/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110520.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, May 20, 2011, Vol. 15, No. 138 Headlines 15-35 HEMPSTEAD: Trustee Seeks to Retain Wolff & Samson as Atty. 15-35 HEMPSTEAD: Seeks to Retain Beverly Cox as Bookkeeper 15-35 HEMPSTEAD: Taps Landis Company as Real Estate Broker 1ST CENTENNIAL: Class Suit Filed for Non-Disclosure of Risky Deals 2001 PROPERTIES: Jack Smith Withdrawn as Schneider Trust Counsel ACCO BRANDS: Moody's Revises Outlook to Positive ADVANCED DISPOSAL: Moody's Affirms Ba3 Corporate Family Rating AES THAMES: Court Extends Time to Decide on Leases Until Aug. 30 AES THAMES: Taps Charles River as Regulatory Consultant ALLEN STOCK: Files for Chapter 7 in Minneapolis AMBASSADORS INT'L: Anschutz Unit Wins Auction With $39M Offer ARIZONA GOLF: Council Mulls Exit Deal, Looks for New Manager ASARCO LLC: Asbestos Trust Files Report for 2010 ASARCO LLC: Plan Admin. Claims Objection Deadline Extended ASARCO LLC: Plan Admin. in Disputes With CSM on Mediation Issue ASARCO LLC: Seeks Summary Judgement on Sterlite Plea for Payments ATLANTIC BROADCASTING: Schaffer Suit Remanded to State Court BALDWIN TECHNOLOGY: Gets Waiver from BofA, Set for Refinancing BANKUNITED FINANCIAL: Has OK for Structured Capital as Advisor BARNES BAY: Judge to OK Bidding Protocol for Anguilla Resort BBB ACQUISITION: Hearing on Case Conversion Plea Reset to June 1 BBB ACQUISITION: Wants Trustee's Motion to Convert Case Denied BBB ACQUISITION: Has Until July 20 to Solicit Acceptances to Plan BEVERLY HILLS SUITES: Working on Plan for Bradley Hotel BIEDERMANN MANUFACTURING: Owner Loses RecZone to Foreclosure BLOCKBUSTER INC: McMillan Law Firm Fights Icahn's Sanctions Bid BLUEKNIGHT ENERGY: Amends Global Transaction Agreement BORDERS GROUP: Still Trying to Find Buye for All of 400 Stores BORDERS GROUP: Close to Finalizing Chapter 11 Plan, Says CEO BORDERS GROUP: Removal Period Extended Until Sept. 14 BORDERS GROUP: Proposes BofA Pact on Compensation Plan BREWERY PROPERTIES: Files for Ch. 11 to Bring Issues in One Forum BROWN PUBLISHING: Court Issues New Order on K&L Contingent Fees BOUNDARY BAY: U.S. Trustee Taps 3-Member Creditors Panel BOUNDARY BAY: Seeks to Employ Weiland as Bankruptcy Counsel BOYLAN INT'L: Liquidating Trust's Life Extended for Two Years CARIBE MEDIA: Court Approves Kurtzman Carson as Claims Agents CENTER COURT: U.S. Trustee Wants Case Dismissed on Converted CHRISTIAN BROTHERS: Strikes Deal to Fund Operations CHRYSLER LLC: Raises $7.5BB After Twice Revising Deal Structure CITY INC: Files for Chapter 7 in Minneapolis CLEARWIRE CORP: Intel Corporation Discloses 32.8% Equity Stake COMDISCO HOLDING: Reports $520,000 Net Loss in First Quarter CONCHO RESOURCES: Moody's Assigns B3 Rating to Notes Offering CONCHO RESOURCES: S&P Rates $400MM Sr. Unsecured Notes at 'BB' CONNACHER OIL: Moody's Assigns 'Caa2' Rating to Sr. Secured Notes CONNACHER OIL: S&P Rates $900MM Sr. Sec. 2nd-Lien Debt at BB- CORDIA COMMS: Can Employ Bilzin Sumberg as Bankruptcy Counsel CORDIA COMMS: Wants to Hire Source Capital as Investment Banker CORDIA COMMS: Court to Convene Final Hearing on Cash Coll. Use CORDIA COMMS: Asks to Proceed With Auction Without Lead Bidder COSIMO LLC: Section 341(a) Meeting Schedules for June 10 CRAIG CARRIER: IFC Sees Minimal Impact on Ending Triple C Deal CROWN EQUITY: Posts $1.5 Million Net Loss in March 31 Quarter DALPHIS HOLDING: Seeks Approval to Tap Cash From Customers DAVID OLSON: Files for Chapter 7 in St. Paul E*TRADE FINANCIAL: Moody's Assigns B2 Rating to Sr. Notes due 2016 EAGLE BULK: May Not Be in Compliance With Orig. Facility Covenants EASTER SEALS: Sanctions Against Ford Motor Credit Rejected ECOSPHERE TECHNOLOGIES: Incurs $3.7-Mil. First Quarter Net Loss EDIETS.COM INC: Extends Subscription Period for Rights Offering EH HOLDING CORP: Moody's Says Ratings Unchanged on Note Offering EIF CALYPSO: S&P Withdraws 'B+' Rating on $800MM Sr. Secured Debt EVERGREEN ENERGY: Incurs $11.34-Mil. First Quarter Net Loss FORBES ENERGY: Moody's Upgrades Corporate Family Rating to 'B3' FORBES ENERGY: S&P Gives 'CCC+' CCR; Places Rating on Watch GENERAL MORTGAGE: Moody's Cuts IFS Rating to 'Ba1' GLC LTD: Court OKs James Burritt as Chief Restructuring Officer GGS INVESTMENTS: Court Wants Plan Documents Revised GREAT LAKES AVIATION: Posts $577,400 Net Loss in First Quarter GUARANTY FINANCIAL: Plan of Liquidation Declared Effective GULFSTREAM INT'L: Creditors Pursue Investigation of Top Executives HCA HOLDINGS: Files Form 10-Q; Posts $334MM Net Income in Q1 HEALTH ADVENTURE: Has 18-Month Lease Offer From Pack Place HUGHES TELEMATICS: Amends Form S-3 for 2.4-Mil. Shares INDIANA EQUITY: Sec. 341 Creditors' Meeting Set for June 16 INDIANA EQUITY: Wants Schedules Filing Deadline Moved to June 9 INDIANA EQUITY: Can Use Rents to Fund Expenses Until Monthend INNOLOG HOLDINGS: Amends 2010 Quarterly Reports to Correct Errors INOVA TECHNOLOGY: Completes $515,000 Network Solutions Projects INTEGRATED FREIGHT: Completes Acquisition of Cross Creek INTERNATIONAL LEASE: Moody's Affirms 'B1' CFR; Outlook Positive INTERPUBLIC GROUP: S&P Ups CCR to 'BB+' on Operating Momentum INTERTAPE POLYMER: Incurs $41,000 Net Loss in March 31 Quarter INVENTIV HEALTH: Moody's Reviews Ratings for Possible Downgrade JARED BLUHM: Files for Chapter 7 in St. Paul JOHENE EGGERT: Judge Wants Plan Documents Amended LA JOLLA: Has 4.01 Million Common Shares Issued and Outstanding LEHMAN BROTHERS: Ruling on Barclays/LBI Trustee Dispute Postponed LEHMAN BROTHERS: Creditors Committee Nominated as Designated Party LEHMAN BROTHERS: LBI Proposes $861-Mil. Deal with JPMorgan LEHMAN BROTHERS: LBI Proposes Levine Lee as Special Counsel LEHMAN BROTHERS: Giants Stadium Wants Leave to Conduct Discovery LPATH INC: Incurs $1.64 Million Net Loss in First Quarter MACY INC: S&P Raises CCR From 'BB+' on Robust Performance MAGNA ENTERTAINMENT: Chickasaw Nation Takes Lone Star Park MAJESTIC CAPITAL: Wants Until May 27 to File Schedules MARKET STREET: Seeks to Hire Eskew Dumez Ripple as Architects MEDCLEAN TECHNOLOGIES: Files Form S-1 for 400-Mil. Shares MEM INVESTMENTS: Judge Wants Exit Plan Amended by May 23 METROPARK USA: Hearing on Employment of Cooley LLP Set for May 23 MIDWEST BANC: Files Second Amended Joint Liquidation Plan MORGANS HOTEL: To Buy Remaining Interests in China Grill Venture MORGANS HOTEL: Parag Vora Discloses 4.15% Equity Stake MSR RESORT: U.S. Administrator Taps 5-Member Creditors Panel MT3 PARTNERS: Permits Nevada State Bank to Sell Property MULTIBANK: Fitch Affirms IDRs at 'BB'; Outlook Stable NEDAK ETHANOL: Reports $248,000 Net Income in First Quarter NEW STREAM: Court OKs $184M Sale of Life Insurance Assets NEXSTAR BROADCASTING: Incurs $6.3-Mil. First Quarter Net Loss NISSWA MARINE: Appeals Court Rules on Frandsen Bank Loan Dispute NMT MEDICAL: Adds Intellectual Property to Its Sealed Bid Sale NO FEAR RETAIL: Files Schedules of Assets and Liabilities NOVASTAR FINANCIAL: Reports $2.27 Million Net Income in Q1 NUVEEN INVESTMENTS: Moody's Upgrades CFR to B3; Outlook positive OMNICITY CORP: Incurs $418,290 Net Loss in Jan. 31 Quarter ORAGENICS INC: Posts $1.6-Mil. Net Loss in First Quarter OXIGENE INC: Incurs $863,000 Net Loss in First Quarter PACIFIC MESA: Appoints George Blaco as Chief Operating Officer PEANUT CORP: Court Won't Dismiss Wrongful Death Suit v. Kanan PHILADELPHIA ORCHESTRA: Has Interim OK to Hire CGC as Claims Agent PHILADELPHIA ORCHESTRA: Pittsburgh Symphony to Sub for Concerts PROFESSIONAL VETERINARY: Boehringer Claim Goes to Trial PROVO CRAFT: S&P Lowers Corporate Credit Rating to 'CCC' QUANTUM FUEL: Receives $695,000 from Sale of Notes and Warrants QUANTUM FUEL: Authorized Common Shares Hiked to 50 Million RADIENT PHARMACEUTICALS: Gets $7.5MM Proceeds Securities Sale RASER TECHNOLOGIES: 3-Member Creditors Committee Formed RASER TECHNOLOGIES: Section 341(a) Meeting Schedules for June 2 RASER TECHNOLOGIES: Court Approves ALCS as Claims Agent RASER TECHNOLOGIES: Ex-Chairman Proposes Rival Financing RASER TECHNOLOGIES: Merrill Lynch Adds to Dissent Over Loan READER'S DIGEST: Still Struggling to Gain Financial Balance REAL ESTATE ASSOCIATES: Incurs $205,000 Net Loss in Q1 REICHHOLD INDUSTRIES: S&P Affirms 'B-' Corporate Credit Rating REMINGTON RANCH: Case Dismissal Hearing Continued Until June 15 SARGENT RANCH: Court Rejects $808T DIP Loan, Mulls Ch.7 Conversion SBARRO INC: Court Approves Epiq Bankruptcy as Administrative Agent SBARRO INC: Can Hire Kirkland & Ellis as Bankruptcy Counsel SBARRO INC: To Tap Steinberg Fineo as Special Counsel SEAVIEW PLACE: Can Hire Jennis & Bowen as Bankruptcy Counsel SELECT MEDICAL: Moody's Upgrades Proposed Credit Facility to Ba3 SELECT MEDICAL: S&P Raises Rating on Sr. Secured Facility to 'BB-' SHUBH HOTELS PITTSBURGH: Court Stays Suit v. Hilton, Blackrock SINCLAIR BROADCAST: Pinnacle Associates Holds 3.1% Equity Stake SONA CO: Files for Chapter 7 Bankruptcy SOUTH EDGE: Ch. 11 Trustee Taps Schwartzer & McPherson as Counsel SOUTH EDGE: Trustee Wins OK for Jones Vargas as Special Counsel SOUTH EDGE: Jones Vargas Withdraws as Ch. 11 Trustee Local Counsel STATION CASINOS: U.S. Trustee Forms Green Valley Committee STATION CASINOS: Committee wants GV Confirmation Adjourned STATION CASINOS: GV Wants Three Committee Members Removed STATION CASINOS: GV Wants to Limit Committee Discovery STRATEGIC AMERICAN: Hosts Shareholder Conference SUN-TIMES MEDIA: Debtor Files Chapter 11 Plan of Liquidation SUNNYSLOPE HOUSING: Section 341(a) Meeting Scheduled for May 31 T.D. BISTRO: Files for Chapter 7 Liquidation THERMOENERGY CORP: Incurs $2.5 Million Net Loss in 1st Quarter TRICO MARINE: Files Liquidation Plan Days After Spinning Off Units UNIVITA HEALTH: S&P Assigns Prelim. 'B' Corporate Credit Rating U.S. CORP: FNMA Suit vs. Creditor Remanded to State Court U.S. EAGLE: Creditors Committee Taps Porzio Bromberg as Counsel U.S. EAGLE: Court Grants Until August 4 to Decide on Leases U.S. EAGLE: Has Until Sept. 2 to Propose Plan of Reorganization VALENCE TECHNOLOGY: CFO Resigns; D. Gotthschalk to Assume Role VIKING SYSTEMS: Sells 9-Mil. Common Shares for $3 Million VILLAGE AT CAMP: Amends Chapter 11 Plan & Disc. Statement VISTEON CORP: CEO Received More Pay Than Ford's in 2010 WARNER MUSIC: Thomas H. Lee Discloses 35.63% Equity Stake WASHINGTON COUNTY MEMORIAL: Ind. Appeals Court Rules on Shonk Suit WASHINGTON MUTUAL: Chapter 11 Plan Flooded With Objections WECHSLER & CO: Sanford Becker Out, Taps KGS LLP as Accountants WESTMORELAND COAL: Incurs $18.7-Mil. First Quarter Net Loss WHOLE FOODS: S&P Raises CCR to 'BB+' on Stronger Operations WIKILOAN INC: Incurs $3.15 Million Net Loss in Fiscal 2011 WOLF MOUNTAIN: Court Rejects Dismissal Bid But Grants Stay Relief WOLF MOUNTAIN: Sec. 341 Creditors' Meeting Set for June 15 WRIGLEY (WM) JR.: Moody's Upgrades CFR to Ba1; Outlook Stable ZALE CORP: Matthew Appel Appointed Chief Administrative Officer ZOEY ESTATES: Sec. 341 Creditors' Meeting Set for June 7 ZOEY ESTATES: Case Reassigned to Bankruptcy Judge Hale * Crowell & Moring Expands on Both Coasts With Two New Partners * DLA Piper Adds Gregg Galardi to Firm * Luce Forward Adds Bankruptcy Atty. Gregg S. Kleiner * BOOK REVIEW: Performance Evaluation of Hedge Funds ********* 15-35 HEMPSTEAD: Trustee Seeks to Retain Wolff & Samson as Atty. ---------------------------------------------------------------- Karen L. Gilman, Esq. as Chapter 11 Trustee of 15-35 Hempstead Properties, LLC and Jackson 299 Hempstead LLC, seeks authority from the U.S. Bankruptcy Court for the District of New Jersey, to retain Wolff & Samson PC as attorney. During its retention, Wolff & Samson employment will be limited to: 1. the operation of the property; 2. protection of tenants and ensure services are provided; and 3. render legal advice concerning whether a condominium conversion is feasible, may be reversed and reverted to a prior use and/or whether the real property should be sold as is. To the best of Ms. Gilman's knowledge, the professional does not hold the adverse interest to the estate, does not represent an adverse interest to the estate, and is a disinterested person under 11 U.S. 101(14). About 15-35 Hempstead Properties 15-35 Hempstead Properties, LLC, owns real property at 101 Boardwalk in Atlantic City, New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 10-43178) on Oct. 26, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, assists 15-35 Hempstead in its restructuring effort. 15-35 Hempstead estimated its assets and debts at $10 million to $50 million. Affiliate Jackson 299 Hempstead, LLC, filed a separate Chapter 11 petition (Bankr. D. N.J. Case No. 10-43180) on Oct. 26, 2010. Jackson 299 Hempstead, LLC, owns a parcel of real property at 101 Boardwalk in Atlantic City, New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 10-43180) on Oct. 26, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, assists Jackson 299 in its restructuring effort. Jackson 299 estimated its assets and debts at $10 million to $50 million. The cases are jointly administered under 15-35 Hempstead Properties, LLC. 15-35 HEMPSTEAD: Seeks to Retain Beverly Cox as Bookkeeper ---------------------------------------------------------- 15-35 Hempstead Properties, LLC, seeks authority from the U.S. Bankruptcy Court for the District of New Jersey, to retain to retain Beverly Cox as bookkeeper. The bookkeeper can be reached at: Beverly Cox The Organizer PO Box 437 Northfield, NJ 098225 To the best of 15-35 Hempstead's knowledge, the professional: 1. does not hold the adverse interest to the estate. 2. does not represent an adverse interest to the estate. 3. is a disinterested person under 11 U.S. 101(14). About 15-35 Hempstead Properties 15-35 Hempstead Properties, LLC, owns real property at 101 Boardwalk in Atlantic City, New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 10-43178) on Oct. 26, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, assists 15-35 Hempstead in its restructuring effort. 15-35 Hempstead estimated its assets and debts at $10 million to $50 million. Affiliate Jackson 299 Hempstead, LLC, filed a separate Chapter 11 petition (Bankr. D. N.J. Case No. 10-43180) on Oct. 26, 2010. Jackson 299 Hempstead, LLC, owns a parcel of real property at 101 Boardwalk in Atlantic City, New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 10-43180) on Oct. 26, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, assists Jackson 299 in its restructuring effort. Jackson 299 estimated its assets and debts at $10 million to $50 million. The cases are jointly administered under 15-35 Hempstead Properties, LLC. 15-35 HEMPSTEAD: Taps Landis Company as Real Estate Broker ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized Karen L. Gilman, Esq. as Chapter 11 Trustee of 15-35 Hempstead Properties, LLC and Jackson 299 Hempstead LLC, to employ Landis Company, LLC, as real estate broker. The trustee said it needs a real estate broker to list and sell condominiums real property known as 101 Boardwalk, Atlantic City, New Jersey 08401. About 15-35 Hempstead Properties 15-35 Hempstead Properties, LLC, owns real property at 101 Boardwalk in Atlantic City, New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 10-43178) on Oct. 26, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, assists 15-35 Hempstead in its restructuring effort. 15-35 Hempstead estimated its assets and debts at $10 million to $50 million. Affiliate Jackson 299 Hempstead, LLC, filed a separate Chapter 11 petition (Bankr. D. N.J. Case No. 10-43180) on Oct. 26, 2010. Jackson 299 Hempstead, LLC, owns a parcel of real property at 101 Boardwalk in Atlantic City, New Jersey. It filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 10-43180) on Oct. 26, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, assists Jackson 299 in its restructuring effort. Jackson 299 estimated its assets and debts at $10 million to $50 million. The cases are jointly administered under 15-35 Hempstead Properties, LLC. 1ST CENTENNIAL: Class Suit Filed for Non-Disclosure of Risky Deals ------------------------------------------------------------------ Brower Piven, A Professional Corporation, disclosed that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of purchasers of the securities of 1st Centennial Bancorp during the period between April 13, 2006 and January 23, 2009, inclusive. The press release by Brower Piven provides: "No class has yet been certified in the above action. Members of the Class will be represented by the lead plaintiff and counsel chosen by the lead plaintiff. If you wish to choose counsel to represent you and the Class, you must apply to be appointed lead plaintiff no later than June 20, 2011 and be selected by the Court. The lead plaintiff will direct the litigation and participate in important decisions including whether to accept a settlement and how much of a settlement to accept for the Class in the action. The lead plaintiff will be selected from among applicants claiming the largest loss from investment in the Company during the Class Period. You are not required to have sold your shares to seek damages or to serve as a Lead Plaintiff. "The complaint accuses the defendants of violations of the Securities Exchange Act of 1934 by virtue of the Company's failure to disclose during the Class Period 1st Centennial's exposure to the risky CRE/ADC loan market and mounting loan losses and that the Bank's loan underwriting and credit administration practices failed to comply with prudent banking standard and lending policy. According to the Complaint, as a result of the alleged misconduct at 1st Centennial, on January 23, 2009 the California Department of Financial Institutions seized 1st Centennial and appointed the FDIC as receiver such that the value of 1st Centennial shares declined significantly. Also according to the complaint, on March 25, 2009, 1st Centennial filed for bankruptcy, and on Jan. 14, 2011 the FDIC sued 1st Centennial's officers and directors alleging, among other things, willful misconduct in causing 1st Centennial's failure. "If you have suffered a net loss for all transactions in 1st Centennial Bancorp securities during the Class Period, including shares or possibly calls purchased during, but not sold until after the end of the Class Period or possibly put options sold but not covered until after the end of the Class Period, you may obtain additional information about this lawsuit and your ability to become a lead plaintiff by contacting Brower Piven at http://www.browerpiven.com/,by email at hoffman@browerpiven.com, by calling 410/415-6616, or at Brower Piven, A Professional Corporation, 1925 Old Valley Road, Stevenson, Maryland 21153. Attorneys at Brower Piven have combined experience litigating securities and class action cases of over 60 years. If you choose to retain counsel, you may retain Brower Piven without financial obligation or cost to you, or you may retain other counsel of your choice. You need take no action at this time to be a member of the class." About 1st Cenntial Bank 1st Centennial Bank, based in Redlands, California, was closed in January 2009 by the California Department of Financial Institutions, which then appointed the FDIC as receiver. Following the closing, the FDIC entered into a purchase and assumption agreement with First California Bank, in Westlake Village, California, to assume the insured deposits of 1st Centennial. As of January 9, 2009, 1st Centennial had total assets of $803.3 million and total deposits of $676.9 million, of which there were approximately $12.8 million that exceeded the insurance limits. 1st Centennial Bank's failure was estimated to cost the FDIC's Deposit Insurance Fund $227 million. 2001 PROPERTIES: Jack Smith Withdrawn as Schneider Trust Counsel ---------------------------------------------------------------- The Hon. Elizabeth E. Brown for the U.S. Bankruptcy Court for the District of Colorado granted 2001 Properties, LLC's request to Withdraw Holland & Hart LLP and its attorneys Jack L. Smith and Clarissa M. Raney to appear as counsel for John F.C. Schneider, as Trustee of the John F.C. Schneider Trust u/a/d Aug. 22, 2002. Mission Hills, Kansas-based 2001 Properties, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 10- 32331) on Aug. 31, 2010. Guy B. Humphries, Esq., in Denver, Colorado, assists the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $35,000,032 in total assets and $44,404,244 in total liabilities as of the Petition Date. ACCO BRANDS: Moody's Revises Outlook to Positive ------------------------------------------------ Moody's Investors Service revised ACCO Brands Corporation's outlook to positive because of Moody's expectation that ACCO's operating performance will improve in the near to mid-term and that the company will use its free cash flow to pay down debt thereby improving credit metrics. Moody's also affirmed ACCO's ratings including its B2 Corporate Family Rating, B2 Probability of Default Rating, B1 senior secured notes, Caa1 senior subordinated notes and SGL-2 speculative grade liquidity rating. "ACCO's significant cost rationalization efforts over the last few years, which Moody's expects to continue, combined with select price increases should enable the company to generate around $50 million of free cash flow in 2011, despite losing almost $250 million of revenue since 2008" said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "The continued focus on costs should help enable ACCO to offset or at least reduce the impact of higher raw material prices," noted Cassidy. RATING RATIONALE ACCO's B2 Corporate Family Rating reflects the company's still relatively high leverage (above 5x debt/EBTIDA) and minimal revenue growth. The rating also incorporates the mature nature of the office supplies industry which has been exacerbated by economic weakness in the US and Europe. Notably, ACCO serves a consumable segment (about half) which is tied to discretionary consumer spending and a durable exposure, which is driven more by business spending but is more vulnerable to cyclicality. Mitigating these factors is ACCO's solid market position within the office supply product categories, improved margins through a realignment of its cost structure, good free cash flow generation, commitment to pay down debt and good liquidity profile that provides financial flexibility to continue to weather the uncertain economic environment. Moody's also considers the relevance of ACCO to its largest customers as one of only a few global suppliers of office products. The positive outlook reflects Moody's view that ACCO's operating performance should continue to improve in the near to mid-term. This, coupled with paying down debt with free cash flow, should result in improved credit metrics with debt/EBITDA approaching 4.5x in 2012. The positive outlook also reflects Moody's expectation that revenue will increase about 3% - 5% in 2011 and 2012 and that operating margins stay above 10%. The rating could be downgraded if raw material prices increase more than expected and the company is not able to sufficiently offset the higher costs with its cost efficiency efforts and price increases. Operating margins in the mid single digits and leverage sustained over 6.5x would not be consistent with a B2 Corporate Family Rating. On the other hand, the rating could be upgraded if ACCO is able to offset higher raw material prices with price increases and cost containment efforts and increase or at least maintain EBITA margins (currently around 10%). Maintaining its approach of paying down debt with free cash flow will also be necessary for an upgrade to be considered as will reducing leverage below 4.5x. Ratings affirmed: -- Corporate Family rating at B2; -- Probability of Default rating at B2; -- Senior Secured Notes rating at B1 (LGD 3, 38% - no change in LGD assessment); -- Senior subordinated notes at Caa1 (LGD 5, 83% - no change in LGD assessment); -- Speculative grade liquidity rating at SGL-2 The principal methodology used in rating ACCO was the Global Consumer Durables rating methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ACCO Brands Corporation ("ACCO") is a leading supplier of branded office products, which are marketed in over 100 countries to retailers, wholesalers, and commercial end-users. Revenue approximated $1.3 billion for the twelve months ended March 31, 2011. ADVANCED DISPOSAL: Moody's Affirms Ba3 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the existing Ba3 corporate family and B1 probability of default ratings of Advanced Disposal Services, Inc. Concurrently, a Ba3 rating has been assigned to the company's recently executed $425 million first-lien revolving credit facility. The rating outlook is stable. Proceeds from the new facility (initially funded at $317 million), as well as a preferred equity contribution, repaid the company's prior first- lien credit facility. Because of the preferred equity contribution, the first-lien debt balance declined to $321 million from $364 million following the transaction. The ratings are: -- Probability of default, B1 -- Corporate family, Ba3 -- $425 million first-lien revolver due 2016, Ba3 LGD 3, 30% Ratings withdrawn: -- $250 million first lien revolver due 2014, Ba3 LGD 3, 31% -- $150 million first-lien term loan due 2015, Ba3 LGD 3, 31% RATINGS RATIONALE The Ba3 corporate family has been affirmed because the debt reduction and an improving economic environment should boost credit metrics that had become weak relative to similarly rated sector peers. Moody's anticipates that an improving economy should raise Advance Disposal's earnings and operating cash flow over 2011 and 2012, particularly in 2012 when construction end markets and their associated waste streams should begin to grow. The company's concentration in the southeastern U.S. states also bodes well for near-term credit metric improvement since that region's growth should lead national growth. Moody's expects continued tuck-in acquisitions and investments that build collection route density and disposal capacity. The expansion spending level could continue exceeding the company's free cash flow generation level, but with expected greater volumes ahead, Moody's anticipates debt to EBITDA declining to the high 3x range by early 2012, from the high 4x range as of Q1-2011; similarly, EBIT to interest should improve to over 2.0x from just under 1.4x (all metrics Moody's- adjusted basis). The company's probability of default rating of B1 remains unchanged at one notch below the corporate family rating. The all first-lien bank debt structure, which supports likelihood of better-than-average creditor recovery in a stress scenario, drives the PDR down-notch. The stable rating outlook reflects a good liquidity profile and anticipated improvement in credit metrics. A good revolver borrowing availability level, expectation of continued covenant headroom cushion and likelihood that cash flow from operations should exceed near-term capital spending and debt maturities. Positive rating pressure, not currently anticipated, would develop with an expanded revenue base, sustained debt to EBITDA at 3x, and EBIT to interest approaching 3x. Downward rating pressure would develop should credit metrics not show the expected improvement, with debt to EBITDA continuing above 4x and EBIT to interest below 2x. (All metrics are on a Moody's adjusted basis.) The principal methodology used in rating Advanced Disposal Services, Inc. was the Solid Waste Management Industry Methodology, published February 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Advanced Disposal Services, Inc., headquartered in Jacksonville, Florida, provides nonhazardous solid waste collection, recycling, transfer and disposal services in the southeastern United States. Revenues for the last twelve months ended March 31, 2011 were about $330 million. AES THAMES: Court Extends Time to Decide on Leases Until Aug. 30 ---------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware has extended, at the behest of AES Thames, LLC, the deadline to assume or reject the unexpired leases of nonresidential real property by 90 days or until Aug. 30, 2011. The assumption/rejection period was set to expire on June 1, 2011. The Debtor was unable to determine whether the lease with Smurfit- Stone Container Corporation should be assumed or rejected until negotiations with key parties progress. The Debtor and Smurfit are parties to that certain ground lease between Stone Connecticut Paperboard Corporation, Ground Lessor, and AES Thamse, Inc., Ground Lessee, executed Nov. 25, 1986. The Debtor said, "The lease is an important asset of the estate as it leases the property upon which the Debtor's power plant is located." The Debtor has been addressing certain matters relating to the bankruptcy filing, including the filing of its schedules of assets and liabilities and statement of financial affairs and the use of assets that may constitute cash collateral. The Debtor has remained current on its obligations under the lease. About AES Thames Uncasville, Connecticut-based AES Thames, L.L.C., owns and operates a coal-fired power plant located in Montville, Connecticut. The facility generates and sells electricity to Connecticut Light and Power Company. It also supplies processed steam to a recycled paperboard mill owned by Smurfit-Stone Container Corp. AES Thames is a unit of AES Corp., the Arlington, Virginia-based power producer with operations in 29 countries. AES Thames filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10334) on Feb. 1, 2011. The increased cost of energy production and the "uneconomic and onerous provisions" of a steam sale agreement with Smurfit-Stone's predecessor led AES Thames to seek bankruptcy protection. Adam G. Landis, Esq., Kerri K. Mumford, Esq., and Landon Ellis, Esq., at Landis Rath & Cobb LLP, serve as the Debtor's bankruptcy counsel. According to court filings, based on the balance sheet as of Dec. 1, 2010, total assets were $162 million, and the Debtor has $52 million in short term liabilities and $122.6 million in long term debt. AES THAMES: Taps Charles River as Regulatory Consultant ------------------------------------------------------- AES Thames, LLC, asks for authorization from the U.S. Bankruptcy Court for the District of Delaware to engage Charles River Associates as regulatory consultant, nunc pro tunc to the date of the engagement letter by and between the Debtor and CRA dated May 12, 2011. The Debtor requires CRA's advice and expertise in electricity markets and regulatory compliance. The hourly rates of CRA's personnel are: Support Staff $150-$160 Analysts $225-$280 Associates $230-$405 Consulting Associates $265-$410 Senior Associates $300-$450 Associate Principals $380-$530 Principals $415-$670 Vice Presidents $465-$700 The Debtor and CRA have agreed to cap CRA's monthly fee at $10,000, unless the Debtor provides written authority to exceed this amount. About AES Thames Uncasville, Connecticut-based AES Thames, L.L.C., owns and operates a coal-fired power plant located in Montville, Connecticut. The facility generates and sells electricity to Connecticut Light and Power Company. It also supplies processed steam to a recycled paperboard mill owned by Smurfit-Stone Container Corp. AES Thames is a unit of AES Corp., the Arlington, Virginia-based power producer with operations in 29 countries. AES Thames filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10334) on Feb. 1, 2011. The increased cost of energy production and the "uneconomic and onerous provisions" of a steam sale agreement with Smurfit-Stone's predecessor led AES Thames to seek bankruptcy protection. Adam G. Landis, Esq., Kerri K. Mumford, Esq., and Landon Ellis, Esq., at Landis Rath & Cobb LLP, serve as the Debtor's bankruptcy counsel. According to court filings, based on the balance sheet as of Dec. 1, 2010, total assets were $162 million, and the Debtor has $52 million in short term liabilities and $122.6 million in long term debt. ALLEN STOCK: Files for Chapter 7 in Minneapolis ----------------------------------------------- The Star Tribune reports that Allen Louis Stock and Lisa Lovlien Stock, as surety for Caymeg Corp., doing business as Sylvan Wright County, in 3320 Walnut Grove Lane, Minneapolis, filed for Chapter 7 bankruptcy (Case No. 11-43352) on May 11. The Stocks disclosed assets of $512,421 and liabilities of $723,080. AMBASSADORS INT'L: Anschutz Unit Wins Auction With $39M Offer ------------------------------------------------------------- Dan Rivoli at Bankruptcy Law360 reports that a subsidiary of billionaire Philip Anschutz's holdings company on Tuesday won Ambassadors International Inc.'s assets in a bankruptcy auction for $39 million. Law360 says the unit of The Anschutz Corp., TAC Cruise LLC, won Ambassadors' assets, along with certain liabilities, after a two- day auction that started Monday with a cash offer, according to a notice filed in Delaware bankruptcy court. U.S. Bankruptcy Judge Kevin Gross will hold a hearing Wednesday for approval of the sale, the report notes. About Ambassadors International Headquarters in Seattle, Washington, Ambassadors International, Inc. (NASDAQ: AMIE) -- http://www.ambassadors.com/-- operates Windstar Cruises, a three-ship fleet of luxury yachts that explore the hidden harbors and secluded coves of the world's most sought- after destinations. Carrying 148 to 312 guests, the luxurious ships of Windstar cruise to nearly 50 nations, calling at 100 ports throughout Europe, the Caribbean and the Americas. Ambassadors International Inc. and 11 affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-11002) on April 1, 2011. Kristopher M. Hansen, Esq.; Sayan Bhattacharyya, Esq.; Marianne Mortimer, Esq.; and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, serve as the Debtors' bankruptcy counsel. Imperial Capital, LLC, is the Debtors' financial advisor. Phase Eleven Consultants, LLC, is the Debtors' claims and notice agent. The Debtors disclosed $86.4 million in total assets and $87.3 million in total debts as of Dec. 31, 2010. ARIZONA GOLF: Council Mulls Exit Deal, Looks for New Manager ------------------------------------------------------------ The Arizona Republic reports that the city of Phoenix will start looking for a new company to run Papago Golf Course as it plans to sever ties with the current manager. The city counsel is set to consider a settlement agreement with the Arizona Golf Foundation that would remove the non-profit's management arm from running the course and require the group to halt bankruptcy proceedings. Neither party will pay for the walk-away settlement. The city is mulling on moving on with restoring the course and rebuilding the clubhouse torn down in 2008. About AGA Management AGA Management, LLC, was engaged by the city of Phoenix in December 2007 to restore, renovate, and manage the Papago Golf Course, located at 5595 E. Moreland Street, in Phoenix, Arizona. To fund this restoration, renovation, and operation, AGA loaned $9,850,000 from Industrial Development Authority of the city of Phoenix through the issuance of Community Development Revenue Bonds. AGA Management stopped making payments on the loan around June 2010. AGA Management filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 10-34580) on Oct. 27, 2010, listing under $500,000 in assets and between $1 million and $10 million in debts. John J. Hebert, Esq. -- jhebert@polsinelli.com -- at Polsinelli Shughart, P.C., represents AGA Management. Brian Sirower, Esq. -- brian.sirower@quarles.com -- at Quarles & Brady LLP, argues on behalf of Compass Bank. Madeleine C. Wanslee, Esq. -- mwanslee@gustlaw.com -- at Gust Rosenfeld, P.L.C., is the attorney for the city of Phoenix. ASARCO LLC: Asbestos Trust Files Report for 2010 ------------------------------------------------ Hon. Alfred M. Wolin, Ret., David F. Levi and Charles A. Koppelman delivered to the U.S. Bankruptcy Court for the Southern District of Texas an annual report of the ASARCO Asbestos Personal Injury Settlement Trust for the fiscal year ended December 31, 2010. Messrs. Wolin, Levi and Koppelman serve as trustees of the Asbestos PI Trust. The Annual Report includes financial statements and results of operations of the Asbestos Trust for the reporting period as well compensation of the Asbestos Trustees for the same reporting period. ASBESTOS TRUST FINANCIAL STATEMENTS ASARCO Asbestos Personal Injury Settlement Trust Special-Purpose Balance Sheet As of December 31, 2010 ASSETS ASSETS: Cash and cash equivalents: CitiBank $55,945,554 U.S. Trust 19,019,107 ------------ Total cash and cash equivalents 74,964,661 Investments: CitiBank: Investments 418,620,742 Accrued income 3,364,957 U.S. Trust: Investments 460,124,856 Accrued income 4,128,128 ------------ Total investments 886,238,683 Other assets: Prepaid assets 145,328 ------------ TOTAL ASSETS $961,348,672 LIABILITIES AND NET CLAIMANTS' EQUITY LIABILITIES: Accounts payable $172,004 Federal income tax payable 2,215,712 ------------ TOTAL LIABILITIES 2,387,716 NET CLAIMANTS' EQUITY: Trust corpus 958,960,956 ------------ TOTAL LIABILITIES AND NET CLAIMANTS' EQUITY $961,348,672 ============ ASARCO Asbestos Personal Injury Settlement Trust Statement of Changes in Assets and Liabilities Year Ended December 31, 2010 ADDITIONS: Contributions: Insurance and settlements $399,563 Investment income, net Interest and dividends income 19,391,620 Investment advisory fees (1,437,618) Realized gain on sale of securities, net 847,868 Unrealized gain on sale of securities, net 14,559,808 ------------ Total investment income, net 33,361,678 ------------ TOTAL ADDITIONS 33,761,241 DEDUCTIONS: Claims settled 15,039,624 General and administrative: Trustees 687,745 Claims processing fess 359,347 Insurance 164,614 Accounting 19,031 Other 20,469 Professional fees: Trust professional fees: Trust general counsel 1,055,676 Trust insurance, special/local counsel 372,948 Trust consultant fees 251,383 Future claims representative fees 50,311 FCR's professional fees and expenses 52,063 TAC attorney fees and expenses 104,805 Federal income tax 2,540,712 ------------ 20,718,728 ------------ NET INCREASE IN TRUST CORPUS 13,042,513 TRUST CORPUS - beginning 945,918,443 ------------ TRUST CORPUS - ending $958,960,956 ============ ASARCO Asbestos Personal Injury Settlement Trust Special-Purpose Statement of Cash Flows Year Ended December 31, 2010 CASH FLOWS FROM OPERATING ACTIVITIES: Net increase in trust equity $13,042,513 Adjustments to reconcile net increase to net trust corpus from operating activities: Realized gain on sale of securities, net (847,868) Unrealized gain on investments, net (14,559,808) Decrease in: Prepaid assets 10,414 Increase in: Accounts receivable 49,504 Federal income taxes payable 1,889,712 ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES (415,533) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of investments 172,474,715 Purchases of investments (1,035,812,637) Increase in interest receivable on investments (7,493,085) Repayment of note receivable 280,000,000 ------------ NET CASH USED BY INVESTING ACTIVITIES (590,831,007) ------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (591,246,540) ------------ CASH AND CASH EQUIVALENTS - beginning 666,211,201 ------------ CASH AND CASH EQUIVALENTS - ending $74,964,661 ============ The Trustees certify that they have performed pursuant to and in compliance with the Confirmed ASARCO Chapter 11 Plan, the Confirmation Order, the Asbestos PI Trust Agreement, the Trust Distribution Procedures, other Plan Documents and Bankruptcy Court orders pertaining to the operation of the Asbestos Trust during the fiscal year ended December 2010. To address the substantial asbestos-related liabilities of the Debtors, the Confirmed Plan established the Asbestos Trust in accordance with the Trust Agreement. On the December 9, 2009 Effective Date of the Confirmed Plan, the Asbestos Trust was created and funded with over $900 million in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO LLC. In addition, the Asbestos Trust received $27.5 million to fund its operating expenses. Under the Trust Agreement, the Trust Advisory Committee represents the holders of present Asbestos Personal Injury Claims, and the Future Claims Representative represents the holders of future Asbestos Personal Injury Claims. The Asbestos Trust, through its claims processing facility -- Verus Claims Services, LLC -- began accepting unliquidated Asbestos Personal Injury Claims in July 2010 but, with the consent of the TAC and the FCR, deferred the processing and payment of those claims until the Asbestos Trust completes its investigation and analysis into the CAPCO and LAQ sales records. Specifically, about 70,145 unliquidated Asbestos Personal Injury Claims were filed with the Asbestos Trust in 2010: Disease Level No. of Claims ------------- ------------- Other Asbestos Disease (Level I) 795 Non-malignant Asbestos Disease (Level II) 32,040 Non-malignant Asbestos Disease (Level III) 21,269 Severe Asbestosis (Level IV) 541 Other Cancer (Level V) 2,650 Lung Cancer 2 (Level VI) 2,405 Lung Cancer 1 (Level VII) 6,216 Mesothelioma (Level VIII) 4,064 Unknown 165 ------------ Grand Total 70,145 The Trustees estimate that the future liability of the Asbestos Trust for Asbestos Personal Injury Claims is approximately $3.716 billion in 2011, using a 4% discount rate. During 2010, the value of the Trust corpus increased by $13,042,513, from $945,918,443 as of January 1, 2010, to $958,960,956 as of December 31, 2010. As of December 31, 2010, the Asbestos Trust has not made any payments on account of unliquidated Asbestos Personal Injury Claims, nor has the Asbestos Trust resolved any Asbestos Personal Injury Claims by individual review, by alternative dispute resolution procedures, or by trial. A full-text copy of the Asbestos Trust 2010 Annual Report is available for free at: http://bankrupt.com/misc/ASARCO_AsbestosAnnualRep_Dec10.pdf About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ASARCO LLC: Plan Admin. Claims Objection Deadline Extended ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas extended the time by which Mark A. Roberts of Alvarez and Marsal North America LLC, the Reorganized Asarco's Plan Administrator, can file objections to claims pursuant to Section 14.2 of the Confirmed Plan of Reorganization and Rule 9006(b)(1)(1) of the Federal Rules of Bankruptcy Procedure. Judge Schmidt extended the Claims Objection Deadline, except only with respect to the Colorado School of Mines Claim, to and including the date upon which the Plan Administrator files a motion requesting entry of an order and final decree closing the ASARCO LLC Bankruptcy Case, with no change effected to Section 14.2(b) of the Plan. The Court's order is without prejudice to the right of either the Plan Administrator or Reorganized ASARCO to seek further extensions of the deadline to object to Claims under Section 14.2 of the Plan and Bankruptcy Rule 9006(b). About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ASARCO LLC: Plan Admin. in Disputes With CSM on Mediation Issue --------------------------------------------------------------- The Asarco Plan Administrator is asking the Bankruptcy Court to compel the Colorado School of Mines to produce certain documents that he has previously requested consisting of several categories of responsive non-privileged documents associated with Claim No. 18309. Prior to that, the Colorado School of Mines asked the Bankruptcy Court for a protective order to prevent discovery of settlement- related information with regard to the Asarco LLC Plan Administrator's objection to its Claim No. 18309. The Plan Administrator objected to the request. CSM: Motion to Compel is not Supported by Law The Colorado School of Mines asks Judge Schmidt to deny the ASARCO LLC Plan Administrator's Motion to Compel production of documents. The Plan Administrator's request is not supported by the law or the facts of the case, CSM asserts. Asimakis (Maki) D. Iatridis, Esq., at Berg Hill Greenleaf & Ruscitti LLP, in Boulder, Colorado, contends that the Plan Administrator failed to meet the burden of showing that the materials and information sought are relevant to the action or will lead to the discovery of admissible evidence. Specifically, the Motion to Compel does not provide any analysis of how the request for production of documents will lead to admissible evidence, he points out. Plan Administrator: No CSM Settlement Was Executed The Plan Administrator has asked the Court to deem Rule 7068 of the Federal Rules of Bankruptcy Procedure applicable to the contested matter between him and CSM relating to Claim No. 18309. In support of his request, the Plan Administrator argues that CSM's objection to the "Motion to Deem" offers only inapplicable case law and several inappropriate and misleading allegations. CSM's continuing references to an alleged settlement agreement between CSM and the debtor in the fall of 2009 willfully violate Rule 408 of the Federal Rules of Evidence, Dion W. Hayes, Esq., at McGuirewoods LLP, in Richmond, Virginia, contends. He asserts that neither Reorganized ASARCO nor the Plan Administrator was a party to any estimation proceedings or alleged settlement negotiations and, thus, neither is bound by any aborted, unexecuted settlement. He further explains that there is no pre- Effective Date settlement agreement, and no agreement was ever executed by the parties or approved by the Bankruptcy Court. After engaging in a lengthy, yet generally inaccurate, recounting regarding certain litigation matters to date, CSM, on its objection to the Motion to Deem, made conclusions with the ridiculous assertion that once the Plan Administrator gains knowledge of the complex facts, he will be in a position to make a realistic settlement offer and to evaluate offers from CSM, Mr. Hayes points out. "CSM's argument is flatly contradicted by the documents reviewed by the Plan Administrator to date," Mr. Hayes asserts. Plan Administrator: CSM's Proposed Orders Contain Misstatements On behalf of the Plan Administrator, Joseph S. Sheerin, Esq., at McGuirewoods LLP, in Baltimore, Maryland -- jsheerin@mcguirewoods.com -- informed Judge Schmidt through a letter that despite not having requested and not receiving permission to do so at the May 6, 2011 hearing on the Motion to Deem, CSM submitted two proposed orders for the "Motion to Deem" along with a cover letter that contains material misstatements and additional arguments to which the Plan Administrator must respond. CSM, Mr. Sheerin contends, cited no authority for its citation in the Cover Letter that "the parties have agreed to mandatory mediation prior to trial." Mr. Sheerin clarifies that the Plan Administrator indicated that mediation may be appropriate with respect to the CSM matter at sometime in the future, but it never entered into any agreement regarding any mandatory mediation. In the Cover Letter, CSM asked for an alternative relief for the first time -- that the Plan Administrator should re-file the "Motion to Deem" after the close of discovery and completion of mediation based on the facts at that time. "[T]hat request is non-sensical and the functional equivalent of denying the relief altogether," Mr. Sheerin argues. Mr. Sheerin further contends that the untimely proposal for the refiling of the Motion to Deem is inconsistent with a Texas court's approach in In re Mirant Corp., Case No. 03-46590 (Lynn, J.), a case that the Plan Administrator discussed at length in the Motion to Deem and at the hearing. Mr. Sheerin points out that notwithstanding the objection of the affected governmental claimant, the Mirant court authorized application of Rule 7068 within 15 days after filing of the motion asking that relief, and not after the several months of additional delay proposed by CSM. Hence, the Plan Administrator asks Judge Schmidt to enter one of the two orders he proposed for the Motion to Deem and ignore CSM's proposed orders. CSM's proposed orders contain misstatements of fact and would not serve to encourage settlement in the dispute, the Plan Administrator reiterates. CSM Elaborates on Proposed Orders Richard E. Lotz, Esq., Assistant Attorney General, in Denver, Colorado, wrote to Judge Schmidt to explain the basis for his statement in the CSM proposed orders. Mr. Lotz relates that on February 25, 2011, he talked with the Plan Administrator's counsel, Donald D. Anderson, Esq., at McGuirewoods LLP, in Richmond, Virginia -- ddanderson@mcguirewoods.com -- regarding the draft of the proposed orders and asked if the Plan Administrator and his counsel would agree to mediation prior to trial. According to Mr. Lotz, Mr. Anderson said Judge Schmidt would probably require it and that he was agreeable to the provision. Mr. Lotz tells Judge Schmidt that the revised draft was submitted to Mr. Anderson, with a copy to Mr. Sheerin, with a note that Mr. Lotz added a provision for mediation as per the February 25 correspondence. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ASARCO LLC: Seeks Summary Judgement on Sterlite Plea for Payments ----------------------------------------------------------------- Reorganized ASARCO LLC asks the Court for a summary judgment regarding the application of Sterlite (USA), Inc., and Sterlite Industries (India) Ltd. for substantial contribution in ASARCO's bankruptcy case. Ralph D. McBride, Esq., at Bracewell & Giuliani LLP, Houston, Texas -- ralph.mcbride@bgllp.com -- asserts that Sterlite's participation in the ASARCO bankruptcy was driven by Sterlite's business objective to obtain copper mining assets in the United States. By its application, Sterlite sought relief on the notion that it made a substantial contribution under Section 503(b)(3)(D) of the Bankruptcy Code. Moreover, to make a claim, Sterlite purchased a nominal amount of bond claims -- after it lost the plan confirmation battle -- in order to try and manufacture "creditor" status to pursue its application, Mr. McBride argues. Mr. McBride contends that as a matter of law, Sterlite is not a creditor for the purpose of being eligible for an award of substantial contribution, and the relief it seeks is not proper relief for a substantial contribution claimant. Mr. McBride further asserts that Sterlite made no "substantial contribution" to ASARCO's bankruptcy; instead Sterlite's breach of the original purchase and sale agreement significantly retarded the progress being made in, and extended the life of, the bankruptcy proceedings. Undisputedly, he emphasizes, time and money was wasted as a direct result of Sterlite's actions and hence, its application for substantial contribution should be denied. A hearing will be held on June 1, 2011, to consider ASARCO's request for summary judgment against Sterlite. A pre-trial hearing will be held on the same day for Sterlite's application. The pre-trial hearing was previously set for May 25, 2011. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ATLANTIC BROADCASTING: Schaffer Suit Remanded to State Court ------------------------------------------------------------ Kenneth R. Schaffer, Jr., v. Atlantic Broadcasting of Lindwood NJ Limited Liability Company and Brett Defano, Civil No. 10-5449 (D. N.J.), arises out of the alleged fraudulent sale of an ownership interest in a privately-held company. Before the Court is the motion to remand filed by Plaintiff Kenneth R. Schaffer, Jr. The Complaint alleges violations of the New Jersey Uniform Securities Law, N.J. Stat. Ann. 49:3-47 to 49:3-76, the Securities and Exchange Act of 1934, 15 U.S.C. Sec. 78(a) et seq., and the New Jersey Consumer Fraud Act, N.J. Stat. Ann. 56:8-1 et seq. The Complaint also alleges state law claims of breach of contract and breach of the implied covenant of good faith and fair dealing. The Plaintiff filed an amended complaint on Jan. 22, 2010. The Amended Complaint includes all of the state law claims in the Complaint, but does not allege a claim under the Securities Act. The Plaintiff argues that because the Amended Complaint alleges only state law claims, the Court should decline to exercise jurisdiction over this matter. The Plaintiff seeks to remand the case to the Superior Court of New Jersey. The Plaintiff's motion to remand is granted. A copy of District Judge Robert B. Kugler's May 17, 2011 Opinion is available at http://is.gd/VX8V7Lfrom Leagle.com. Atlantic Broadcasting of Linwood NJ Limited Liability Company filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 10-49149) on Dec. 20, 2010. BALDWIN TECHNOLOGY: Gets Waiver from BofA, Set for Refinancing -------------------------------------------------------------- Baldwin Technology Company, Inc. has negotiated an amendment and waiver to its credit facility with Bank of America. Vice President and Chief Financial Officer Ivan R. Habibe said, "We are pleased to have worked with our lending partners to reach this mutually satisfactory agreement. We have jointly established new appropriate covenant targets extending through the remainder of the term of the credit facility." Baldwin President and CEO Mark Becker added, "We were able to demonstrate to our lenders that Baldwin is on track to successfully refinance its existing credit facility prior to its maturity in November. The combination of recent changes in our global organization structure, restructuring steps already taken and continued improvements in our order trends bodes well for Baldwin's future with a much improved business model." The Company will include the Waiver and Amendment as an exhibit to its Form 10-Q for the third quarter, which it plans to complete and file no later than May 23, 2011. About Baldwin Technology Baldwin Technology Company, Inc. -- http://www.baldwintech.com/-- is an international supplier of process automation equipment for the printing and publishing industries. Baldwin offers its customers a broad range of market-leading technologies, products and systems that enhance the quality of printed products and improve the economic and environmental efficiency of printing presses. Headquartered in Shelton, Connecticut, the company has operations strategically located in the major print markets and distributes its products via a global sales and service infrastructure. Baldwin's technology and products include cleaning systems, fluid management and ink control systems, web press protection systems and drying systems and the related consumables. BANKUNITED FINANCIAL: Has OK for Structured Capital as Advisor -------------------------------------------------------------- BankUnited Financial Corporation and its debtor affiliates received authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Structured Capital Solutions as investment advisor. As reported by the Troubled Company Reported on Nov. 25, 2010, BUFC filed a Chapter 11 plan on Nov. 22, 2010, that contemplates an equity investment transaction by an investor. While the Debtors continue to negotiate with potential investors, SCS has made a proposal to bring a potential Transaction counter-party to the Debtors and assist in structuring and advising on the Transaction, in exchange for payment of (a) a contingent fee equal to 15% of all amounts distributed to all holders of allowed prepetition claims against BUFC in respect of securities issued to those BUFC Creditors in a Transaction as and when amounts are distributed on any of those securities, plus (b) an advance payment of $5,000 per calendar quarter, for four calendar quarters through Dec. 31, 2011, for reimbursement of documented reasonable out-of-pocket travel and hotel expenses incurred for travel from New York City in connection with the Transaction. As investment advisor, SCS will: (a) introduce BUFC to potential counterparties for a potential equity investment transaction; (b) work with BUFC and its advisors in developing a proposed structure for any potential Transaction with an SCS Counterparty; and (c) work with BUFC in connection with preparation of documentation related to a potential Transaction. SCS's fee is entirely contingent and would be payable over the life of an investment transaction, only in the event the Debtors close a transaction with an SCS Counterparty under a confirmation Chapter 11 plan on or before Dec. 31, 2011. Mark McTigue, a managing director of Structured Capital Solutions, LLC, assures the Court that his firm is a "disinterested party" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors' estates. About BankUnited Financial BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors led by W.L. Ross & Co. BankUnited, FSB, had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The Company and its affiliates filed for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 09-19940) on May 22, 2009. Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz, P.A., represent the Debtors as counsel. Corali Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as counsel to the official committee of unsecured creditors. In its bankruptcy petition, BankUnited Financial Corp. disclosed $37,729,520 in assets against $559,740,185 in debts. Aside from those assets, BankUnited said that a "valuable" asset is its $3.6 billion net operating loss carryforward. Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York were listed among the company's largest unsecured creditors in their roles as trustees for security issues. BankUnited estimated the Bank of New York claim tied to convertible securities at $184 million. U.S. Bank and Wilmington Trust are owed $120 million and $118.171 million on account of senior notes. BARNES BAY: Judge to OK Bidding Protocol for Anguilla Resort ------------------------------------------------------------ Peg Brickley, writing for Dow Jones Daily Bankruptcy Review, reports that Barnes Bay Development Ltd. will put Viceroy Anguilla Resort and Residences up for public auction on July 27. DBR reports that Judge Peter Walsh said he would sign off on rules for the bidding Thursday. Approving the controversial sale plan is another thing, the judge said, adding that objections creditors voiced Thursday will be weighed when the results of the auction are presented for approval According to DBR, Barnes Bay says it's going to conduct an open public auction with a $250,000 deposit as the only price of admission. DBR says that is an improvement over many bankruptcy auctions, where companies and creditors screen bidders in advance and bar those they deem "unqualified" to compete. DBR notes creditors have objected to the proposed sale, saying the auction is a setup designed to deliver the resort to Starwood Capital Group, free and clear of claims from those who put up more than $50 million in deposits to buy luxury residences that weren't ready in time. Creditors sought changes in the bid rules that allow them to challenge Starwood's right to credit bid, or bid with debt instead of cash. Nearly complete, the Viceroy Anguilla cost more than $500 million to build, court papers say. Starwood paid a $117 million to $122 million for Barnes Bay's secured debt, and is poised to bid the face amount of the debt, $327.5 million, instead of cash, at the auction. DBR further relates that Judge Walsh granted those buyers the right to turn to the Anguillan courts immediately for help. He lifted the automatic stay that shields Barnes Bay from hostile legal action to permit the buyers that objected to the bid rules to go to the island's courts "and seek a declaratory judgment or whatever relief they are entitled to under Anguilla law." If the Anguillan courts rule that the buyer's claims are "prior to Starwood's, then so be it," Judge Walsh said. DBR considered the ruling "unusual". About Barnes Bay Beverly Hills, California-based Barnes Bay Development Ltd., owns the Viceroy Anguilla Resort & Residences on the British West Indies island of Anguilla. Barnes Bay and two affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10792) on March 17, 2011. The Debtor disclosed $3,331,282 in assets and $481,840,435 in liabilities as of the Chapter 11 filing. Akin Gump Straus Hauer & Feld LLP is the Debtors' bankruptcy counsel, and Keithley Lake & Associates is the Debtors' special Anguillan counsel. Kurtzman Carson Consultants LLC is the Debtors' claims, noticing, solicitation and balloting agent. The Debtors' Chapter 11 plan is intended to facilitate the sale of the Viceroy Anguilla Resort and Residences. The U.S. Trustee appointed five members to the official committee of unsecured creditors in the Debtors' cases. Brown Rudnick LLP serves as the Committee's co-counsel, and Womble Carlyle Sandridge & Rice, PLLC, as its Delaware co-counsel. FTI Consulting, Inc., serves as the Creditors Committee's financial advisors. BBB ACQUISITION: Hearing on Case Conversion Plea Reset to June 1 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Wyoming has rescheduled to June 1, 2011, at 1:30 p.m., the hearing to consider the U.S. Trustee's request to convert BB Acquisition, LLC's Chapter 11 case to one under the Chapter 7 of the Bankruptcy Code. The hearing was previously scheduled for May 25, at 1:30 p.m. BBB Acquisition, LLC, in Cincinnati, Ohio, filed for Chapter 11 bankruptcy (Bankr. D. Wyo. Case No. 10-21002) on Aug. 24, 2010, represented by Brent R. Cohen, Esq. -- bcohen@rothgerber.com -- and Chad S. Caby, Esq. -- ccaby@rothgerber.com -- at Rothgerber Johnson & Lyons LLP in Denver, Colorado. The Debtor disclosed $57,239,218 in assets and $35,613,501 in liabilities. BBB ACQUISITION: Wants Trustee's Motion to Convert Case Denied -------------------------------------------------------------- BBB Acquisition, LLC, asks the U.S. Bankruptcy Court for the District of Wyoming to deny the motion of the U.S. Trustee for Region 19 to convert its case to one under Chapter 7 of the Bankruptcy Code. The Debtor asserts that due process has not been satisfied with the U.S. Trustee's request based on his failure to provide adequate and proper notice of the motion to convert to creditors and interested parties. BBB Acquisition, LLC, in Cincinnati, Ohio, filed for Chapter 11 bankruptcy (Bankr. D. Wyo. Case No. 10-21002) on Aug. 24, 2010, represented by Brent R. Cohen, Esq. -- bcohen@rothgerber.com -- and Chad S. Caby, Esq. -- ccaby@rothgerber.com -- at Rothgerber Johnson & Lyons LLP in Denver, Colorado. The Debtor disclosed $57,239,218 in assets and $35,613,501 in liabilities. BBB ACQUISITION: Has Until July 20 to Solicit Acceptances to Plan ----------------------------------------------------------------- The Hon. Peter J. McNiff of the U.S. Bankruptcy Court for the District of Wyoming extended BBB Acquisition, LLC's exclusive period to solicit acceptances for the proposed plan of reorganization until July 20, 2011. As reported in the Troubled Company Reporter on April 25, the Debtor needs further extension of its exclusive plan solicitation period to allow it to submit evidence at the Disclosure Statement Hearing demonstrating that its Plan provides adequate information under Section 1125 of the Bankruptcy Code. Further extension will also allow the Debtor sufficient time to move its Plan to a confirmation hearing. The TCR reported on Jan. 20, the Bankruptcy Court denied, without prejudice, the disclosure statement explaining BBB Acquisition's Plan, citing areas that are insufficient. The Debtor on March 1 amended the disclosure statement explaining its Plan of Reorganization. The Plan was filed Nov. 22, 2010. Under the original Plan, Reorganized BBB will be responsible for administering the Plan and making distributions to the remaining creditors. Reorganized BBB will also continue the operation of its business in the same fashion as it did prior to the Petition Date. The members making up to the Class 7 equity interests in the Debtor will retain their ownership interest. Creditors holdings allowed unsecured claims -- under Class 6 -- will receive their pro rata share of distributions on a quarterly basis from the creditor fund after payment of allowed administrative claims, allowed general priority claims, allowed convenience class claims and the allowed Fifth Third Claim until paid in full, plus simple interest at the rate of 4% per annum, calculated from the Petition Date. Payment of allowed Class 6 Claims will be made from funds generated from the sale of real estate within the Bar-B-Bar Ranch in Teton County, Wyoming. Holders of unsecured claims classified as convenience claims -- under Class 5 -- will be paid in full on the distribution date. Holders of Class 5 claims will receive cash in an amount equal to their allowed claim, without interest, not exceeding $2,500 on the distribution date. A copy of the Disclosure Statement dated Nov. 22 is available for free at http://bankrupt.com/misc/BBBAcquisition_DS.pdf About BBB Acquisition, LLC BBB Acquisition, LLC, in Cincinnati, Ohio, filed for Chapter 11 bankruptcy (Bankr. D. Wyo. Case No. 10-21002) on Aug. 24, 2010, represented by Brent R. Cohen, Esq. -- bcohen@rothgerber.com -- and Chad S. Caby, Esq. -- ccaby@rothgerber.com -- at Rothgerber Johnson & Lyons LLP in Denver, Colorado. The Debtor disclosed $57,239,218 in assets and $35,613,501 in liabilities. BEVERLY HILLS SUITES: Working on Plan for Bradley Hotel ------------------------------------------------------- Greg Bordonaro, writing for the Hartford Business Journal Online, reports that an attorney for Beverly Hills Suites LLC said the company is working on an reorganization plan that it hopes to present to the court within 90 days. "We expect to successfully reorganize," New Haven attorney Peter L. Ressler, Esq., said. Beverly Hills Suites, LLC, operator of the 165-room Bradley Hotel in Windsor Locks, Connecticut, filed a Chapter 11 petition (Bankr. D. Conn. Case No. 11-21441) on May 13, 2011. Peter L. Ressler, Esq., at Groob Ressler & Mulqueen, in New Haven, Connecticut, serves as counsel to the Debtor. The Debtor estimated under $50,000 in assets and $1 million to $10 million in debts as of the Chapter 11 filing. BIEDERMANN MANUFACTURING: Owner Loses RecZone to Foreclosure ------------------------------------------------------------ David Bracken at The (Raleigh, N.C.) News & Observer reports that RecZone, the Raleigh ice rink where the Carolina Hurricanes practice, has been foreclosed upon and could close its doors as early as next month. BB&T Bank recently took back the property, said John Biedermann, whose family had owned the facility since 2000. "We're supposed to be out of there by June 15," he said. "By June 15, they're going to decide whether there's ice in there or not." Mr. Biedermann said the foreclosure was caused by financial problems incurred by his other business, Biedermann Manufacturing Industries, which sought bankruptcy protection in November. About Biedermann Manufacturing Based in Raleigh, North Carolina, Biedermann Manufacturing Industries, Inc., is a Connecticut corporation engaged since 1983 in the manufacturing of precision screw machine products. The Debtor operates in Thomaston, Connecticut; Raleigh, North Carolina; and Westminister, South Carolina. The Debtor sells its products to equipment manufacturers throughout the United States and internationally. Biedermann filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 10-09207) on Nov. 8, 2010, represented by John A. Northen, Esq., and Vicki L. Parrott, Esq., at Northen Blue, LLP. In its petition, the Debtor disclosed $1,071,393 in assets and $3,453,126 in debts. BLOCKBUSTER INC: McMillan Law Firm Fights Icahn's Sanctions Bid --------------------------------------------------------------- Megan Stride at Bankruptcy Law360 reports that the McMillan Law Firm APC said Monday that it should not be sanctioned for bringing a Blockbuster Inc. bondholder's short-lived adversary suit accusing ex-Blockbuster board member Carl Icahn of making shady maneuvers to obtain senior debt in the Company. Icahn's sanctions bid against the firm and bondholder Lyme Regis Partners LLC should be denied, the law firm argued, because attorney Scott A. McMillan fulfilled his obligation to carefully review and consider the merits of Lyme Regis' complaint before he filed it, Law360 relates. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan (Bankr. S.D.N.Y. Case No. 10-14997) on Sept. 23, 2010. It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. The Bank of New York Trust Company, N.A., as trustee under that certain indenture, dated as of Aug. 20, 2004, with respect to the 9% Senior Subordinated Notes due 2012 issued by Blockbuster Inc., is represented by Edward P. Zujkowski, Esq., at Emmet, Marvin & Martin, LLP. The Ad Hoc Studio Committee of Blockbuster Inc. et al. is represented by Robert J. Feinstein, Esq., at Pachulski Stang Ziehl & Jones LLP. Blockbuster on Feb. 21, 2011, entered into an Asset Purchase and Sale Agreement providing for the sale of substantially all of their assets or the proceeds of those assets to a newly formed entity named Cobalt Video Holdco LLC. For purposes of entering into the Purchase Agreement, the Purchaser was established by Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management, LLC, and Varde Partners, Inc. who collectively hold more than 50% of the Senior Secured Notes and each of which is a member of the Steering Committee. Cobalt Video Holdco LLC, the stalking horse purchaser, was represented by Mark Shinderman, Esq., at Milbank, Tweed, Hadley & McCloy LLP. The auction was held earlier in April and Dish Network Corp. won with an offer having a gross value of $320 million. BLUEKNIGHT ENERGY: Amends Global Transaction Agreement ------------------------------------------------------ Blueknight Energy Partners, L.P., has entered into a First Amendment to Global Transaction Agreement pursuant to which certain transactions contemplated by the Global Transaction Agreement entered into in October 2010 have been modified. "After several months of discussions with a group of large unitholders, the board agreed to certain modifications to the Global Transaction Agreement which we believe, on the whole, accrue to the benefit of our public Common Unitholders. Vitol and Charlesbank agreed to these modifications, including higher distribution levels for the common unitholders than originally anticipated by the Global Transaction Agreement, with the expectation of securing the common unitholders' vote in favor of certain amendments to the Partnership Agreement," commented James Dyer, chief executive officer and director of the Partnership's general partner. "The modified refinancing transactions, if approved, when combined with the recently announced proposed settlement of the securities class action litigation and the relisting of the Partnership's common units on NASDAQ, will simplify the Partnership's capital structure, facilitate the ability of the Partnership to take advantage of growth opportunities, and allow us to continue the focus on building unitholder value." The Global Transaction Agreement entered into in October, 2010 contemplated a series of transactions related to the refinancing of the Partnership's debt and the recapitalization of the Partnership's securities. Generally, these transactions were separated into three types of transactions: (i) Phase I Transactions, (ii) Unitholder Vote Transactions, and (iii) Phase II Transactions. The Phase I Transactions were completed on Oct. 25, 2010. The Amendment modifies the Unitholder Vote Transactions and the Phase II Transactions contemplated in the Global Transaction Agreement. The Partnership's general partner's Board of Directors approved the Amendment based on a recommendation from its Conflicts Committee, which consists entirely of independent directors. The Conflicts Committee retained independent legal and financial advisors to assist it in evaluating the Amendment. The Committee considered a number of factors, including an opinion from the Conflicts Committee's independent financial advisor that the Unitholder Vote Transactions and the Phase II Transactions effected pursuant to the Global Transaction Agreement as amended by the Amendment are fair, in aggregate, from a financial point of view, to the public unaffiliated common unitholders of the Partnership. The Partnership's general partner has agreed to convene a special meeting of holders of the Partnership's Common Units to consider and vote upon the following Unitholder Proposals: * Distributions to Common Unitholders: amend the Partnership's partnership agreement to reset (i) the Minimum Quarterly Distribution to $0.11 per unit per quarter, (ii) the First Target Distribution to $0.1265 per unit per quarter, (iii) the Second Target Distribution to $0.1375 per unit per quarter and (iv) the Third Target Distribution to $0.1825 per unit per quarter, each effective as of the first day of the quarter during which the unitholders approve the Unitholder Proposals; * Cancel Subordinated Units: amend the partnership agreement to cancel all of the Partnership's outstanding subordinated units; * Eliminate Arrearages: waive the Cumulative Common Unit Arrearage due and owing through and including the quarter during which the unitholders approve the Unitholder Proposals; * Two-years before General Partner can receive Incentive Distributions: amend the partnership agreement to provide that no distributions of Operating Surplus will accrue or be paid to the holders of the Incentive Distribution Rights during the two-year period beginning with the quarter in which the Unitholder Proposals are approved; * Corporate Governance: amend the partnership agreement to provide that during the period beginning on the date the Unitholder Proposals are approved until June 30, 2015, the Partnership will not issue any senior equity securities except for certain exceptions as set forth in the Amendment; and * Ability for the Board to Convert Preferred Units to Common Units: amend the partnership agreement to provide that in addition to the Partnership's current rights to convert the Series A Preferred Units into common units, the Series A Preferred Units will also be convertible in whole or in part at the option of the Partnership at any time on or after Oct. 25, 2015, subject to certain price and volume requirements as set forth in the Amendment. The Board and the Conflicts Committee each recommend the public unitholders approve the Unitholder Proposals. The Unitholder Proposals must be approved by a majority of the outstanding common units held by the public. The Partnership's Series A Preferred Units are not entitled to vote upon the Unitholder Proposals. Upon the approval of the Unitholder Proposals: * Vitol and Charlesbank will transfer all of the Partnership's outstanding subordinated units to the Partnership and the Partnership will cancel such subordinated units, and * the Partnership will undertake a $77 million rights offering, the proceeds of which will be used to pay for any and all expenses relating to conducting the rights offering, redeem the Partnership's convertible debentures plus any interest payable thereon, and then to repurchase up to a maximum of $22 million of preferred units from Vitol and Charlesbank. A full-text copy of the First Amendment to Global Transaction Agreement is available for free at http://is.gd/6VLjuK About Blueknight Energy Blueknight Energy Partners, L.P. (Pink Sheets: BKEP) -- http://www.bkep.com/-- provides integrated terminalling, storage, processing, gathering and transportation services for companies engaged in the production, distribution and marketing of crude oil and asphalt product. It provides services for the customers, and its only inventory consists of pipeline linefill and tank bottoms necessary to operate the assets. It has three operating segments: crude oil terminalling and storage services, crude oil gathering and transportation services, and asphalt services. The Company reported a net loss of $23.79 million on $152.62 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $16.50 million on $156.77 million of total revenue during the prior year. The Company also reported a net loss of $13.19 million on $39.09 million of total revenue for the three months ended Dec. 31, 2010, compared with a net loss of $5.64 million on $37.07 million of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $323.49 million in total assets, $358.56 million in total liabilities and a $35.06 million total partners' deficit. BORDERS GROUP: Still Trying to Find Buye for All of 400 Stores -------------------------------------------------------------- Borders Group, Inc. has not yet found a buyer for the entire chain, according to four people familiar with the matter, Lauren Coleman-Lochner, Jeffrey McCracken and Tiffany Kary of Bloomberg News report. Borders hopes to find a buyer for some or all of the business in the next few weeks, Bloomberg relays, citing two people. A May 13, 2011 report from The Wall Street Journal's Mike Spector and Jeffrey A. Trachtenberg related that people familiar with the matter said Borders is in discussions with a potential bidder for more than 225 stores that would keep it operating as a going concern. According to the Journal, the identity of the possible bidder couldn't be learned, but the sources said the bidder has expressed interest in more than 190 of the chain's remaining superstores. The sources also cautioned that talks remain at an early stage and could fall through. Borders has been soliciting offers as it attempts to survive amid mounting losses. According to the Journal, the sources said Borders hasn't received interest from any bidders in purchasing all of its about 400 outlets. Sources told the Journal that a soft deadline for potential Borders bids passed May 6, 2011, but these people said Borders remains in discussions with a handful of potential suitors. The Journals' sources also said rival Barnes & Noble Inc. recently offered to buy 10 stores, the company's Web site and customer lists. One of the sources said Borders wasn't keen on the offer. A Barnes & Noble spokeswoman said she could neither confirm nor deny the chain's bid, according to the Journal. The Journal also reports that an executive at a leading publisher recently said the firm would keep an open mind regarding terms with Borders, noting that there is considerable value for publishers in having Borders continue to operate. A second publishing executive, however, said there was little possibility that their publishing house would resume normal trade terms with Borders in the near future. Borders owes the six largest publishers $182 million, according to court papers. People familiar with the matter told the Journal Borders could be forced to liquidate in the event it can't sell the bulk of its stores. Likewise, Bloomberg comments that the lack of offers for the whole Borders business "may spell the end" for the bookstore chain. "It is not looking great for Borders," voiced Ken Dalton, a Farmington Hills-based turnaround expert, in an interview with The Detroit Free Press. "They are looking for investors because they are not exactly sure they will make it on their own," the turnaround expert continued. Borders spokesperson Mary Davis in e-mailed statement to Bloomberg maintained, "We are focused on moving forward with the execution of our business plan. We are continuing to evaluate interest in the company as expressed through the ongoing Chapter 11 process." Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, bankruptcy counsel of Borders, also declined to comment on the matter, Bloomberg adds. * * * Publishers Weekly observes that rumors of Borders selling a piece of its business were swirling last weekend just days after Borders CEO Mike Edwards said in a letter to vendors that it had decided against selling the company, or parts of it, and was preparing a way to exit from bankruptcy as an intact company. In earlier reports, Publishers Weekly disclosed that two companies had made a bid by the May 6 deadline -- one a financier and the other, a retailer. Publishers' Weekly was the first to report on May 11, 2011, that at least one bid was made for Borders, according to its sources. At a May 11, 2011 hearing, Judge Glenn Martin of the U.S. Bankruptcy Court for the Southern District of New York asked for updates on where things stood in Borders' bankruptcy, Publishers Weekly relates. The bankruptcy judge then adjourned the hearing after returning from a brief meeting with the lawyers "out of ear shot from those listening on the phone," Publishers Weekly says. It was speculated that the attorneys were updating the bankruptcy judge on whether any bids for the company were made on May 6, Publishers Weekly points out. In other news, Publishers Weekly notes that posts in the Borders employee Web site indicated that a new store layout has been developed. Borders did not comment on the sale reports or on the authenticity of the employee posts, according to Publishers Weekly. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. National law firm Lowenstein Sandler has been appointed to represent the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Close to Finalizing Chapter 11 Plan, Says CEO ------------------------------------------------------------ Borders Group, Inc. CEO Mike Edwards disclosed that the bookstore chain is close to finalizing a reorganization plan, www.AnnArbor.com's Nathan Bomey related in a May 5, 2011 report. "We have all the components of the plan done. What has to be shored up at this point is a financial sponsor and getting clarity on what the go-forward publishing terms will be," Mr. Edwards said of the Chapter 11 plan in a recent interview with AnnArbor.com. Mr. Edwards said he confident his company can emerge from bankruptcy as a viable entity, the report relayed. The company's future, however, is hinged on the publishers' willingness to agree to new terms under which they will continue to ship books to the company, Mr. Edwards acknowledged in the AnnArbor.com interview. Borders will know by the end of June whether publishers will support the company or not, said Mr. Edwards, according to the report. "All I can tell you is that we are here fighting to the end," the report quoted Mr. Edwards as saying. "We know we have a business plan that works, but it requires a lot of support to get there, and our publishers are going to make or break our ability to transform this company at the end of the day." Mr. Edwards apprised AnnArbor.com that Borders has presented an 80-page business plan proposal with new terms to publishers in the past weeks. On the risk that Borders will be forced to liquidate its assets in bankruptcy, Mr. Edwards said he is convinced the company will be on firm financial ground once it closes unprofitable stores; gets better lease terms; secures improved terms with vendors; and boosts its online sales, e-book offerings and in-store product mix, www.AnnArbor.com stated. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. National law firm Lowenstein Sandler has been appointed to represent the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Removal Period Extended Until Sept. 14 ----------------------------------------------------- Judge Martin Glenn extended the time by which Borders Group Inc. and its affiliates must file notices of removal of civil actions and proceedings to which they are or may become party to, to the later of: (a) Sept. 14, 2011; or (b) 30 days after the entry of an order terminating the automatic stay with respect to the particular Civil Action sought to be removed. The Court's order is without prejudice to any position the Debtors may take regarding whether Section 362 of the Bankruptcy Code applies to stay any Civil Action, which will not prejudice the Debtors' rights under Rule 9027(a)(2)(B) of the Federal Rules of Bankruptcy Procedure to remove those Civil Actions in the event that the automatic stay is lifted with respect to the Civil Actions. The Court's order does not prejudice the Debtors' rights to seek further extensions of the Action Removal Period. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. National law firm Lowenstein Sandler has been appointed to represent the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BORDERS GROUP: Proposes BofA Pact on Compensation Plan ------------------------------------------------------ Borders Group and its affiliates ask the Bankruptcy Court to approve a stipulation it negotiated with Bank of America, N.A., authorizing and directing performance under a trust agreement for the Debtors' Deferred Compensation Plan. In August 2001, Borders Group, Inc. and BofA, successor to Merrill Lynch Trust Company, FSB, as trustee, entered into a Borders Group, Inc. Non-Qualified Deferred Compensation Plan Trust Agreement, creating a "rabbi" trust to hold assets contributed by the Debtors to be used to fund the Debtors' payment obligations under the Borders Group, Inc. Non-Qualified Deferred Compensation Plan. The Trust Agreement governs the Debtors' and BofA's rights and obligations with respect to payments from the Trust, which are used to satisfy payment obligations under the Deferred Compensation Plan. The Deferred Compensation Plan is a typical non-qualified deferred compensation plan that permits Plan Participants to elect to defer payment of a portion of their current wages on a tax-deferred basis to be distributed in the future as designated under the plan document. At the time of deferral, the Debtors make a contribution to the Trust equal to the amount deferred by the Plan Participant to insure there are sufficient funds available to make distributions under the Deferred Compensation Plan as they become due under the terms of the Deferred Compensation Plan. As of the Petition Date, 18 Plan Participants have accounts under the Deferred Compensation Plan, aggregating approximately $582,000. Pursuant to interim and final orders on the Debtors' Employee Benefits Motion, the Debtors have continued to maintain and operate the Deferred Compensation Plan and Plan Participants have continued to defer amounts under the Deferred Compensation Plan, collectively deferring approximately $26,000. Some of the Plan Participants are in pay status under the Deferred Compensation Plan as a result of previously terminating employment with the Debtors, while others have become entitled distributions in-service distributions based on prior elections and the terms of the Deferred Compensation Plan. BofA has declined to make distributions under the Trust until it obtains certain direction, authorization and protections as set forth in the Parties' Stipulation. Accordingly, the Parties stipulate that: (a) The Debtors and BofA are authorized and directed to continue to administer and otherwise perform under the Trust Agreement and the Deferred Compensation Plan, including, but not limited to, the distribution of funds to Plan Participants in the ordinary course or upon plan termination pursuant to the Deferred Compensation Plan, Section 40A of the Internal Revenue Code, and the Trust Agreement. (b) The Debtors and BofA are authorized and directed to pay or otherwise honor all obligations to Plan Participants incurred under or related to the Deferred Compensation Plan and Trust Agreement that (i) were or are due and payable and relate to the period prior to the Petition Date; and (ii) are or become due and payable or relate to the period after the Petition Date, in all cases, without further order of the Court; (c) The Debtors are authorized, but not directed, to pay all costs and other obligations owing to BofA in connection with the Deferred Compensation Plan and the Trust Agreement that may have been outstanding as of the Petition Date, and to continue so paying, in the ordinary course of business; (d) The Trust Agreement, including but not limited to the indemnification provisions set forth in the Trust Agreement, are approved and enforceable against the Debtors' estates. A full-text copy of the Parties' Stipulation is available for free at http://bankrupt.com/misc/Borders_BofAStipulation.pdf Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, tells Judge Glenn that the Debtors' Motion only seeks to clarify that BofA can act in accordance with the Final Benefits Order. Absent the relief requested in the motion, the Plan Participants will suffer undue hardship, because amounts requested from the Deferred Compensation Plan are needed to enable the Plan Participants to meet their own personal obligations, he stresses. Likewise, a delay of any requested distribution might have a negative effect on the well being and morale of the Plan Participants and their families, he maintains. Judge Glenn will consider the Debtors' request on June 2, 2011. Objections are due no later than May 26. About Borders Group Borders Group is a leading operator of book, music and movie superstores and mall-based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders- branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. Two of Borders' flagship stores (along with other less prominent stores) are located in Manhattan. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e- commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. National law firm Lowenstein Sandler has been appointed to represent the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group has sought approval to sell merchandise and owned furniture, fixtures and equipment located at approximately 200 of their stores and, at Borders' option, up to 75 of 136 potential other stores, through store closing sales. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000) BREWERY PROPERTIES: Files for Ch. 11 to Bring Issues in One Forum ----------------------------------------------------------------- Bethany Bray, staff writer at The Salem News, reports that Ipswich Ale Brewery's much-delayed plans to relocate to a bigger facility downtown and open a brew pub have hit another snag after the owner, Brewery Properties Group, filed for bankruptcy. The owner contemplated on moving the brewing operation from 23 Hayward St. to 2 Soffron Lane but "a number of disagreements have arisen over issues in delays," according to Michael Goldberg, Esq., Boston- based lawyer for Brewery Properties. "The bankruptcy was filed to bring all those disputes into one forum and to solve them, whether or not with a judge's help." A hearing before Judge Joan Feeney is scheduled for June 15 in Boston. The Debtor and partner Mercury Brewing & Distribution Co. of Ipswich. are involved in litigation over unpaid rent. "We have filed a (bankruptcy) plan (to) resolve our issues with Mercury over unpaid rent," Mr. Goldberg said. "Once we can solve those issues, we would move forward to bring the Danversbank loan current, provide payment, over time, to unpaid contractors and go back to getting the project done. . . . We hope to have it come to fruition." Brewery Properties Group LLC, the developer of a significant parcel in Ipswich, Massachusetts, filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 11-14208) on May 3, 2011. Judge Joan N. Feeney presides over the case. Michael J. Goldberg, Esq., at Casner & Edwards, LLP, represents the Debtor. The Debtor disclosed $2,166,583 in assets, and $3,439,367 in debts. BROWN PUBLISHING: Court Issues New Order on K&L Contingent Fees --------------------------------------------------------------- Judge Dorothy Eisenberg of the U.S. Bankruptcy Court for the Eastern District of New York (Central Islip) has modified the order granting application for the retention and employment of K&L Gates LLP as bankruptcy counsel to recover on a contingent fee basis for certain affirmative recoveries obtained by the Debtors or their estates nunc pro tunc to February 18, 2011. Judge Eisenberg has authorized K&L Gates to be paid contingent fees with respect to affirmative recoveries ranging from 17% to 30%. For all other claims including all avoidance actions, K&L Gates is authorized to be paid contingent fees with respect to affirmative recoveries in the amount of 20% to 33% of all gross collections. As reported in the March 28, 2011 edition of the Troubled Company Reporter, the Debtors asked the Bankruptcy Court for an order modifying, nunc pro tunc to Feb. 18, 2011, a prior order granting their application to employ K&L Gates LLP as bankruptcy counsel to allow K&L Gates to be paid, on a contingent fee basis for services performed in connection with certain affirmative recoveries which may be obtained by the Debtors or their estates. The Debtors, the Official Committee of Unsecured Creditors and PNC Bank, N.A., as agent for the Debtors' prepetition secured first lien lenders have reached an agreement regarding a global resolution of the primary outstanding issues in the cases, including the adversary proceeding commenced by the Committee against the First Lien Lenders entitled The Official Committee of Brown Publishing Company, et al. v. PNC Bank, N.A., et al. (Adv. Pro. No. 10-8300). Among the terms of the settlement is the imposition of a limit on the amount of fees to be paid to the Debtors' and the Committee's counsel and financial advisors, which has been incorporated into the Debtors' First Amended Joint Chapter 11 Plan of Liquidation and accompanying Disclosure Statement, filed on March 4, 2011. If the aggregate amount of the allowed claims of the professionals employed in the Chapter 11 Cases pursuant to Sections 327, 328, 1103 or otherwise of the Bankruptcy Code, net of (i) any sums previously received, and unapplied retainers held, by the Retained Professionals, exceeds the Professional Fee Cap, each of the Main Professionals will defer or waive payment of its Allowed Professional Fee Claim in an amount equal to the product of the Professional Fee Shortfall multiplied by a fraction, the numerator of which will be the Main Professional's Allowed Professional Fee Claim and the denominator of which will be the total of all of the Main Professionals Allowed Professional Fee Claims, until the date when distributions are made to holders of Allowed Class 3 General Unsecured Claims under the First Amended Plan by the disbursing agent, at which point the deferred amounts will be paid in full to the extent of the remaining 30% of each dollar of any additional net proceeds -- GUC 30%. If, on the Final Distribution Date, the GUC 30% is not sufficient to enable a liquidating trustee to pay the Professional Fee Shortfall in full, then the unpaid Professional Fee Shortfall of each Main Professional will be paid out of the GUC 30% pro rata in the proportion that each Main Professional's unpaid Professional Fee Shortfall bears to the total unpaid Professional Fee Shortfall. Any portion of the Professional Fee Shortfall remaining unpaid after the Final Distribution Date and the exhaustion of the GUC 30% will be deemed to have been waived. Under the terms of the agreement, the Debtors, the Committee and PNC have agreed that, in return for its agreement to conclude the administration of the Debtors' estates notwithstanding the imposition of the Fee Cap, K&L Gates will be entitled to recover, on a contingent fee basis, for affirmative recoveries -- other than vehicle or real estate sales, utility deposits, accounts receivable recovered without litigation and the Committee's litigation against the Debtors' prepetition secured first lien lenders -- expressly including the security deposit posted by Brown Media Corporation, obtained by the Debtors or their estates from and after Feb. 18, 2011. According to the Debtors, due to the unanticipated length and complexities of their cases, K&L Gates and the other Main Professionals have already incurred fees and expenses in excess of the Fee Cap. Although K&L Gates has agreed to complete the administration of the case subject to the Fee Cap, the Debtors, the First Lien Lenders and the Committee have agreed that an alternative arrangement is necessary and appropriate to compensate K&L Gates for the legal work that it performs on behalf of the Debtors and their estates in obtaining affirmative recoveries for the benefit of the estates creditors. K&L Gates has proposed to be compensated on a contingent fee basis with respect to the affirmative recoveries that it obtains on behalf of the Debtors or their estates with respect to matters K&L Gates elects to take on, as follows: (a) For preference actions pursuant to 11 U.S.C. Sec. 547, K&L Gates would charge contingent fees with respect to affirmative recoveries in the amount of (i) 17% of all gross collections on cases settled prior to the filing of a complaint, (ii) 26% of all gross collections recovered after commencement of suit and at least 31 days before the earlier of (x) a scheduled trial and (y) the initial scheduled return date of a motion for a default or summary judgment and (iii) 30% of all gross collections recovered after commencement of suit and less than 31 days before the earlier of (x) a scheduled trial or (y) the initial scheduled return date of a motion for a default or summary judgment. (b) For all other claims including, without limitation, all avoidance actions pursuant to Chapter 5 of the Bankruptcy Code other than preference actions pursuant to 11 U.S.C. Sec. 547, and all other claims and causes of action, if any, K&L Gates would charge contingent fees with respect to affirmative recoveries in the amount of (i) 20% of all gross collections on cases settled prior to the filing of a complaint, (ii) 29% of all gross collections recovered after commencement of suit and more than 61days before the earlier of (x) a scheduled trial and (y) the initial scheduled return date of a motion for a default or summary judgment and (iii) 33% of all gross collections recovered after commencement of suit and less than 61 days before the earlier of (x) a scheduled trial or (y) the initial scheduled return date of a motion for a default or summary judgment. In the event preference and non-preference claims are asserted against the same defendant, the contingent fee on all claims, including preference claims, would be charged at the rate applicable to non-preference claims. Disbursements would be paid directly by the Debtors estates or any liquidating trust established pursuant to a Chapter 11 plan of liquidation that is confirmed by the Court, or upon invoice, regardless of recovery, and would not be subject to any contingency or level of recovery. About Brown Publishing Headquartered in Cincinnati, Ohio, The Brown Publishing Company owns business publications in Ohio, Utah, Texas, South Carolina, New York, and Iowa. Brown publishes 15 daily, 32 weekly, 11 business and 41 free publications. There are also 51 websites. Seventy-eight of the publications are in Ohio. Brown publishes Dan's Papers, the weekly newspaper with the largest circulation in the area of eastern Long Island, New York, known as the Hamptons. Brown also publishes the Montauk Pioneer, which it calls the official newspaper of Montauk, New York. The Company filed for Chapter 11 bankruptcy protection on April 30, 2010 (Bankr. E.D.N.Y. Case No. 10-73295). The Company estimated its assets and debts at $10,000,001 to $50,000,000. BOUNDARY BAY: U.S. Trustee Taps 3-Member Creditors Panel -------------------------------------------------------- Peter C. Anderson, the U.S. Trustee for Region 16, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of Boundary Bay Capital, Llc. The Creditors Committee members are: 1. Albert c. Wazlak 1901 Pine St. Huntington Beach, CA 92648 Tel: (714) 809-6100 Facsimile: (714) 787-0990 E-mail: awazlak@aol.com 2. Harrington Construction Co., Inc. West Harrington 22632 Golden Springs Dr., #215 Diamond Bar, CA 91765 Tel: (909) 861-5452 Facsimile: (909) 861-2871 E-mail: hccl@hccigroup.com 3. Henry Worthington Testamentary Trust Sherril W. Keithley 10715 SW Heron Circle Beaverton, OR 97007 Tel: (503) 579-9123 Tel: (503) 701-2105 (cell) E-mail: swkwkeithley@comcast.net About Boundary Bay Irvine, California-based Boundary Bay Capital, LLC, a California LLC, fka Covenant Bancorp, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-14298) on March 28, 2011. Hutchison B. Meltzer, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $50 million to $100 million. Affiliate Cartwright Properties, LLC, filed a separate Chapter 11 petition on June 9, 2010 (Bankr. C.D. Calif. Case No. 10-17823). Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. BOUNDARY BAY: Seeks to Employ Weiland as Bankruptcy Counsel ----------------------------------------------------------- Boundary Bay Capital LLC asks U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, for permission to employ Weiland, Golden, Smiley, Wand, Ekvall & Strok LLP as its counsel. The firm will: a) advise the Debtor with respect to requirements and provisions of the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, Local Bankruptcy Rules, U.S. Trustee Guidelines and other applicable requirements which may affect the Debtor; b) assist the Debtor in preparing and filing Schedules and Statement of Financial Affairs, complying with and fulfilling U.S. Trustee requirements, and preparing other documents as may be required after the initiation of a Chapter 11 petition; c) assist the Debtor in the preparation of a disclosure statement and formulation of a Chapter 11 plan of reorganization; d) advise the Debtor concerning the rights and remedies of the estate and of the Debtor in regard to adversary proceedings which may removed to, or initiated in, the Bankruptcy Court; and e) represent the Debtor in any proceeding or hearing in the Bankruptcy Court in any action where the rights of the estate or the Debtor may be litigated, or affected. The firm will undertake representation of the Debtor at its customary hourly rates which currently range from $200 and $640, depending on the experience and expertise of the attorney or paralegal performing the work. The professionals and the hourly rates that are expected to render service to the Debtor are: Name Designations Hourly Rates ------------ ------------ ------------ Evan D. Smiley Partner $590 Hutchinson B. Meltzer Senior Counsel $450 Beth E. Gaschen Associates $360 Claudia M. Yoshonis Senior Paralegal $230 The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Boundary Bay Irvine, California-based Boundary Bay Capital, LLC, a California LLC, fka Covenant Bancorp, Inc., is in the business of making loans secured by real estate. The debtor owns real estate property obtained through foreclosures on real estate loans. Boundary Bay Capital filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-14298) on March 28, 2011. Hutchison B. Meltzer, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $50 million to $100 million. Affiliate Cartwright Properties, LLC, filed a separate Chapter 11 petition on June 9, 2010 (Bankr. C.D. Calif. Case No. 10-17823). BOYLAN INT'L: Liquidating Trust's Life Extended for Two Years ------------------------------------------------------------- Bankruptcy Judge Martin Glenn granted a request by Alma Garnett, the Liquidating Trustee for Boylan International Ltd., for an order permitting the modification of the Debtor's confirmed chapter 11 liquidation plan. Ms. Garnett seeks to modify the Combined Disclosure Statement and Plan of Liquidation, which was confirmed on May 30, 2009, by extending the life of the Boylan Liquidating Trust. By its terms, the Trust expires on June 9, 2011. Ms. Garnett seeks to extend the life of the Trust for two years with the option of an additional two year extension upon notice to the Court. Ms. Garnett asserts the extension is necessary so that the Trust can continue to prosecute the estate's "primary asset" -- a malpractice claim against the Debtor's former counsel. Judge Glenn limited the extension of the Trust to two years. No objections were filed to the Motion. However, the Office of the United States Trustee moved for an order converting the Debtor's chapter 11 case to one under chapter 7 or, in the alternative, dismissing the chapter 11 case, arguing, inter alia, that conversion or dismissal was appropriate because the Debtor could not effectuate substantial consummation of a confirmed plan. The U.S. Trustee's Motion was subsequently withdrawn. A copy of Judge Glenn's May 18, 2011 Memorandum Opinion is available at http://is.gd/hR5U0Vfrom Leagle.com. Boylan International, Ltd., d/b/a Boylan Studios, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 07-11372) on May 7, 2007, listing under $1 million in assets and debts. Alma Garnett was named Liquidating Trustee. She is represented by Anthony T. Nguyen, Esq. -- anguyen@pattonboggs.com -- at Patton Boggs LLP, in New York. A copy of Boylan's petition is available at http://bankrupt.com/misc/nysb07-11372.pdf CARIBE MEDIA: Court Approves Kurtzman Carson as Claims Agents ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Caribe Media Inc. and CII Acquisition Holding Inc., to employ to employ Kurtzman Carson Consultants LLC as claims and notice agent. KCC can be reached at: Drake D. Foster KURTZMAN CARSON CONSULTANTS LLC 2335 Alaska Ave. El Segundo, CA 90245 Tel: (310) 823-9000 Fax: (310) 823-9133 E-mail: dfoster@kccllc.com Albert H. Kass, vice president of Corporate Restructuring Services at KCC, attests that his firm does not hold or represent an interest materially adverse to the Debtors' estates in connection with any matter on which it would be employed and that it is a "disinterested person" as referenced by sec. 324(a) of the Bankruptcy Code and as defined Sec. 101(14) of the Bankruptcy Code. About Caribe Media Caribe Media Inc. owns publication rights for certain print and Internet directories in the Dominican Republic and Puerto Rico. Caribe Media owns 60% of Axesa Servicios de Informacion, S. en C., a Yellow Pages publisher in Puerto Rico and the official publisher of all telephone directories for Puerto Rico Telephone Company, Inc., the largest local exchange carrier in Puerto Rico, and US$100% of Caribe Servicios de Informacion Dominicana, S.A., the sole directory publisher in the Dominican Republic with the exclusive right to publish under the brand of Codetel, the largest telecom operator in the Dominican Republic. Caribe Media is wholly owned by CII Acquisition Holding Inc. They are affiliates of Local Insight Media Holdings, Inc. Caribe Media and CII filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-11387 and 11-11388) on May 3, 2011. Caribe Media is being represented by lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel. Lawyers at Curtis, Mallet-Prevost, Colt & Mosle LLP will serve as conflicts counsel. Local Insight Media is also a debtor in its own Chapter 11 pending in Delaware. Local Insight Media filed in 2010. It is also being represented by lawyers at Kirkland and Pachulski. CENTER COURT: U.S. Trustee Wants Case Dismissed on Converted ------------------------------------------------------------ Peter C. Anderson, the U.S. Trustee for Region 16, asks the U.S. Bankruptcy Court for the Central District of California to dismiss, or, in the alternative, convert the Chapter 11 case of Center Court Partners LLC, to one under Chapter 7 of the Bankruptcy Code. The Court will convene a hearing on May 26, 2011, at 9:30 a.m., to consider the request to convert or dismiss the Debtor's case. Carolyn J. Feinstein, bankruptcy analyst, tells the Court that the Debtor failed to comply with the requirements of the U.S. Trustee Chapter 11 Notices and Guides and Local Bankruptcy Rules by failing to provide documents, and financial reports. About Center Court Partners LLC Based in Agoura Hills, California, Center Court Partners LLC filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-13715) on March 25, 2011. Judge Maureen Tighe presides over the case. The Law Offices of Martin D. Gross represents the Debtor in its restructuring efforts. The Debtor estimated assets and debts at $10 million and $50 million as of the chapter 11 filing. CHRISTIAN BROTHERS: Strikes Deal to Fund Operations --------------------------------------------------- Dow Jones' Small Cap reports that the Christian Brothers Institute Inc. is seeking court approval of a deal it struck with its lender that will ensure it's able to cover its operating costs, including funding its Roman Catholic schools throughout New York. Headquartered in New Rochelle, New York, The Christian Brothers' Institute filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-22820) on April 28, 2011. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $50 million to $100 million and debts at $1 million to $10 million. CHRYSLER LLC: Raises $7.5BB After Twice Revising Deal Structure --------------------------------------------------------------- Katy Burne, writing for Dow Jones Newswires, reports that Chrysler Group LLC completed its $7.5 billion financing Thursday after twice revising the structure of the deal: (A) $3 billion in six-year term loan, increased from the planned $2.5 billion; Dow Jones relates the $3 billion loan was priced at 4.75 percentage points above the London interbank offered rate, or Libor, with a discounted offer price of 99 cents on the dollar and a Libor floor set at 1.25%. Dow Jones relates one person familiar with the matter said the company dialed back the size of the loan earlier this week to $2.5 billion from an original $3.5 billion, but decided to increase it again after "demand kicked up over the past couple of days". Dow Jones notes original price talk on the loan was 4-4.25 percentage points over Libor with a 1.25% floor and 99-99.5 offer price. The step-up in yield was thus a welcome move, Dow Jones says. Dow Jones also reports the loan won't be callable for the first year, but will be callable at a premium of 102 cents on the dollar in the second year and 101 cents on the dollar in the third year. Lead bookrunners on the term loan are Morgan Stanley and Goldman Sachs Group Inc., supported by Bank of America Corp.'s Bank of America Merrill Lynch and Citigroup Inc. as joint bookrunners. (B) $3.2 billion in second-lien notes offering, down from the planned $3.5 billion; Dow Jones says the $3.2 billion of junk bonds are being offered in two parts: an eight-year tranche and a 10-year tranche. The total was increased earlier in the week by $1 billion, reaching $3.5 billion, before it was cut back. The bonds priced at the wide end of their indicative range, at 8% on the $1.5 billion of notes due 2019 and 8.25% on the $1.7 billion of notes due 2012. Price guidance had been 7.75% to 8% on the 2019 notes and 8% to 8.25% on 2021 notes, respectively. The bond is being led by Bank of America and Goldman, supported by Citi and Morgan Stanley. (C) $1.3 billion in five-year revolving credit facility, down from the planned $1.5 billion; Citi is lead arranger and bookrunner on the revolver, supported by BofA, Goldman and Morgan. Dow Jones further reports that Chrysler had to offer more protection for investors on the loan and a higher yield than initial guidance. "They are raising more or less what they wanted to raise, but they had to shift it around a bit because of the demand for different tranches," said Gregory Maddock, director at Standard & Poor's, Dow Jones reports. Dow Jones says Shawn Morgan, a spokesman for Chrysler, declined to comment. According to Dow Jones, a person familiar with the matter said the deal puts Chrysler on track to repay its government bailout funds as early as next week. About Chrysler Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of Dec. 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. As part of the deal, Fiat acquired a 20% equity interest in Chrysler Group. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. The U.S. and Canadian governments provided Chrysler with $4.5 billion to finance its bankruptcy case. Those loans are to be repaid with the proceeds of the bankruptcy estate's liquidation. In April 2010, the Bankruptcy Court confirmed Chrysler's repayment plan. CITY INC: Files for Chapter 7 in Minneapolis -------------------------------------------- The Star Tribune reports that The City Inc., in 1315 12th Ave. N., Minneapolis, Minnesota, filed a Chapter 7 petition (Case No. 11- 43348) in its hometown on May 11. It disclosed assets of $1,042,735 and liabilities of $747,649. CLEARWIRE CORP: Intel Corporation Discloses 32.8% Equity Stake -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Intel Corporation disclosed that it beneficially owns 102,404,811 shares of Class A common stock of Clearwire Corporation representing 32.8% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/2ug4Ev About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G mobile broadband network serves 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company's balance sheet at March 31, 2011, showed $10.28 billion in total assets, $5.23 billion in total liabilities, and $5.05 billion in total stockholders' equity. The Company reported a net loss of $2.30 billion on $556.82 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.25 billion on $274.46 million of revenue during the prior year. The Company disclosed in its Form 10-Q for the third quarter ended Sept. 30, 2010, that its expected continued losses from operations and the uncertainty about its ability to obtain sufficient additional capital raise substantial doubt about the Company's ability to continue as a going concern. "Without additional financing sources, we forecast that our cash and short-term investments would be depleted as early as the middle of 2011. Thus, we will be required to raise additional capital in the near-term in order to continue operations. The audit reports of Deloitte & Touche LLP, in Seattle, Washington, on the Company's financial statements for 2009 and 2010 did not include a going concern qualification. * * * As reported by the Troubled Company Reporter on Nov. 11, 2010, Standard & Poor's Ratings Services lowered its corporate credit rating, and all other ratings, on Clearwire Corp. to 'CCC' from 'B-'. At the same time, S&P revised the CreditWatch listing on the company from negative to developing. S&P had initially placed the ratings on CreditWatch with negative implications on Oct. 6, 2010, based on S&P's view that Clearwire faced significant near- term liquidity risks. The downgrade follows the Company's disclosure -- in its Form 10-Q for quarter ended Sept. 30, 2010 -- regarding the uncertainty about its ability to obtain additional capital and continue as a going concern. In Clearwire's 2010 third-quarter earnings report and conference call, the company indicated that it expected to run out cash by mid-2011, which is consistent with S&P's earlier comments. Cash totaled around $1.4 billion as of Sept. 30, 2010. COMDISCO HOLDING: Reports $520,000 Net Loss in First Quarter ------------------------------------------------------------ Comdisco Holding Company, Inc. (OTC: CDCO) on Monday reported financial results for its fiscal second quarter ended March 31, 2011. For the quarter ended March 31, 2011, Comdisco reported a net loss of approximately $520,000, or $0.13 per common share (basic and diluted). The per share results for Comdisco are based on 4,028,951 shares of common stock outstanding on March 31, 2011. For the quarter ended March 31, 2011, total revenue was approximately $353,000 as compared to approximately $177,000 for the quarter ended March 31, 2010. The increase is primarily the result of gains recognized from the new extended management agreement with Windspeed Acquisition Fund GP, LLC and slightly higher liquidations of positions held compared to the quarter ended March 31, 2010. There were gains of $128,000 for the current year quarter compared to gains of $25,000 for the quarter ended March 31, 2010. Net cash used in operating activities was approximately $1,756,000 for the six months ended March 31, 2011 compared to net cash used in operating activities of approximately $9,158,000 for the six months ended March 31, 2010. Total assets are approximately $63,707,000 as of March 31, 2011, including approximately $54,241,000 of unrestricted cash and short-term investments, compared to total assets of approximately $65,150,000 as of Sept. 30, 2010, including $55,742,000 of unrestricted cash and short-term investments. The decrease in cash is primarily a result of a $268,000 payment of a Mexican tax liability and selling, general and administrative expenses paid during the six months ended March 31, 2011. As a result of bankruptcy restructuring transactions, the adoption of fresh-start reporting and multiple asset sales, Comdisco's financial results are not comparable to those of its predecessor company, Comdisco, Inc. About Comdisco Comdisco filed for chapter 11 protection on July 16, 2001 (Bankr. N.D. Ill. Case No. 01-24795), and emerged from chapter 11 bankruptcy proceedings on August 12, 2002. John Wm. "Jack" Butler, Jr., Esq., Charles W. Mulaney, Esq., George N. Panagakis, Esq., Gary P. Cullen, Esq., N. Lynn Heistand, Esq., Seth E. Jacobson, Esq., Andre LeDuc, Esq., Christina M. Tchen, Esq., L. Byron Vance, III, Esq., Marian P. Wexler, Esq., and Felicia Gerber Perlman, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented Comdisco. Evan D. Flaschen, Esq., and Anthony J. Smits, Esq., at Bingham Dana LLP, now Bingham McCutchen, served as Comdisco's International Counsel. The purpose of reorganized Comdisco is to sell, collect or otherwise reduce to money in an orderly manner the remaining assets of the corporation. Pursuant to the Plan and restrictions contained in its certificate of incorporation, Comdisco is specifically prohibited from engaging in any business activities inconsistent with its limited business purpose. Accordingly, within the next few years, it is anticipated that Comdisco will have reduced all of its assets to cash and made distributions of all available cash to holders of its common stock and contingent distribution rights in the manner and priorities set forth in the Plan. At that point, the company will cease operations. The company filed on August 12, 2004 a Certificate of Dissolution with the Secretary of State of the State of Delaware to formally extinguish Comdisco Holding Company, Inc.'s corporate existence with the State of Delaware except for the purpose of completing the wind-down contemplated by the Plan. CONCHO RESOURCES: Moody's Assigns B3 Rating to Notes Offering ------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Concho Resources Inc.'s (Concho) proposed offering of $400 million Senior Notes due 2022. The rating outlook was changed to stable from negative. Moody's affirmed Concho's B1 Corporate Family Rating (CFR) and its SGL-2 Speculative Grade Liquidity (SGL) rating. Substantially all of the proceeds from the new notes will be used to repay bank debt. RATINGS RATIONALE "The move to a stable outlook reflects leverage on production and reserves which has been significantly reduced since the July 2010 Marbob acquisition to a level more in line with current ratings, with March 31, 2011 pro forma adjusted leverage of $28,300/Boe of average daily production," commented Jonathan Kalmanoff, Moody's Analyst. The B1 CFR reflects Concho's oil focus, strong operational track record with low F&D costs, seasoned management team with extensive experience in the Permian Basin, and aggressive growth strategy with a track record of material leverage reduction following acquisitions. Moody's leverage calculation adjusts for 3,750 Mboe/d of production which was curtailed during the first quarter of 2011 due to extreme cold temperatures. Concho's SGL-2 liquidity rating reflects adequate liquidity through June of 2012. The company has a $2 billion senior secured borrowing base credit facility, with the next borrowing base redetermination scheduled for October of 2011. At March 31, 2011 pro forma availability under the facility was $1.6 billion, and Concho's cash balance was just under $1 million. Credit facility availability should provide ample liquidity given the company's current capital spending plans which include modestly outspending cash flow during 2011. Moody's expects there to be significant headroom under the leverage ratio and current ratio covenants through June of 2012. There are no debt maturities until April 25, 2016 when the credit facility matures. Substantially all of Concho's oil and gas assets are pledged as security under the facility which limits the extent to which asset sales could provide a source of additional liquidity if needed. The B3 senior unsecured note rating reflects Concho's overall probability of default, to which Moody's assigns a PDR of B1, and a loss given default of LGD6-81%. The size of the $2 billion senior secured revolver's potential priority claim relative to the senior unsecured notes results in the notes being rated two notches beneath the B1 CFR under Moody's Loss Given Default Methodology. Positive rating action could result if leverage were to decrease with Debt/Boe of average daily production sustained below $25,000 and debt/PD sustained below $8.00, or if Concho were to substantially increase its scale and/or diversification through either a major acquisition, funded with sufficient equity so that leverage is not materially increased, or through organic growth over the longer term. The rating could be lowered if leverage were to increase with the expectation of Debt/Average Daily Production remaining above $30,000/Boe over an extended period. The principal methodology used in rating Concho Resources was the Independent Exploration and Production (E&P) Industry Methodology, published December 2008. Concho Resources Inc. is an independent exploration and production company headquartered in Midland, Texas. CONCHO RESOURCES: S&P Rates $400MM Sr. Unsecured Notes at 'BB' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned issue-level and recovery ratings to exploration and production (E&P) company Concho Resources Inc.'s (BB/Stable/--) $400 million senior unsecured notes due 2022. The assigned issue rating on the notes is 'BB'(the same as the corporate credit rating)."The recovery rating on this debt is '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of default. We do not expect any changes in ratings if the offering size is increased. The company will use the proceeds to repay indebtedness under its revolving credit facility," S&P related. "At the same time we revised the recovery ratings on Concho's existing unsecured debt to '3', indicating our expectation of meaningful recovery (50% to 70%) in the event of a default, from '4'; the issue ratings remain unchanged at 'BB'," S&P noted. The ratings on the independent oil and gas E&P company Concho Resources Inc. reflect what Standard & Poor's views as the company's weak business risk profile, which is largely a result of the cyclical and capital-intensive nature of the industry and the geographic concentration of reserves, with 98% of the company's reserves located in the company's core operating areas in the Permian Basin. The ratings also incorporate Concho's good reserve replacement metrics, competitive cost structure, and adequate liquidity. As of March 31, 2011, Midland, Texas-based Concho had approximately $1.7 billion in adjusted debt, adjusted for operating leases and ARO's. Ratings List Concho Resources Inc. Corporate credit rating BB/Stable/-- New Rating $400 mil. senior notes due 2022 BB Recovery rating 3 Revised Recovery Rating To From Senior unsecured debt BB BB Recovery rating 3 4 CONNACHER OIL: Moody's Assigns 'Caa2' Rating to Sr. Secured Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Caa2 rating to Connacher's proposed $900 million second lien senior secured notes. Moody's affirmed these ratings: Caa1 Corporate Family Rating (CFR), Caa1 Probability of Default Rating (PDR), B1 rating on the existing first lien notes due July 2014, and Caa2 rating on the existing second lien notes due December 2015. The SGL-3 Speculative Grade Liquidity rating was affirmed. The proceeds of the proposed notes will be used to fund the repayment of Connacher's existing first and second lien notes and for general corporate purposes. The rating outlook is stable. RATING RATIONALE Connacher's Caa1 CFR reflects its very high leverage and debt service cost, small production base, and a liquidity position that is likely to be periodically dependent on external sources absent high bitumen prices. The CFR is supported by Connacher's current bitumen production of about 14,000 to 15,000 bpd, its large proven and probable reserve base, and its 9,500 barrels per day heavy oil refinery. Connacher will have a lower capital spending program in 2011 with Algar and its associated 13 megawatt cogen facility now complete, but nevertheless the company will be significantly dependent on completed asset dispositions to fund negative free cash flow. Connacher's SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity over the next twelve to fifteen months. Moody's expects a pro-forma cash balance of $40 million combined with completed asset sale proceeds of about $75 million to largely fund negative free cash flow of approximately $100 million over the next year. The company's proposed $100 million committed revolver ($94 million unused; expires in May, 2014) will be needed to fund Connacher's maturing $100 million subordinated notes issue due in June, 2012 Moody's expects Connacher to be in compliance with its financial covenants during this period (Debt to Capitalization not to exceed 75% and revolver debt to EBITDA not to exceed 2x.) The company's assets are pledged under the first lien credit facility and notes, but it does have the ability to sell certain non-core assets if proceeds are reinvested in the business, as Connacher has indicated it intends to do. Incremental cash from assets sales may be needed to cover the company's interest and capex in 2011. The stable outlook reflects Moody's expectation that Algar and Pod 1 will consistently produce bitumen in the range of 14,000 bpd to 15,000 bpd and that the company's high leverage will not worsen. The rating could be upgraded if Connacher is able to demonstrate that it will be able to maintain bitumen production in the range of 14,000 to 15,000 bpd, maintain adequate liquidity to readily fund interest and capex, lower its debt to EBITDA towards the 5x range and repay the C$100 million subordinated notes. The outlook or rating could be lowered if liquidity appears insufficient to meet negative free cash flow or if debt to EBITDA does not show improvement from current levels. The principal methodology used in rating Connacher Oil and Gas was the Independent Exploration and Production (E&P) Industry Methodology, published December 2008. In accordance with Moody's Loss Given Default Methodology the notching of the second lien notes at Caa2, one notch below the Caa1 CFR, reflects their junior ranking in the capital structure to the revolver and first lien notes. The ranking of the first lien notes above the CFR at B1 reflects their priority ranking to the second lien notes. The revolver ranks prior to the first lien notes. Connacher Oil and Gas Limited, headquartered in Calgary, Alberta, is an oil and gas company with primary focus on the development and production of oil sands. CONNACHER OIL: S&P Rates $900MM Sr. Sec. 2nd-Lien Debt at BB- ------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'BB-' issue rating and '1' recovery rating to Calgary, Alta.-based Connacher Oil and Gas Ltd.'s proposed US$900 million senior secured second-lien debt. A '1' recovery rating indicates S&P's expectations of very high (90%-100%) recovery in a default scenario. This new debt issue will effectively refinance the company's existing senior secured first- and second-lien debt. "As a result, we expect to withdraw our ratings on Connacher's existing debt following completion of this new issue," S&P noted. "We expect Connacher should be able to refinance its debt at more favorable terms than those associated with its current senior secured first- and second-lien debt. Moreover, this bond issue will allow the company to extend its debt maturity profile," said Standard & Poor's credit analyst Michelle Dathorne. "Although our assessment of Connacher's liquidity remains unchanged following this refinancing, the extended maturity profile does, however, enhance the company's financial flexibility," Ms. Dathorne added. "Our 'B' long-term corporate credit rating, and stable outlook, on Connacher reflect our view of the company's highly levered balance sheet, the weak cash flow protection measures associated with current gross debt levels, and exposure to volatile hydrocarbon prices and light-heavy oil price differentials. We believe these weaknesses, which hamper Connacher's overall credit profile, are somewhat mitigated by the company's large oil sands resource base, good visibility to long-term drill-bit-related production growth, and the potential for strong operating cash flows, if it can achieve and sustain its in-situ oil sands design capacity production and steam-oil ratio targets," S&P elaborated. Ratings List Connacher Oil and Gas Ltd. Corporate credit rating B/Stable/-- Rating Assigned US$900 mil. senior secured debt BB- Recovery rating 1 CORDIA COMMS: Can Employ Bilzin Sumberg as Bankruptcy Counsel ------------------------------------------------------------- Cordia Communications Corporation and its affiliates sought and obtained approval from the Bankruptcy Court to employ Scott L. Baena and the law firm of Bilzin Sumberg Baena Price & Axelrod LLP, as bankruptcy counsel, nunc pro tunc to May 1, 2011. Bilzin Sumberg can be reached at: Scott L. Baena, Esq. BILZIN SUMBERG BAENA PRICE & AXELROD, LLP 1450 Brickell Avenue, Suite 2300 Miami, Florida 33131 Tel: (305) 350-2403 E-mail: sbaena@bilzin.com Bilzin Sumberg will: a. advise the Debtors with respect to its powers and duties as debtors and debtors-in-possession in the continued management and operation of their business and property; b. attend meetings and negotiate with representatives of creditors and other parties-in-interest; c. advise and consult on the conduct of the Chapter 11 Cases, including all of the legal and administrative requirements of operating in chapter 11; and d. advise the Debtors in connection with the Sale or any other contemplated sales of assets or business combinations, including the negotiation of sales promotion, liquidation, stock purchase, merger or joint venture agreements, formulate and implement bidding procedures, evaluate competing offers, draft appropriate corporate documents with respect to the proposed sales, and counsel the Debtors in connection with the closing of such sales. Bilzin Sumberg will be paid based on the rates of its professionals: Scott L. Baena, Partner $675 Jason Z. Jones, Partner $475 Paraprofessionals $205-$225 Scott L. Baena, attorney and partner at Bilzin Sumberg Baena Price & Axelrod, LLP, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. About Cordia Communications Cordia Corporation -- through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar Telecom, Inc., Cordia Prepaid Corp., and Cordia International Corp. -- offers business, residential, and wholesale customers local and long distance telecommunications services in more than 60 countries utilizing traditional wireline and Voice over Internet Protocol -- VoIP -- technologies. CCC currently holds licenses to operate in 28 states throughout the contiguous United States, and CCCVA is licensed in Virginia. Winter Garden, Florida-based Cordia Communications Corp., along with affilaites, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-06493) on May 1, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, serves as the Debtors' bankruptcy counsel. Source Capital Group, Inc., serves as investment banker. Development Specialists, Inc., is providing restructuring and management services, including Joseph J. Luzinski as chief restructuring officer. CORDIA COMMS: Wants to Hire Source Capital as Investment Banker --------------------------------------------------------------- Cordia Communications Corp., et al. requested approval to employ Source Capital Group, Inc. as investment banker. Source Capital will, among other things: a) review and analyze the Debtors' assets and their operating and financial strategies, and assist in the preparation of financial projections; b) assist and advise the Debtors in the anticipated sale of their assets, operations or stock; and c) determine and evaluate the risks and benefits of considering, initiating and consummating any transaction. The Debtor relates that the hourly compensation of $300 for professional services rendered by Source Capital will be capped at $25,000. In addition, the Debtors have agreed to pay Source Capital a success fee as: (a) 1% of the total consideration paid from the sale of the Debtors' assets including initial consideration, assumption of or indemnification for liabilities and tax obligations, and earn out clauses. The Success Fee will be due and payable upon transaction closing or final order of the Bankruptcy Court, paid in cash from transaction proceeds. In addition, upon the closing of a transaction, Source Capital will also receive 500,000 restricted shares of Cordia Corporation common stock. To the best of the Debtors' knowledge, Source Capital is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors are represented by: BILZIN SUMBERG BAENA PRICE & AXELROD LLP 1450 Brickell Avenue, Suite 200 Miami, FL 33131 Tel: (305) 374-7580 Fax: (305) 375-7593 About Cordia Communications Cordia Corporation -- through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar Telecom, Inc., Cordia Prepaid Corp., and Cordia International Corp. -- offers business, residential, and wholesale customers local and long distance telecommunications services in more than 60 countries utilizing traditional wireline and Voice over Internet Protocol -- VoIP -- technologies. CCC currently holds licenses to operate in 28 states throughout the contiguous United States, and CCCVA is licensed in Virginia. Winter Garden, Florida-based Cordia Communications Corp., along with affilaites, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-06493) on May 1, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, serves as the Debtors' bankruptcy counsel. Source Capital Group, Inc., serves as investment banker. Development Specialists, Inc., is providing restructuring and management services, including Joseph J. Luzinski as chief restructuring officer. CORDIA COMMS: Court to Convene Final Hearing on Cash Coll. Use -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida granted, on May 6, 2011, Cordia Communications Corp., et al., permission, on an interim basis, to use alleged cash collateral of Thermo Credit, LLC, in accordance with a budget through such date as the Court holds a final hearing on the motion during the week beginning May 16, 2011. As of April 29, 2011, the net amount advanced by Thermo under the that certain Factoring and Security Agreement, as amended from time to time (the "FSA"), was $1,975,584 (without application of $225,000 in the Contingency Account). Pursuant to the FSA, Thermo has established a Contingency Account which, upon information and belief, was funded by Thermo with $225,000 that would have otherwise been distributed to non-Debtor Cordia Corp. as Excess Collections. Thermo is granted a replacement lien on and in cash collateral, receivables, and other property, including but not limited to all amounts contained in or payments received or deposited into the Lockbox, Collections Accounts or Contingency Account, owned, acquired or generated post-petition by the Debtors' continued operations solely to the extent and priority, if any, and of the same kind and nature as Thermo had, if any, prior to the filing of this bankruptcy case effective as of the Petition Date. In its motion the Debtors said it needs the funds to operate its business pending a sale of their assets as a going concern conducted under section 363 of the Bankruptcy Code. Debtors are authorized to utilize all proceeds of pre- and post- petition receivables and customer payments received into the Lockbox, Collections Accounts, and Contingency Account on or at the Petition Date. In connection with the Debtors' use of cash collateral, the Debtors, in any particular calendar month: (i) are not authorized to exceed any line item on the budget by more than ten (10%) percent of such line item unless it receives prior written consent from Thermo; (ii) may not incur a negative variance from aggregate income (revenues less operating expenses) by more than ten (10%) percent unless it receives prior written consent from Thermo, and (iii) may not pay any prepetition obligation without a prior order of the Court. Notwithstanding the foregoing, the Debtors may pay any fees due to the Office of the United States Trustee pursuant to 28 U.S.C. Section 1930(a)(6) when due. Thermo is granted a replacement lien on and in cash collateral, receivables, and other property, including but not limited to all amounts contained in or payments received or deposited into the Lockbox, Collections Accounts or Contingency Account, owned, acquired or generated post-petition by the Debtors' continued operations solely to the extent and priority, if any, and of the same kind and nature as Thermo had, if any, prior to the filing of this bankruptcy case effective as of the Petition Date. To the extent that the replacement lien granted hereunder is found to be insufficient, Thermo will be afforded the priority in payment afforded by section 507(b) of the Bankruptcy Code to the extent of any diminution in the value of its security or ownership interests, if any, after giving effect to the value, if any, of the replacement lien granted hereunder. A further interim hearing will be held in connection with the motion on May 18, 2011, at 3:00 p.m. About Cordia Communications Cordia Corporation -- through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar Telecom, Inc., Cordia Prepaid Corp., and Cordia International Corp. -- offers business, residential, and wholesale customers local and long distance telecommunications services in more than 60 countries utilizing traditional wireline and Voice over Internet Protocol -- VoIP -- technologies. CCC currently holds licenses to operate in 28 states throughout the contiguous United States, and CCCVA is licensed in Virginia. Winter Garden, Florida-based Cordia Communications Corp., along with affilaites, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-06493) on May 1, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, serves as the Debtors' bankruptcy counsel. Source Capital Group, Inc., serves as investment banker. Development Specialists, Inc., is providing restructuring and management services, including Joseph J. Luzinski as chief restructuring officer. CORDIA COMMS: Asks to Proceed With Auction Without Lead Bidder -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Cordia Communications Corp. is seeking to push forward with its auction plans despite so far failing to secure an offer from a prospective stalking-horse bidder for its telecommunications services operations. About Cordia Communications Cordia Corporation -- through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar Telecom, Inc., Cordia Prepaid Corp., and Cordia International Corp. -- offers business, residential, and wholesale customers local and long distance telecommunications services in more than 60 countries utilizing traditional wireline and Voice over Internet Protocol -- VoIP -- technologies. CCC currently holds licenses to operate in 28 states throughout the contiguous United States, and CCCVA is licensed in Virginia. Winter Garden, Florida-based Cordia Communications Corp., along with affilaites, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-06493) on May 1, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, serves as the Debtors' bankruptcy counsel. Source Capital Group, Inc., serves as investment banker. Development Specialists, Inc., is providing restructuring and management services, including Joseph J. Luzinski as chief restructuring officer. COSIMO LLC: Section 341(a) Meeting Schedules for June 10 -------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of creditors in Cosimo, LLC's Chapter 11 case on June 10, 2011, at 2:00 p.m. The meeting will be held at the Donald Stuart Russell Federal Courthouse, 201 Magnolia Street, Spartanburg, South Carolina. This is the first meeting of creditors required under Section 341(a) of the 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. Greenville, South Carolina-based Cosimo, LLC, filed for Chapter 11 protection (Bankr. D. S.C. Case No. 11-03012) on May 4, 2011. Bankruptcy Judge Helen E. Burris presides the case. Curtis W. Stodghill, Esq., at Stodghill Law Firm Chartered represents the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. CRAIG CARRIER: IFC Sees Minimal Impact on Ending Triple C Deal -------------------------------------------------------------- Integrated Freight Corporation said in a press release that last December, Triple C Transport's former owner and general manager initiated Chapter 11 bankruptcy proceedings for two of his companies, White Farms Trucking and Craig Carrier Corporation. These companies owned the tractor and trailer equipment that Integrated Freight's subsidiary, Triple C Transport, leased for its trucking operations. Recently, as a result of the Chapter 11 filing, the bankruptcy court ordered the return of this leased equipment. Current Triple C management has complied with the court's order and has leased a small amount of operating equipment as a replacement. IFCR has secured local counsel to protect its interests through the former owner's bankruptcy proceedings and to recover any ongoing losses that may result from this situation, including a rescission of Integrated Freight's original stock purchase agreement with the previous owners of Triple C Transport. "We believe that rescission will not have a materially negative impact on our financial performance going forward. However, we will not be able to take advantage of many of the additional opportunities provided by this acquisition that we had originally envisioned at the time of its closing until this situation is rectified," Integrated Freight said. About the Debtors White Farms Trucking, Inc., and Craig Carrier Corp., LLC, own numerous trucking units, including tractors and trailers, and, at one time, operated trucking businesses. The trucking units have been financed and all, or almost all, are subject to perfected security interests held by financing entities such as People's United Equipment Finance Corp. and Navistar Financial Corporation. The businesses were sold to Integrated Freight Corporation and its subsidiary, Triple C Transport, Inc. The Debtors then leased the trucking units to Triple C Transport, Inc., and its parent company. White Farms Trucking and Craig Carrier filed for Chapter 11 bankruptcy (Bankr. D. Neb. Case Nos. 10-43797 and 10-43798) on Dec. 21, 2010, represented by Robert V. Ginn, Esq. -- rvgbknotice@huschblackwell.com -- at Husch Blackwell Sanders. In their petitions, White Farms Trucking and Craig Carrier each estimated $1 million to $10 million each in assets and debts. CROWN EQUITY: Posts $1.5 Million Net Loss in March 31 Quarter ------------------------------------------------------------- Crown Equity Holdings Inc. filed its quarterly report on Form 10- Q, reporting a net loss of $1.5 million on $345,231 of revenue for the three months ended March 31, 2011, compared with a net loss of $127,046 on $324,776 of revenue for the same period last year. The Company's balance sheet at March 31, 2011, showed $1.5 million in total assets, $828,209 in total liabilities, and stockholders' equity of $643,598. MaloneBailey, LLP, in Houston, expressed substantial doubt about Crown Equity's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has historically suffered losses from operations. A complete text of the Form 10-Q is available for free at: http://is.gd/ncJhat Las Vegas, Nev.-based Crown Equity Holdings Inc. (OTC BB: CRWE) -- http://www.crownequityholdings.com/-- was incorporated in August 1995 in Nevada. The Company provides various consulting services to companies and individuals dealing with corporate structure and operations globally. The Company also provides public relations and news dissemination for publicly and privately held companies. DALPHIS HOLDING: Seeks Approval to Tap Cash From Customers ---------------------------------------------------------- Wayne Risher of the Commercial Appeal reports that Dalphis Holding LLC has sought bankruptcy court approval to tap into cash from customers to pay two weeks' worth of expenses totaling $467,403. Dalphis said it was unable to make payroll and pay other expenses after its lender, Synovus Bank, halted payments under a line of credit. Dalphis filed for bankruptcy protection five months after unveiling expansion plans. Dalphis in December won approval from the Memphis-Shelby County Industrial Development Board for a tax- break on property taxes valued at $227,427. Dalphis Holding, LLC, a Memphis, Tenn.-based manufacturer of window treatments, filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 11-24849) in its hometown on May 12, 2011. Melanie T. Vardaman, Esq., at Harris Jernigan & Geno, PLLC, in Ridgeland, Missouri, serves as counsel to the Debtor. The Company estimated $1 million to $10 million in assets as of the Chapter 11 filing. DAVID OLSON: Files for Chapter 7 in St. Paul -------------------------------------------- The Star Tribune reports that David William Olson, formerly doing business as Higgins Camper Rental and Sales and David Kimberly Ltd., and Kimberly Krista Olson, in 1311 W. 15th St., Hastings, Minnesota, filed for Chapter 7 bankruptcy (Case No. 11-33192) on May 11. E*TRADE FINANCIAL: Moody's Assigns B2 Rating to Sr. Notes due 2016 ------------------------------------------------------------------ Moody's Investors Service assigned a rating of B2 to the proposed issuance by E*TRADE Financial Corp of $435 million of Senior Unsecured Notes due 2016. E*TRADE will use the proceeds of the proposed $435 million Senior Unsecured Notes scheduled to mature in 2016 to call for redemption $415 million of 7 3/8% senior notes due in 2013, and to pay for the call premium and other transaction related cost. "The opportunistic refinancing of the 2013 notes, the stabilization of E-TRADE's mortgage portfolio, and 1Q11 improved core brokerage metrics and profitability are positive developments," said Al Bush, Moody's Vice President -- Senior Analyst. In addition, the recent conversion of $314 million of convertible debentures by an affiliate of one of E*TRADE's largest shareholders, Citadel LLC, for 30.4 million shares of common stock, has boosted capital levels. "Notwithstanding the improved fundamentals of the company, E*TRADE's ability to extract dividends from its bank subsidiary will remain subject to regulatory approval for the foreseeable future," added Mr. Bush. In Moody's view, a longer-term risk for E*TRADE is that if it fails to adequately invest in its core brokerage franchise, its organic growth may not be sufficient to keep up with larger scale competitors, such as Charles Schwab, TD Ameritrade, and Fidelity. Any resulting competitive disadvantage in product offerings and costs could negatively impact E*TRADE's core brokerage market share and earnings. The principal methodology used in this rating was the Global Securities Industry Methodology published in December 2006. EAGLE BULK: May Not Be in Compliance With Orig. Facility Covenants ------------------------------------------------------------------ Eagle Bulk Shipping Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $5.8 million on $86.7 million of revenues for the three months ended March 31, 2011, compared with net income of $4.6 million on $54.2 million of revenues for the same period last year. The Company's balance sheet at March 31, 2011, showed $1.901 billion in total assets, $1.232 billion in total liabilities, and stockholders' equity of $668.3 million. Disagreement with Lender on Interpretation of Facility Agreement's Covenant Calculation On Aug. 4, 2009, the Company entered into a third amendatory agreement to its revolving credit facility. Among other things, the third amendatory agreement amended the facility's net worth covenant from a market value to book value measurement with respect to the value of the Company's fleet and reduced the facility's EBITDA to interest coverage ratio, with these changes to stay in effect until the Company was in compliance with the facility's original covenants for two consecutive accounting periods. Based on information which the Company provided in 2010 to the lenders under the revolving credit facility, the agent for the lenders has only recently notified the Company that according to its interpretation the Company was in compliance with the original covenants for the second and third quarters during 2010, and, therefore, the Company's original collateral covenants have been reinstated. The Company disagrees with the agent and believe that the Company's interpretation of the facility agreement's covenant calculation is correct, that the reinstatement of the original loan covenant was not valid, and that the Company remains in compliance with all covenants in effect at March 31, 2011. The Company is in active discussions with the agent to resolve this technical matter. "However, if the agent's interpretation is determined to be correct, the Company would not be in compliance with the original covenants for the period ending March 31, 2011, which could lead to a default under the facility agreement and would result in the classification as current of amounts due under the facility agreement and could lead to substantial doubt about the Company's ability to continue as a going concern, if the Company is unable to agree on satisfactory terms or obtain a waiver from the agent," the Company said in the filing. A complete text of the Form 10-Q is available for free at: http://is.gd/TSS3Wb Eagle Bulk Shipping Inc. is a Republic of the Marshall Islands corporation headquartered in New York City. The Company owns one of the largest fleets of Supramax dry bulk vessels in the world. Supramax dry bulk vessels range in size from 50,000 to 60,000 dwt. The Company transports a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes. As of March 31, 2011, the Company owned and operated a modern fleet of 40 Handymax segment dry bulk vessels, 38 of which are of the Supramax class. The Company also has an on-going Supramax newbuilding program for the construction of 6 newbuilding vessels in China. Upon delivery of all newbuilding vessels by the end of 2011, the Company's total fleet will consist of 46 vessels with a combined carrying capacity of approximately 2.51 million dwt. EASTER SEALS: Sanctions Against Ford Motor Credit Rejected ---------------------------------------------------------- Easter Seals Tennessee, Inc., seeks sanctions against Ford Motor Credit Company LLC for allegedly violating the discharge injunction pursuant to 11 U.S.C. Sec. 524(i). FMCC denied any violation. At the hearing on May 12, 2011, the Court granted FMCC's request to dismiss the Motion for Sanctions based on the Debtor's failure to carry its burden of proof. A copy of Bankruptcy Judge George C. Paine II's May 17, 2011 Memorandum is available at http://is.gd/le0178from Leagle.com. Based in Nashville, Tennessee, Easter Seals Tennessee Inc., a not for profit corporation, filed for Chapter 11 protection on May 17, 2009 (Bankr. M.D. Tenn. Case No. 09-05597). Glenn Benton Rose, Esq., Harwell Howard Hyne Gabbert et al., represents the Debtor. In its petition, the Debtor listed between $1 million and $10 million in assets, and between $10 million and $50 million in debts. The Court confirmed the Debtor's plan of reorganization on Aug. 12, 2010. ECOSPHERE TECHNOLOGIES: Incurs $3.7-Mil. First Quarter Net Loss --------------------------------------------------------------- Ecosphere Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.7 million on $2.2 million of revenues for the three months ended March 31, 2011, compared with a net loss of $23.0 million on $2.1 million of revenues for the same period last year. Loss from operations for the three months ended March 31, 2011, was $3.3 million compared to a loss of $1.4 million for the three months ended March 31, 2010. The increase in the loss from operations in 2011 versus 2010 was due to the increase in operating expenses which was partially offset by the increase in gross profit. Included in the loss from operations were non-cash expenses including stock based compensation of $2.5 million plus depreciation and amortization of $528,045. "The Company's net loss for the three months ended March 31, 2010, was significantly impacted by the accounting for derivative liabilities related to warrants and convertible notes issued by the Company," the Company said in the filing. The Company's balance sheet at March 31, 2011, showed $11.3 million in total assets, $9.3 million in total liabilities, $3.9 million of redeemable convertible cumulative preferred stock, and a stockholders' deficit of $1.9 million. A complete text of the Form 10-Q is available for free at: http://is.gd/TX2JUm About Ecosphere Technologies Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a diversified water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. Ecosphere, through its majority-owned subsidiary Ecosphere Energy Services, LLC ("EES"), provides energy exploration companies with an onsite, chemical free method to kill bacteria and reduce scaling during fracturing and flowback operations. As reported in the TCR on Mar 22, 2011, Salberg & Company, P.A., in Boca Raton, Fla., expressed substantial doubt about Ecosphere Technologies' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has a net loss applicable to Ecosphere Technologies, Inc. common stock of $22,237,207, and net cash used in operations of $1,267,206 for the year ended Dec. 31, 2010, and a working capital deficit, a stockholders' deficit and an accumulated deficit of $5,459,051, $1,780,735 and $110,025,222, respectively, at Dec. 31, 2010. In addition, the Company has redeemable convertible cumulative preferred stock that is eligible for redemption at a redemption amount of $3,877,796 including accrued dividends as of Dec. 31, 2010. EDIETS.COM INC: Extends Subscription Period for Rights Offering --------------------------------------------------------------- eDiets.com, Inc., has extended the subscription period for its pending rights offering to May 13, 2011. As the Company was advised that some qualified holders of its common stock have requested additional time to complete their subscriptions, the Company has decided to extend the subscription period for two additional days. The subscription rights may now be exercised at any time prior to 5:00 p.m. New York time on May 13, 2011. Under the terms of the rights offering, each stockholder received one non-transferable subscription right for each share of common stock owned on April 18, 2011, the record date. Each subscription right entitles the rights holder to purchase 0.15 newly issued shares of the Company's common stock at a subscription price equal to $0.4125 per share. Each subscription right also includes an over-subscription privilege, by which rights holders that fully exercise their basic subscription privileges may purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering. The over-subscription privilege is subject to the availability and pro rata allocation of shares among exercising rights holders. During the extended offering period for the rights offering, any person who received subscription rights from the Company during the original offering period may exercise those rights that have not already been exercised. Other than the extension of the expiration date of the rights offering, all of the offering terms described in the prospectus dated April 21, 2011, remain the same and apply during the extended period of the rights offering. Questions from stockholders regarding the rights offering or requests for additional copies of documents may be directed to the information agent, Phoenix Advisory Partners, toll-free at (877) 478-5038. About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com. Ernst & Young LLP, in Boca Raton, Florida, expressed substantial doubt about eDiets.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $43.3 million on $23.4 million of revenues for 2010, compared with a net loss of $12.1 million on $18.1 million of revenues for 2009. At Dec. 31, 2010, the Company's balance sheet showed $3.6 million in total assets, $5.6 million in total liabilities, and a stockholders' deficit of $2.0 million. EH HOLDING CORP: Moody's Says Ratings Unchanged on Note Offering ---------------------------------------------------------------- Moody's Investors Service said that EH Holdings' ratings were unchanged on upsized note offering. On May 17, 2011, EH Holding Corp. priced its offering of $1,100 million aggregate principal amount of 6.5% senior secured notes due 2019 and $900 million aggregate principal amount of 7.625% senior unsecured notes due 2021. However, as a result of the modification in the offering, the LGD point estimates on EHH's unsecured notes have changed to B3 LGD5-71%. The principal methodology used in rating was Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. EHH, an indirect, wholly-owned subsidiary of EchoStar Corporation (EchoStar; a publicly traded holding company controlled by Mr. Charles Ergen and certain trusts; the same entities also control Dish Network Corporation (Dish), a U.S.-based direct broadcast television company with some 14.2 million subscribers.) operates 10 satellites that provide fixed satellite and broadcast satellite services. EIF CALYPSO: S&P Withdraws 'B+' Rating on $800MM Sr. Secured Debt ----------------------------------------------------------------- Standard & Poor's Rating Services withdrew its rating on EIF Calypso LLC's $800 million in senior secured facilities at the request of the project. "Before the withdrawal, we affirmed the 'B+' rating and revised the outlook to developing from negative," S&P stated. The facilities consist of a $150 million revolver, a two-tranche term loan of $260 million (tranche A amortizing and maturing 2014; $174 million outstanding) and a $390 million (tranche B maturing 2019; $335.3 million outstanding). "Before withdrawing the rating, we revised the outlook to developing to reflect our opinion of the project's likely creditworthiness based on the latest information the project provided to us," said Standard & Poor's credit analyst Theodore Dewitt. The outlook revision reflected the potential for improved credit from better operations at the Windsor power plant, which provides a large share of EIF's cash flow, but there are potential negative effects from weak merchant prices at other assets. "We did not revise our '2' recovery score, based on our understanding of the assets at the time of rating withdrawal," S&P added. EVERGREEN ENERGY: Incurs $11.34-Mil. First Quarter Net Loss ----------------------------------------------------------- Evergreen Energy Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $11.34 million on $100,000 of total operating revenue for the three months ended March 31, 2011, compared with a net loss of $8.23 million on $100,000 of total operating revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $33.50 million in total assets, $37.62 million in total liabilities, and a $4.12 million total stockholders' deficit. Ilyas Khan, Executive Chairman of Evergreen, stated: "During the first quarter, Evergreen made significant progress on several business development efforts. Most notably, we signed the memorandum of understanding with WPG Resources to establish a joint venture to develop and commercialize K-Fuel throughout Australia. In addition, to support our development efforts, the management team at Evergreen has put in place a prudent cost management structure to ensure we are reducing operating costs wherever possible while still investing in our future business development initiatives. We are building the infrastructure to establishing a presence in key locations in Asia and Europe to ensure we are well-positioned to take advantage of the many applications for K-Fuel worldwide." A full-text copy of the Form 10-Q is available for free at: http://is.gd/L8Gn6D 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 reported a net loss of $21.02 million on $403,000 of total operating revenue for the year ended Dec. 31, 2010, compared with a net loss of $58.53 million on $423,000 of total operating revenue during the prior year. Hein & Associates LLP, in Denver, Colo., expressed substantial doubt about Evergreen Energy's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has had recurring cash used in operations. FORBES ENERGY: Moody's Upgrades Corporate Family Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service upgraded Forbes Energy Services Ltd.'s (Forbes) Corporate Family Rating (CFR) to B3 from Caa1. Moody's also assigned a Caa1 rating to the company's proposed offering of $255 million senior notes due 2019 and a SGL-3 Speculative Grade Liquidity rating. The proceeds from the senior notes will be used to repurchase Forbes Energy Services LLC's (wholly owned subsidiary of Forbes) 11% senior secured notes due 2015 and to retire other outstanding debts. The CFR has been moved from Forbes Energy Services LLC to Forbes and the senior secured notes Caa1 rating will be withdrawn following their full retirement. The outlook is stable. These rating actions assume that the senior notes issuance, senior secured notes retirement and the company's new credit facility are completed as proposed and are subject to a review of the final documents. RATINGS RATIONALE "The announced refinancing along with the planned $75 million senior secured credit facility will improve Forbes' liquidity and financial flexibility," commented Pete Speer, Moody's Vice- President. "Despite the increase in debt due to the refinancing cost, Moody's expects Forbes earnings to continue to increase, resulting in stronger credit metrics by the end of 2011." Forbes B3 CFR is supported by its large fleet of relatively new workover rigs, with approximately 88% built within the last five years. The company is directly benefiting from increasing development of the Eagle Ford shale and the Permian Basin in its home markets of South and West Texas due to strong oil and natural gas liquids prices. The rating is restrained by Forbes' small size and higher geographical concentration compared to the leading well servicing competitors and high amount of long-term debt. The company's earnings and cash flows are driven by the capital spending patterns of independent exploration and production companies, which fluctuate greatly in response to oil and natural gas prices, access to capital markets and what geographic regions and basins are being focused on for maintenance and development. The SGL-3 rating is based on Moody's expectation that Forbes will maintain adequate liquidity through mid-2012. Pro forma for the senior notes offering, the company had approximately $29 million of cash at March 31, 2011. Forbes expects to obtain a $75 million senior secured asset-based revolver that will have pro forma availability of $52.5 million. This should provide adequate funding for the company's planned capital expenditures and working capital needs for the remainder of 2011 and first half of next year. Moody's notes that the company's sequential growth in revenues and earnings over the course of 2010 consumed most of its operating cash flow in working capital funding, demonstrating the significant working capital intensity of its business. The stable outlook is based on Moody's expectation that Forbes gradual growth in sequential quarterly EBITDA continues, reducing its leverage (Debt/EBITDA) below 4x by the end of 2011 while maintaining adequate liquidity. If the company restrains its capital expenditures in the upcycle and directs free cash flow to debt reduction and increased cash liquidity, a positive outlook or ratings upgrade could occur. Debt/EBITDA approaching 2x in an upcycle earnings environment would be more supportive of a B2 CFR given the company's size, market position and earnings cyclicality. An increase in leverage metrics from pro forma levels due to a failure to meet EBITDA forecasts and/or a rapid increase in capital expenditures could result in a negative outlook or ratings downgrade. A reduction in liquidity could also pressure the ratings. The Caa1 rating to the proposed $255 million senior notes reflects both the overall probability of default of Forbes, to which Moody's assigns a PDR of B3 (raised from Caa2), and a loss given default of LGD 4 (64% changed from 34%). The senior notes are unsecured and guaranteed by domestic subsidiaries on a senior unsecured basis. The notes will be subordinate to the $75 million senior secured credit facility. The size of this potential priority claim results in the senior notes being rated one notch beneath the B3 CFR under Moody's Loss Given Default (LGD) Methodology. While the relatively new rig fleet provides significant collateral coverage, the addition of a $75 million senior secured revolver, the increase in debt in the capital structure, and the lessened restrictions in the new senior notes compared with the senior secured notes resulted in Moody's using the standard 50% recovery rate in Moody's LGD analysis as opposed to the 65% recovery rate used previously. The principal methodology used in rating Forbes Energy was the Global Oilfield Services Rating Methodology Industry Methodology, published December 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009 Forbes Energy Services Ltd. is a publicly traded workover rig and related oilfield services company based in Alice, Texas. FORBES ENERGY: S&P Gives 'CCC+' CCR; Places Rating on Watch ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' corporate credit rating to Alice, Texas-based Forbes Energy Services Ltd. and placed the rating on CreditWatch with positive implications. "At the same time we removed the corporate credit rating on Forbes Energy Services LLC, a subsidiary of Forbes Ltd.," S&P related. "We also assigned a preliminary 'B-' issue rating (one notch higher than the corporate credit rating) to Forbes Ltd.'s proposed $255 million senior unsecured notes. The recovery rating is 4, indicating our expectation of average (30% to 50%) recovery in a payment default," S&P noted. The ratings on the existing $205 million second lien notes due 2015 ($192.5 million outstanding) remain unchanged. "We assume the notes will be fully repurchased through a tender offer," S&P continued. "The positive CreditWatch listing reflects the potential for significantly improved liquidity resulting from a proposed $75 million senior secured credit facility, contingent upon the sale of the proposed $255 million senior unsecured notes," said Standard & Poor's credit analyst Paul Harvey. The company will use proceeds from the $255 million notes to help fund the tender offer for the existing $192.5 million senior secured notes due 2015 and $20 million first lien notes due 2014. "Following the close of the transactions, we expect Forbes Ltd. to have cash and revolver availability of about $80 million. If, for whatever reason, priority debt of $30 million or more remains, the senior unsecured recovery and preliminary issue ratings would be reassessed and could be lowered," stated S&P. "The rating actions also reflect the robust industry conditions supporting Forbes' improved EBITDA and cash flow generation," added Mr. Harvey. "For the quarter ended March 31, 2011 EBITDA, increased to about $20 million compared with only about $5 million the previous year. As a result, we currently estimate that adjusted debt leverage should be about 3.5x or less during 2011 from over 4.5x in 2010," S&P noted. Nevertheless, improving credit quality is limited by Forbes still high debt leverage and related interest expense burden. Forbes remains susceptible to a market downturn given its aggressive debt load and related costs. Further, its limited market diversity leaves it exposed to a downturn in the South Texas market or increased competition from larger and better capitalized competitors such as Key Energy Services or Nabors Industries Inc. "We will resolve the CreditWatch listing on Forbes Ltd. and finalize the preliminary ratings on the unsecured notes once the proposed transactions have closed. We expect to update our analysis within the next 60 to 90 days. At that time we expect to raise the corporate credit rating on Forbes to 'B-', with a positive outlook and to assign 'B-' senior unsecured and '4' recovery ratings to the proposed $255 million note offering," S&P stated. The preliminary senior unsecured debt rating is based on the successful tender for the remaining $205 million notes due 2015 ($192.5 million outstanding as of March 31, 2011) and $20 million first lien debt due 2014. GENERAL MORTGAGE: Moody's Cuts IFS Rating to 'Ba1' -------------------------------------------------- Moody's Investors Service has confirmed the debt ratings of Genworth Financial, Inc. ("Genworth"; NYSE: GNW, senior debt at Baa3), as well as the A2 insurance financial strength (IFS) ratings of the company's primary life insurance operating subsidiaries and the A1 IFS rating of Genworth Financial Mortgage Insurance Pty Ltd. (Genworth Australia). In the same action, Moody's lowered the IFS rating of Genworth Mortgage Insurance Corporation and its supported affiliates (collectively, "GMICO"), to Ba1 from Baa2. The rating actions conclude a review for downgrade that was initiated on February 3, 2011. The outlook on Genworth and all of its affiliates is negative. Ratings Rationale Holding Company and Life Operations According to Scott Robinson, Senior Vice President: "The confirmation of Genworth Financial and it's life insurance operating subsidiaries reflects the strong holding company liquidity position ($1.3 billion as of March 31, 2011), the additional financial resources available ($1.5 billion of its investment in the Canadian mortgage insurer), and the improvement in the company's ability to manage through a life company stress scenario. Furthermore, while there is still continued uncertainty and downside risks with GMICO, the degree of support required from the rest of the company in a stress scenario appears to be manageable in the context of capital for Genworth overall." The rating agency noted that the confirmation of the holding company's ratings also reflects the expectation that Genworth will reduce financial leverage (the company has publicly stated a target of 20% by year-end 2012) and maintain strong liquidity at the holding company. The life company remains well capitalized and has a leading position in long term care insurance and a strong position in term insurance, along with strong brand awareness. However, the weak capital generation of the life entities over the past years has limited their ability to help support holding company debt. According to Robinson, "To improve the credit profile of the life insurance subsidiaries, the company needs to strengthen profitability on its core business lines such that they generate excess regulatory capital that can help support holding company needs on a recurring basis." Genworth's Baa3 senior debt rating is 4 notches lower than the A2 IFS ratings of the company's lead life insurance. The notching differential between the main life insurance operating entities and the holding company is greater than the standard 3 notches typical for insurance groups, a reflection of the lower credit profile and downside risks of the US MI company. US Mortgage Insurance (GMICO) Moody's downgraded the ratings of GMICO and the other US mortgage insurance subsidiaries from Baa2 to Ba1 to reflect higher losses from Moody's revised loss projections. The deterioration reflects continued high delinquency rates and reduced captive reinsurance and loss mitigation benefits. Under Moody's central scenario, GMICO's loss coverage score is 1.36x, consistent with the expectation for high Ba-rated credits. The rating agency anticipates high claims payments in 2011- 2012 such that, absent new capital contribution and substantial new business flows, GMICO's invested asset base could decline by 50- 60% over the period. Additionally, large operating losses are likely to further pressure the firm's regulatory risk-to-capital metric which was at 25.0x at the end of the first quarter of 2011. Moody's added that continued, although modest, improvements in portfolio performance trends are positive. GMICO's portfolio delinquency rate fell from 13.7% at year end 2009 to 11.7% at end of the first quarter of 2011. The rate of new delinquencies declined from 4.7% to 3.5% over the same period. The company continues to write high quality new mortgage insurance business. Volume could increase as the FHA reduces its share of origination and regulatory and counterparty forbearance is maintained. However, weakness in the aggregate mortgage originations is a concern. The Ba1 rating for GMICO reflects continued meaningful implicit financial support from the Genworth group as evidenced from recent capital contributions. The rating agency said the outlook for GMICO is negative because of the continuing uncertainty and downside risk for significantly higher levels of delinquencies and losses over the next few years. Such a stress scenario would put greater capital demands on the other operations and resources of Genworth, prompting the negative outlook on the other insurance subsidiaries and holding company. Non-US Mortgage Insurance Moody's confirmed the A1 IFS rating of Genworth Australia as its business continues to perform well, has a leading market share, and remains profitable. Loss development remains within expectations following the Reserve Bank of Australia's multiple interest rate increases to curb inflationary pressures and slow the pace of house price increases. Genworth Australia relies, in part, on reinsurance credit from GMICO to meet its regulatory capital requirements. While the Australian regulator has not reduced the amount of eligible reinsurance credit provided by the US MI, Genworth Australia has taken proactive steps to reduce its reliance on the GMICO reinsurance. Genworth Mortgage Insurance (MI) Canada Inc., in which Genworth reported a 57.5% ownership stake as of March 31, 2011, continues to perform within expectations and report solid earnings. A recent C$160 million share repurchase announcement by Genworth MI Canada Inc. will provide a proportionate amount of additional capital resource to Genworth's holding company. Rating Drivers According to Moody's, these could lead to a change in outlook to stable from negative: the losses and capital requirements of the stress case scenario for the U.S. MI operations are determined to have a modest impact on the group, positive pressure on the company's lead life companies (see Genworth Life Insurance Group credit opinion for specific rating drivers), and improved financial flexibility at the holding company. On the other hand, these could result in a downgrade of the holding company's ratings: a downgrade of the IFS ratings of the company's lead operating mortgage and/or life companies and/or adjusted financial leverage exceeding 30% and earnings coverage falling below 2x on a sustained basis. These ratings were confirmed with a negative outlook: -- Genworth Financial, Inc.