LLC 915 Hilby #26 Seaside, CA 93955 Bankruptcy Case No.: 11-01020 Chapter 11 Petition Date: March 3, 2011 Court: United States Bankruptcy Court Eastern District of Washington Spokane/Yakima) Debtor's Counsel: Timothy R. Fischer, Esq. MURPHY BANTZ & BURY PS 818 W Riverside Ave Suite #631 Spokane, WA 99201 Tel: (509) 838-4458 Fax: (509) 838-5466 E-mail: tfischer@mbandbps.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/waeb11-01020.pdf The petition was signed by Galen Ishii, manager. DAUERWALDEN, INC.: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: DauerWalden, Inc. 41500 Whitehouse Fork Road Bay Minette, AL 36507 Bankruptcy Case No.: 11-00835 Chapter 11 Petition Date: March 3, 2011 Court: U.S. Bankruptcy Court Southern District of Alabama (Mobile) Judge: William S. Shulman Debtor's Counsel: Geraldine S. Lester, Esq. LAW OFFICE OF DON A. MCGRIFF 101 N. Section Street Fairhope, AL 36532 Tel: (251) 928-7074 E-mail: glester022@gmail.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/alsb11-00835.pdf The petition was signed by Thomas C. Swearingen, president. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Beebe & Swearingen LLC 11-220 01/20/11 DAVE DUERSON: Filed for Bankruptcy in September ----------------------------------------------- As widely reported, former Chicago Bears player Dave Duerson, who killed himself late February, had filed for voluntary personal bankruptcy protection (Bankr. S.D. Fla. Case No. 10-____) last September. The Chicago Tribune reports that Mr. Duerson, in his bankruptcy petition, had listed $34.6 million in assets and $14.7 million in liabilities. Accounting for nearly all of his assets was one accounts receivable, or a payment owed to Mr. Duerson: a final judgment entered against defendants in case of Duerson Foods LLC vs. Ohio, and Dutch food interests stemming from a 2004 case in Wisconsin. His debts are mostly connected to his company, Duerson Foods LLC, which was forced into receivership in 2006. The Chicago Tribune discloses that in December, his ex-wife, Alicia Duerson, had filed an adversary proceeding in the bankruptcy. Among other things, it said that Mr. Duerson still owed her $70,000 and was trying to conceal certain assets, including his two Super Bowl rings and a large bronze trophy for being named the Walter Payton Man of the Year in 1987. DELUXE CORPORATION: Moody's Assigns Ba2 Rating to $200 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Deluxe Corporation's proposed $200 million senior unsecured notes, which benefit from a pari passu guaranty from the company's material subsidiaries. Net proceeds from the new notes will be used to tender the company's existing 5% senior unsecured notes due 2012 which carry no subsidiary guaranty. Deluxe's Corporate Family Rating and Probability of Default Rating remain unchanged, each at Ba2. The transaction improves the company's liquidity and financial flexibility by extending its debt maturity profile and allowing Deluxe to build up cash balances which may be used to fund tuck-in acquisitions or investments in organic growth. The refinancing of non-guaranteed debt with guaranteed notes reduces the cushion provided by lower priority, non-guaranteed instruments and shifts the majority of the debt composition to guaranteed instruments rated Ba2, in line with the CFR. Accordingly, the senior unsecured notes due 2015 were downgraded to Ba2 from Ba1. Also as a result of the change in capital mix, the non-guaranteed 2014 notes and any untendered 2012 notes are notched lower, resulting in the downgrade to B1 from Ba3. Deluxe has tendered for all of the approximately $280 million of senior unsecured notes due 2012; to the extent more than $200 million of the 2012 notes are tendered exhausting net proceeds from the new note issuance, Deluxe expects to fund the shortfall with advances from its unrated, $200 million revolver. The outlook is revised to positive from stable. This is a summary of the actions and Moody's ratings for Deluxe: Unchanged: Issuer: Deluxe Corporation -- Corporate Family Rating: Ba2, No Change -- Probability of Default Rating: Ba2, No Change Assignment: Issuer: Deluxe Corporation -- $200 million senior unsecured notes, Assigned Ba2, LGD3, 40% Downgrades: Issuer: Deluxe Corporation -- 7-3/8% senior unsecured notes, due 2015, Downgraded to Ba2, LGD3, 40% from Ba1, LGD2, 24% -- 5% senior unsecured notes, due 2012, Downgraded to B1, LGD5, 86% from Ba3, LGD5, 73% -- 5-1/8% senior unsecured notes, due 2014, Downgraded to B1, LGD5, 86% from Ba3, LGD5, 73% Outlook Actions: Issuer: Deluxe Corporation -- Outlook, Changed to Positive from Stable Ratings Rationale Deluxe's Ba2 Corporate Family Rating reflects ongoing pressure on the company's revenue base (consisting largely of printed products) and operating margins, as well as execution risks associated with the company's strategy to expand its small business services segment. While the company generates more than $110 million in free cash flows annually, there are risks associated with how it utilizes this cash as balances build up, albeit mitigated by the 3.5x net debt-to-EBITDA limitation (as defined and allowed for sizable acquisitions) under the credit agreement of the unrated revolver maturing 2013 (note that more recent indentures also have a 101% change of control put). Moody's anticipates that Deluxe is likely to continue investing in organic growth and acquisitions as management executes its strategy of transitioning to a broader business model of providing an array of services to small businesses and financial institutions. Over the long term, Moody's believe that Deluxe should maintain a more conservative leverage profile than comparably-rated issuers due to the declining outlook for its core check businesses. Over the near term, the improving economic environment and stable EBITDA margins, as a result of the announced $65 million target for additional expense reductions for 2011 on top of the recently completed $325 million cost reduction program, mitigate some of the downward earnings pressure from declining check usage. The rating reflects Moody's expectation that Deluxe will continue to maintain a good liquidity profile, as demonstrated by the proposed refinancing of 2012 note maturities. In addition, Moody's anticipate the company will sustain debt-to- EBITDA leverage below 2.5x (incorporating Moody's standard adjustments), providing Deluxe with capacity to absorb a moderate earnings decline, increases in investment, or other uses of free cash flow within this leverage level. The outlook was revised to positive from stable reflecting Moody's expectations that leverage will remain below 2.5x, liquidity will remain strong and management will continue to apply excess cash to reduce debt balances. The outlook also accommodates the expected ongoing 7-8% decline in check volumes offset by the company's growing non-check related businesses. Given the positive outlook, Moody's does not expect to downgrade ratings; however, debt-to-EBITDA ratios exceeding 3.5x or free cash flow-to-debt falling below 9% due to earnings deterioration or a leveraging event would lead to a downgrade. Consistent revenue growth, stable to higher EBITDA margins, and debt reduction that leads to greater flexibility to absorb a significant customer loss or industry downturn while sustaining debt-to-EBITDA below 2.25x and free cash flow-to-debt in excess of 13% could position the company for an upgrade. Moody's last rating action for Deluxe was on March 29, 2010 when Moody's modified Deluxe's instrument ratings to reflect the change in guarantee support structure. Deluxe's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, like i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Deluxe's core industry and Deluxe's ratings are believed to be comparable to those of other issuers of similar credit risk. Deluxe Corporation, headquartered in St. Paul, MN, uses direct marketing, distributors and a North American sales force to provide a wide range of customized products and services to its customers. The company has been diversifying from its legacy printed-check business into a growing suite of business services, including logo design, payroll, web design and hosting, business networking and other web-based services to help small business grow. In the financial services industry, Deluxe sells check programs and fraud prevention, customer loyalty and retention programs to banks. Deluxe also sells personalized checks, accessories and other services directly to consumers. Revenue for LTM December 2010 totaled $1.4 billion. DELUXE HOLDINGS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Deluxe Holdings, Inc. 5251 West Imperial Highway Los Angeles, CA 90045 Bankruptcy Case No.: 11-19242 Chapter 11 Petition Date: March 3, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: Douglas M. Neistat, Esq. GREENBERG & BASS 16000 Ventura Boulevard, #1000 Encino, CA 91436 Tel: (818) 382-6200 Fax: (818) 986-6534 E-mail: twilliams@greenbass.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/cacb11-19242.pdf The petition was signed by John Hennessay, CEO. DOMMER CONSTRUCTION: Subcontractor's Financier May Amend Claim -------------------------------------------------------------- Bankruptcy Judge Michael J. Kaplan directs BFG Inc. to amend the proof of claim it filed in the bankruptcy case of Dommer Construction Corporation. Pre-bankruptcy, Dommer entered into direct negotiations with BFG to assist MBE Group in obtaining the funds it needed to perform sub-subcontracting work for Dommer, and to make sure that to the extent that Dommer would be making payments to BFG rather than MBE, Dommer would not violate the New York Lien Law. The Court will hold a status report on March 30, 2011, at 10:00 a.m., after the amended claim has been filed. A copy of the Court's March 3, 2011 Amended Opinion and Order is available at http://is.gd/8mAoZXfrom Leagle.com. Based in Lancaster, New York, Dommer Construction Corporation filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 10-12764) on June 23, 2010, represented by Beth Ann Bivona, Esq. -- bbivona@damonmorey.com -- at Damon Morey LLP in Buffalo. In its petition, it estimated under $50,000 in assets and $1 million to $10 million in debts. DULATOWN OUTREACH: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Dulatown Outreach Center, Inc. P.O. Box 679 Lenoir, NC 28645 Bankruptcy Case No.: 11-50242 Chapter 11 Petition Date: March 3, 2011 Court: United States Bankruptcy Court Western District of North Carolina (Wilkesboro) Judge: J. Craig Whitley Debtor's Counsel: Verna Carol Bash-Flowers, Esq. ATTORNEY VERNA BASH-FLOWERS P.O. Box 927 Lowell, NC 28098 Tel: (704) 691-7220 Fax: (704) 691-7321 E-mail: vbashflowers@gmail.com Scheduled Assets: $1,008,390 Scheduled Debts: $191,704 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ncwb11-50242.pdf The petition was signed by Elijah B. Freeman, Jr., president/executive director. E-DEBIT GLOBAL: Enters Into Joint Venture With ebackup Inc. ----------------------------------------------------------- E-Debit Global Corporation has entered into a joint-venture with ebackup Inc. through ownership participation in Capital Six Limited to provide technical and marketing services for ABM, POS, OCB, E-Commerce and a wide array of Card Services across North America. Overview With the additional owned computer and network infrastructure supplied by ebackup, it creates an end-to-end service model unparalleled in the ABM industry. The joint venture facilitates lower cost placements and processing services allowing for better margins and automated management systems to maintain cost controls. "The two companies have been actively cooperating without a formal structure to further enhance our unparalleled "end to end" payment delivery and processing solution. This Joint Venture solidifies that relationship. We are excited to have ebackup supplying our PCI compliant data centre, technical support and data protection services," E-Debit Chief Executive Doug Mac Donald said in a joint statement with ebackup Inc. President Rowland Perkins. "Through our Capital Six joint-venture we can act more strategically in both marketing and infrastructure development. This single, shared approach to gain significant economies of scale will benefit our development speed and costs, facilitate standardization of platforms through consolidated hardware components and in addition, Capital Six brings a wealth of people and experience in E-Debit's core business, this added personnel utilization will allow us to gain a faster development and implementation processes" they added. "For us, our joint-venture enables us to advance development of an integrated payment solution in order to utilize our entire collective technological and ATM and POS distribution and processing expertise for rapid business growth throughout Canada and the USA." About ebackup Inc. ebackup Inc. is one of Western Canada's largest "Cloud" based PCI compliant data centers and backup service providers, supplying simple, robust, cost effective and secure data asset protection through automated solutions that are fully scalable to its customer's needs. ebackup provides single source comprehensive automated and offsite data backup processes, protecting critical data for the full spectrum of business operations. ebackup enables businesses, from one-person operations, to medium sized corporations to concentrate on their core business and to allow their valuable human resources to concentrate and compete effectively in today's marketplace while ebackup manages their technological requirements. About E-Debit Global Corporation E-Debit Global Corporation (WSHE) is a financial holding company in Canada at the forefront of debit, credit and online computer banking. Currently, the Company has established a strong presence in the privately owned Canadian banking sector including Automated Banking Machines (ABM), Point of Sale Machines (POS), Online Computer Banking (OCB) and E-Commerce Transaction security and payment. E-Debit maintains and services a national ABM network across Canada and is a full participating member of the Canadian INTERAC Banking System. The Company's balance sheet at Sept. 30, 2010, showed US$1.79 million in total assets, US$1.96 million in total liabilities, and a stockholders' deficit of US$165,000. As of Sept. 30, 2010, the Company had a working capital deficit of US$770,000 and an accumulated deficit of US$4.08 million. Cordovano and Honeck LLP, in Englewood, Colorado, expressed substantial doubt about E-Debit Global Corporation's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has suffered recurring losses, has a working capital deficit, and has an accumulated deficit of US$760,509 as of Dec. 31, 2009. ECONOMIC DEVELOPMENT: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Economic Development & Training Institut 5625 Allentown Road, Suite 107 Suitland, MD 20746 Bankruptcy Case No.: 11-14303 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Charles Earl Walton, Esq. LAW OFFICE OF CHARLES E. WALTON 10905 Fort Washington, Suite 201 Fort Washington, MD 20744 Tel: (301) 292-8357 Fax: (301) 292-9439 E-mail: cwalton@cwaltonlaw.com Scheduled Assets: $1,297,572 Scheduled Debts: $1,242,019 A list of the Company's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb11-14303.pdf The petition was signed by Joseph Gaskins, president. ENERGY FUTURE: Calls Aurelius' Default Allegation 'Meritless' ------------------------------------------------------------- Emre Peker and Pierre Paulden at Bloomberg News report that Energy Future Holdings Corp., formerly known as TXU Corp., is rejecting an assertion by hedge fund Aurelius Capital Management LP that it's in default on a $23.9 billion loan that financed its record buyout by KKR & Co. and TPG Capital. The allegations are "utterly meritless," Robert Walters, general counsel of Energy Future, said in a telephone interview with Bloomberg News. The Troubled Company Reporter on March 2 reported the Company's receipt of a default notice from Aurelius. The hedge fund, led by Mark Brodksy, said in a letter to Citigroup Inc., administrator of the buyout loans, that payments to the Dallas-based company by one of its units aren't in compliance with the credit agreement, Energy Future said in a Feb. 25 regulatory filing. The electricity provider purchased some of its debt at a discount last year and said Feb. 18 that profit for the last three months rose 18% to $161 million on buybacks even as revenue dropped because of low natural gas prices. Energy Future owes $39.6 billion in loans and bonds. "Owners of the term loan would love a default and a restructuring because then the subsidiary could stop bleeding high coupon interest payments," Andy DeVries, an analyst for debt-research firm CreditSights Inc. in New York, said in a Feb. 25 e-mail. About Energy Future Energy Future Holdings Corp. is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leveraged buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. * * * As reported by the Troubled Company Reporter on August 19, 2010, Fitch Ratings downgraded the Issuer Default Ratings of Energy Future Holdings Corp. and its subsidiaries Energy Future Intermediate Holding Company LLC, Texas Competitive Electric Holdings Company LLC, and Energy Future Competitive Holdings Company by one notch to 'CCC' from 'B-'. The downgrades of the IDRs of EFH and its non-ring-fenced subsidiaries reflect large debt maturities occurring in 2014, over-leveraged capital structure, cash flow dependence on the forward natural gas NYMEX curve, which has been consistently moving down since mid-2008, and the likely outcome of future debt exchanges and amend-and-extend bank facility negotiations. In Fitch's view, potential defaults in 2011-2012 are considered more likely to result from coercive debt exchanges and unlikely to result from payment defaults. The TCR on August 19 also reported that Moody's Investors Service changed the probability of default rating for Energy Future Holdings to Caa2/LD from Ca following the completion of a debt restructuring which Moody's views as a distressed exchange. EFH's Caa1 CFR and SGL-4 liquidity rating are affirmed. The rating outlook remains negative. EFH recently executed a debt restructuring which involved an exchange of its 10.875% senior unsecured (guaranteed) notes due 2017 and its 11.25% / 12.00% senior unsecured PIK Toggle (guaranteed) notes due 2017 for new 10.00% senior secured notes due 2020 issued at EFIH, plus approximately $500 million in cash, plus accrued interest. These events had the effect of allowing EFH to reduce its overall net debt by approximately $1.0 billion and extend a portion of its maturities. The transaction crystallized losses for investors of approximately 30%. Taken as a whole, Moody's views the transaction as a distressed exchange and has classified this transaction as a limited default by appending an LD designation to the PDR. In approximately three business days, Moody's will remove the LD designation and reposition the PDR to Caa2. The affirmation of EFH's Caa1 CFR considers the very weak financial profile, untenable capital structure, questionable long- term business plan and material operating headwinds for the company. Moody's believes EFH has very little financial flexibility. EUGENE PIPE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Eugene Pipe, LLC dba Ridgeline Pipe Manufacturing 2220 Nugget Way Eugene, OR 97403 Bankruptcy Case No.: 11-60920 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court District of Oregon Judge: Frank R. Alley III Debtor's Counsel: Loren S. Scott, Esq. MUHLHEIM BOYD 88 East Broadway Eugene, OR 97401 Tel: (541) 868-8005 E-mail: ecf@mb-lawoffice.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/orb11-60920.pdf The petition was signed by Mike Stickel, MICA Investments, LLC, member. EURAMAX INTERNATIONAL: Moody's Affirms 'Caa1' Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the Caa1 corporate family rating of Euramax International, Inc. Moody's also assigned a Caa1 rating to the company's proposed $375 million senior secured notes due 2016. The rating action was prompted by the company's recent refinancing of its existing indebtedness with proceeds from the rated notes, ABL borrowings, and a new unrated unsecured term loan used to repay its amended and restated secured term loan due in 2013. Following the close of the transaction, Moody's will withdraw the ratings on the existing secured term loan facility. The rating outlook was changed to positive from stable. Ratings Affirmed: Issuer: Euramax International, Inc. -- Corporate Family Rating, Caa1 -- Probability of Default Rating, Caa1 Ratings Assigned: Issuer: Euramax International, Inc. -- Sr. Secured Notes, Caa1 (LGD4, 50%) -- Outlook, Positive from Stable Rating Rationale The affirmation and positive outlook reflect the company's improved operating performance in 2010, prospects for 2011, and the new capital structure, which extends the maturity profile by three years, lowers interest expense, and eliminates restrictive financial maintenance covenants. As a result, Moody's believes the overall liquidity position has improved as a breach in financial covenant compliance is no longer expected in the next 12-18 months. Euramax amended its $70 million ABL revolving credit facility, which now matures in 2015. Currently, aggregate outstanding amounts are roughly $15 million, with availability of approximately $30 million after considering the most recent borrowing base calculation. The company also has approximately $25 million of cash on the balance sheet. For the ABL facility, the company must maintain a fixed charge ratio of 1.25 to 1 if availability falls under 15% of the lesser of the borrowing base and the commitment. Moody's believes the availability will not fall below this threshold in the next 12-18 months. The unrated unsecured term loan contains a PIK toggle feature. At the company's option, but no more than 6 payments over the life of the loan, Euramax can elect to pay approximately 50% of the interest in cash, if liquidity weakens. The Caa1 corporate family rating considers the company's high adjusted leverage, around 8.0x EBITDA, low adjusted interest coverage (EBIT/Interest slightly below 1.0x), sluggish operating performance due to the continued weakness of the residential and commercial building markets, and the slow recovery of the global economy in general. Moody's believes debt reduction over Moody's rating horizon will remain uncertain if demand levels fail to maintain traction. Although Euramax's operating performance improved in 2010 and end-markets show signs of additional recovery in 2011, Moody's expects credit metrics to remain weak in 2011, primarily due to Moody's expectation of a slow economic recovery and the depressed state of the residential/commercial building and recreational vehicle end markets. The ratings also consider a limited ability to reduce debt, vulnerability to cyclical end-use markets, exposure to volatile raw material costs for commodities such as aluminum and steel, modest free cash flow relative to debt levels, and significant customer concentration risks with retail home centers. The positive outlook reflects the company's improved liquidity position, operating results in 2010, and prospects for additional gains in 2011. The company has shown recent revenue and cost improvement, therefore, if Euramax sustains this improvement, an upgrade would be warranted. Specifically, if operating results expand sufficiently to sustain adjusted EBIT/Interest at 1.5x and adjusted Debt/EBITDA below 6.5x, ratings will likely be raised. The ratings may be downgraded should the company face significant price and volume deterioration, persistent negative free cash flow, or a material deterioration in liquidity arrangements. Moody's last rating action was on August 6, 2009, when Moody's assigned Caa1 ratings to Euramax's corporate family and probability of default ratings. Headquartered in Norcross, Georgia, Euramax International Inc. is an international producer of value-added aluminum, steel, vinyl and fiberglass products. EVANS OIL: Reports $39.7 Million in Liabilities ----------------------------------------------- Laura Layden at Naples News reports that Evans Oil disclosed nearly $39.7 million in liabilities, with most of that owed to Fifth Third Bank. The Company's assets are estimated at about $18.7 million. A dispute with its largest lender spurred the Chapter 11 filing, but it has been "business as usual," owner and manager Randy Long said, according to the report. Fifth Third Bank looks to aggressively collect more than $35.1 million in debt. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. It filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-01515) on Jan. 30, 2011. John S. Sarrett, Esq., Lawrence E. Oscar, Esq., Daniel A. DeMarco, Esq., Christopher B. Wick, Esq., and Emily W. Ladky, Esq., at Hahn Loeser & Parks LLP, servers as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates KCWL, LLC (Bankr. M.D. Fla. Case No. 11-01519), Long Equipment Finance, LLC (Bankr. M.D. Fla. Case No. 11-01520), Long Petroleum Products (Bankr. M.D. Fla. Case No. 11-01521), Long Run, LLC (Bankr. M.D. Fla. Case No. 11-01522), Octane, LLC (Bankr. M.D. Fla. Case No. 11-01523), and RML, LLC (Bankr. M.D. Fla. Case No. 11-01524) filed separate Chapter 11 petitions on January 30, 2011. The cases are jointly administered. Evans Oil is the lead case. The Debtors hired The Garden City Group, Inc., as claims, noticing and balloting agent. EVEREST HEIGHTS: Section 341(a) Meeting Scheduled for March 24 -------------------------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of Everest Heights Dallas Real Estate, Inc.'s creditors on March 24, 2011, at 11:00 a.m. The meeting will be held at Office of the U.S. Trustee, 1100 Commerce Street, Room 976, Dallas, Texas. 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. Dallas, Texas-based Everest Heights Dallas Real Estate, Inc., filed for Chapter 11 bankruptcy protection on Feb. 27, 2011 (Bankr. N.D. Tex. Case No. 11-31308). Mark Edward Andrews, Esq., at Cox Smith Matthews Incorporated, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Everest Heights Dallas, Inc., filed a separate Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-31309). It estimated its assets and debts at $10 million to $50 million. EVERGREEN ENERGY: Regains Listing Compliance With NYSE Arca ----------------------------------------------------------- Evergreen Energy Inc. has regained compliance with listing standards issued by the New York Stock Exchange Arca Inc. The NYSE Arca will continue to list the stock under the ticker symbol "EEE." Ilyas Khan, Executive Chairman of Evergreen Energy, commented: "I wish to thank the NYSE Arca exchange for their support of Evergreen while we completed our plan to regain compliance with the listing requirements. We are entirely focused on continuing to meet our ambitious milestones, and I wish to take this opportunity to also thank our long-standing and supportive shareholders." The company will be subject to a 12-month review by NYSE Arca to ensure compliance with the continued listing standards. If the company should fall below the continued listing standards during this period, its compliance plan is subject to further regulatory review and the company's listing may be subject to suspension from the NYSE Arca. About Evergreen Energy Evergreen Energy Inc. has developed two, proprietary, patented, and green technologies: the GreenCert(TM) suite of software and services and K-Fuel(R). GreenCert, which is owned exclusively by Evergreen, is a science-based, scalable family of environmental intelligence solutions that quantify process efficiency and greenhouse gas emissions from energy, industrial and agricultural sources and may be used to create verifiable emission reduction credits. K-Fuel technology significantly improves the performance of low-rank coals, yielding higher efficiency and lowering emissions. The Company's balance sheet as of Sept. 30, 2010, showed $33.93 million in total assets, $45.04 million in total liabilities, $3,000 in temporary equity, and a stockholders' deficit of $11.11 million. Deloitte & Touche LLP, in Denver, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted of the Company's recurring losses from operations and stockholders' deficit. FAIRVUE CLUB: Gallatin, New Owner, to Reopen Club Mid-March ----------------------------------------------------------- Eric Miller at The Tennessean reports that the sale of the Fairvue Plantation clubhouse and Lakes golf course was closed on Feb. 28, 2011, and the new ownership, Gallatin Golf LLC, plans to have the course reopened by the end of March. "The base plan is to have the golf course open by mid-month and the clubhouse open as soon as practical thereafter," the report quotes Barry Jacobson, spokesperson for the Club at Fairvue Plantation, as saying. While the new ownership is still working out details about the reopening, a plan is already in place to entice members under the previous ownership to stay with the club, The Tennessean discloses. Illinois-based firm KemperSports has been hired to manage the operation of the golf course and clubhouse, according to the report. About Fairvue Club Properties, LLC Based in Gallatin, Tennessee, Fairvue Club Properties, LLC, owns the Fairvue Plantation, a 504-acre development featuring 650 home sites, two 18-hole golf courses, and 5-miles of shoreline around Old Hickory Lake, a reservoir in north central Tennessee. The Company filed for Chapter 11 bankruptcy protection on Dec. 1, 2009 (Bankr. M.D. Tenn. Case No. 09-13807). William L. Norton, III, Esq., at Bradley Arant Boult Cummings LLP, in Nashville, Tenn., assists the Debtor in its restructuring effort. The Company disclosed $13,287,625 in assets and $17,215,175 in liabilities as of the Petition Date. Foxland Harbor Marina LLC filed for Chapter 11 bankruptcy protection on Dec. 31, 2009 (Bankr. M.D. Tenn. Case No. 09-14911), estimating both assets and debts between $1 million and $10 million. Foxland Club Properties, LLC, filed for Chapter 11 (Bankr. M.D. Tenn. Case No. 10-03566) on April 1, 2010, estimating both assets and debts to be between $1 million and $10 million. Mr. Norton also represents Foxland Harbor and Foxland Club. The three debtor entities are 100% owned by the Leon Moore 2009 Irrevocable Trust. Leon Leslie Moore is a Chapter 7 debtor. FIDELITY PROPERTIES: Parties Withdraw Plea to Dismiss Ch. 11 Case ----------------------------------------------------------------- Shannon Leigh Aiken, et al., notified the U.S. Bankruptcy Court for the Middle District of Florida that they have withdrawn their motion to dismiss the Chapter 11 case of Fidelity Properties Group, LLC. The withdrawal was in accordance with a Settlement Agreement between the movants and the Debtor. Ms. Aiken, Jane Medford Simpson, Laura Margaret Aiken Grindstaff, and Robert Medford Aiken, are executors of the estates of J. B. Medford and Mildred Moore Medford and as trustees of the trust created under the Last Will and Testaments of J. B. Medford and Mildred Moore Medford. The movants are represented by: Andrew M. Brumby, Esq. Chadwick C. Crews, Esq. SHUTTS & BOWEN LLP 300 S. Orange Avenue, Suite 1000 Orlando, FL 32801 Tel: (407) 835-6901 Fax: (407) 849-7201 E-mail: abrumby@shutts.com ccrews@shutts.com About Fidelity Properties Orlando, Florida-based Fidelity Properties Group LLC owns eleven real estate properties. The Company filed for Chapter 11 protection on April 1, 2010 (Bankr. M.D. Fla. Case No. 10-05510). Lawrence M. Kosto, Esq., Kosto & Rotella PA, in Orlando, Fla., represents the Debtor in its restructuring effort. The Company disclosed $10,333,188 in assets and $3,593,828 in debts as of the Petition Date. FIRSTFED FINANCIAL: Wins Court Nod to Hire Garden City Group ------------------------------------------------------------ BankruptcyData.com reports that the U.S. Bankruptcy Court approved FirstFed Financial's motion seeking to retain Garden City Group as noticing agent. The firm will provide notice of hearing to consider confirmation of the Debtor's plan and distribute the solicitation package approved by the Court in connection with the plan. The Debtor assures the Court that the firm is a "disinterested person" as defined in the Bankruptcy Code. About FirstFed Financial Irvine, Calif.-based FirstFed Financial Corp. is the bank holding company for First Federal Bank of California and its subsidiaries. The Bank was closed by federal regulators on December 18, 2009. FirstFed Financial Corp. filed for Chapter 11 protection on Jan. 6, 2010 (Bankr. C.D. Calif. Case No. 10-10150). Jon L. Dalberg, Esq., at Landau Gottfried & Berger LLP, represents the Debtor in its restructuring efforts. Garden City Group is the claims and notice agent. The Debtor disclosed assets at $1 million and $10 million, and debts at $100 million and $500 million. FKF MADISON: Judge Approves Loan Over Creditors' Objections ----------------------------------------------------------- Dow Jones' DBR Small Cap reports that One Madison Park won approval to tap into a bankruptcy loan from HFZ Capital Group and iStar Financial Inc. over the objection of its unsecured creditors, who fear the loan will hand HFZ an unfair competitive edge in its bid to acquire the Manhattan condominium. Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., on Thursday, court papers show, allowed One Madison to tap $1.1 million of the $2.4 million loan, which One Madison argued was essential to preserving the stalled development. Dow Jones notes that the loan had raised some eyebrows heading into Thursday's hearing. One Madison's official committee of unsecured creditors urged Judge Gross to deny the financing, which it said contained numerous objectionable terms and was ultimately the product of the lenders "acting solely for their own benefit." About One Madison Park FKF Madison Park Group Owner, LLC, filed for Chapter 11 bankruptcy protection on June 8, 2010 (Bankr. D. Del. Case No. 10-11867). FKF Madison owns the One Madison Park condominium tower in New York City. One Madison Park project came to halt in February 2010 when iStar Financial Inc., the chief financier for the project, moved to foreclose on it. The high-profile condominium project, a 50-story tower was developed by Ira Shapiro and Marc Jacobs. FLEETWOOD FOOD: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Fleetwood Food Corp. dba Key Food 42 West Broad Street Mount Vernon, NY 10552 Bankruptcy Case No.: 11-22395 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Jonathan S. Pasternak, Esq. Julie A. Cvek, Esq. RATTET PASTERNAK, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 E-mail: jsp@rattetlaw.com jcvek@rattetlaw.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 Salvatore Gizzo, president. FNB UNITED: Banking Unit Converts $5-Mil. of Term Loan to Shares ---------------------------------------------------------------- On Feb. 28, 2011, CommunityONE Bank, National Association, the bank subsidiary of FNB United Corp., entered into and consummated a conversion agreement with SunTrust Bank, pursuant to which $5,000,000 of the outstanding principal amount of the $7.5 million subordinated term loan from SunTrust to CommunityONE Bank evidenced by the amended and restated subordinated note due 2015 made by CommunityONE Bank and dated Dec. 30, 2010, was converted into 5,000,000 shares of nonvoting, nonconvertible, nonredeemable cumulative preferred stock, par value $1.00 per share, of CommunityONE Bank. The preferred stock carries an 8% dividend rate and is includable in the bank's tangible equity for regulatory capital purposes. The remaining $2.5 million of subordinated debt owed by CommunityONE Bank to SunTrust was ratified and confirmed but with interest being payable monthly rather than quarterly beginning on March 31, 2011. Immediately prior to the conversion, CommunityONE Bank paid the interest accrued and unpaid to Feb. 28, 2011 on the subordinated debt. It will be an event of default under the SunTrust subordinated note if FNB United does not raise at least $300 million through the issuance of equity securities by July 31, 2011. A full-text copy of the Conversion Agreement is available for free at http://ResearchArchives.com/t/s?746d About FNB United Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services. The Company's balance sheet at Sept. 30, 2010, showed $2.01 billion in total assets, $1.99 billion in total liabilities, and stockholders' equity of $18.56 million. In its Form 10-Q for the three months ended June 30, 2010, the Company acknowledged the existence of certain conditions that raise substantial doubt its ability to continue as a going concern, including significant losses that the Company incurred in 2009 and the Bank's agreement to the issuance of a Consent Order by the Office of the Comptroller of the Currency, dated July 22, 2010. In the Consent Order, the Bank and the OCC agreed as to areas of the Bank's operations that warrant improvement and a plan for making those improvements. FOREST GROVE: Court Rejects Disclosure Statement, Dismisses Case ---------------------------------------------------------------- Bankruptcy Judge David R. Duncan held that Forest Grove, LLC's disclosure statement does not contain adequate information sufficient to inform creditors of their rights and treatment under the Debtor's plan. As a result, approval of the Debtor's Disclosure Statement is denied. Because the Debtor has no proven income and no ability to confirm a chapter 11 plan, cause for dismissal exists. The Debtor's chapter 11 case is dismissed. Judge Duncan said because the success of the Debtor's chapter 11 case is clearly contingent on the personal contributions of Nickey Maxey, the trustee of the CLM Irrevocable Trust, the sole member of the Debtor, to provide adequate information, the Debtor must disclose information regarding Mr. Maxey's financial situation that shows his ability to make the contributions. Without proof of Mr. Maxey's ability to pay the Debtor $2,000 per month in rent plus additional, unspecified contributions, the Debtor cannot propose a feasible plan, as it has no income of its own. As a result, regardless of the adequacy of the information contained in the Debtor's Disclosure Statement, approval of the Disclosure Statement should be denied due to the Debtor's inability to confirm a plan. Ameris Bank objected to the Disclosure Statement and filed a Motion to Dismiss the Debtor's Chapter 11 Case. A copy of the Court's March 3, 2011 order is available at http://is.gd/qs1DUBfrom Leagle.com. Forest Grove, LLC, is a limited liability company formed in 2001 to acquire and develop real estate. It filed for Chapter 11 protection (Bankr. D. S.C. Case No. 10-05542) on Aug. 2, 2010. The Debtor estimated under $50,000 in assets and debts. It is represented by: John Pinckney, Esq. THE LAW OFFICE OF DEAN B. BELL, LLC Corpus Christie Place, Bldg. #105 Hilton Head Island, SC 29928 Telephone: 843-785-9772 Facsimile: 843-785-9773 E-mail: jpinckney@deanbell-law.com FOXCO ACQUISITION: Moody's Upgrades Corp. Family Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of FoxCo Acquisition Sub LLC to B3 from Caa1, upgraded the senior secured bank credit facilities ratings to B1 from B2, and upgraded the senior unsecured notes rating to Caa2 from Caa3. The rating outlook was changed to positive from stable. This is a summary of the rating actions: -- Corporate Family Rating to B3 from Caa1 -- Probability of Default Rating to B3 from Caa1 -- $50 million Senior Secured Revolving Credit Facility to B1 (LGD3,33%) from B2 (LGD3, 33%) -- $445 million Senior Secured Term Loan Facility to B1 (LGD3,33%) from B2 (LGD3, 33%) -- $200 million Senior Unsecured Bonds to Caa2 (LGD5, 86%) from Caa3 (LGD5, 86%) Ratings outlook changed to Positive from Stable. Ratings Rationale The upgrade of FoxCo's CFR to B3 reflects the Company's solid revenue / EBITDA growth and improved credit metrics following the recovery in advertising revenues for its core TV station group in 2010 following a severe reduction in revenues and cash flows in 2009. The upgrade also incorporates Moody's expectation for enhanced free cash flow generation prospects stemming from the Company's proposed re-pricing of its secured term loan facility, which should be supportive of further deleveraging over the near to medium-term. While Moody's projects a modest decrease in revenues and EBITDA for 2011, due to the lack of significant political advertising revenue, Moody's expect credit metrics will remain supportive of the B3 CFR as the Company benefits from continued recovery in core advertising momentum benefiting from improved macro conditions, incremental retransmission revenues from renegotiated retransmission agreements and long-term affiliation agreements with Fox and a reduction in programming expenses as high-cost legacy contracts expire in 2011 and 2012. FoxCo's B3 CFR reflects it's still highly leveraged, albeit improving, capital structure (evidenced by leverage of approximately 6.1x debt-to-EBITDA for 2010), which will continue to pose challenges for managing a business vulnerable to volatile advertising spending cycles. Additionally, the rating is constrained by the Company's modest scale and concentration with the Fox Network, although the Company benefits from a station portfolio in top DMAs with leading audience positions. The positive rating outlook reflects Moody's expectation that FoxCo will maintain a good liquidity position and generate non- political revenue growth in the low to mid-single digit %-range in 2011 supported by growth in core advertising revenues and an increasing portion of retransmission revenues. The outlook also incorporates Moody's expectation that FoxCo will maintain a conservative financial policy and that the Company will contribute a significant portion of expected cash flows towards debt reduction. Moody's could consider an upgrade to the extent FoxCo is able to demonstrate through a combination of revenue / EBITDA growth and permanent debt reduction such that its two-year average leverage is sustained below 6.0x debt to EBITDA (Moody's adjusted) without impairing its liquidity position as well as the sustainable generation of free cash flow exceeding 8% of debt. Conversely, downward rating pressure could develop if an unexpected downturn in advertising spending leads to FoxCo's leverage exceeding 7.0x or failure of FoxCo to maintain at least an adequate liquidity profile. The last rating action occurred on June 15, 2010 when Moody's affirmed FoxCo's Caa1 CFR and changed its ratings outlook to stable from negative. Formed in July 2008 through the acquisition of 8 stations from Fox Television Stations, Inc., FoxCo owns or operates 10 stations in DMAs that rank from 16 to 58, including seven owned Fox affiliates and one owned CBS affiliate. Local TV Holdings, LLC, which is 95% owned by affiliates of Oak Hill Capital Partners, serves as FoxCo's parent company. The company maintains headquarters in Fort Wright, Kentucky and its revenue for 2010 was approximately $333 million. FRANK J. GOMES: Creditors Withdraw Plea to Dismiss Chapter 11 Case ------------------------------------------------------------------ Creditors FPC Financial, f.s.b., and Deere and Company, notified Judge Whitney Rimel of the U.S. Bankruptcy Court for the Eastern District of California that they have withdrawn their motion to dismiss the Chapter 11 case of Frank J. Gomes Dairy. As reported in the Troubled Company Reporter on Jan. 31, 2011, Deere & Company, a secured creditor, and FPC Financial, a secured and unsecured creditor, requested the Court dismiss the Debtor's case, citing that the Debtor failed to fulfill its duties pursuant to the Court's order confirming the Debtor's Second Amended Chapter 11 Plan entered on Aug. 23, 2010. Specifically, the motion said the Debtor failed to make payments to Deere under Class 3H and to FPC under Class 5 in the Second Amended Plan for Reorganization. Deere has an allowed secured claim in the amount of $29,153 and FPC has an allowed secured claim of $51,557 and an allowed unsecured claim of $316,001. A full-text copy of the Second Amended Plan is available for free at http://bankrupt.com/misc/FrankJGomez_DS.pdf About Frank J. Gomes Dairy Headquartered in Stevenson, California, Frank J. Gomes Dairy dba F and A Farms operates an agricultural and farming business. The Company filed for Chapter 11 protection on November 12, 2009 (Bankr. E.D. Calif. Case No. 09-61024). Hilton A. Ryder, Esq., at McCormick, Barstow, Sheppard, Wayte & Carruth LLP, represents the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $34,625,671 in assets and $30,931,395 in liabilities as of the petition date. GENERAL MOTORS: Court OKs $420-Mil. Claims Reserve -------------------------------------------------- The Bankruptcy Court authorized Motors Liquidation Co. and its affiliates to establish a reserve on account of certain fully unliquidated and disputed general unsecured claims or potential claims. The reserve will be calculated based on a claim amount of $420 million. Claim No. 70869 filed by Tracy Woody is liquidated in the amount of $41,000 for reserve purposes only, subject to the Debtors' right to object to the Claim. Prior to the entry of the order, Tracy Woody objected to the Debtors' motion on the ground that the Claimant's Claim No. 70481 was not listed in the established and allowable claims of the Debtors. The Court also approved the procedures for the establishment and administration of disputed claims reserves. 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. 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: Removal Period Extended 1 Year After Confirmation ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended the time within which Motors Liquidation Co. and its units, or the General Unsecured Trust Administrator, as appropriate, may file notices of removal of Civil Actions pursuant to Rule 9027 of the Federal Rules of Bankruptcy Procedure until the date that is one year after the date on which the Debtors confirm a chapter 11 plan. 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: Brown Rudnick Directed to Submit Rule 2019 Notice ----------------------------------------------------------------- Bankruptcy Judge Robert Gerber held that Brown Rudnick LLP, representing a group led by Anchorage Capital Master Offshore Ltd. failed to file a statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure. The group also includes Canyon-GRF Master Fund, L.P.; Canyon Value Realization Fund L.P.; CSS, LLC; CQS Directional Master Fund Inc.; KIVU Investment Fund Limited; Knighthead Master Fund, LP; LMA SPC for and on behalf of MAP 84, Lyxor/Canyon Realization Fund, Ltd., Onex Debt Opportunity Fund, Ltd., Redwood Master Fund Ltd, and The Canyon Value Realization Master Fund, L.P. The group filed a joinder to Appaloosa Management, L.P. et al.'s objection to confirmation of the Amended Joint Chapter 11 Plan of Reorganization. Accordingly, Judge Gerber ordered the Group or its counsel to file, on behalf of and with respect to each member of the Group, the disclosure required under Rule 2019 of the Federal Rules of Bankruptcy Procedure by March 1, 2011. If the Group does not timely comply, the Group's joinder will not be considered. In an endorsed letter, the Court granted Brown Rudnick's request to extend the deadline to comply with the order to March 7, 2011. 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) GIGOPTIX LIMITED: PwC Raises Going Concern Doubt ------------------------------------------------ GigOptix, Inc., filed on March 3, 2011, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2010. PricewaterhouseCoopers LLP, in San Jose, Calif., expressed substantial doubt about GipOptix, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. The Company reported a net loss of $4.4 million on $26.9 million of revenue for 2010, compared with a net loss of $10.0 million on $14.8 million for 2009. The Company's balance sheet at Dec. 31, 2010, showed $27.9 million in total assets, $12.5 million in total liabilities, and stockholders equity of $15.4 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?7476 Palo Alto, Calif.-based GigOptix, Inc. (OTC BB: GGOX) -- http://www.GigOptix.com/-- supplies high performance electronic and electro-optic components that enable next generation 40G and 100G fiber-optic telecommunications and data- communications networks. The Company offers a broad portfolio of high speed electronic devices including polymer electro-optic modulators, modulator drivers, laser drivers and receiver amplifiers for telecom, datacom, Infiniband and consumer optical systems, covering serial and parallel communication technologies from 1G to 100G. GigOptix also offers a wide range of mixed- signal and RF ASIC solutions in the market including Standard Cell, Hybrid and Structured ASICs targeting the Consumer, Industrial, Defense & Avionics industries. GOTTSCHALKS INC: Discloses Termination of Registration of RSP ------------------------------------------------------------- Gottschalks, Inc., filed with the U.S. Securities and Exchange Commission on Friday, March 4, 2011, a notice of termination of registration covering its Interests in the Gottschalks Inc. Retirement Savings Plan pursuant to Rule 12g-4(a)(1) of the General Rules and Regulations under the Securities Exchange Act of 1934. A full-text copy of the Form 15-12B filing is available for free at http://researcharchives.com/t/s?746f About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- was a department and specialty store chain in United States that operated 58 full-line department stores and 3 specialty stories in 6 western states. The Company filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-10157) on Jan. 14, 2009. Stephen H. Warren, Esq., Karen Rinehart, Esq., Alexandra B. Redwine, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, serves as the Debtor's bankruptcy counsel. Mark D. Collins, Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. When the Debtor filed for protection from its creditors, it disclosed $288,438,000 in total assets and $197,072,000 in total debts. As reported in the TCR on March 4, 2011, Gottschalks' Amended Chapter 11 Plan of Liquidation became effective and the Company has emerged from Chapter 11 Bankruptcy protection. GREAT ATLANTIC & PACIFIC: Panel Withdraws Plea to Hire Lowenstein ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Great Atlantic & Pacific Co's Chapter 11 cases has withdrawn its application to retain Lowenstein Sandler PC as its conflicts counsel. No reason for the withdrawal was disclosed. About A&P Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific (A&P) is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. The Great Atlantic & Pacific Tea Company, Inc., and its affiliates filed petitions under Chapter 11 of the U.S. Bankruptcy Code on Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of Sept. 11, 2010, the Debtors reported total assets of $2.5 billion and liabilities of $3.2 billion. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by A&P and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). GREAT ATLANTIC & PACIFIC: Local 342 vs. Pathmark Stores ------------------------------------------------------- United Food and Commercial Workers Local 342 has filed a complaint against Pathmark Stores Inc. to confirm an arbitration award issued pursuant to its collective bargaining agreement with the company. Local 342 is the bargaining agent of certain employees of Pathmark Stores, one of the affiliated debtors of The Great Atlantic & Pacific Tea Company Inc. The local union filed the complaint after Pathmark Stores allegedly failed to provide UFCW a personal guaranty or a surety bond for $5 million pursuant to the CBA. This prompted the local union to file a grievance and to commence an arbitration pursuant to the mandatory dispute resolution procedures of the CBA. Early this year, the arbitrator upheld the grievance filed by UFCW and found that Pathmark Stores violated a provision in the CBA. The arbitrator directed the company to provide a personal guarantee to assure severance payments under the CBA or a surety bond at the union's option. Although due demand has been made by UFCW to Pathmark Stores by letter dated February 7, 2011, the company has refused to comply with the order from the arbitrator, the union's attorney, Richard Seltzer, Esq., at Cohen Weiss and Simon LLP, in New York -- rseltzer@cwsny.com -- relates. UFCW also seeks a court ruling directing Pathmark stores to pay the union its attorney's fees. About A&P Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific (A&P) is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. The Great Atlantic & Pacific Tea Company, Inc., and its affiliates filed petitions under Chapter 11 of the U.S. Bankruptcy Code on Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of Sept. 11, 2010, the Debtors reported total assets of $2.5 billion and liabilities of $3.2 billion. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by A&P and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). GREAT ATLANTIC & PACIFIC: $629,000 in Claims Switch Hands February ------------------------------------------------------------------ Seven claims totaling $628,896 changed hands in the Debtors' bankruptcy cases in February 2011. The claims traded were: Transferor Transferee Claim No. Claim Amount --------- ---------- --------- ------------ Able Rolling Steel Sierra Liquidity 37 $4,062 Door Inc. Fund LLC Riviera Finance of Hain Capital 415 $135,237 Texas Inc. Holdings Ltd. HP Sales of New Hain Capital 20 $151,368 Jersey Inc. Holdings Ltd. Gourmet Guru Inc. Corre Opportunties N/A $252,419 Fund L.P. Preferred Sales and Claims Recovery 109 $15,582 Service Co Inc. Group LLC Island Fresh, LLC Jefferies Leveraged 659 $27,950 Credit Products LLC Christmas Promotions Sierra Liquidity 614 $42,275 Inc. Fund LLC About A&P Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific (A&P) is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. The Great Atlantic & Pacific Tea Company, Inc., and its affiliates filed petitions under Chapter 11 of the U.S. Bankruptcy Code on Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains. As of Sept. 11, 2010, the Debtors reported total assets of $2.5 billion and liabilities of $3.2 billion. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by A&P and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). GREEN MANOR: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Green Manor, LLC aka Mason Oaks, LLC P.O. Box 4 Lowell, NC 28098 Bankruptcy Case No.: 11-30537 Chapter 11 Petition Date: March 3, 2011 Court: United States Bankruptcy Court Western District of North Carolina (Charlotte) Judge: J. Craig Whitley Debtor's Counsel: James H. Henderson, Esq. JAMES H. HENDERSON, P.C. 1201 Harding Place Charlotte, NC 28204-2248 Tel: (704) 333-3444 Fax: (704) 333-5003 E-mail: henderson@title11.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ncwb11-30537.pdf The petition was signed by James William Isbill, Sr., manager. HALLMARK WOODWORKERS: Case Summary & 20 Largest Unsec Creditors --------------------------------------------------------------- Debtor: Hallmark Woodworkers, Inc. 11 Precision Road Danbury, CT 06810 Bankruptcy Case No.: 11-50395 Chapter 11 Petition Date: March 3, 2011 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Douglas S. Skalka, Esq. NEUBERT, PEPE, AND MONTEITH 195 Church Street, 13th Floor New Haven, CT 06510 Tel: (203) 821-2000 Fax: (203) 821-2009 E-mail: dskalka@npmlaw.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/ctb11-50395.pdf The petition was signed by John Griffin, president. HEADWATERS INC: Moody's Assigns 'B2' Rating to Senior Notes ----------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Headwaters Inc.'s proposed senior secured notes due 2019, and affirmed its B3 Corporate Family Rating and B3 Probability of Default Rating. Proceeds from the notes issuance will be used to redeem most of the company's existing senior secured notes due 2014 and to pay redemption premiums and other related fees and expenses. The outlook is stable. These ratings/assessments were affected by this action: -- Corporate Family Rating affirmed at B3; -- Probability of Default Rating affirmed at B3; -- Proposed senior secured notes due 2019 assigned B2 (LGD3, 41%); and, -- $328 million senior secured notes due 2014 affirmed B2 (LGD3, 41%). The company's speculative grade liquidity rating remains SGL-3. Ratings Rationale The B2 rating assigned to the proposed $400 million senior secured notes due 2019, one notch above the corporate family rating, reflects their first priority interest in substantially all of the company's non-current assets, second priority interest in the revolving credit facility's collateral, and the support provided by upstream guarantees from Headwaters' material domestic subsidiaries. Proceeds from the notes issuance will be used to redeem most, if not all, of the company's $328 million 11.375% senior secured notes due 2014, and to pay redemption premiums and other related fees and expenses. The ratings for the existing Notes due 2014 will be withdrawn upon closing of the transaction since the anticipated amount of remaining debt will likely be minimal, warranting removal of the rating. The proposed note issuance, along with $10 million of other debt reduction that occurred in 1Q11, will improve interest coverage ratios slightly due the proposed notes having a lower interest rate than the Notes due 2014 despite a higher principal balance. The lower interest expense, approaching $10 million annually, will also improve free cash flow. Lastly, the transaction also improves Headwaters' debt maturity profile, reducing the amount of debt that needs to be addressed in 2014. Headwaters' B3 Corporate Family Rating reflects the company's high financial leverage, and ongoing cyclical weakness. Headwaters' key business segments continue to face economic weakness in 2011, though appear poised to benefit when the North American economy returns to normal levels of activity. Healthy operating margins remain a credit positive, and may improve as the company tries to take more costs out of its CCP segment. Despite the likelihood of margin expansion and new business, Headwaters' debt leverage and interest coverage credit metrics will remain stressed, but in- line with the current rating. On a pro-forma basis through Dec. 31, 2010, debt leverage worsened moderately to about 6.1 times from 5.5 times, but EBITA-to-interest expense improved slightly to about 0.8 times from 0.7 times (all ratios adjusted per Moody's methodology). The company's cash balance and revolver availability support its rating as well. The stable outlook reflects Moody's belief that the company's cash balances and revolver availability coupled with no near-term debt maturities provide Headwaters with sufficient financial flexibility to fund its normal operations while contending with ongoing uncertainties facing the U.S. construction market. When the company's end markets show sustainable growth Headwaters needs to demonstrate its ability to generate significant earnings and cash flows from its two largest businesses. EBITA-to-interest expense trending towards 1.5 times and debt-to-EBITDA remaining below 5.5 times for a sustainable period of time (all ratios adjusted per Moody's standard adjustments) would support consideration for positive ratings action. Over the next twelve to eighteen months, Headwaters must demonstrate its ability to generate significant amount of earnings in order to improve its credit metrics. EBITA-to-interest expense sustained below 1.0 times (adjusted per Moody's standard adjustments), or a deterioration in its liquidity profile would introduce ratings pressures and may result in a downgrade. The last rating action was on October 13, 2009, at which time Moody's upgraded Headwaters Inc.'s Corporate Family Rating to B3 and its Probability of Default Rating to B3. Headwaters Incorporated, headquartered in South Jordan, Utah, is a diversified company providing products, technologies and services to the energy and construction materials industries. The company operates three principal business segments: Light Building Products, Coal Combustion Products and Energy Services. Revenues for the twelve months ended Dec. 31, 2010 totaled about $670 million. HOA RESTAURANT: Moody's Assigns 'B3' Rating to $165 Mil. Notes -------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to HOA Restaurant Group, LLC's proposed $165 million guaranteed senior secured 2nd lien notes due 2018. Moody's also assigned HOA a B3 Corporate Family Rating and Probability of Default Rating. The outlook is stable. Proceeds from the proposed note offering will be used to re-finance existing debt. Ratings are subject to final documentation. This is the first time Moody's rates this debt for HOA. Ratings assigned are: -- Corporate Family Rating at B3 -- Probability of Default Rating at B3 -- $165 million guaranteed senior secured 2nd lien notes due 2018 at B3 (LGD 3, 48%) The outlook is stable. Ratings Rationale HOA's ratings reflect its high leverage and relatively weak interest coverage, which position the company weakly in the B3 category. The ratings also reflect the company's modest level of revenues and earnings and more narrow customer demographic versus some of its peers, expected turnover of the CEO and CFO management positions, and Moody's expectation that historically high unemployment and high levels of promotional activities by competitors will continue to pressure operating performance. The ratings also reflect HOA's reasonable scale in regards to number of restaurants, good brand awareness, relatively stable earnings stream, and adequate liquidity. The stable outlook reflects Moody's view that debt protection metrics will gradually improve over the next twelve months with a full year of operating results from Texas Wings, Inc. and the implementation of various cost synergies, despite soft consumer spending. The outlook also expects the establishment of a stable and effective management team and a financial policy that allows time to successfully integrate Texas Wings, Inc. and does not result in decisions that are outside current expectations in regards to debt levels, capital expenditures, dividends, or acquisitions. Given the company's weak debt protection metrics a higher rating over the intermediate term is unlikely. However, factors that could result in an upgrade would include a sustained strengthening of debt protection metrics driven in part by a solid improvement in same store sales -- particularly guest counts. Specifically, a higher rating would require debt to EBITDA of below 5.25 times and EBITA coverage of gross interest of over 1.5. A higher rating would also require the establishment of a stable and effective management team to address weak same store sales and boost its brand image. An upgrade would also require adequate liquidity. A downgrade could occur if debt protection metrics deteriorated from current levels over the next twelve months driven in part by persistently weak same store sales. Specifically, a downgrade could occur if HOA is unable to reduce Debt to EBITDA over the next twelve months towards 5.75 times and EBITA to interest coverage approaching 1.25 times. A deterioration in liquidity could also result in a downgrade. This is a first time rating for HOA HOA, with headquarters in Atlanta, GA, operates 161 and franchises 294 restaurants, of which 69 are international, under the brand name Hooters of America. Annual revenues will be about $374 million, although systemwide sales are about $950 million. HORIZON LINES: Moody's Retains 'Caa1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service said Horizon Lines, Inc.'s plea agreement regarding antitrust matters in the Puerto Rico trade lane is credit negative but does not at this time affect its Caa1 Corporate Family or its other debt ratings of Horizon. The last rating action on Horizon was on May 18, 2010 when Moody's lowered its ratings, including the corporate family rating to Caa1 and maintained the negative outlook. Horizon Lines, Inc., based in Charlotte, North Carolina, through its wholly-owned indirect operating subsidiary, Horizon Lines, LLC, currently operates 11 of its 15 Jones Act qualified U.S. flag container ships in Jones Act liner services between the continental United States and either Alaska, Hawaii, or Puerto Rico and five U.S. flag container ships between the Far East, U.S. west coast and Guam. I/OMAGIC CORP: Simon & Edward Raises Going Concern Doubt -------------------------------------------------------- I/OMagic Corporation filed on March 4, 2011, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2010. Simon & Edward, LLP, in City of Industry, Calif., expressed substantial doubt about I/OMagic's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses, has serious liquidity concerns and may require additional financing in the foreseeable future. The Company reported a net loss of $779,444 on $5.9 million of sales for 2010, compared with net income of $407,156 on $10.3 million of sales for 2009. The Company's balance sheet at Dec. 31, 2010, showed $2.0 million in total assets, $4.6 million in total liabilities, and a stockholders' deficit $2.6 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?747b Irvine, Calif.