- senior unsecured at Baa3, junior subordinated debt at Ba1(hyb), preferred stock at Ba2(hyb), senior unsecured shelf at (P)Baa3, subordinate shelf at (P)Ba1, preferred shelf at (P)Ba2, short-term debt rating for commercial paper at P-3 -- Genworth Life Insurance Company-insurance financial strength rating at A2, short term insurance financial strength rating at P-1 -- Genworth Life and Annuity Insurance Company-insurance financial strength rating at A2, short term insurance financial strength rating at P-1 -- Genworth Life Insurance Company of New York-insurance financial strength rating at A2 -- Genworth Global Funding Trusts-funding agreement-backed senior secured Medium-Term Note Program at (P)A2 -- Genworth Global Funding Trusts 2006-C through E; 2007-A through C; 2007-3 through 4; 2008-1 through 2; 2008-5; 2008- 7; 2008-9 through 49 - funding agreement-backed senior secured debt at A2 -- Genworth Life Institutional Funding Trust-funding agreement backed senior secured debt at A2, senior secured Medium-Term Note Program at (P)A2 -- General Repackaging ACES SPC, Series 2007-2; Series 2007-3; Series 2007-6; Series 2007-7-funding agreement-backed senior secured debt at A2 -- Premium Asset Trust Series 2005-3-funding agreement-backed senior secured debt at A2 -- Genworth Seguros de Credito a la Vivienda (Mexico)-insurance financial strength rating at Baa3, national scale insurance financial strength rating at Aa3.mx -- Genworth Financial Mortgage Insurance Limited-insurance financial strength rating at Baa3 -- Genworth Financial Mortgage Insurance Pty Ltd. (Genworth Australia)-insurance financial strength rating at A1 These ratings were downgraded and now have negative outlooks: -- Genworth Mortgage Insurance Corporation-insurance financial strength rating to Ba1 from Baa2 -- Genworth Residential Mortgage Insurance Corporation of NC- insurance financial strength rating to Ba1 from Baa2 -- Genworth Financial, Inc., headquartered in Richmond, Virginia, reported shareholders' equity excluding AOCI of $12.5 billion as of March 31, 2011. The principal methodologies used in rating Genworth were "Moody's Global Rating Methodology for Life Insurers," published in May 2010 and "Moody's Global Rating Methodology for the Mortgage Insurance Industry" published in February 2007. GLC LTD: Court OKs James Burritt as Chief Restructuring Officer --------------------------------------------------------------- Judge Jeffery P. Hopkins of the U.S. Bankruptcy Court for the Southern District of Ohio, Western Division, authorized GLC Limited to employ James Burritt as chief restructuring officer, nunc pro tunc the Petition Date. In December 2010, the Debtor employed Mr. Burritt of MainStream Management as its chief restructuring officer and to provide it management and advisory services. Pursuant to a resolution, the Company's board of directors authorized Mr. Burritt to act on behalf of the Debtor in its Chapter 11 case and in the operation of the businesses of the Debtor. Mr. Burritt, as Chief Restructuring Officer of the Debtor, will be responsible for day-to-day executive management and operational issues of the Debtor. His duties and responsibilities will be comparable to those typically held by a chief executive officer, the Debtor said in court papers. In addition, Mr. Burritt will be responsible for evaluating the assets of the Debtor and determining the method that will return the highest value to creditors and the Debtor's chapter 11 estate. Mr. Burritt will be paid an hourly fee of $315 and receive a success fee equal to 2%, payable on the gross proceeds returned to the creditors and other interested parties pursuant to a plan of reorganization confirmed by the Court. Mr. Burritt will also be reimbursed for any necessary out-of-pocket expenses. The maximum available fee to Mr. Burritt when combining the Weekly Fee with the Success Fee will not exceed $10,000 per week. He will not be entitled to collect a Success Fee on any inventory sales that occur on or after June 18, 2011. Any fees earned or due after June 18, 2011 will be paid on an hourly basis as a Weekly Fee, subject to the $8,820 per week cap and pursuant to a budget agreed to by the Official Committee of Unsecured Creditors. Mr. Burritt assures the Court that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor's estates. Mr. Burritt, however, discloses that, through Mainstream, he received a $30,000 retainer in connection with preparing for the filing of the Debtor's bankruptcy case. He also discloses that within one year prior to the Petition Date, he received a total of $52,921 as payment for prepetition fees and expenses. About GLC Limited Proctorville, Ohio-based GLC Limited is principally a liquidation company in the wholesale/retail distribution industry. It offers large selections of name brand products in many categories. It distributes its goods through a network of wholesale distributors, retail chains and discount and surplus centers. It owns four warehouses for its goods which are located in Proctorville and Columbus, Ohio and Huntington, West Virginia. GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio Case No. 11-11090) on Feb. 28, 2011. James R. Burritt, chief restructuring officer, signed the Chapter 11 petition. The Debtor estimated its assets and debts at $10 million to $50 million. Ronald E. Gold, Esq., at Frost Brown Todd LLC, serves as the Debtor's bankruptcy counsel. The Official Committee of Unsecured Creditors in GLC Limited's Chapter 11 bankruptcy case has tapped Morris, Manning & Martin, LLP, as counsel. GGS INVESTMENTS: Court Wants Plan Documents Revised --------------------------------------------------- Bankruptcy Judge Thomas J. Tucker directed George Shamoun, Jr., and Melinda Shamoun to revise the "Proposed Second Amended Combined Plan and Second Amended Disclosure Statement of Jointly Administered Affiliated Cases" the Debtors filed May 5, 2011. Judge Tucker said he cannot grant preliminary approval of the disclosure statement, citing a laundry list of problems the Debtors must correct. The revised documents, including a redlined version of the documents, were due to be filed by May 16, 2011. A copy of Judge Tucker's May 12, 2011 Order is available at http://is.gd/oFw1a9from Leagle.com. George Shamoun, Jr., and Melinda Shamoun filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 10-66172) on Nov. 18, 2010. The case is being jointly administered with the case of GGS Investments Inc., dba Budget Auto Repair One (Bankr. E.D. Mich. Case No. 10-75027). GGS Investments listed under $1 million in assets and debts in its petition, a copy of which is available at http://bankrupt.com/misc/mieb10-75027.pdf GREAT LAKES AVIATION: Posts $577,400 Net Loss in First Quarter -------------------------------------------------------------- Great Lakes Aviation, Ltd., filed its quarterly report on Form 10-Q, reporting a net loss of $577,406 on $29.7 million of revenues for the three months ended March 31, 2011, compared with a net loss of $204,540 on $28.8 million of revenues for the same period last year. At March 31, 2011, the Company has $36.0 million of long-term debt payments or debt maturity debt payments due in the next twelve months. At March 31, 2011, the largest portion of the Company's long-term debt was held by the Company's principal creditor and largest single shareholder, Raytheon Aircraft Credit Corporation. The notes, which were used to finance the purchase of aircraft, are secured by 25 Beechcraft 1900D aircraft and mature on June 30, 2011. A $32.7 million balloon payment for all 25 aircraft notes is due upon maturity of the notes. The Company's senior note with Raytheon, in the amount of $7.2 million at March 31, 2011, is cross defaulted to the aircraft notes. In order to satisfy these obligations the Company will need to generate sufficient cash from operations to repay the obligations, secure alternative sources of financing with which to repay Raytheon, raise additional capital sufficient to repay Raytheon, refinance the obligations with Raytheon, or achieve a combination of any or all of the foregoing to satisfy the terms of the aircraft notes. As of May 10, 2011, the Company has not extended the terms of the aircraft notes or secured alternative sources of financing to satisfy these obligations. The Company has not generated sufficient cash from operations to be able to make a June 30, 2011 payment to Raytheon in the amount of $32.7 million. Raytheon has informed the Company that it does not intend to extend or refinance the obligations due on June 30, 2011. "In the event that the Company is unable to obtain new financing, Raytheon may exercise remedies available to it, including the foreclosure and taking of the 25 mortgaged aircraft and causing the $7.2 million senior note to become due and payable," the Company said in the filing. The Company's balance sheet at March 31, 2011, showed $81.1 million in total assets, $52.8 million in total liabilities, and stockholders' equity of $28.3 million. As reported in the TCR on April 12, 2011, KPMG LLP, in Denver, expressed substantial doubt about Great Lakes Aviation's ability to continue as a going concern, following the Company's results for 2010. The independent auditors noted that the Company has $38.4 million of debt payments and maturities due in 2011, including a one-time payment in the amount of $32.7 million due on June 30, 2011. The independent auditors said that the Company's cash flows from operations are not sufficient to fund these debt obligations. A complete text of the Form 10-Q is available for free at: http://is.gd/Ym5Uag Cheyenne, Wyo.-based Great Lakes Aviation, Ltd., is a a regional airline operating as an independent carrier and as a code share partner with United Air Lines, Inc., and Frontier Airlines, Inc. As of May 10, 2011, the Company served 47 airports in 12 states with a fleet of six Embraer EMB-120 Brasilia and 32 Raytheon/Beech 1900D regional airliners. GUARANTY FINANCIAL: Plan of Liquidation Declared Effective ---------------------------------------------------------- BankruptcyData.com reports that Guaranty Financial Group's Second Amended Joint Plan of Liquidation became effective, and the Company emerged from Chapter 11 protection. BData relates that pursuant to the Plan and order of the Court confirming the Plan, as of the effective date, all shares of common stock of Guaranty Financial Group were deemed cancelled. Guaranty Financial received approval of its Chapter 11 plan at the May 11 confirmation hearing. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that Guaranty Financial's plan barely received the required two-thirds vote in four creditor classes. Unsecured creditors with $382 million in claims were told in the disclosure statement to expect a recovery between 1% and 3%, or more if lawsuits are successful. Unsecured claims include $318 million from trust preferred securities. According to Mr. Rochelle, the Federal Deposit Insurance Corp., as receiver for Guaranty Financial's failed banking unit, had asserted it was entitled to tax refunds and asserted a claim for $1.977 billion in capital contributions that should have been made to the bank subsidiary. The Plan resulted from a settlement between the FDIC and the indenture trustee for noteholders. The FDIC will receive part of the remaining cash and all of the tax refunds, which are estimated to be $3.49 million. Unsecured creditors receive whatever is collected by a liquidating trust. About Guaranty Financial Dallas, Texas-based Guaranty Financial Group Inc. -- http://www.guarantygroup.com/-- was a unitary savings and loan holding company. The Company's primary operating entities were Guaranty Bank and Guaranty Insurance Services, Inc. Guaranty Financial filed for bankruptcy after the Guaranty bank was seized by regulators and sent to receivership under the Federal Deposit Insurance Corporation. Before the bank was taken over, the balance sheet of the holding company had $15.4 billion in assets as of Sept. 30, 2008. Guaranty Financial and its affiliates filed for Chapter 11 (Bankr. N.D. Tex. Case No. 09-35582) on Aug. 27, 2009. Attorneys at Haynes & Boone, LLP, serve as the Debtors' bankruptcy counsel. According to the schedules attached to its petition, the Company disclosed $24.3 million in total assets and $323.4 million in total debts, including $305.0 million in trust preferred securities. GULFSTREAM INT'L: Creditors Pursue Investigation of Top Executives ------------------------------------------------------------------ Dow Jones' DBR Small Cap reports that top executives at Gulfstream International Group Inc.-- which is already battling shareholder accusations that it misled investors about the dismal financial reality behind the company's recently sold Florida airline -- could soon face other claims from creditors looking into whether company officials improperly spent corporate money. About Gulfstream International Fort Lauderdale, Florida-based Gulfstream International Airlines (NYSE Amex: GIA) operated a fleet of turboprop Beechcraft 19000 aircraft, and specialized in providing travelers with access to niche locations not typically covered by major carriers. GIA operated more than 150 scheduled flights per day, serving nine destinations in Florida, 10 destinations in the Bahamas, five destinations from Continental Airline's hub under the Department of Transportation's Essential Air Service Program and supports charter service to Cuba through a services agreement with Gulfstream Air Charter, Inc., an entity otherwise unrelated to the Debtors. GIA operated as a Continental Connection carrier, as well as for United Airlines, Northwest Airlines and Copa Airlines, through code share agreements. GIA has 620 employees, including 530 working full-time. Gulfstream International Group, Inc., and its units including Gulfstream International Airline, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-44131) on Nov. 4, 2010. Brian K. Gart, Esq., at Berger Singerman, P.A., serves as the Debtors' bankruptcy counsel. Jetstream Aviation Capital, LLC and Jetstream Aviation Management, LLC, serve as financial advisors to the Debtors. Robert A. Schatzman, Esq., Steven J. Solomon, Esq., and Frank P. Terzo, Esq., at GrayRobinson, P.A., in Miami, Florida, serve as counsel to the Official Committee of Unsecured Creditors. Gulfstream International Airlines disclosed $15,967,096 in total assets and $25,243,099 in total liabilities. On January, Bankruptcy Judge John K. Olson entered an order authorizing Gulfstream to sell its business to an affiliate of Chicago-based Victory Park Capital Advisors LLC. Victory Park bought Gulfstream in return for the $5 million DIP financing it provided to the Debtor, agreed to pay Raytheon Aircraft Credit Co. $18.7 million to buy the 21 Beechcraft 1900 D aircraft that Gulfstream operates, and agreed to set aside a $600,000 fund to pay professional fees. Victory Park completed the purchase in April HCA HOLDINGS: Files Form 10-Q; Posts $334MM Net Income in Q1 ------------------------------------------------------------ HCA Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting net income of $334 million on $8.05 billion of revenue for the quarter ended March 31, 2011, compared with net income of $476 million on $7.54 billion of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $23.81 billion in total assets, $31.59 billion in total liabilities, and a $7.78 billion stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/ZDJR9Z About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the twelve months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. * * * In November 2010, Moody's Investors Service confirmed the existing ratings of HCA, including the 'B2' Corporate Family and Probability of Default Ratings. Moody's assigned a Caa1 (LGD6, 96%) rating to HCA, Inc.'s proposed offering of $1.525 billion of senior unsecured notes due 2021 to be issued at a parent holding company. HCA's 'B2' Corporate Family Rating anticipates that the company will continue to operate with significant leverage. Pro forma for the proposed debt financed distribution Moody's estimate that adjusted leverage would have been 5.2 times at Sept. 30, 2010. Furthermore, the company has large maturities in 2012 and 2013 that will likely need to be refinanced in the capital markets. However, the rating acknowledges the company's progress in systematically extending its maturity profile. Finally, the rating reflects HCA's solid EBITDA growth, which has benefited the credit metrics and demonstrated the company's ability to weather industry pressures. As reported by the Troubled Company Reporter on March 14, 2011, Moody's Investors Service commented that the completion of the IPO by HCA Holdings, Inc., has no immediate impact on the company's B2 Corporate Family Rating. The outlook for the ratings remains positive. While Moody's believes that the completion of the IPO is a credit positive since proceeds are expected to be used to repay outstanding debt, the estimated $2.6 billion of proceeds to the company won't meaningfully reduce HCA's $28.2 billion debt load. In the March 16, 2011, edition of the TCR, Fitch Ratings has upgraded its ratings for HCA Inc. and HCA Holdings Inc., including the companies' Issuer Default Ratings which were upgraded to 'B+' from 'B'. The Rating Outlook is revised to Stable from Positive. The ratings apply to approximately $28.2 billion in debt outstanding at Dec. 31, 2010. Fitch noted that HCA has made significant progress in reducing debt leverage since it was taken private in 2006 in a LBO which added $17 billion to the company's debt balance; at Dec. 31, 2006, immediately post the LBO, debt-to- EBITDA was 6.7x. Most of the reduction in debt leverage over the past four years was accomplished through growth in EBITDA, which Fitch calculates has expanded by $1.7 billion or 40% to $5.9 billion for 2010 versus $4.2 billion in 2006. Although the company did not undertake a significant organizational restructuring post the LBO, management has nevertheless been successful in growing EBITDA and significantly expanding discretionary free cash flow (FCF). Fitch believes this was accomplished through various operational initiatives, including expansion of profitable service lines and the divestiture of some under performing hospitals, as well as the generally resilient operating trend of the for-profit hospital industry during the recent economic recession despite the pressure of increased levels of uncompensated care and generally weak organic patient volume trends. HEALTH ADVENTURE: Has 18-Month Lease Offer From Pack Place ---------------------------------------------------------- John Boyle at Citizen-Times.com reports that The Health Adventure, a children's museum and education center at the Pack Place, in Asheville, North Carolina, has received approval from the building's board of trustee to stay at the facility for 18 more months. The board though has required the Debtor to pay $1,000 a month for the first 12 months, then $3,000 a month for the next six months, as well as $15,000 in overdue assessments to remain in the building, its home since 2002. According to the report, some of the five partners in Pack Place, particularly the Asheville Museum of Art, wanted the Health Adventure out in nine months. The art museum was pushing for a shorter term as it was planning to take over Health Adventure's space last year, when the children's museum was supposed to have moved into a new site in Montford called Momentum. When the Health Adventure declared bankruptcy, that essentially ended the ambitious plans for the new $25 million museum on a 10-acre site. The Health Adventure, Inc., filed a petition for relief under Chapter 11 (Bankr. W.D.N.C. Case No. 11-10299) on March 28, 2011, represented by David G. Gray, Esq., at Westall, Gray, Connolly & Davis, P.A., in Asheville, North Carolina. In its schedules, the Debtor disclosed $1,433,700 in assets and $4,272,158 in liabilities. HUGHES TELEMATICS: Amends Form S-3 for 2.4-Mil. Shares ------------------------------------------------------ HUGHES Telematics, Inc., filed with the U.S. Securities and Exchange Commission Amendment No. 1 to Form S-3 registration statement relating to the offer for sale by the existing holders of the Company's common stock of 2,428,572 shares of the Company's common stock, par value $0.0001 per share, including 1,000,000 shares of the Company's common stock issuable upon exercise of warrants. All of the shares of common stock offered by the prospectus are being sold by the selling security holders. It is anticipated that the selling security holders will sell these shares of common stock from time to time in one or more transactions, in negotiated transactions or otherwise, at prevailing market prices or at prices otherwise negotiated. The Company will not receive any proceeds from the sales of shares of common stock by the selling security holders. The Company has agreed to pay all fees and expenses incurred by it incident to the registration of its common stock, including SEC filing fees. Each selling security holder will be responsible for all costs and expenses in connection with the sale of their shares of common stock, including brokerage commissions or dealer discounts. The Company's common stock is currently traded on the Over-the- Counter Bulletin Board, commonly known as the OTC Bulletin Board, under the symbol "HUTC." As of May 9, 2011, the closing sale price of the Company's common stock was $3.25 per share. A full-text copy of the amended prospectus is available for free at http://is.gd/xdO4rF About HUGHES Telematics Atlanta, Ga.-based HUGHES Telematics, Inc. is a telematics services company that provides a suite of real-time voice and data communications services and applications for use in vehicles and is developing additional applications for use within and outside of the automotive industry. The Company reported a net loss of $89.56 million on $40.34 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $163.66 million on $33.04 million of total revenues during the prior year. The Company's balance sheet at March 31, 2011, showed $110.12 million in total assets, $186.96 million in total liabilities, and a $76.84 million total stockholders' deficit. The Company's balance sheet at March 31, 2011, showed $110.12 million in total assets, $186.96 million in total liabilities, and a $76.84 million total stockholders' deficit. As of March 31, 2011, the Company had cash, cash equivalents and short-term investments of approximately $26.1 million and restricted cash of approximately $1.3 million which secures outstanding letters of credit. Of the Company's consolidated cash, cash equivalents and short-term investments, approximately $7.8 million is held by the Company's Lifecomm subsidiary for use in that business. As a result of the Company's historical net losses and the Company's limited capital resources, PricewaterhouseCoopers LLP's report on the Company's financial statements as of and for the year ended Dec. 31, 2010, includes an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern. INDIANA EQUITY: Sec. 341 Creditors' Meeting Set for June 16 ----------------------------------------------------------- The United States Trustee for Region 11 will hold a meeting of creditors in the bankruptcy case of Indiana Equity Investments, LLC, on June 16, 2011, at 1:30 p.m. at 219 South Dearborn, Office of the U.S. Trustee, 8th Floor, Room 802, in Chicago, Illinois. 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. Based in Alsip, Illinois, Indiana Equity Investments, LLC, aka Autumnwoods Apartments and Brendonwood Apartments, owns two commercial multi-family properties located in Fort Wayne, Indiana. It filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19277) on May 5, 2011. Judge Eugene R. Wedoff presides over the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor listed $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Joseph Junkovic, the manager. Mr. Junkovic filed for Chapter 11 case (Bankr. N.D. Ill. Case No. 10-55888) in 2010. INDIANA EQUITY: Wants Schedules Filing Deadline Moved to June 9 --------------------------------------------------------------- Indiana Equity Investments, LLC, seeks more time to file its Schedules of Assets and Liabilities, and Statement of Financial Affairs. Pursuant to Rule 1007 of the Federal Rules of Bankruptcy Procedure, the Debtor was to file by May 19 its Schedules and Statement. However, the Debtor said it is in the process of gathering all of the information necessary to complete its Schedules and Statement. The Debtor wants the deadline moved to June 9. Based in Alsip, Illinois, Indiana Equity Investments, LLC, aka Autumnwoods Apartments and Brendonwood Apartments, owns two commercial multi-family properties located in Fort Wayne, Indiana. It filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19277) on May 5, 2011. Judge Eugene R. Wedoff presides over the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor listed $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Joseph Junkovic, the manager. Mr. Junkovic filed for Chapter 11 case (Bankr. N.D. Ill. Case No. 10-55888) in 2010. INDIANA EQUITY: Can Use Rents to Fund Expenses Until Monthend ------------------------------------------------------------- Indiana Equity Investments, LLC, sought and obtained limited authority from the Bankruptcy Court to use rents from its properties which serves as cash collateral of Federal National Mortgage Association. The Debtor requested the use of rents to operate its properties and provide services to its tenants. As of the petition date, Fannie Mae asserts that the Debtor owes it no less than $8.189 million in mortgage loans. Fannie Mae acquired the loans from the original lender, Arbor Commercial Funding LLC. Fannie Mae objected to the Debtor's request, citing four grounds: -- It is unclear whether the expenses to be paid under the proposed Cash Collateral Budgets are actually expenses of the Debtor or expenses of the Debtor's managing member Midwestern Equities, LLC; -- The Debtor should not be permitted to "bank" excess cash collateral from month to month while refusing to make any adequate protection payments to Fannie Mae; -- The Budgets include certain inappropriate expenses, including monthly "Ownership Payroll" for the Debtor's key principals and "Management Payroll" for the self-managed Debtor; and -- The Motion fails to adequately protect Fannie Mae. Pursuant to the Court's First Interim Cash Collateral Order, the Debtor obtained permission to use the rents solely to pay expenditures for the period from the petition date up to and including May 31. The First Interim Order provides Fannie Mae with adequate protection for any diminution in value of its collateral as a result of the Debtor's use. The Court will hold a final hearing on the use of rents on May 31. The Debtor will provide Fannie Mae with a 90-day budget. Fannie Mae is represented in the case by: Jill L. Nicholson, Esq. Joanne Lee, Esq. FOLEY & LARDNER LLP 321 North Clark Street, Suite 2800 Chicago, IL 60654 Tel: 312-832-4500 Fax: 312-832-4700 E-mail: jnicholson@foley.com jlee@foley.com Based in Alsip, Illinois, Indiana Equity Investments, LLC, aka Autumnwoods Apartments and Brendonwood Apartments, owns two commercial multi-family properties located in Fort Wayne, Indiana. It filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19277) on May 5, 2011. Judge Eugene R. Wedoff presides over the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor listed $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Joseph Junkovic, the manager. Mr. Junkovic filed for Chapter 11 case (Bankr. N.D. Ill. Case No. 10-55888) in 2010. INNOLOG HOLDINGS: Amends 2010 Quarterly Reports to Correct Errors ----------------------------------------------------------------- Innolog Holdings Corporation's Principal Executive Officer, Principal Financial Officer and the Chairman of the Company's Audit Committee concluded that the Company's previously issued consolidated financial statements for the three months ended March 31, 2010, the six months ended June 30, 2010, and the nine months ended Sept. 30, 2010, should no longer be relied upon. The consolidated financial statements for the three months ended March 31, 2010, and for the six months ended June 30, 2010, were included in amendments to our Current Report on Form 8-K which was originally filed with the Securities and Exchange Commission on Aug. 16, 2010. The amendments were filed with the Securities and Exchange Commission on Aug. 16, 2010, and Oct. 15, 2010, respectively. The consolidated financial statements for the nine months ended Sept. 30, 2010, were included in the Company's Quarterly Report on Form 10-Q, which was filed with the SEC on Nov. 22, 2010. The errors in the consolidated financial statements include the following: (i) The notes payable are understated by $359,405; (ii) Expenses incurred by related parties on behalf of Innolog Holding Corporation were misstated; and (iii) Dividends to Innolog's former sole stockholder were misstated. Below is the comparison of net losses for the three periods: Restated Originally Quarter Amounts Reported ------- -------- ---------- March 31, 2010 $640,138 $436,043 June 30, 2010 $368,059 $553,772 Sept. 30, 2010 $4,247,109 $4,432,622 The restated balance sheet at Sept. 30, 2010, showed $1.18 million in total assets, $8.09 million in total liabilities and a $6.91 million total stockholders' deficit, compared with $1.18 million in total assets, $7.73 million in total liabilities and a $6.55 million total stockholders' deficit. A full-text copy of the filing is available for free at: http://is.gd/o7nE4k In a separate filing, the Company informed the SEC that it will be late in filing its quarterly report on Form 10-Q for the period ended March 31, 2011. The Company said it does not yet have all the information it needs to complete the preparation of its financial statements. About Innolog Holdings Fairfax, Virginia-based Innolog Holdings Corporation is a holding company designed to make acquisitions of companies in the government services industry. The Company's first acquisition, Innovative Logistics Techniques, Inc., is a solutions oriented provider of logistics services primarily to agencies of the U.S. government, but also to state and local agencies and to private businesses. The Company's balance sheet at Sept. 30, 2010, showed $1.19 million in total assets, $7.74 million in total liabilities, all current, and a stockholders' deficit of $6.55 million. "The Company has sustained substantial operating losses in the prior year and increasing losses in the current periods, and has a stockholders' deficit of $6.54 million and $2.49 million at Sept. 30, 2010, and Dec. 31, 2009, respectively," the Company said in its Form 10-Q for the quarter ended Sept. 30, 2010. "There are many delinquent claims and obligations, such as payroll taxes, employee income tax withholdings, employee benefit plan contributions, loans payable and accounts payable, that could ultimately cause the Company to cease operations." INOVA TECHNOLOGY: Completes $515,000 Network Solutions Projects --------------------------------------------------------------- Inova Technology has completed another $515,000 worth of network solutions projects for Lamesa ISD and San Eli ISD. "Inova Technology has the largest backlog in its history as the company moves towards the busiest part of the fiscal year," said CEO, Mr. Adam Radly. "The company has also bid on numerous additional projects and expects to report the results of those bids during May 2011." The company receives projects in two stages: The first stage involves being awarded the project and the second stage involves getting approved funding for the project. Projects that form part of the company's backlog are projects that are both awarded and funded. Inova previously announced that its revenue for the nine months ended January 2011 was up by 32%, compared to the same period a year ago. The company also previously announced that it paid down $600,000 of debt in February 2011. About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company's balance sheet at Jan. 31, 2011, showed $10.39 million in total assets, $16.32 million in total liabilities, and a $5.93 million stockholders' deficit. As reported in the Troubled Company Reporter on August 26, 2010, MaloneBailey, LLP, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended April 30, 2010. The independent auditors noted that Inova incurred losses from operations for fiscal 2010 and 2009 and has a working capital deficit as of April 30, 2010. INTEGRATED FREIGHT: Completes Acquisition of Cross Creek -------------------------------------------------------- Paul Henley, CEO of Integrated Freight Corporation said in a letter to investors that over the last two months it completed its acquisition of Cross Creek Trucking, a Medford, Oregon-based refrigerated freight hauler. In operation since 1986, Cross Creek will add over 115 late model tractors, 170 refrigerated trailers, and 30 dry trailers to the Integrated Freight fleet, along with 2010 revenues of approximately $28M. Triple C Integrated Freight that last December, Triple C Transport's former owner and general manager initiated Chapter 11 bankruptcy proceedings for two of his companies, White Farms Trucking and Craig Carrier Corporation. These companies owned the tractor and trailer equipment that Integrated Freight's subsidiary, Triple C Transport, leased for its trucking operations. Recently, as a result of the Chapter 11 filing, the bankruptcy court ordered the return of this leased equipment. Current Triple C management has complied with the court's order and has leased a small amount of operating equipment as a replacement. IFCR has secured local counsel to protect its interests through the former owner's bankruptcy proceedings and to recover any ongoing losses that may result from this situation, including a rescission of Integrated Freight's original stock purchase agreement with the previous owners of Triple C Transport. "We believe that rescission will not have a materially negative impact on our financial performance going forward. However, we will not be able to take advantage of many of the additional opportunities provided by this acquisition that we had originally envisioned at the time of its closing until this situation is rectified," Integrated Freight said. About Integrated Freight Integrated Freight Corporation, formerly PlanGraphics, Inc., (OTC BB: IFCR) -- http://www.integrated-freight.com/-- is a Sarasota, Florida headquartered motor freight company providing long-haul, regional and local service to its customers. The Company specializes in dry freight, refrigerated freight and haz-waste truckload services, operating primarily in well-established traffic lanes in the upper mid-West, Texas, California and the Atlantic seaboard. IFCR was formed for the purpose of acquiring and consolidating operating motor freight companies. On Aug. 19, 2010, at a special stockholders' meeting the Company approved a reverse stock split, a relocation of its State of Incorporation to Florida and a change of its name to Integrated Freight Corporation. The Company's name change and State of Incorporation have been approved and are effective as of Aug. 18, 2010. The reverse stock split has been approved but is not effective as of the date of this filing. * * * Sherb & Co., LLP, in Boca Raton, Fla., expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has suffered recurring losses and has a negative working capital position and a stockholders' deficit. The Company's balance sheet at Sept. 30, 2010, showed $8.96 million in total assets, $11.91 million in total liabilities, and a stockholders' deficit of $2.95 million. INTERNATIONAL LEASE: Moody's Affirms 'B1' CFR; Outlook Positive --------------------------------------------------------------- Moody's Investors Service affirmed International Lease Finance Corporation's ratings (B1 Corporate Family Rating) and revised its rating outlook to positive. Moody's also changed the rating outlooks assigned to Delos Aircraft Inc., ILFC E-Capital Trust I, and ILFC E-Capital Trust II to positive. Ratings Rationale Moody's said the change in rating outlook reflects ILFC's progress restructuring liabilities, improving liquidity, and reducing leverage. ILFC's achievements in this regard over the past five quarters, together with its strong competitive positioning, provide the basis for the firm to continue its funding transition and credit quality improvements. Tempering this view, Moody's believes that ILFC faces challenges relating to lease margin improvements and generating attractive returns on a sustainable basis as operating conditions evolve. "Over the next twelve to eighteen months, our normal outlook horizon, Moody's expects to see further liquidity and funding improvements at ILFC," said Moody's senior analyst Mark Wasden. "The firm's performance over that time frame should also provide additional insight into its ability to solidify acceptable margins and returns." ILFC strengthened its credit profile by extending its debt maturities and lengthening its liquidity runway. So far this year, ILFC put into place a $2 billion unsecured revolving line of credit to provide liquidity backup and closed a $1.5 billion term loan to prefund upcoming maturities. Moody's believes that ILFC's liquidity and liability management actions have materially reduced its intermediate term liquidity risk. By repaying debt, ILFC also reduced leverage, building a capital cushion to absorb potential asset quality and performance weakness. Moody's anticipates that ILFC will continue to reduce leverage in the intermediate term to a more appropriate level. However, ILFC must effectively balance lower leverage with the ability to generate an acceptable return on equity. ILFC's operating cash flows have shown resilience during the downturn, considering the gradually increasing average age of its aircraft fleet, asset sales, and the effects of the industry downturn on airline credit quality, aircraft demand, and lease rates. However, ILFC faces potential challenges relating to the effect of fuel costs and economic conditions on air travel volumes and aircraft demand, airline lessee financial health and operating performance, and heightened competition. ILFC's composite borrowing rate is also increasing, though lower debt levels partially offset the effect of this on lease margin. Additionally, ILFC's credit spreads have declined over the past year, providing potential opportunity for the firm to refinance debt at a cost that is less dilutive to its margins. Because of its size and recurring need for capital, for ILFC to maintain reliable access to multiple sources of market funding it must generate reasonably predictable and acceptable cash flows and returns. ILFC's rating is supported by its position as an industry leader in aircraft finance, its fleet of relatively recent vintage, widely utilized aircraft, and its diverse global customer relationships. ILFC's new aircraft orders are speculative, though it is generally able to place airplanes into committed leases well in advance of delivery. As a credit concern, ILFC's aircraft deliveries could become an increasing liquidity consideration over time as aircraft it has ordered enter production and near delivery dates. ILFC's rating formerly incorporated a one-notch uplift based on Moody's expectation that parent AIG would provide sufficient support for ILFC to maintain a minimum B1 level of creditworthiness. Because ILFC has strengthened its stand alone credit profile, the B1 rating no longer relies on an assumption of AIG support. Moody's could consider upgrading ILFC's ratings if the firm makes further progress aligning its debt maturity profile with operating cash flows, sustains lease margin improvements during the developing economic and industry recovery, and manages leverage (adjusted debt/common equity) to below 2.5x while achieving and sustaining an attractive return for its owners. In its last ILFC rating action dated December 2, 2010, Moody's assigned a B1 rating to ILFC's $1 billion senior unsecured notes, due 2020. The principal methodology used in rating ILFC is Analyzing the Credit Risks of Finance Companies dated October 2000, which can be found at www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating these issuers can also be found in the Rating Methodologies sub- directory. International Lease Finance Corporation, headquartered in Los Angeles, California, is a major owner-lessor of commercial aircraft. INTERPUBLIC GROUP: S&P Ups CCR to 'BB+' on Operating Momentum ------------------------------------------------------------- Standard & Poor's Rating Services raised its long-term corporate credit rating on Interpublic Group of Cos. Inc. (IPG) to 'BB+' from 'BB', and removed the ratings from CreditWatch, where they were originally placed with positive implications on March 31, 2011. The outlook is stable. "We also raised our issue-level ratings on IPG's debt in accordance with our upgrade of the corporate credit rating. These ratings were also removed from CreditWatch. The recovery ratings on these debt issues remain unchanged," S&P stated. "The upgrade reflects our expectation that IPG will continue to gradually improve profitability metrics in 2011 based on our assumption of mid-single-digit percent organic revenue growth and ongoing cost management," said Standard & Poor's credit analyst Michael Altberg. Further upgrade potential will be based on additional progress toward peer levels, continued broad-based profitability gains across business segments, and further reduction of fully adjusted leverage, which was slightly high for investment grade as of March 31, 2011, at 3.9x. "Derailment of the economic and advertising/marketing recovery (which we believe would weaken IPG and peers) or lack of sustained momentum in business wins could delay additional ratings upside," S&P stated. The stable rating outlook reflects Standard & Poor's expectation of further organic revenue growth and gradual margin expansion in 2011, and continued strong liquidity despite increased shareholder returns and potential acquisitions. INTERTAPE POLYMER: Incurs $41,000 Net Loss in March 31 Quarter -------------------------------------------------------------- Intertape Polymer Group Inc. reported a net loss of US$41,000 on US$192.62 million of revenue for the three months ended March 31, 2011, compared with a net loss of US$4.75 million on US$173.12 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed US$493.55 million in total assets, US$345.44 million in total liabilities, and US$148.11 million shareholders' equity. A full-text copy of the press release announcing the financial results is available for free at http://is.gd/4CItY9 About Intertape Polymer Group Intertape Polymer Group Inc. (TSX:ITP) (NYSE:ITP) develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the Company employs approximately 2,100 employees with operations in 17 locations, including 13 manufacturing facilities in North America and one in Europe. The Company reported a net loss of US$56.44 million on US$720.51 million of sales for the year ended Dec. 31, 2010, compared with a net loss of US$14.39 million on US$615.46 million during the prior year. * * * In August 2010, Moody's Investors Service revised the rating outlook on Intertape Polymer Group Inc. to negative from stable and affirmed the B2 Corporate Family Rating. Moody's also affirmed the SGL-3 speculative grade liquidity rating and instrument ratings. Moody's said the B2 Corporate Family Rating reflects Intertape's narrow operating margins, lack of pricing power, largely commoditized product line and reliance on cyclical end markets, such as industrial, building and construction segments. Intertape is operating in a fragmented and highly competitive industry. The presence of large competitors with significant financial resources restricts Intertape's ability to recover raw material increases from customers and constrains the rating. In July 2010, Standard & Poor's Ratings Services revised its outlook on Intertape Polymer Group to positive from negative and affirmed its ratings, including its 'CCC+' corporate credit rating, on the Company and its subsidiary IntertapePolymer U.S. Inc. "The outlook revision reflects some improvement in the company's liquidity position and S&P's expectation that the improvement to the financial profile will continue into the next several quarters," said Standard & Poor's credit analyst Paul Kurias. INVENTIV HEALTH: Moody's Reviews Ratings for Possible Downgrade --------------------------------------------------------------- Moody's Investors Service placed the ratings of inVentiv Health Inc., including the B2 Corporate Family Rating, under review for possible downgrade following the announcement that the company will acquire PharmaNet Development Group (B3, stable) from JLL Partners. The acquisition is expected to close on or around June 30, 2011. Financial terms of the acquisition were not disclosed. These ratings were placed under review for possible downgrade: -- B2 Corporate Family Rating -- B2 Probability of Default rating -- $75 million Senior Secured Revolver due 2015, Ba3 -- $525 million Senior Secured Term Loan due 2016, Ba3 -- $105 million Senior Secured Term Loan due 2016, Ba3 -- $210 million delayed draw Term Loan due 2016, Ba3 -- $160 million Unsecured notes due 2018, Caa1 -- $275 million Unsecured Notes due 2018, Caa1 The Speculative Grade Liquidity Rating of SGL-2 remains unchanged at this time. However, Moody's will reevaluate the rating as more details around the financing become available. The initiation of the review is based on the aggressive pace of acquisitions and the likelihood that inVentiv will have to increase debt in order to fund the purchase of PharmaNet. This will be the third material acquisition that inVentiv has announced since the beginning of 2011. The company completed the purchase of Campbell Alliance Group in February 2011 and should close the acquisition of i3 Global within the next month or so. InVentiv is raising debt by approximately $475 million to fund these two acquisitions. Given inVentiv's limited cash balance and revolver availability at March 31, 2011, Moody's believes the company will seek incremental debt financing to acquire PharmaNet. On January 28 2011, Moody's affirmed the ratings of inVentiv in connection with the Campbell Alliance and i3 acquisitions and cited pro forma adjusted debt to EBITDA of approximately 6.0 times. A further increase in debt to fund PharmaNet could result in adjusted leverage that is no longer appropriate for a B2 Corporate Family Rating. The rating review will consider primarily the financing for the acquisition and the resulting pro forma credit metrics, including leverage, interest coverage and cash flow to debt. Moody's will also consider other factors in Moody's rating review including; the strategic fit of PharmaNet, potential synergies, integration risk and liquidity. The principal methodology used in rating inVentiv Health Inc. was the Global Business & Consumer Service Industry Rating Industry Methodology, published October 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. inVentiv, headquartered in Burlington, MA, is a leading provider of outsourced services to the pharmaceutical, life sciences and healthcare industries. inVentiv provides a broad range of clinical development, communications and commercialization services to clients to assist in the development and commercialization of pharmaceutical products and medical devices. For the twelve months ended March 31, 2011, the company reported approximately $1 billion in net revenues. In August 2010, inVentiv was taken private by Thomas H. Lee Partners and Liberty Lane Partners in a transaction valued at $1.1 billion. JARED BLUHM: Files for Chapter 7 in St. Paul -------------------------------------------- The Star Tribune reports that Jared Dean Bluhm Sr., as surety for Bluhm Brothers Inc., in 1017 Howell St. S., St. Paul, Minnesota, filed a Chapter 7 bankruptcy petition (Case No. 11-33146) on May 10. It disclosed $248,401 in assets and $1,033,286 in liabilities as of the bankruptcy filing. JOHENE EGGERT: Judge Wants Plan Documents Amended ------------------------------------------------- Bankruptcy Judge Thomas J. Tucker directed Robert M. Eggert, and Johene L. Eggert to amend the Combined Plan and Disclosure Statement they filed May 6, 2011. Judge Tucker said he cannot grant preliminary approval of the disclosure statement, citing a laundry list of problems the Debtors must correct. The amended plan documents, as well as a redlined version of the plan documents, were to be filed no later than May 17, 2011. A copy of the Court's May 12, 2011 Order is available at http://is.gd/BAAHmz from Leagle.com. Robert M. Eggert and Johene L. Eggert filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 11-40655) on Jan. 11, 2011. LA JOLLA: Has 4.01 Million Common Shares Issued and Outstanding --------------------------------------------------------------- La Jolla Pharmaceutical Company reported that on May 10, 2011, it had converted approximately 11 shares of Series C-1 1 Convertible Preferred Stock into 1,848,996 shares of common stock. Following these conversions, the Company had a total of 4,014,327 shares of common stock issued and outstanding. About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. The Company reported a net loss of $3.76 million on $0 of revenue from collaboration agreement for the year ended Dec. 31, 2010, compared with a net loss of $8.63 million on $8.12 million of revenue from collaboration agreement during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $6.93 million in total current assets, $6.40 million in total current liabilities $47,000 in Series C-1 redeemable convertible preferred stock, and $482,000 in total stockholders' equity. As reported by the TCR on April 18, 2011, BDO USA, LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, an accumulated deficit of $428 million as of Dec. 31, 2010 and has no current source of revenues. LEHMAN BROTHERS: Ruling on Barclays/LBI Trustee Dispute Postponed ----------------------------------------------------------------- Judge James Peck declined to rule on the dispute between Barclays Plc and the trustee overseeing the liquidation of Lehman Brothers Holdings Inc.'s U.S. brokerage business at a May 9 hearing, the Daily Bankruptcy Review reports. The parties' dispute stems from Barclays' 2008 acquisition of LBHI's North American brokerage business. LBHI sued Barclays in November 2009, alleging that the 2008 sale was structured to allow Barclays to get a windfall profit in the sum of $8.2 billion. Barclays subsequently filed a countersuit claiming some $3 billion in certain assets. After conducting a trial that spanned about seven months, Judge Peck entered an order on February 22, 2011, holding that the 2008 transaction was fair even as the sale process was imperfect. He, however, left it to the parties to work out who gets what from the disputed assets. The assets in dispute include over $4 billion in margin assets, more than $2 billion in clearance box assets, and $769 million in customer reserve accounts. Thus, as of press time, the Lehman trustee and Barclays are still fighting over who has rights to the margin assets, which refer to deposits held to back trades. The Lehman trustee thinks the February 22 decision entitles it to about $4 billion of the margin assets. He is thus seeking court approval to collect $2.1 billion from Barclays and to go after about $1.9 billion more being held by third parties. Barclays, however, asserts Lehman is entitled to a much lesser amount. Barclays argued that it inherited about $6 billion in liabilities when it agreed to take on Lehman's proprietary cash margin held at clearing houses, Reuters relates. The UK bank maintained that even if that figure is offset by $5 billion in other assets related to 2008 sale, a $1 billion offset is still in order, according to Reuters. The Lehman trustee countered that any liabilities associated with the cash margin were already Barclays' responsibility by virtue of the UK bank's agreement to buy the Lehman broker unit, Reuters says. Barclays also argued at the May 9 hearing that some of the assets in the margin account were government securities rather than cash, and therefore could stay with Barclays, the Daily Bankruptcy Review points out. Judge Peck balked at Barclays' argument, castigating the bank for not raising that matter at trial. "The issues surrounding margin are not really tied to the margin of government securities . . . [t]hat seems to be a brand new argument by Barclays," Reuters quoted Judge Peck as saying. Judge Peck held off on a final decision on whether Barclays' arguments are compelling enough to reverse his February 22 decision that Lehman is entitled to the margin assets, Reuters notes. He said the issue will need "some thought" and added that another hearing date will be set for it, according to Bloomberg News. Judge Peck also held off ruling on whether the Lehman trustee is entitled to interest on the margin account, but appeared to lean towards ruling against the Lehman trustee's contention that Barclays should pay it about 9% interest from the time the margin assets went to Barclays, the Daily Bankruptcy Review relates. Barclays to Get $1.1-Bil. from Lehman Trustee Barclays and the Lehman trustee settled one key difference before the May 9 hearing, with the trustee agreeing to pay the U.K. bank $1.1 billion from the so-called clearance box assets that were worth $869 million at the time the U.K. bank bought the Lehman brokerage firm, the Daily Bankruptcy Review relates. The Lehman trustee originally asserted it owed only $869 million, but Barclays insisted that the value of some of the securities had gone up to well over $1 billion and that it should receive much of that value, The Financial Times states. While the two sides agreed on a final figure of $1.1 billion, lawyers still found room for debate on what the figure represents, Reuters cites. An attorney for the Lehman trustee framed it as comprising the $869 million damages figure plus interest while Barclays said it represented the appreciated value of the underlying assets, Reuters notes. Judge Peck made no ruling on the parties' agreement with respect to the clearance box assets but said he is not opposed to its terms, Bloomberg News relays. LBHI's Intent to File Summary Judgment Motion on Breach of Contract Claim Before the May 9 hearing, LBHI counsel sent Judge Peck a letter raising two issues on four claims asserted in LBHI's adversary complaint that were not addressed at the 2010 trial of the suit. In the April 29, 2011, letter, Robert Gaffey, Esq., at Jones Day, in New York, disclosed that LBHI has proposed a stipulation to Barclays, which provides that three of the four remaining LBHI claims will be deemed dismissed in light of the trial record and the Court's Feb. 22 Opinion. As to the last remaining LBHI claim for breach of contract, LBHI related that it intends to file a summary judgment motion, based on undisputed facts and determinations made by the Court in the Feb. 22 Opinion, demonstrating that Barclays has breached its bonus payment obligations under the Asset Purchase Agreement. Accordingly, LBHI sought that the May 9 hearing be treated as a pre-motion conference on its intent to file a summary judgment request shortly thereafter. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Creditors Committee Nominated as Designated Party ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in Lehman Brothers Holdings Inc. is seeking a court order confirming its appointment as the designated party for all purposes in connection with the discovery process related to the confirmation of Lehman Brothers Holdings Inc.'s Chapter 11 plan of reorganization. "The Creditors' Committee is the logical and best choice for this responsibility because appointing the Creditors' Committee will ensure continuity and that a compensated fiduciary manages this process," Dennis Dunne, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York, said in a notice of nomination filed with the Court. The Creditors' Committee was nominated by Lehman Brothers Inc.'s trustee and more than 30 creditors, which include Citigroup Inc. and Deutsche Bank AG, to serve as Designated Party. The group nominated the Creditors' Committee in accordance with the Court's April 14, 2011 order, which authorized LBHI to implement uniform discovery procedures related to the confirmation of its restructuring plan. In a related development, LBHI and the Creditors' Committee agree that the deadline for filing preliminary document requests to the Debtors pursuant to the Plan Discovery Order will be May 19, 2011. Deadline for the Debtors to make available "Preliminary APP Requests" and the "Preliminary Participant Requests" pursuant to the Plan Discovery Order is also extended to May 19, 2011. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Proposes $861-Mil. Deal with JPMorgan ---------------------------------------------------------- James W. Giddens, as Trustee for the SIPA liquidation of Lehman Brothers Inc., ask the Court to approve a settlement and compromise he negotiated with JPMorgan Chase Bank, N.A., J.P. Morgan Securities LCC, formerly known as J.P. Morgan Securities, Inc., and J.P. Morgan Clearing Corp. Prior to September 22, 2008, JPMorgan served as the principal clearing bank for LBI for a variety of securities transactions. JPMorgan maintained numerous accounts for LBI through which it processed billions of dollars of cash and securities transactions generated by LBI's operations, and provided tens of billions of dollars of intraday loans to LBI on a daily basis to fund its clearance operations. As a result of a series of investigations, the SIPA Trustee discovered various potential claims against JPMorgan, which the Bank disputes. The settlement, according to court papers, would secure the return of more than $800 million of cash and securities that the SIPA Trustee has identified as customer property, including $755 million in cash and $106 million in securities (valued as of September 19, 2008), to the Trustee for distribution to customer claimants in the SIPA proceeding. The proposed settlement is consistent with the SIPA Trustee's statutory mandate, and JPMorgan's willingness to settle the dispute is consistent with JPMorgan's course of cooperation concerning the return of customer property, James B. Kobak, Jr., Esq., at Hughes Hubbard & Reed LLP, in New York, tells the Court. "T[he] [settlement] is a milestone in the administration of the LBI estate to recover assets to pay customer claims," Law 360 quotes Mr. Giddens as saying. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Proposes Levine Lee as Special Counsel ----------------------------------------------------------- Lehman Brothers Inc.'s trustee has sought court approval to retain Levine Lee LLP as his special counsel effective May 1, 2011. The trustee proposed to retain Levine Lee in order for him to continue to receive legal counsel from Kenneth Lee, Esq., a member of the firm, on matters related to claims asserted by and against Lehman Brothers Holdings Inc. and its affiliated debtors. The firm will coordinate with Hubbard & Reed LLP, the trustee's lead counsel, in the rendition of its services. Mr. Lee was a former partner at Hubbard & Reed where he served as one of the trustee's principal counsel on matters related to the Lehman claims. The proposed retention will be limited to Mr. Lee and will not involve others at Levine Lee, according to the trustee's lawyer, James Kobak Jr., Esq., at Hughes Hubbard. The trustee proposed to pay Mr. Lee for his services at an hourly rate of $695 and to reimburse him for his expenses. The Court will consider approval of the proposed retention at the May 18, 2011 hearing. The deadline for filing objections is May 11, 2011. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Giants Stadium Wants Leave to Conduct Discovery ---------------------------------------------------------------- Giants Stadium LLC seeks leave from the Court to conduct discovery on Lehman Brothers Inc. and Lehman Brothers Special Financing Inc. pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. Giants Stadium specifically asks the Court to direct Debtors to respond to document requests and provide for examination of the Debtors' representative who is most knowledgeable in the Debtors' derivative valuation methodology as well as information concerning all transactions the Debtors may have entered into in order to offset the risk of ISDA transactions. Giants Stadium is represented by: Bruce E. Clark, Esq. SULLIVAN & CROMWELL LLP 125 Broad Street New York, New York 10004 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 Debtors Object The Debtors urge the Court to deny Giants Stadium's discovery request, saying it is "inappropriate" and "unnecessary." In a court filing, Richard Slack, Esq., at Weil Gotshal & Manges LLP, in New York, relates that the Debtors' Rule 2004 discovery regarding Giants Stadium's claims and the related derivative contracts is ongoing and that the conclusion of the examination of those claims may result in no objection to the allowance of those claims. "If the Debtors' review of Giants Stadium's derivatives contracts results in allowance of Giants Stadium's claims, the examination sought by Giants Stadium would be a complete waste of estate resources," Mr. Slack states in court papers. Mr. Slack also points out that the Debtors are still in the process of reviewing unresolved derivative contracts with thousands of counterparties. He argues that allowing those counterparties to take "broad and intrusive" Rule 2004 discovery of the Debtors before the filing of objections to allowance of claims or the filing by Debtors of adversary proceedings would be burdensome and expensive. The Debtors' objection drew support from the Official Committee of Unsecured Creditors. In court papers, the Creditors Committee asserts that since Giants Stadium has filed its proofs of claim, it should not be permitted to take discovery of the Debtors unless and until the Debtors object to its claim, after which Giants Stadium would be entitled to discovery through the claims reconciliation process. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LPATH INC: Incurs $1.64 Million Net Loss in First Quarter --------------------------------------------------------- LPath, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $1.64 million on $2.77 million of total revenues for the three months ended March 31, 2011, compared with net income of $659,471 on $4.07 million of total revenues for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $22.51 million in total assets, $20.90 million in total liabilities and $1.61 million in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/g50wHu About LPath San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. The Company reported a net loss of $4.60 million on $7.83 million of total revenues for the year ended Dec. 31, 2010, compared with net income of $3.98 million on $11.91 million of total revenues during the prior year. As reported by the TCR on March 28, 2011, Moss Adams LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements at the end of 2009. The independent auditors noted that the Company had incurred significant cash losses from operations since inception and expects to continue to incur cash losses from operations in 2010 and beyond. In its audit report for 2010, the auditor did not issue a going concern qualification. MACY INC: S&P Raises CCR From 'BB+' on Robust Performance --------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Cincinnati-based Macy's Inc. to 'BBB-' from 'BB+'. "At the same time, we raised the issue-level rating on the company's unsecured notes to 'BBB-' from 'BB+'. The outlook is stable," S&P related. "The upgrade, which returns the rating to investment grade after an approximate two-year gap, reflects the company's continued robust performance," said Standard & Poor's credit analyst David Kuntz, "and a significant moderation of its historically aggressive financial policy with targets that are now commensurate with an investment-grade rating." "Another factor is our expectations for further strengthening of the company's credit protection metrics over the intermediate term because of operational growth and debt repayment," S&P said. "The ratings on Macy's reflect its continued good performance over the past year and our that it is likely to build on these gains over the near term," added Mr. Kuntz. "Additionally, the company has moderately improved its credit protection measures over the past year through debt reduction and operational growth. We believe this trend likely will continue over the near term as the company uses cash on hand for upcoming debt maturities." MAGNA ENTERTAINMENT: Chickasaw Nation Takes Lone Star Park ---------------------------------------------------------- Murray Evans at The Associated Press reports that after waiting for almost three years, a subsidiary of Chickasaw Nation signed the final documents to take over ownership of Lone Star Park in Grand Prairie, Texas. Global Gaming LSP LLC paid $47.8 million to buy the track from Magna Entertainment Corp. The group previously bought another track, Remington Park in Oklahoma City, for $80.25 million. About Magna Entertainment Corp. Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, served as the Debtors' bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., served as the Debtors' local counsel. Miller Buckfire & Co. LLC acted as the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC served as the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of Dec. 31, 2008. On April 29, 2010, the Bankruptcy Court confirmed the Second Modified Third Amended Joint Plan of Magna Entertainment Corp., its affiliated Debtors, the official committee of unsecured creditors, MI Developments Inc., and MI Developments US Financing. The Debtors emerged from Bankruptcy on April 30, 2010. MAJESTIC CAPITAL: Wants Until May 27 to File Schedules ------------------------------------------------------ Majestic Capital, Ltd., et al., are asking the Hon. Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York to extend their deadline to file their schedules until May 27. About Majestic Capital, Ltd. Headquartered in Poughkeepsie, New York City, Majestic Capital, Ltd., fdba CRM Holdings, Inc., filed for Chapter 11 protection (Bankr. S.D. N.Y. Case No. 11-36225) on April 29, 2011. Affiliates also sought Chapter 11 protection Bankr. S.D. N.Y. Case Nos. 11-36221 - 11-36234) on April 29, 2011. Bankruptcy Judge Cecelia G. Morris presides over the case. Thomas Genova, Esq., at Genova & Malin, Attorneys represents the Debtors in their restructuring effort. Murphy & King, P.C. serves as the Debtors' co-counsel. The Debtors tapped Michelman & Robinson, LLP, as special counsel, and Day Seckler, LLP, as accountants and financial advisors. The Debtor disclosed $436,191,000 in assets and $421,757,000 in liabilities as of Dec. 31, 2010. MARKET STREET: Seeks to Hire Eskew Dumez Ripple as Architects ------------------------------------------------------------- Market Street Properties, LLC, asks for authorization from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Eskew Dumez Ripple/Manning Architects as architects. Eskew+Dumez+Ripple is a design-driven studio based in New Orleans which produces diverse projects in architecture and planning. Eskew will provide the Debtor with presentations of master plans for the development of the Debtor's properties, such as an approximately 500,000 square foot power plant, two substations and three parcels of vacant land. In particular, Eskew will assist the Debtor in presenting plans at scale the International Convention of Shopping Centers in Las Vegas, Nevada, and in development of final master plans thereafter. Eskew will be paid a flat fee of $320,000 for the services described in the Professional Services Agreement. In addition to the flat fee, the Debtor and Skew anticipate that in order to provide necessary traffic and transportation planning, Eskew will be required to pay a fee to a sub-consultant, Urban Systems, a total amount of $156,500 and that the Debtor will reimburse Eskew for such amount. Additionally, the Profession Services Agreement contemplates that Eskew will be reimbursed for all expenses incurred by it in connection with the services provided, including identifiable expenses that would not have been incurred except for the engagement on behalf of the particular client. To the best of the Debtor's knowledge, Eskew does not hold any interest adverse to the Debtor or the Debtor's estate. About Market Street Properties Oceanside, New York-based Market Street Properties, L.L.C., owns an approximately 500,000 square-foot power plant, two substations, and three parcels of vacant land. It filed for Chapter 11 bankruptcy (Bankr. E.D. La. Case No. 09-14172) on Dec. 23, 2009, represented by Christopher T. Caplinger, Esq., Joseph Patrick Briggett, Esq., and Stewart F. Peck, Esq., at LUGENBUHL WHEATON PECK RANKIN & HUBBARD, in New Orleans. The Company reported $52,404,026 in assets and $26,848,596 in liabilities as of the Chapter 11 filing. MEDCLEAN TECHNOLOGIES: Files Form S-1 for 400-Mil. Shares --------------------------------------------------------- MedClean Technologies, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the resale of up to 400,000,000 shares of the Company's common stock, par value $0.0001 per share by the selling security holders, which are Put Shares that the Company will put to Southridge pursuant to the Equity Credit Agreement. The Equity Credit Agreement with Southridge provides that Southridge is committed to purchase up to $15,000,000 of the Company's common stock. The Company may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Equity Credit Agreement. Southridge is an "underwriter" within the meaning of the Securities Act in connection with the resale of our common stock under the Equity Credit Agreement. No other underwriter or person has been engaged to facilitate the sale of shares of the Company's common stock in this offering. This offering will terminate 36 months after the registration statement to which the prospectus is made a part is declared effective by the SEC. Southridge will pay the Company 95% of the average of the lowest closing bid price of the Company's common stock reported by Bloomberg, LP, in any two trading days, consecutive or inconsecutive, of the five consecutive trading day period commencing the date a put notice is delivered. Th Company will not receive any proceeds from the sale of these shares of common stock offered by the Selling Security Holders. However, the Company will receive proceeds from the sale of its Put Shares under the Equity Credit Agreement. The proceeds will be used for working capital or general corporate purposes. The Company will bear all costs associated with this registration. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "MCLN.OB." The shares of the Company's common stock registered hereunder are being offered for sale by the Selling Security Holders at prices established on the OTC Bulletin Board during the term of this offering. On May 6, 2011, the closing bid price of the Company's common stock was $0.004 per share. These prices will fluctuate based on the demand for the Company's common stock. A full-text copy of the Form S-1 prospectus is available for free at http://is.gd/NHZhWB About MedClean Technologies Based in Bethel, Connecticut, MedClean Technologies, Inc., provides solutions for managing medical waste on site including designing, selling, installing and servicing on site (i.e. "in- situ") turnkey systems to treat regulated medical waste. The Company's balance sheet at March 31, 2011, showed $1.8 million in total assets, $2.1 million in total liabilities, and a stockholders' deficit of $295,325. As reported in the TCR on April 6, 2011, Child, Van Wagoner & Bradshaw, PLLC, in Salt Lake City, Utah, expressed substantial doubt about the MedClean Technologies' ability to meet its obligations and to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred substantial recurring losses. MEM INVESTMENTS: Judge Wants Exit Plan Amended by May 23 -------------------------------------------------------- Bankruptcy Judge Thomas J. Tucker directed MEM Investments, LLC, to amend the Combined Joint Plan of Reorganization and Disclosure Statement Under Chapter 11 of the Bankruptcy Code it filed May 12, 2011. Judge Tucker said he cannot grant preliminary approval of the disclosure statement, citing a laundry list of problems the Debtors must correct. The amended plan documents, as well as a redlined version of the plan documents, must be filed no later than May 23, 2011. A copy of the Court's May 16, 2011 Order is available at http://is.gd/97CmqLfrom Leagle.com. MEM Investments, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 10-67143) on Aug. 30, 2010. The case is being jointly administered with the cases of Post Six, Inc. (Case No. 10-67149); S&J Post, Inc. (Case No. 10-67151); Real Entertainment, LLC (Case No. 10-67153); The Elephant, Inc. (Case No. 10-67154); Entertainment Holdings, LLC (Case No. 10-67155); and BCB Development Associates, LLC (Case No. 10-67162). METROPARK USA: Hearing on Employment of Cooley LLP Set for May 23 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on May 23, 2011, at 10:00 a.m., to consider Metropark USA, Inc.'s request to employ Cooley LLP as counsel. Objections are due today, May 18. The Debtor asked the Court for permission to employ Cooley LLP to represent it in the bankruptcy proceedings. About Metropark USA Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los Angeles retail chain with 70 stores in 21 states. Metropark was founded in 2004 to capitalize on the large Gen Y segment (the 25- 35 year old customer) in demand for fashion-forward apparel and accessories. Its headquarters, distribution centers, and e- commerce site located in Los Angeles, California. Metropark filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf, Esq., and Jeffrey L. Cohen, Esq., at Cooley LLP, serve as the Debtor's bankruptcy counsel. CRG Partners Group, LLC, is the Debtor's financial advisor. Omni Management Group is the Debtor's claims and noticing agent. The Debtor disclosed total assets of $28,933,805 and total debts of $28,697,006 as of April 2, 2011. The U.S. Trustee appointed a three member official committee of Unsecured creditors in the case of the Debtor. MIDWEST BANC: Files Second Amended Joint Liquidation Plan --------------------------------------------------------- Midwest Banc Holdings, Inc., and the Official Committee of Unsecured Creditors ask the Bankruptcy Court to: -- approve modifications to their First Amended Joint Plan of Liquidation dated March 24, 2011, as embodied in the Second Amended Joint Plan of Liquidation dated May 6, 2011, and -- provide that ballots submitted with respect to the Plan will be deemed to have been submitted with respect to the Amended Plan. The Plan Proponents initially filed the Plan and the Disclosure Statement on Dec. 20, 2010, and filed amended versions of the Plan and Disclosure Statement on March 24, 2011. On March 18, 2011, the Court conditionally approved the Disclosure Statement. Judge A. Benjamin Goldgar will hold a hearing to confirm the Plan on May 25, 2011, at 10:00 a.m. Four objections were filed, raising numerous objections to confirmation of the Plan or the adequacy of the Disclosure Statement. The majority of the Objections raised concerns with respect to the Plan's classification of Unsecured Creditors. The Plan divided the non-TOPrS Unsecured Creditors into three separate classes: Class 3A (General Unsecured Claims, including the M&I Deficiency Claim), Class 3B (Claims of former employees, directors and officers) and Class 3C (Claims of the FDIC). The separate classification of Unsecured Claims was the result of negotiation and, while no firm commitments to support confirmation were either sought or offered, the Plan Proponents believed that the classification scheme was acceptable to the major constituencies and justifiable. Nevertheless, certain of the parties filing Objections took the position that the classification provided a higher pro rata distribution to Class 3B Creditors in violation of 11 U.S.C. Sections 1129(a)(1) and 1122(a), and that the Plan unfairly discriminated among Classes 3A, 3B and 3C in violation of Section 1129(b)(1). The Plan Proponents contacted the holders of Claims in Class 3B, seeking their approval to eliminate the Class 3B Settlement language from the Plan and combine Classes 3A, 3B and 3C into one Class of General Unsecured Creditors (i.e., Class 3). Holders of Claims in Class 3B have agreed to consider foregoing treatment as Class 3B Creditors and instead be treated as Class 3 General Unsecured Creditors (i.e., former Class 3A) to resolve the Objections. Having opted out of Class 3C, the sole member of Class 3C -- the FDIC, as Receiver for Midwest Bank & Trust Company -- has effectively elected to be treated as a Class 3 general creditor. The Plan Proponents have modified the Plan accordingly (and have made other modifications required to resolve other Objections to the Plan). The modifications to the Plan have the support of a significant number of Creditors. Based on communications with M&I, the Plan Proponents anticipate that M&I will withdraw its Objection and support confirmation of the Amended Plan, and the Plan Proponents submit that M&I should thus be afforded an opportunity to resubmit its Class 2 ballot with respect to the Amended Plan. With the exception of certain objections raised by a party asserting Class 4 Claims, the Plan Proponents believe that the Amended Plan resolves all objections to confirmation. The Plan Proponents submit that these modifications to the Plan are in the best interest of Creditors. About Midwest Banc Holdings Midwest Banc Holdings is the holding company for Midwest Bank and Trust Company. The bank became subject to FDIC receivership in May 2010. Midwest Banc Holdings filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 10-37319) in Chicago on Aug. 20, 2010. Midwest Banc disclosed assets of $9,690,937 and debts of $144,746,169 as of the bankruptcy filing. Hinshaw & Culbertson serves as bankruptcy counsel to the Debtor. The Official Committee of Unsecured Creditors appointed in the case is represented by Freeborn & Peters LLP. MORGANS HOTEL: To Buy Remaining Interests in China Grill Venture ---------------------------------------------------------------- Morgans Group LLC and other subsidiaries of Morgans Hotel Group Co. entered into an omnibus agreement to acquire the remaining 50% interests that the Company does not already own in its food and beverage joint ventures from affiliates of China Grill Management Inc. for approximately $20 million. The joint ventures operate, and CGM manages, restaurants and bars at Delano, Mondrian Los Angeles, Mondrian South Beach, Morgans, Sanderson and St Martins Lane. CGM will continue to manage the food and beverage operations at these properties for a transitional period pursuant to short-term cancellable management agreements while Morgans reassesses its food and beverage strategy. Pursuant to the omnibus agreement, the Company's ownership interest in the Asia de Cuba brand, and all intellectual property related to the Asia de Cuba brand, will be transferred to CGM. The transaction is expected to close in the second quarter of 2011 and is subject to satisfaction of certain closing conditions, including the receipt of certain lender consents and the execution of a standard mutual release among the parties. 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 March 31, 2011, showed $692.76 million in total assets, $721.93 million in total liabilities, and a $29.17 million total deficit. The Company reported a net loss of $83.64 million on $236.37 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $101.60 million on $225.05 million of total revenues during the prior year. MORGANS HOTEL: Parag Vora Discloses 4.15% Equity Stake ------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Parag Vora and his affiliates disclosed that they beneficially own 1,263,255 shares of common stock of Morgans Hotel Group Co. representing 4.15% of the shares outstanding. A full-text copy of the regulatory filing is available for free at: http://is.gd/W22Mhr 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 March 31, 2011, showed $692.76 million in total assets, $721.93 million in total liabilities, and a $29.17 million total deficit. The Company reported a net loss of $83.64 million on $236.37 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $101.60 million on $225.05 million of total revenues during the prior year. MSR RESORT: U.S. Administrator Taps 5-Member Creditors Panel ------------------------------------------------------------ Tracy Hope Davis, the U.S. Trustee for Region 2, appointed five members to the official committee of unsecured creditors in the Chapter 11 cases of MSR Hotels & Resorts. The Creditors Committee members are: 1. Arizona Biltmore Hotel Villas Condominiums P. O. Box 39242 Phoenix, Arizona 85069 ATTN: Mark Finney Tel: (602) 263-7772 Fax: (602) 246-6674 2. Kerry William Rose c/o The Cavanagh Law Firm 1850 N. Central Avenue, #2400 Phoenix, Arizona 85004 ATTN: Scott A. Rose, Esq. Tel: (602) 321-9242 Fax: (602) 322-4101 3. Stationary Engineers Local 39 Pension Trust Fund c/o Weinberg, Roger & Rosenfeld 1001 Marina Village Parkway, Suite 200 Alameda, California 94501 ATTN: Christian L. Rainer/Ezekiel D. Carder Tel: (510) 337-1001 Fax: (510) 337-10234 4. Gourmet Foods Hawaii 740 Kopke Street Honolulu, Hawaii 96819 ATTN: Shannon Piper, Owner Tel: (808) 841-8071 Fax: (808) 842-5093 5. All Bright Cleaning Service, Inc. 29865 Whispering Palms Tr. Cathedral City, California 92234 ATTN: Lisa Casavant Tel: (760) 322-7660 Fax: (760) 864-6684 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About 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 with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on 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. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. MT3 PARTNERS: Permits Nevada State Bank to Sell Property -------------------------------------------------------- The Bankruptcy Court approved a stipulation modifying the automatic stay to allow Nevada State Bank to begin advertising the sale of MT3 Partners LLC's property after May 2, 2011. The Debtor also consents to terminating the automatic stay allowing NSB to proceed with and complete any and all contractual and statutory remedies to pursue its security interest in the Property. The Debtor owns the 6.84 net acre vacant land parcel located along the western shore of a private lake, east of Double R Blvd. and north of South Meadows Pkwy., Reno, Nevada. In March 2007, the Debtor and NSB entered into a Business Loan Agreement in the principal amount of $7,350,000. The Loan is secured by a Deed of Trust and is evidenced by a separate promissory note, which, among other things, provides that the Property serves as security for the Loan. Prior to the stipulation, MT3 withdrew a Disclosure Statement and Summary of Plan of Reorganization three days before the scheduled April 28 hearing to consider the plan outline. However, MT3 reserved the right to file an amended or revised Disclosure Statement. No party in interest filed an opposition to the Disclosure Statement. The Plan, filed Feb. 18, groups claims against and interests in the Debtor in nine classes. All classes are impaired. Holders of general unsecured claims in Class 8, totaling $1,246,566, will not receive interest but will be paid in full no later than Sept. 30, 2012. Payments to allowed secured claims, including the claims of Nevada State Bank and Heritage Bank of Nevada, will be paid in installments beginning Jan. 12, 2012. The Plan expects those claims to be paid in full by Jan. 3, 2015. According to the Plan, MT3 is pursuing two forms of financing. The initial borrowing, subject to Court approval, will be for $300,000 to be utilized for the completion of certain engineering and architectural plans and specifications. The second financing concerns the phased implementation of the entire Boulevard South project. The equity funder for the Boulevard South development is Resolute Capital Partners. RCP will fund Bordeaux Communities, LLC -- http://www.bordeauxcommunities.com/ It is anticipated that Bordeaux will fund MT3 on this schedule: January 3, 2012 $19,318,132 March 31, 2012 16,281,854 June 30, 2012 7,965,671 September 30, 2012 8,161,382 ------------ $51,727,039 Bordeaux Communities is a Nevada limited liability company. Mark Kubinski and Tami Topol, which hold the membership interest in MT3, each own 25% of the membership interest in Bordeaux Communities and Sierra Nevada Regional Center owns the remaining 50% interest. The Plan provides that in the event of a default in failure to pay interest payments due to any Class commencing in January 2012, the secured creditor to which payments are due will, after 30 business days written notice, be permitted to commence foreclosure under applicable state law. A copy of the Disclosure Statement is available at no charge at: http://bankrupt.com/misc/MT3DisclosureStatement.pdf Nevada State Bank is represented by: Timothy A. Lukas, Esq. HOLLAND & HART LLP 5441 Kietzke Lane, Second Floor Reno, Nevada 89511 Tel: (775) 327-3000 Fax: (775) 786-6179 E-mail: ECFlukast@hollandhart.com Reno, Nevada-based MT3 Partners, LLC, filed for Chapter 11 bankruptcy protection on Oct. 22, 2010 (Bankr. D. Nev. Case No. 10-54172). Jeffrey L. Hartman, Esq., a member at Hartman & Hartman, serves as counsel to the Debtor. The Debtor estimated its assets at $50 million to $100 million and debts at $10 million to $50 million. MULTIBANK: Fitch Affirms IDRs at 'BB'; Outlook Stable ----------------------------------------------------- Fitch Ratings has affirmed Multibank's (MB) ratings: -- Long-term Issuer Default Rating (IDR) at 'BB'; -- Short-term IDR at 'B'; -- Individual rating at 'C/D'; -- Support Rating at '5'; -- Support Floor at 'NF'; -- Long-term National Rating at 'A+(PAN)'; -- Short-term National Rating at 'F1(PAN)'. The Rating Outlook is Stable. Multibank's (MB) ratings reflect its improved franchise, solid performance through the crisis, sound asset quality, adequate reserves, improved revenue diversification, clear strategy, and strengthened management team. They also factor in its relatively high cost structure, moderate loan portfolio concentration and the pressure that growth is placing on core capital. MB's ratings would be upgraded if the bank is able to manage growth and maintain its positive performance while preserving good asset quality ratios and enhancing its capital base. Improved efficiency and lower loan concentration would also be credit positives although these may take longer to achieve. A sharp deterioration in asset quality that affects performance and erodes the capital/reserve cushion would pressure MB's ratings downward. A long-standing dollarized economy, Panama lacks a central bank and lender of last resort. Banco Nacional de Panama, the country's largest state controlled bank, could only provide temporary liquidity loans, if needed. In Fitch's opinion, external support for MB, although possible, cannot be relied upon. MB's performance during 2010 was driven by strong loan growth which, coupled with resilient margins (in part due to lower funding costs) and improved non-interest revenues resulted in higher operating revenues. Operating costs grew at a slower pace than revenues, thus contributing to improved efficiency and profitability in spite of higher credit costs (which grew in line with the portfolio and its underlying risk) and a heavier tax burden (that resulted from a fiscal reform). Thus, net income increased by 31% in 2010, growing the return on average assets (ROAA) to 1.56% and return on average equity (ROAE) to 21.50%, although these ratios are slightly below the market average and Multibank's previous metrics. MB has a clear opportunity to improve in this area going forward. Deposits grew 20% and remain the main source of funding, albeit at a relatively higher but improving cost than the market leaders. Capital ratios decreased slightly due to the bank's recent growth but are still aligned with the median of similarly rated banks. As such, Fitch core capital-to-risk weighted assets ratio decreased to 9% (2009:10%). Regulatory capital ratios have remained fairly stable and benefited with preference share issuances. MB's regulatory capital stood at 15% at December 2010. Strong loan growth should continue into 2011-2012 albeit at a slower pace than in 2010. Margins are expected to gradually come under pressure given the ample liquidity and increased competition although growth into the retail segment should somewhat offset this effect. As MB plans to continue expanding, Fitch expects further increases in operating expenses in 2011 that should nevertheless be in line with revenues. Credit cost on the other hand should gradually stabilize while overall profitability is expected to remain stable during 2011 and show some improvement in 2012 as the bank exploits the business opportunities created by its expanded footprint and customer base in Panama and abroad. Capital should increase and capital ratios gradually improve, thanks mainly to sustained profitability and retained earnings. After a wave of mergers and acquisitions, MB is the 10th largest Panamanian bank with a market share of about 3% of assets at December 2010 in a market dominated by big players. MB has undergone a significant and successful corporate re-structuring to become a universal bank. MB is controlled by a well regarded local family. NEDAK ETHANOL: Reports $248,000 Net Income in First Quarter ----------------------------------------------------------- Nedak Ethanol, LLC, filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting net income of $248,000 on $35.08 million of revenue for the three months ended March 31, 2011, compared with net income of $1.72 million on $20.93 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $85.43 million in total assets, $51.65 million in total liabilities and $33.78 million in total members' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/iHZHnG About NEDAK Ethanol Atkinson, Neb.-based NEDAK Ethanol, LLC -- http://www.nedakethanol.com/-- operates a 44 million gallon per year ethanol plant in Atkinson, Nebraska, and produces and sells fuel ethanol and distillers grains, a co-product of the ethanol production process. Sales of ethanol and distillers grains began in January 2009. The Company reported a net loss of $2.08 million on $94.77 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $9.23 million on $67.53 million of revenue during the prior year. As reported by the TCR on April 7, 2011, McGladrey & Pullen, LLP, in Sioux Falls, South Dakota, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2010 results. The independent auditors noted that there is uncertainty as to the Company's ability to cure credit agreement defaults and, therefore, to secure additional funds needed to fund ongoing operations. NEW STREAM: Court OKs $184M Sale of Life Insurance Assets --------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that New Stream Secured Capital Inc. won bankruptcy court approval Monday to sell its portfolio of life settlement investments to a McKinsey & Co. affiliate for $184 million after an unsecured creditors committee- led effort to shop the assets failed to produce a topping bid. About New Stream New Stream is an inter-related group of companies that collectively comprise an investment fund, headquartered in Ridgefield, Connecticut. Founded in 2002, New Stream focuses on providing non-traded private debt to the insurance, real estate and commercial finance sectors. On March 7, 2011, when New Stream was still soliciting votes on the Chapter 11 plan, certain investors filed a petition (Bankr. D. Del. Lead Case No. 11-10690) seeking to force three new stream funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy. The petitioning investors in the New Stream investment enterprise say they are collectively owed over $90 million, representing roughly 28% of the approximately $320 million owed to all U.S. and Cayman investors. The Petitioners are represented by (i) Joseph H. Huston, Jr., Esq., Maria Aprile Sawczuk, Esq., Meghan A. Cashman, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, and Beth Stern Fleming, Esq., at Stevens & Lee, P.C., in Philadelphia, Pennsylvania, and Nicholas F. Kajon, Esq., David M. Green, Esq., and Constantine Pourakis, Esq., at Stevens & Lee, P.C., in New York, (ii) Edward Toptani, Esq., at Toptani Law Offices, in New York, and (iii) John M Bradham, Esq., and David Hartheimer, Esq., at Mazzeo Song & Bradham LLP, in New York. New Stream Secured Capital, Inc., and three affiliates (New Stream Insurance, LLC, New Stream Capital, LLC, and New Stream Secured Capital, L.P.) filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-10753) on March 13, 2011, with a proposed prepackaged Chapter 11 plan. Kurt F. Gwynne, Esq., J. Cory Falgowski, Esq., Michael J. Venditto, Esq., and Scott M Esterbrook, Esq., at Reed Smith LLP, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. NSSC, Inc., estimated its assets and debts at up to $50,000. NSC estimated its assets at $100,000 to $500,000 and debts at $50,000 to $100,000. NSI estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. NSSC, LP, estimated its assets and debts at $500 million to $1 billion. NSI's insurance portfolio is being sold for $184.35 million as part of the Chapter 11 plan. The aggregate indebtedness secured by the investment portfolio of NSSC is $688,412,974. NSI owes $81,573,376 to certain account classes under a Bermuda fund. NEXSTAR BROADCASTING: Incurs $6.3-Mil. First Quarter Net Loss ------------------------------------------------------------- Nexstar Broadcasting Group, Inc., reported a net loss of $6.31 million on $69.94 million of net revenue for the three months ended March 31, 2011, compared with a net loss of $3.67 million on $68.62 million of net revenue for the same period during the prior year. Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Nexstar's strong operating and financial momentum continues in 2011 as reflected by our record first quarter net revenue and record 'odd year' EBITDA and free cash flow. Our strategies for building new-to-television local direct billings combined with the ongoing advertising rebound drove Nexstar's sixth consecutive quarter of core television advertising revenue growth. In addition, we continue to make significant debt reduction progress and, as announced last month, will expand our station base and coverage through the accretive and de-leveraging acquisition of two CBS affiliated stations later this year." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/daN3P3 About Nexstar Broadcasting Group Irving, Texas-based Nexstar Broadcasting Group Inc. currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households. The Company reported a net loss of $1.81 million on $313.35 million of net revenue for the year ended Dec. 31, 2010, compared with a net loss of $12.61 million on $251.97 million of net revenue during the prior year. * * * As reported by the Troubled Company Reporter on Aug. 30, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Nexstar Broadcasting Group to 'B' from 'B-'. The rating outlook is stable. "The 'B' corporate credit rating reflects S&P's expectation that Nexstar's core ad revenue will continue growing modestly in 2010 and 2011," said Standard & Poor's credit analyst Deborah Kinzer. The EBITDA growth resulting from the rebound in core advertising, combined with political ad revenue from the 2010 midterm elections, should, in S&P's view, enable Nexstar to reduce its leverage significantly by the end of the year. NISSWA MARINE: Appeals Court Rules on Frandsen Bank Loan Dispute ---------------------------------------------------------------- Judge Thomas J. Kalitowski of the Court of Appeals of Minnesota affirmed, in part, and dismissed, in part, an appeal in the suit, Northern National Bank n/k/a Frandsen Bank & Trust, Respondent, v. Stephen J. Wiczek, Donna L. Wiczek, ABC Partnership, XYZ Corporation, John Doe and Mary Roe, Appellants; Nisswa Properties, L.L.C., et al., Appellants, Nos. A10-1488, A10-1678 (Minn. App. Ct.). In the consolidated appeal, appellants challenge the dismissal of their counterclaims against respondent on the ground that appellants were intended third-party beneficiaries of loan agreements between respondent and Nisswa Marine, Inc. Judge Kalitowski said Nisswa Properties was not an intended third-party beneficiary of any loan agreement between the bank and Nisswa Marine, and the district court did not err by dismissing its counterclaim in the Crow Wing County action. Appellants Stephen J. Wiczek and Donna L. Wiczek were owners and officers of appellant Nisswa Properties L.L.C. The Wiczeks were also shareholders and officers of Nisswa Marine Inc., which operated a boat dealership on land that it leased from Nisswa Properties. The Wiczeks, Nisswa Properties, and Nisswa Marine each entered into separate loan agreements with respondent Northern National Bank, now known as Frandsen Bank & Trust. The Wiczeks' debt was secured by a mortgage on their homestead in Cass County. Nisswa Properties' debt was secured by a mortgage on land it owned in Crow Wing County and by personal guaranty agreements executed by the Wiczeks. Nisswa Marine's debt was secured by a second mortgage on the Wiczeks' homestead and by personal guaranty agreements executed by the Wiczeks. The bank's loans to the Wiczeks, Nisswa Properties, and Nisswa Marine matured in June 2009. When the loans were not paid in full, the bank (1) sued the Wiczeks in Cass County, seeking to foreclose the mortgages on the homestead; and (2) sued the Wiczeks and Nisswa Properties in Crow Wing County, seeking to foreclose the mortgage on the Crow Wing County properties and to enforce the Wiczeks' personal guaranties. The district courts in both actions granted summary judgment in favor of the bank and dismissed appellants' counterclaims that they had been damaged by the bank's alleged breach of its loan agreements with Nisswa Marine. Nisswa Marine, having filed for Chapter 11 bankruptcy, was not a party to either action. Nisswa Marine filed for bankruptcy on June 8, 2009. The appellate court panel consists of Judges Kalitowski, Larry Stauber, and Renee L. Worke. A copy of their May 16, 2011 Unpublished Opinion is available at http://is.gd/IOm7oHfrom Leagle.com. NMT MEDICAL: Adds Intellectual Property to Its Sealed Bid Sale -------------------------------------------------------------- NMT Medical, Inc., added intellectual property, which has been assigned to Joseph F. Finn, Jr., C.P.A. of the firm Finn, Warnke & Gayton, LLP to be liquidated for the benefit of NMT Medical creditors, to its sealed bid sale of June 10, 2011. The intellectual property comprises: * Nitinol and Other Novel Implants for Septal Defect Repair * Radiofrequency Technology for Closure of Patent Foramen Ovale (PFO) * Adhesive Technology for Bonding of Patent Foramen Ovale (PFO) * Suturing and Clip Technology for Closure of Patent Foramen Ovale (PFO) * Devices for Left Atrial Appendage (LAA) Obliteration and Remodeling * Transseptal Puncture Technology * Catheter-Related Technologies * Shape-Memory Related Technology * Distal Protection/Embolic Protection System * Anastomosis Devices The intellectual property, patents, etc. will be sold at a sealed bid sale on Friday, June 10, 2011 at noon. Persons interested in bidding must sign a Confidentiality Disclosure Agreement ("CDA") obtained from Finn's Office - jffinnjr@finnwarnkegayton or 781- 237-8840. They will then receive a bid package. About Joseph F. Finn Joseph F. Finn, Jr., C.P.A. is a founding partner of the firm Finn, Warnke & Gayton -- http://www.finnwarnkegayton.com-- Certified Public Accountants of Wellesley Hills, Massachusetts. He works primarily in the area of management consulting for distressed enterprises, bankruptcy accounting and related matters, such as assignee for the benefit of creditors and liquidating agent for a corporation. About NMT Medical Based in Boston, NMT Medical, Inc. (NASDAQ: NMTI) -- http://www.nmtmedical.com/-- is an advanced medical technology company that designs, develops, manufactures and markets proprietary implant technologies that allow interventional cardiologists to treat structural heart disease through minimally invasive, catheter-based procedures. The Company's balance sheet at Sept. 30, 2010, showed $7.78 million in total assets, $9.75 million in total liabilities, and a stockholders' deficit of $1.97 million. The Company has incurred losses from operations during each of the past two fiscal years and has experienced decreasing sales over those time periods. The Company also incurred a loss from operations of $10.71 million for the nine months ended Sept. 30, 2010. The Company has also had negative operating cash flows over the comparable periods, have approximately $3.40 million in cash, cash equivalents and marketable securities as of Sept. 30, 2010, and has an accumulated deficit of $59.21 million as of Sept. 30, 2010. NO FEAR RETAIL: Files Schedules of Assets and Liabilities --------------------------------------------------------- No Fear Retail Stores, Inc., filed with the U.S. Bankruptcy Court for the Southern District of California (San Diego), an amended schedule of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $31,648,063 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $1,194,807 E. Creditors Holding Unsecured Priority Claims $1,428,799 F. Creditors Holding Unsecured Non-priority Claims $9,929,378 ----------- ----------- TOTAL $31,648,063 $12,552,985 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. Simo Holdings Inc. disclosed that it had a 52% share in the company. That entity developed the No Fear brand and is mostly owned by founding brothers Brian and Mark Simo, each of whom own about 38% of the company. No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz, Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the Debtor's bankruptcy counsel. 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. Tiffany L. Carroll, the Acting U.S. Trustee for Region 15, appointed three creditors to serve on an Official Committee of Unsecured Creditors of No Fear MX, Inc. NOVASTAR FINANCIAL: Reports $2.27 Million Net Income in Q1 ---------------------------------------------------------- Novastar Financial, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting net income of $2.27 million on $27.68 million of total income and revenues for the three months ended March 31, 2011, compared with net income of $981.86 million on $22.60 million of total income and revenues for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $42.59 million in total assets, $151.28 million in total liabilities, and a $108.69 million total shareholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/2j8oZf About NovaStar Kansas City, Missouri-based NovaStar Financial, Inc. (OTCQB: Common Stock: NOVS; Series C Preferred Stock: NOVSP), is currently engaged in managing its portfolio of nonconforming residential mortgage securities and owning and operating two majority owned subsidiaries: StreetLinks National Appraisal Services LLC, a national residential appraisal and real estate valuation management services company; Advent Financial Services LLC, a start-up business which provides access to tailored banking accounts, small dollar banking products and related services to low and moderate income level individuals. Prior to 2008, NovaStar originated, securitized, sold and serviced residential nonconforming mortgage loans. NUVEEN INVESTMENTS: Moody's Upgrades CFR to B3; Outlook positive ---------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating of Nuveen Investments, Inc. (Nuveen) to B3 from Caa1. Moody's also upgraded Nuveen's senior unsecured note rating to Caa2 from Caa3. There is a positive outlook on all ratings. The upgrade of Nuveen's ratings reflect its sustained positive earnings trend driven by strong organic growth and improved market performance and Moody's expectation that these trends will continue in the near to mid-term. At the same time, the company has taken proactive steps to address its immediate balance sheet weakness by extending its debt maturities and consistently reducing leverage over the last several quarters. The combination of improved earnings and reduced debt levels has resulted in improved credit metrics and greater financial flexibility. Financial leverage has dropped from 14.0x at the end of 2009 to close to 8.4x and Moody's expects leverage to continue to decrease in 2011 as Nuveen operating results benefit from higher levels of average assets under management (AUM). Ratings Rationale Nuveen's B3 Corporate Family Rating reflects the company's weak financial fundamentals, characterized by high financial leverage, marginal interest coverage and refinancing risk relative to other Moody's-rated asset managers. Also incorporated in the rating is Nuveen's good market position, adequate liquidity profile, and strong distribution capabilities. The company's refinancing and deleveraging strategy is also reflected in the B3 rating. The positive outlook reflects Nuveen's strengthened brand and positive momentum of its operating fundamentals with Moody's expectations for further improvement in credit metrics. The company's intention to proactively address upcoming maturities in the next two years with equity or debt financing is also considered in the positive outlook. While not expected in the near term, a ratings upgrade could occur if Nuveen sustains positive financial performance and proactively delevers its balance sheet to bring total debt/EBITDA below 6x. A ratings downgrade could result if average assets under management (AUM) drop below $145 billion or the company experiences sustained quarterly net outflows in excess of 2.5% of beginning-of-quarter AUM. These ratings were upgraded: -- Corporate Family rating to B3 from Caa1; -- $193 million senior secured revolver to B2 from B3 -- $1.087 billion senior secured first lien loan due 2014 to B2 from B3 -- $1.057 billion senior secured first lien loan due 2017 to B2 from B3 -- $500 million senior secured 2nd lien loan due 2015 to Caa1 from Caa2 -- $935 million senior unsecured notes due 2015 to Caa2 from Caa3 -- $300 million senior unsecured notes due 2015 to Caa2 from Caa3 Nuveen Investments, Inc., headquartered in Chicago, is a US- domiciled holding company whose subsidiaries provide investment management products and services to retail and institutional investors predominantly in the US. The company's assets under management were $212 billion as of April 30, 2011. The last rating action was on January 13, 2011, when Moody's assigned a Caa3 rating to Nuveen's $150 million senior unsecured note issuance. The principal methodology used in rating Nuveen Investments, Inc. was Moody's Global Rating Methodology for Asset Management Firms, published in October 2007, which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating Nuveen Investments, Inc. can also be found in the Rating Methodologies sub-directory on Moody's website. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. OMNICITY CORP: Incurs $418,290 Net Loss in Jan. 31 Quarter ---------------------------------------------------------- Omnicity Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $418,290 on $1.20 million of sales for the three months ended Jan. 31, 2011, compared with a net loss of $633,590 on $635,946 of sales for the same perid a year ago. The Company also reported a net loss of $878,337 on $2.46 million of sales for the nine months ended Jan. 31, 2011, compared with a net loss of $1.27 million on $1.25 million of sales for the same period during the prior year. The Company's balance sheet at Jan. 31, 2011, showed $5.75 million in total assets, $7.85 million in total liabilities and a $2.09 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/9OIOnX About Omnicity Corp. Based in Rushville, Indiana, Omnicity Corp. (OTC BB: OMCY) -- http://www.omnicitycorp.com/-- provides broadband access via wireless and fiber infrastructure to business, government and residential customers in rural markets in the Midwest. * * * Weaver & Martin LLC, in Kansas City, Mo., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for fiscal 2009. The independent auditors noted that Company has suffered recurring losses and had negative cash flows from operations. ORAGENICS INC: Posts $1.6-Mil. Net Loss in First Quarter -------------------------------------------------------- Oragenics, Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $1.6 million on $349,937 of revenues for the three months ended March 31, 2011, compared with a net loss of $1.7 million on $341,483 of revenues for the same period last year. The Company's balance sheet at March 31, 2011, showed $1.2 million in total assets, $4.5 million in total liabilities, and a stockholders' deficit of $3.3 million. As reported in the TCR on April 5, 2011, Kirkland, Russ, Murphy & Tapp, P.A., in Clearwater, Fla., expressed substantial doubt about Oragenics' ability to continue as a going concern, following the Company 2010 results. The independent auditors noted that the Company has incurred recurring operating losses, negative operating cash flows and has an accumulated deficit. A complete text of the Form 10-Q is available for free at: http://is.gd/ejEwNd About Oragenics Inc. Tampa, Fla.-based Oragenics, Inc. (OTC BB: ORNI) -- http://www.oragenics.com/-- is a biopharmaceutical company focused primarily on oral health products and novel antibiotics. Within oral health, Oragenics is developing its pharmaceutical product candidate, SMaRT Replacement Therapy, and also commercializing its oral probiotic product, ProBiora3. Within antibiotics, Oragenics is developing a pharmaceutical candidate, MU1140-S and intends to use its patented, novel organic chemistry platform to create additional antibiotics for therapeutic use. OXIGENE INC: Incurs $863,000 Net Loss in First Quarter ------------------------------------------------------ OXiGENE, Inc., reported a net loss of $863,000 for the three months ended March 31, 2011, compared with a net loss of $11.02 million for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $3.85 million in total assets, $2.80 million in total liabilities and a $1.05 milion total stockholders' equity. A full-text copy of the press release announcing the financial results is available for free at http://is.gd/z3pdeX About OXiGENE Inc. South San Francisco, Calif.-based OXiGENE (Nasdaq: OXGN) -- http://www.oxigene.com/-- is a clinical-stage biopharmaceutical company developing novel therapeutics to treat cancer and eye diseases. The Company reported a consolidated net loss of $23.77 million on $0 of license revenue for the year ended Dec. 31, 2010, compared with a consolidated net loss of $28.94 on $0 of license revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $5.57 million in total assets, $10.82 million in total liabilities and $5.25 million in total stockholders' deficit. As reported by the Troubled Company Reporter on March 23, 2011, Ernst & Young LLP expressed substantial doubt about the Company's ability to continue as a going concern. Ernst & Young noted that the Company has incurred recurring operating losses and will be required to raise additional capital, alternative means of financial support, or both, prior to Jan. 1, 2012 in order to sustain operations. According to Ernst & Young, the ability of the Company to raise additional capital or alternative sources of financing is uncertain. PACIFIC MESA: Appoints George Blaco as Chief Operating Officer -------------------------------------------------------------- Pacifica Mesa Studios, LLC, seeks permission from the U.S. Bankruptcy Court for the Central District of California to employ Nagler and Associates as special counsel. Nagler and Associates will charge the Debtors' estates in accordance with its customary hourly rates. The firm's hourly rates are: Personnel Hourly Rate --------- ---------- Lawrence H. Nagler $550 Charles Avrith $500 David F. Berry $450 Judith T. Sethna $300 Daniel L. Nagler $225 Paralegals $85-$110 About Pacifica Mesa Agoura Hills, California-based Pacifica Mesa Studios, LLC, dba Albuquerque Studios and ABQ Studios, is a California limited liability company that was formed for the purpose of developing and running a state-of-the art production complex in Albuquerue, New Mexico. The Debtor is owned on a 50/50 basis by members Harold Katersky and Dana Arnold. The Debtor is the largest film studio in New Mexico. The Debtor filed for Chapter 11 bankruptcy protection on July 20, 2010 (Bankr. C.D. Calif. Case No. 10-18827). Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, assists the Debtor in its restructuring effort. The Debtor estimated $50 million to $100 million in assets and $100 million $500 million in liabilities in its Chapter 11 petition. PEANUT CORP: Court Won't Dismiss Wrongful Death Suit v. Kanan ------------------------------------------------------------- Chief District Judge Michael J. Davis denied Kanan Enterprises, Inc.'s request for summary judgment to dismiss a 2009 wrongful death lawsuit resulting from Salmonella-contaminated peanut butter. Louis Tousignant, as Trustee for the Next of-Kin of Clifford Tousignant, v. Kanan Enterprises, Inc., d/b/a/ King Nut Companies, Civil No. 09-919 (D. Minn.), alleges that from December 2008 to January 2009, the decedent, Clifford Tousignant, a resident at the Woodland Good Samaritan Village nursing facility in Brainerd, Minnesota, consumed Kanan's King Nut brand peanut butter. In late December 2008, he became ill and began suffering serious gastrointestinal issues, later confirmed to be the result of a Salmonella Typhimurium infection. He died on Jan. 12, 2009. Kanan, among other things, argues it is entitled to summary judgment on account of Plaintiff's separate settlement agreement with Peanut Corporation of America, which supplied peanut butter to Kanan. Kanan says the PCA accord explicitly released all claims against Kanan. However, Judge Davis held that Kanan is not a third party beneficiary entitled to enforce the terms of the Settlement Agreement. In 2010, the Plaintiff settled the Clifford Tousignant estate's claims against PCA for $217,254. An Amended Motion seeking approval of the accord states that the proposed settlement between Plaintiff and PCA "does not include compromise of any claims that the Estate and beneficiaries may have against Kanan Enterprises (d/b/a King Nut) and such claims are expressly intended to be preserved under Minnesota law as reflected in the Settlement Agreement and Release." The Settlement Agreement itself however, listed Kanan as a "Debtor Releasee," and went on to state that "[i]n consideration of the payments set forth in Section 2, Plaintiff/Releasor hereby completely releases and forever discharges Debtors/Releasees." Although Kanan is listed as a "Debtor/Releasee," Kanan did not execute the Settlement Agreement, as is evidenced by Kanan's blank signature line at the end of the document. A copy of Judge Davis' May 16, 2011 Memorandum Of Law & Order is available at http://is.gd/Sxd8Fifrom Leagle.com. Following a nationwide outbreak of Salmonella poisoning that reports say sickened more than 700 people and killed nine, Peanut Corporation of America -- http://www.peanutcorp.com/-- filed a Chapter 7 bankruptcy petition in February 2009 (Bankr. W.D. Va. Case No. 09-60452). The Company estimated its assets and liabilities in the range of $1 million to $10 million at the time of the filing. In September 2010, Judge Norman Moon of the U.S. District Court for the Western District of Virginia allowed PCA settle tort claims with more than two dozen victims of the 2008 salmonella outbreak at the company's facilities. Under the settlement, the PCA trustee would distribute $12 million to resolve tort claims arising from people who became ill or died after eating salmonella-tainted peanut products. PHILADELPHIA ORCHESTRA: Has Interim OK to Hire CGC as Claims Agent ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Pennsylvania has granted Debtors The Philadelphia Orchestra Association and Academy Music of Philadelphia, Inc., permission, on an interim basis, to employ The Garden City Group, Inc., as notice, claims and solicitation agent in their Chapter 11 cases, in accordance with the terms and conditions as set forth in the Bankruptcy Administration Agreement. GCG is appointed as agent for the Office of the Clerk of the Court and custodian of Court records and, as such, is designated as the authorized repository for all proofs of claims filed in the Debtors' Chapter 11 cases and is authorized and directed to maintain official claims registers for POA and AOM and to provide the Clerk's Office with a certified duplicate thereof on a monthly basis unless otherwise directed by the Clerk's Office. The Bankruptcy Court is satisfied that CGC neither holds nor represents an interest adverse to the estates of Debtors POA and AOM nor has a connection to Debtors POA and AOM, their creditors or their related parties. Debtors POA and AOM are authorized to compensate GCG on a monthly basis, in accordance with the Administration Agreement, upon the receipt of reasonably detailed invoices setting forth the services provided by GCG in the prior month and the rates charged for each, and to reimburse GCG for all reasonable and necessary expenses it may incur upon the presentation of appropriate documentation. This interim order will become final if no objection is filed on or before May 20, 2010. If an objection is filed, a hearing will be held on May 23, 2011, at 1:00 p.m. A copy of the Bankruptcy Administration Agreement is available for free at http://bankrupt.com/misc/POA.GardenCityAgreement.pdf About Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. The bankruptcy cases of Debtors POA and AOM are being jointly administered. Currently, Debtor Encore Series, Inc. ("ESI") is also part of these jointly administered chapter 11 cases, pending entry of an order severing ESI from these jointly administered cases. A seven-member official committee of unsecured creditors has been formed in the Chapter 11 cases of The Philadelphia Orchestra. PHILADELPHIA ORCHESTRA: Pittsburgh Symphony to Sub for Concerts --------------------------------------------------------------- Andrew Druckenbrod, writing for the staff blogs section of the Pittsburgh Post-Gazette, reports that the Pittsburgh Symphony Orchestra is stepping in for the Philadelphia Orchestra for two concerts this summer at the Mann Center. Post-Gazette, citing the Philadelphia Inquirer, said the concerts in July are part of a usual nine summer dates for the Philly group at Philadelphia's Fairmount Park but since the Philadelphia Orchestra is now in Chapter 11 bankruptcy, it is not making all of those dates. About Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. Garden City Group, Inc. serves as the Debtor's claims and noticing agent. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. PROFESSIONAL VETERINARY: Boehringer Claim Goes to Trial ------------------------------------------------------- Bankruptcy Judge Timothy J. Mahoney denied the request of Professional Veterinary Products, Ltd., for summary judgment as to the reclamation claim of Boehringer Ingelheim Vetmedica, Inc. The issue before the Court is whether BIV as a reclaiming seller has a remedy now that goods are no longer available. According to Judge Mahoney, it remains unclear whether BIV will be able to establish its reclamation right, in terms of the element of insolvency, as well as whether any secured creditors' interests in inventory take priority, but it should not be foreclosed at this point in the proceedings from attempting to do so. BIV manufactures and sells pharmaceutical products used in the field of veterinary medicine. It sold pharmaceutical products to Professional Veterinary Products, Ltd., on credit. Some of those products were sold and delivered to PVP within 45 days before PVP filed its Chapter 11 petition on Aug. 20, 2010. Since Aug. 25, 2010, BIV has been asserting its right to reclaim those products from the Debtor under the provisions of the Nebraska Uniform Commercial Code and 11 U.S.C. Sec. 546(c). In the meantime, the Debtor sold substantially all of its inventory to another company, and subsequently filed a liquidating plan. The Debtor filed a notice of proposed treatment of reclamation claims in which it proposed to deny all reclamation claims for three reasons: (1) because the inventory had been sold with proceeds going to the debtor's senior lender, (2) because the reclamation claimants failed to protect their interests in inventory, and (3) because PVP was not insolvent on the petition date. BIV objected. Between July 6, 2010 and July 31, 2010, BIV delivered to the Debtor, in the ordinary course of business, goods valued at more than $1 million. BIV asserts an aggregate invoiced amount of $1,747,870. The Debtor uses a book value of $1,345,857. A copy of the Court's May 16, 2011 Order is available at http://is.gd/Zo3VZ2from Leagle.com. About Professional Veterinary Products Professional Veterinary Products Ltd. -- http://www.pvpl.com/-- operated a veterinary supply company owned and managed by veterinarians. Professional Veterinary sought Chapter 11 protection from creditors on August 20, 2010, in Omaha, Nebraska (Bankr. D. Neb. Case No. 10-82436). Affiliates ProConn and Exact Logistics also filed for Chapter 11. The Company reported $89.79 million in total assets, $78.23 million in total liabilities, and $11.56 million in stockholders' equity at April 30, 2010. The Company hired McGrath North Mullin & Kratz PC LLC, as bankruptcy counsel, and Alliance Management as financial and restructuring advisors. Professional Veterinary Products and ProConn completed on Aug. 20 the sale of their inventory of certain animal health products and miscellaneous related assets to Micro Beef Technologies Ltd. The purchase price for the Micro Beef transaction was based on the cost of the inventory to the Company and ProConn, which amount totaled approximately $1.5 million plus the assumption of certain vehicle leases. On Aug. 17, 2010, the Debtors completed the sale of their inventory of certain swine products and miscellaneous related assets to Lextron Inc. The purchase price for the Lextron transaction was based on the cost of the inventory to the Company, which amount totaled approximately $2.5 million. The proceeds of the Micro Beef and Lextron transactions were paid to the Debtors' lender and used to reduce the obligations owing under the existing credit facility. Omaha World-Herald, citing government documents, said the $4 million in proceeds from the sales were paid to Wells Fargo Bank, the company's lender. As reported in the Troubled Company Reporter on Dec. 29, 2010, the Debtors and the Official Committee of Unsecured Creditors have submitted to the Bankruptcy Court a proposed Plan of Liquidation and an explanatory Disclosure Statement. PROVO CRAFT: S&P Lowers Corporate Credit Rating to 'CCC' -------------------------------------------------------- Standard & Poor's Rating Services lowered its corporate credit rating on South Jordan, Utah-based Provo Craft & Novelty Inc. to 'CCC' from 'CCC+. "At the same time, we lowered the ratings on the company's $170 million senior secured credit facility to 'CCC+' from 'B-'. The outlook is negative. We removed all ratings from CreditWatch, where they were placed with developing implications on March 17, 2011, reflecting our belief that the company may not be able to comply with its financial covenants over the near term," S&P noted. "The downgrade and negative outlook reflect our opinion that the company may have significant liquidity constraints," said Standard & Poor's credit analyst Stephanie Harter. "We believe that the company might have breached its fourth quarter 2010 covenants given our estimates of very thin covenant cushion at the end of the third quarter, coupled with our expectations that profitability would decline further in the near term. We might have made further adjustments to our assessment depending upon subsequent information, but we have not received any financials or compliance information for the quarter. We have subsequently withdrawn all ratings due to a lack of sufficient information to maintain the ratings." QUANTUM FUEL: Receives $695,000 from Sale of Notes and Warrants --------------------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., entered into a Bridge Note and Warrant Purchase Agreement with certain "accredited investors", as such term is defined in Rule 501(a) of Regulation D under the United States Securities Act of 1933, as amended, for the purchase and sale of senior subordinated promissory notes and warrants. At the closing, the Company received gross proceeds of $695,000, which will be used for general working capital purposes, and issued warrants entitling the Investors to purchase up to an aggregate of 78,455 shares of the Registrant's common stock at $2.92 per share. The Purchase Agreement contains customary representations, warranties, conditions to closing and covenants. The Purchase Agreement provides the Investors with piggyback registration rights for the shares underlying the Warrants. The Notes have an interest rate of 15% per year. Principal and accrued interest is due and payable on Sept. 30, 2011. The Notes are subordinate to the Company's senior secured indebtedness but senior to all future indebtedness of the Company. The Warrants have a three year term, contain standard and customary anti-dilution provisions, and may be exercised on a cashless basis unless the shares underlying the Warrants at the time of exercise are covered by an effective resale registration statement, in which case they must be exercised for cash. The Company paid its placement agent a cash fee of approximately $65,000. The Notes, Warrants and Warrant Shares have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act or any applicable state securities laws. As a result of the transaction, the anti-dilution provision contained in warrants issued by the Company on Oct. 27, 2006, and on Aug. 19, 2008, was triggered. The exercise price for the October 2006 Warrants was reset from $3.0510 to $2.9200 and the number of shares subject to the October 2006 Warrants was increased from 1,277,593 to 1,334,908. The exercise price for the August 2008 Warrants was reset from $43.6535 to $43.4074 and the number of shares subject to the August 2008 Warrants increased from 1,237,758 to 1,244,776. About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel and its senior lender, WB QT, LLC, entered into a Ninth Amendment to Credit Agreement and a Forbearance Agreement on Jan. 3, 2011. The Senior Lender agreed to provide the Company with a $5.0 million non-revolving line of credit, which may be drawn upon at any time prior to April 30, 2011. Advances under the New Line of Credit do not bear interest -- unless an event of default occurs, in which case the interest rate would be 10% per annum -- and mature on April 30, 2011. The Senior Lender also agreed to forbear from accelerating the maturity date for any portion of the Senior Debt Amount and from exercising any of its rights and remedies with respect to the Senior Debt Amount until April 30, 2011. The Company's balance sheet at Jan. 31, 2011 showed $72.09 million in total assets, $45.07 million in total liabilities and $27.02 million in total equity. The Company recorded a net loss of $28.0 million in fiscal 2009, compared to a net loss of $86.8 million in fiscal 2008. QUANTUM FUEL: Authorized Common Shares Hiked to 50 Million ---------------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., held a Special Meeting of Stockholders on May 10, 2011. A total of 7,901,491 shares of the Company's common stock were present or represented by proxy at the meeting, representing 68.6% of shares outstanding as of the April 5, 2011, record date. Three proposals were submitted to the Company's stockholders at the Special Meeting and all three proposals passed. The proposals are: (1) The amendment to the Company's Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 20,000,000 to 50,000,000. (2) To authorize the Board of Directors to issue up to $10.0 million of common stock units at a discount to fair market value not to exceed 20% in one or more private placements within six months following the date of the Special Meeting. (3) To approve one or more adjournments to the Special Meeting, if necessary, to permit further solicitation of proxies if there were not sufficient votes received at the time of the Special Meeting to approve Proposal 1 and Proposal 2. About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel and its senior lender, WB QT, LLC, entered into a Ninth Amendment to Credit Agreement and a Forbearance Agreement on Jan. 3, 2011. The Senior Lender agreed to provide the Company with a $5.0 million non-revolving line of credit, which may be drawn upon at any time prior to April 30, 2011. Advances under the New Line of Credit do not bear interest -- unless an event of default occurs, in which case the interest rate would be 10% per annum -- and mature on April 30, 2011. The Senior Lender also agreed to forbear from accelerating the maturity date for any portion of the Senior Debt Amount and from exercising any of its rights and remedies with respect to the Senior Debt Amount until April 30, 2011. The Company's balance sheet at Jan. 31, 2011 showed $72.09 million in total assets, $45.07 million in total liabilities and $27.02 million in total equity. The Company recorded a net loss of $28.0 million in fiscal 2009, compared to a net loss of $86.8 million in fiscal 2008. RADIENT PHARMACEUTICALS: Gets $7.5MM Proceeds Securities Sale ------------------------------------------------------------- Radient Pharmaceuticals Corporation entered into a securities purchase agreement with 5 accredited investors for a private financing. The Company closed the financing contemplated by the securities purchase agreement on Jan. 31, 2011, and received approximately $7,500,000 in gross proceeds pursuant to the sale of convertible notes pursuant to the securities purchase agreement. Net proceeds from the financing were approximately $6,820,000. In connection with the closing of the transactions, the Company issued Convertible Promissory Notes in the aggregate principal amount of $8,437,500, at a purchase price of $888.88 for each $1,000 of principal amount of Notes, which are initially convertible into an aggregate of 14,062,500 shares of the Company's common stock to the Investors, and the Investors also received: (i) Series A Warrants to purchase an aggregate of 14,062,500 shares of the Company's common stock at an initial exercise price of $0.67 per share and (ii) Series B Warrants to purchase an aggregate of 7,031,250 shares of our common stock at an initial exercise price of $0.8175 per share for their investment. Each of the Warrants has a term of five years from the date the Warrants are initially exercisable. The Company is required to pay a certain portion of the Notes back on the first day of each month during the term of the Note, beginning on March 1, 2011, in cash or shares of the Company's common stock. As of May 1, 2011, the outstanding principal of the Notes is $6,750,000. The total Installment Amount due on May 1, 2011, was $843,750. The Company is also required under the terms of the Notes to maintain a cash balance at all times of no less than $2,250,000 in unrestricted cash. The May 1 Installment Amount would cause the Company's cash balance to go below the Cash Reserve; accordingly the Company did not make the Installment Amount that was due on May 1, 2011, which is an event of default under the Notes. Upon the occurrence of an event of default under the Note, the Note holder has the right to force the Company to redeem all or any portion of such holder's Note in cash. As of May 10, 2011, the Company received redemption notices from all of the investors of the financing demanding the Company redeem the entire amount outstanding on the Notes as of May 1, 2011. Accordingly, the Company is required to pay $8,618,311 pursuant to the redemption notices and such payment is due within 5 business days of receipt of such notices. Based on when the Company received the redemption notices, the Company is required to pay one investor on May 9, 2011, and the remaining 4 investors on or before May 12, 2011. In furtherance of the Company's efforts to reserve cash for the Company's operations rather than the repayment of debt, the Company is reaching out to the Note holders to reach an amicable solution with them regarding the default and payment owed. About Radient Pharmaceuticals Headquartered in Tustin, Calif., Radient Pharmaceuticals Corporation -- http://www.Radient-Pharma.com/-- is engaged in the research, development, manufacturing, sale and marketing of its ONKO-SURE(TM) a proprietary IVD Cancer Test in the United States, Canada, China, Chile, Europe, India, Korea, Taiwan, Vietnam and other markets throughout the world. Radient said in October 2010 it incurred a trigger event on the 12% Convertible Notes issued in first and second quarter of 2010 due to its failure to have the related registration statement declared effective by June 1, 2010. The Company filed on Sept. 7, 2010, an Event of Default under those same notes occurred since it did not hold the related shareholder meeting by Aug. 31, 2010. As reported in the Troubled Company Reporter on April 19, 2010, KMJ Corbin & Company LLP, in Costa Mesa, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company incurred a significant operating loss and negative cash flows from operations in 2009 and had a working capital deficit of $4.2 million at Dec. 31, 2009. The Company's balance sheet at Sept. 30, 2010, showed $23.56 million in total assets, $34.22 million in total liabilities, and a stockholders' deficit of $10.66 million. The Company has yet to file its annual report on Form 10-K for the year ended Dec. 31, 2010. The Company said it expects to report a net loss in the range of $68M-74M for 2010 compared with net loss of approximately $17M for fiscal 2009. RASER TECHNOLOGIES: 3-Member Creditors Committee Formed ------------------------------------------------------- Roberta A. Deangelis, the U.S. Trustee for Region 3, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of Raser Technologies, Inc. The Creditors Committee members are: 1 The Bank of New York Mellon ATTN: Alex Chang, 101 Barclay Street, 8W, New York NY 10296 Tel: (212) 815-2816 2. Bombay Investments ATTN: Mark Sansom 4061 Powers Circle Salt Lake City UT 84124 Tel: (801) 272-8722 Fax: (801) 930-9500 3. Quantec Geoscience Limited ATTN: Carey Chow 146 Sparks Avenue Toronto Ontario M2H2S4 Tel: (416) 306-1941 Fax: (416) 306-1949 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Raser Technologies, Inc. Provo, Utah-based Raser Technologies, Inc., also known as Wasatch Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-11315) on April 29, 2011. Other Debtor affiliates filed for separate Chapter 11 protection on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350). Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton & Williams LLP represent the Debtors in their restructuring efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia Ross Friedman Ference LLP serves as the Debtors' corporate counsel. The Debtors' financial advisor is Canaccord Genuity. The Company reported a net loss of $101.80 million on $4.25 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $20.90 million on $2.19 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $41.84 million in total assets, $107.78 million in total liabilities, $5.00 million of Series A-1 cumulative convertible preferred stock, and a stockholders' deficit of $70.94 million. RASER TECHNOLOGIES: Section 341(a) Meeting Schedules for June 2 --------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors in Raser Technologies Inc.'s Chapter 11 case on June 2, 2011, at 11:00 a.m. The meeting will be held at the U.S. District Court, 844 North King Street, 5th Floor, Room 5209, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Raser Technologies, Inc. Provo, Utah-based Raser Technologies, Inc., also known as Wasatch Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-11315) on April 29, 2011. Other Debtor affiliates filed for separate Chapter 11 protection on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350). Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton & Williams LLP represent the Debtors in their restructuring efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia Ross Friedman Ference LLP serves as the Debtors' corporate counsel. The Debtors' financial advisor is Canaccord Genuity. The Company reported a net loss of $101.80 million on $4.25 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $20.90 million on $2.19 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $41.84 million in total assets, $107.78 million in total liabilities, $5.00 million of Series A-1 cumulative convertible preferred stock, and a stockholders' deficit of $70.94 million. RASER TECHNOLOGIES: Court Approves ALCS as Claims Agent ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Raser Technologies Inc. to employ American Legal Claim Services, LLC, as claims, noticing and balloting agent. About Raser Technologies Provo, Utah-based Raser Technologies, Inc., also known as Wasatch Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-11315) on April 29, 2011. Other Debtor affiliates filed for separate Chapter 11 protection on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350). Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton & Williams LLP represent the Debtors in their restructuring efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia Ross Friedman Ference LLP serves as the Debtors' corporate counsel. The Debtors' financial advisor is Canaccord Genuity. The Company reported a net loss of $101.80 million on $4.25 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $20.90 million on $2.19 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $41.84 million in total assets, $107.78 million in total liabilities, $5.00 million of Series A-1 cumulative convertible preferred stock, and a stockholders' deficit of $70.94 million. RASER TECHNOLOGIES: Ex-Chairman Proposes Rival Financing -------------------------------------------------------- Dow Jones' DBR Small Cap reports that the former chairman of Raser Technologies Inc. is challenging its bid for bankruptcy financing, claiming he has arranged a superior financing package for the renewable-energy company. About Raser Technologies Provo, Utah-based Raser Technologies, Inc., also known as Wasatch Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-11315) on April 29, 2011. Other Debtor affiliates filed for separate Chapter 11 protection on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350). Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton & Williams LLP represent the Debtors in their restructuring efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia Ross Friedman Ference LLP serves as the Debtors' corporate counsel. The Debtors' financial advisor is Canaccord Genuity. The Company reported a net loss of $101.80 million on $4.25 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $20.90 million on $2.19 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $41.84 million in total assets, $107.78 million in total liabilities, $5.00 million of Series A-1 cumulative convertible preferred stock, and a stockholders' deficit of $70.94 million. RASER TECHNOLOGIES: Merrill Lynch Adds to Dissent Over Loan ----------------------------------------------------------- Dow Jones' DBR Small Cap reports that one of Raser Technologies Inc.'s largest unsecured creditors is joining the fight against the Company's bankruptcy financing package, saying the deal places control of the case squarely in the hands of the bankruptcy lenders and could potentially "cripple" the company as it looks to emerge from Chapter 11. About Raser Technologies Raser Technologies Inc. (NYSE: RZ) is a renewable energy company focusing on geothermal power development. The Company has one operating plant in Utah and another eight early and development stage projects in Utah, New Mexico, Nevada and Oregon. The Company invested $120 million in Thermo No. 1, its sole operating plant, which is near Beaver, Utah, and has a power generation capacity of 10 megawatts. The City of Anaheim, California, agreed in 2008 to buy the generated electricity for 20 years. Provo, Utah-based Raser Technologies, Inc., also known as Wasatch Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-11315) on April 29, 2011. Other Debtor affiliates filed for separate Chapter 11 protection on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350). Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton & Williams LLP represent the Debtors in their restructuring efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia Ross Friedman Ference LLP serves as the Debtors' corporate counsel. The Debtors' financial advisor is Canaccord Genuity. The Company reported a net loss of $101.80 million on $4.25 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $20.90 million on $2.19 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $41.84 million in total assets, $107.78 million in total liabilities, $5.00 million of Series A-1 cumulative convertible preferred stock, and a stockholders' deficit of $70.94 million. READER'S DIGEST: Still Struggling to Gain Financial Balance ----------------------------------------------------------- Erik Sass at Media Daily News reports that The Reader's Digest Association, despite emerging from bankruptcy last year, is struggling to put its finances on firm footing, as revenues tumbled 22% to $326 million in the first quarter. According to data from Publishers Information Bureau, these declines were attributed to lower ad revenue at Reader's Digest, Every Day with Rachael Ray, and affiliated publications, as well as the closure of some businesses since last year. Media Daily News also notes that the publisher recently underwent a major shake-up. In April, former RDA President and CEO Mary Berner stepped down after four years on the job to be succeeded by Tom Williams, previously the SVP and CFO. Ms. Berner took the reins at RDA in March 2007, when the magazine publisher was acquired for $2.8 billion by Ripplewood Holdings, LLC, marking the end of 17 years as a publicly traded company for RDA. About Reader's Digest The Reader's Digest Association is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-23529) on Aug. 24, 2010. As of June 30, 2009, it had total assets of US$2.2 billion against total debts of US$3.4 billion. Kirkland & Ellis LLP served as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP was tapped as conflicts counsel. Ernst & Young LLP served as auditor. Miller Buckfire & Co, LLC, served as financial advisor. AlixPartners, LLC, served as restructuring consultant. Kurtzman Carson Consultants served as notice and claims agent. The Official Committee of Unsecured Creditors tapped BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. The Bankruptcy Court confirmed RDA's Chapter 11 plan on Jan. 15, 2010. On Feb. 1, 2010, RDA elected to temporarily delay emergence from Chapter 11 to allow additional time for the UK pension issue to be addressed. RDA ultimately emerged from Chapter 11 on Feb. 22, 2010. REAL ESTATE ASSOCIATES: Incurs $205,000 Net Loss in Q1 ------------------------------------------------------ Real Estate Associates Limited VII filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $205,000 on $0 of revenue for the three months ended March 31, 2011, compared with a net loss of $223,000 on $0 of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $1.38 million in total assets, $20.87 million in total liabilities and a $19.48 million partners' deficit. In its audit report on the Partnership's financial statements for the year ended Dec. 31, 2010, Ernst & Young LLP, in Greenville, South Carolina, expressed substantial doubt about the Partnership's ability to continue as a going concern. According to the independent auditors, the Partnership continues to generate recurring operating losses. In addition, notes payable and related accrued interest totaling approximately $15,738,000 are in default due to non-payment. A full-text copy of the Form 10-Q is available for free at: http://is.gd/AxtwiG About Real Estate Associates Real Estate Associates Limited VII is a limited partnership which was formed under the laws of the State of California on May 24, 1983. On February 1, 1984, the Partnership offered 2,600 units consisting of 5,200 limited partnership interests and warrants to purchase a maximum of 10,400 additional limited partnership interests through a public offering managed by E.F. Hutton Inc. The Partnership received $39,000,000 in subscriptions for units of limited partnership interests (at $5,000 per unit) during the period from March 7, 1984 to June 11, 1985. The Partnership will be dissolved only upon the expiration of 50 complete calendar years -- December 31, 2033 -- from the date of the formation of the Partnership or the occurrence of various other events as specified in the Partnership agreement. The principal business of the Partnership is to invest, directly or indirectly, in other limited partnerships which own or lease and operate Federal, state and local government-assisted housing projects. The general partners of the Partnership are National Partnership Investments Corp., a California Corporation, and National Partnership Investments Associates II. The business of the Partnership is conducted primarily by NAPICO, a subsidiary of Apartment Investment and Management Company, a publicly traded real estate investment trust. The Partnership holds limited partnership interests in 11 local limited partnerships as of both March 31, 2010, and December 31, 2009. The Partnership also holds a general partner interest in Real Estate Associates IV, which, in turn, holds limited partnership interests in nine additional Local Limited Partnerships; therefore, the Partnership holds interests, either directly or indirectly through REA IV, in twenty (20) Local Limited Partnerships. The general partner of REA IV is NAPICO. The Local Limited Partnerships own residential low income rental projects consisting of 1,387 apartment units at both March 31, 2010, and December 31, 2009. The mortgage loans of these projects are payable to or insured by various governmental agencies. REICHHOLD INDUSTRIES: S&P Affirms 'B-' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Reichhold Industries Inc. to negative from stable. It is affirming the 'B-' corporate credit rating. At the same time, Standard & Poor's affirmed its 'CCC+' issue-level rating on the company's $195 million unsecured notes due Aug. 15, 2014. The recovery rating is unchanged at '5', which indicates the expectation for modest (10% to 30%) recovery in the event of a payment default. The company has a $100 million asset-based revolving credit facility due May 1, 2014, which Standard & Poor's does not rate. The negative outlook reflects the potential for ratings to move lower if the financial profile deteriorates further due to weak operating results or cash flow pressures caused by substantial capital outlays or adverse working capital trends. The continuation of weak operating results, resulting from elevated raw material costs and limited pricing power, would limit profitability in the near term. "If operating results do not improve, we believe that liquidity will deteriorate this year, particularly because of additional cash outlays required for its China expansion and higher-than- expected working capital needs," said Standard & Poor's credit analyst Henry Fukuchi. The rating on Durham, N.C.-based Reichhold, a producer of unsaturated polyester resins used for composite applications and resins used for coatings by architectural and industrial customers, reflects the company's highly leveraged financial profile and a weak business risk profile characterized by low operating margins, and cyclical, competitive markets. Reichhold's market positions in its resins product lines, significant geographic diversity of sales, management's commitment to maintain adequate liquidity and to reduce debt-like obligations when business conditions improve, only partially mitigate these weaknesses. According to Standard & Poor's, a diverse customer base, long- standing customer relationships, a global production footprint, and new products should help sustain Reichhold's competitive positions. However, Standard & Poor's continues to assess the company's business risk profile as weak, incorporating the limited breadth of Reichhold's primary product lines; its subpar operating margins; and the vulnerability of its operating results to raw material cost increases; and pricing pressures in a fragmented, competitive environment. REMINGTON RANCH: Case Dismissal Hearing Continued Until June 15 --------------------------------------------------------------- The Hon. Elizabeth L. Perris Bankruptcy Court for the District Of Oregon ordered creditor Hooker Creek Companies LLC, to provide a written carve out agreement for an amount that will benefit the creditors of Remington Ranch, LLC. In a May 11, 2011, hearing, the Court added that if the commitment is submitted on June 10, the Court will convene a hearing on June 15, at 1:30 p.m., to consider the request to dismiss or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. Hooker Creek is represented by: Martin E. Hansen, Esq. Michael H. McGean, Esq. FRANCIS HANSEN & MARTIN LLP 1148 NW Hill Street Bend, OR 97701 Tel: (541) 389-5010 Fax: (541) 382-7068 E-mail: meh@francishansen.com mike@francishansen.com About Remington Ranch, LLC, Powell Butte, Oregon-based Remington Ranch, LLC, is a property developer. The Company filed for Chapter 11 bankruptcy protection on Jan. 21, 2010 (Bankr. D. Ore. Case No. 10-30406). The Debtor disclosed $29,298,544 in assets and $32,453,284 in liabilities as of the Petition Date. SARGENT RANCH: Court Rejects $808T DIP Loan, Mulls Ch.7 Conversion ------------------------------------------------------------------ Chief Bankruptcy Judge Peter W. Bowie withheld approval of the request by the Chapter 11 trustee for Sargent Ranch LLC to borrow $808,000 on a superpriority basis on its present terms. Judge Bowie further ruled that, unless a borrowing agreement is reached in the interim, on June 20, 2011 at 4 p.m. the Court will hear argument on its own motion to convert the case to one under Chapter 7. If any agreement is reached, it will not be approved by the Court if it includes any purported breakup fee. The Court believes Enderly acted prudently in waiting to prepare the loan documents until it appeared an agreement had been reached. Nevertheless, as Enderly has pointed out, it was not the stalking horse proposer, but rather offered more favorable terms than another. Breakup fees in this situation are not warranted. The Chapter 11 trustee seeks to borrow $808,000 in two phases: The first would yield $350,000 and the second, if sequentially authorized would yield an additional $325,000. The remainder of the loan would constitute prepaid interest and fees. The term of the loan is for one year, at 11% interest, and a default rate of interest of 15%, after maturity if the loan is not sooner repaid. The proposed lender is an assignee of one of the creditors in the case, which claims to hold interest positions in both the first and second trust deeds on the property. A group of creditors secured by interests in the first trust deed -- representing 14% to 18% of the total first trust deed creditors -- oppose the Chapter 11 trustee's motion, arguing the interests of the first trust deed holders would be eroded by granting a priority lien over theirs without any adequate protection of their interest. The Court pointed out that the threshold problem has been, and remains that the estate has no cash in it to do anything. At the same time the parties and the Court wanted a Chapter 11 trustee to take charge, the trustee has not been provided with any of the necessary wherewithal to move the case toward any form of reorganization. And the threshold issue for the trustee has been to try to find out what the potential assets of the estate are. That takes funding for disinterested analysts and appraisers to assess. So the trustee and his counsel have worked hard to find funding to take those first steps which, seemingly, would inure to the benefit of all the creditors, including the first trust deed interest holders. Indeed, the trustee thought the structure of an agreement had been agreed upon, but apparently not. "The Chapter 11 trustee is in an almost impossible position," Judge Bowie said. Judge Bowie noted that the Chapter 11 trustee advances two arguments why the Court should approve borrowing on terms the same or better than those offered by Enderly's assignee. First, he argues that the senior secured creditors should be held to have consented by virtue of a majority not having timely filed opposition, and recognizing that under applicable California law and the applicable Operating Agreement a majority has the authority to act for the group. Since the majority have been silent, they should be deemed to have consented under the Court's Local Rules. The Court is loathe to so hold in the instant circumstances. Judge Bowie also noted that the trustee's second argument is that obtaining expert analysis of remunerative uses to which the real property may be put enhances its value in virtually any direction because it moves the property closer to some sort of use, even if it rules out other theoretically possible uses. It is still an analysis someone else will not have to spend money to do in the future. Indeed, it is interesting to note that the proposed loan agreement describes as collateral not just the superpriority secured lien on the real property, but also the reports and analyses performed on the property. The Court believes there is support for and merit in the trustee's second argument. However, the record is silent on the extent to which, if at all, the value of the property will be increased quantitatively by borrowing to fund the analyses. Nor does the record show that the value of the property will be increased sufficiently to afford the senior secured creditors the adequate protection that 11 U.S.C. Section 364 requires. The Court is mindful that this case, which has been pending over 16 months, has not brought forth any third party, or any creditor or group of creditors, who asserts belief in the economic viability of this property. No one has stepped forward with any proposal to fund even the modest first steps the trustee proposes without all sorts of guarantees. To be sure, Enderly has made a proposal to loan $808,000 for one year at 11% interest, plus points and a commitment fee, but in addition Enderly wants a superpriority secured lien ahead of all others in a property valued at the low end at over $9 million. So Enderly would be oversecured approximately 12 times over. As noted, the loan term would be one year, with prepaid interest and, if not paid in full in one year, the default interest rate of 15% kicks in. That, despite the record which indicates there would be no cash flow from a sand quarry operation for over two years even if the project were begun right now. And, on top of that, Enderly wants a breakup fee of up to $20,000 if someone else offers the estate a more preferable loan. A copy of Judge Bowie's May 17, 2011 Order is available at http://is.gd/DFj4U8from Leagle.com. About Sargent Ranch La Jolla, California-based Sargent Ranch, LLC, filed for Chapter 11 bankruptcy (Bankr. S.D. Calif. Case No. 10-00046) on Jan. 4, 2010. Douglas P. Wilson was appointed Chapter 11 Trustee on Jan. 11, 2011. John L. Smaha, Esq., at Smaha Law Group, APC, assists the Company in its restructuring effort. The Company estimated its assets at $500 million to $1 billion and debts $50 million to $100 million. The U.S. Trustee has been unable to form an official creditors committee in the case. A plan of reorganization has been filed by the Debtor. As reported by the Troubled Company Reporter on Oct. 14, 2010, the Plan provides that the secured creditors will be receiving substitute collateral through a liquidating trust. As of the effective date, all liens and encumbrances on the Sargent Ranch property in existence prior to the effective date will be eliminated and replaced by the deed of trust held by the liquidating trust. General and subordinated unsecured claims will be paid in full without interest after the payment in full of all secured claims. The payments will be paid pro rata semi-annually by the distribution agent from the operating distribution fund. The unsecured creditors can expect payments in full by year 2017. Sargent Ranch's Plan did not prosper and Douglas P. Wilson was appointed as Chapter 11 Trustee. Mr. Wilson is represented by lawyers at Higghs, Fletcher & Mack LLP. Douglas P. Wilson Companies provides accounting and real estate development related services to the bankruptcy estate. SBARRO INC: Court Approves Epiq Bankruptcy as Administrative Agent ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Sbarro Inc., et al., to employ Epiq Bankruptcy Solutions, LLC as their administrative agent. On May 3, 2011, Judge Shelley C. Chapman, authorized Epiq to, among other things: -- provide a call center or other creditor hotline, responding to creditor inquiries via telephone, letter, email, facsimile or otherwise, as appropriate, and related services; -- manage and coordinate the publication of legal notices, as requested; -- manage any distributions pursuant to a confirmed plan of reorganization. Jason D. Horwitz, vice president and senior consultant of Epiq, told the Court that prior to the Petition Date, the Debtors paid Epiq a retainer of $25,000 that was replenished as appropriate. Mr. Horwitz added that Epiq will also be paid based on the hourly rates of its professionals: Clerk $34-$51 Case Manager (Level 1) $106-$149 IT Programming Consultant $119-$161 Case Manager (Level 2) $157-$187 Senior Case Manager $191-$234 Senior Consultant $250 Mr. Horwitz assured the Court that Epiq is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Sbarro Inc. The Sbarro family started its business after moving to Brooklyn, New York, from Naples, Italy, in 1956. Today Sbarro is a leading, global Italian quick service restaurant concept with approximately 5,170 employees, 1,045 restaurants throughout 42 countries, and annual revenues in excess of $300 million. Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr. S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million in debt. The Debtor disclosed $51,537,899 in assets and $460,975,646 in liabilities as of the Chapter 11 filing. Sbarro said it has reached an agreement with all of its second- lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate more than half of the Company's total indebtedness. Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' general bankruptcy counsel. Rothschild, Inc., is the Debtors' investment banker and financial advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors' special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co is the Debtors' communications advisor. SBARRO INC: Can Hire Kirkland & Ellis as Bankruptcy Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Sbarro Inc., et al., to employ Kirkland & Ellis LLP as counsel. Kirkland & Ellis is representing the Debtor in the Chapter 11 proceedings. The hourly rates of Kirkland & Ellis' personnel are: James H.M. Sprayregen, P.C. $995 Edward O. Sassower, Esq. $895 Nicole L. Greenblatt, Esq. $730 Paul Wierbicki, Esq. $675 Partners $590 - $995 Of Counsel $450 - $995 Associates $360 - $715 Paraprofessionals $135 - $305 The Debtors relate that K&E received $350,000 as a classic retainer. Subsequently, on Jan. 10, 2011, the Debtors paid to K&E an additional $200,000, increasing the retainer balance to $550,000. To the best of the Debtors' knowledge, K&E is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: James H.M. Sprayregen, P.C. Edward O. Sassower, Esq. Nicole L. Greenblatt, Esq. Paul Wierbicki, Esq. KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022-4611 Tel: (212) 446-4800 Fax: (212) 446-4900 About Sbarro Inc. The Sbarro family started its business after moving to Brooklyn, New York, from Naples, Italy, in 1956. Today Sbarro is a leading, global Italian quick service restaurant concept with approximately 5,170 employees, 1,045 restaurants throughout 42 countries, and annual revenues in excess of $300 million. Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr. S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million in debt. The Debtor disclosed $51,537,899 in assets and $460,975,646 in liabilities as of the Chapter 11 filing. Sbarro said it has reached an agreement with all of its second- lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate more than half of the Company's total indebtedness. Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' general bankruptcy counsel. Rothschild, Inc., is the Debtors' investment banker and financial advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors' special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co is the Debtors' communications advisor. SBARRO INC: To Tap Steinberg Fineo as Special Counsel ----------------------------------------------------- Dow Jones' DBR Small Cap reports that Sbarro Inc. has requested to hire Steinberg Fineo Berger & Fischoff as special counsel. The company filed the request on April 19 with the U.S. Bankruptcy Court in Manhattan, according to DBR Small Cap. About Sbarro Inc. Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr. S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million in debt. According to its schedules, the Debtor disclosed $51,537,899 in total assets and $460,975,646 in total debts. Sbarro said it has reached an agreement with all of its second- lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate more than half of the Company's total indebtedness. Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' general bankruptcy counsel. Rothschild, Inc., is the Debtors' investment banker and financial advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors' special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co is the Debtors' communications advisor. SEAVIEW PLACE: Can Hire Jennis & Bowen as Bankruptcy Counsel ------------------------------------------------------------ The Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle District of Florida authorized, on a final basis, Seaview Place Developers, Inc., to employ Jennis & Bowen, P.L., as bankruptcy counsel. As reported in the Troubled Company Reporter on April 2, 2011, the hourly rates of J&B personnel are: Paralegals $110 - $145 Attorneys $185 - $395 To the best of the Debtor's knowledge, J&B is "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Seaview Place Developers, Inc. Clearwater Beach, Florida-based Seaview Place Developers, Inc., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-05126) on March 22, 2011. According to its schedules, the Debtor disclosed $24,769,500 in total assets and $15,147,744 in total debts as of the Petition Date. SELECT MEDICAL: Moody's Upgrades Proposed Credit Facility to Ba3 ---------------------------------------------------------------- Moody's Investors Service upgraded Select Medical Corporation's proposed senior secured credit facility, consisting of a $300 million revolver and an $850 million term loan, to Ba3 (LGD 3, 30%) from B1 (LGD 3, 41%). Select Medical Corporation is a wholly owned subsidiary of Select Medical Holdings Corporation (collectively Select Medical). Concurrently, Moody's downgraded the company's senior subordinated notes due 2015 to Caa1 (LGD 5, 81%) from B3 (LGD 4 62%). The action results from the announcement that the proceeds from the proposed term loan would be reduced from its originally proposed $1.2 billion and the announcement that the company will no longer tender for the full amount of outstanding subordinated notes. This benefits the secured debt as it is now receives relatively greater collateral support than previously. It is a detriment to the subordinated debt as there is now more secured debt in the capital structure which has a priority claim. The company's B2 Corporate Family and Probability of Default Ratings remain unchanged. The rating outlook is positive. Moody's anticipates that the proceeds of the new credit facility will be used to refinance Select Medical's existing bank debt and fund the tender for a portion of the company's subordinated notes. Moody's also understands that the senior floating rate notes at the parent holding company level will remain part of the capital structure as originally anticipated. Therefore, Moody's will withdraw the ratings of the refinanced credit facility at the close of the transaction. This is a summary of Moody's ratings actions. Ratings upgraded: Select Medical Corporation: -- $300 million senior secured revolver expiring 2016 to Ba3 (LGD 3, 30%) from B1 (LGD 3, 41%) -- $850 million senior secured term loan (reflects reduced term loan size) due 2018 to Ba3 (LGD 3, 30%) from B1 (LGD 3, 41%) Ratings downgraded: Select Medical Corporation: -- 7.625% senior subordinated notes due 2015 to Caa1 (LGD 5, 81%) from B3 (LGD 4, 62%) Ratings unchanged/LGD assessments revised: Select Medical Holdings Corporation: -- $175 million senior floating rate notes due 2015, Caa1 (LGD 6, 95%) -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 -- Speculative Grade Liquidity Rating, SGL-2 Ratings unchanged to be withdrawn at the close of the transaction: Select Medical Corporation: -- $300 million senior secured revolver expiring 2013, Ba2 (LGD 2, 14%) -- $268 million senior secured term loan due 2012, Ba2 (LGD 2, 14%) -- $385 million senior secured term loan due 2014, Ba2 (LGD 2, 14%) RATINGS RATIONALE "While the changes to the originally proposed refinancing impact the expected loss estimates on the individual debt instruments, the overall debt level remains the same as previously expected," said Dean Diaz, a senior credit officer at Moody's. "Interest expense will likely increase modestly and cash flow generation will decline from the announced change in the proposed capital structure, but the impact on the estimated credit metrics is expected to be minimal," continued Diaz The B2 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with considerable financial leverage and that the company's reliance on the specialty hospital segment for the majority of its EBITDA results in a concentration of revenue from Medicare. However, the ratings are supported by Moody's expectation that the company will continue to generate strong free cash flow that can be used to repay debt. The rating also reflects Moody's consideration of Select Medical's considerable scale and position as one of the largest LTACH and outpatient rehabilitation providers in the US. Moody's could upgrade the rating if the company is expected to maintain leverage below 5.0 times and free cash flow coverage of debt around 5.0% through either improvement in the operating results of the acquired Regency facilities or the benefits from the inception of the joint venture partnership for rehabilitation services with the Baylor Health Care System. While the considerable reduction in leverage over the last two years and the improvement in the maturity profile of the company mitigates the likelihood of a rating downgrade in the near term, Moody's could downgrade the rating if adverse developments in Medicare reimbursement result in significant margin deterioration and cash flow coverage metrics or if the company were to complete a material debt financed acquisition or shareholder initiative. More specifically, Moody's could downgrade the rating if leverage was expected to rise to 6.0 times. The principal methodology used in rating Select Medical Corporation was the Global For-Profit Hospital Industry Methodology, published September 2008. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Headquartered in Mechanicsburg, PA, Select Medical provides long- term acute care hospital services and inpatient acute rehabilitative care through its specialty hospital segment. The company also provides physical, occupational, and speech rehabilitation services through its outpatient rehabilitation segment. For the year ended December 31, 2010, the company recognized net revenues of approximately $2.4 billion. SELECT MEDICAL: S&P Raises Rating on Sr. Secured Facility to 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its issue-level ratings on Mechanicsburg, Pa.-based Select Medical Corp.'s proposed senior secured credit facility to 'BB-' (two notches above the corporate credit rating) from 'B+', and revised the recovery rating on the debt to '1' from '2'. The '1' recovery rating indicates expectations for very high (90%-100%) recovery of principal in the event of default. "The upgrade reflects the $350 million reduction in the proposed amount of senior secured debt as compared with the amount we originally considered," S&P stated. The lower amount of senior secured debt improves recovery prospects in the event of default as compared with S&P's original analysis. "At the same time, we lowered our issue-level ratings on Select Medical's existing senior subordinated notes due 2015 to 'CCC+' (two notches below the corporate credit rating) from 'B-' and revised the recovery rating on the notes to '6' from '5'. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery of principal in the event of default. These actions are necessary since these notes will not be completely refinanced as we had originally anticipated. We now expect about $345 million of these notes to remain outstanding. The revised issue-level ratings reflect weaker recovery prospects in the event of default due to the increase in senior secured debt as compared with the current amount of senior secured debt," S&P continued. S&P noted, "Our speculative-grade ratings on Select Medical remain unchanged and reflect its weak business risk profile characterized by significant regulatory and reimbursement risk, given the company's reliance on Medicare for nearly half of its revenues. Additionally, the company has a relatively narrow service niche as an operator of long-term, acute care hospitals (LTACHs), inpatient rehabilitation hospitals, and outpatient rehabilitation clinics. We do not believe there will be any significant industry changes in these subsectors in the foreseeable future that would alter our view of business risk." "However, we believe that over the long term, the company may struggle to meet the growing threat to the LTACH business from nursing home efforts to treat more medically complex patients," S&P related. The ratings also reflect Select Medical's aggressive financial risk profile, with lease-adjusted leverage that S&P believes may fall below 5x in 2011, and funds from operations (FFO) to lease- adjusted debt of about 15%. Ratings List Select Medical Corp. Corporate Credit Rating B/Positive/-- Upgraded; Recovery Rating Revised To From Select Medical Corp. Senior Secured BB- B+ Recovery Rating 1 2 Downgraded; Recovery Rating Revised To From Select Medical Corp. Subordinated CCC+ B- Recovery Rating 6 5 SHUBH HOTELS PITTSBURGH: Court Stays Suit v. Hilton, Blackrock -------------------------------------------------------------- Bankruptcy Judge Jeffery A. Deller granted the request of the Official Committee of Unsecured Creditors of Shubh Hotels Pittsburgh, LLC, to enforce automatic stay provisions of 11 U.S.C. Sec. 362(a)(3) and for contempt and payment of sanctions or damages pursuant to 11 U.S.C. Sec. 362(h)(1). The Motion seeks to enforce the automatic stay with regard to the filing of a six-count complaint on Oct. 14, 2010, by Atul Bisaria in the United States District Court for the Southern District of Florida. The Complaint was filed against HLT Existing Franchise Holding, LLC d/b/a Hilton Hotels Corporation, Blackrock Financial Management, Inc., and Reed Smith, LLP, over the alleged conduct of the Defendants regarding the Debtor's acquisition, ownership, and management of a 713-room hotel property located at 600 Commonwealth Place, in Pittsburgh, Pennsylvania. The Complaint asserts claims against the Defendants for breach of the implied covenant of good faith and fair dealing and for "tortuous [sic] interference with [Bisaria's] advantages [sic] business relationship[s]" existing between the Debtor and Mr. Bisaria and several entities, including the Defendants. The Complaint alleges that Blackrock conspired with Hilton to induce a breach of Blackrock's loan agreement with the Debtor via the termination of a franchise agreement between the Debtor and Hilton. The Complaint also alleges that in complicity with those acts, Reed Smith intentionally withheld funds belonging to the Debtor. The Motion requests that the Florida Action should be dismissed and that Mr. Bisaria should be enjoined from prosecuting the claims. The Committee contends Mr. Bisaria is asserting claims, which, if they exist, belong to the Debtor's estate and not to Mr. Bisaria individually. The Committee contends that the filing of the Florida Action was an attempt to exercise control over property of the estate and is therefore void. A copy of Judge Deller's May 16, 2011 Memorandum Opinion is available at http://is.gd/pWLElNfrom Leagle.com. About Shubh Hotels Pittsburgh Boca Raton, Florida-based Shubh Hotels Pittsburgh, LLC, owns and operates the largest hotel in the city of Pittsburgh. For roughly 50 years, the Hotel operated as a Hilton franchise. Hilton terminated the Hilton Franchise Agreement by letter dated Sept. 1, 2010. Shubh Hotels Pittsburgh filed for Chapter 11 bankruptcy (Bankr. W.D. Pa. Case No. 10-26337) on Sept. 7, 2010, Judge Jeffery A. Deller presiding. The Debtor estimated its assets at $10 million to $50 million and debts at $50 million to $100 million. The Debtor is represented by David K. Rudov, Esq., at Rudov & Stein; and Scott M. Hare, Esq., as bankruptcy counsel. James R. Walsh was appointed as Chapter 11 Trustee on Feb. 7, 2011. He is represented by lawyers at his firm, Spence, Custer, Saylor, Wolfe & Rose. An Official Committee of Unsecured Creditors has been appointed in the case. The Creditor Committee is represented by The Law Office of Christopher A. Boyer and David W. Lampl, Esq. and John M. Steiner, Esq., at Leech Tishman Fuscaldo & Lampl LLC. The Committee retained Meridian Financial Advisors, Ltd., as its financial advisors. Pittsburgh Grand LLC -- an equity holder of Shubh Hotel Pittsburgh LLC -- and Dr. Kiran Patel, the principal of Pittsburgh Grand filed a Modified Second Amended Plan of Reorganization on April 6, 2011. SINCLAIR BROADCAST: Pinnacle Associates Holds 3.1% Equity Stake --------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Pinnacle Associates Ltd. disclosed that it beneficially owns 2,526,131 shares of common stock of Sinclair Broadcast Group, Inc., representing 3.1% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/WvNThw About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company's balance sheet at March 31, 2011, showed $1.57 billion in total assets, $1.71 billion in total liabilities, and a $144.58 million total deficit. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. Moody's raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on Aug. 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. As reported by the Troubled Company Reporter on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.-based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. SONA CO: Files for Chapter 7 Bankruptcy --------------------------------------- Crain's New York Business reports that Sona Co., based in 104 W. 27th St., Manhattan, filed for Chapter 7 bankruptcy protection on May 3. The filing cites estimated debts of $500,001 to $1 million and assets of $50,001 to $100,000. Among the creditors with the largest unsecured claims are 104 W. 27th St. Realty, owed $189,243.73; CBB Group, owed $95,394.97; and Long Ocean Corp., owed $89,110. SOUTH EDGE: Ch. 11 Trustee Taps Schwartzer & McPherson as Counsel ----------------------------------------------------------------- Cynthia Nelson, the Court-appointed Chapter 11 trustee in the Chapter 11 case of South Edge, LLC, asks the U.S. Bankruptcy Court for the District of Nevada for permission to employ Schwartzer & McPherson Law Firm as her local counsel. The trustee proposes a hearing on May 23, 2011, at 1:30 p.m., to consider the retention of Schwartzer & McPherson. Schwartzer & McPherson will, among other things: a) assist in reviewing and evaluating documentation relating to the assets, liabilities, and historic and ongoing business affairs, operations and limited liability company organizational activities of the Debtor; b) assist in advising the trustee in negotiating, reviewing, drafting documents and pleadings, and consummating any transactions contemplated during this Chapter 11 Case; and c) assist in advising the Trustee in reviewing and resolving claims asserted against the Debtor's estate, including without limitation through claims objection and claims estimation proceedings. The hourly rates of Schwartzer & McPherson's personnel are: Lenard Schwartzer $485 Jeanette E. McPherson $435 To the best of the trustee's knowledge, Schwartzer & McPherson is a "disinterested person" as that term is defined in Section 101(14) of Bankruptcy Code. The firm can be reached at: Lenard E. Schwartzer, Esq. Jeanette E. McPherson, Esq. SCHWARTZER & MCPHERSON LAW FIRM 2850 South Jones Boulevard, Suite 1 Las Vegas, NV 89146-5308 Tel: (702) 228-7590 Fax: (702) 892-0122 E-Mail: bkfilings@s-mlaw.com 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., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. SOUTH EDGE: Trustee Wins OK for Jones Vargas as Special Counsel --------------------------------------------------------------- The Hon. Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada authorized Cynthia Nelson, the Court-appointed Chapter 11 Trustee in the bankruptcy case of South Edge, LLC, to retain Jones Vargas as special counsel. As reported in the Troubled Company Reporter on April 5, 2011, Jones Vargas will assist Milbank, Tweed, Hadley & McCoy, LLP, in its representation of the Chapter 11 Trustee. In addition, the firm will advise the Chapter 11 Trustee with respect to the evaluation of infrastructure development and applications for reimbursement under Local Improvement District Bonds; and advise the Chapter 11 Trustee regarding rights and obligations under agreements, covenants or state or local laws affecting the subdivision of land and land use, including (i) zoning and other entitlement issues, (ii) special or conditional uses, (iii) review and possible renegotiation with local governmental authorities, including the City of Henderson, of development, parks, and annexation agreements and other obligations to local governments. The firm's Tracy A. DiFillippo, Esq., attested Jones Vargas has no connection with the Chapter 11 Trustee, the Debtor, the Debtor's creditors, the United States Trustee, Judge Bruce A. Markell, or any other party with an actual or potential known interest in the Chapter 11 Case. In addition, Jones Vargas does not hold or represent an interest adverse to the Debtor's estate. The firm's Gary Goodheart, Tracy DiFillippo and Conor Flynn will be the attorneys primarily responsible for the local counsel designations in the bankruptcy and appeal matters. Michael Buckley and Edward Garcia will be the attorneys primarily responsible for the real estate matters and land use related to the bankruptcy. Jones Vargas will be paid its customary hourly rates. Gary Goodheart's current rate is $450 per hour, Michael Buckley's current rate is $550 per hour, Edward Garcia's current rate is $450 per hour, Tracy DiFillippo's current rate is $375 per hour, and Conor Flynn's current rate is $195 per hour. Other attorneys at Jones Vargas are generally billed at $195 to $700 per hour and paralegals and law clerks are billed at $145 to $185. Jones Vargas has not received an advance payment to establish a retainer to pay for legal services rendered or to be rendered to the Chapter 11 Trustee in connection with the Chapter 11 case. 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., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. SOUTH EDGE: Jones Vargas Withdraws as Ch. 11 Trustee Local Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Nevada has granted the motion of Jones Vargas to withdraw as proposed counsel of Cynthia Nelson, the Court-appointed Chapter 11 Trustee in South Edge, LLC's involuntary Chapter 11 case. As reported in the TCR on April 5, 2011, Cynthia Nelson tapped Jones Vargas to assist lead counsel Milbank, Tweed, Hadley & McCoy, LLP, in its representation of the Chapter 11 Trustee. 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., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a Chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. Chapter 11 trustee Cynthia Nelson tapped Paul S. Aronzon, Esq., and Robert J. Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, as her lead bankruptcy counsel. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. STATION CASINOS: U.S. Trustee Forms Green Valley Committee ---------------------------------------------------------- August B. Landis, acting U.S. Trustee for Region 17, has appointed three entities to the Official Committee of Unsecured Creditors in the Chapter 11 case of Station Casinos, Inc.'s affiliate, Green Valley Ranch Gaming LLC, pursuant to Section 1102 of the Bankruptcy Code: 1. MFS Investment Management Represented by: Janine Idelson, Esq. 500 Boylston Street Boston, MA 02116-3741 617-954-5185 617-954-7779 ax 2. Panton Capital Group Represented by: Kassahun Kebede 245 Park Avenue, Ste. 2406 New York, NY 10167 212-582-3100 3. Babson Capital Management, LLC Represented by: Thomas Q. McDonnell 201 South College Street, Ste. 2400 Charlotte, NC 28244 704-805-7200 ly. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP is local counsel. Lazard Freres & Co. LLC is investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart, Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New York, serves as counsel to the Official Committee of Unsecured Creditors. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Thirty-one affiliates of Station Casinos Inc. sought bankruptcy protection under Chapter 11 protection on April 12, 2011. First to file among the April 12 Debtors was Auburn Development, LLC (Bankr. D. Nev. Case No. 11-51188). The April 12 Debtors filed a prepackaged plan of reorganization together with their Chapter 11 petitions in order to reorganize debts and consummate the sale of the Green Valley Ranch Resort, Spa & Casino to a group of buyers led by the Fertitta family. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Committee wants GV Confirmation Adjourned ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Green Valley Ranch Gaming LLC sought and obtained Court authority to file certain parts of its request to adjourn the confirmation hearing of the April 12 Debtors' Joint Chapter 11 Plan as it pertains to Green Valley under seal. The Creditors' Committee asserted that certain information contained in the exhibits are confidential and damaging to Green Valley if obtained by a competitor. Upon obtaining the sealing order, the Committee filed its request to adjourn the confirmation hearing for at least one month. The Committee seeks that the May 25, 2011 confirmation hearing be conducted as a status conference to establish certain pretrial and trial procedures, including mediating any discovery disputes between the Committee, Green Valley, and other stakeholders. Robert J. Stark, Esq., at Brown Rudnick LLP, in New York, contends that the Committee was recently formed, in April 29, 2011, and needs time to evaluate and test the April 12 Debtors' Plan. Mr. Stark tells the Court that there are hints of insider dealing in the Plan. He specifically points out that the Plan is premised on (i) an expedited sale of substantially all of the Debtor's assets to the purchaser of Green Valley -- an entity controlled by the Fertitta family -- on a timeline dictated by the insiders; (ii) an unreliable valuation assumption; (iii) ratification of the GVR Transition Services Agreement, which is an agreement negotiated by the very insiders who would benefit from the proposed sale; (iv) broad releases of significant claims against insiders; and (v) unsecured creditors are to receive nothing on account of their claims. The Plan's valuation assumption, Mr. Stark further argues, is significantly undercut by (i) historical cash flows potentially depressed by the wrongful acts of insiders; (ii) cash flow projections may significantly understate Green Valley's earning capacity; (iii) a now stale auction process conducted many months ago; (iv) an auction process, outside the purview of this Court, tainted by the participation of the insiders; (v) the apparent failure to account for significant cyclicality in the Debtor's industry; and (vi) the failure to appropriately account for barriers to entry. The auction of Green Valley's assets appears to have been rigged to depress the value of Green Valley, Mr. Stark says. He points out that there is reason for suspicion regarding a key factor that drove the results of the sale process and that is Green Valley's historic cash flows. "As this Court is aware, allegations of mismanagement and wrongful insider dealing (by the same insider group that would now purchase Green Valley at a depressed valuation) have been raised," Mr. Starks notes. "[T]he impact of this alleged misconduct on Green Valley's historic cash flows (necessarily a starting data point in projecting future cash flows for forecasting and valuation purposes) must be investigated and understood by this Court." Despite Green Valley's self-serving representations that it ran a robust sales process, Mr. Stark asserts that the Court must consider the efficacy of that unsupervised sale process in light of these points: (a) The gaming industry involves significant barriers to entry, like the industry's strict licensing requirements, that can constrain bidding by potentially interested parties; (b) The failure of insider-controlled management to engage potential bidders and respond timely and fully to information requests also undercut the sale process; and (c) The omnipresent control of Green Valley by Station Casinos, Inc. cast a large shadow over the bidding process. Mr. Starks further notes that the gaming industry is highly cyclical and fair valuation of large gaming properties like Green Valley requires evaluation across business cycles. However, he points out, under the Plan the insiders would ask the Court to sanction a sale to them at an enterprise value derived at the "trough" of the industry cycle. He notes that economic conditions and Green Valley's results have improved markedly over the many months since the auction. "New data must be considered in arriving at Green Valley's current enterprise value," Mr. Starks asserts. The Committee says that in its limited time on the scene, it has identified several potential estate causes of action Green Valley now appears intent on ignoring. Mr. Starks tells the Court that these potential actions include, but are not limited to: (i) fraudulent transfer and breach of fiduciary duty claims arising out of the "Green Valley 2008 Note Distribution" whereby Green Valley forgave $200 million of indebtedness owed by insiders in 2008; (ii) contract or tort claims emanating from the diversion of so-called "whale" gamblers from Green Valley to entities wholly-owned by Station Casinos; (iii) claims against certain insiders for historic dividends, including the Green Valley 2007 Refinancing; and (iv) potential claims relating to mismanagement of Green Valley, including usurpation of corporate opportunities. Green Valley will not be unduly prejudiced by a reasonable adjournment, Mr. Starks maintains. He notes that having more than $40 million of cash and cash equivalents on hand as of March 31, 2011, Green Valley has sufficient liquidity for a reasonable continuance of the confirmation hearing. The Adjournment Request will be heard on May 25, 2011, at 10:00 a.m. Any objection must be filed no later than May 23, at 12:00 p.m. Steering Committee Objects The Steering Committee of First Lien Term Lenders to Green Valley Ranch Gaming LLC asks the Court to deny the Creditors' Committee's request to adjourn the Confirmation Hearing. Amy N. Tirre, Esq., in Reno, Nevada, contends that the request violates an intercreditor agreement among Green Valley and credit agreement agents dated February 16, 2007. The Intercreditor Agreement is related to (1) a first lien credit agreement Green Valley entered with Wilmington Trust FSB, as successor administrative agent, and (ii) a second lien credit agreement with Bank of New York Mellon, as successor administrative agent and certain lender parties, both of which are dated February 16, 2007. The First Lien Obligations, all of which were in default as of the Petition Date, exceed $606 million and are secured by a valid and enforceable first lien on substantially all of Green Valley's assets, with certain immaterial exclusions. The Second Lien Obligations, which aggregate approximately $270 million as of the Petition Date, are secured by a second lien on the Collateral, with the same immaterial exclusions as applicable to the First Lien Obligations. Green Valley's obligations under the First Lien Credit Agreement and the Second Lien Credit Agreement are both secured by the Collateral and its related proceeds. The Intercreditor Agreement provides for the full and complete subordination of the liens securing the Second Lien Obligations to the liens securing the First Lien Obligations, and, in particular, prohibits the Second Lien Lenders from taking any action which would interfere with the disposition of the Collateral by or on behalf of First Lien Lenders, Ms. Tirre notes. Ms. Tirre contends that the Confirmation Hearing Adjournment Request, on its face, violates the Second Lien Lenders' agreement that First Lien Lenders would have exclusive control over the disposition of the Collateral. It is also an unmistakable action that would effort to hinder, delay or impede the First Lien Lenders' exercise of remedies pursuant to the Plan, she argues. By raising objections to the manner in which the First Lien Lenders decide to enforce their rights, the members of the Committee have asserted objections they agreed to waive, a waiver that applies whether the objections are made as Second Lien Lenders "or otherwise." The members of the Committee offer no rationale to excuse them from their express obligations to First Lien Lenders, Ms. Tirre adds. The Committee Members, Ms. Tirre points out, seem to believe that the Intercreditor Agreement permits them to violate the Intercreditor Agreement as much as they want so long as they claim to do so, for the benefit of unsecured creditors. "The Intercreditor Agreement provides nothing of the sort, and any claim to be acting for the benefit of unsecured creditors is objectively false," Ms. Tirre asserts. Ms. Tirre adds that the sale process was among the means by which the First Lien Lenders determined how they would enforce their rights, including their right to dispose of their Collateral in a Chapter 11 plan. "The Committee Members have no proper purpose in pursuing an investigation of the sale process, since they have expressly waived their right to object to any aspect of it," Ms. Tirre says. Wilmington Trust, as First Lien Agent, joins in the arguments made by the Steering Committee in its objection filing. ly. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP is local counsel. Lazard Freres & Co. LLC is investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart, Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New York, serves as counsel to the Official Committee of Unsecured Creditors. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Thirty-one affiliates of Station Casinos Inc. sought bankruptcy protection under Chapter 11 protection on April 12, 2011. First to file among the April 12 Debtors was Auburn Development, LLC (Bankr. D. Nev. Case No. 11-51188). The April 12 Debtors filed a prepackaged plan of reorganization together with their Chapter 11 petitions in order to reorganize debts and consummate the sale of the Green Valley Ranch Resort, Spa & Casino to a group of buyers led by the Fertitta family. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: GV Wants Three Committee Members Removed --------------------------------------------------------- Green Valley Ranch Gaming LLC asks the Bankruptcy Court to direct the U.S. Trustee for Region 17 to remove MFS Investment Management, Panton Capital Group, and Babson Capital Management LLC from the Official Committee of Unsecured Creditors. On behalf of Green Valley, James H. M. Sprayregen, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, contends that MFS Investment, et al.: -- are subordinated Second Lien Lenders, not unsecured creditors. In fact, under a February 2007 Intercreditor Agreement, the Secured Lenders have no claims against Green Valley when the First Lien Lenders release part of their claims in connection with exercising their remedies, like a sale; -- are precluded under a host of provisions under the 2007 Intercreditor Agreement from discharging their fiduciary obligations as creditors' committee members. Among other things, they cannot oppose confirmation of the Plan, the payment of sales proceeds to the First Lien Lenders, or even the validity, extent, or priority of the first liens; -- cannot adequately represent general unsecured creditors because they are hopelessly conflicted as holders of second lien claims. The Secured Lenders have a single economic incentive to create value for the Second Lien Lenders without regard to general unsecured creditors; -- are in fact one creditor, because they hold loans under a single credit agreement and have delegated authority under that agreement to the second lien agent. It is inappropriate for a committee to consist of one creditor, or to be so dominated by a group of creditors to the exclusion of others, especially when that group of creditors consists of sophisticated financial institutions that have already been involved in these matters for over a year and have been represented by counsel at their own expense. Mr. Sprayregen asserts that the Court should not condone the Secured Lenders' last minute subterfuge. He maintains that the Secured Lenders have been apprised of and have had counsel advising them about Green Valley's restructuring efforts throughout the process and so if they desire to challenge the Plan, they should do so within the confines of the Intercreditor Agreement and at their own expense -- but not through the guise of a creditors' committee. The Court will hear Green Valley's request on May 25, 2011, at 10:00 a.m. Objections must be filed not later than May 23, 2011, at 12:00 p.m. ly. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP is local counsel. Lazard Freres & Co. LLC is investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart, Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New York, serves as counsel to the Official Committee of Unsecured Creditors. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Thirty-one affiliates of Station Casinos Inc. sought bankruptcy protection under Chapter 11 protection on April 12, 2011. First to file among the April 12 Debtors was Auburn Development, LLC (Bankr. D. Nev. Case No. 11-51188). The April 12 Debtors filed a prepackaged plan of reorganization together with their Chapter 11 petitions in order to reorganize debts and consummate the sale of the Green Valley Ranch Resort, Spa & Casino to a group of buyers led by the Fertitta family. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: GV Wants to Limit Committee Discovery ------------------------------------------------------ Green Valley Ranch Gaming LLC asks Judge Zive (i) to forbid the Official Committee of Unsecured Creditors from seeking discovery in its case, or (ii) in the alternative, to enter an order limiting the scope of discovery under Rules 26, 30, and 45 of the Federal Rules of Civil Procedure, Rules 7026, 7030, and 9014 of the Federal Rules of Bankruptcy Procedure, and Rule 4001 of the Local Rules of Bankruptcy Procedure for the Bankruptcy Court of the District of Nevada. James H. M. Sprayregen, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, notes that the Creditors' Committee is wholly comprised of three second lien creditors that have been active players in Green Valley's more than year-long restructuring efforts; and since January 2009, at least two of the three Committee members have had counsel representing their interests in the process. Because Green Valley's plan of reorganization does not provide any recovery for second lien creditors, the Committee members' sole interest is to try to interfere with the confirmation of the pre-packaged Plan in an attempt to extort some value for themselves, Mr. Sprayregen contends. The first and second lien lenders have an intercreditor agreement with Green Valley, which prevents the second lien creditors, including MFS Investment, et al., from challenging the Plan, Mr. Sprayregen adds. "[MFS Investment, et al.,] are only using the cover of membership on the Unsecured Creditors' Committee to skirt their intercreditor contractual duties." Under the guise of an unsecured creditors committee, MFS Investment, et al., have dumped outrageously broad and burdensome discovery requests on 16 people and entities," Mr. Sprayregen relates. The document requests served on Green Valley and Station Casinos, Inc. contain a total of 129 numbered requests and also demands the depositions of 14 people and entities, including current and former Green Valley management, its current owners, advisors and independent committee members, counsel, advisors and the agent for first lien lenders and a representative of the company arranging exit financing. Because MFS Investment, et al., are not proper members of the Unsecured Creditors' Committee, as currently constituted, and seek discovery for purposes contrary to their obligations under the Intercreditor Agreement, they should be prohibited from seeking any discovery, Mr. Sprayregen asserts. If the Court determines that the Unsecured Creditors' Committee is entitled to discovery, the Court should impose reasonable and appropriate limits on what the Unsecured Creditors' Committee is entitled to receive. The Court will hear Green Valley's request on May 18, 2011. Objections are to be filed no later than May 16, 2011. In separate filings, these parties filed joinders to Green Valley's request: -- Station Casinos, Inc.; -- Larry Lindholm, The Greenspun Corporation, and GCR Gaming, LLC; -- The Seaport Group LLC and Oppenheimer & Co., Inc.; -- Jefferies & Co., Inc.; -- William A. Bible, a member of the Transaction Committee conducting a "special investigation"; -- Wilmington Trust FSB; and -- James E. Nave, D.V.M., a member of a certain "Transaction Committee". Creditors Committee Responds The Committee argues that the Court should put an end to Green Valley's attempts to block it from carrying out its statutory and fiduciary duties to investigate Green Valley's proposed Chapter 11 Plan and related issues. It would eviscerate the U.S. Trustee's April 29, 2011 appointment of the Committee if the Committee is to be rendered powerless to conduct any independent investigation through the discovery process, in preparation for advocating on behalf of all unsecured creditors in connection with Green Valley's looming confirmation hearing, Robert J. Stark, Esq., at Brown Rudnick LLP, in New York, contends. Granting Green Valley's request would be contrary to the reality that plan confirmation is intended to be an adversarial process whereby Green Valley, as Plan proponent, bears the burden of establishing, over the objections of parties-in-interest, that each of the Bankruptcy Code's requirements for confirmation is satisfied by a preponderance of the evidence, Mr. Stark says. Green Valley's request is aimed at foreclosing the Committee from effectively advocating on behalf of its constituency on the adjudication of whether Green Valley has satisfied the confirmation requirements, Mr. Stark further argues. For these reasons, the Committee asks Judge Zive to deny Green Valley's Request. In a separate filing, the Committee emphasizes it and its professionals require swift cooperation from the Producing Parties given that the confirmation hearing is scheduled for late May. Instead, the Committee complains that it has been blocked at every turn from conducting any meaningful investigation into, inter alia, the Plan's valuation assumptions and potential causes of action arising out of Green Valley's and its insiders' pre- and postpetition transactions and conduct. After unilaterally deciding what the Official Committee needs by way of discovery and producing a limited set of documents that do not permit the Committee to carry out its duties to its constituency, Green Valley now seeks to bar any further discovery, Mr. Stark points out. Mr. Stark reveals that Green Valley's offer to produce three witnesses has been retracted pending the Court's ruling on the competing requests for relief regarding discovery. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP is local counsel. Lazard Freres & Co. LLC is investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart, Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New York, serves as counsel to the Official Committee of Unsecured Creditors. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Thirty-one affiliates of Station Casinos Inc. sought bankruptcy protection under Chapter 11 protection on April 12, 2011. First to file among the April 12 Debtors was Auburn Development, LLC (Bankr. D. Nev. Case No. 11-51188). The April 12 Debtors filed a prepackaged plan of reorganization together with their Chapter 11 petitions in order to reorganize debts and consummate the sale of the Green Valley Ranch Resort, Spa & Casino to a group of buyers led by the Fertitta family. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STRATEGIC AMERICAN: Hosts Shareholder Conference ------------------------------------------------ Strategic American Oil Corporation hosted a shareholder conference call on Thursday, May 12, 2011, at 4:10 p.m. EST (3:10 p.m. CST) discussing corporate updates. The call began with a 15-minute presentation followed by a Q&A session. Jeremy Driver, CEO, discussed the recent acquisition of a private Texas oil and gas company named Galveston Bay Energy, LLC, which owns interests in, and operates, producing oil and natural gas properties and related facilities in five fields located in Galveston Bay, Texas. During the update call, Mr. Driver explained how this acquisition is immediately accretive to cash flow, production, and reserves on a per share basis. About Strategic American Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Going Concern As reported by the TCR on March 25, 2011, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Strategic American Oil's ability to continue as a going concern following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficit. In the Form 10-Q, the Company acknowledged that it had a working capital deficit of $3,362,822 and an accumulated deficit of $13,016,680 as of Jan. 31, 2011. The Company said its ability to continue as a going concern is dependent on raising additional capital to fund ongoing exploration and development and ultimately on generating future profitable operations. SUN-TIMES MEDIA: Debtor Files Chapter 11 Plan of Liquidation ------------------------------------------------------------ BankruptcyData.com reports that Sun-Times Media Group (nka Chicago Newspaper Liquidation) filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Liquidation and related Disclosure Statement. According to the Disclosure Statement, "The Plan provides for the liquidation and distribution of the Debtors' remaining assets for the benefit of certain holders of allowed claims. Specifically, holders of administrative claims and priority non-tax claims will be paid full in case. Holders of priority tax claims (namely, holders of the allowed IRS claim and allowed NY State claim), comprising the only voting class, will receive all of the Debtors' residual distributable value. All other classes of claims will receive no distribution of their respective claims and interests." The Court scheduled a June 20, 2011 hearing to consider the Disclosure Statement. About Sun-Times Media Sun-Times Media Group, Inc. (Pink Sheets: SUTMQ) -- http://www.thesuntimesgroup.com/-- (Pink Sheets: SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com and 58 suburban newspaper titles and corresponding Web sites. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at Sept. 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, and a stockholders' deficit of $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Del. Case No. 09-11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP, Serve as the Debtors' bankruptcy counsel. Sun-Times Media's investment banker is Rothschild Inc. and its restructuring advisor is Huron Consulting Group. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors disclosed $479 million in assets and $801 million in debts as of Nov. 7, 2008. In October 2009, the bankruptcy judge approved the $25 million sale of Sun-Times Media Group to STMG Holdings LLC, a private investor group led by Chicago businessman and Mesirow Financial Holdings Inc. CEO James C. Tyree. SUNNYSLOPE HOUSING: Section 341(a) Meeting Scheduled for May 31 --------------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of creditors in Sunnyslope Housing Limited Partnership's Chapter 11 case on May 31, 2011, at 10:30 a.m. The meeting will be held at the US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, Arizona. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Sunnyslope Housing Sunnyslope Housing Limited Partnership, dba Pointe Del Sol Apartments, was placed into involuntary Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-02441) by a creditor, Reid Butler, on Jan. 31, 2011. The Court entered on April 18, 2011, an order granting the Debtor relief from the involuntary case. Reid W. Butler represents the Debtor in its restructuring effort. T.D. BISTRO: Files for Chapter 7 Liquidation -------------------------------------------- Gary Haber at the Baltimore Business Journal reports that celebrity chef Timothy Dean's T.D. Bistro Inc. has filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Baltimore. The Business Journal, citing a May 4 court filing, discloses that T.D. Bistro has assets of between $50,001 and $100,000 and liabilities of between $1 million and $10 million. Its largest unsecured creditor, according to the filing, is Washington, D.C.'s Adams National Bank, which has a $1.2 million judgment against the company, the report says. Adams National Bank was awarded a confessed judgment in Circuit Court for Baltimore City in April 2010 against Dean, T.D. Bistro and M & T.D. Realty LLC, another Dean entity. Previous Chapter 11 Filing In May 2010, T.D. Bistro Inc. filed for chapter 11 bankruptcy protection, estimating assets of less than $50,000, and liabilities of between $100,000 and $500,000. In August that your, the Chapter 11 bankruptcy case was dismissed at the chef's request. In court papers, Mr. Dean's lawyers said the company's hoped-for reorganization was no longer possible after it failed to renew its liquor license. THERMOENERGY CORP: Incurs $2.5 Million Net Loss in 1st Quarter -------------------------------------------------------------- Thermoenergy Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $2.54 million on $948,000 of revenue for the three months ended March 31, 2011, compared with a net loss of $1.98 million on $1.16 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $3.97 million in total assets, $13.15 million in total liabilities and a $9.18 million total stockholders' deficiency. A full-text copy of the Form 10-Q is available for free at: http://is.gd/n2nmWw About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. The Company reported a net loss of $9.85 million on $2.87 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $12.98 million on $4.01 million of revenue during the prior year. As reported by the TCR on April 7, 2011, Kemp & Company, a Professional Association, in Little Rock, Arkansas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses since inception and will require substantial capital to continue commercialization of the Company's technologies and to fund the Companies liabilities. TRICO MARINE: Files Liquidation Plan Days After Spinning Off Units ------------------------------------------------------------------ Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review, reports that Trico Marine Services Inc. filed a bankruptcy liquidation plan Thursday that proposes to pay its unsecured convertible noteholders less than six cents on the dollar. DBR notes Trico unveiled its liquidation plan less than a week after completing an out-of-court spin off of its marine supply and shipping businesses. DBR reports the salient terms of the Plan: -- creditors of the companies in Chapter 11 will get 5% of new DeepOcean stock plus warrants. Trico estimates the stocks and warrants are worth somewhere between $22 million and $37 million; -- A group of convertible noteholders, owed $162 million from Trico's holding company, will get 29.5 % of that stake, for an expected recovery of 5.5% on its claims; -- The bulk of the new shares and warrants, 70.5%, will go to Trico 8.125% noteholders as payment for their deficiency claims. They'll recover about 10.7 cents on the dollar on those claims, which total $200.4 million; -- General unsecured creditors, owed about $3.1 million, will divvy up $250,000 in cash for a recovery of about eight cents on the dollar. DBR notes the committee representing Trico's unsecured creditors has indicated it may pursue lawsuits against Trico's directors and officers for wrongdoing prior to the bankruptcy filing. Trico doesn't believe the creditors have any viable claims, but the company does have a $45 million insurance policy that could pay out if creditors are successful. Judge Brendan Shannon will hold a hearing Monday to consider disclosure statement explaining 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 (Bankr. D. Del. Case No. 10- 12653) on Aug. 25, 2010. John E. Mitchell, Esq., Angela B. Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP, serve as the Debtor's bankruptcy counsel. 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. UNIVITA HEALTH: S&P Assigns Prelim. 'B' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Scottsdale, Az.-based insurance administration services and integrated health care company Univita Health Inc. "At the same time, we assigned a preliminary 'B' issue-level and preliminary '3' recovery rating, indicating meaningful (50%-70%) recovery in the event of payment default, to the company's proposed $220 million senior secured credit facility. The facility consists of a $20 million revolving credit facility due 2016 and $200 million term loan B due 2017," S&P related. Proceeds from the credit facility will be used to refinance existing first-lien and mezzanine debt and to pay transaction- related expenses and fees. Genstar Capital incurred the first-lien and mezzanine debt to purchase Long Term Care Group Inc. in 2008 and Atenda Healthcare Solutions in 2009; the combination of those companies created Univita Health Inc. "The preliminary ratings on Univita Health Inc. reflect our expectation that the financial sponsorship of the company will dominate its low-speculative grade rating," said Standard & Poor's credit analyst Michael Berrian. "Considering the accrual of holding company paid-in-kind (PIK) cumulative preferred units, which we view as debt under our criteria, the highly leveraged financial risk profile reflects pro forma lease and preferred- stock-adjusted leverage of more than 9x. At the same time, we believe that Univita's business risk profile is weak, given the company's relatively small size in each of its three niche businesses, customer and geographic concentration, and the potential for competition from larger companies in the integrated health care business." "Despite our expectation of continued free cash flow generation, we believe that adjusted leverage will be about 9x at the end of 2011, and will likely be more than 8x over the next several years, because of increasing adjusted debt from the PIK cumulative preferred stock. However, we recognize the qualitative benefits (financial flexibility, with no mandated need to access the capital markets) that the PIK preferred stock provides to the company. Thus, while adjusted debt leverage will be substantial, liquidity will be adequate, in our view. From a bank covenant perspective, Univita's pro forma debt to EBITDA will be no greater than 4x, and will likely be less than 4x by the end of 2012 after covenant step downs," S&P stated. U.S. CORP: FNMA Suit vs. Creditor Remanded to State Court --------------------------------------------------------- On April 6, 2011, Petitioning Creditor Marshall E. Home filed a notice of removal of Pima County Superior Court Case # 20103852 to the Bankruptcy Court as a related proceeding to an involuntary Chapter 11 case filed by Mr. Home against "U.S. Corp." The Removed Action is a forcible entry and detainer action against Mr. Home by Federal National Mortgage Association. In the Removed Action, Mr. Home also filed a number of counterclaims against FNMA and other parties and a motion for summary judgment. The state court entered an order on March 21, 2011, in favor of FNMA on the FED Action and denied Mr. Home's counterclaims and motion for summary judgment. In a May 13, 2011 Memorandum Decision, Bankruptcy Judge Eileen W. Hollowell remanded the case to the Pima County court. The case is Federal National Mortgage Association, v. Marshall E. Home, Adv. Proc. No. 11-00664 (Bankr. D. Ariz.). A copy of Judge Hollowell's ruling is available at http://is.gd/ets5GWfrom Leagle.com Tucson, Arizona-based U.S. Corp and its Federal State of Arizona Employees Agents Instrumentalities were put in involuntary Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-06731) on March 16, 2011, by creditors M & E Home, Jerald J. Gustafson and James P. Moreno. U.S. EAGLE: Creditors Committee Taps Porzio Bromberg as Counsel --------------------------------------------------------------- The Hon. Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of U.S. Eagle Corporation, et al., to retain Porzio, Bromberg & Newman, P.C., as its counsel. Porzio Bromberg will, among other things: -- assist and advise the Committee in its analysis of, and negotiations with, the Debtors and any third parties, in the formulation of any plan of reorganization or liquidation; -- assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in the Debtors' case; and -- analyze and advise the Committee of the meaning and import of all pleadings and other documents filed with the Court. The Court ordered that Porzio Bromberg will not represent (a) Scott Westphal or any person or entity related to or affiliated with Mr. Westphal (other than the Committee), including but not limited to any successors, heirs or assigns of Scott Westphal, in connection with any claim or cause of action involving any of the Debtors or Debtors' current directors, officers, agents, or employees, or (b) any party other than the Committee in connection with the Debtors' case. To the best of the Committee's knowledge, Porzio Bromberg is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: PORZIO, BROMBERG & NEWMAN, P.C. John S. Mairo, Esq. 100 Southgate Parkway Morristown, NJ 07962-1997 Tel: (973) 538-4006 About U.S. Eagle Corporation Elizabeth, New Jersey-based U.S. Eagle Corporation sells and rents traffic control related equipment, as well as trench shoring equipment and steel plates primarily in California, Nevada, and Arizona. It designs and distributes golf course maintenance products to customers located principally in the United States. It also owns certain parcels of commercial real estate in Nevada and California and rents them under a long term operating lease of real property located in Trenton, New Jersey. U.S. Eagle filed for Chapter 11 bankruptcy protection on Jan. 6, 2011 (Bankr. D. N.J. Case No. 11-10392). Samuel Jason Teele, Esq., at Lowenstein Sandler PC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates U.S. Eagle Litho, Inc. (Bankr. D. N.J. Case No. 11- 10401), Eagle One Golf Products, Inc. (Bankr. D. N.J. Case No. 11- 10397), Julius Realty Corporation (Bankr. D. N.J. Case No. 11- 10393), Traffic Control Service, Inc., An Arizona Corporation (Bankr. D. N.J. Case No. 11-10398), Traffic Control Service, Inc., A California Corporation (Bankr. D. N.J. Case No. 11-10403), and Traffic Control Service, Inc., A Nevada Corporation (Bankr. D. N.J. Case No. 11-10392) filed separate Chapter 11 petitions on Jan. 6, 2011. U.S. EAGLE: Court Grants Until August 4 to Decide on Leases ----------------------------------------------------------- The Hon. Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey gave U.S. Eagle Corporation, et al. until Aug. 4, 2011, to assume or reject their unexpired nonresidential real property leases. The deadline for the Debtors to assume or reject their leases expired on May 6, 2011. Elizabeth, New Jersey-based U.S. Eagle Corporation sells and rents traffic control related equipment, as well as trench shoring equipment and steel plates primarily in California, Nevada, and Arizona. It designs and distributes golf course maintenance products to customers located principally in the United States. It also owns certain parcels of commercial real estate in Nevada and California and rents them under a long term operating lease of real property located in Trenton, New Jersey. U.S. Eagle filed for Chapter 11 bankruptcy protection on Jan. 6, 2011 (Bankr. D. N.J. Case No. 11-10392). Samuel Jason Teele, Esq., at Lowenstein Sandler PC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates U.S. Eagle Litho, Inc. (Bankr. D. N.J. Case No. 11- 10401), Eagle One Golf Products, Inc. (Bankr. D. N.J. Case No. 11- 10397), Julius Realty Corporation (Bankr. D. N.J. Case No. 11- 10393), Traffic Control Service, Inc., An Arizona Corporation (Bankr. D. N.J. Case No. 11-10398), Traffic Control Service, Inc., A California Corporation (Bankr. D. N.J. Case No. 11-10403), and Traffic Control Service, Inc., A Nevada Corporation (Bankr. D. N.J. Case No. 11-10392) filed separate Chapter 11 petitions on Jan. 6, 2011. U.S. EAGLE: Has Until Sept. 2 to Propose Plan of Reorganization --------------------------------------------------------------- The Hon. Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey extended U.S. Eagle Corporation's exclusive right to file and solicit acceptances for the proposed plan or plans of reorganization until Sept. 2, 2011, and Nov 11, respectively. Elizabeth, New Jersey-based U.S. Eagle Corporation sells and rents traffic control related equipment, as well as trench shoring equipment and steel plates primarily in California, Nevada, and Arizona. It designs and distributes golf course maintenance products to customers located principally in the United States. It also owns certain parcels of commercial real estate in Nevada and California and rents them under a long term operating lease of real property located in Trenton, New Jersey. U.S. Eagle filed for Chapter 11 bankruptcy protection on Jan. 6, 2011 (Bankr. D. N.J. Case No. 11-10392). Samuel Jason Teele, Esq., at Lowenstein Sandler PC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates U.S. Eagle Litho, Inc. (Bankr. D. N.J. Case No. 11- 10401), Eagle One Golf Products, Inc. (Bankr. D. N.J. Case No. 11- 10397), Julius Realty Corporation (Bankr. D. N.J. Case No. 11- 10393), Traffic Control Service, Inc., An Arizona Corporation (Bankr. D. N.J. Case No. 11-10398), Traffic Control Service, Inc., A California Corporation (Bankr. D. N.J. Case No. 11-10403), and Traffic Control Service, Inc., A Nevada Corporation (Bankr. D. N.J. Case No. 11-10392) filed separate Chapter 11 petitions on Jan. 6, 2011. VALENCE TECHNOLOGY: CFO Resigns; D. Gotthschalk to Assume Role -------------------------------------------------------------- Valence Technology, Inc., announced the resignation of Ross Goolsby, Chief Financial Officer, effective June 3, 2011, to pursue other business opportunities. Donald E. Gottschalk, who joined the company in 2007 and is currently serving as Corporate Controller, will assume the role of Acting Chief Financial Officer. Mr. Gottschalk has over 25 years of financial management experience and has held significant business operations, financial planning and analysis, and finance and accounting positions at Capital Anesthesiology, Inc, Cellular One, and Thermon Manufacturing Co. He has been a C.P.A. since 1986. "Ross has been a valuable member of our senior management team and I wish him the best as he pursues his next venture," stated president and chief executive officer Robert L. Kanode. About Valence Technology Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. The Company's balance sheet at Dec. 31, 2010, showed $36.78 million in total assets, $103.87 million in total liabilities and $67.09 million in total stockholders' deficit. Stockholders' deficit was $75.20 million at Sept. 30, 2010. PMB Helin Donovan LLP expressed substantial doubt about Valence Technology's ability as a going concern following the Company's fiscal 2010 results. The Company has incurred operating losses each year since its inception in 1989 and had an accumulated deficit of $581 million as of March 31, 2010. For the fiscal years ended March 31, 2010, 2009, and 2008 the Company sustained net losses available to common stockholders of $23.2 million, $21.4 million, and $19.6 million, respectively. VIKING SYSTEMS: Sells 9-Mil. Common Shares for $3 Million --------------------------------------------------------- Viking Systems, Inc., closed on agreements with Clinton Group, Inc., and other accredited investors for a private placement of 12,000,000 shares of the Company's common stock, along with warrants to purchase up to 9,000,000 shares of the Company's common stock, yielding gross proceeds of $3,000,000. The warrants will have an exercise price of $0.25 per share, subject to adjustment, will expire five years from May 10, 2011, and are exercisable in whole or in part, at any time prior to expiration. In conjunction with the completed Transaction, the Company has agreed to reimburse to Clinton Group, Inc., an amount up to $50,000 for reasonable and documented out-of-pocket expenses incurred by the Investors. Such reimbursement will be paid upon demand against presentation of reasonably detailed invoices for those expenses. The Company anticipates using the proceeds from the offering for general corporate purposes and working capital, including the funding of additional demonstration systems for the Company's 3DHD Vision System as well as for sales and marketing expansion. Pursuant to the terms of a Registration Rights Agreement dated May 5, 2011, between the Company and the Investors, the Company is obligated to file a registration statement with the SEC on or before sixty calendar days after May 10, 2011, to register the resale by the Investors of the 12,000,000 shares of the common stock underlying the Purchase Agreement, and to register the warrants to purchase an additional 5,551,034 shares of the Company's common stock purchased by the Clinton Group, Inc., in a third-party transaction with the prior holder, Midsummer Investment Ltd. The Company is obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC within 90 days after the registration statement is filed. If the Company does not register a sufficient number of the Investors' shares before the 90 day deadline, the Company will have to pay 1% of the amount invested to the Investors each month as liquidated damages, subject to certain conditions. The maximum amount of liquidated damages that the Company will pay pursuant to the Registration Rights Agreement is 3% of the total amount invested. Immediately prior to the Company's entry into the Purchase Agreement with the Investors, on May 10, 2011, the Company terminated its equity line of credit facility under the Investment Agreement with Dutchess Opportunity Fund, II, LP, dated Jan. 7, 2010. Pursuant to the Investment Agreement, Dutchess committed to purchase up to $5,000,000 of the Company's common stock over thirty-six months. The Company did not incur any penalties in connection with such early termination. About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. The Company's balance sheet at March 31, 2011, showed $4.24 million in total assets, $2.49 million in total liabilities, all current and $1.75 million in total stockholders' equity. The Company reported a net loss applicable to common shareholders of $2.44 million on $8.04 million of sales for the year ended Dec. 31, 2010, compared with a net loss applicable to common shareholders of $1.07 million on $7.22 million of sales during the prior year. The report from Viking Systems, Inc.'s independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, dated February 22, 2010, includes a going concern explanatory paragraph which states that factors relating to the Company's net losses and working capital concerns raise substantial doubt the Company's ability to continue as a going concern. Viking Systems said it will need to generate significant additional revenue to achieve profitability and it may require additional financing during 2010. "The going concern explanatory paragraph in the independent auditor's report emphasizes the uncertainty related to our business as well as the level of risk associated with an investment in our common stock," Viking Systems said. VILLAGE AT CAMP: Amends Chapter 11 Plan & Disc. Statement --------------------------------------------------------- Village at Camp Bowie I LP amended its Chapter 11 plan of reorganization and disclosure statement filed with the U.S. Bankruptcy Court for the Northern District of Texas. Like in the original plan, the Amended Plan contemplates that the Reorganized Debtor will continue in business and creditors will be paid 100% of their claims over time. The Amended Plan contemplates that the Debtor will pay its creditors from cash on hand plus $1,000,000 from the preferred equity to be issued to participating interest holders of the debtor or other third party investors and from future revenue of the Reorganized Debtor. The original iteration of the Plan contemplates raising $600,000 from the issuance of preferred equity. The allowed secured claim of Western Real Estate Equities LLC will be paid through a combination of cash and issuance of the New Western Note which shall have a 5 year term, bear interest at a rate of 5.83% per annum, with interest only payments for the first 36 months following the Effective Date, principal and interest payments based on a 30 year amortization for months 37 - 59 with the remaining principal balance and all accrued and unpaid interest due at maturity in month 60. Under the Amended Plan, the claims of general unsecured creditors will be paid in full, without interest through three monthly payments beginning on the Effective Date. The original iteration contemplated six monthly payments. Like in the original plan, the Amended Plan provides that existing equity interest holders will be subordinated to the preferred equity, but will otherwise retain their interests in the Debtor under the Plan. A full-text copy of the Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?75bf A full-text copy of the Amended Chapter 11 Plan is available for free at http://ResearchArchives.com/t/s?75c0 About Village at Camp Bowie Dallas, Texas-based Village at Camp Bowie I, L.P., is the owner of a mixed use real estate development located in Forth Worth, Texas, on Camp Bowie Boulevard between Bryant Irvin Road an Ridglea Avenue, about 1/2 mile south of I-30 an known as the Village at Camp Bowie. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-45097) on Aug. 2, 2010. J. Mark Chevallier, Esq., at McGuire, Craddock & Strother, P.C., in Dallas, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. VISTEON CORP: CEO Received More Pay Than Ford's in 2010 ------------------------------------------------------- MotorTrend.com reports that Donald Stebbins, CEO of Visteon Corp., in 2010 received more compensation than Alan Mulally, head of Ford Motor Company, the only member of Detroit's Big 3 automakers not to have sought bankruptcy protection and a massive bail-out from the U.S. government. Mr. Mulally has recently come under fire from United Auto Workers President Bob King for his supposedly lavish compensation. According to the report, most of Mr. Stebbins' compensation stems from a $21.2 million stock award. The report also relates William Quigley, Visteon's executive vice president and CFO, received a $11 million package, $10 million more than in 2009. About Visteon Corp Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for automakers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company disclosed assets of US$4,561,000,000 and debts of US$5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represented the Debtors in their restructuring effort. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' investment banker and financial advisor were Rothschild Inc. The Debtors' notice, claims, and solicitation agent was Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor was Alvarez & Marsal North America, LLC. The Bankruptcy Court entered an order on Aug. 31, 2010, confirming the Fifth Amended Plan of Reorganization of Visteon Corporation and its debtor-affiliates. Visteon emerged from Chapter 11 on Oct. 1. * * * In December 2010, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating on reorganized Visteon. Moody's Investors Service gave Visteon Corporate Family and Probability of Default Ratings of 'B1'. WARNER MUSIC: Thomas H. Lee Discloses 35.63% Equity Stake --------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Thomas H. Lee Advisors, LLC, and its affiliates disclosed that they beneficially own 55,491,627.581 shares of common stock of Warner Music Group Corp. representing 35.63% of the shares outstanding. The Company announced on May 6, 2011, that it had entered into an Agreement and Plan of Merger, dated as of May 6, 2011, with Airplanes Music LLC, and Airplanes Merger Sub, Inc. The Acquiring Parties are affiliated with Access Industries, Inc. The Merger Agreement provides for, upon the terms and subject to the conditions in the Merger Agreement, the merger of Merger Sub with and into the Company with the Company surviving as a wholly- owned subsidiary of Parent. Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding Share will be cancelled and will be converted automatically into the right to receive $8.25 in cash, without interest. The closing of the Merger is subject to various conditions, including the approval by the holders of a majority of the outstanding shares of the Company's common stock entitled to vote on the Merger, certain regulatory approvals and the absence of any Company Material Adverse Effect In connection with the execution of the Merger Agreement, Parent and certain stockholders of the Company have entered into a voting agreement, dated as of May 6, 2011, pursuant to which those stockholders, consisting of the Reporting Persons, affiliates of Bain Capital and Edgar Bronfman, Jr., have agreed with Parent, among other things, to vote approximately 56% of the Shares in favor of the Merger and the adoption of the Merger Agreement and against any competing takeover proposals, subject to the limitations set forth in the Voting Agreement. During the term of the Voting Agreement, each of the Stockholders has agreed not to transfer any of such Shares, except as permitted by the Voting Agreement. The Stockholders' obligations under the Voting Agreement will terminate upon the earlier of (i) the consummation of the Merger and (ii) the termination of the Merger Agreement in accordance with its terms, including in connection with a Superior Proposal. In addition, in the event the Company terminates the Merger Agreement to enter into a Superior Proposal in circumstances in which a Company Termination Fee has been paid, and such Superior Proposal is consummated, such Stockholders have agreed to pay Parent 50% of any consideration received by them in excess of the Merger Consideration upon consummation of such transaction. A full-text copy of the regulatory filing is available at no charge at http://is.gd/g2SzBN About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. Warner Music reported a net loss of $39 million on $682 million of revenue for the three months ended March 31, 2011, compared with a net loss of $28 million on $666 million of revenue for the same period during the prior year. The Company also reported a net loss of $57 million on $1.47 billion of revenue for the six months ended March 31, 2011, compared with a net loss of $44 million on $1.58 billion of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $3.61 billion in total assets, $3.87 billion in total liabilities and a $254 million in total deficit. * * * In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. WASHINGTON COUNTY MEMORIAL: Ind. Appeals Court Rules on Shonk Suit ------------------------------------------------------------------ Shonk Electric, Inc., appeals a trial court's entry of summary judgment in favor of Siemens Medical Solutions USA, Inc. and award of attorneys' fees in favor of Siemens. The Court of Appeals of Indiana affirmed and remanded, holding that it found no abuse of discretion in granting Siemens its attorneys' fees and denying Shonk its attorney's fees. The Appeals Court also found that appellate attorneys' fees are appropriate in the case. The Court remanded to the trial court for a hearing to determine Siemens' appellate attorneys' fees. Pursuant to a lease agreement dated April 10, 2008, Washington County Memorial Hospital leased an MRI unit and related equipment from Siemens. Siemens provided financing to the Hospital for the "build-out of its facilities to house" the equipment. In May 2008, the Hospital's general contractor, Richardson Construction Co., hired Shonk as a subcontractor to perform electrical work at the Hospital, including work necessary for the installation of the MRI equipment. Upon completion of work, Shonk submitted invoices to Richardson Co. for payment. Subsequently, the Hospital defaulted under the terms of the lease and financing agreements. On June 16, 2009, the Hospital filed for Chapter 11 bankruptcy. Siemens filed a proof of claim for $2,656,341. After the Hospital rejected the lease agreement in November 2009, Siemens sold the MRI equipment for $800,000, leaving Siemens with an unsecured claim in the amount of $1,806,341. On July 17, 2009, Shonk filed a complaint against Siemens; Jim Richardson and Jeff Richardson, individually; and Richardson Co. to recover payment due in the amount of $41,583. The case if Shonk Electric, Inc., Appellant, v. Siemens Medical Solutions USA, Inc., Appellee, No. 55A05-1009-CC-554 (Ind. App. Ct.). A copy of the Court of Appeal's May 17, 2011 Memorandum Decision is available at http://is.gd/bgk86Lfrom Leagle.com. WASHINGTON MUTUAL: Chapter 11 Plan Flooded With Objections ---------------------------------------------------------- Eric Hornbeck at Bankruptcy Law360 reports that a slew of equity and debt holders, class action plaintiffs and a former executive objected to Washington Mutual Inc.'s reorganization plan in a Delaware court Friday, saying it could stymie their own lawsuits or decrease their payouts. About 20 objections were filed Thursday, Friday and Monday to the proposed Chapter 11 reorganization plan for WMI by two groups of securities class action plaintiffs, institutional investors who hold $600 million in WMI debt, former WMI Chief Operating Officer Stephen J. Rotella and others, according to Law360. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York City and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan Chase Bank, N.A., upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. Additionally, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. Washington Mutual has filed with the U.S. Bankruptcy Court for the District of Delaware a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement. The Company believes that the Modified Plan has addressed the Bankruptcy Court's concerns and looks forward to returning to the Bankruptcy Court to seek confirmation of the Modified Plan. WECHSLER & CO: Sanford Becker Out, Taps KGS LLP as Accountants -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Wechsler & Co., Inc., to: -- terminate the employment of Sanford Becker & Co., P.C. as accountants; and -- employ KGS LLP as substitute accountants. The Debtor related that the Court approved the employment of Sanford Becker & Co., P.C. as accountants for the Debtor, however, Sanford's insurance carrier informed its professional liability insurance did not include work performed in connection with any bankruptcy proceeding. Accordingly, Sanford notified the Debtor that it would not be able to continue as accountants for the Debtor. KGS LLP is overseeing and assisting the Debtor in preparing both state and federal income tax returns for the Debtor. The Debtor added that KGS LLP received a third party retainer in the amount of $2,500 from Norman Wechsler. To the best of Debtor's knowledge, KGS LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor is represented by: RATTET, PASTERNAK & GORDON-OLIVER, LLP Jonathan S. Pasternak, Esq. Erica R. Feynman, Esq. 550 Mamaroneck Avenue Harrison, NY 10528 Tel: (914) 381-7400 About Wechsler & Co., Inc. Mount Kisco, New York-based Wechsler & Co., Inc., is a private investment firm that invests in both public and privately held companies. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-23719) on Aug. 18, 2010. Jonathan S. Pasternak, Esq., at Rattet, Pasternak & Gordon Oliver, LLP, assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million as of the Petition Date. WESTMORELAND COAL: Incurs $18.7-Mil. First Quarter Net Loss ----------------------------------------------------------- Westmoreland Coal Company reported a net loss of $18.73 million on $127.76 million of revenue for the three months ended March 31, 2011, compared with a net loss of $3.74 million on $126.44 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $787.98 million in total assets, $294.36 million in total debt and a $173.92 million total deficit. "The first quarter of 2011 was the sixth straight quarter in which we increased our operating profit and adjusted EBITDA over the prior year quarter" said Keith E. Alessi, Westmoreland's President and CEO. "As previously announced, we incurred substantial charges during the quarter related to the refinancing of debt and placement of our senior subordinated debt issuance in February 2011. The expiration of an unfavorable coal contract led to improved results in our coal operation despite lower sales. Strong hydro-power conditions combined with scheduled maintenance shutdowns by our coal customers and our ROVA plant will negatively impact our Q2 2011 versus the Q2 2010 results. However, this is in line with our expectations." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/FiEIGM About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. The Company reported a net loss of $3.2 million on $506.1 million of revenues for 2010, compared with a net loss of $29.2 million on $443.4 million of revenues for 2009. Operating income was $20.5 million in 2010 compared to a loss of $31.8 million in 2009. The Company's balance sheet at Dec. 31, 2010, showed $750.3 million in total assets, $912.7 million in total liabilities, and a stockholders' deficit of $162.4 million. * * * As reported in the TCR on March 4, 2011, Standard & Poor's Ratings Services said that it assigned a 'CCC+' corporate credit rating to Colorado Springs, Colorado-based Westmoreland Coal Co. The rating outlook is stable. WHOLE FOODS: S&P Raises CCR to 'BB+' on Stronger Operations ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Austin, Texas-based organic and natural grocer Whole Foods Market Inc. one notch to 'BB+' from 'BB'. The outlook is stable. "The rating action comes after the company reported stronger second-quarter results than we anticipated. The improved operations over the past year and a half have allowed the company to repay outstanding borrowings on its term loan -- due in August of 2012 -- more quickly than anticipated, thereby enhancing credit protection measures," S&P stated. "The rating on Whole Foods reflects our expectation that the company will maintain its sales and profit growth and enhance credit metrics," said Standard & Poor's credit analyst Charles Pinson-Rose. "It is positioned as the leader in the organic and natural food retailing sector, which has outperformed traditional grocery stores and we foresee that trend continuing. Nonetheless, we view the company's business risk profile as fair because the competitive nature of the industry, coupled with food inflation, could stunt the recent favorable trends. We assess Whole Foods' financial risk as significant." WIKILOAN INC: Incurs $3.15 Million Net Loss in Fiscal 2011 ---------------------------------------------------------- Wikiloan Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, reporting a net loss of $3.15 million on $635,184 of revenue for the year ended Jan. 31, 2011, compared with a net loss of $596,639 on $1,801 of revenue for the same period during the prior year. The Company's balance sheet at Jan. 31, 2011, showed $497,115 in total assets, $2.62 million in total liabilities, and a $2.12 million total stockholders' deficit. PS Stephenson & Co., PC, in Wharton, Texas, expressed substantial doubt about WikiLoan's ability to continue as a going concern following the Company's results for the fiscal year ended Jan. 31, 2011. The independent auditors noted that the Company has no revenue, significant assets or cash flows. A full-text copy of the Form 10-K is available for free at: http://is.gd/2wnQDz About WikiLoan Inc. Los Angeles, Calif.-based WikiLoan, Inc. -- http://wikiloan.com/- - is a Web site that provides tools for person-to-person borrowing and lending. People can use the tools on the website to borrow and lend money ($500 to $25,000) among themselves at rates that make sense to all parties. WikiLoan provides management tools that allow Borrowers and Lenders to manage the process by: providing loan documentation, promissory notes, repayment schedules, email reminders, online account access, and online repayment. WOLF MOUNTAIN: Court Rejects Dismissal Bid But Grants Stay Relief ------------------------------------------------------------------ Judge Peter H. Carroll denied ASC Utah LLC's request to dismiss the chapter 11 case of Wolf Mountain Resorts, L.C., and to bar the Debtor from re-filing for bankruptcy for 90 days. Judge Carroll, however, granted ASC Utah relief from the automatic stay, permitting it to seek an extension of a pre-judgment writ of attachment issued by a Utah state court on May 5, limited as to any property attached prior to the Debtor's bankruptcy filing; and to allow parties in interest to conclude all matters directly related to Consolidated Case No. 060500297 pending before the Third Judicial District Court in Summit County. Judge Carroll said the stay relief includes any appeal and the Utah court may determine the appropriate amount of supersedeas bond related thereto. As reported by the Troubled Company Reporter, ASC Utah seeks dismissal of the case so it can continue collection of a jury award and pursue a return of transferred property. ASC Utah bought a ski resort from Wolf Mountain in 1997. ASC charged that the "case represents a veritable poster child for bad faith Chapter 11 filings." ASC said the sale was structured so ASC leased the real property for 200 years with an option to purchase. ASC and Wolf Mountain began lawsuits against one another in 2006. The result was a $55 million state-court jury verdict against Wolf Mountain in March. In early May, Wolf Mountain allegedly transferred its property to insiders, ASC said. The state court judge in Utah gave ASC an attachment on the transferred property. The attachment was to expire May 19. The Debtor objected to ASC's request, saying ASC wants to grab and force a fire-sale of the Debtor's substantial assets to satisfy its alleged claim ahead and to the detriment of all other creditors, while at the same time, insulting itself from any preferential transfer liability. The Debtor said its case is not about "a classic two-party dispute," secreting assets, forum shopping or re-litigating a state court action. Rather, the case is about protecting the Debtor's substantial assets, maximizing their value and maintaining the status quo with regard to claim priority rights held by the Debtor's multiple creditors. ASC Utah is represented in the case by: Gary E. Klausner, Esq. Scott H. Yun, Esq. STUTMAN TREISTER & GLATT PC 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067 Tel: 310-228-5600 Fax: 310-228-5788 E-mail: gklausner@stutman.com syun@stutman.com - and - Clark K. Taylor, Esq. VAN COTT BAGLEY CORNWALL & MCCARTHY PC 36 South State Street, Suite 1900 Salt Lake, UT 84111 Tel: 801-237-0425 Fax: 801-237-0888 E-mail: ctaylor@vancott.com About Wolf Mountain Resorts Wolf Mountain Resorts, L.C., based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-30162) on May 9, 2011. Judge Peter Carroll presides over the case. Mark S. Horoupian, Esq., at SulmeyerKupetz, serves as bankruptcy counsel. Wolf Mountain Resorts estimated that both its assets and debts measure between $100 million and $500 million. WOLF MOUNTAIN: Sec. 341 Creditors' Meeting Set for June 15 ---------------------------------------------------------- The United States Trustee for the Central District of California will hold a meeting of creditors in the bankruptcy case of Wolf Mountain Resorts, L.C., on June 15, 2011 at 3:00 p.m. at RM 2610, 725 S Figueroa St., in Los Angeles. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Wolf Mountain Resorts Wolf Mountain Resorts, L.C., based in Los Angeles, California, is the former operator of The Canyons Ski Resort, one of Utah's biggest vacation spots. Wolf Mountain Resorts owns or leases most of the land that comprise the ski resort, which it in turn leased to ASC Utah Inc. pursuant to a ground lease and related agreements. Wolf Mountain Resorts filed for Chapter 11 bankruptcy just weeks after it lost a $54.4 million legal battle with the resort's former operator. It filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-30162) on May 9, 2011. Judge Peter Carroll presides over the case. Mark S. Horoupian, Esq., at SulmeyerKupetz, serves as bankruptcy counsel. Wolf Mountain Resorts estimated that both its assets and debts measure between $100 million and $500 million. WRIGLEY (WM) JR.: Moody's Upgrades CFR to Ba1; Outlook Stable ------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating and Probability of Default Rating of the Wm Wrigley Jr. Company ("Wrigley") to Ba1 from Ba2. Moody's also upgraded the ratings on $2.1 billion of secured debt instruments to Baa1 from Baa2. The outlook is stable. The ratings upgrades reflect the further progress Wrigley has made in reducing the high financial leverage that resulted from the acquisition of the company in 2008 by Mars, Inc. ("Mars"). The upgrades also reflect the meaningful operational improvements achieved under the influence of Mars, including significant cost and working capital savings. Although Wrigley remains an independently-operated subsidiary of Mars, Inc., the companies have benefited mutually from the sharing of best business practices. RATING RATIONALE Wrigley's Ba1 Corporate Family Rating reflects Wrigley's strong qualitative factors - including its portfolio of well-known confectionary brands, high profit margins, and global reach. Wrigley's financial leverage remains high and its interest coverage weak for the current rating category, but should continue to steadily improve over time through debt repayment and earnings growth. Ratings upgraded: Wm Wrigley Jr. Company: -- Corporate Family Rating to Ba1 from Ba2; -- Probability of Default Rating to Ba1 from Ba2; -- $200 million senior secured revolving credit facility due 2014 to Baa1 from Baa2; -- $149 million senior secured bank term loan due 2014 to Baa1 from Baa2; -- $1.8 billion of senior secured notes due 2011-2014 to Baa1 from Baa2. On January 4, 2011 Wrigley entered into a new $200 million one- year revolving credit agreement with Mars that expires December 31, 2011. The terms of the new agreement are similar to the preexisting senior secured $200 million revolving agreement provided by Rabobank, but is not rated by Moody's. The stable outlook reflects Moody's expectation that Wrigley will continue to make progress de-levering and simplifying its capital structure over time, but that it could take some time before the company is able to adequately address its restrictive, high-cost capital that resulted from the acquisition by Mars. For example, Berkshire Hathaway still holds $4.4 billion of high-cost 11.45% subordinated notes due 2018 of Wrigley and $2.1 billion of 5% preferred stock of Wrigley and of the holding company that legally owns Wrigley's stock. These securities are all serviced by Wrigley's cash flows, which weakens its credit metrics. "Qualitatively, Wrigley already has a high-grade profile," said Brian Weddington, Senior Credit Officer at Moody's. "To the extent it can further align its capital structure with its strong fundamentals, Moody's could begin to consider a move to investment grade," added Weddington,. An upgrade to investment grade would also require Wrigley to maintain stable operating performance and to sustain stronger credit metrics, including debt/EBITDA leverage below 4.0 times, and EBITA/interest of at least 3.0 times. Conversely, if operating performance deteriorated such that debt/EBITDA is sustained above 5.0 times, a downgrade could occur. The assigned Baa1 ratings on the senior secured debt instruments are three notches higher than the Corporate Family Rating, reflecting their all-assets secured position. There is currently $6.1 billion of unsecured funded debt (not publicly rated by Moody's), or 76% of total funded debt that is ranked below the senior secured debt. Moody's takes into consideration the implicit support of parent company Mars, which has invested nearly $14 billion in cash and assets in Wrigley and has a comparatively stronger credit profile. This enhances Wrigley's liquidity profile, however, given that there are no formal support agreements in place, such as parent guarantees from Mars, the relationship does not currently provide sufficient lift to warrant notching Wrigley's ratings higher. The principal methodology used in rating Wm Wrigley Jr. Company was the Global Packaged Goods Industry Methodology, published July 2009. Wm. Wrigley Jr. Company, a Chicago, Illinois-based, wholly-owned subsidiary of Mars, Inc., is a leading global confectionery products company and the largest manufacturer of chewing gum in the world. Wrigley's products are sold in over 180 countries. Key brands include: Doublemint, 5, Orbit, Extra, Starburst, Skittles, Eclipse, Altoids and Life Savers. Net revenues in fiscal 2010 totaled $6 billion. Mars, Incorporated, headquartered in McLean, Virginia, is a family-owned leading producer of confectionery, food, and pet care products. Mars operates in over 66 countries. Key brands include Dove, M&M's, and Snickers confectionery products, Uncle Ben's rice, and Pedigree and Whiskas pet care products. ZALE CORP: Matthew Appel Appointed Chief Administrative Officer --------------------------------------------------------------- Matthew W. Appel was appointed as Chief Administrative Officer of Zale Corporation on May 5, 2011. In this role, Mr. Appel will be responsible for real estate, supply chain and logistics, merchandise planning and allocation, information technology, warranty, repair and credit products, as well as the ongoing management of the Company's finance and control functions. Mr. Appel will continue to serve as the Company's Chief Financial Officer. Mr. Appel, age 55, was named Executive Vice President of the Company effective May 2009 and appointed Chief Financial Officer of the Company on June 15, 2009. From March 2007 to May 2009, Mr. Appel served as Vice President and Chief Financial Officer of ExlService Holdings, Inc. Prior to ExlService Holdings, Inc, Mr. Appel was Vice President, BPO Product Management from 2006 to 2007 and Vice President, Finance and Administration BPO from 2003 through 2005 at Electronic Data Systems Corporation. From 2001 to 2003, Mr. Appel was the Senior Vice President, Finance and Accounting BPO at Affiliated Computer Services, Inc. Mr. Appel began his career with Arthur Andersen, where he spent seven years in their audit practice. Mr. Appel is a certified public accountant and certified management accountant. In connection with Mr. Appel's appointment as Chief Administrative Officer, Mr. Appel's annual base salary was increased from $470,000 to $540,000. About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ Zale reported a net loss of $93.67 million on $1.62 billion of revenues for the year ended July 31, 2010, compared with a net loss of $166.35 million on $1.78 billion of revenues for the same period a year ago. As reported by the Troubled Company Reporter on February 10, 2010, The Deal.com's Sara Behunek reported that analysts said bankruptcy looms for Zale if it fails to restructure its debt and put in place a solid merchandising strategy. The Company's balance sheet at Jan. 31, 2011 showed $1.20 billion in total assets, $960.97 million in total liabilities and $244.01 million in total stockholders' investment. ZOEY ESTATES: Sec. 341 Creditors' Meeting Set for June 7 -------------------------------------------------------- The U.S. Trustee for the Northern District of Texas in Dallas will hold a meeting of creditors in the bankruptcy case of Zoey Estates, LLC, on June 7, 2011, at 1:30 p.m. at Dallas, Room 976. 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. Meanwhile, proofs of claim against the Debtor are due by Sept. 6, 2011. Chicago, Illinois-based Zoey Estates, LLC, c/o PRM Realty Group, LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-33116) on May 5, 2011. John Mark Chevallier, Esq., at McGuire, Craddock & Strother, P.C., serves as bankruptcy counsel. In its petition, the Debtor listed $10 million to $50 million in assets and $1 million to $10 million in debts. ZOEY ESTATES: Case Reassigned to Bankruptcy Judge Hale ------------------------------------------------------ Zoey Estates, LLC's Chapter 11 case has been reassigned to Bankruptcy Judge Harlin DeWayne Hale from Judge Stacey G. Jernigan. Chicago, Illinois-based Zoey Estates, LLC, c/o PRM Realty Group, LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-33116) on May 5, 2011. John Mark Chevallier, Esq., at McGuire, Craddock & Strother, P.C., serves as bankruptcy counsel. In its petition, the Debtor listed $10 million to $50 million in assets and $1 million to $10 million in debts. * Crowell & Moring Expands on Both Coasts With Two New Partners --------------------------------------------------------------- In a response to new opportunities in the deal market, Crowell & Moring LLP has bolstered its Corporate Group with the addition of two partners to the firm's New York and San Francisco offices. Paul J. Pollock, who concentrates his practice on middle-market private equity, mergers and acquisitions (M&A) and corporate finance, joins the firm's New York office from Katten Muchin Rosenman LLP. Jeffrey C. Selman, who joins Crowell & Moring's San Francisco office from Nixon Peabody LLP, is a transactional lawyer who focuses his practice on advising emerging and middle-market public and private technology and life sciences companies and investors. "Our growth is a reflection that the deal market is heating up, and Paul and Jeff will play an important role in helping our clients take advantage of new opportunities," said James R. Stuart, chair of Crowell & Moring's Corporate Group. "Paul and Jeff are seasoned partners with an impressive wealth of experience in the key markets of New York and San Francisco. Our group has grown significantly in recent years, and our new additions build on the incredible book of experience we've amassed leading middle- market deals for the most prestigious and most promising businesses." Pollock's clients have primarily included private equity funds and sponsors, venture and venture-backed corporations, and senior and subordinated lenders, to which he provides corporate counseling on a wide variety of issues. Selman represents emerging and middle- market public and private technology and life sciences companies and investors on formation, equity and debt financing, mergers and acquisitions, licensing, restructurings, board and management issues, and general corporate and commercial transactional matters. Pollock has represented a variety of buyers and sellers in M&A transactions, as well as non-U.S. companies seeking to enter the U.S. marketplace or engage in transactions with U.S. companies. In addition, his distressed debt experience includes work for lenders, buyers, and sellers in workouts and refinancing inside and outside of bankruptcy. These transactions include asset sales, 363 sales, and leveraged and non-leveraged recapitalizations. Pollock has also represented underwriters in public offerings, placement agents in private placements, and foreign issuers in connection with securities offerings under SEC Regulation S. His clients are from a wide range of industries, including publishing, automotive, media and entertainment, high-tech, and health care technology. Since joining the firm, Pollock has represented Italkithen International, Inc., a Miami-based provider of custom kitchens for hotel and apartment developers; Monomoy Capital Partners, L.P. in connection with the acquisition of Steel Parts Manufacturing, Inc., an Indiana based manufacturer of transmission clutch plates; and the owners of projectiondesign LLC, a New Jersey based distributor of high end projectors in connection with the sale of all of the equity of their company According to Pollock, "There's a real change in the deal universe. After a tough few years, companies, lenders, and non-traditional lenders are back in business. As the equity marketplace once again looks at venture opportunities, I am excited to join Crowell & Moring to better help clients navigate the M&A reemergence." Selman has extensive experience facilitating transformative growth of small to mid-cap public and emerging private technology and life science companies through corporate finance and securities work, and middle-market M&A's and other strategic transactions. His representation of public companies includes public offerings, PIPE transactions, and general SEC and national exchange compliance. He also advises clients on corporate governance issues including board and management matters and investor relations. Selman has managed strategic transactions for clients which include mergers, tender offers, and asset and stock sales on both the buy and sell side, cross-border transactions, joint ventures, and intellectual property licensing and collaborative agreements. Frequently serving as an outside general counsel for clients, he has represented companies in a wide range of industries such as information technology, software (enterprise and consumer), the Internet, social networking, mobile device applications, interactive gaming and entertainment, media, semiconductor, network equipment, life sciences, biotech, medical devices, cleantech, geothermal, solar, agbio, battery, and energy storage. "Crowell & Moring offers broad-based experience and an expansive network of potential finance and strategic partners to clients who are looking for a firm that can help them achieve their business goals. It is a dynamic and entrepreneurial place to practice, and I am particularly pleased to be a part of expanding the Corporate Group in California, where the firm has grown tremendously in recent years," said Selman. Selman's representative clients have included CerRx Inc., an early-stage cancer therapeutic company, and Bossa Nova Robotics, a developer of advanced robotic technologies. Pollock received his B.A., cum laude, from Colgate University, where he was a member of Omicron Delta Epsilon, and his J.D. from Fordham Law School. Selman received his B.A., with distinction and honors, from Stanford University and his J.D. from Columbia University School of Law. Crowell & Moring LLP -- http://www.crowell.com/-- is an international law firm with nearly 500 lawyers representing clients in litigation and arbitration, regulatory, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity. The firm has offices in Washington, DC, New York, Los Angeles, San Francisco, Orange County, Anchorage, London, and Brussels. * DLA Piper Adds Gregg Galardi to Firm -------------------------------------- DLA Piper disclosed that Gregg Galardi, formerly a senior partner at Skadden, Arps, Slate, Meager & Flom LLP, will join the firm as partner and co-chair of the Bankruptcy and Reorganization Group, resident in the New York office. Galardi, is widely recognized as one of the world's leading bankruptcy practitioners and has more than 20 years of experience representing borrowers and debtors in sophisticated and high-profile bankruptcies across multiple jurisdictions. "Gregg is an ideal addition to our talented restructuring team, said Roger Meltzer, Global Chair of DLA Piper's Corporate and Finance Practice. "His highly-regarded work on some of the most complex bankruptcy filings in recent years make him a tremendous asset to the firm and our clients, both here in the US and abroad." Galardi's arrival comes shortly after an influx of several other high profile bankruptcy partners to DLA Piper this year. In April, Craig Rasile and Andrew Zaron joined in the Miami office. Stuart Brown came on board as managing partner of the firm's Wilmington office, which opened in March. In February, a team of five partners, led by Richard A. Chesley, joined the practice in Chicago. The additions are part of the firm's strategy to further enhance its global transactional practice areas. "As a leader in the international restructuring space, Gregg will be instrumental in meeting the short and long-term needs of companies, as distressed opportunities arise," said Sir Nigel Knowles, joint Chief Executive Officer of DLA Piper. "Gregg's experience will also help our private equity and hedge fund clients identify opportunities for distressed asset acquisitions." At Skadden, Galardi represented a wide variety of industries in high-profile workouts and traditional Chapter 11 cases. Notable client representations include serving as counsel for: CIT Group, Inc. in its prepackaged Chapter 11 case (the fifth-largest bankruptcy of all time, and the largest prepackaged bankruptcy to date); Sportsman's Warehouse, Inc., HealthSouth Corporation, Circuit City Stores, Inc., Plastech Engineered Products, and Polaroid Corporation. Galardi also represents financial institutions, private equity and hedge funds, international corporations, litigants and significant creditors. Galardi is a Fellow of the American College of Bankruptcy and has been cited on numerous occasions for his leading role in major restructurings. He has been recognized by Turnaround & Workout's top restructuring lawyers in 2009; Best Lawyers in America, Euromoney, Legal Media Group's 2009 Expert Guide to the World's Leading Insolvency and Restructuring Lawyers and The International Who's Who of Legal Professionals. "I am thrilled to join DLA's preeminent restructuring team, and I look forward to working together in continuing to build a practice that complements the firm's global transactional footprint," said Galardi. Galardi received a J.D. from the University of Pennsylvania Law School, cum laude, where he participated in the University of Pennsylvania Law Review; a Ph.D. in philosophy from the University of Pennsylvania; an M.A. in economics from the University of Pennsylvania; and a B.A., also from the University of Pennsylvania, cum laude and honors. He is admitted to practice in Delaware, New York and the District of Columbia. About DLA Piper's Restructuring Practice DLA Piper's Restructuring practice has been involved in some of the largest, most intricate and most time-critical cases in recent history. It serves an exceptionally diverse client base encompassing debtors, creditor committees, governmental entities, indenture trustees, senior, mezzanine and second lien lenders, hedge funds, shareholders, directors, and distressed debt and asset buyers and investors. The group handles restructurings across an array of industries with particular strength in real estate, energy, hospitality, sports, transportation, health care and retail. About DLA Piper DLA Piper -- http://www.dlapiper.com--has 4,200 lawyers in 30 countries and 76 offices throughout the US, UK, Continental Europe, Middle East and Asia. In certain jurisdictions, this information may be considered attorney advertising. * Luce Forward Adds Bankruptcy Atty. Gregg S. Kleiner ----------------------------------------------------- Gregg S. Kleiner recently joined Luce Forward as special counsel to the firm's Commercial, Finance & Insolvency practice group, according to a May 16 announcement by the Company. Mr. Kleiner will work out of the firm's San Francisco office. Mr. Kleiner's primary focus at Luce Forward will be representing Chapter 7 and 11 trustees, pursuing and defending preference and fraudulent transfer litigation, asset sales and acquisitions, and statutory liquidation proceedings, while enhancing the firm's litigation capabilities in the bankruptcy and insolvency arenas. He will work closely with partners Michael A. Isaacs, Charles P. Maher and Barry Milgrom, all of whom joined Luce Forward in 2000 and whom he previously worked with at Rosenblum, Parish & Isaacs PC. "Luce Forward has long had an extraordinarily successful group of litigators, and with the arrival of Gregg to our team, our capabilities will only be that much stronger," said Kurt L. Kicklighter, Luce Forward's Managing Partner. "As Luce Forward continues to grow its practice groups and offices throughout California, we welcome Gregg and look forward to the unique expertise he brings to the firm." Prior to joining Luce Forward, Mr. Kleiner was special counsel at Cooley LLP where he regularly represented Chapter 11 debtors in possession, creditor committees, sellers of distressed assets, third party purchasers of assets, assignors and assignees for benefit of creditors, dissolving corporations and their liquidation managers, secured and unsecured creditors in contested matters and adversary proceedings, with a special emphasis on defending preference litigation. Previous positions include associate counsel at Pillsbury, Madison & Sutro; director & shareholder at Rosenblum, Parish & Isaacs PC; associate at Graham & James LLP; and Judicial Law Clerk to the Honorable James R. Grube, United States Bankruptcy Judge (Ret.). Mr. Kleiner received his undergraduate degree from Colorado State University, with distinction and his Juris Doctorate from the University of California Hastings College of the Law. Luce Forward's Commercial, Finance and Insolvency Group, which has attorneys in the firm's San Francisco, Los Angeles and San Diego offices, approaches commercial transactions and insolvency matters in a practical, creative, economical and effective way. As part of a full-service law firm, Luce Forward takes a multi-disciplinary approach to addressing these issues by drawing on the experience of attorneys who practice in its corporate, intellectual property, litigation, appellate, tax, real estate, environmental, labor and employment, ERISA and international departments. * BOOK REVIEW: Performance Evaluation of Hedge Funds ---------------------------------------------------- Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro Publisher: Beard Books Hardcover: 203 pages Listprice: $59.95 Review by Henry Berry Hedge funds can be traced back to 1949 when Alfred Winslow Jones formed the first one to "hedge" his investments in the stock market by betting that some stocks would go up and others down. However, it has only been within the past decade that hedge funds have exploded in growth. The rise of global markets and the uncertainties that have arisen from the valuation of different currencies have given a boost to hedge funds. In 1998, there were approximately 3,500 hedge funds, managing capital of about US$150 billion. By mid-2006, 9,000 hedge funds were managing US$1.2 trillion in assets. Despite their growing prominence in the investment community, hedge funds are only vaguely understood by most people. Performance Evaluation of Hedge Funds addresses this shortcoming. The book describes the structure, workings, purpose, and goals of hedge funds. While hedge funds are loosely defined as "funds with no rules," the editors define these funds more usefully as "privately pooled investments, usually structured as a partnership between the fund managers and the investors." The authors then expand upon this definition by explaining what sorts of investments hedge funds are, the work of the managers, and the reasons investors join a hedge fund and what they are looking for in doing so. For example, hedge funds are characterized as an "important avenue for investors opting to diversify their traditional portfolios and better control risk" -- an apt characterization considering their tremendous growth over the last decade. The qualifications to join a hedge fund generally include a net worth in excess of US$1 million; thus, funds are for high net-worth individuals and institutional investors such as foundations, life insurance companies, endowments, and investment banks. However, there are many individuals with net worths below US$1 million that take part in hedge funds by pooling funds in financial entities that are then eligible for a hedge fund. This book discusses why hedge funds have become "notorious as speculating vehicles," in part because of highly publicized incidents, both pro and con. For example, George Soros made $1 billion in 1992 by betting against the British pound. Conversely, the hedge fund Long-Term Capital Management (LTCP) imploded in 1998, with losses totaling US$4.6 billion. Nonetheless, these are the exceptions rather than the rule, and the editors offer statistics, studies, and other research showing that the "volatility of hedge funds is closer to that of bonds than mutual funds or equities." After clarifying what hedge funds are and are not, the book explains how to analyze hedge fund performance and select a successful hedge fund. It is here that the book has its greatest utility, and the text is supplemented with graphs, tables, and formulas. The analysis makes one thing clear: for some investors, hedge funds are an investment worth considering. Most have a demonstrable record of investment performance and the risk is low, contrary to common perception. Investors who have the necessary capital to invest in a hedge fund or readers who aspire to join that select club will want to absorb the research, information, analyses, commentary, and guidance of this unique book. Greg N. Gregoriou teaches at U. S. and Canadian universities and does research for large corporations. Fabrice Rouah also teaches at the university level and does financial research. Komlan Sedzro is a professor of finance at the University of Quebec and an advisor to the Montreal Derivatives Exchange. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. 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 ***