-based I/OMagic Corporation sells electronic data storage products and other consumer electronics products in the North American retail marketplace, which includes the United States and Canada. During 2010 and 2009, all of the Company's net sales were generated within the United States. ILLINOIS FINANCE: Fitch Cuts Ratings on $190 Mil. Bonds to 'BB-' ---------------------------------------------------------------- Fitch Ratings has downgraded the Illinois Finance Authority $190 million revenue bonds (issued on behalf of Illinois Institute of Technology) to 'BB-' from 'BBB'. The Rating Outlook is Negative. Rating Rationale: -- The downgrade to 'BB-' primarily reflects a substantial decline in balance sheet resources, driven largely by Illinois Institute of Technology's inability to bring structural balance to its operating budget, and the heavy reliance on endowment spending, including draws in excess of its annual payout policy, to offset sizeable annual operating deficits; -- The Negative Outlook continues to reflect the extremely limited financial flexibility provided by IIT's nearly depleted financial cushion, exacerbated by a fiercely competitive operating environment, and the institute's overall constrained ability to materially raise revenues to reduce or eliminate operating losses; -- Importantly, IIT's senior management team, many of whom joined IIT over the past three years, has made recent progress in reducing excess endowment draws and implementing budgetary strategies to better align annual operating expenditures with revenues going forward; What Could Trigger A Downgrade?: -- Inability to effectuate sustained, material improvement in operating performance, inclusive of a spending policy defined annual payout from endowment; -- Further deterioration of balance sheet resources from fiscal 2010 levels; -- Failure to maintain stable enrollment, including at the undergraduate level, where plans to institute a phased tuition increase would have their greatest potential negative impact. Security: The bonds are secured by a general obligation pledge of IIT. The series 2009 bonds are additionally secured by a cash-funded debt service reserve. Credit Summary: IIT has historically produced a deeply negative operating margin, averaging negative 15.4% over the past five fiscal years. Including endowment payout, the operating margin remains negative, with the average improving to only negative 7.1% - far below the break-even level typically expected for an investment grade, private university. This budgetary imbalance has required IIT to rely on significant excess endowment draws beyond the annual, spending policy-defined, base distribution. The history of negative operating margins indicates an inherent mismatch between revenues and expenses at IIT, which the current senior management team has taken steps to address. Beginning in fiscal 2010, management's actions have resulted in a decreasing the excess endowment draw required to support operations, and has budgeted to eliminate the reliance on excess endowment draws entirely by fiscal 2012. While Fitch views management's decisive actions to correct the operating issues favorably, the excess draws, in combination with losses associated with investment in research ventures through the IIT Research Institute and general market losses, have critically depleted IIT's financial resources. IITRI is a non-profit research institute originally formed to work alongside and in support of IIT, but operates as an independent organization. IIT's available funds, defined by Fitch as cash and investments not permanently restricted, have plummeted 95.3% over the past five years. As of fiscal 2010, IIT's available funds represented only 3.2% of operating expenses and 3.5% of total debt. IIT's exposure to alternative investments (which amounted to approximately 13.1% in fiscal 2010) further reduces IIT's remaining financial flexibility. IIT's enrollment has continued to grow year over year for the past five fiscal years, reaching 7,774 on a headcount basis in fall 2010. At IIT, graduate enrollment has historically comprised approximately two-thirds of total enrollment, with traditional undergraduate students making up the remainder. Demand is particularly strong at the graduate level, where the demand for programs allows IIT to charge tuition premiums in certain fields. In recent years, IIT has changed its approach to attracting undergraduate students, focusing attention on students who demonstrate a good fit with the institute's programmatic offerings. This strategy has resulted in a decline in application volume since fall 2008 and a slight increase in acceptance rate. However, the number of freshman matriculating at IIT has declined for both fall 2009 and 2010 - a problematic trend given IIT's annual revenue shortfalls and plans to increase net tuition revenue through a plan to increase tuition rates. Despite an overall strong demand for programs, IIT's continued negative operating performance and significant deterioration of resources prompted the United States Department of Education to allow IIT's participation in the US$E student financial aid programs only on a provisional basis for fall 2010 - 2012. The provisional status requires that IIT maintain an irrevocable direct pay letter of credit payable to US$E. Should the US$E take further action eliminating the eligibility of IIT students to participate in the SFA programs, the potential negative impact on enrollment (particularly at the undergraduate level) could be significant, which could result in further negative rating actions. IIT is a private, nonsectarian technical engineering institute established in 1940 through the merger of the Armour Institute of Technology and the Lewis Institute, which were both founded in the 1890s. IIT operates five campuses in the city of Chicago and its suburbs. Its main campus is located four miles south of downtown Chicago, on a 128-acre complex of approximately 50 buildings. INDUSTRIAS ARENERAS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Industrias Areneras B&M Inc. P.O. Box 775 Juncos, PR 00777 Bankruptcy Case No.: 11-01854 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Wigberto Lugo Mender, Esq. LUGO MENDER & CO. Centro Internacional de Mercadeo Carr 165 Torre 1 Suite 501 Guaynabo, PR 00968 Tel: (787) 707-0404 E-mail: wlugo@lugomender.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/prb11-01854.pdf The petition was signed by Carlos Beltran Rodriguez, president. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Carlos L. Beltran Rodriguez 09-06437 08/04/2009 INNOVIDA HOLDINGS: Receiver Takes Over, Can Pursue Chapter 11 ------------------------------------------------------------- Jay Weaver at the Miami Herald reports that Circuit Judge Valerie Manno-Schurr has stripped entrepreneur Claudio Osorio of the authority to run his high-tech housing business, replacing him with a receiver empowered to seek a bankruptcy reorganization -- if necessary -- to protect lenders, investors and other creditors. According to the report, circuit judge Manno-Schurr defined the broad powers of the newly named receiver for Miami Beach-based InnoVida Holdings, after finding Osorio, the company and others in default for failing to turn over financial records in a lawsuit brought by an investor, Miami businessman Chris Korge. Mr. Korge, who poured $4 million into Mr. Osorio's company, claimed he was deceived by the entrepreneur and asked the judge to place InnoVida in receivership. Other investors and lenders are expected to intervene in the receivership, including Osorio's Star Island neighbor, Engin Yesil, who invested $8 million in InnoVida and filed a separate lawsuit, notes Mr. Weaver. In her order, circuit judge Manno-Schurr said "there is evidence of mismanagement and fraud upon the rights of a minority shareholder [Mr. Korge], which may threaten imminent danger of loss of corporate assets." Circuit Judge Manno-Schurr appointed lawyer Mark Meland as InnoVida's receiver, with the "full authority to act as the board of directors," replacing Mr. Osorio, the company's chairman and CEO, and other officials. The board once listed former Florida Gov. Jeb Bush as a director. The Miami Herald relates that in an interview, Mr. Osorio said the company has total assets between $100 million and $200 million, including $25 million in cash on hand. He said he did not think anyone other than himself would have the ability to run the company, which makes high-tech wall panels for low-cost housing in developing countries. The judge gave the receiver powers to take "immediate" control of the Company's assets, including the North Miami Beach factory, bank accounts and inventory, adds Mr. Weaver. Mr. Meland said he can also take possession of all of InnoVida's computers, financial records and other documents. He can also investigate InnoVida to determine whether anyone associated with the company may have "wrongfully, illegally or otherwise improperly misappropriated or transferred" money from investors such as Messrs. Korge and Yesil. Bottom line: the receiver is entrusted by the judge to "maintain, operate and preserve the assets of InnoVida," including the "exclusive authority" to ask the judge for permission to place the company in Chapter 11 bankruptcy if necessary. Mr. Meland further said he also cannot cease operations of the company without the judge's consent. At a court hearing Thursday, Manno-Schurr took Osorio's lawyer, Robert Zarco, to task for his client's refusal to release InnoVida's financial records, saying the entrepreneur defied 11 of her orders. Mr. Osorio's wife, Amarilis, a company director, and Craig Toll, InnoVida's chief financial officer, were also named as defendants in Mr. Korge's lawsuit. KALIMATA INC: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Kalimata, Inc. 1776 Whitten Road Memphis, TN 38134 Bankruptcy Case No.: 11-22284 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: David S. Kennedy Debtor's Counsel: William A. Cohn, Esq. THE COHN LAW FIRM 291 Germantown Bend Cove Cordova, TN 38018 Tel: (901) 757-5557 E-mail: info@cohnlawfirm.com Scheduled Assets: $1,475,100 Scheduled Debts: $1,043,100 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnwb11-22284.pdf The petition was signed by Aka Patel, president. KATUMBH, LLC: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Katumbh, LLC fka Katumbh, Inc. 530 E. Washington Street Petersburg, VA 23803 Bankruptcy Case No.: 11-31397 Chapter 11 Petition Date: March 3, 2011 Court: U.S. Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Douglas O. Tice, Jr. Debtor's Counsel: Alexander Hamilton Ayers, Esq. AYERS & STOLTE, P.C. 710 Hamilton Street, Suite 300 Richmond, VA 23221 Tel: (804) 358-4731 E-mail: aayers@ayerslaw.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 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb11-31397.pdf The petition was signed by Kulvinder K. Singh, managing member. LAFAYETTE INVESTORS: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Lafayette Investors, LLC P.O. Box 11754 Norfolk, VA 23517 Bankruptcy Case No.: 11-70954 Chapter 11 Petition Date: March 3, 2011 Court: United States Bankruptcy Court Eastern District of Virginia (Norfolk) Judge: Stephen C. St. John Debtor's Counsel: Karen M. Crowley, Esq. CROWLEY, LIBERATORE, & RYAN, P.C. 1435 Crossways Boulevard, Suite 300 Chesapeake, VA 23320 Tel: (757) 333-4500 Fax: (757) 333-4501 E-mail: kcrowley@clrfirm.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 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb11-70954.pdf The petition was signed by William J. Wilson, managing partner. LANDMARK ATLANTIC: Court Prefers Case Dismissal, Not Conversion --------------------------------------------------------------- Bankruptcy Judge Duncan W. Keir finds that Landmark Atlantic Hess Farm, LLC's case should be dismissed and that continuation of the case in a chapter 7 is not in the best interests of the creditors or the estate. The Motion to Dismiss was filed by Merrill Cohen. A Motion to Dismiss or Convert the case was filed by the United States Trustee. A copy of the Court's March 3, 2011 Memorandum of Decision is available at http://is.gd/YlTlnjfrom Leagle.com. Merrill Cohen is the Chapter 7 Trustee for the bankruptcy estates of Tally, LLC and Michael Silver. Mr. Cohen asserts standing as an interested party to the Landmark bankruptcy case by virtue of his status as a Defendant in the adversary proceeding, Landmark Atlantic Hess Farm, LLC vs. Cohen, et al., Adversary No. 10-660D-K. Landmark has challenged Mr. Cohen's standing to pursue dismissal of the case. The Court finds that the United States Trustee has proven grounds that require the court to dismiss or convert Landmark's case and therefore it is not necessary to decide whether Mr. Cohen has independent standing. Arlington, Virginia-based Landmark Atlantic Hess Farm, LLC, filed for Chapter 11 bankruptcy (Bankr. M.D. Case No. 10-24656) on June 29, 2010, represented by Craig Palik, Esq. -- cpalik@mhlawyers.com -- at McNamee, Hosea, Jernigan, Kim, Greenan and Lynch, P.A., in Greenbelt, Maryland. It scheduled $3,080,000 in assets and $3,350,016 in debts. Hess Farm Partnership, an affiliated entity, filed for Chapter 11 (Bankr. D. Md. Case No. 08-15348) on April 17, 2008. LEVEL 3: Fitch Assigns 'B+/RR2' Rating to $500 Mil. Senior Notes ---------------------------------------------------------------- Fitch Ratings has assigned a 'B+/RR2' issue rating to Level 3 Financing, Inc.'s $500 million issuance of 9.375% senior notes due 2019. The notes will rank pari passu with Level 3 Financing's existing senior unsecured indebtedness. Proceeds from the notes will be used primarily to redeem approximately $443 million aggregate principal amount of Level 3 Financing's $1.25 billion senior notes due 2014. Level 3 Financing is a wholly owned subsidiary of Level 3 Communications, Inc., and each have a 'B-' Issuer Default Rating and a Stable Rating Outlook from Fitch. As of Dec. 31, 2010, LVLT had approximately $6.5 billion of debt outstanding. Fitch believes the issuance is positive for the company's credit profile as it reduces the refinancing risk associated with its 2014 scheduled maturities. As of Dec. 31, 2010, approximately $2.9 billion of debt was scheduled to mature during 2014. Outside of the extension of the company's maturity profile, LVLT's credit profile has not substantially changed. Overall, Fitch's ratings incorporate LVLT's highly levered balance sheet, its weaker competitive position and lack of scale relative to larger and better capitalized market participants. The lingering effects of the recession weakened LVLT's credit and operating profile during 2010. Fitch anticipates that the tendency for the demand for telecommunication services to lag economic recovery will likely hamper revenue growth during the first half of 2011 leading to nominal overall revenue growth for the full year and a modest improvement in LVLT's operating profile during 2011. LVLT's weaker operating performance has resulted in an erosion of credit protection metrics. For the year ended Dec. 31, 2010, leverage was 7.5 times, a marked increase from 7.04x as of Dec. 31, 2009. The focus of LVLT's capital structure strategy is to strengthen the company's overall credit profile and efficiently manage its maturity profile. LVLT established a target leverage ratio of 3.0x to 5.0x. Fitch expects that total debt will decline by approximately $199 million reflecting the repayment of current maturities and that LVLT's leverage metric will range between 7.4x and 7.6x as of year-end 2011. Fitch believes that LVLT's credit profile is firmly positioned within the current rating category. LVLT's liquidity position is primarily supported by cash carried on its balance sheet, which as of Dec. 31, 2010 totaled approximately $616 million ($727 million on a pro forma basis after considering the issuance of LVLT's 11.875% notes due 2019 issued in part in exchange for LVLT's 9% convertible notes due 2013, the redemption of LVLT's 5.25% convertible notes due 2011 and the issuance of Level 3 Financing's notes due 2019). The company does not maintain a revolver and relies on capital market access to replenish cash reserves, which in Fitch's opinion limits the company's overall financial flexibility. Refinancing risk associated with LVLT's scheduled maturities had been a long-standing ratings concern within the company's credit profile; however, recent capital market activity has largely mitigated the refinancing risks over the near term. LVLT does not have any maturities scheduled during the remainder of 2011, and 2012 scheduled maturities total approximately $299 million. From Fitch's perspective, LVLT's existing cash balance positions the company to satisfy its 2012 scheduled maturities and to fund anticipated free cash flow deficits during a period of expected weak operating performance and free cash flow generation. Considering capital market activity during the beginning of 2011, LVLT's 2013 scheduled maturities total approximately $400 million and $2.5 billion in 2014. As previously demonstrated, Fitch expects the company to maintain access to the capital markets and bring the scheduled maturities in line with existing liquidity resources and free cash flow expectations. Following the generation of approximately $44 million of free cash flow during 2009, the company swung to a free cash flow deficit of approximately $97 million during 2010. The weaker operating performance along with higher levels of capital expenditures contributed to the free cash flow deficit during 2010. LVLT increased its capital intensity to 11.9% during 2010 reflecting a 360 basis point increase relative to 2009. The increase in capital expenditures supports LVLT's higher order volume and the level of demand the company is experiencing across its service portfolio as a significant portion of the company's capital expenditure is success based. Additionally the company continues to invest in its network to reduce incremental costs and to add capacity. Based on its expectation for stable operating margins and capital intensity metrics substantially similar to those experienced during 2010, Fitch does not expect LVLT to generate positive free cash flow during 2011 and for the company to generate a minimal amount (less than $50 million) during 2012. Positive rating actions will likely be considered as the company re-establishes sustainable revenue growth which Fitch expects would lead to margin expansion, free cash flow generation and strengthening credit protection metrics including driving leverage below 6.5x while maintaining a stable liquidity profile. Negative rating actions would stem from leveraging merger and acquisition activity, debt financed shareholder-friendly actions, revenue declines that are larger and more persistent than expected, operating margin compression, and elevated liquidity or refinancing risks. Fitch notes that weaker operating results experienced by LVLT during the course of 2010 put Recovery Ratings at the lower end of the 'RR2' assigned to the senior notes issued by Level 3 Financing and the 'RR5' assigned to the senior convertible notes issued by LVLT. Continued erosion of LVLT's operating profile during 2011 may lead to lowering the Recovery Ratings and the issue-specific ratings assigned to the debt issued by Level 3 Financing, Inc., and LVLT. MACCO PROPERTIES: Creditors Panel Has OK to Hire Welch as Counsel ----------------------------------------------------------------- The Official Unsecured Creditors' Committee in Macco Properties, Inc.'s Chapter 11 bankruptcy case sought and obtained authorization from the Hon. Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma to retain Welch Law Firm, P.C., as counsel. Welch will represent the Committee in the Debtor's bankruptcy case. Welch will be paid $260 per hour for its services. To the best of the Committee's knowledge, Welch is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. Oklahoma City, Oklahoma-based Macco Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10- 16682) on Nov. 2, 2010. G. Rudy Hiersche, Jr., Esq., at the Hiersche Law Firm, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. MAACO PROPERTIES: US Trustee Appoints 3 Members to Creditors Panel ------------------------------------------------------------------ Richard A. Wieland, the U.S. Trustee for Region 20, appoints three members to the Official Committee of Unsecured Creditors in Maaco Properties, Inc.'s Chapter 11 case. The Committee members include: 1) Jackie L. Hill, Jr., Attorney 210 Park Avenue, Suite 2800 Oklahoma City, OK 73102 Attention: Jackie L. Hill, Jr. Fax: (405) 232-4457 Telephone: (405) 232-4456 2) Bristol Park Apartments, Tulsa, LLC; Canyon Creek Apartments Tulsa, LLC; Foxfire Apartments Tulsa, LLC; and Tower Crossing Apartments Tulsa, LLC Attention: Robert J. Haupt, Phillips Murrah P.C. 101 N. Robinson Avenue, 13th Floor Oklahoma City, OK 73102 Fax: (405) 235-4133 Telephone: (405) 235-4100 3) Woodard Hernandez Roth & Day, L.L.C. 257 N. Broadway Suite 300 Wichita, KS 67202 Attention: Chris Cole Fax: (316) 263-0125 Telephone: (316) 263-4958 Oklahoma City, Oklahoma-based Macco Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10- 16682) on Nov. 2, 2010. G. Rudy Hiersche, Jr., Esq., at the Hiersche Law Firm, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. MERUELO MADDUX: Seeks Relief from Paying Lawyers' Fees ------------------------------------------------------ Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that Meruelo Maddux Properties Inc. says the cost of fighting two competing reorganization plans leaves insufficient cash to pay professionals. Early in the case, the bankruptcy court approved a process where professionals for the company and the two official committees would be paid 80% of their monthly billings, absent objection. At a hearing on March 18, Meruelo Maddux will ask the bankruptcy judge to relieve it of the obligation to pay professionals on a current basis. According to the report, Meruelo Maddux itself employs two bankruptcy law firms, separate securities counsel, financial advisers and an accounting firm. The Company is also obligated to pay lawyers and advisers for the two committees. Mr. Rochelle notes that since the inception of the case, Meruelo Maddux has incurred more than $17 million in professional expenses for itself and the committees. For six months ended Jan. 31, given the courtroom fight over competing plans, the fees exceed $9 million, according to court papers. The Company, according to the report, is asking to be relieved of the obligation to pay almost $2 million in fees for January. If the court approves, Meruelo Maddux would pay $500,000 pro rata among the professionals. The motion says the fees can be paid when the Company's plan is confirmed and it draws down a $15 million loan. The bankruptcy judge authorized creditors to vote on the three plans. The hearing for confirmation of one of the plans began in late January. The competing plans came from lenders Legendary Investors Group No. 1 LLC and East West Bank and from shareholders Charlestown Capital Advisors LLC and Hartland Asset Management Corp. The bankruptcy court permitted the filing of competing plans in May. About Meruelo Maddux Meruelo Maddux and its affiliates filed for Chapter 11 protection (Bankr. C.D. Calif. Lead Case No. 09-13356) on March 26, 2009. Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N. Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the Debtors in their restructuring effort. The Debtors' financial condition as of Dec. 31, 2008, showed $681,769,000 in assets and $342,022,000 of debts. FTI Consulting, Inc., serves as the Debtors' financial advisors, Ernst & Young as independent auditors and tax advisors, DLA Piper LLP (US) as special securities and litigation counsel, and Waldron & Associates, Inc. as real estate appraiser. The U.S. Trustee has appointed an official committee of unsecured creditors and a separate official shareholders' committee in the case. SulmeyerKupetz, APC, serves as the Creditors Committee's counsel and Kibel Green, Inc., as its financial advisor. The equity committee has sought to retain Ron Orr & Professionals, Inc., Rodiger Law Office, and Jenner & Block as counsel, and Kibel Green, Inc. as its financial advisor. The Debtors; Legendary Investors Group No. 1, LLC, and East West Bank; and Charlestown Capital Advisors, LLC and Hartland Asset Management Corporation have proposed rival reorganization plans in the case. In mid-January 2011, the Debtors struck a deal with the Legendary Group to drop the group's competing plan. The Debtors have hired Kurtzman Carson Consultants as solicitation and balloting agent. Legendary Investors Group No. 1, LLC, is represented in the case by Jeremy V. Richards, Esq., and Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP; and Surjit P. Soni, Esq., at The Soni Law Firm. East West Bank is represented by Curtis C. Jung, Esq., and Monica H. Lin, Esq., at Jung & Yuen, LLP, and Elmer Dean Martin III, Esq. Charlestown Capital Advisors, LLC and Hartland Asset Management Corporation are represented in the case by Christopher E. Prince, Esq., Matthew A. Lesnick, Esq., and Andrew R. Cahill, Esq., at Lesnick Prince LLP. METROPCS WIRELESS: Moody's Assigns 'Ba1' Rating to $1.5 Bil. Loan ----------------------------------------------------------------- Moody's Investors Service has assigned a Ba1 rating to MetroPCS Wireless, Inc.'s new $1.5 billion term loan. MetroPCS plans to amend the terms of its Ba1 rated senior secured credit facility, increasing its size by $1.5 billion in new debt that will mature in 2018. The company plans to use the proceeds to retire $540 million outstanding under the credit facility that was scheduled to mature in 2013 and to create the financial flexibility to pursue spectrum acquisitions. Moody's has also affirmed Moody's positive outlook, reflecting the MetroPCS's strong performance and expected improvements in credit profile relative to its B1 Corporate Family Rating. MetroPCS Wireless, Inc. -- Corporate Family Rating.B1 -- Probability of Default Rating.B1 -- Sr. Secured RCFBa1, LGD-2 (19%) -- Sr. Secured Term LoansBa1, LGD-2 (19%) -- Sr. Unsec. Notes - B2, LGD-5 (75%) -- SGL/Short-Term Rating - SGL-1 -- Outlook - Positive Ratings Rationale Moody's has assigned a Ba1 rating to MetroPCS new $1.5 billion senior secured term loan due 2018. The new term loan will be issued through an amendment and extension of the company's current credit facility. The company plans to use the proceeds of the new term loan to repay its existing $540 million outstanding senior secured term loan due in 2013 and to position itself to have the financial flexibility to opportunistically purchase additional spectrum assets over the next 12-18 months. The amendment to the credit faclity will also increase the revolving credit facility to $105 million from $67.5 million prior and loosen the agreement's financial covenants. Following this refinancing action, MetroPCS will have no material debt maturities before 2016 and a cash balance exceeding $2.0 billion. Moody's continues to believe that MetroPCS will seek to acquire additional spectrum capacity as it grows its subscriber base of 3G and 4G data customers. Moody's project that the company will spend approximately $1.0 billion over the next 12-18 months to acquire this needed spectrum. However, this investment will offset capital spending which would otherwise be required to increase network density as spectrum utilization became constrained. Moody's maintains a positive outlook on MetroPCS based on its strong growth and lower churn despite an environment that is increasingly competitive due in part to U.S. wireless penetration nearing 100%. In addition to solid execution, the positive outlook reflects Moody's view that the company's credit metrics will continue to improve from strong growth, low churn and stable ARPU and margins. Moody's believes that MetroPCS's operating performance will result in modest deleveraging and a meaningful improvement in free cash flow. Moody's project that leverage, measured as Debt to EBITDA (Moody's adjusted), will increase slightly to approximately 4.0x at year-end 2011, but will fall to approximately 3x by year end 2013 as a result of EBITDA growth. Free cash flow as a percentage of debt is projected to approximately double to 10% during this timeframe. Moody's Senior Vice President Dennis Saputo commented, "MetroPCS is a mini-juggernaut, growing at a pace higher than the industry average while transforming into a strong cash-generating business." Moody's anticipates that MetroPCS will accumulate a significant cash position over the next 2-3 years as capex declines and margins expand, both at a modest pace. MetroPCS's B1 CFR reflects the positive factors referenced above, offset by the company's small scale and the intensely competitive status of the wireless communications industry. MetroPCS's price- centric strategy could be duplicated by peers, many of which are much larger and better capitalized. Although Moody's feels that the industry has exhibited price discipline, the potential exists for competitors to undercut MetroPCS to gain market share while sacrificing margins. Additionally, the network costs incurred by the growth in data services could adversely impact profitability. The $1.5 billion senior secured term loan is rated Ba1 (LGD-2, 19%), three notches above the company's B1 CFR due to the senior secured status of the debt and the loss aborption offered by MetroPCS's existing $2.0 billion of unsecured notes (rated B2, LGD-5). MetroPCS's rating could be moved up if the company continues on its current growth trajectory while keeping churn and pricing stable, which would result in rapidly increasing earnings and cash flows. Specifically, Moody's could raise MetroPCS's rating if its leverage is likely to approach 3.0x amid stable EBITDA margins and if free cash flow were to improve to between 5% to 10% of total debt (note that all cited financial metrics are referenced on a Moody's adjusted basis). Downward rating pressure could develop if the Company's leverage trends toward 4.5x or if free cash flow falls below 2% of total debt. In addition, lower EBITDA margins, declining to below 30% on a sustained basis or a significant deterioration in its liquidity profile could pressure the rating downward. Moody's last rating action for MetroPCS was on November 5, 2010 when the company's $1.0 billion senior unsecured notes were rated B2 and the company's outlook was revised to positive from stable. MONTEBELLO, CA: Fiscal Mess Raises Insolvency Fears --------------------------------------------------- The Los Angeles Times reported last month that millions in Montebello city funds have been mismanaged or drained from off- the-books accounts, leaving officials scrambling for explanations and prompting fears about the city's solvency. Federal officials say Montebello misused $1.3 million in federal housing money and want it back; a city official discovered $5 million in debt a few weeks ago; and the city has been sued by a businessman who alleges it illegally borrowed up to $19 million from its redevelopment agency last fall. MORGANS HOTEL: JV Assigns Stake in LV Hard Rock Hotel to Lender --------------------------------------------------------------- Morgans Hotel Group Co. announced that the Hard Rock joint venture, in which the company holds a minority interest, has reached a settlement agreement with its lenders effective March 1, 2011. Pursuant to the terms of the settlement, the Hard Rock joint venture's equity interests in the Hard Rock Hotel & Casino in Las Vegas have been transferred to the first mezzanine lender and MHG's management agreement has been terminated. Fred Kleisner, Chief Executive Officer of Morgans, said, "The Las Vegas market has faced significant headwinds since 2008 and as a result we consistently reduced our equity interest in the Hard Rock JV following our initial investment. This settlement agreement is the final step for Morgans to completely exit the Hard Rock investment and increase our focus on an asset light strategy that further builds our Morgans brands in growing markets." With this agreement, MHG has been released from any liability for the Hard Rock debt, and from all of its guarantee obligations with regard to this property. As a result of the settlement, MHG will also no longer be subject to gaming regulations which previously imposed compliance costs and certain filing and suitability requirements on the Company's stockholders over certain ownership levels, among other things. While the conclusion of the Hard Rock relationship will reduce MHG's management fees in the short term, MHG has been focused on its existing brands such as Delano and Mondrian and has been successful in signing new and more secure contracts. MHG recently announced the opening of the Mondrian in SoHo and the signing of four new Morgans Hotel Group branded hotel management agreements including two for new Delano hotels. Forbearance As reported by the Troubled Company Reporter on Feb. 15, 2011, two subsidiaries of Hard Rock Hotel Holdings, LLC, a joint venture through which they hold a minority interest in the Hard Rock Hotel & Casino, received a notice of acceleration on Jan. 28 from NRFC HRH Holdings, LLC, pursuant to the First Amended and Restated Second Mezzanine Loan Agreement, dated as of Dec. 24, 2009, between the Second Mezzanine Subsidiaries and the Second Mezzanine Lender, declaring all unpaid principal and accrued interest under the Second Mezzanine Loan Agreement immediately due and payable. The amount due and payable under the Second Mezzanine Loan Agreement as of Jan. 20 was roughly $96 million. The Second Mezzanine Lender also notified the Second Mezzanine Subsidiaries that it intended to auction to the public the collateral pledged in connection with the Second Mezzanine Loan Agreement, including all membership interests in certain subsidiaries of the Hard Rock Joint Venture that indirectly own the Hard Rock Hotel & Casino and other related assets. The First Mezzanine Subsidiaries, the Second Mezzanine Subsidiaries, certain other subsidiaries of the Hard Rock Joint Venture, Vegas HR Private Limited, Brookfield Financial, LLC - Series B, the Second Mezzanine Lender, Morgans Group LLC, certain affiliates of DLJ Merchant Banking Partners, and certain other related parties have entered into a Standstill and Forbearance Agreement, dated as of Feb. 6, 2011. Among other things, until February 28, 2011, the Mortgage Lender, First Mezzanine Lender and the Second Mezzanine Lender agreed not to take any action or assert any right or remedy arising with respect to any of the applicable loan documents or the collateral pledged under such loan documents, including remedies with respect to the Hard Rock management agreement. The Mortgage Lender's agreement to standstill is subject to certain conditions. In addition, pursuant to the Standstill and Forbearance Agreement, the Second Mezzanine Lender agreed to withdraw its foreclosure notice, and the parties agreed to jointly request a stay of all action on the pending motions that had been filed by various parties to enjoin such foreclosure proceedings. The parties to the Standstill and Forbearance Agreement are engaged in continuing discussions regarding the obligations of the parties under the Hard Rock loan documents and disposition of the related collateral and other related agreements. The Hard Rock Hotel In connection with Hard Rock Hotel Holdings LLC's acquisition of the Hard Rock in 2007, certain subsidiaries of the joint venture entered into a debt financing comprised of a senior mortgage loan and three mezzanine loans, which provided for a $760.0 million acquisition loan that was used to fund the acquisition, of which $110.0 million was subsequently repaid according to the terms of the loan, and a construction loan of up to $620.0 million, which was fully drawn and remains outstanding as of Sept. 30, 2010, for the expansion project at the Hard Rock. According to Morgans Hotel's Form 10-Q for the quarter ended Sept. 30, 2010, "Due to the downturn in the Las Vegas economy and Hard Rock's high degree of leverage and seasonality, Hard Rock's operating cash flows have not been sufficient to cover debt service under the Hard Rock Credit Facility for the nine month period ended Sept. 30, 2010 and there were months when the joint venture was forced to use funds from the reserves it had established under the Hard Rock Credit Facility to meet its liquidity needs." "The joint venture anticipates that it will not be able to fully fund both its operating expenses and its debt service on the Hard Rock Credit Facility, solely from its revenues until the economic conditions affecting Las Vegas have improved from their current conditions. The joint venture is reviewing its options to identify the best possible resolution to its liquidity position, including pursuing discussions with the joint venture's lenders." NorthStar Realty Finance Corp., is a participant lender in the Hard Rock Credit Facility. About Hard Rock Hotel Holdings Hard Rock Hotel Holdings, LLC, is a joint venture formed in January 2007 to acquire the Hard Rock Hotel & Casino in Las Vegas. In February 2007, Hard Rock Hotel, funded one-third, or approximately $57.5 million, by the Morgans Hotel, and two-thirds, or approximately $115.0 million, by DLJ Merchant Banking Partners, completed the acquisition of Hard Rock Hotel & Casino in Las Vegas. Hard Rock Hotel had assets of $1.29 billion, liabilities of $1.43 billion and members' deficit of $143.3 million as of Sept. 30, 2010. Net loss was $80.0 million on $179.3 million of net revenue for nine months ended Sept. 30, 2010, compared with a net loss of $70.1 million on $126.06 million of net revenue for nine months ended Sept. 30, 2009. About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company's balance sheet at Sept. 30, 2010, showed $759.10 million in total assets, $801.22 million in total liabilities, and a stockholders' deficit of $42.12 million. The Company also reported a net loss of $83.07 million on $236.37 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $101.60 million on $225.05 million of total revenue during the prior year. MORITZ WALK: Must File Plan by April 15 to Avoid Foreclosure ------------------------------------------------------------ Bankruptcy Judge Letitia Z. Paul granted in part, and denied, in part, Green Bank, N.A.'s Motion for Relief from Stay in the bankruptcy case of Moritz Walk, L.P. The Court conditioned the automatic stay on the Debtor's filing of a plan and a disclosure statement by April 15, 2011, and obtaining confirmation of a plan by July 11, 2011. According to testimony presented to the Court, as of Dec. 6, 2010, the Debtor owed Green Bank $2,318,564. Green Bank's security interest in the Debtor's real property is subordinate to a tax lien for $164,000. Judge Paul noted that the Debtor's equity in property securing obligations to the bank's is eroding, due to the continuing accrual of interest, both on the Debtor's tax lien debt, and on the debt the Debtor owes to Green Bank. The Court held that adequate protection of Green Bank's interest in the property requires that the Debtor act promptly to propose a confirmable plan, and to obtain confirmation of the plan. A copy of Judge Paul's March 3, 2011 Memorandum Opinion is available at http://is.gd/JiYyGcfrom Leagle.com. Based in Houston, Texas, Moritz Walk, LP filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 10-41069) on Dec. 6, 2010, represented by James B. Jameson, Esq. -- jbjameson@jamesonlaw.net -- at James B. Jameson & Associates. The Debtor scheduled assets of $3,660,160 and debts of $3,392,181. MORNINGSIDE HEIGHTS: Terrace in the Sky in Chapter 11 ----------------------------------------------------- Morningside Heights Restaurant Corp., doing business as Terrace in the Sky, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11- 10731) in Manhattan on Feb. 22, 2011. Terrace in the Sky is a French-Mediterranean restaurant, located at Columbia University property atop Butler Hall at 400 West 119th St. in New York. The Debtor estimated assets at up to $50,000 and debts of up to $500,000 as of the Chapter 11 filing. Constance Boozer at Colombia Spectator, citing papers filed with the court, says Terrace in the Sky owes Columbia, one of its largest creditors and its landlord, $87,000. The Trustees of Columbia University have been suing the restaurant for the past year in civil court for failure to pay for occupancy of the space. In addition, the restaurant owes $50,000 to the Internal Revenue Service and $100,000 to the New York State Department of Tax and Finance. The Debtor is represented by: Lawrence F. Morrison, Esq. 140 East 45th Street 19th Floor New York, NY 10017 Tel: (212) 655-3582 Fax: (646) 539-3682 E-mail: morrlaw@aol.com MORTGAGE LENDERS NETWORK: Authorized to Destroy Files ----------------------------------------------------- Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that what remains of Mortgage Lenders Network USA Inc. was authorized by the bankruptcy judge last week to destroy 11,000 boxes of documents and more than three terabytes of digital information. The documents can be destroyed after March 27. The records to be destroyed include loan files that have been sought from time to time by third parties looking for mortgages, deeds, assignments, and the like. About Mortgage Lenders Middletown, Connecticut-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- was once the 15th largest mortgage lender in the United States. The Company filed for Chapter 11 protection on February 5, 2007 (Bankr. D. Del. Case No. 07-10146). Pachulski Stang Ziehl & Jones LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Honorable Peter J. Walsh approved the Company's liquidating Chapter 11 plan in February 2009. A full-text copy of the Debtor's First Amended Liquidating Plan under Chapter 11 of the Bankruptcy Code, dated December 19, 2008, is available at http://is.gd/1a3YGat no charge. MOSDOS CHOFETZ: Board's Approval of Site Plan Voids Violations -------------------------------------------------------------- Steve Lieberman at The Journal News' LoHud.com reports that Mosdos Chofetz Chaim, the yeshiva trying to develop an adult-student housing complex, can rent its units, despite evidence it was in violation of a state judge's order and Ramapo laws for already beginning to house students. According to the report, town officials say an approval by the Ramapo Planning Board of the final site plan for the yeshiva devlopment on Grandview Avenue voids any past violation claims and allows the yeshiva to operate. Officials said only the state judge hearing contempt charges against Mosdos Chofetz Chaim can overrule the board's approval. The Journal News notes opponents involved in litigation with the yeshiva and Ramapo are planning to appeal. Until the judge rules, the Planning Board's approval legalizes any occupancies in the development of 60 units in 12 buildings and a religious study center. Ramapo Town Attorney Michael Klein said the Planning Board decision also prevents the Building Department from issuing the violation notices to the yeshiva for illegal occupancies, notes The Journal News. Mosdos Chefetz Chaim Inc. c/o Rabbi Aryeh Zaks filed for Chapter 11 bankruptcy protection on Jan. 18, 2011 (Banr. S.D. N.Y. Case No. 11-22062). Judge Robert D. Drain presides over the case. Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Green Genovese & Gluck P.C., represents the Debtor. In its petition, the Debtor disclosed $4,530,000 in assets, and $16,412,113 in debts. MSCI INC: Moody's Upgrades Corporate Family Rating to 'Ba1' ----------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating of MSCI, Inc., to Ba1 from Ba2 and assigned a Ba1 rating to the proposed $1.125 billion amended term loan. The amended term loan due 2017 will replace the company's existing term loan due in 2016. Moody's also affirmed the SGL-1 speculative grade liquidity rating. The rating outlook was revised to stable from positive. Moody's took these rating actions (LGD assessments revised): * Assigned $1.125 billion secured term loan due 2017, Ba1 (LGD 3, 34%) * Upgraded $1.275 billion secured term loan due 2016, to Ba1 (LGD 3, 34%) from Ba2 (LGD 3, 33%) -- rating to be withdrawn upon completion of the refinancing * Upgraded $100 million secured revolving credit facility due 2015, to Ba1 (LGD 3, 34%) from Ba2 (LGD 3, 33%) * Upgraded Corporate Family Rating, to Ba1 from Ba2 * Upgraded Probability of Default Rating, to Ba2 from Ba3 * Affirmed Speculative Grade Liquidity Rating, SGL-1 Ratings Rationale "The upgrade reflects solid pro forma revenue and profitability growth in fiscal 2010, a rebound in customer retention rates and new subscription sales, Moody's expectation of further deleveraging through EBITDA growth and debt repayments, and strong growth opportunities in the index and risk management business lines" stated Lenny Ajzenman, Senior Vice President at Moody's. The Ba1 Corporate Family Rating is supported by MSCI's leading market positions, a stable recurring subscription base, strong growth of international exchange traded funds and significant product line and geographic diversification. Pro forma financial strength metrics are solid and position the company well in the rating category. The company has made significant progress towards its goal of achieving $50 million of run rate cost synergies related to the RiskMetrics acquisition by the end of fiscal 2011. The ratings are principally constrained by a relatively moderate revenue base (which is also small for the rating category), a short track record as a standalone publicly traded company and history of acquisitions. The ratings also reflect declining revenues in the portfolio analytics and governance business lines, and potential volatility in index revenues derived from asset-based fees. The stable outlook reflects Moody's anticipation of a moderate improvement in financial strength metrics in fiscal 2011 driven by EBITDA growth and the use of free cash flow to reduce term debt. The company's performance should continue to benefit from solid secular growth trends supporting the growth of ETF's, international indices and risk management products. Given the company's relatively moderate revenue base, short tenure as a standalone public company and history of growth through acquisitions, Moody's is unlikely to upgrade the ratings in the near term. Over the medium term, a material expansion of the revenue base to over $1.2 billion, a sustained improvement in financial leverage to about 3 times, steady top and bottom line growth, and a track record of conservative financial policies could lead to an upgrade. The ratings could be pressured by a substantial erosion in profitability or credit metrics due to a loss of market share, a more difficult pricing environment or a change to more aggressive financial policies. If Moody's comes to expect debt to EBITDA and free cash flow to debt to be sustained at over 4 times and under 10% respectively, a downgrade is possible. The last rating action on MSCI was on March 23, 2010, when Moody's assigned a Ba2 to a proposed $1.375 billion credit facility, affirmed the Ba2 Corporate Family Rating and changed the rating outlook to positive from developing. MSCI is a leading global provider of investment decision support tools, including indices, portfolio risk and performance analytics and corporate governance products and services. Reported revenues for the fiscal year ended November 30, 2010, were $663 million. MSR RESORT: Paulson, Five Mile Offer $30 Million Loan ----------------------------------------------------- MSR Resort Golf Course LLC; MSR Biltmore Resort, LP; MSR Grand Wailea Resort, LP; MSR Desert Resort, LP; MSR Resort Hotel, LP; MSR Resort Silver Properties, LP; and MSR Claremont Resort, LP, ask for authorization from the Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York to obtain postpetition secured financing from a syndicate of lenders led by Paulson Real Estate Recovery Fund, LP and Five Mile Capital II CNL DIP Administrative Agent LLC. Paulson Real Estate Recovery Fund, LP and Five Mile Capital II Equity Pooling LLC, as DIP Lenders, have committed to provide up to $30 million. The DIP Debtors seek authority on an interim basis to borrow up to $5 million of the committed amount. A copy of the DIP financing agreement is available for free at: http://bankrupt.com/misc/MSR_RESORT_dipfinancingpact.pdf Paul M. Basta, Esq., at Kirkland & Ellis LLP, explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The DIP Lenders will be granted a perfected, first-priority security interest and lien upon all pre- and post-petition property of the Debtors, and a perfected security interest in and lien upon all pre- and post-petition property of the DIP Debtors that is subject to valid, perfected and non-avoidable liens in existence prior to the Petition Date or to valid and non-avoidable liens in existence prior to the Petition Date that are perfected subsequent to the Petition Date. DIP Obligations will be immediately due and payable on, among other things: (i) the 12th month after the date on which the Closing Date occurs, (ii) five Business Days following notice to the Debtors, their counsel, counsel for any Committee and the U.S. Trustee of the occurrence of the maturity of the DIP Obligations upon acceleration of the DIP Obligations and termination of the Commitment in accordance with the DIP Agreement, (iii) the failure of the Debtors to obtain a final court order on the terms set forth herein, with modifications as may be satisfactory to the DIP Agent, on or before the date that is 30 days after the date on which the interim court order is entered, (iv) the closing date of a sale of all or substantially all of the assets or businesses of the Debtors, following entry by the Court of an order authorizing and approving the sale pursuant to section 363 of the U.S. Bankruptcy Code, and (v) the effective date of a plan of reorganization or liquidation in the cases confirmed by the Court. The loans will accrue interest at a rate per annum equal to the LIBO Rate plus 3.00%. In event of default, the Debtors will pay an additional 1.00% per annum. The Debtors agree to pay the DIP Agent a commitment fee in an amount equal to 1.00% of the DIP Lender's Commitment Amount. The DIP Facility Debtors agree to pay on demand all reasonable and documented out-of-pocket fees and expenses of the DIP Agent and the DIP Lenders. The Debtors covenant that until the date on or after the maturity date on which all obligations have been paid in full in cash, the Debtors will perform the obligations, including: (a) the administrative borrower will furnish the DIP Agent and the DIP Lenders copies of certain financial statements, reports, notices and information; (b) the Debtors will pay and discharge all post- Petition Date taxes, assessments and other similar governmental charges or levies, fees or charges imposed in connection with the collateral and the execution and delivery of the DIP documents; (c) each borrowing Debtor will jointly and severally pay all filing, registration and recording fees and all expenses incident to the execution and acknowledgement of any DIP document. Cash Collateral The Debtors also seek to continue using the Cash Collateral to provide additional liquidity. As of the Petition Date, the Debtors had secured debt in the aggregate amount of approximately $1.525 billion, consisting of (a) a $1 billion mortgage loan from Bank of America, National Association, as successor by merger to LaSalle Bank National Association, as trustee for the Certificate Holders of Deutsche Mortgage & Asset Receiving Corporation, COMM 2006-CNL2 Commercial Mortgage Backed Certificates; and (b) four tranches of mezzanine loans in the aggregate principal amount of $525 million. The Mortgage Loan is secured by cross-collateralized and cross- defaulted first priority mortgages on certain of the Debtors' properties, including the Debtors' resorts, and the products and proceeds thereof, including the cash generated by the resort operations. In addition to the Prepetition Mortgages, the Mortgage Loan is secured by pledges of the equity interests of the brokerage entities. The Mezzanine Loans are secured by pledges of equity. The Mezzanine Loans are not secured by any of the Resorts or any of the other collateral securing the Mortgage Loan, including the cash and proceeds generated from the resorts. As of the Petition Date, the Mezzanine Loans were held by Metropolitan Life Insurance Company; 450 Lex Private Limited, a Singapore corporation; C Hotel Mezz Private Limited, a Singapore corporation; and Five Mile Capital SPE B LLC. As adequate protection, the Prepetition Secured Parties will receive (i) a perfected replacement lien and security interest in and valid, binding, enforceable and perfected liens on each of the Debtors' rights in, to, and under all present and after-acquired property and assets; and (ii) an allowed superpriority administrative expense claim. The Debtors will provide the Prepetition Secured Parties with: a. Payment of Interest. b. Non-Mortgage Borrower Superpriority Claims. If any Debtor that is not a Mortgage Borrower is a direct or indirect recipient of Cash Collateral, or receives benefit from the use of Cash Collateral, the Prepetition Secured Parties also will receive a Superpriority Claim against each Debtor that is not a Mortgage Borrower Debtor; c. Expense Reimbursement of Servicer and Mortgage Lender; and d. Reporting. The Debtors will deliver to the Servicer, by no later than the 10th day of each calendar month, a report for each Mortgaged Property and for all Mortgage Borrowers combined showing in reasonable detail, including an identification of the property generating receipts, incurring expenditures or the method of allocating a joint expenditure among the properties, a comparison of actual receipts and disbursements for the prior calendar month against the receipts and disbursements projected in the cash budget for that period. The Debtors will deliver to the servicer a proposed cash budget covering the subsequent 13-week period by no later than the first calendar day of each month. The Debtors will also deliver to the servicer a proposed accrual budget covering the subsequent three- month period by no later than the 10th calendar day of each month. In the event that the servicer fails to approve any of the proposed budgets, the Debtors will be permitted to continue to use Cash Collateral for the six-week period beginning on the eighth business day from the date upon which the proposed budgets were due; provided, however, that the Debtors' continued use of Cash Collateral during that time must be in accordance with the already approved cash budget and accrual budget. A hearing to consider entry of an order authorizing the Debtors' continued use of Cash Collateral on an interim basis will be held on March 15, 2011, at 5:00 p.m., prevailing Eastern Time. * * * Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that Paulson & Co., one of the owners of five resorts foreclosed in January, was selected along with Five Mile Capital Partners LLC to provide $30 million in subordinate secured financing for the properties' Chapter 11 reorganization. According to the report, Government of Singapore Investment Corp., a sovereign-wealth fund that holds $360 million in mezzanine debt, was also offering financing. The hearing for approval of financing is set for March 15. Mr. Rochelle relates that the resorts say in their court filing that cash flow from the properties will be sufficient to pay operating expenses and debt service. The loan is needed to cover professional costs and capital expenses. The loan, Mr. Rochelle notes, would be subordinate to existing secured claims. It would not contain case control provisions requiring a sale within a specified time. The one-year loan would bear interest at 3 percentage points above the London interbank borrowed rate. There will be a 1% commitment fee. From the loan, $5 million would be available on an interim basis. The Singapore government fund has offered to buy the resorts for $1.475 billion. The price would be made up of $1.115 billion cash to cover what equates to the first mortgage and the first layer of $115 million in mezzanine debt. The remainder of the price would be a so- called credit bid using the second and third mezzanine loans that the fund owns in the total amount of $360 million. February 28 Hearing According to Mr. Rochelle, a lawyer for MSR Resort and its affiliates told the bankruptcy judge in court at a hearing Feb. 28 that there is a "growing dispute" to play out in court with Government of Singapore Investment Corp. The Singapore government fund offered to buy the resorts for $1.475 billion in a combination of stock and exchange for existing debt. Singapore's offer includes $1.115 billion cash to cover what equates to the first mortgage and the first layer of $115 million in mezzanine debt. The remainder of the price would be a credit bid using the second and third mezzanine loans that the fund owns in the total amount of $360 million. The fund is willing to be the stalking-horse at an auction. The resorts' lawyer told the judge they want to work on financing and cost cutting before considering a sale of one or more hotels or potentially reorganizing as a whole. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla. and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc. A joint venture affiliated Morgan Stanley's CNL Hotels & Resorts owned the resorts before the foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature Feb. 1, 2011, were sent to Chapter 11 by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. MWM CARVER: Files Chapter 11 Petition for Full-Payment Sale ----------------------------------------------------------- Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that the owner of the 407-unit Carver Terrace apartment building on Maryland Avenue in the District of Columbia filed for Chapter 11 protection on March 3 while it prepares to sell the property. The owner says it is "finalizing" a sale that will pay all secured and unsecured claims in full. Federal National Mortgage Association is owed $8.3 million on a mortgage. Unsecured claims are about $740,000, court papers say. The property is 75% occupied. Monthly rental is more than $41,000, court papers say. MWM Carver Terrace LLC filed a Chapter 11 petition (Bankr. D. D.C. Case No. 11-00168) on March 3, 2011, in Washington. Brent C. Strickland, Esq., at Whiteford, Taylor, & Preston L.L.P., in Baltimore, Maryland, serves as counsel. The Debtor estimated assets of $10 million to $50 million and debts of $1 million to $10 million as of the chapter 11 filing. MWM Carver's case summary was published in yesterday's Troubled Company Reporter. NATIONAL JOCKEY CLUB: Judge Dismisses Suit v. Carey --------------------------------------------------- Bankruptcy Judge Pamela S. Hollis dismissed Counts I and II in the suit, DII Northwest LLC (in the name of National Jockey Club), v. Thomas Carey, III, Adv. Pro. No. 10 A 00302 (Bankr. N.D. Ill.), at the defendant's behest. Count I asserts a claim for turnover of property of the estate. Count II asserts a claim under Illinois state law for breach of fiduciary duty. A copy of the Court's March 3, 2011 Memorandum Opinion is available at http://is.gd/p0w7SSfrom Leagle.com. Cicero, Illinois-based National Jockey Club is an organization that conducts thoroughbred horse racing meets. National Jockey Club filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 06-13247) on Oct. 17, 2006, represented by Chad H. Gettleman, Esq., at Adelman & Gettleman, in Chicago. In its petition, the Debtor estimated $1 million to $100 million in assets and debts. NAT'L MEMORIAL PARK: Rasmus Auctioneers Conducts Liquidation ------------------------------------------------------------ Rasmus Auctioneers, Inc., disclosed the online liquidation auction of burial plots at National Memorial Park, according to Christopher R. Rasmus. "We are making a complete liquidation of 66 in-ground burial plots by order of the US Bankruptcy Court," explained Rasmus. "These plots are located on beautifully maintained grounds with rolling hills and mature shade trees." Located at 7482 Lee Highway in Falls Church, Va., in the Northern part of the state, National Memorial Park is 200 acres of natural beauty that was established in 1933. The park is just a short drive away from Washington, D.C., and contains several multicultural sections and a number of monuments and memorials, including the Fountain of Faith created by Carl Mills, a world- renowned Swedish artist. There is a transfer fee of $200 per buyer (not per plot). This online only auction will begin closing on Friday, March 11, 2011. Bidders must register prior to bidding. Items may be inspected during scheduled preview times. For more details and terms, visit http://www.rasmus.com/or call (703) 768-9000. R.L. Rasmus Auctioneers, Inc. was founded in 1981 to provide asset recovery and auction services to the legal, banking and business community. Emerging out of the technology and used equipment business, Rasmus has been unconventional in its approach to asset liquidation. Rasmus is one of a handful of liquidators who has combined the benefits of traditional liquidation techniques with the power of the internet to create a liquidation model which is fast, affordable, flexible, efficient and astoundingly effective. NEBRASKA BOOK: Said to Tap Advisors for Possible Chapter 11 ----------------------------------------------------------- NBC Acquisition Corp. and its Nebraska Book Co. operating subsidiary hired legal and financial advisers to help in restructuring debt and preparing for a Chapter 11 filing if necessary, Bill Rochelle, Bloomberg News' bankruptcy columnist, reports, citing people familiar with the talks. If there is a distressed exchange or a Chapter 11 filing, Goldman Sachs Group Inc. and Cerberus Capital Management LP could end up in control after purchasing debt at discount, the people said, according to the report. The $77 million of senior discount notes issued by the holding company last traded on Feb. 23 at 52.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes have a Caa3 rating from Moody's. The $200 million of second-lien bonds of the operating company traded March 2 at 101 cents on the dollar. The notes are rated B2 by Moody's. About Nebraska Book Headquartered in Lincoln, NE, Nebraska Book Company is a leading operating of on-campus and off-campus college bookstores. Revenues in the last 12-month period ending Dec. 31, 2010, were approximately $608 million. The Company reported a $16.3 million net loss for the quarter ended Dec. 31 on net revenue of $69.2 million. The operating loss was $13.3 million. NBC Acquisition carries a 'Caa1' corporate family rating and 'Caa2' probability of default rating, with developing outlook, from Moody's Investors Service. In February 2011, Moody's said the downgrade of the PDR from 'Caa1' to 'Caa2' reflects the heightened default risk for the company, which could include a transaction that Moody's would deem a distressed exchange, as NBC faces significant near term debt maturities. Substantially all debt of Nebraska Book Company (the operating entity) matures before March 15, 2012. And because other securities will mature during 2011, Moody's believes the company must implement a comprehensive refinancing of its capital structure over the next six to nine months. The developing outlook reflects the uncertainty around NBC's ability to execute a refinancing plan in the very near term. NEW SOLUTIONS: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: New Solutions Collier, LLC 1265 Creekside Parkway, Suite 400 Naples, FL 34108 Bankruptcy Case No.: 11-04020 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Ft. Myers) Debtor's Counsel: Ronald G. Neiwirth, Esq. FOWLER WHITE BURNETT PA 1395 Brickell Avenue, 14th Floor Miami, FL 33131 Tel: (305) 789-9200 Fax: (305) 789-9201 E-mail: rgn@fowler-white.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 four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb11-04020.pdf The petition was signed by Phillip R. Wood and Edgar E. Davis, president of managing companies. Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- New Solutions Diamond 11-04024 03/04/11 New Solutions, Ltd. 11-04027 03/04/11 NEW STREAM: Investors Seek to Force Bankruptcy, Want Trustee ------------------------------------------------------------ creditors of New Stream Secured Capital Fund (U.S.) LLC filed a petition (Bankr. D. Del. Case No. 11-10690) seeking to force the fund into involuntary bankruptcy, saying the fund owes $320 million to U.S. and Cayman creditors. The investors filed involuntary Chapter 11 petitions for other New Stream affiliates including New Stream Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured Capital Fund K1 (Cayman), Ltd. The petitioning investors in the New Stream investment enterprise are collectively owed over $90 million, representing roughly 28% of the approximately $320 million owed to all U.S. and Cayman investors. They claim to be mostly sophisticated investors, including "funds of funds," whose moneys have been fraudulently funneled to bankruptcy-remote entities in the New Stream enterprise to preserve and even augment the collateral of purported senior lien holders in a Bermuda feeder fund, a fund which U.S. and Cayman investors had been assured would be eliminated in a restructuring of the New Stream group in 2007. The U.S. and Cayman investors claim they were further misled with a costly 2009 "Restructuring Plan" that was a failure from the inception because, despite New Stream's misrepresentations that over 90% of investors had approved, the largest investor and the most significant assets were excluded from its scope. The New Stream Funds The New Stream enterprise is an interrelated group of companies that collectively constitute an investment fund. The primary operating entity for this enterprise is New Stream Secured Capital, L.P., a Delaware limited partnership, the so-called Master Fund. All management, investment and administrative functions for NSSC (and its subsidiaries and affiliates) are provided by its general partner, New Stream Capital, LLC -- NSC or the Fund Manager -- a Delaware limited liability corporation. The New Stream entities have no employees of their own. New Stream Insurance, LLC, a Delaware limited liability company, one of the directly-owned subsidiaries of NSSC, owns a significant portfolio of insurance-related investments, including life insurance policies that the policy holder has sold to a third party investor, in this case, NSI. NSSC, until 2006 known as Porter Secured Capital Partners, LP, began marketing direct limited partnership interests only to U.S. investors in March 2003, as the fund documents prohibited foreign investment. In October 2005, New Stream organized what is now New Stream Capital Fund, Limited, as a Bermuda segregated accounts mutual fund company to enable foreign entities to invest in NSSC and later NSI. Prepackaged Plan The Investors say the appointment of a Chapter 11 trustee is made all the more urgent because New Stream's management and the Liquidators have distributed a prepackaged joint plan of liquidation along with a disclosure statement for which they are currently soliciting support, which they propose to confirm immediately following the filing of voluntary Chapter 11 petitions by four New Stream entities no later than March 11, 2011. "Now, through a proposed prepackaged plan for which votes are currently being solicited by only four strategically-selected prospective debtor entities of the New Stream group, the New Stream debtors and management, and the principal beneficiaries of purported senior liens, seek to obtain the Bankruptcy Court's imprimatur for their scheme and to obtain releases for their improprieties by majority vote obtained through woefully inadequate and misleading disclosure," Counsel to the investors, Joseph H. Huston, Jr., Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, relates. This plan, according to Mr. Huston, offers a mere pittance to the US/Cayman Investors, funded primarily with "gifts" from allegedly senior classes traceable to funds supplied by the US/Cayman Investors in the first place; gives the Bermuda feeder fund, the purported senior lien holder, the vast majority of all plan distributions; and grants releases to all wrongdoers; this after admitting to losing almost $500 million on assets that the Fund Manager valued at $800 million less than three years ago. Chapter 11 Trustee The petitioning investors are: The Latta Family Trust, Christiane L. Latta Trust, Jean Y. Rose Revocable Trust, Irwin D. Yalom and Marilyn Yalom, Robert Shostak and Nancy Shostak, Consulta Collateral Fund PCC Ltd., Consulta Alternative Strategy Fund PCC Ltd., Kas Trust Bewaarder Finles Alternative Bond Fund B.V., Kas Trust Bewaarder Finles European Selector Fund B.V., Guernoy Limited, SPL Private Finance (PF2) IC Ltd, The Stillwater Market Neutral II, LP, The Stillwater Matrix Fund, L.P., The Stillwater Market Neutral Fund III SPL - Stillwater Matrix PC, Stratos Non- Directional Fund, LP, ZAM Asset Finance Limited ("ZAM AF"), Toledo Fund LLC, ZCALL, LLC, Mont Blanc Fund - Select, Absolute Return Partners, LLP, and Lillian Kling Trust. They filed together with the involuntary petitions a motion asking the bankruptcy court to enter an order: (i) appointing a Chapter 11 trustee for the three above-captioned US/Cayman Feeders prior to the entry of an order for relief pursuant to 11 U.S.C. Secs. 1104(a) and 105 and Fed. R. Bankr. P. 2007.1; or, in the alternative, (ii) appointing an examiner pursuant to 11 U.S.C. Secs. 1104(c) and Fed. R. Bankr. P. 2007.1. Ponzi Scheme According to Mr. Huston, US Investors agreed to use $152 million in existing direct investments in New Stream Secured Capital, L.P. -- the principal operating entity, the "Master Fund" -- to purchase investments in the US/Cayman Feeders and advanced $200 million in new money after being assured that the senior secured position of the Bermuda Investors (i.e. investors in New Stream Capital Fund, Limited) would be eliminated under a new fund structure (the "2007 Restructuring") effective as of January 1, 2008, that all investments under the 2007 Restructuring in all New Stream feeder funds would be pari passu, and that new investments would be used by New Stream only as capital to acquire new investment assets. However, among other things, the senior secured positions of the Bermuda Fund in NSSC's and NSI's assets were not eliminated by the 2007 Restructuring and most Classes of the Bermuda Fund retained their senior security interests, giving them a claim to priority in repayment over the US/Cayman Investors. "New Stream's misrepresentations and failure to disclose the Bermuda Fund's senior security interest was not atypical, for dishonesty and fraud permeated many New Stream transactions. A Ponzi-like element of New Stream's scheme was the misuse of new investments induced by the 2007 Restructuring. Despite New Stream's assurances that new investments would be used solely for the acquisition of new investment assets, by the end of September 2008, new investment proceeds of over $200 million had been used substantially to satisfy what were 2008 redemption payments totaling over $170 million. Those getting out just in time were paid with the funds of those defrauded into getting in too late," Mr. Huston relates. Another fraudulent component of New Stream's operations was the inflated values New Stream attributed to its Life Settlement Assets, NSI's principal asset and collateral for the debt owed to Gottex Funds AB, a Swiss-based fund of funds and owner of the Bermuda Fund's Classes C and I, Mr. Huston tells the Court. "New Stream's motive for failing to write down its insurance assets timely could have been grounded in one or more of (i) fraud, since delaying the write-down delayed the redemptions which would have inexorably followed, (ii) greed, since NSC's compensation was a direct function of assets under management, or (iii) incompetence and gross mismanagement. Nowhere on the spectrum between gross mismanagement and fraud will New Stream find a defense to the appointment of a Chapter 11 trustee." NEW STREAM: Involuntary Chapter 11 Case Summary ----------------------------------------------- Alleged Debtor: New Stream Secured Capital Fund (U.S.), L.L.C. 38 Grove Street, Building C Ridgefield, CT 06877 Bankruptcy Case No.: 11-10690 Involuntary Chapter 11 Petition Date: March 7, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Mary F. Walrath Counsel for Petitioners and Related Entities: Joseph H. Huston, Jr., Esq. Maria Aprile Sawczuk, Esq. Meghan A. Cashman, Esq. STEVENS & LEE, P.C. 1105 North Market Street, 7th Floor Wilmington, DE 19801 Tel: (302) 425-3310 (302) 425-3306 (302) 425-3307 Fax: (610) 371-7972 E-mail: jhh@stevenslee.com masa@stevenslee.com maca@stevenslee.com - and - Beth Stern Fleming, Esq. STEVENS & LEE, P.C. 1818 Market Street, 29th Floor Philadelphia, PA 19103 Tel: (215) 575-0100 E-mail: bsf@stevenslee.com - and - Nicholas F. Kajon, Esq. David M. Green, Esq. Constantine Pourakis, Esq. STEVENS & LEE, P.C. 485 Madison Avenue, 20th Floor New York, NY 10022 Tel: (212) 319-8500 E-mail: nfk@stevenslee.com dmg@stevenslee.com cp@stevenslee.com - and - Edward Toptani, Esq. TOPTANI LAW OFFICES 127 E. 59th Street, 3rd Floor New York, NY 10022 Tel: (212) 699-8930 E-mail: edward@toptanilaw.com - and - John M Bradham, Esq. David Hartheimer, Esq. MAZZEO SONG & BRADHAM LLP 708 Third Avenue, 19th Floor New York, NY 10017 Telephone: (212) 599-0700 E-mail: jbradham@mazzeosong.com dhartheimer@mazzeosong.com Debtor-affiliates also subject to Chapter 11 petitions: Debtor Case No. ------ -------- New Stream Secured Capital Fund P1 (Cayman), Ltd. 11-10694 New Stream Secured Capital Fund K1 (Cayman), Ltd. 11-10696 Creditors who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Irvin and Marilyn Yalom Debt Owed $168,000 851 Matadero Avenue Palo Alto, CA 94360 Robert and Nancy Shostak Debt Owed $168,000 25 Larguita Lane Portola Valley, CA 94028 The Latta Family Trust Debt Owed $166,000 1010 Westridge Drive Portola Valley, CA 94028 Jean Y. Rose Revocable Trust Debt Owed $157,865 4101 Cathedral Avenue, NW Washington, DC 20016 ---------- $659,865 NO FEAR RETAIL: Has Court's Nod to Reject 12 Unexpired Leases ------------------------------------------------------------- No Fear Retail Stores, Inc., sought and obtained authorization from the Hon. Margaret M. Mann of the U.S. Bankruptcy Court for the Southern District of California to reject 12 unexpired leases of nonresidential real property under which the Debtor is the lessee. A list of the affected properties is available for free at: http://bankrupt.com/misc/NO_FEAR_leases.pdf The leases are rejected as of the petition date, Feb. 24, 2011, or the ate by which the Debtor relinquishes possession of the subject premises to the landlord in broom swept condition. To the extent any personal property remains on the premises of the Rejected Leases, the landlord is authorized to dispose of such personal property as it deems fit. The Debtor said that the continued liabilities associated with the Leases will impede the Debtor's opportunity to maximize the value of the estate and are burdensome to the estate. The Debtor already closed all 12 stores operated at the properties covered by the Leases. The rejection of the Leases will avoid the continuing imposition of administrative claims for rent or adequate protection against the estate for properties where the reasonable business decision is that marketing the Debtor's leasehold interest isn't cost effective and wouldn't benefit the estate. "The Leases either relate to properties which are no longer profitable for the Debtor, or have terms that are burdensome to the Debtor," the Debtor said. About No Fear Retail Carlsbad, California-based No Fear Retail Stores, Inc., is a retailer of action, sports, and casual youth lifestyle apparel and accessories, targeting young adults and teens. It operates 41 retail locations in California, Oregon, Arizona, Florida, Nevada, North Carolina, and Texas. No Fear filed for Chapter 11 bankruptcy protection on Feb. 24, 2011 (Bankr. S.D. Calif. Case No. 11-02896). David S. Kupetz, Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897) and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898) filed separate Chapter 11 petitions on Feb. 24, 2011. NORDYKE VENTURES: Case Converted to Chapter 7 --------------------------------------------- Bankruptcy Judge Robert E. Nugent converted the Chapter 11 case of Nordyke Ventures, LLC, to one under Chapter 7 of the Bankruptcy Code. Creditor Benton Holdings, L.L.C. sought dismissal or, in the alternative, conversion. Judge Nugent said cause exists to dismiss or convert the case as not being brought in good faith and that the best interests of the creditors and the estate will be better served by converting the case to Chapter 7. Judge Nugent denied Benton's Motion for Stay relief without prejudice to afford a Chapter 7 trustee an opportunity to review the Debtor's assets and liabilities. A copy of Judge Nugent's March 2, 2011 Memorandum Opinion is available at http://is.gd/plyhBtfrom Leagle.com. About Nordyke Ventures Nordyke Ventures LLC, based in Wichita, Kansas, filed for Chapter 11 bankruptcy (Bankr. D. Kans. Case No. 10-13332) on Sept. 28, 2010. W. Thomas Gilman, Esq. -- wtgilman@redmondnazar.com -- at Redmond & Nazar, L.L.P. In its petition, the Debtor estimated under $50,000 in assets and $1 million to $10 million in debts. NORTEL NETWORKS: Ex-Workers Want Fast-Track of Claim Status Bill ---------------------------------------------------------------- Toronto Sun reports that two former employees of Nortel Networks appealed to Prime Minister Stephen Harper Thursday to fast-track a bill that would keep their disability pensions flowing. Bill C-624 would amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arraignment Act to protect employees on long- term disability by granting them preferred status during bankruptcy proceedings, according to Toronto Sun. Toronto Sun says Liberal MP Mark Eyking, who tabled the bill last month, is confident it will pass because it doesn't propose using any taxpayer money. According to Toronto Sun, Mr. Eyking said a fast-track is needed because time is running out for the more than 400 Nortel employees on long-term disability who lost their benefits Jan. 1. Toronto Sun relates Mr. Eyking said 1.1 million Canadians work for companies where disability benefits are self-insured by the employees. If their employer goes bankrupt, they become unsecured creditors. "They're left holding an empty bag, while the company walks away from its responsibilities," Toronto Sun quotes Mr. Eyking as saying. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. In March 2009, the U.S. Bankruptcy Court entered an order approving the sale of the Layer 4-7 assets to Radware Ltd. as the successful bidder at auction. In July 2009, Nortel sold its CDMA and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ). In September 2009, the Court Nortel sold its Enterprise Solutions business to Avaya Inc. In October 2009, the Court approved the sale of assets associated with Nortel's Next Generation Packet Core network components to Hitachi, Ltd. On December 2, 2009, the Court approved the sale of assets associated with Nortel's GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and Kapsch Carriercom AG. In December 2009, the Debtors sold their Metro Ethernet Networks business to Ciena Corporation. In March 2010, Nortel sold its Carrier Voice Over IP and Application Solutions business to GENBAND Inc. In September 2010, Nortel sold its Multi-Service Switch business to Ericsson. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NORTEL NETWORKS: Posts $4.061 Billion Net Loss in 2010 ------------------------------------------------------ Nortel Networks Corporation filed on March 4, 2011, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2010. The Company reported a net loss of $4.061 billion on $620 million of revenues for 2010, compared to net income of $505 million on $3.446 billion of revenue for 2009. Net loss for 2010 included reorganization items of $3.595 billion and interest expense of $306 million, partially offset by other operating income of $281 million comprised primarily of billings under transition services agreements and other income of $83 million. The Company's consolidated balance sheet showed $4.516 billion in total assets, $11.007 billion in total liabilities, and a stockholders' deficit of $6.491 billion. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?747e About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. In March 2009, the U.S. Bankruptcy Court entered an order approving the sale of the Layer 4-7 assets to Radware Ltd. as the successful bidder at auction. In July 2009, Nortel sold its CDMA and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ). In September 2009, the Court Nortel sold its Enterprise Solutions business to Avaya Inc. In October 2009, the Court approved the sale of assets associated with Nortel's Next Generation Packet Core network components to Hitachi, Ltd. On December 2, 2009, the Court approved the sale of assets associated with Nortel's GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and Kapsch Carriercom AG. In December 2009, the Debtors sold their Metro Ethernet Networks business to Ciena Corporation. In March 2010, Nortel sold its Carrier Voice Over IP and Application Solutions business to GENBAND Inc. In September 2010, Nortel sold its Multi-Service Switch business to Ericsson. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. OCTAVIUS TOWER: Fitch Assigns 'CCC' Issuer Default Rating --------------------------------------------------------- Fitch Ratings has assigned a 'CCC' Issuer Default Rating to Caesars' newly created subsidiary (Octavius Tower & Project Linq Financing Subsidiary), which was created to facilitate the financing and development of the Octavius Tower and Project Linq. Fitch has also assigned a 'B-/RR3' rating to NewCo's $400 million proposed senior secured term loans. The 'RR3' Recovery Rating implies good recovery prospects in event of default. Additionally, Fitch has affirmed the IDRs on Caesars Entertainment Operating Co. and Caesars Entertainment Corp. (parent) at 'CCC' and Chester Downs and Marina LLC at 'B-'. The full list of the ratings beings affirmed is below. The Rating Outlook remains Stable. The term loans will have a six-year maturity and will be secured by the assets of Octavius Tower and the assets associated with Project Linq. The OpCo will transfer the unfinished Octavius Tower and the land adjacent to the Imperial Palace, on which Project Linq will be developed, to the NewCo. Once the projects are complete, the OpCo will lease the Octavius Tower and the gaming component of Project Linq (O'Shea Casino) for a total of $50 million per year. The NewCo will also generate income from leasing Project Linq's restaurant and retail outlets to third- party vendors as well as from owning and operating the planned observation wheel. Caesars will 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 or the OpCo will also contribute between $100 million to $150 million in equity to complete the projects. The above guarantees and the lease arrangement contribute significantly to the strong IDR linkage between the NewCo and the OpCo/Parent. The 'CCC' IDR and the linkage also reflect the integrated nature of the transferred assets vis-a-vis strategic value and physical connectivity to the OpCo's Las Vegas operations, particularly the flagship Caesars Palace. Although Fitch links the IDRs, in an event of Caesars'/OpCo's bankruptcy filing Fitch believes that the OpCo is unlikely to reject the leases given their strategic importance. The strong recovery prospect for the NewCo term loan mainly reflects Project Linq's considerable land value that is being contributed with respect to Project Linq and the assumption that the retail and restaurant component of Project Linq will open and generate some level of positive cash flow. Fitch's RR analysis also considers the stand- alone values of O'Shea Casino and the Octavius Tower in event OpCo chooses to terminate either of the leases under an OpCo default scenario. Affirmation of Caesars' and CEOC' 'CCC' IDRs reflects the company's highly leveraged capital structure; CEOC weak FCF profile; deteriorating asset quality; a limited organic growth profile; and a poor near-term market exposure profile. Fitch also recognizesthe company's solid liquidity position, minimal near- term debt maturities, industry-leading U.S. business profile, and solid track record of acquiring and disposing of gaming assets. 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 and the Octavius Tower 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 Project Linq and the Octavius Tower helping to fuel that improvement. The Stable Outlook is supported by the company's adequate liquidity profile, which provides a cushion of a few years in order 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. 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 has affirmed these ratings: Caesars Entertainment Corp. -- Long-term IDR at 'CCC'. Caesars Entertainment Operating Co. (CEOC, fka Harrah's Operating Co.) -- Long-term IDR at 'CCC'; -- Senior secured first-lien revolving credit facility and term loans at 'B/RR2'; -- Senior secured first-lien notes at 'B/RR2'; -- Senior secured second-lien notes at 'C/RR6'; -- Senior unsecured notes with subsidiary guarantees at 'C/RR6'; -- Senior unsecured notes without subsidiary guarantees at 'C/RR6'. Chester Downs and Marina LLC -- Long-term IDR at 'B-'; -- Secured term loans at 'BB-'. The Rating Outlook is Stable. PALM HARBOR: Court Approves Sale of Assets to Fleetwood ------------------------------------------------------- Palm Harbor Homes, Inc. disclosed that the U.S. Bankruptcy Court approved a subsidiary of Cavco as the successful bidder for the assets of Palm Harbor at an auction conducted under section 363 of the United States Bankruptcy Code. A newly-formed subsidiary of Fleetwood Homes will purchase substantially all of Palm Harbor's assets comprising its manufactured and modular housing construction and retail businesses and all of the outstanding stock of its insurance and finance subsidiaries, and will assume certain liabilities of Palm Harbor. As previously reported, Palm Harbor and certain of its subsidiaries filed for chapter 11 bankruptcy protection on Nov. 29, 2010. Shortly thereafter, Fleetwood Homes provided a $50 million debtor-in-possession credit facility to Palm Harbor. On March 1, 2011, Fleetwood Homes' subsidiary was selected as the successful bidder in the court auction with a winning bid of $83.9 million, subject to certain post-closing adjustments and customary conditions to closing. At the close of the asset purchase transaction, the then-outstanding balance of the credit facility, including accrued interest, will be credited to the purchase price, thus reducing the amount of cash consideration to be transferred at the close of the transactions contemplated by the purchase agreement. The successful bid included manufactured housing factories, retail locations, equipment, accounts receivable, inventory, intellectual property, and certain warranty and other liabilities. Palm Harbor's insurance and finance subsidiaries, including Standard Casualty Company, Standard Insurance Agency, CountryPlace Acceptance Corp., and CountryPlace Mortgage, Ltd. were not parties to the Palm Harbor bankruptcy filing, but the shares of these companies are included in the assets to be acquired by Fleetwood Homes' subsidiary. About Palm Harbor Homes Addison, Texas-based Palm Harbor Homes, Inc. -- http://www.palmharbor.com/-- manufactures and markets factory- built homes. The Company markets nationwide through vertically integrated operations, encompassing manufactured and modular housing, financing and insurance. Palm Harbor filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13850) on Nov. 29, 2010. It disclosed $321,263,000 in total assets and $280,343,000 in total debts. Affiliates Palm Harbor Albemarle, LLC (Bankr. D. Del. Case No. 10-13849), Palm Harbor Real Estate, LLC (Bankr. D. Del. Case No. 10-13851), Palm Harbor GenPar, LLC (Bankr. D. Del. Case No. 10-13852), Palm Harbor Manufacturing, LP (Bankr. D. Del. Case No. 10-13853), and Nationwide Homes, Inc. (Bankr. D. Del. Case No. 10-13854) filed separate Chapter 11 petitions. Brian Cejka at Alvarez & Marsal is the Debtors' chief restructuring officer. Raymond James and Associates, Inc., is the Debtors' investment banker. Alvarez & Marshal North America, LLC, is the Debtors' financial advisor. BMC Group, Inc., is the Debtors' claims agent. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Official Committee of Unsecured Creditors. PC DEVELOPMENT: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: PC Development Group, Inc. 10 Far Hill Lane Pleasantville, NY 10570 Bankruptcy Case No.: 11-22391 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Jonathan S. Pasternak, Esq. RATTET PASTERNAK, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 E-mail: jsp@rattetlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nysb11-22391.pdf The petition was signed by Pamela M. Crecco, president. PEA RIVER: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Pea River Timber Company, Inc. 15273 Highway 84 Elba, AL 36323-5821 Bankruptcy Case No.: 11-10344 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court Middle District of Alabama (Dothan) Judge: William R. Sawyer Debtor's Counsel: Collier H. Espy, Jr., Esq. ESPY, METCALF & ESPY, P.C. P.O. Drawer 6504 326 North Oates Street Dothan, AL 36302-6504 Tel: (334) 793-6288 E-mail: kc@espymetcalf.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/almb11-10344.pdf The petition was signed by James M. Bruce, president. PILGRIM'S PRIDE: Court Says Rejection of N.C. Growers' Pacts Valid ------------------------------------------------------------------ Bankruptcy Judge Dennis Michael Lynn issued a Memorandum Opinion dated March 2, 2011, on (i) Pilgrim's Pride Corp. and its affiliates' Motion for Partial Summary Judgment on Alleged Violations of the Packers and Stockyards Act, 1921, and (ii) North Carolina Claimants' Motion for Partial Summary Judgment against Reorganized Debtors for Violations of the Packers & Stockyards Act and the North Carolina Deceptive Trade Practices Act. The Motions address claims filed in the Debtors' bankruptcy cases by chicken farmers who raised chickens under contract to supply certain of the Debtors' processing plants. The claims assert various theories of liability, including under the PSA. On Jan. 19, 2011, the Court held a hearing on, inter alia, the Motions during which the parties presented oral argument. Thereafter, on Jan. 24, 2011, the Court issued a letter ruling stating that it would grant the Debtors' Motion for Summary Judgment in part and deny it in part and would deny the N.C. Growers' Motion for Summary Judgment. In the Memorandum Opinion, Judge Lynn explained that the Debtors' Motion for Summary Judgment must be granted based upon the Debtors' proof that their plant closings and selection of grower contracts for termination or rejection were undertaken for a valid business purpose and were more beneficial than detrimental to competition. "The Debtors clearly had a valid business purpose for their actions. It would not be possible for a reasonable jury to conclude otherwise," Judge Lynn said. A copy of the March 2, 2011 Memorandum Opinion is available at http://is.gd/166Vfgfrom Leagle.com. About Pilgrim's Pride Pilgrim's Pride Corporation -- http://www.pilgrimspride.com/-- is one of the largest chicken companies in the United States, Mexico and Puerto Rico. The Company's fresh chicken retail line is sold throughout the US, throughout Puerto Rico, and in the northern and central regions of Mexico. The Company exports commodity chicken products to 90 countries. The Company operates feed mills, hatcheries, processing plants and distribution centers in 15 U.S. states, Puerto Rico and Mexico. Pilgrim's Pride and six of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 08-45664) on Dec. 1, 2008. The Company's subsidiaries in Mexico and certain subsidiaries in the United States were not included in the filing and operated outside of the Chapter 11 process. Attorneys at Weil, Gotshal & Manges LLP served as bankruptcy counsel. Lazard Freres & Co., LLC, was the Company's investment bankers. Kurtzman Carson Consulting LLC served as claims and notice agent. Kelly Hart and Brown Rudnick represented the official equity committee. Attorneys at Andrews Kurth LLP represented the official committee of unsecured creditors. On December 10, 2009, the Bankruptcy Court confirmed the Joint Plan of Reorganization filed by the Debtors. The Plan was premised on the sale of the business to JBS SA. Under the Plan, creditors are paid in full. Existing owners retained 34% of the equity. The Company emerged from its Chapter 11 bankruptcy proceedings on December 28, 2009. PJ FINANCE: Owner of 32 Apartment Locations in Chapter 11 --------------------------------------------------------- PJ Finance Company LLC, along with six affiliates, filed a Chapter 11 petition (Bankr. D. Del. Lead Case No. 10-10688) in Wilmington, Delaware on March 7. PJ Finance Co. is the owner of apartment communities in the states of Arizona, Florida, Georgia, Tennessee and Texas. PJ Finance owns or holds ownership interests in 32 apartment communities that collectively have more than 9,500 rentable units, court papers show. The company has 20 apartment locations in Texas, and the remaining 12 in Arizona, Florida, Georgia and Tennessee. The day- to-day operations of the portfolio are managed by a third party, WestCorp Management Group One, Inc. The Debtors said rents aren't enough to cover debt payments and fund daily operations. They owe Bank of America NA, as the trustee for lenders, $475 million plus interest and fees, pursuant to a loan provided by Column Financial Inc. in 2006 and due to mature November 11, 2006. The loan is secured by mortgages and deeds of trust encumbering all of the properties in the portfolio. According to the list of 20 largest unsecured creditors, BofA's securities are worth $275 million. "Owing to a combination of internal problems among the Debtors' previous shareholders and management team, the severe economic recession and the current overleveraged debt structure of the Debtors, the Portfolio currently yields insufficient rents to service both its suffocating monthly debt service obligations and those obligations related to its day to day operations. Indeed, the combination of the severe economic recession and the lasting effects of the recent decline in the multi-family real estate market has resulted in the aggregate value of the Properties to be dramatically less than the amount of the Debtors' outstanding secured debt under the Prepetition Loan Agreement," Michael W. Husman, president of the operating units, said in court filings. The Company hasn't been able to re-lease units as vacancies occur due to its insufficient cash to return the units to move-in condition, Mr. Husman said. The apartment owner is unable to rent more than 1,700 units, or about 18%, which Husman said will rise to more than 20% with the upcoming notices to vacate in the next 30 days. PJ Finance needs a "significant cash infusion and restructuring of the loan in order to continue to operate the properties," Mr. Husman said. The Company has obtained a commitment from Gaia Real Estate Investments LLC to invest $42 million. The Debtors have also filed a motion seeking authority to use cash collateral in order to sustain operations during the pendency of the Chapter 11 cases. PJ FINANCE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: PJ Finance Company, LLC 1200 North Ashland Avenue, Suite 600 Chicago, IL 60622 Bankruptcy Case No.: 11-10688 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- PJ Finance Company, LLC 11-10688 PJ Holding Company Manager, LLC 11-10692 PJ Holding Company, LLC 11-10693 Alliance PJRT GP, Inc. 11-10695 Alliance PJWE GP, L.L.C. 11-10697 Alliance PJRT Limited Partnership 11-10699 Alliance PJWE Limited Partnership 11-10700 Chapter 11 Petition Date: March 7, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Linehan Shannon About the Debtors: PJ Finance Co. is the owner of apartment communities in the states of Arizona, Florida, Georgia, Tennessee and Texas. PJ Finance owns or holds ownership interests in 32 apartment communities that collectively have more than 9,500 rentable units. The company has 20 apartment locations in Texas, and the remaining 12 in Arizona, Florida, Georgia and Tennessee. The day-to-day operations of the portfolio are managed by a third party, WestCorp Management Group One, Inc. Debtors' Local Bankruptcy Counsel: Michelle E. Marino, Esq. Stuart M. Brown, Esq. EDWARDS ANGELL PALMER & DODGE, LLP 919 N. Market Street, Suite 1500 Wilmington, DE 19801 Tel: (302) 425-7104 (302) 777-7770 Fax: (302) 777-7263 (888) 325-9533 E-mail: mmarino@eapdlaw.com sbrown@eapdlaw.com Debtors' Bankruptcy Counsel: Richard A. Chesley, Esq. Kimberly D. Newmarch (DE 4340) DLA PIPER LLP (US) 203 N. LaSalle Street, Suite 1900 Chicago, Illinois 60601 Tel: (312) 368-4000 Fax: (312) 236-7516 E-mail: richard.chesley@d1apiper.com kim.newmarch@dlapiper.com Debtors' Claims and Notice Agent: Kurtzman Carson Consultants, LLC Total Assets: At least $275 million (estimated value of portfolio securing loan to BankofAmerica). Total Debts: At least $479 million ($475 million owed to BofA, $4.4 million trade debt). The petitions were signed by Michael Husman, authorized signatory. PJ Finance's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America, N.A. Bank Loan $200,000,000 540 West Madison Street Chicago, IL 60601 Quantum Asset Development, Inc. Trade Debt $417,320 4225 Lake Forest Drive Kalamazoo, MI 49008 Aimsco/MRO Trade Debt $389,441 3200 Earhart Drive Carrollton, TX 75006 HD Supply Facilities Maintenance Trade Debt $190,726 Genie Services, Inc. Trade Debt $142,480 Valet Waste Trade Debt $140,000 Richmond & Associates Landscaping Trade Debt $130,815 Ltd. Contemporary Contractors Inc. Trade Debt $130,508 Nature's Paintbrush Trade Debt $128,592 Consumer Source Inc. Trade Debt $113,905 Alliance Tax Advisors Trade Debt $108,510 Dfw Tech Group Inc. Trade Debt $98,563 Bnk Inc. Trade Debt $79,687 Creative Multicare, Inc. Trade Debt $78,173 Element Enterprises Trade Debt $76,162 Red Carpet Cleaning Trade Debt $75,397 Aquarius Painting Company Trade Debt $70,083 National Water & Power Trade Debt $69,853 Beaver Force Property Services, Trade Debt $65,045 LLC Valley Green Landscape Inc. Trade Debt $63,150 PLANT INSULATION: Inks Settlement Pact with Arrowood Indemnity -------------------------------------------------------------- Plant Insulation Company has filed, in the United States Bankruptcy Court for the Northern District of California, a motion to approve a settlement agreement pursuant to 11 U.S.C. Secs. 105(a), 363 and 365 and Fed. R. Bankr. P. 2002, 6004 and 9019, with respect to Arrowood Indemnity Company f/k/a Royal Indemnity Company (successor-in-interest to Globe Indemnity Company). The Motion seeks an order of the Bankruptcy Court approving the Settlement and the releases and compromises of claims reflected in the Settlement. The Settlement includes the sale of certain insurance policies free and clear of "Pending Asbestos Claims" as that term is defined in the Settlement (as a general matter, the term means any asbestos related claims that were the subject of a lawsuit that was pending against Plant on May 20, 2009, the date on which Plant's bankruptcy petition was filed). If the Motion is approved, Plant will sell, and Arrowood will purchase, the relevant insurance policies free and clear of all such Pending Asbestos Claims. In exchange for the sale of such insurance policies, and for the additional consideration set forth in the Settlement, Plant will receive $12 million from Arrowood, plus additional amounts of up to $18 million in the future upon the occurrence of certain conditions as set forth in the Settlement. If you are the holder of a Pending Asbestos Claim, your rights to pursue or recover claims against Arrowood will be affected by the Settlement. Objections, if any, must be filed by March 22, 2011, and served on: Counsel to the Debtor: Peter Benvenutti, Esq. Jones Day 555 California St., 26th Floor San Francisco, CA 94104 Counsel to the Unsecured Creditors' Committee: Michael Ahrens, Esq. Sheppard Mullin Richter & Hampton 4 Embarcadero Center, 17th Floor San Francisco, CA 94111 Counsel to the Hon. Charles B. Renfrew (Ret.), Futures Representative: Gary Fergus, Esq., Fergus, A Law Office 595 Market St., Suite 2430 San Francisco, CA 94105 Counsel to Arrowood: Bruce D. Celebrezze, Esq. Sedgwick, Detert, Moran & Arnold LLP One Market Plaza, Steuart Tower, 8th Floor San Francisco, CA 94105 A hearing is scheduled for April 5, 2011, at 2:00 p.m. (Pacific Time) before the Honorable Thomas E. Carlson in San Francisco. San Francisco, California-based Plant Insulation Company manufactured insulation products and services. The Company filed for Chapter 11 on May 20, 2009 (Bankr. N.D. Calif. Case No. 09- 31347). Michaeline H. Correa, Esq., Peter J. Benvenutti, Esq., and Tobias S. Keller, Esq., at Jones Day represents the Debtor in its restructuring effort. The Debtor has assets and debts ranging from $500 million to $1 billion. POPLAR VILLAS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Poplar Villas, LLC 600 Allerton Street, Suite 202 Redwood City, CA 94063 Bankruptcy Case No.: 11-30867 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Laura A. Palazzolo, Esq. BERLINER COHEN 10 Almaden Boulevard, 11th Floor San Jose, CA 95113-2233 Tel: (408) 286-5800 E-mail: laura.palazzolo@berliner.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $0 to $50,000 The list of unsecured creditors filed together with its petition does not contain any entry. The petition was signed by Hussain Tawfik, managing member. PREMIER NW: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Premier NW Investment Hotels, LLC 13101 NE 27th Avenue Vancouver, WA 98686 Bankruptcy Case No.: 11-41620 Chapter 11 Petition Date: March 3, 2011 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch Debtor's Counsel: John D. Nellor, Esq. NELLOR RETSINAS CRAWFORD PLLC 1201 Main St., P.O. Box 61918 Vancouver, WA 98666 Tel: (360) 695-8181 E-mail: jd@nellorlaw.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/wawb11-41620.pdf The petition was signed by Michael J. DeFrees, member. PRESIDIO INC: Moody's Affirms 'B1' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service affirmed Presidio, Inc.'s B1 corporate family and probability of default ratings and assigned Ba3 ratings to the Presidio's proposed $35 million Senior Secured Revolving Credit Facility and $325 Million Senior Secured Term Loan. The rating outlook is stable. Ratings Rationale The B1 CFR reflects Presidio's moderately high financial leverage with debt to EBITDA at about 4:1 (pro-forma for the proposed financing), smaller scale compared to competing technology services and managed services firms, and reliance on acquisitions to drive revenue growth. Nonetheless, Presidio's niche as a solutions provider within the rapidly evolving areas of data center virtualization, unified communications, and network security provides the expectation of good long term growth prospects. In addition, partnerships with leading technology vendors such as Cisco, Oracle/Sun, EMC, and IBM serve as a foundation to support continuing profitability and cash flow generation. Presidio's solid operating performance throughout the economic recession in a business requiring minimal capital investment also contributes to the B1 CFR. The stable outlook reflects Moody's expectation that Presidio will maintain its market position, generate revenue growth, and produce consistent levels of operating profits and cash flows as IT spending increases with a recovering U.S. economy in 2011 and 2012. The rating could be upgraded or downgraded if debt to EBITDA moves more than one turn from the initial pro-forma level of about 4:1 (after Moody's standard adjustments) on a sustained basis. Ratings could also be pressured downwards with shareholder dividends, which are not anticipated. The ratings were assigned in connection with American Securities planned leveraged buyout of Presidio. The proceeds from the new Term Loan along with new sponsor equity will be used primarily to fund the acquisition and repay existing debt of $200 million. American Securities will effectively own 80% of the company with management owning the remaining 20%. The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. These ratings were affirmed: * Corporate Family Rating -- B1 * Probability of Default Rating -- B1 These ratings were assigned: * $35 Million Senior Secured Revolving Credit Facility -- Ba3 (LGD 3 -- 30%) * $325 Million Senior Secured Term Loan -- Ba3 (LGD 3 -- 30%) These ratings will be withdrawn upon completion of the new financing: * $35 Million Senior Secured Revolving Credit Facility due 2013 -- Ba3 (LGD 2 -- 29%) * $200 Million Senior Secured Term Loan due 2015 -- Ba3 (LGD 2 -- 29%) RANCHES HOLDINGS: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Ranches Holdings, LLC 3311 S. Rainbow Blvd., Ste. 209 Las Vegas, NV 89146 Bankruptcy Case No.: 11-13006 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Timothy P. Thomas, Esq. LAW OFFICES OF TIMOTHY P. THOMAS, LLC 8670 W. Cheyenne Ave. #120 Las Vegas, NV 89129 Tel: (702) 227-0011 Fax: (702) 227-0015 E-mail: tthomas@tthomaslaw.com Scheduled Assets: $1,827,729 Scheduled Debts; $1,704,366 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb11-13006.pdf The petition was signed by William Dyer, manager of Integrated Managers LLC. RITE AID: Completes Refinancing of Tranche 3 Term Loan ------------------------------------------------------ Rite Aid Corporation has successfully refinanced the approximately $343 million Tranche 3 Term Loan due June 2014 under its senior secured credit facility with the proceeds of a new $343 million Tranche 5 Term Loan due March 2018 under its senior secured credit facility. The new Tranche 5 Term Loan bears interest at a rate of LIBOR plus 3.25% with a 1.25% LIBOR floor, which is an improvement over the Tranche 3 Term Loan interest rate of LIBOR plus 3.00% with a 3.00% LIBOR floor. The Tranche 5 Term Loan has a seven-year maturity, although the maturity will be Dec. 1, 2014, in the event that Rite Aid does not repay or refinance its outstanding 8.625% senior notes due 2015 prior to that time, or Sept. 16, 2015, in the event that Rite Aid does not repay or refinance its outstanding 9.375% senior notes due 2015 prior to that time. The Tranche 5 Term Loan is subject to a 1.0% prepayment fee in the event it is refinanced within the first year. All other terms of the Tranche 5 Term Loan are consistent with the terms of the Tranche 3 Term Loan. Rite Aid is one of the nation's leading drugstore chains with more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual sales of more than $25.7 billion. About Rite Aid Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. Rite Aid carries 'Caa2' probability of default and corporate family ratings from Moody's Investors Service. It has a 'B-' corporate credit rating from Standard & Poor's Ratings Services. The Company's balance sheet at Nov. 27, 2010, showed $7.8 billion in total assets, $9.8 billion in total liabilities, and a stockholders' deficit of $2.0 billion. RIVER ROAD: Files Plan for O'Hare InterContinental Chicago Hotel ---------------------------------------------------------------- Bill Rochelle, Bloomberg News' bankruptcy columnist, reports the owner of the InterContinental Chicago O'Hare hotel near Chicago's largest airport filed a revised Chapter 11 plan calling for the sale of the property for $53 million unless a higher bid turns up at auction. The owner's plan competes with the plan filed in January by Longview Ultra Construction Loan Investment Fund and co-lender U.S. Bank NA. Under the lenders' plan they would take ownership. The ultimate victor between the plans may be decided as the result of an appeal scheduled for argument on April 7 in the U.S. Court of Appeals in Chicago. According to the report, in August, River Road was hoping the judge would approve bidding procedures for a sale the lenders were opposing. Instead, the judge denied the motion for sale procedures and held that the lenders were being improperly denied the right to bid their secured claims rather than cash. The bankruptcy judge, Mr. Rochelle discloses, allowed River Road to take a direct appeal to the U.S. Court of Appeals. In addition to deciding if River Road can sell the project without permitting the lenders to bid their secured debt rather than cash, the appeal will say whether the 7th U.S. Circuit Court of Appeals in Chicago agrees with recent cases from appeals courts in Philadelphia and New Orleans. The other two circuit courts held that lenders can b denied a so-called credit bid so long as they receive the equivalent of the value of their mortgages, which can be less than the face amount of the mortgages. Mr. Rochelle relates that River Road's plan would pay mechanics' lien in full from the sale. The lenders would receive the proceeds remaining after payment of administrative expenses and mechanics' liens. The lenders would share their pot with holders of subordinate mechanics' liens. Unsecured creditors are to split $500,000 to be paid by the purchaser over time. For their deficiency claims, the lenders will split $250,000 paid by the purchaser over time. The secured creditor with a mortgage on the restaurant will be given title. The deficiency claim of the restaurant lender will share in the $250,000. River Road hasn't yet filed a disclosure statement explaining the new plan. Mr. Rochelle notes that the bankruptcy court scheduled a March 24 hearing to consider approval of the disclosure statement explaining the lenders' plan. The creditors' plan was made possible when the bankruptcy judge in Chicago terminated the exclusive period to propose a Chapter 11 plan. About River Road Hotel Partners River Road Hotel Partners, LLC, developed and manage the InterContinental Hotel Chicago O'Hare located in Rosemont, Illinois. Affiliate RadLAX Gateway Hotel LLC owns the Radisson hotel at Los Angeles International Airport. Both are ultimately controlled owned by Harp Group. River Road and its affiliates filed Chapter 11 in Chicago on August 17, 2009 (Bankr. N.D. Ill. Lead Case No. 09-30029). Based in Oak Brook, Illinois, River Road estimated assets of as much as $100 million and debt of as much as $500 million in its Chapter 11 petition. River Road disclosed $0 in assets and $14,400,000 in liabilities as of the Chapter 11 filing. Terrence O'Brien & Co. serves as the Debtors' appraiser, and Madigan & Getzendanner as serves as the Debtors' special counsel. RadLAX and its affiliates filed a separate chapter 11 petition (Bankr. N.D. Ill. Case No 09-30047), estimating assets at $50 million to $100 million. David M. Neff, Esq., at Perkins Coie LLP, serves as counsel to the River Road and RadLAX debtors. The two cases, however, are not jointly administered. The Official Committee of Unsecured Creditors is represented by Stephen T. Bobo and Ann E. Pille at Reed Smith LLP. ROBERT RYNDERS: Files For Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Richard Moore at The Lakeland Times reports that Robert A. Rynders, who has sought Chapter 11 protection, disclosed $26.2 million in assets, most of it real property holdings, against more than $17.3 million in liabilities. According to the report, Mr. Rynders blamed Harris Bank of Chicago for the bankruptcy filing, saying the bank was not interested in working with local businesses in a down economy. By preventing the auction of his properties, Mr. Rynders said his bankruptcy action would help protect area property values. Mr. Rynders real property interests include his house; Rynders Realty, Inc.; Island Estates, LLC; Morgan Oaks Apartments Homes, LLC; Rusty Putter, LLC; Rynders Development Co.-Lakeview Condominiums; Parkway Restaurant; RAR Holdings, LLC; and Wildwood Golf Course. Mr. Rynders said he plans to continue to operate his business while he devises a plan to reorganize, and he says he intends to keep employees working and will pay all creditors, according to The Lakeland Times. Among the creditors holding the largest unsecured claims are Harris Bank of Chicago, holding a claim of $1,182,037, $900,000 of which is secured by collateral; Heartland Wisconsin Corp., holding a claim of $162,653, of which $135,000 is secured; River Valley Bank, holding claims totaling $2,130,889, of which $1 million is secured; and loans from Rynders's father, Allen A. Rynders for $250,000, and his brother, Peter Rynders, for $220,500, notes Mr. Moore. Mr. Rynders said he would pay all creditors. Robert A. Rynders is one of the Northwoods, Wisconsin's largest developers. Mr. Rynders filed a Chapter 11 petition (Bankr. W.D. Wis. Case No. 11-10707) on Feb. 10, 2011. S & Y ENTERPRISES: Files Amended Schedules of Assets & Liabilities ------------------------------------------------------------------ S & Y Enterprises, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of New York amended schedules of its assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $20,000,000 B. Personal Property $200,095 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $6,350,000 E. Creditors Holding Unsecured Priority Claims $617 F. Creditors Holding Unsecured Non-priority Claims $2,356,889 ----------- ----------- TOTAL $20,200,095 $8,707,506 A copy of the Debtor's SAL is available for free at: http://bankrupt.com/misc/S&YEnterprises.SAL.pdf About S & Y Enterprises, LLC Brooklyn, New York-based S & Y Enterprises, LLC, own and maintain real estate. The Company filed for Chapter 11 protection on November 11, 2010 (Bankr. E.D. N.Y. Case No. 10-50623). David Carlebach, Esq., who has an office in New York, assists the Debtor in its restructuring effort. S & Y ENTERPRISES: Has Until March 11 to File Chapter 11 Plan ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York approved on Feb. 8, 2011, the stipulation made by S & Y Enterprises, LLC, and secured creditor Capital One, N.A., enlarging the 90 day period under 11 U.S.C. Section 362(d)(3) for the Debtor to make adequate protection payments or to file a Chapter 11 Plan of Reorganization until March 11, 2011. Capital One currently holds a mortgage lien on the Debtor's primary asset located at 130 North 4th Street (a/k/a 193 Berry Street, a/k/a 240 Bedford Ave.), in Brooklyn, New York, in the amount of approximately $5,000,000. The Debtor's 90 day deadline to make adequate protection payments or file a plan of reorganization expired on Feb. 9, 2011. Capital One is represented by: Joseph C. Savino, Esq. LAZER, APTHEKER, ROSELLA & YEDID, P.C. 225 Old Country Road Melville, NY 11747 Tel: (631) 761-0855 About S & Y Enterprises, LLC Brooklyn, New York-based S & Y Enterprises, LLC, own and maintain real estate. The Company filed for Chapter 11 protection on November 11, 2010 (Bankr. E.D. N.Y. Case No. 10-50623). David Carlebach, Esq., who has an office in New York, assists the Debtor in its restructuring effort. In its amended schedules, the Company disclosed $20,200,095 in assets and $8,707,506 in liabilities. SABRE DEFENCE: Court Sets March 10 as Auction Date -------------------------------------------------- Annie Johnson at the Nashville Business Journal, citing papers filed with the U.S. Bankruptcy Court Middle District of Tennessee, reports that Sabre Defence Industries is once again on the auction block. A judge set a March 10, 2011 date for the sale of the Company. According to Business Journal, at an earlier proposed sale of Sabre, which was organized by Mississippi-based Cadance Bank, Alabama-based USA Manroy was the highest bidder at $2.3 million, followed by US Ordnance and Colt Defense. That sale was postponed when Sabre Defence filed in February for Chapter 11 bankruptcy protection. The Nashville Business Journal relates that USA Manroy has upped its bid to $2.4 million although it's unclear in court documents just how much Colt is willing to pay. The sale is a result of an indictment that accused Sabre executives of violating the Arms Export Control Act. Potential bidders can obtain all the required documents at http://www.sabresale.com/ About Sabre Defence 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. SEMCRUDE LP: Plains Marketing Has Green Light to Amend Complaint ---------------------------------------------------------------- Bankruptcy Judge Brendan Linehan Shannon granted the motion filed by Plains Marketing, L.P., for leave to file an amended complaint, pursuant to which Plains seeks, inter alia, to amend its Complaint for Declaratory Relief to Determine the Validity and Priority of Asserted Liens and Permit Final Payments to Debtors for Prepetition Crude Purchases, to add two claims for relief against SemCrude, L.P. and Eaglwing, L.P.: (1) a claim for recoupment of its damages for the Debtors' alleged breach of warranty of title as provided in certain purchase agreements between Plains and the Debtors; and (2) a claim for indemnification, as provided in certain netting agreements between Plains and the Debtors, for its attorneys' fees and litigation costs incurred in actions that have been asserted against Plains on account of its transactions with the Debtors. Before filing for bankruptcy, the Debtors had engaged in the business of purchasing crude oil and natural gas from certain producers of oil and gas, and subsequently reselling the oil and gas to certain downstream purchasers. As one of the Downstream Purchasers, Plains had purchased crude oil from the Debtors prior to the commencement of the Debtors' bankruptcy case pursuant to various purchase agreements and netting agreements. The case is Plains Marketing, L.P., v. Bank of America, N.A. as Agent; Eaglwing, L.P.; Mull Drilling Company, Inc.; Murfin Drilling Company, Inc.; Samson Contour Energy E&P, LLC; Samson Lone Star, LLC; Samson Resources Company; Semcrude, L.P.; St. Mary Land & Exploration Company; Vess Oil Corporation; and John Does 1-100, Adv. Pro. No. 09-51003 (Bankr. D. Del.). A copy of the Court's March 3, 2011 Opinion is available at http://is.gd/4XhjPd from Leagle.com. Counsel for Plaintiffs Plains Marketing, L.P., are: Bradford J. Sandler, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor Wilmington, DE 19801 Telephone: 302-778-6424 E-mail: bsandler@pszjlaw.com About SemGroup L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008. John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. served as the Debtors' claims agent. The Blackstone Group L.P. and A.P. Services LLC acted as the Debtors' financial advisors. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represented the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. SemGroup, LP, won confirmation from the Bankruptcy Court of its Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan, which distributed more than $2.5 billion in value to stakeholders, was declared effective on November 30, 2008. S.J. HOSPITALITY: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: S.J. Hospitality, LLC 2800 Highlands Parkway Smyrna, GA 30082 Bankruptcy Case No.: 11-56979 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Joyce Bihary Debtor's Counsel: John A. Christy, Esq. SCHREEDER, WHEELER, & FLINT, LLP 1100 Peachtree Street, Suite 800 Atlanta, GA 30309-4516 Tel: (404) 681-3450 Fax: (404) 681-1046 E-mail: jchristy@swfllp.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 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb11-56979.pdf The petition was signed by Shehzad J. Lutfeali, authorized agent. SOUTH EDGE: District Court Affirms Rejection of Briefing Schedule ----------------------------------------------------------------- District Judge Philip M. Pro denied a slew of motions by South Edge, LLC: -- for Order Shortening Time for Responses to the Concurrently Filed Motion to Restore an Appellate Briefing Schedule; and -- to Restore an Appellate Briefing Schedule. The District Court reaffirmed its prior Order that the Chapter 11 Trustee, Cynthia Nelson, will have until March 28, 2011, to notify the Court in writing whether the Trustee will pursue the appeal on behalf of South Edge. The Court will defer ruling on the Emergency Motion for Leave to Intervene in Appeal until after the Trustee advises the Court of her intention regarding the appeal. A copy of the Court's March 2, 2011 Order is available at http://is.gd/IzaJ84from Leagle.com. As reported by the Troubled Company Reporter, Judge Pro vacated a the briefing schedule previously entered in the appellate case, South Edge LLC, Appellant, v. JPMorgan Chase Bank, N.A.; Credit Agricole Corporate and Investment Bank; Wells Fargo Bank, N.A.; and U.S. Trustee, Appellees, Case No. No. 2:11-CV-00240-PMP-RJJ (D. Nev.), and gave the Chapter 11 Trustee time to notify the District Court whether she will pursue an appeal. As reported by the TCR on Feb. 15, 2011, Bill Rochelle, the bankruptcy columnist for Bloomberg News, said South Edge took an appeal from the bankruptcy judge's ruling that put it into Chapter 11 reorganization involuntarily. South Edge also appealed from a second ruling ousting management and placing the reorganization in the hands of a Chapter 11 trustee. Mr. Rochelle recounted that U.S. Bankruptcy Judge Bruce A. Markell, in his opinion delivered from the bench, put South Edge into Chapter 11 because more than $320 million has been in default since 2008. He said the lenders didn't need to prove the exact amount by which their claims exceeded the value of South Edge's Inspirada project. Without deciding if there was gross mismanagement, Judge Markell appointed a trustee after finding there was a deadlock in management that prevented the filing of lawsuits against the homebuilders who are the ultimate owners of Inspirada. Mr. Rochelle noted that South Edge elected to have the appeal heard by a district judge and not by a panel of three bankruptcy judges on the Bankruptcy Appellate Panel. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank N.A. and two other lenders filed an involuntary petition on Dec. 9, 2010, in Las Vegas against South Edge LLC (Bankr. D. Nev. Case No. 10-32968). The lenders who filed the involuntary petition are part of a group that provided a $595 million credit. New York-based JPMorgan is a lender and agent for the lenders. Other lenders filing the involuntary petition were Credit Agricole Corporate and Investment Bank and Wells Fargo Bank NA. On Jan. 6, 2011, South Edge filed motions with the court to dismiss the involuntary bankruptcy petition by JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A. and Credit Agricole Corporate and Investment Bank. The court held a trial that commenced on Jan. 24, 2011. On Feb. 3, 2011, the court denied South Edge's motions and entered an order for relief and for the appointment of a trustee. SOUTH EDGE: FTI's Cynthia Nelson is Chapter 11 Trustee ------------------------------------------------------ Bill Rochelle, Bloomberg News' bankruptcy columnist, reports Cynthia Nelson, a senior managing director with FTI Consulting Inc., was approved to be the trustee in the Chapter 11 reorganization of South Edge LLC. According to the report, the bankruptcy judge in Las Vegas called for a trustee when he put the project into Chapter 11 involuntarily on Feb. 3. The owners immediately filed appeals from the orders granting the involuntary petition and calling for a trustee. Without deciding if there had been gross mismanagement, U.S. Bankruptcy Judge Bruce A. Markell said there needed to be a trustee on account of potential deadlock in management. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank N.A. and two other lenders filed an involuntary petition on December 9, 2010, in Las Vegas against South Edge LLC (Bankr. D. Nev. Case No. 10-32968). The lenders who filed the involuntary petition are part of a group that provided a $595 million credit. New York-based JPMorgan is a lender and agent for the lenders. Other lenders filing the involuntary petition were Credit Agricole Corporate and Investment Bank and Wells Fargo Bank NA. On January 6, 2011, South Edge filed motions with the court to dismiss the involuntary bankruptcy petition by JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A. and Cr,dit Agricole Corporate and Investment Bank. The court held a trial that commenced on January 24, 2011. On February 3, 2011, the court denied South Edge's motions and entered an order for relief and for the appointment of a trustee. SPIRIT TOURS: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- Ashland, Virginia-based Spirit Tours, LLC, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 11-31407) in Richmond on March 4, 2011. Peter Bacque at the Richmond Times-Dispatch reports that Robyn T. Winston, Spirit Tours' vice president, said that the Company plans to reorganize and remain in business. The Company's financial difficulties traced to the recession. The Company estimated assets of $100,001 to $500,000 and liabilities of $500,001 to $1 million, with 1 to 49 creditors. The largest creditor listed was American Express Blue at $24,899. Other large creditors and their claims listed were: U.S. Treasury, $13,739.26; Town of Ashland treasurer, $10,186.78; Quarles Fuel Network, Fredericksburg, $6,430; and the Virginia Department of Taxation, $1,956. The Company's 2009 federal tax return showed a loss of $29,649. Spirit Tours offers charter bus tour service and operates commuter buses from Chester and Colonial Heights to Northern Virginia. The Debtor is represented by: Paula S. Beran, Esq. TAVENNER & BERAN, PLC 20 North Eighth Street, Second Floor Richmond, VA 23219 Tel: 804-783-8300 Fax: 804-783-0178 E-mail: pberan@tb-lawfirm.com SUN COUNTRY: Sale On Track; Trustee Expecting LOI Shortly --------------------------------------------------------- Christa Meland at TwinCities Business, citing papers filed with the court, reports that Sun Country Airlines is on track to being sold in the near future. Doug Kelley, the trustee handling the Mendota Heights-based airline's bankruptcy estate, "is anticipating accepting a letter of intent from a proposed purchaser shortly." According to the report, Sun Country -- which officially emerged from bankruptcy late last month -- has been looking for a buyer for at least a year. In a reorganization plan filed in April 2010, which outlined the airline's plans to exit bankruptcy, the company said that it believes that "the indications of interest confirm a valuation in the range of $10 million to $30 million," according to the report. TwinCities notes that, in the just-filed court documents, the trustee asked U.S. Bankruptcy Judge Gregory Kishel to seal the name of the expected buyer and offer price, along with the minimum amount the airline would accept, until the transaction has been negotiated. The trustee said that the deal may be jeopardized if he can't assure the prospective purchaser that the offer price will be accepted by shareholders. About Sun Country St. Paul, Minnesota-based Sun Country Airlines (MN Airlines, LLC, d.b.a. Sun Country Airlines) -- http://www.SunCountry.com/-- flies to popular destinations in the U.S., Mexico and the Caribbean. Sun Country Airlines and its debtor-affiliates Petters Aviation LLC and MN Airline Holdings Inc. filed separate petitions for Chapter 11 relief on Oct. 6, 2008 (Bankr. D. Minn. Lead Case No. 08-45136). Brian F. Leonard, Esq., Matthew R. Burton, Esq., at Leonard O'Brien et al., represent the Debtors as counsel. In its petition, Petters Aviation LLC estimated $50 million and $100 million in total assets and debts. SUNCAL COS: Lehman Commercial Paper Bids for LBREP Projects ----------------------------------------------------------- American Bankruptcy Institute reports that LBREP/L-SunCal Master I LLC is looking to sell its unfinished residential developments through a liquidation plan and has attracted a $45 million stalking-horse credit bid from its first-lien lender, Lehman Commercial Paper Inc. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Some of SunCal's communities include Amerige Heights in Fullerton, Lincoln Crossing near Sacramento and Terra Lago and Fairway Canyon near Palm Springs. SunCal Companies recently added an active-adult, commercial, homebuilding, multifamily and urban divisions; and expanded to Florida, Texas and Washington, D.C. Gramercy Warehouse Funding LLC and several creditors filed involuntary petitions each against LBREP/L-SunCal Master I LLC, LBREP/L-SunCal McAllister Ranch LLC, LBREP/L-SunCal McSweeny Farms LLC, and LBREP/L-SunCal Summerwind Ranch LLC on Sept. 11, 2008 (Bankr. C.D. Calif Case No. 08-15588, 08-15637, 08-15639, and 08-15640). Daniel H. Reiss, Esq., at Levene, Neale, Bender, Rankin & Brill represents the petitioners. SunCal affiliates led by Palmdale Hills Property, LLC, filed voluntary Chapter 11 petitions (Bankr. C. D. Calif. Case No. 08- 17206) on Nov. 6, 2008. Affiliates that also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. SUPERIOR ACQUISITIONS: Disc. Statement Hearing Set for April 1 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California will convene a hearing on April 1, 2011, at 9:00 a.m., to consider adequacy of the Disclosure Statement explaining Superior Acquisitions, Inc.'s Plan of Reorganization as of Feb. 21, 2011. Objections, if any, are due March 25. 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 allowed claims to receive distributions under the Plan. Under the Plan, the Debtor intends to treat claims as: 1. Most of the secured claims will be paid in full together with 4.25% interest amortized amortized over 30 years with the unpaid principal and interest to be all due and payable on the eight anniversary of the day the plan is confirmed. Other secured claims will be treated as: - Bay Sierra (One First Street) will be paid $315,000 together with 1.95% interest; - The deeds of trust held Jim Berger (One First Street), and Bob Nutto (One First Street) will be avoided with the claim to be paid as a general unsecured claim; - The judicial lien held by Clear Lake Lave (One First Street) Lave will be avoided and paid as a general unsecured claim; - Premier West Bank (15895 Dam Road). The third deed of trust that secures this loan will be transferred to a parcel to be created pursuant to an agreement amongst the Premier West Bank and co-owners Larry Moss and the Debtor. When the deed of trust transfers the Debtor will either surrender the property to Premier West Bank or the Debtor will pay the obligation on terms mutually acceptable to the parties. - First Community Bank (6883 Old Hwy 53). The Debtor will either surrender the property to First Community Bank or the Debtor will pay the obligation on terms mutually acceptable to the parties. 2. Delinquent Real Property Taxes, if any, will be paid in full plus statutory interest in 60 equal monthly installments. 3. General Unsecured Creditors will be paid not less than $600,000 over ten years plus 25% of the Debtor's net operating profit over the same time period. It is the Debtor's intention to pay all creditors in full but the actual return will be dependent on the success of the Debtor. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/SUPERIORACQUISITIONS_DS.pdf The Debtor is represented by: Michael C. Fallon, Esq. 100 E Street, Suite 219 Santa Rosa, CA 95404 Tel: (707) 546-6770 Fax: (707) 546-5775 E-mail: mcfallon@fallonlaw.net About Superior Acquisitions, Inc. Lakeport, California-based Superior Acquisitions, Inc., filed for Chapter 11 bankruptcy protection on Sept. 28, 2010 (Bankr. N.D. Calif. Case No. 10-13730). Michael C. Fallon, Esq., represents the Debtor in the Chapter 11 case. The Debtor disclosed $13,889,530 in assets and $14,866,437 in liabilities as of the Chapter 11 filing. SUPERIOR ACQUISITIONS: Ch. 11 Trustee Agrees to DRMG Stay Relief ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California approved in its entirety on Feb. 23, 2011, the stipulation between Chapter 11 trustee Linda S. Green and secured creditor DRMG, LLC, granting relief from stay and payment of adequate protection, as to the Churn Creek property, commonly described as the ground lease for the real property and improvements located at 2971-2991 Churn Creek Road, in Redding, California. At a Jan. 27, 2011 preliminary hearing on the motion for relief from stay filed by DRMG, dated Dec. 16, 2010, the Court found that pursuant to 11 U.S.C. Sec. 362(d)(1)that there is no equity on the property and set a further hearing on the motion for Feb. 24, 2011, as to whether the property is necessary for an effective reorganization under Sec. 362(d)(2). Pursuant to the stipulation, the Chapter 11 trustee, having no intention to reorganize the property, and there being no existing or anticipated funds to pay insurance on the property, so that DRMG lacks adequate protection, has agreed that DRMG is entitled to relief from stay to exercise all rights and remedies with respect to the property. The Chapter 11 trustee has also agreed to turn over the rents on the property to DRMG, and that DRMG can demand that tenants at the property pay rent directly to DRMG. DRMG is represented by: Howard N. Madris, Esq. LAW OFFICES OF HOWARD N. MADRIS, A P.C. 424 S. Beverly Drive Beverly Hills, CA 90212 Tel: (310) 277-0757 Fax: (310) 975-6757 E-mail: hmadris@madrislaw.com - and - Mark A. Serlin, Esq. SERLIN & WHITEFORD, LLP 813 F Street, 2nd Floor Sacramento, CA 95814 Tel: (916) 446-0790 Fax: (916) 446-0791 E-mail: mserlin@globelaw.com About Superior Acquisitions, Inc. Lakeport, California-based Superior Acquisitions, Inc., filed for Chapter 11 bankruptcy protection on Sept. 28, 2010 (Bankr. N.D. Calif. Case No. 10-13730). John H. MacConaghy, Esq., at MacConaghy & Barner, represents Chapter 11 trustee Linda S. Green as counsel. The Debtor disclosed $13,889,530 in assets and $14,866,437 in liabilities as of the Chapter 11 filing. TERRA BENTLEY II: Village Denied Derivative Standing ---------------------------------------------------- Village of Overland Pointe, LLC, v. Terra Bentley II, LLC, NRC Advisors, LLC, Steven Seat, Eric Comeau, Tony Bettis, Adv. Pro. No. 10-6025 (Bankr. D. Kans.), sues under the Kansas Uniform Fraudulent Transfer Act to avoid a mortgage the Debtor gave to another creditor before filing for bankruptcy. Village seeks relief in three counts. The first two counts ask to have the mortgage avoided, and the third count asks for actual and punitive damages. As reported by the Troubled Company Reporter on Feb. 23, 2011, defendants NRC Advisors, LLC, Steven Seat, Eric Comeau, and Tony Bettis have been dismissed from the suit. The Debtor contends the causes of action belong exclusively to it as the Chapter 11 Debtor-in-possession, and Village has no standing to pursue them. A very liberal interpretation of Village's response suggests the creditor is asking to be granted "derivative standing" to pursue the avoidance action on behalf of the bankruptcy estate. After giving the matter due consideration, Bankruptcy Judge Dale L. Somers concludes Village has failed to show, or even allege, the existence of the prerequisites for derivative standing. Consequently, the Debtor's motion for judgment on the pleadings will be granted. A copy of Judge Somers' March 2, 2011 Opinion is available at http://is.gd/gBx64afrom Leagle.com. NRC et al. are represented by: Frank Wendt, Esq. BROWN & RUPRECHT, PC 911 Main Street, Suite 2300 Kansas City, MO 64105-5319 Telephone: 816-292-7000 E-mail: fwendt@brlawkc.com Village of Overland Pointe is represented by: Steven R. Smith, Esq. Eldon J. Shields, Esq. GATES, SHIELDS & FERGUSON, P.A. 10990 Quivira, Suite 200 Overland Park, KS 66210 Telephone: 913-661-0222 Facsimile: 913-491-6398 E-mail: stevesmith@gsflegal.com ejshields@gsflegal.com - and - Ronald S. Weiss, Esq. BERMAN DELEVE KUCHAN & CHAPMAN L.C. 911 Main Street # 2230 Kansas City, MO 64105-5320 Telephone: (816) 471-5900 Terra Bentley II, LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Kans. Case No. 09-23107) on Sept. 18, 2009. The Debtor is represented by James F.B. Daniels, Esq. -- jdaniels@mcdowellrice.com -- at McDowell Rice Smith & Buchanan. According to the schedules, the Company has assets of at least $4,564,588, and total debts of $7,608,849. TERRESTAR CORP: Colbeck Wants Additional Adequate Protection ------------------------------------------------------------ As reported in the Feb. 22, 2011 edition of the Troubled Company Reporter, TerreStar Corporation, TerreStar Holdings Inc., and Motient Ventures Holding Inc., jointly are asking Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York to allow them to secure a $13,368,421 postpetition financing from Solus Alternative Management LP. Colbeck Capital Management LLC, a prepetition secured creditor of Terrestar Corporation and Terrestar Holdings, Inc., asserts that if the Court determines to approve the proposed $13 million DIP Facility, it should require the TSC Debtors to provide the same additional adequate protection to Colbeck as is being provided to the Debtors' Prepetition Bridge Loan Lenders. Colbeck states that prior to the Petition Date, it was approached by TSC on whether it would be willing to provide a debtor-in- possession financing. Colbeck relates that at the time, TSC represented that it was virtually out of cash, and that it had no funds with which to pay either a commitment fee or any expense reimbursement. In order to induce Colbeck to undertake diligence and to incur professional fees and expenses, TSC and Colbeck entered into a certain Fee and Expense Reimbursement Letter, pursuant to which TSC agreed to pay to Colbeck, among other things, a $125,000 non- refundable work fee. Because of TSC's liquidity constraints, the obligation to pay the Work Fee was evidenced by a secured Promissory Note dated January 28, 2011. The Work Fee Note is secured by a collateral, which lien is junior to the liens securing the obligations to the Bridge Loan Lenders. On February 1, 2011, Colbeck issued a certain DIP & Confirmation Financing Commitment, pursuant to which Colbeck committed to provide TSC with a $15 million DIP financing facility and an exit financing facility. Among other things, the proceeds of the Colbeck DIP Financing were to be used to repay in full all of TSC's obligations outstanding to the Bridge Loan Lenders. In consideration for providing the DIP Commitment Letter, TSC agreed to pay to Colbeck (i) an additional $300,000 expense deposit, and (ii) a $450,000 non-refundable commitment fee. Because of TerreStar's liquidity constraints, the obligation to pay the Additional Deposit and the Commitment Fee was evidenced by a secured Promissory Note dated February 1, 2011. The DIP Fee Note is secured by the Collateral, which lien is "pari passu" with the liens securing the Work Fee Note and junior to the liens securing the obligations to the Bridge Loan Lenders. Colbeck then properly perfected its security interests in the Collateral by filing a financing statement in accordance with the Uniform Commercial Code. Subsequent to the execution and delivery by TerreStar of the DIP Commitment Letter, TerreStar discontinued discussions with Colbeck with respect to the Colbeck DIP Financing and proceeded to negotiate the proposed DIP Facility with Solus Alternative Asset Management L.P. In their current request to obtain DIP financing, the TSC Debtors seek to provide to the DIP Lender a first priority "priming" lien on the Colbeck Collateral and to have a "carve-out" imposed which, in effect, would also "prime" Colbeck's interests in the Colbeck Collateral. Adam C. Harris, Esq., at Schulte Roth & Zabel LLP, in New York, points out that in the present circumstance, Terrestar had the opportunity to obtain the Colbeck DIP Financing from Colbeck without the need to resort to "priming" financing under Section 364(d)(1) of the Bankruptcy Code. Therefore, the requirement of Section 364(d)(1)(A) has not been satisfied. Mr. Harris adds that while TSC repeatedly trumpets its view that the interests of both the Bridge Loan Lenders and Colbeck are adequately protected because the value of the Bridge Loan Collateral and the Colbeck Collateral greatly exceeds the amount of secured debt encumbering assets, the actions of TSC in granting additional adequate protection to the Bridge Loan Lenders -- but not Colbeck -- speak louder than its words. Pursuant to the DIP Motion, the TSC Debtors seek authority to grant to the Bridge Loan Lenders -- whose liens are senior to the liens held by Colbeck -- additional adequate protection in the form of (a) current payments of interest at the default rate, (b) the Adequate Protection Lien, (c) the 507(b) Claims, (d) current payments to the Bridge Loan Agent and each Bridge Loan Lender of current professional fees and expenses, (e) a right to credit bid, and (f) certain information rights. "Yet at the same time, [TSC and TerreStar Holdings] have made no offer of additional adequate protection to Colbeck," Mr. Harris points out. It is wholly inconsistent to argue, on the one hand, that both the Bridge Loan Lenders and Colbeck are adequately protected by the value of the Collateral alone, yet at the same time offer to provide significant additional adequate protection only to the more senior lienholder, Mr. Harris contends. Colbeck has no interest in seeking to deny the proposed DIP financing for TSC, which is necessary to prosecute their Chapter 11 cases, Mr. Harris assures the Court. All Colbeck is looking for is fundamental fairness and equality of treatment, he maintains. 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 CORP: Files Schedules of Assets & Liabilities ------------------------------------------------------- A. Real Property $0 B. Personal Property B.2 Bank Accounts 60,065 B.9 Interests in Insurance Policies See http://bankrupt.com/misc/TstarCorp_B9Insurance.pdf B.13 Business Interests and stocks 100% of Common Stock Ownership Motient Holdings Inc. Unknown MVH Holdings Inc. Unknown TerreStar Holdings Inc. Unknown TerreStar New York Inc. Unknown Treasury Stock TerreStar Corporation 73,876,875 B.16 Accounts Receivable Intercompany Receivable TerreStar Networks Inc. 61,293,151 TerreStar Global LTD. 15,170,251 TerreStar National Services Inc. 11,022 TerreStar 1.4 Holdings LLC 10,621 TerreStar New York Inc. 5,000 0887729 B.C. Ltd 13,945 B.21 Other Contingent & Unliquidated Claims Proof of claim (No. 99) for contribution Unknown rights filed against TerreStar Networks Inc., Case. No. 10-1544 B.35 Other Personal Property Pre-paid expenses Financing Fees (DIP Loan) 1,411,921 Insurance 233,050 Weil, Gotshal & Manges, LLP 123,275 Quinn Emanual Urquhart & Sullivan LLP 94,512 Akin, Gump, Strauss, Hauer & Feld LLP 67,773 EPIQ Financial Balloting Group 11,668 Wachtell, Lipton, Rosen & Katz 8,448 TOTAL SCHEDULED ASSETS $152,391,582 ======================================================== C. Property Claimed as Exempt N/A D. Secured Claim Colbeck Capital Management LLC $875,000 Nexbank SSB 4,308,262 E. Unsecured Priority Claims Unknown F. Unsecured Non-priority Claims Elektrobit Inc. 25,753,554 Terrestar 1.4 Holdings LLC 956,630 Van Vlissingen and Company 444,209 Jefferies & Company Inc. 350,000 Mehlman Capitol Strategies Inc. 70,000 Morgan Stanley Smith Barney LLC 13,823 Comed 866 Iron Mountain Records Management 591 R4 Services LLC 76 TOTAL SCHEDULED LIABILITIES $32,773,013 ======================================================== Terrestar Corp. also filed schedules of its executory contracts and non-residential real property leases, which can be accessed at http://bankrupt.com/misc/TstarCorp_Leases.pdf 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 CORP: Files Statement of Financial Affairs ---------------------------------------------------- Vincent Loiacono, chief financial officer of Terrestar Corporation, disclosed that the company recorded these net losses from the operation of its business: Period Amount ------ ------------ Fiscal YTD - 01/31/11 ($4,518,728) Fiscal 2010 ($53,084,807) Fiscal 2009 ($58,092,514) The company also recorded these net loss and net income other than from the operation of its business during the two years prior to its bankruptcy filing: Period Amount ------ ------------ Fiscal YTD - 01/31/11 Interest Income $762,924 Fiscal Year 2010 Other Income $225,431 Fiscal Year 2010 Interest Income $12,180,375 Fiscal Year 2010 Loss on Disposal ($2,137) of Assets Fiscal Year 2009 Other Income $242,702 Fiscal Year 2009 Interest Income $1,647,478 Mr. Loiacono disclosed that within 90 days before the Petition Date, TerreStar Corp. paid $3,991,598 to 18 creditors. A list of the 90-day pre-bankruptcy payments is available for free at: http://bankrupt.com/misc/TCorp_Payment90days.pdf Within one year before the Petition Date, TerreStar Corp. made payments to these creditors who are or were insiders: Insiders Title Amount -------- ----- ---------- David Andonian Board Member $42,750 David Meltzer Board Member $33,750 Eugene Davis Board Member $46,500 Jacques Leduc Board Member $24,000 William Freeman Board Member $66,380 TerreStar Corp. also made these payments related to debt counseling or bankruptcy within one year before the Petition Date: Firm Amount ---- ---------- Akin, Gump, Strauss, Hauer & Feld LLP $4,873,516 Blackstone Advisory Partners LP $1,367,154 Quinn Emanual Urquhart & Sullivan LLP $1,074,915 Fraser Milner Casgrain LLP $985,830 Weil, Gotshal & Manges LLP $718,951 Wachtell, Lipton, Rosen & Katz $358,006 Stikeman Elliott LLP $249,173 The Garden City Group Inc. $236,600 Deloitte & Touche LLP $133,975 Blackstone Advisory Group $116,071 Bennett Jones $45,252 Mr. Loiacono disclosed that "second priority interest" in all of the assets of TerreStar Corp. had been transferred to Colbeck Capital Management LLC on January 28, 2011. The CFO further disclosed that the company is or was a party to four lawsuits within one year before the Petition Date: (1) Elektrobit, Inc. v. TerreStar Corporation (2) Highland Crusader Offshore Partners, L.P., et al v. TerreStar Corporation (3) Highland Crusader Offshore Partners, L.P., et al v. TerreStar Corporation (4) Highland Crusader Offshore Partners, L.P., et al v. Motient Corporation The three lawsuits filed by Highland Crusader have been dismissed while the Elektrobit lawsuit remains pending. Within two years prior to TerreStar's Corp.'s bankruptcy filing, these bookkeepers and accountants kept or supervised the keeping of the company's books of account and records: Personnel Dates Services Rendered --------- ----------------------- Premsingh Giridharsuryakala 06/01/09 to Present Controller Vincent Loiacono 02/16/09 to Present Chief Financial Officer At the time of TerreStar's bankruptcy filing, the company's books of accounts and records were at the custody of Messrs. Giridharsuryakala and Loiacono. Meanwhile, Ernst & Young audited the books of account and records of the company for the fiscal year ending Dec. 31, 2009. Charles Schwab & Co. Inc. has 23.7% of common stock ownership of Terretar Corp.; Goldman Sachs & Co., 11.5%; and J.P. Morgan Clearing Corp., 18%, Mr. Loiacono further disclosed. 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: Proposes to Purchase Equipment for $557,472 --------------------------------------------------------------- TerreStar Networks Inc. and its affiliates ask the Bankruptcy Court to allow TerreStar Networks (Canada) Inc. to enter into an agreement with Data Sales Co. to purchase certain equipment totaling $557,472, pursuant to Section 363(b) of the Bankruptcy Code. TerreStar Networks Inc. entered into a prepetition lease with Data Sales for the lease of network equipment. TSN continues to utilize certain equipment under the Lease, but no longer requires the use of all equipment originally included in the Lease, Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, tells the Court. Although TSN no longer requires the equipment for its business operations, TSN Canada needs the Excess Equipment for use in development of its point of presence in Toronto, Canada, he explains. TSN Canada has begun to build an intercept point in Toronto and is scheduled to complete that construction by the third quarter of 2011, Mr. Dizengoff relates. However, TSN Canada lacks certain network equipment necessary for completion of the Toronto Point of Presence, he reveals. To ensure a timely completion of the development of the Toronto Point of Presence, TSN Canada needs to acquire the requisite equipment without delay, he continues. If TSN Canada cannot obtain the required equipment on time, completion of the Toronto Point of Presence will be significantly delayed, which, in turn, may jeopardize TSN Canada's ability to comply with its spectrum license and regulations, Mr. Dizengoff contends. He adds that because TSN's license in the United States is based in part on TSN Canada's license, continued Canadian license compliance is important to TSN. Against this backdrop, TSN Canada and TSN approached Data Sales regarding a purchase of the Excess Equipment, and after engaging in arm's-length negotiations, TSN Canada and Data Sales entered into the Purchase Agreement. Mr. Dizengoff contends that the Purchase Agreement will also indirectly benefit TSN because upon TSN Canada's entry into the Purchase Agreement, Data Sales agreed to amend the Lease with TSN to reflect a concomitant reduction in TSN's payments under the Lease to account for the removal of the Excess Equipment from the Lease. The Debtors believe that TSN's entry into the Lease Amendment is clearly within the ordinary course of its business and thus, the motion does not request any relief from the Court related to TSN's entry into the Amendment. The Court will convene a hearing on March 23, 2011, to consider the request. Objections are due on March 16. 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: Sprint Filing Identical Claims, Says Panel -------------------------------------------------------------- As reported in the Jan. 3, 2011 edition of the Troubled Company Reporter, TerreStar Networks Inc. and its units seek the entry of a Bankruptcy Court order expunging, disallowing, or reducing Sprint Nextel Corporation's Claim Nos. 49 through 52, 66 through 70, and 79 through 82. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, contends that by filing identical claims aggregating more than $104 million against each of the TSN Debtors, Sprint Nextel opportunistically and inequitably is attempting to turn the bankruptcy claims process "on its head and create claims that did not previously exist, either legally or factually." In response, the basic facts underlying the claims asserted by Sprint Nextel Corporation are not in dispute, Eric T. Moser, Esq., at K&L Gates LLP, in New York, relates. He points out that the Debtors do not dispute that Sprint Nextel has completely cleared the spectrum band licensed by the Debtors, thereby making the spectrum available for the Debtors to provide mobile satellite services. In response, the Official Committee of Unsecured Creditors in TerreStar Networks Inc.'s cases relates that Sprint Nextel Corporation purports to be one of the single largest unsecured creditors in the Debtors' cases and is, no doubt, a member of the constituency that the Creditors Committee represents. As a fiduciary of the estate, however, the Creditors Committee represents the interests of all unsecured creditors and must respond when its constituency as a whole may be aggrieved by the actions of one particular creditor. In this regard, Sprint is attempting to use the bankruptcy claims process to obtain a larger recovery and assert claims that simply do not exist, David M. Posner, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York, contends. He notes that Sprint's alleged claims arise from reimbursement of certain expenses it incurred in reconfiguring certain Broadcast Auxiliary Service licensees in the 2 GHz band. He adds that Sprint is allowed to seek reimbursement from Mobile Satellite Service licensees under certain circumstances and the reimbursement is what Sprint is attempting to recover through its proofs of claim. "Yet, instead of asserting its claims against the appropriate MSS Licensee, Sprint has adopted a strained interpretation of the 2010 Declaratory Ruling and takes the position that all of the Debtors in these cases are jointly and severally liable to Sprint for the MSS Reimbursement," Mr. Posner asserts. Accordingly, he notes, Sprint has filed identical proofs of claim for approximately $104 million against each of the Debtors. The Creditors Committee agrees with the Debtors that Sprint should not be permitted to assert claims against each Debtor. Contrary to Sprint's assertions, the 2010 Declaratory Ruling does not impose joint and several liability on all of the Debtors, Mr. Posner contends. He insists that there simply is no basis to hold all of the Debtors jointly and severally liable for the MSS Reimbursement. The Creditors Committee also believes a basis exists to disallow the Sprint Claims for the simple reason that Sprint has not shown that it will suffer any damages if it is not reimbursed for the BAS relocation costs. This is because Sprint is entitled to deduct any costs incurred from an "anti-windfall" payment that Sprint is required to pay to the U.S. Treasury as a result of receiving valuable spectrum assets, Mr. Posner points out. The Debtors, the Creditors Committee and Sprint will present to Judge Lane on March 7, 2011, a discovery and supplemental briefing scheduling order for the objection of the Sprint Claims. Among other things, the scheduling order provides that the parties will complete depositions and all discovery by April 20, 2011. 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: Committee Challenge Period Moved to March 11 ---------------------------------------------------------------- TerreStar Networks Inc. and its affiliates and the Official Committee of Unsecured Creditors in their Chapter 11 cases notify parties-in-interest that they will present a stipulation extending the Creditors' Committee's "challenge period" before the Court on March 11, 2011. The Challenge Period refers to the period, noted in the Final DIP Financing Order issued in the TSN Debtors' cases, by which certain parties including the Creditors' Committee may challenge liens afforded to the TSN Debtors' prepetition lenders. The Challenge Period is currently set to expire on March 7, 2011. Pursuant to the Final DIP Financing Order, the Challenge Period may be extended (i) by the Court, after notice and a hearing, for cause shown, or (ii) by the Prepetition Agent, in writing, in its sole and absolute discretion. After engaging in discussions, the TSN Debtors and the Creditors Committee stipulate that the Challenge Period, only with respect to the Creditors' Committee, and not for any other party, will be extended by three weeks or through and including March 28, 2011. For the avoidance of doubt, the Challenge Period with respect to all other parties-in-interest will expire on March 7, the Parties maintain. The Creditors' Committee and the TSN Debtors agree that, as it relates to the TSN Debtors, it will take a deposition to be held on March 10, 2011, or another date mutually agreed upon by the Committee and the Debtors, during which it, and only it, will be entitled to ask questions, and during which it will be limited to asking questions based on an agreed list of topics which relate solely to matters that are subject to the Challenge Period. 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-SCARBOROUGH: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Texas-Scarborough, Inc. 4400 Westway Dallas, TX 75205 Bankruptcy Case No.: 11-40702 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Christopher J. Moser, Esq. QUILLING, SELANDER, CUMMISKEY & LOWNDS 2001 Bryan Street, Suite 1800 Dallas, TX 75201-3005 Tel: (214) 871-2100 E-mail: cmoser@qsclpc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txeb11-40702.pdf The petition was signed by Kenneth M. Good, president. TRICO MARINE: Plan Outline Hearing Set for April 13 --------------------------------------------------- As reported in the TCR on March 3, 2011, Trico Marine Services, Inc., et al., filed with the U.S. Bankruptcy Court for the District of Delaware a Joint Chapter 11 Plan of Liquidation and related Disclosure Statement. The Bankruptcy Court will conduct a hearing on the Debtors' request to approve the Disclosure Statement on April 13, 2011. According to the DS, treatment under the Plan is as follows: Credit Facility Claims and Priority Claims will be paid in full; Allowed 8.125% Notes Secured Claims will be paid from the proceeds of the sale of collateral securing such claims; other Secured Claims will either be paid in full in cash, have their claims reinstated or receive the collateral securing the claims; holders of Allowed Convenience Claims will receive in full satisfaction, discharge and release of such Claim its pro rata share of $250,000, in cash, on the distribution date; holders of Allowed General Unsecured Claims will, in full satisfaction, discharge and release of such claim, receive its pro rata share of available assets; all Intercompany Claims will be cancelled or otherwise terminated and holders of Intercompany Claims will receive no distribution under the Plan and Old TMS Equity will be cancelled or otherwise terminated and holders of allowed Old TMS Equity will receive no distribution under the Plan. 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. TULLY'S COFFEE: Names Cathy Campbell as Chief Financial Officer --------------------------------------------------------------- TC Global, Inc., dba Tully's Coffee named Cathy Campbell as Chief Financial Officer and Controller. Campbell will be responsible for all aspects of Tully's finance and accounting operations. Campbell originally joined Tully's in October 2010 as Controller and has been managing all aspects of the financial accounting cycle during that time. Her promotion to CFO is effective as of Feb. 28, 2011. Campbell will replace Howard Mendelsohn, who had been serving as Tully's interim CFO since June 2010. "We are very excited to have the opportunity to promote Cathy to her new role on our senior leadership team," said Carl W. Pennington, President and Chief Executive Office. "The combination of Cathy's overall business acumen, acute attention to detail, experience with other public retail companies and personable management style will make her an outstanding addition to the Tully's team." Prior to joining Tully's, Campbell worked for Organic to Go Food Corporation where she served as Corporate Controller and was recognized for her cash handling policies and detailed SEC reporting and management. She has also served as Director of External Reporting and Corporate Controller for other Seattle- based, publicly-traded companies, Cray Inc. and drugstore.com, respectively. She started her career in accounting in the Anchorage, Alaska office of KPMG, LLP. Campbell graduated from the University of Alaska - Anchorage with a Bachelor of Business Administration and a Major in Accounting. About Tully's Coffee Headquartered in Seattle, Tully's Coffee Corporation -- http://www.tullys.com/-- is a specialty retailer and wholesaler of fully handcrafted roasted, gourmet coffees. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 24, 2008, Moss Adams LLP of Seattle, Washington, expressed substantial doubt about Tully's Coffee Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the periods ended March 30, 2008, and April 1, 2007. The firm reported that the company has incurred recurring operating losses, an accumulated, and total stockholders' and working capital deficit. Tully's Coffee Corporation's consolidated balance sheet at Sept. 28, 2008, showed $19.8 million in total assets and $32.4 million in total liabilities, resulting in a $12.6 million stockholders' deficit. The company's Sept. 30 balance sheet also showed strained liquidity with $16.0 million in total current assets available to pay $28.7 million in total current liabilities. The Company also had $104.4 million in accumulated deficit. Tully's Coffee posted $801,000 in net losses on $10.0 million in net sales for the 13-week period ended Sept. 28, 2008. VECTAIR USA: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: VectAir USA, LLC dba Vector LLC dba VectairUSA 11299 Airport Road Olive Branch, MS 38654 Bankruptcy Case No.: 11-22278 Chapter 11 Petition Date: March 4, 2011 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: Jennie D. Latta Debtor's Counsel: Steven N. Douglass, Esq. HARRIS SHELTON HANOVER WALSH, PLLC 2700 One Commerce Square Memphis, TN 38103 Tel: (901) 525-1455 Fax: (901) 526-4084 E-mail: snd@harrisshelton.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 16 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnwb11-22278.pdf The petition was signed by Ken Hammerton, member. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Kenneth and Brenda Hammerton 10-29460 09/01/10 VETTA LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Vetta, LLC dba RE Holding LLC P.O. Box 875 Tacoma, WA 98401 Bankruptcy Case No.: 11-41627 Chapter 11 Petition Date: March 3, 2011 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Debtor's Counsel: Brian L. Budsberg, Esq. BUDSBERG LAW GROUP PLLC 1115 W Bay Dr Suite 201 Olympia, WA 98502 Tel: (360) 584-9093 E-mail: paralegal@budsberg.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb11-41627.pdf The petition was signed by Bruce Steel, managing member. VULCAN MATERIALS: Moody's Cuts Senior Unsec. Ratings to 'Ba1' ------------------------------------------------------------- Moody's Investors Service downgraded Vulcan Materials Company's senior unsecured ratings to Ba1 from Baa3, and assigned Ba1 corporate family rating, Ba1 probability of default rating, and SGL-3 speculative grade rating. This rating action concludes the review of Vulcan's ratings that was initiated on December 17, 2010. The rating outlook is stable. These rating actions were taken: -- Corporate Family Rating, assigned Ba1; -- Probability of Default Rating, assigned Ba1; -- Speculative Grade Liquidity Rating, assigned SGL-3; -- Various tranches of senior unsecured notes, downgraded to Ba1, LGD4, 52% from Baa3; Rating outlook changed to stable from under review. Rating Rationale The downgrade was driven by Moody's expectation that Vulcan's operating earnings, cash flow, and EBITDA will remain weak over the intermediate term as it grapples with soft pricing in several key markets, low demand from private construction, and ultimately a conclusion to federal stimulus spending. In Moody's view, Vulcan will be unable to restore investment grade credit metrics over the next two years. At Dec. 31, 2010 adjusted debt-to-EBITDA leverage exceeded 7x. Leverage metrics will likely remain elevated and coverage metrics will remain weak until more robust private construction demand takes hold, and in the meantime the company's overall margins will likely remain pressured by weak volumes and diminished pricing power in several key US markets, particularly in Florida and parts of the Western U.S. which offset strength in other key markets. The Ba1 corporate family rating is supported by Vulcan's leading position in the North American aggregates industry and its regional geographic and end market diversity, substantial revenue streams, and large proven reserves. Longer term, the business benefits from high barriers to entry, a stable competitive landscape, and diverse end use markets. The rating is constrained by high financial leverage, in part resulting from debt incurred to finance the Florida Rock acquisition, and in part due to a sharp cyclical contraction in shipment volumes and resultant operating cash flows. Diminished cash flows hamper Vulcan's ability to delever as debt reduction efforts are offset by falling EBITDA. The SGL-3 speculative grade liquidity rating reflects Vulcan's sufficient liquidity profile, supported by $1.15 billion of availability under its credit facility, absence of significant debt maturities until December 2012, and sufficient room under the financial covenant. The company maintains modest cash balances, and is expected to generate limited free cash flow over the next twelve months. The company relies on borrowing under its revolving credit facility for a portion of its funding needs. The company could absorb up to a $2.5 billion impairment before violating its 65% debt-to-capital covenant, out of a total of $3.1 billion of goodwill and about $700 million of intangibles. The stable outlook presumes that the company will be able to modestly improve its credit metrics in 2011 as the conditions in the building materials industry continue to stabilize, and demonstrate more substantial improvement in 2012. Current credit metrics position Vulcan weakly in the Ba1 rating category. Should demand conditions not improve, there would be additional pressure on earnings and leverage, and the rating might be at risk of further downgrade. The rating presumes that over the next eighteen to twenty four months the company will successfully drive debt-to-EBITDA toward 4.0x or lower, among other relevant metrics. Over the past few years the company's successful infusion of equity capital, dividend cut, focus on cost cutting, and capital preservation demonstrate a commitment to improving its credit profile despite challenging operating conditions. Given current weak operating and financial metrics and weak demand and pricing conditions in the industry, upward rating pressure in the intermediate term is unlikely. The rating would likely be downgraded in the event that Vulcan does not demonstrate substantial progress towards improving its margins, reducing its leverage and increasing its coverage metrics over the near and intermediate horizon. Failure to demonstrate a consistent ability to drive debt-to-EBITDA towards 4.0x or lower over the next eighteen to twenty four months could result in consideration of further downgrade. Rating pressures may emerge in the event that private construction remains weak, state and local construction remains constrained by fiscal tightening, and stimulus funds are eventually exhausted. Vulcan Materials Company is the largest producer of construction aggregates in the U.S., and is also a major producer of asphalt mix and concrete. Its primary end markets include public construction, infrastructure, private nonresidential, and private residential construction, and its aggregates reserves are about 14.7 billion tons. In 2010 Vulcan generated approximately $2.6 billion in revenues. WHISPERING WIND: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Whispering Wind Trailer Park 7726 E. Highway 287 Coolidge, AZ 85228 Tel: (602) 692-9609 Bankruptcy Case No.: 11-05553 Chapter 11 Petition Date: March 4, 2011 Court: U.S. Bankruptcy Court District of Arizona (Tucson) Judge: James M. Marlar Debtor's Counsel: Philip C. Tower, Esq. TOWER BRAND AND ASSOCIATES, PLLC 7047 E. Greenway Parkway, #250 Scottsdale, AZ 85254 Tel: (602) 692-9609 Fax: (602) 296-0450 E-mail: pctower@tower-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Peyman Masachi, manager. WISCONSIN CHEESEMAN: All Plant Assets to be Sold at Public Auction ------------------------------------------------------------------ On March 2, 2011, at The Madison Concourse Hotel in Madison, Wisconsin, a group of well-established food manufacturers, industrial liquidators and gourmet food purveyors, gathered to take part in a bid procedure to sell the assets of The Wisconsin Food Gift Co. This parent company consists of The Wisconsin Cheeseman, Mille Lacs Gourmet Foods and Scott's Fundraising. The company was established in 1946 by the Cremer family, who sold the firm to an investment group in 2007. The company suffered during the economic downturn and was further burdened by debt service and shrinking sales during peak seasonal times. The Wisconsin Food Gift Co, in receivership under Chapter 128 of Wisconsin Bankruptcy Law, went under the hammer in a process led by Attorney Michael Polsky, Receiver, who is highly specialized in such proceedings. The result of the hard fought bidding was the sale of The Wisconsin Cheeseman intangible assets to Swiss Colony, and the sale of Mille Lacs intangible assets to a local cheese maker, along with certain inventory assets. The remaining intellectual property, manufacturing equipment and plant assets were secured by Rabin Worldwide, a leading international industrial auction house that specializes in food facilities. Rabin will offer these assets by public auction on March 9 and 10, selling the intellectual property and cheese related manufacturing equipment on March 9 and the candy and chocolate equipment along with plant assets on March 10. The two-day sale will be attended by hundreds of bidders and will allow for potential buyers to bid live on site or via RabinLive(TM) , as the sale will be simulcast on the Internet to allow for real-time electronic bidding in tandem with onsite bidding. Michael Polsky accepted Rabin's service package as the highest and best offer and will rely upon them to prepare, promote and conduct the sale on behalf of the senior secured creditor, Cole Taylor Bank, who provided their consent to the decision. Rabin Worldwide will offer public inspection of the assets on Tuesday, March 8 from 9:00 a.m. - 4:00 p.m. CST, each day of the auction sale, or earlier by appointment. Auction offerings consist of all the cheese and confectionery processing and packaging machinery, as well as forklifts, office furniture, computers, lab, shop tools, and pallet racking. To download a catalog for the sale, to receive further information, or to make an appointment to inspect the plant please contact Rabin at 800.421.2144 or go to http://www.rabin.com/ WTB FINANCIAL: Fitch Downgrades Preferred Stock Rating to 'BB+' --------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Ratings for W.T.B Financial Corporation and its principal banking subsidiary to 'BBB' from 'BBB+'. The Rating Outlook is Stable. The rating action is due in part to WTBF's still elevated, although moderately improved, asset quality metrics particularly given the company's relatively small size compared to its rated peer group. WTBF's non-performing assets, including restructured loans, as a percentage of gross loans plus other real estate owned declined to a still elevated 3.82% at Dec. 31, 2010. This figure is down from 4.58% at Sept. 30, 2010, and up from 3.51% at the end of 2009. Fitch notes that this metric is also impacted by WTBF's declining loan portfolio, given that it is the denominator in the ratio. WTBF continues to have an elevated number of problem loans in its most problematic construction portfolios. However, Fitch notes that WTBF has made progress in reducing the number of problem loans in this portfolio on an absolute basis. That said, WTBF has also continued to experience some inflows of problem assets in both its residential mortgage and home equity portfolios amid continued weak economic conditions across the company's Pacific Northwest footprint, which has lagged the broader national economy. In addition, there continues to be lumpiness in both non-accrual loans and early stage delinquencies in its large commercial and industrial portfolio. WTBF has had difficulties with a couple of large loans over the course of the past year. Furthermore, while Fitch acknowledges that WTBF possesses a leading franchise in Spokane, WA, its geographic footprint is much more concentrated compared to higher rated peers. The Stable Outlook reflects Fitch's view that WTBF has largely remained profitable, despite the elevated NPA's, as well as the view that overall capital and reserve levels are appropriate to support the current rating. In Fitch's opinion, WTBF's key markets have lagged the broader economy. Therefore, further asset quality pressures could surface over the near-term. So far, not including WTBF's construction portfolios, the performance of the company's commercial real estate portfolios has been decent. However, Fitch notes that the amount of non-accrual loans in both the owner-occupied and non-owner occupied CRE portfolios have modestly increased in absolute terms over the course of 2010. Since CRE losses tend to lag in an economic cycle, Fitch notes that there is still the potential for additional losses to emanate from this portfolio. Should WTBF experience growth, in absolute terms, in non-performing assets, ratings could be pressured. Seeing as WTBF is a privately held institution, the company does not have access to the public equity markets. This may make it more difficult for WTBF to raise sufficient equity capital to exit the U.S. Treasury's Capital Purchase Program, known widely as TARP, before the rate on the company's preferred CPP shares resets higher in 2014. Although not required to repay the CPP at that point, the higher rate would negatively impact overall profitability. WTBF has demonstrated some ability to raise new equity, and in combination with dividends from the bank, could facilitate repayment prior to the reset. Although this would likely lead to lower capital levels, it would not affect ratings. Fitch has downgraded these ratings: W.T.B. Financial Corporation -- Long-term IDR to 'BBB' from 'BBB+'; -- Preferred stock to 'BB+' from 'BBB-'. Washington Trust Bank -- Long-term IDR to 'BBB' from 'BBB+'; -- Long-term deposits to 'BBB+' from 'A-'; Fitch has also affirmed these ratings: W.T.B. Financial Corporation -- Short-term IDR at 'F2'; -- Individual at 'B/C'; -- Support at 'NF'; -- Support Floor at '5'. Washington Trust Bank -- Short-term IDR at 'F2' -- Individual at 'B/C'; -- Short-term deposits at 'F2'; -- Support at 'NF'; -- Support Floor at '5'. The Rating Outlook is Stable. ZOGENIX INC: Recurring Losses Prompt Going Concern Doubt -------------------------------------------------------- Zogenix, Inc., filed on March 4, 2011, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2010. Ernst & Young LLP, in San Diego, Calif., expressed substantial doubt about Zogenix, Inc.'s ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $73.6 million on $23.4 million of revenue for 2010, compared with a net loss of $45.9 million on $0 revenue for 2009. The Company's balance sheet at Dec. 31, 2010, showed $94.2 million in total assets, $65.5 million in total liabilities, and stockholders' equity of $28.7 million. A full-text copy of the Form 10-K is available for free at: http://researcharchives.com/t/s?747d Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Zogenix's first commercial product, SUMAVELr DosePro(TM)(sumatriptan injection) Needle-free Delivery System, was launched in January 2010 for the acute treatment of migraine and cluster headache. Zogenix's lead product candidate, ZX002, is a novel, oral, single-entity controlled-release formulation of hydrocodone currently in Phase 3 clinical trials for the treatment of moderate to severe chronic pain in patients requiring around-the-clock opioid therapy. * Circuits Now Split on Negative Equity on Auto Loans ----------------------------------------------------- Bill Rochelle, Bloomberg News' bankruptcy columnist, reports there is now an official split of circuit courts on the question of whether the so-called negative equity on a previously owned auto must be paid in full as a condition to keeping the newer car after bankruptcy. In AmeriCredit Financial Services Inc. v. Penrod (In re Penrod), 08-60037, the 9th U.S. Circuit Court of Appeals (San Francisco), departing from the eight other circuits that considered the issue, denied a motion for rehearing. Had the motion been granted, the case would have been heard again by all active judges on the court. * Holding Repossessed Car Warrants $13,000 in Damages ----------------------------------------------------- Bill Rochelle, Bloomberg News' bankruptcy columnist, reports failure to return a repossessed car immediately after the owner's bankruptcy properly resulted in a damage award of almost $13,000 to the bankrupt individual, U.S. District Judge Samuel Der-Yeghiayan in Chicago ruled on Feb. 24, in Consumer Financial Services Corp. v. Alexander, 10-6725. The bankruptcy judge found, and the district judge upheld, that there was a willful violation of the automatic stay, justifying actual and punitive damages, after the car owner refused to return the auto after it was demanded. * Two Ex-Bank of America Execs. Buying More Failed Banks -------------------------------------------------------- Rick Rothacker at the Charlotte Observer reports that since July, North American Financial Holdings founders Gene Taylor and Chris Marshall have bought five banks from Miami to Raleigh. Through more deals, they plan to double North American Financial's assets over the next 12 to 18 months. According to the report, in little more than a year, Taylor and Marshall have created a $5 billion bank with 84 branches from Raleigh to the Florida Keys, through a total of five deals. In the next year and a half, they plan to make more purchases, meld the banks they have already bought and make NAFH a public company. The former Bank of America Corp. executives, along with two other partners, are continuing the tradition of acquisitive Charlotte banks, while emphasizing plans to build a smaller regional institution focused on customer service. * Congress Warned That Reform Hurts Small Banks ----------------------------------------------- American Bankruptcy Institute reports that industry officials at a House Financial Services subcommittee hearing on March 2 told lawmakers that many of the Dodd-Frank Act's new rules meant to end unsound lending practices will only force small banks to close while doing nothing to rein in the unregulated mortgage brokers and other lenders that triggered the financial collapse. * DiNapoli Tells CNBC State Bankruptcy Talk is 'Irresponsible' -------------------------------------------------------------- Bloomberg News reports that New York State Comptroller Thomas DiNapoli told CNBC that talk about possible state or federal bankruptcy is "irresponsible" and the focus should be on getting the state's spending under control. * Michigan Governor Directs Cities to Begin Tightening Their Belts ------------------------------------------------------------------ Dow Jones' Small Cap reports that Michigan Gov. Rick Snyder says his administration wants no part of the noisy labor fights flaring in three neighboring states. The report relates that instead, he is leaning hard on his state's struggling cities and school districts to do their own belt-tightening. With his recent budget and proposed legislation, the newly elected Republican is pressing municipal leaders to be more aggressive in cutting jobs, benefits and services, and more efficient with their spending, according to DBR. The report notes that cities that don't comply stand to lose either millions of dollars of state funding or control of their finances. DBR relates that in Allen Park, a Detroit suburb where property values are down $100 million since last year and revenue is off $1.1 million, officials are heeding the message. This month, in a bid to exact concessions from employees and close a $663,000 deficit, the city laid off its entire fire department. Elsewhere, officials are bracing for disaster, the report adds. * Moody's: Municipal Market Continues to Face Credit Pressure ------------------------------------------------------------- Rating activity in 2010 provides further evidence that the municipal market faces credit pressure not seen since the Great Depression and that credit stress is expected to continue through 2011, says Moody's Investors Service in its annual report on rating changes for the previous year. "Rating downgrades outpaced upgrades for the eighth consecutive quarter, continuing a trend that began in the third quarter of 2008," said Moody's Assistant Vice President Elizabeth Foos, author of the report, which outlines credit trends in each municipal sector, discusses key factors behind those trends, and highlights the most significant rating changes that occurred in 2010. "While many issuers in the municipal sector will continue to face pressure in 2011, we anticipate most will make the difficult choices necessary to continue to service their debt," said Foos. "While we expect payment defaults to rise, we believe that they will be isolated and not widespread." Moody's maintains a negative outlook on all major sectors, including state and local governments, higher education, housing and healthcare. "Many issuers continue to face credit pressures related to deterioration of revenue streams, growing expenditure demands, and weak balance sheets," said Foos. While most issuers managed to maintain a stable credit profile in 2010, approximately 5.5% or 750 of roughly 13,700 Moody's-rated unique obligors experienced a rating change during the year with the vast majority consisting of a one-notch change up or down. For the full year, the overall ratio of municipal upgrades to downgrades decreased to 0.5-to-1 in 2010 from 0.7-to-1 in 2009, resulting in the lowest annual ratio of municipal upgrades to downgrades in over 20 years. The ratio of municipal upgrades to downgrades based on affected par for 2010 remained very low as well at 0.3-to-1. "The ratio of upgrades to downgrades during 2010 is reflective of economic and financial challenges faced by municipal issuers that are expected to continue," said Foos. "As in 2009, the majority of rating revisions in 2010 were attributable to broad economic rather than issuer-specific credit stress." During the fourth quarter of 2010, the ratio of rating upgrades to downgrades decreased to 0.2-to-1 from the third quarter 2010 ratio of 0.5-to-1. The fourth quarter ratio remains one of the lowest recorded for this measure in at least the last five years and is significantly lower than the 1.1-to-1 ratio experienced in the first quarter of 2003, the year after the last national economic recession. The fourth quarter ratio of upgrades to downgrades based on affected par value decreased to 0.2-to-1 from 0.4-to-1 in the third quarter. While economists report that the national recession has officially ended and the U.S. economic outlook is improving, municipalities are expected to remain challenged, says the Moody's report. "Municipal issuers across all sectors are experiencing stress, which is evidenced by persistent revenue deterioration, increased spending pressures, and weakening of reserve funds," said Foos. The report, "U.S. Public Finance Rating Revisions for Q4 and Full Year 2010: The Stress Continues," is available at moodys.com. * Moody's: Default Wave Failed to Sink Investor Recoveries ---------------------------------------------------------- The wave of U.S. corporate defaults that accompanied the credit crisis and Great Recession produced average firm-wide recoveries on defaulted debt that were near historical norms and higher than the last two default cycles, Moody's Investors Service said in a report published late last month. Recovery rates benefitted from a preponderance of distressed exchanges, which usually have higher recoveries than other types of default, and the comparatively short duration of the default wave, Moody's said. "A higher default rate typically leads to lower recoveries, but recoveries in this default cycle were surprisingly ordinary," said David Keisman, senior vice president at Moody's and author of the report. Average firm-wide recoveries were 54.7% for 136 U.S. non-financial corporate issuers that emerged from default between the fourth quarter of 2008 and the first quarter of 2011, compared with an historical average of 55.5%. In the 1990-1991 and 2001-2002 default cycles, firm-wide recoveries averaged 47.7% and 46.7%, respectively. About one in four defaults during the latest cycle were distressed exchanges, which are favored by private equity firms. The swift decline in the U.S. speculative-grade default rate, which hit 3.6% a year after peaking at 14.6% in November 2009, also bolstered recoveries. "The default wave was brutal but comparatively quick," Mr. Keisman said. "Many companies emerged from default when the default rate was relatively low and asset values were high in comparison with previous cycles. Stronger recoveries in this cycle partly reflected the shape of the default-rate curve and fortuitous timing for issuers, not a breakdown in the traditional correlation of defaults and recoveries." There are still a large number of defaulted companies that have yet to emerge, the report notes, but their recovery rates would have to be very low to meaningfully change the benign average recoveries seen so far. The report, "Hard Data for Hard Times II: The Crisis That Wasn't," is available at http://www.moodys.com/ * Moody's: Defaults Down Dramatically in 2010 --------------------------------------------- The year 2010 marked a dramatic turnaround for corporate defaults, with the number of Moody's-rated defaulted issuers dropping to about a fifth of the number in 2009, and volumes falling to about an eighth of what they had been the previous year, Moody's Investors Service says in its annual corporate default and recovery rates study. "The year 2010 was a good one for the high-yield debt market with respect to above-average returns and below-average defaults," said Albert Metz, Moody's Managing Director of credit policy research. "Indeed, defaults dropped significantly last year mainly due to ample liquidity which helped some lowly rated companies avoid default." World-wide, only 57 Moody's-rated corporate issuers defaulted on a total of $39.1 billion of debt in 2010. By comparison, 265 companies defaulted on a total of $330.0 billion of debt in 2009, while 103 defaults were registered in 2008, affecting $280.9 billion of debt. Geographically, defaults remained concentrated in North America, where 45 issuers defaulted in 2010. Europe recorded eight defaults, the second largest total for a region. On a volume basis, defaulted debt totaled $23.4 billion in North America compared to $9.0 billion in Europe. By issuer count, the Capital Industries sector-industries that use capital intensely such as the automotive, capital equipment, chemicals, construction and building industries-accounted for 23% of 2010 defaults, while the Consumer Industries sector accounted for the next greatest share, making up 18% of the defaults. By default volume, the Energy & Environment sector topped the list by contributing 17% to the total volume, followed by the Transportation, the Consumer Industries, the Banking, and the Media & Publishing sectors, each of which accounted for 12% of the total volume. Although the Capital Industries sector accounted for 23% of defaults last year, it was not the sector with the highest rate of default. That distinction belongs to the Media & Publishing industry, which had a 3.6% default rate in 2010. One trend that continued in 2010 was the significant proportion of defaults that were distressed exchanges, which accounted for 42% of total initial defaults during the year. By contrast, distressed exchanges only accounted for approximately 11% of initial defaults on average from 1970 to 2007. Between 2008 and 2010, the share of distressed exchanges increased from 23% to 42%, while the share of bankruptcy filings fell from 45% to 21%, according to Moody's. The year 2010 also supported Moody's observation that default rates and recovery rates are negatively correlated. In 2010, as default rates decreased, recovery rates increased. For example, the average corporate debt recovery rate for a senior unsecured bond was 49.5% in 2010 as compared to 37.1% in 2009. Moody's observes that recovery rates generally tend to be higher on distressed exchanges as opposed to other types of default. "Corporate Default and Recovery Rates 1920-2010" is Moody's 24th annual default study in which the rating agency updates statistics on the default, loss, and rating transition experience of corporate bond and loan issuers for the previous year, as well as for the historical period since 1920. The study covers financial institutions, non-financial corporates, and regulated utilities that have long-term debt ratings. It is available on http://www.moodys.com/ * Lenny Goldberg Talks About Construction Subcontractor Defaults ---------------------------------------------------------------- Leonard P. Goldberger, a Stevens & Lee shareholder, participated in a program at the American Bar Association's Insurance Coverage Litigation Committee's 2011 Continuing Legal Education conference held on March 4-5 in Tucson, Arizona. Addressing a national audience of insurance company and policyholder coverage counsel, Mr. Goldberger discussed the practical aspects of dealing with construction subcontractors who default on a job, then seek bankruptcy protection. He described how legal practitioners can position their general contractor clients to effectively manage risks of subcontractor defaults through insurance and surety risk products, as well as other strategies for maximizing protections in the context of subcontractor bankruptcy cases. Mr. Goldberger has nearly 35 years of experience practicing business bankruptcy law. He represents insurers in asbestos, mass tort and environmental bankruptcy cases and works with foreign and domestic investor clients in the acquisition and financing of financially distressed businesses. A former Vice President, Director and Executive Committee member of the American Bankruptcy Institute, Mr. Goldberger also has been Chair of the American Bar Association's Committee on Insurance Coverage Subcommittee on Insolvency and is a member of the ABA's Litigation Section and its Tort Trial and Insurance Practice Section. Mr. Goldberger is a member of INSOL International and is an INSOL International Global Insolvency Fellow. As published in Philadelphia magazine, Mr. Goldberger has been recognized as a Pennsylvania Super Lawyer from 2005 to 2010 by being selected by his peers as among the top 5 percent of lawyers in the Commonwealth. He received a J.D. from Villanova University School of Law and a B.A., summa cum laude, from Temple University. About Stevens & Lee Stevens & Lee -- http://www.stevenslee.com-- is part of a multidisciplinary professional services platform which also consists of a health care risk consulting business, a FINRA- licensed investment bank, an insurance consultancy specializing in the risk finance, premium finance and life settlement markets, a D&O and E&O insurance risk consulting business, a swap and derivative advisory business, an operations consultancy for manufacturers and federal and state lobbying units and a government incentives and sales and use tax consulting business. Stevens & Lee represents clients throughout the Mid-Atlantic region and across the country from 15 offices in Pennsylvania, New Jersey, Delaware, New York City and South Carolina. * Perkins Coie Opens NY Office to Expand Restructuring Practice --------------------------------------------------------------- Perkins Coie, Oregon's sixth-largest law firm, is opening a law office in New York City. Perkins Coie, with 68 Portland-area lawyers, according to the Portland Business Journal's 2011 Book of List, said Schuyler Carroll has joined the firm and will be the partner in charge of the new office. This is the law firm's second East Coast office; it has another in Washington, D.C. In a statement, law firm officials said opening the New York office will allow Perkins Coie to "broaden its restructuring practice to include representation of Chapter 11 debtors and creditors' committees in the Southern District of New York, which is (with Delaware) one of the two busiest business bankruptcy courts in the nation." * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Share- Total Working Holders' Assets Capital Equity Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- -------- ABRAXAS PETRO AXAS US 178.1 (5.2) (1.7) ABSOLUTE SOFTWRE ABT CN 117.9 (12.8) (11.9) ACCO BRANDS CORP ABD US 1,149.6 292.8 (79.8) AEGERION PHARMAC AEGR US 2.9 (29.5) (27.3) ALASKA COMM SYS ALSK US 620.6 1.4 (20.5) AMER AXLE & MFG AXL US 2,114.7 33.0 (468.1) AMERICAN STANDAR ASEN US 0.0 (0.1) (0.1) AMR CORP AMR US 25,088.0 (1,942.0) (3,945.0) ANACOR PHARMACEU ANAC US 20.4 (1.6) (8.2) ARQULE INC ARQL US 94.1 45.1 (9.7) ARVINMERITOR INC ARM US 2,814.0 357.0 (990.0) AUTOZONE INC AZO US 5,640.5 (584.3) (817.2) BLUEKNIGHT ENERG BKEP US 296.0 (427.8) (152.8) BOARDWALK REAL E BOWFF US 2,326.8 - (109.0) BOARDWALK REAL E BEI-U CN 2,326.8 - (109.0) BOSTON PIZZA R-U BPF-U CN 112.0 2.0 (115.5) CABLEVISION SY-A CVC US 8,840.7 (522.2) (6,280.7) CAMPUS CREST COM CCG US 327.5 - (60.7) CANADIAN SATEL-A XSR CN 188.3 (44.0) (6.1) CC MEDIA-A CCMO US 17,479.9 1,504.6 (7,204.7) CENTENNIAL COMM CYCL US 1,480.9 (52.1) (925.9) CENVEO INC CVO US 1,393.6 220.0 (332.5) CHENIERE ENERGY CQP US 1,797.0 30.3 (521.9) CHENIERE ENERGY LNG US 2,616.5 (137.1) (431.0) CHOICE HOTELS CHH US 411.7 (1.7) (58.1) CLEVELAND BIOLAB CBLI US 11.9 (9.7) (10.0) COLUMBIA LABORAT CBRX US 28.9 13.3 (12.1) COMMERCIAL VEHIC CVGI US 286.2 116.1 (0.1) CUMULUS MEDIA-A CMLS US 324.1 (2.5) (349.3) DENNY'S CORP DENN US 311.2 (27.8) (103.7) DISH NETWORK-A DISH US 9,632.2 74.1 (1,133.4) DISH NETWORK-A EOT GR 9,632.2 74.1 (1,133.4) DOMINO'S PIZZA DPZ US 425.7 104.1 (1,241.9) DUN & BRADSTREET DNB US 1,727.3 (612.4) (717.4) EASTMAN KODAK EK US 6,239.0 966.0 (1,075.0) ENDOCYTE INC ECYT US 11.4 4.7 (2.6) EPICEPT CORP EPCT SS 6.7 (1.1) (14.2) EXELIXIS INC EXEL US 360.8 (16.5) (228.3) FIRST SURGICAL P FSPI US - (0.0) (0.0) FORD MOTOR CO F US 180,330.0 (18,558.0) (1,740.0) FORD MOTOR CO F BB 180,330.0 (18,558.0) (1,740.0) GENCORP INC GY US 991.5 71.4 (195.1) GLG PARTNERS INC GLG US 400.0 156.9 (285.6) GLG PARTNERS-UTS GLG/U US 400.0 156.9 (285.6) GRAHAM PACKAGING GRM US 2,806.8 268.0 (530.7) HICKS ACQUISITIO HKACU US 0.8 (0.8) (0.1) HICKS ACQUISITIO HKAC US 0.8 (0.8) (0.1) HOVNANIAN ENT-A HOV US 1,817.6 1,101.9 (337.9) HOVNANIAN ENT-B HOVVB US 1,817.6 1,101.9 (337.9) HUGHES TELEMATIC HUTC US 111.4 1.9 (42.1) IDENIX PHARM IDIX US 63.1 24.0 (21.3) INCYTE CORP INCY US 489.6 341.9 (88.6) IPCS INC IPCS US 559.2 72.1 (33.0) ISTA PHARMACEUTI ISTA US 134.2 15.8 (79.1) JAZZ PHARMACEUTI JAZZ US 108.0 (13.3) (0.8) JUST ENERGY GROU JE CN 1,760.9 (339.4) (328.6) KNOLOGY INC KNOL US 787.7 20.4 (15.9) KV PHARM-A KV/A US 358.6 (81.1) (139.1) KV PHARM-B KV/B US 358.6 (81.1) (139.1) LIGHTING SCIENCE LSCG US 60.0 28.3 (122.4) LIN TV CORP-CL A TVL US 782.4 21.2 (146.9) LIZ CLAIBORNE LIZ US 1,257.7 39.0 (21.7) LORILLARD INC LO US 3,296.0 1,509.0 (225.0) MAINSTREET EQUIT MEQ CN 448.9 - (9.0) MANNKIND CORP MNKD US 277.3 55.8 (185.5) MEAD JOHNSON MJN US 2,293.1 472.9 (358.3) MOODY'S CORP MCO US 2,540.3 409.2 (309.7) MORGANS HOTEL GR MHGC US 759.1 47.0 (42.1) MPG OFFICE TRUST MPG US 3,267.4 - (897.2) NATIONAL CINEMED NCMI US 854.5 77.3 (318.4) NAVISTAR INTL NAV US 9,730.0 2,246.0 (924.0) NEWCASTLE INVT C NCT US 3,760.1 - (591.2) NEXSTAR BROADC-A NXST US 607.6 31.2 (189.9) NORTH AMERICAN G NMGL US 0.0 (0.1) (0.1) NPS PHARM INC NPSP US 228.9 133.8 (155.3) NYMOX PHARMACEUT NYMX US 0.9 (1.0) (1.8) OTELCO INC-IDS OTT US 322.1 22.0 (5.2) OTELCO INC-IDS OTT-U CN 322.1 22.0 (5.2) PALM INC PALM US 1,007.2 141.7 (6.2) PDL BIOPHARMA IN PDLI US 257.5 26.1 (304.5) PETROALGAE INC PALG US 5.9 (8.2) (51.6) PLAYBOY ENTERP-A PLA/A US 165.8 (16.9) (54.4) PLAYBOY ENTERP-B PLA US 165.8 (16.9) (54.4) PRIMEDIA INC PRM US 215.5 (5.8) (97.8) PRIMO WATER CORP PRMW US 29.0 (29.4) (9.6) PROTECTION ONE PONE US 562.9 (7.6) (61.8) QUALITY DISTRIBU QLTY US 284.3 26.9 (132.9) QWEST COMMUNICAT Q US 17,220.0 (1,649.0) (1,655.0) REGAL ENTERTAI-A RGC US 2,670.3 114.1 (267.3) RENAISSANCE LEA RLRN US 53.8 (38.5) (35.1) REVLON INC-A REV US 1,086.7 157.6 (696.4) RIGNET INC RNET US 93.2 9.5 (11.6) RSC HOLDINGS INC RRR US 2,718.0 (60.8) (37.3) RURAL/METRO CORP RURL US 285.3 60.1 (98.6) SALLY BEAUTY HOL SBH US 1,670.4 371.1 (406.1) SINCLAIR BROAD-A SBGI US 1,485.9 36.4 (157.1) SINCLAIR BROAD-A SBTA GR 1,485.9 36.4 (157.1) SMART TECHNOL-A SMT US 559.1 201.9 (63.2) SMART TECHNOL-A SMA CN 559.1 201.9 (63.2) STEREOTAXIS INC STXS US 47.5 (6.2) (5.3) SUN COMMUNITIES SUI US 1,162.7 - (132.4) SWIFT TRANSPORTA SWFT US 2,577.9 237.4 (83.2) SYNERGY PHARMACE SGYP US 2.7 (2.3) (1.8) TAUBMAN CENTERS TCO US 2,546.9 - (527.9) TEAM HEALTH HOLD TMH US 807.7 17.9 (51.4) THERAVANCE THRX US 212.6 161.1 (141.1) UNISYS CORP UIS US 3,020.9 538.7 (933.8) UNITED RENTALS URI US 3,693.0 156.0 (20.0) VECTOR GROUP LTD VGR US 949.6 299.9 (46.2) VENOCO INC VQ US 750.9 (11.6) (84.2) VIRGIN MOBILE-A VM US 307.4 (138.3) (244.2) VISTEON CORP VC US 5,147.0 1,184.0 (737.0) VONAGE HOLDINGS VG US 260.4 (67.7) (129.6) WARNER MUSIC GRO WMG US 3,604.0 (602.0) (228.0) WEIGHT WATCHERS WTW US 1,092.0 (348.7) (690.8) WESTMORELAND COA WLB US 765.0 (51.3) (133.7) WORLD COLOR PRES WC CN 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WCPSF US 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WC/U CN 2,641.5 479.2 (1,735.9) WR GRACE & CO GRA US 4,271.7 1,371.3 (68.8) ********* 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 ***